In this episode of Coffee & Cap Rates, Shimon Shkury sits down with Kenny Burgos, CEO of NYAA, to discuss the current state of New York City’s multifamily housing market and the growing challenges facing the rent-stabilized sector.

In late March, the Pinnacle Group’s portfolio of 5,100 rent-stabilized apartments sold out of Chapter 11 bankruptcy for $451.3 million. The buyer paid a fraction of what those buildings were worth a decade ago. The seller had seen the math become impossible: operating costs up 40% since Albany’s 2019 rent law overhaul, rents allowed to rise just 1-3% per year creating a 24-point gap with no escape valve in addition to crippling collection losses and elevated interest rates.

The FOMC maintained the federal funds rate at 3.50% to 3.75% at its April meeting, though the decision exposed disagreements within the Committee. While one governor pushed for a 25-basis-point cut, three regional presidents voted to maintain rates but resisted including an 'easing bias' in the announcement. Despite a resilient economy and a steady 4.3% unemployment rate, inflation remains a persistent headwind. Headline PCE climbed to 3.5% in March because of rising energy costs, while core PCE, excluding the volatile food and energy categories, sat at 3.2%, hampered by ongoing tariffs in the goods sector. Both metrics are above the 2% target.