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Investing.com -- Shares of several New York-based real estate investment trusts tumbled on Wednesday after Zohran Mamdani took the lead in New York City’s Democratic mayoral primary, raising concerns about his proposed rent control policies.
Vornado Realty Trust (NYSE:VNO) stock fell 5.4%, SL Green Realty Corp (NYSE:SLG) dropped 5.5%, and Equity Residential (NYSE:EQR) declined 2.3% as investors reacted to the possibility of Mamdani’s campaign promises becoming reality.
Mamdani, a 33-year-old state lawmaker who identifies as a democratic socialist, has pledged to freeze rents for all rent-stabilized apartments in New York City if elected mayor. This policy stance has alarmed real estate investors who fear such measures could significantly impact property owners’ revenue and profitability.
The sell-off comes at a particularly challenging time for the real estate sector, which has already been struggling with the dual pressures of elevated interest rates and reduced demand for office space. Property owners have been grappling with financial strain as higher borrowing costs affect their operations, while the widespread adoption of remote work following the pandemic has left many office buildings with high vacancy rates.
The Democratic primary winner will be heavily favored to win the mayoral election in the predominantly Democratic city, making Mamdani’s policy proposals a significant concern for real estate investors with exposure to the New York market.
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