Liz’s view
Good news for Zohran Mamdani: Wall Street isn’t going anywhere.
Andrew Cuomo, the vessel for Wall Street’s dashed mayoral hopes, is fond of invoking scripture: deeds over words, he’s told many a church congregation over his now-punctuated political career. As the city’s financiers complain loudly about Zohran Mamdani’s win, watch what they do, not what they say.
The local media and thirsty suburban real estate agents have stoked fears that New York’s billionaires (i.e. its tax base, cultural patrons, and scientific benefactors) will leave for places where it is cheaper to be rich. I doubt it. “There are two things driving the US economy right now: compute power and people power,” said Scott Rechler, CEO of RXR, one of the city’s biggest commercial property firms. “The compute is in data centers in the middle of nowhere. The people are in New York City.”
Indeed, “Midtown in particular is celebrating an incredibly hot real estate market,” the former real estate executive now running the MTA, Janno Lieber, remarked last week. “Commercial leasing is out of sight.”
The same college-educated, white-collar workers who backed Mamdani’s affordability campaign are pinched by costs precisely because their cohort wants to live here. And finance companies aren’t even pretending to leave anymore. Goldman Sachs nine years ago splashily moved investment bankers to Dallas, Atlanta, and other heartland cities — and has scarcely mentioned the initiative since. “Equities in Dallas” (shudder) remains as relevant a shorthand for New York City’s primacy as it was when Michael Lewis wrote Liar’s Poker in 1989. Bosses who demanded their employees return to the office five days a week will have a hard time moving to Florida. The city’s biggest hook on the billionaire set is a personal income tax that is, practically speaking, optional.
The physical embodiment of a finance industry doubling down on the city is the $3 billion, gleaming, hypersustainable monument to capitalism JPMorgan just opened on 47th Street. RXR plans to break ground early next year a few blocks away, at 175 Park Ave., which will be the tallest building in the Western hemisphere; “We’re not changing any of our plans,” Rechler said. Salesforce — whose CEO, Marc Benioff, isn’t shy about criticizing urban mismanagement as he sees it — renewed and expanded its Times Square office tower in September. Sales of pricey condos hit a three-year high as Mamdani’s win was all but assured.
That’s the evidence of the markets, and of long-term investors putting their money where their mouths are. On the other side of the ledger, we have … a few Florida real estate agents on TikTok getting reprinted in the New York Post. It’s a fun story, evergreen and buzzy, but don’t mistake it for reality. Just ask John Paulson when you see him at the Princeton Club.
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Room for Disagreement
New York’s financiers have a “tolerance for taxes and tumult, but there’s a tipping point,” said Rich Farley, a Wall Street lawyer and outspoken Mamdani critic.
Notable
- Real-estate mogul (and a concerned leader in New York’s Jewish community) Barry Sternlicht thinks the city will get worse before it gets better. “Maybe the million people that voted him won’t realize that socialism has never worked anywhere on the planet Earth, ever,” he told CNBC.
- “It appears that NYC is electing to commit suicide by Mayor,” investment researcher Jim Bianco wrote on X.