Billionaire real estate investor Barry Sternlicht has warned that New York City could "turn into Mumbai" under the leadership of mayor-elect Zohran Mamdani, a Democratic socialist set to take office on January 1.
Sternlicht, who serves as Chairman and CEO of Starwood Capital Group, told CNBC that his firm is considering relocating from New York following Mamdani's victory. He predicted that other companies may also move their operations out of the city due to what he described as rising costs and anti-business policies.
Starwood Capital Group, which holds extensive commercial and residential real estate in New York and maintains offices in Midtown Manhattan, has long been involved in major development projects. However, Sternlicht said that mandatory union rules and escalating project costs are discouraging further investment.
"Over $100 million, every project in New York has to go union, and it's super expensive. It leads to extremely expensive housing. And other developers have tried to cut deals with the unions, but they rule New York, and that's one of the key reasons the blue states are so expensive and they're so difficult to add a supply of housing to," said Sternlicht in an interview with CNBC Property Play.
"And then 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. So the neighbour finds out the neighbour 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."
Sternlicht's comments reflect concerns among some business leaders who believe new regulations could affect growth and investment. Mamdani's office has not yet commented on his remarks.
