A US bankruptcy court rejected New York City Mayor Zohran Mamdani's attempt to block a major real estate transaction involving the US branch of Israeli company Summit Properties in Brooklyn over the weekend.
The deal is valued at $451 million and includes more than 5,000 apartments across 90 buildings, most of them subject to rent regulation.
For Mamdani, who has made tenant protection a core theme of his platform, the ruling represented a personal setback. One of the central buildings included in the deal is a neglected property in Brooklyn that he visited on his first day in office, where he publicly promised residents that the city would step in on their behalf.
The legal battle intensified last week when city officials filed with the bankruptcy court seeking to halt the sale. The city’s main argument was that the Israeli-owned Summit lacked the “will or resources” to rehabilitate the deteriorating buildings.
During the hearings, the city presented data showing that properties already owned by Summit in New York have more than 780 open violations, including roughly 290 classified as posing an “immediate danger.”
The figures were supported by documents Summit filed with the Tel Aviv Stock Exchange in 2025 detailing its holdings in the city. Despite the claims, the judge rejected the city’s request to delay the proceedings and allowed the bidding process to continue.
Zohar Levy, chairman of the Summit Group, told The New York Times that the company is “deeply committed” to the city and has already engaged with government officials to discuss ways to “invest in the properties and make New York affordable for everyone.”
A company spokesperson said the buildings are old and that deficiencies are being addressed on an ongoing basis.
'We hope the judge stop the sale'
As the case progressed in court, dozens of Pinnacle tenants demonstrated outside Summit’s Manhattan offices, reporting difficult living conditions, including collapsing ceilings and pest infestations.
“We hope the judge will stop the sale,” said one resident.
The court’s decision underscores the challenge Mamdani faces in fulfilling his campaign promises, chief among them a rent freeze.
While Mamdani has pledged to defend tenants, figures in the real estate sector warn that his policies could further worsen conditions in rent-regulated buildings.
“We are examining our next steps. Our fight to protect tenants is not over,” Deputy Mayor for Housing Laila Bozorg said.
The next hearing for final approval of the sale is scheduled for Thursday.