The P3 Approach

The P3 Approach

Capstone’s approach to working with colleges and universities in a P3, or public private partnership centers around collaboration and flexibility. Capstone Development Partners’ business model focuses on on-campus facilities, partnering directly with colleges and universities in public private partnerships to help campuses meet their housing goals and objectives. Our unique on-campus focus allows us to 1) better address the specific student housing and campus facilities needs and objectives a university has identified, 2) communicate effectively with university stakeholders to improve project outcomes, and 3) dedicate our internal project teams to fewer projects in order to provide higher quality projects accompanied by a higher level of customer service throughout the development process. Read more about our company’s mission statement, approach to conducting business and guiding principles.

In our collaborative approach to working with a university partner, we encourage the active involvement of University stakeholders at every step in the P3 process of design, pre-development and construction. Each of our projects begins with intensive exploration regarding the current practices on campus as well as the goals and objectives of the University, both from a facilities perspective as well as from an academic and enrollment perspective. This ensures an alignment of interests and the achievement of the most important goals and objectives of the public private partnership.


Project financing

Private Equity

Capstone has earned a market reputation for being an innovator and creator of transaction structures.  We have been the originator of financing plans that have literally transformed the industry. In 2013, spurred by an economic shift and resultant ambiguity regarding rating agency treatment of P3 projects on campus, Capstone crafted a beneficial project structure that allows colleges and universities to determine what elements are the most important to them and then, with CDP, craft a privately owned, conventionally financed transaction that doesn’t require the institution to relinquish control of either the property (ground) or the operations for generations to come. We call this innovative approach P3+. P3+ allows the attributes that universities have typically found most important to be realized in a transaction while at the same time allowing for flexibility in the future, acknowledging that the situation on a campus today may not be the situation on that same campus 20, 10 or even 5 years from now.

In the crafting of P3+ our focus is:

  • Shortening the term of the transaction relative to other equity models,
  • Substantial equity participation (35-100%),
  • Overall cost of capital at or below conventionally financed market rates,
  • Operational / Management Flexibility, and
  • Beneficial reversion / buy-out provisions.

Recent P3+ Financings


Tax-Exempt Financing

CDP predecessor, Capstone Development Corporation, pioneered tax-exempt financing for on-campus student housing in the mid-1990’s and it has since become a staple in on-campus P3 housing development nationwide. This structure involves vesting ownership of the improvements in a qualified 501c(3) non-profit owner and financing up to 100% of the development costs through the non-profit owner with fixed-rate, investment-grade rated and publicly sold tax-exempt revenue bonds, non-recourse to the University.  This tax-exempt financing structure can result in minimal to zero impact to a University’s balance sheet and credit rating while providing the University the ability to maintain a high degree of control relative to the project design and ongoing operations, resulting in a seamless housing experience for its students.

Recent Tax-Exempt Financings