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Portland’s office market is poised to grow, especially along North Williams Avenue.

“There’s very little office (space) and very little new office space that has been built in that area for some time,” said Lucy Corbett, a project manager for Kaiser Group Inc. “The majority of what’s being built now is residential. So we’re taking advantage of that opportunity to differentiate ourselves and add something to the market that is currently missing.”

Kaiser Group – led by Portland architect Ben Kaiser – recently broke ground on an uber-efficient, speculative office building as part of a development along North Fremont Street, between Williams and Vancouver avenues. The Radiator Building and two other buildings will total approximately 115,000 square feet of office and retail at .

Throughout the Portland market, office vacancy rates are down and rents are up. Kaiser Group is hoping to take advantage on North Williams, and build a green gateway.

“We hope that by adding office space it will allow people living in the area to work closer to home, and hopefully be able to walk to work and bike to work, and (meet) all those sustainability goals that a lot of us are trying to achieve – including the city of Portland,” Corbett said.

More than 600 new residential units are planned or under construction along the mile-long stretch between Cook and Going streets. Meanwhile, the bike lane along North Williams is already crowded at rush hour. Corbett has already secured a lease for 16,000 square feet of the 36,000-square-foot Radiator Building to the Kartini Clinic, a treatment facility for children’s eating disorders.

In addition to the Radiator, One North consists of the four-story, 43,400-square-foot East Building, and the five-story, 35,600-square-foot West Building. All are “pushing the envelope” in energy efficiency by employing passive house features like super-insulated exterior walls and triple-paned windows. Notably, the development will reuse waste heat from the New Seasons Market across the street.

Green building certifications won’t be sought for the buildings; however, Nels Gabbert, who is developing the East and West buildings with property owner Eric Lemelson, said the hope is that they will consume only 50 percent of the energy used in standard baseline buildings. Lemelson himself recently built a passive house on his farm in Carlton.

Kaiser sold the land for the East and West buildings to Lemelson in 2011 for $1.65 million, and then purchased the Radiator property in 2012 for $500,000, according to records obtained from First American Title Insurance.

The Radiator Building will have a geometric concrete facade interspersed with horizontal timber beams. The East and West buildings will feature sweeping “S” curves and trapezoidal window wells.

Gabbert declined to share the project’s budget, but said the cost to employ its passive features wouldn’t be prohibitive. He’s seeking traditional financing and talking with a major lender. The objective, he said, is to show that significant energy efficiency is obtainable without spending a fortune.

Another objective is building a community.

“It’s important to know that historically, as a neighborhood, it had a long dry spell and now (growth is) kind of coming in a tsunami,” Gabbert said. “One of the things that we’ve really been focusing on is pulling out the vibrancy in that community that already exists, and giving (the neighborhood) some new opportunities for expressing it.”

So, the development team has been working closely with neighbors to program a 14,200-square-foot community courtyard that will be open to the public. They envision it hosting events like movies in the park and picnics.

The Radiator Building is being developed and built by Kaiser Group, and designed by Path Architecture. The East and West buildings are being developed by Karuna Properties II LLC, Nels Gabbert LLC and Owen Gabbert LLC. The general contractor is R&H Construction Co., and the design firm is Holst Architecture. Lango Hansen is performing the landscaping.

Market trends bode well for the project. According to Colliers’ third-quarter report, demand for office space is growing as the local job market improves – Portland’s unemployment rate, at about 7.3 percent, has dropped 50 basis points over the past year and 400 basis points since the height of the recession in 2009.

The result is that office absorption has picked up in Portland – vacancy has dropped 120 basis points over the past year to 10.3 percent. The lowest vacancy was on the Willamette River’s east side, at 7 percent – 2.4 points lower than in the Central Business District.

Absorption did cool a bit for the first time in 14 quarters, but Colliers reported that was mostly fueled by the Edith Green-Wendell Wyatt building reopening, and the subsequent relocation of numerous government agencies inside. Nevertheless, a Unico Properties-led institutional fund purchased the Commonwealth Building in downtown Portland for $41 million.

At One North, Gabbert has leased approximately 40,000 square feet to Portland-based digital creative agency Instrument; he also has letters of intent from two other businesses. Ground could be broken on the East and West buildings next spring, he said.

“We made it complex for ourselves,” Gabbert said. “We have a relationship with Ben (Kaiser and) with the neighborhood. We have the commitment to the courtyard, to pushing the energy envelope, and a commitment to pushing an interesting design. It’s a complicated and wonderful project … If we can continue to make good headway on it, it will be a distinctive effort.”