Court Rejects Mamdani Bid to Block Israeli-Linked Brooklyn Housing Deal

A U.S. bankruptcy court has rejected an effort by New York City Mayor Zohran Mamdani to stop or delay a large real estate deal in Brooklyn involving an Israeli-linked company. The decision, issued over the weekend, allows the sale to move forward despite objections from the city.

The deal would see the U.S. arm of Summit Properties acquire more than 5,000 apartments spread across over 90 buildings in Brooklyn. The transaction is valued at $451 million, and most of the apartments are rent-regulated, meaning landlords face strict limits on rent increases and maintenance obligations.

City officials said they sought to block or delay the sale because the buildings involved have a long history of poor maintenance and tenant complaints. They argued that the court should pause the process to allow the city to examine whether the buyer had the financial capacity and concrete plans to carry out long-overdue repairs in thousands of rent-regulated apartments, many of which tenants say have suffered from years of neglect.

For Mamdani, who took office earlier this month, the ruling is an early political setback. Protecting tenants has been one of the main promises of his campaign, including calls for a rent freeze and tougher action against landlords accused of neglect. The court case quickly became a test of how much power the new mayor has to intervene in major housing deals.

One of the buildings included in the sale is a rundown Brooklyn property that Mamdani visited on his first day in office. During that visit, he met residents and publicly promised that the city would act to protect them. The court’s decision makes clear that when properties are under federal bankruptcy supervision, the city’s ability to intervene is limited.

The buildings are currently owned by the Pinnacle Group, which filed for Chapter 11 bankruptcy protection in May 2025 after struggling with large debts. As part of that process, the properties were put up for sale. Summit emerged as the leading bidder for the portfolio. 

City officials asked the court to slow down the sale, arguing that more time was needed to review Summit’s ability to repair aging buildings and protect tenants living in them. The judge rejected that request and allowed the sale process to continue. A hearing is scheduled for Thursday to decide whether to give final approval to the deal.

Summit responded by stressing its commitment to the city. Zohar Levy, chairman of the Summit Group, told The New York Times that the company is “deeply committed” to New York and is already in talks with government officials about investing in the properties and improving affordability. A company spokesperson said the buildings are old and that repairs are being carried out on an ongoing basis.

As the case moved through court, dozens of tenants protested outside Summit’s Manhattan offices. They described difficult living conditions, including pest infestations and structural problems. “We hope the judge will stop the sale,” one resident said.

The ruling highlights the challenges Mamdani faces in turning campaign promises into action. “We are examining our next steps. Our fight to protect tenants is not over,” Deputy Mayor for Housing Laila Bozorg said.

The court is expected to consider final approval of the sale later this week.