UNIVERSITY APARTMENTS near Duke University in Durham, N.C., was originally built in 1935 with red brick, decorative stucco, hardwood floors, large windows, decorative trim, and 9-foot ceilings. When Birmingham, Ala.–based Capstone Cos. bought the property, made up of 13 contiguous buildings totaling 114 units and 192 beds, these original features remained.

“You can tell where they had individual craftsmen on diff erent ends of the building,” says Rick Hansen , the executive vice president at Capstone who worked on the project. “That created some real appeal."

But as any property built in the 1930s would, University Apartments needed updating. So Capstone added a pool, new decks, and outdoor fireplaces within the footprint of the property while enhancing the landscaping, making parking more available and accessible, and improving security. The new amenities were added in an attempt to transform the project from a simple housing complex into a student community providing an inviting lifestyle.

Inside, the developer opened up the floor plans, modernized the units, and made them more effi- cient—without sacrificing historical detail. The firm added washers, dryers, and dishwashers, as well as cable and Internet connections and crown molding; replaced all the cabinets; and upgraded the finishes by adding granite countertops in the kitchen and refinishing the hardwood floors.

Capstone also cut energy costs by installing high-efficiency HVAC systems; energy-efficient appliances and windows; and low-flow showerheads, all while protecting the historic nature of the 76-year-old property and meeting current codes, relocating residents, and completing the renovation on time. The resulting property has seen significant success, with Capstone increasing gross rental revenue by 30 percent.

“I’ve been in the acquisition and renovation business for 25 years, and I’ve never acquired a property with so much inherent charm,” Hansen says. “We felt it was absolutely essential to mix the old with the new and maintain [the original building’s] character. I actually think we enhanced it."