The future of rent-stabilized units was at the heart of Zohran Mamdani’s ultimately successful bid for the Democratic nomination for New York City mayor, but the issue came into the present this week.
The Rent Guidelines Board approved a 3 percent rent increase for one-year leases and 4.5 percent for two-year leases in rent-stabilized units, displeasing both landlord and tenant representatives.
Landlord groups argued the increase wasn’t enough to cover rising operating costs and distress in the housing stock. Tenant advocates and some politicians, like Mamdani, called for a rent freeze due to affordability concerns.
The vote highlighted the board’s difficult position in balancing affordability for tenants with the financial health of rent-stabilized buildings.
It also highlighted the headwinds the rent-stabilization industry is facing.
A nonprofit’s billion-dollar puzzle
Community Preservation Corp acquired a $5.8 billion portfolio of troubled Signature Bank debt tied to rent-stabilized buildings, expecting distress and a big clean-up effort. Sure enough, more than 70 percent of the loans show financial distress and nearly 40 percent are linked to physical property issues.
CPC’s strategy for the portfolio? Loan modifications — maturity extensions, rate relief, principal forgiveness — to restore cash flow and improve building conditions. The last resort is foreclosure; its joint venture has already filed 41 foreclosures impacting about 2,200 units.
Office deals fell back down to earth
Manhattan’s office market received a harsh reality check in the second quarter. Office leasing volume dropped by 18.9 percent to 9.2 million square feet in the second quarter, according to Colliers, a disappointing follow-up to a strong Q1. Despite the drop, the first half of 2025 was the strongest since 2014, 20.7 million square feet leased in the year’s first six months.
NYU’s 1.1 million-square-foot deal at 770 Broadway was the largest lease of the quarter. Other significant leases included Amazon’s at 10 Bryant Park and Goodwin Procter’s at 200 Fifth Avenue.
The borough’s availability rate tightened for the fifth consecutive quarter to 15.4 percent, while sublet supply decreased by over 30 percent in the last year.
The attorney wading through legal troubles
Finally, real estate attorney Mark Nussbaum’s law firms filed a petition in New York Supreme Court to start a process known as an Assignment for the Benefit of Creditors (ABC), an alternative to bankruptcy considered to be faster and less bureaucratic than Chapter 7 or 11. He’s facing down creditors to the tune of tens of millions of dollars.
A nursing home exec named Jacob Sod filed a lawsuit demanding Nussbaum return $15 million in escrow money. Nussbaum said Sod’s allegations were false and a Kings County judge dismissed Sod’s case last week.
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Rent board approves 3% rent increase for stabilized units
Inside a nonprofit’s effort to clean up billions in rent-stabilized debt
Manhattan office leasing snaps back to reality