A derelict Brooklyn apartment building that Mayor Zohran Mamdani visited on his first day in office, vowing to help the tenants, could be sold to a real estate investment firm that may have dozens of open violations at its properties, according to city records.
With a bid of $451 million, the firm, Summit Properties USA, won an auction on Friday for the Brooklyn building and more than 90 others owned by the Pinnacle Group, said Kenneth Fisher, a Pinnacle lawyer. Together, the buildings comprise about 5,150 apartments across New York City, most of them rent stabilized. They were put up for auction after Pinnacle filed for bankruptcy in May.
In one of his first acts as mayor, Mr. Mamdani declared that the city would intervene in the case, making the apartments’ fate a referendum on his ability to protect New York renters. City officials filed court papers on Monday asking the bankruptcy judge to delay the auction, arguing that Summit, which had indicated a desire to buy the buildings, “may not have sufficient resources or willingness to rehabilitate the properties.”
But on Thursday, the judge rejected the city’s request and let the auction proceed as planned, though he must still approve the sale. A hearing is scheduled for next Thursday, Mr. Fisher said.
Leila Bozorg, Mr. Mamdani’s deputy mayor for housing and planning, said on Thursday that the city was evaluating its next steps.
“This is not the end of our fight to protect Pinnacle tenants and working New Yorkers across the city,” she said in a statement. “We are assessing our options as these proceedings move forward, and 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.”
Zohar Levy, the chairman of Summit Group, the parent company of Summit Properties, said the company was “deeply committed” to the city and had contacted the Mamdani administration to talk about ways to “invest in the portfolio and help make New York affordable for everyone.”
The outcome on Friday could prove to be an early setback for Mr. Mamdani, who is eager to be a formidable force for renters. The bankruptcy case has become a symbol of the city’s broader housing woes, and how difficult they may be to solve.
Many tenants in rent-stabilized buildings, similar to those at issue in the Pinnacle bankruptcy, are increasingly complaining about deteriorating conditions that they blame on profit-hungry property owners.
But landlords often blame poor maintenance on city and state officials, who have limited the ways that building owners can raise rents in rent-stabilized apartments.
In court papers, city officials said little was known about Summit, which is part of a bigger Israeli company, and how it might operate the buildings, should it take ownership. The company says on its website that it owns 90 residential buildings in the city, in addition to malls and retail space elsewhere in the United States.
A 2025 document filed by Summit with the Tel Aviv Stock Exchange lists at least some of the properties it says it has in New York. City records show more than 780 open violations in a dozen Summit properties, including more than 290 considered “immediately hazardous.”
A Summit spokesman said the buildings were older and that the violations were being addressed.
Mr. Mamdani now must find a way through the dispute, while also trying to deliver on one of his key campaign pledges: freezing rents in rent-stabilized apartments. Some property owners and housing experts say that such a move could make conditions in many rent-stabilized buildings even worse.
On Thursday, as the auction was taking place, about 30 Pinnacle tenants gathered outside Summit’s Midtown Manhattan offices and expressed concerns about the company that may soon own their apartments.
“We hope the judge blocks the sale,” said Susan Rinkunas, 41, who lives in the Brooklyn building Mr. Mamdani visited, at 85 Clarkson Avenue.
Tenants at the property told The New York Times that pipes were rusting, kitchen floors were cracked and at least one chunk of ceiling had fallen on a child.
Jorge Miranda, 58, said he had lived since 1978 in an apartment building owned by Pinnacle and had watched conditions deteriorate. He said he expected it to get worse.
“It’s a shame we can’t make the decision of who’s going to run our buildings,” Mr. Miranda said. “It’s a shame there’s no oversight in government to hold these landlords accountable.”
Jackie Waddy, 72, moved in to her apartment in a Hell’s Kitchen building owned by Pinnacle in 1979. Since then, she said, parts of her ceiling had fallen down, her belongings had been soaked as water poured through leaks in the ceiling and the building had been regularly infested with cockroaches and carpenter ants.
Ms. Waddy said if the sale to Summit did go through she was counting on the company to make a lasting change.
“They need to step up to the plate and take care of our buildings,” she said.
If Summit takes over, it would be investing in apartment buildings that city officials say have many problems and limited financial upside — while apparently having issues at its own properties to deal with.
Violations at apartments in one Pinnacle building in Manhattan describe mouse and cockroach infestations. A violation at a Queens building cites problems with a window leading to a fire escape. Other violations mention broken floors and counter tops, faulty faucets and leaky pipes.
A Summit spokesman said the Pinnacle properties would be more affordable to run and maintain after the debt attached to the buildings is significantly reduced through the bankruptcy process.
Some Summit properties are managed by a company called Denali Management, which has been criticized by tenant advocates over conditions in other buildings. The connection between Summit and Denali was reported earlier by the real estate trade publication Bisnow.
Denali said in a statement that “aging buildings cannot be sustainably operated when rents are artificially capped below the cost of basic operations and maintenance,” and that housing providers were often vilified unfairly.
The Summit spokesman said that Denali would not be involved in managing the Pinnacle apartments.
Miles G. Cohen contributed reporting, and Georgia Gee contributed research.
Mihir Zaveri covers housing in the New York City region for The Times.
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