The Mayor’s Race That Could Reshape Real Estate

• New York’s dark horse: New York’s mayoral race is intensifying, and the outcome could signal how the country might navigate its political relationship with the real estate industry.

• Underwater again: A growing number of Americans who moved during the pandemic are finding their homes are worth less than the mortgage they took out on them.

• Uneven rebound: A new report shows that companies are starting to grow their office footprints but the demand is not equal for all office space.

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Politics

The Mayor’s Race That Could Reshape Real Estate

New York City’s mayoral race isn’t just a political fight—it’s fast becoming a defining moment for the future of real estate across the city. On one hand, Andrew Cuomo offers supply-centered solutions: a bold plan to create 500,000 housing units in a decade, paired with property tax caps and streamlined zoning, aimed at attracting private investment and favoring multifamily and mixed-use developers. On the other, Zohran Mamdani—with sweeping proposals like rent freezes for stabilized apartments, fare-free transit, and millions for public housing—threatens to recalibrate the relationship between tenants, landlords, and the state’s fiscal framework.

The real estate industry’s response has been predictable and intense: a kind of full-court press in support of Cuomo. Landlord groups and major developers are pouring tens of millions into super PACs favoring Cuomo, warning that a Mamdani win could usher in a repeat of the 1970s fiscal collapse causing stalled investment and distressed rental stock. Meanwhile, tenant advocates are energized behind Mamdani’s rent-freeze pledge, seeing him as a candidate who truly listens to New York’s rent-burdened majority.

Cuomo’s strength lies in attracting developers and Wall Street with promises of robust returns, streamlined regulatory processes, and tax incentives, the kind of environment that investors crave . Mamdani, on the other hand, is betting on a grassroots coalition: small-dollar donors, volunteer-driven outreach, and core support from progressive icons like AOC and Bernie Sanders. His calls for tax hikes on millionaires and corporations to bankroll public services are bold but critics argue they risk driving capital and real estate investment out of the city.

For real estate professionals and CRE strategists, this race underscores an urgent need to prepare for uncertainty. A Cuomo administration could mean accelerated approvals, upzoning around transit nodes, and fewer regulatory hurdles, benefiting traditional development plays. Conversely, a Mamdani victory could introduce regulatory shocks: rent stabilization, public housing expansion, and municipal bond-driven finance—all of which would necessitate new underwriting models and risk assumptions.

But the stakes go deeper. This mayoral contest reflects a shifting ideological terrain in urban policymaking: will New York double down on supply‑side economics, or pivot to tenant‑centered policy at the expense of landlords? The real estate industry is closely watching who wins the mayoral race in NYC since it may be a foreshadowing of the country's political future.

Overheard

The Office Market Isn’t Bouncing Back Equally

Office footprint reductions appear to have finally peaked, according to a new Cushman & Wakefield/CoreNet Global report released June 23, 2025. After several years of aggressive downsizing, companies are now showing signs of expanding—about 12% of occupiers are planning to grow their footprints, and the average lease size has climbed an impressive 13% over the past two years. This signals a shift: landlords and tenants alike are recalibrating strategies in response to heightened return-to-office initiatives and improving space utilization.

Utilization rates are stabilizing but regional variability prevails. Globally, offices are 51–60% occupied—still below pre-pandemic norms—but markedly higher than in recent years. In the Americas, utilization hovers around 50%, whereas EMEA and APAC markets report closer to 60% as companies enforce more structured in-office policies. Despite financial and geopolitical pressures that have delayed some real estate decisions by a few quarters, Cushman & Wakefield emphasizes these are mere pauses—not full stops—for occupiers committed to reshaping their workspaces.

Tenant demands are evolving, putting a premium on quality, even if it comes at a cost. Tenants now expect top-tier amenities and experiences in their office leases: a staggering 85% prioritize enhanced features, while nearly half are willing to pay more for premium space, driving rental premiums of about 10%. That spells brighter prospects for landlords who can deliver modern, amenitized environments focused on collaboration, wellness, and unique office experiences.

Conversely, outdated or poorly located buildings are increasingly at risk, with obsolescence and vacancy concentrations highlighted in past Cushman reports. For landlords, this bifurcation spells opportunity—but it also raises the stakes for capital expenditures. Owners must selectively reinvest to stay competitive, or risk being sidelined in the evolving tenant landscape.

More Homeowners in COVID Boomtowns are Facing Negative Equity

A growing number of homeowners, particularly in former pandemic boomtowns, now owe more on their mortgages than their homes are worth. Markets like Austin, Texas, and Cape Coral, Florida, which experienced a surge in prices between 2020 and 2022, are now grappling with price corrections of nearly 20%, pushing more recent buyers into negative equity.

Though negative equity remains a relatively small share of the market, April marked the highest number of underwater homeowners for that month in five years, over half a million, according to Intercontinental Exchange. FHA and VA borrowers, many of whom made minimal down payments, are most vulnerable, accounting for the majority of both delinquencies and underwater mortgages.

Unlike the 2008 crisis, foreclosures remain unlikely. Lending standards have tightened, and most homeowners can still afford their monthly payments. But for sellers, being underwater can be a trap, preventing refinancing and forcing losses at sale.

Today’s sellers, especially those who bought near the peak, are more likely to cut their losses before values decline further. Despite overall national home equity remaining strong, markets with softening prices and rising inventory are shifting the calculus for homeowners. This is raising new questions about the post-pandemic residential housing market.

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Propmodo Daily is written and edited by Franco Faraudo with contributions from readers like you and the Propmodo team.

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