Building Tenure While the property management ranks at Capstone are filled with younger people close to college life, the senior-level group is filled with experience. As the company has added senior development positions, the people filling those positions have not left. “Capstone staff brings a professionalism that’s hard to beat,” says Pat Mielke, assistant vice president of student affairs for the University of Maryland in College Park. “They know their business and have been successful.”
Mouron keeps these senior company leaders happy by challenging them, paying them well, and giving them opportunities to advance without stepping on each other. “You don’t have to crawl over someone to get ahead,” Mouron says. “If people show the ability to do more than they’re given, with all the prospects we have, we just work to expand the base of the pyramid.”
Mouron would like nothing more to expand that pyramid by than by building at every one of the colleges and universities represented on his hallway walls. That’s not easy as other student housing developers adopt the foundation model and compete with Capstone. But Mouron isn’t ready to concede any campus to his competitors. “If bigger developers attempt to move into our market niche, they would find us like a mongoose,” he says. “We may not be big, but we’re wiry, mean, quick, and agile.”
Rehab Craze It’s no secret that college dormitories are aging. “Many housing operations around the country were built out in the early ’50s through ’60s to accommodate the increased numbers of students attending colleges,” says Pat Mielke, assistant vice president of student affairs for the University of Maryland in College Park.
“These facilities are approaching 50 years old or the end of their useful life and need major systems upgrades or new facilities.”– But in many cases, these structures have a rich history or great architectural value, opening a new rehab and renovation market for multifamily companies such as Capstone Development Corp. Rehabs, of course, do involve more pitfalls than a new development. One of the main problems: the unpredictable costs.
“With new construction, you know how much a new wall costs,” says Michael Mouron, president of Capstone. “But with older walls, you don’t know where there’s plumbing and electrical wiring. You also don’t know if there’s asbestos in there.”
If unwanted surprises pop up, costs can quickly rise in rehabs. Most Capstone projects come with a reserve fund to cover these expenses. But if a project goes over that, the extra money comes from Capstone’s developer fees and then from the company’s own pockets.
“To the school, the project never exceeds budget,” Mouron says.
Capstone at a Glance
- What: Developer and manager of on-campus and off-campus student housing.
- President: Mike Mouron
- Headquarters: Birmingham, Ala.
- Markets: National markets including College Park, Md., Birmingham, Ala., and Kansas City, Mo.
- Founded: 1990
- Employees: 340
- Beds Built in 2003: 3,997
- Beds in the Pipeline: 8,082
- Expected Growth in Units Within Five Years: Approximately 22,500
