Walk through the offices of Capstone Development Corp. in Birmingham, Ala., and the baseball hats lining the hallways are hard to miss. Pick a college–Winthrop, Duke University, or Arizona State, for instance–and you just might see its colors on the walls. That's because each time Capstone representatives visit a new campus, they buy a hat, hanging it in the office as either a mark of success or a goal to be achieved: Company president Michael Mouron would like to build or manage on every campus whose college hat graces Capstone's walls.

In fact, Mouron thinks Capstone should probably get every student housing contract available. "I go home after I bid on a job and I tell my wife, 'We should really get that contract,'" he says. "And she also says, 'Mouron, you always say that.' And I do, because I think we should get every student housing job."

Mouron founded Capstone in 1990, first building and managing off campus and then, in 1996, moving on campus. And he's passionate about the company's capabilities. The reason he's so confident: a team of devoted employees, including a group of senior managers who have been with Mouron since Capstone's beginnings. Their loyalty is as intense as their devotion to their alma maters. Given that many of them graduated from the University of Alabama and Auburn University, where loyalty to school follows closely behind allegiance to God and family, that's no small accomplishment. "Mike has built a loyal team of people with virtually no turnover in key employee ranks," says Chris Murvin, chairman of White Swan Advisors in Orlando. A close friend of Mouron, Murvin has worked on a number of Capstone deals.

President Michael Mouron started Capstone Development Corp in 1990.
President Michael Mouron started Capstone Development Corp in 1990.

Mouron drew on that loyalty to build Capstone, a company that has built more than 36,000 beds through its advanced financing techniques and integrated approach to student housing property management. It also does rehabs on campus. This has led to happy customers at a number of colleges around the country. "Capstone is very customer oriented," says Virginia Gauld, vice president of student affairs at the University of Alabama-Birmingham, where Capstone built a residence hall. "They have really worked aggressively and caringly to make sure they were meeting our expectations as an institution. They were a very good partner."

Early Lessons Thirty years ago, student housing wasn't even a blip on the radar screen for Mouron, who graduated from the University of Alabama in 1972. After a stint as an accountant at Price Waterhouse and some dabbling in real estate, Mouron began working in development for a Montgomery, Ala. construction firm whose sister firm soon began developing "kiddie condos"–condominiums near campuses designed as housing for college students and investments for their parents.

When Mouron moved in 1985 to development firm Polar BEK in Birmingham to run its development arm, he took the student housing idea with him–but added a twist. Instead of building condos, which were difficult to finance because banks often wanted 100 percent of the units sold before construction began, Mouron focused on apartments. Some industry observers say Mouron led the way by building private apartments near college campuses. "He pioneered the idea of large student-specific multifamily properties back in the 1980s," says Rich Humphrey, a vice president and deputy chief underwriter with Collateral Mortgage Capital LLC in Birmingham.

From 1985 to 1990, Mouron built student apartments for Polar BEK. But the company wanted to focus on commercial development, so he decided to cash out his profit-sharing plan and invest the money into his own student housing venture. Mouron started the company, which was named Capstone, with coworkers Jimmy Goodson, John Vawter, and Claire Davis. Mouron controlled the company; the other three shared in the profits. (Two of the original founders are still with Capstone: Goodson now heads the company's Northeastern office and Vawter leads its California office.)

Capstone started slowly, building two properties in 1990 and one in 1991. But by the end of the decade, Capstone had built or managed 22 properties in 19 college markets. To develop these deals, the company relied on banks to finance about 75 percent of the cost. The other 25 percent came from partners, including corporations, institutions, and private individuals, such as former basketball star and Auburn alum Charles Barkley. The company generally holds these properties and puts them on long-term mortgages.