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The outcome of New York’s mayoral election on Tuesday may wind up putting pressure on some specific stocks. Democratic nominee Zohran Mamdani, who has consistently led the polls heading into Election Day, wants to freeze the rent on rent-stabilized apartments in the city. He’s facing former Democratic Governor Andrew Cuomo, running as an independent, and Republican Curtis Sliwa, founder of Guardian Angels. That rent freeze could have implications for companies operating in New York that have exposure to rent-regulated real estate. About 1 million apartments in New York City are rent stabilized. A pause on increases would hurt those companies’ profits. Regional bank exposure Regional bank Flagstar Bank , for instance, has a portfolio of loans that includes rent-stabilized units in New York. The stock dropped 4% the day after Mamdani’s primary win in June but is now 1.5% higher since the June 24 close, before election results were announced, through Monday. “FLG’s rent regulated portfolio, which has received more attention post candidate Mamdani’s win in the Democratic primary for NYC Mayor (and with him leading in current polls in the upcoming election), has been a negative overhang on shares given his stance on freezing rent for rent regulated units,” Deutsche Bank said in a Sept. 30 research report. FLG YTD mountain Flagstar Bank year to date Initial calculations by analysts in June found that anywhere between $11 billion and $18 billion of the bank’s portfolio was exposed to the rent freeze. However, an analysis by Flagstar found a smaller risk, Deutsche Bank analyst Bernard Von Gizycki wrote. “Management has conducted a deep dive into its rent regulated portfolio and believes the real risk is in $1.9b of the $4.3b criticized/classified loans,” he said. “The rent regulated portfolio should continue to decline given continued strong par payoffs which have occurred over the last several quarters and should help reduce the perceived risk over time.” Flagstar has gained 18% year to date. Webster Financial is another regional bank that could suffer if Mamdani wins, said Seaport Research Partners. “While we believe that WBS will easily be able to absorb any valuation adjustments to its rent-controlled [multi-family] book, in our view, a likely win by NY mayoral candidate, Zohran Mamdani will likely keep WBS shares range-bound in the near- to medium term,” analyst Laurie Havener Hunsicker said in a note Monday. She downgraded Webster to neutral last summer once Mamdani became the clear front-runner. Shares are up about 3% so far this year. Real estate impact Mamdani’s proposed policies are also seen as unfavorable to the city’s commercial real estate market. SL Green Realty , which primarily owns and operates office properties in Manhattan, has already seen an impact from the June primary. The stock is down more than 15% since Sept. 30. SLG YTD mountain SL Green Realty year to date SL Green held interests in 53 buildings , totaling 30.7 million square feet, as of Sept. 30, including ownership interests in 27.1 million square feet of Manhattan buildings. “We think the ‘sell Mamdani’ trade is being expressed [primarily]… through SLG, despite the company having worked well with the last progressive mayor, Bill de Blasio,” Piper Sandler analyst Alexander Goldfarb wrote in a note Monday. The company’s proposed casino in Times Square was also shot down in September. SL Green has fallen 26% year to date. Vornado Realty Trust , which owns or manages nearly 20 million square feet of office space in Manhattan, also took a hit after the June primary. Its portfolio includes 2.4 million square feet of storefront commercial real estate in the city. Shares are down 14% so far this year ‘Be brave’ amid potential opportunities Piper Sandler’s Goldfarb believes a Mamdani win is already more than priced into SL Green Realty stock. “Be brave. Buy SLG,” he said. “If businesses truly thought Zohran Mamdani was going to upend their world, we doubt 3Q25 office leasing would have been so robust.” Meanwhile, Cantor Fitzgerald remains positive on Flagstar, maintaining an overweight rating and $15 price target, which suggests 33% upside from Monday’s close. The investment bank also sees potential upside to that target if current Mayor Eric Adams opts to re-nominate all the New York City Rent Guidelines Board (RGB) members with expired terms, or nominates new board members to open slots before the end of his term on Dec. 31. The board oversees rent-stabilized apartments and the mayor has the power to appoint representatives to the board. That “would reduce uncertainty on FLG credit trends in the more heavily rent-stabilized portion of the bank’s NYC multifamily loan book, as Adams has supported rent increases historically, and this move would make it more difficult for any new mayor to materially influence the RGB for the next few years,” Cantor analyst Dave Rochester said in a note Monday. If Adams takes no action, Flagstar faces a tougher scenario but the bank can still take steps to mitigate the blow, the analyst noted. It can raise rents more materially in market-rate units within the more heavily rent-stabilized buildings, he said. Piper Sandler’s Goldfarb also isn’t ruling out a potential casino for SL Green. “Three casinos within 16 miles of each other (Bally’s, Steve Cohen and Aqueduct) likely make little economic sense, while Mamdani’s need for cash to fund his socialist agenda makes re-opening a Manhattan option possible,” he wrote in a separate Oct. 21 note.
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