First Street Companies has closed on the acquisition of 257 Main Street, a 1.7-acre development site in the Village of Hempstead, New York.  The planned development will feature 246 residential units, ground-floor retail space and a two-level parking garage.   The project will aim to contribute to the Village of Hempstead’s ongoing revitalization of its Downtown. 

The company was founded by Rashid Walker, a real estate industry veteran, after stints at some of the largest real estate and asset management firms in the country; including AvalonBay, JP Morgan Asset Management and Wood Partners.  The Hempstead project will be the first project developed under the First Street banner.  Recently, First Street collaborated with Grubb Properties, a Charlotte, NC based development company, to develop Link Apartments® QPN, a 417-unit project in Long Island City, NY.  First Street is also partnering with Grubb Properties to develop a  462-unit project at 8 Carlisle Street in Lower Manhattan.

 First Street Companies specializes in developing multifamily communities in high-barrier-to-entry markets in the New York City metropolitan area, and Long Island certainly fits the bill.  Long Island, known for its single-family homes, has fewer multifamily housing options than other suburbs near New York City. In fact, single-family housing can be built on 89% of Long Island’s land area, excluding environmentally protected zones.  But housing for three families or more, including apartment buildings, is allowed on just 3.6% of land. That means apartment buildings are prohibited on more than 96% of the zoned land on Long Island.

That means that most developers not only have to contend with very high prices for development sites but also navigate a notoriously time intensive and complex process for obtaining re-entitlements and tax abatements.  Walker elaborated. “On Long Island, the village may control zoning. That said, you cannot build successful projects on Long Island in most places without some tax abatement. While the village of Hempstead does control its zoning, it does not control its tax abatement. You may spend months, if not years, which tends to be the case on Long Island, trying to get your development approvals.”

Walker’s observation is not academic and hints at the level of resolve required to succeed in the market. He began working on 257 Main Street in 2015, while leading the region at a former employer, and has persevered through mayoral changes and NIMBYism in the Village of Hempstead. .  “Opportunities to develop projects of this scale on Long Island are rare, so the challenges faced by multifamily developers are worth it if they can make it through the very rough waters.  On the other side, there is strong demand from renters and institutional investors.”

Then his employer exited the NY market. Walker was not deterred. He continued his pursuit via subsequent employers, who looked favorably on the project, but also found the approval process to be too painstakingly difficult to see the deal through to completion. Ultimately, he partnered with a larger developer who acquired the site. Despite various changes to local political leadership, evolving zoning priorities, as well as economic pressures and time delays created by Covid, Walker and his partner successfully navigated these challenges, ultimately securing the key approvals, including a 25-year PILOT tax abatement.

Later, when unforeseen external factors created an opportunity to buy his partner out and develop the site under his own banner, he jumped at the opportunity, launching First Street. The company partnered with investment firm Walker & Co.(not related) and secured acquisition funding from lender H Equities, run by Elliot Horowitz to acquire 100% of the property. Groundbreaking is now slated for Q4 2025. For Mr. Walker, the deal represents a homecoming of sorts. Raised on Long Island, he had long aspired to leverage his local understanding of Hempstead’s  housing needs  with his extensive real estate expertise. But this deal represents a culmination of not just his long-fought vision, but many others on the island. “This is my hometown, so clearly, I’m deeply committed to developing a successful project. But I’m not alone. There have been so many supportive friends and advocates, including the local administration, my prior, and current partners, investors, etc. My goal is not to be the first and last developer that looks like me on Long Island doing developments of this scale. I hope that there will be many more, and watching the development of this project, despite the challenges, will be important catalyst towards achieving that.”