Judge blocks Mamdani’s bid to slow sale of 5,000 NYC apartments

A bankruptcy judge has rejected New York City Mayor Zohran Mamdani’s effort to delay the sale of thousands of rent-stabilized apartments owned by the real estate firm Pinnacle Group.

After taking office at the start of the year, Mamdani directed the city to intervene in the bankruptcy sale of more than 90 buildings comprising roughly 5,100 rent-stabilized apartments owned by Pinnacle Group. The company filed for bankruptcy after defaulting on loans totaling more than half a billion dollars, while many of its properties fell into disrepair and accumulated housing code violations.

The bankruptcy resulted in a network of Pinnacle tenants across the city organizing to attempt to slow a potential sale and find an alternative buyer. Last month, however, the Israeli real estate firm Summit Properties USA submitted a $451 million bid for the portfolio.

According to a report by the Gothamist, the Union of Pinnacle Tenants expressed concerns that Summit would continue the same practices as the current landlord, such as neglected maintenance.

In a Monday court filing, city attorneys questioned the bid, arguing it was unclear if the company was fit to handle the needed repairs while still being able to pay off loans and make a profit because most of the apartments have regulated rent. 

Mamdani and Steven Banks, the head of the city’s law department, announced upon taking office that the city would intervene in the case because Pinnacle owes the city roughly $12.7 million in unpaid fines. However, in a Thursday ruling, bankruptcy Judge David Jones declined to grant the city’s request to delay the sale. 

“We will continue to fight to ensure any owner of this portfolio makes necessary repairs to bring the buildings up to code and respects the rent stabilization regulations,” said Leila Bozorg, the city’s deputy mayor for housing, in a statement.