A potential Zohran Mamdani mayorship strikes fear in the NYC real estate industry

www.nytimes.com nytimes.com

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Oh no. Not the real estate industry.
- How will they pay their mortgages and survive without price gouging?!? (/s)
  
  They could probably start by putting all the units they’re holding off the market back on the market, but that wouldn't let them keep rents artificially high.
  And if they did that then they couldn’t exaggerate the value of the buildings, since the theoretical earnings is based on the average rent multiplied by the total number of units.
  And if the value of the buildings dropped because the average rent fell, then they would suddenly be over leveraged on all the loans they’ve taken out with the buildings as collateral, and they couldn’t take out new loans to pay the interest on the old loans.
  We wouldn’t want a that to happen now would we?
  
  Don’t worry, Trump will bail them out with hard-working people’s taxes.
  
  Or they could just overstate the value when selling, but understate its value to the IRS.
  As long as you're loyal, you won't be audited
  
  More like with debt, but who will buy the bonds that fund that debt?
  
  China (and some others).
  
  China’s not exactly flush with cash to buy debt with at the moment, they’re having their own struggle party at the moment, although they tend to be less vocal about it. After all, their real estate market basically got massively over leveraged and a lot of capital disappeared and turned out wasted.
  The Saudi’s too are having a bit of a liquidity problem at the moment, they’ve made a lot of commitments on weird mega projects and spent a lot of money trying to diversify their economy and repair their image, much of it with limited success.

8 comments