Barry Sternlicht is worried that Zohran Mamdani’s tenure as mayor could push New Yorkers out of the city — starting with his own employees.
“We’ll see how this works, but the team in New York is for the first time saying maybe we should leave,” Sternlicht, the billionaire CEO of Starwood, warned in an interview with CNBC this week.
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Miami-based Starwood Capital Group signed a 10-year, 14K SF office lease in Manhattan's Meatpacking District in 2019. But Sternlicht said Mamdani's policies, particularly his past criticism of the New York Police Department, could motivate an exit.
“If people feel like their kids aren’t safe on the streets, they will pull them out of school and they will leave,” Sternlicht told CNBC. “And if he defunds the police or he doesn’t give them the honor and prestige they deserve, I think the city’s in for a really tough time.”
Mamdani said he will retain the 35,000 officers on the force and ask Police Commissioner Jessica Tisch to stay on board. Still, that is a departure from Mayor Eric Adams, a former police officer who planned to raise NYPD’s headcount to 40,000 by 2029, the highest level in two decades.
Mamdani wants to create a Department of Community Safety, through which trained professionals would handle certain cases concerning mental health and homelessness, as well as oversee violence prevention programs.
Between Starwood Capital Group, Starwood Property Trust and Starwood Hotels, Sternlicht has significant exposure to New York City.
But to further grow New York City’s housing stock, Sternlicht said Mamdani’s policies, which include freezing rent on 1 million New York City apartments and strengthening tenant protections, won’t work.
“The far left gets really nuts and says the tenants don’t have to pay. Well, you can’t kick them out if they don’t pay,” Sternlicht said. “So the neighbor finds out the neighbor isn’t paying, and they don’t pay, and the next guy doesn’t pay, and then you’re basically going to turn New York City into Mumbai.”
Mamdani has been supportive of City of Yes, the citywide upzoning that Adams spearheaded with support from the real estate industry. Although Mamdani's campaign included pledges to fast-track affordable housing projects, he has also promised to triple the production of publicly subsidized, union-built, rent-stabilized homes to 200,000 new units over the next 10 years.
“We need to increase housing,” Sternlicht said. “That’s not going to happen easily.”
Union requirements are a large reason why developing in the city is so expensive and, at times, impossible to make pencil, according to Sternlicht.
“You need serious subsidies from the government,” Sternlicht said. “If they want us to work with unions, the unions have to be more accommodative on their work laws and the wages and everything else. Otherwise, you can’t add economically.”
Sternlicht joins a swath of business leaders who have voiced concerns about the incoming democratic socialist mayor. Prior to the election, others similarly threatened to leave the city — but many have since walked their statements back.
Tensions continue to run high in the business community. One day after the election, JLL fired one of its top brokers, Scott Panzer, due to an email comparing Mamdani to Adolf Hitler and New York City to the Middle East, The Real Deal reported.
Unlike some of his peers, who donated millions of dollars to Mamdani's rival, former Gov. Andrew Cuomo, Sternlicht told CNBC that he didn't contribute. He also said he didn't speak with Mamdani prior to the election.
Despite his fears, the Starwood executive is also willing to give the mayor-elect a chance.
“New York will survive. It survived de Blasio,” Sternlicht said. “But it’s a shame that it’s going to get a lot worse before it gets better.”
A representative for Starwood declined to provide additional comment.
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