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Portland’s Central Business District is poised to gain more than 176,000 square feet of office space in 2015 via just one 30-story building.

But the restart of construction of Park Avenue West isn’t necessarily a good barometer for the local office market, according to Greg Goodman, co-president of Downtown Development Group.

“It’s not indicative because it is (involving) someone that decided to pay above market rent,” he said. “It wasn’t a market-driven deal. You had a tenant, just like ZGF a while back, who said, ‘You know what? There’s value to me to be in a new building and I’m willing to pay above market to be in a new building.’ ”

Stoel Rives will occupy the top nine floors, or approximately 131,000 square feet, of Park Avenue West when it opens. ZGF Architects made a similar move in 2010, when Twelve | West opened.

However, when Stoel Rives relocates, it will leave behind approximately 160,000 square feet in the Standard Insurance Center – a move that Goodman said will add to the approximately 1.25 million square feet of Class A space currently available in the Portland market.

According to Goodman’s calculations, that is 14 times the net Class A absorption over the past five years. And while the office market is improving along with the general economy, he said financial feasibility will be challenging for new developments in Portland.

“You can be in a Class A office space downtown for $26.50 per square foot,” Goodman said. “… To build a new building you need about $38 per square foot.”

Office rents have been growing, but not nearly enough to justify the expense of new construction. While rents from a year ago were up 38 cents overall, and 50 cents in the Central Business District, they were down slightly from the second quarter across the board, according to a recent report from Colliers International. The report attributed much of that decline to the large blocks of space left behind after various government agencies relocated to the Edith Green-Wendell Wyatt Federal Building.

Rents are expected to go back up once that space is absorbed, but that could take a while because many firms are choosing to condense – Stoel Rives, for example, will occupy 29,000 fewer square feet in Park Avenue West than in the Standard Insurance Center. One exception, however, is in the creative office industry.

“It feels like everybody is talking about creative office space, and this different kind of environment from traditional Class A,” said Jill Sherman, a vice president of development for Gerding Edlen. “(It’s) not just creative firms anymore, but even law firms and accounting firms in terms of being able to attract their employees. So (an opportunity might be) how maybe new construction might be able to create that aesthetic … because there are only so many old warehouses that can be renovated.”

Gerding Edlen is drafting plans for a mixed-use housing, retail and creative office development in Old Town Chinatown. Another nine-story office development was proposed recently in the Pearl District, though few details are available yet. Sherman said banks are still unwilling to lend for speculative office projects without a tenant lined up.

Nevertheless, demand for creative office space is strong, and some companies have taken to repositioning their Class A spaces as creative ones. Unico Properties, for instance, has used the strategy to attract four large tech companies to its U.S. Bancorp Tower.

Additionally, while the overall vacancy rate for office space in Portland was 10.3 percent in the third quarter – an increase of 10 basis points over the previous quarter – Melvin Mark CEO Jim Mark estimates vacancy for creative office space is less than 5 percent. His company recently partnered with Becker Capital Management to acquire a 65,000-square-foot creative office building in Northwest Portland for $12.3 million.

“The opportunity for creative spaces are few and far between, especially in the Pearl District, and to get an opportunity for a building like this … they just don’t come along very often,” Mark said.

Few available downtown core spaces – especially for creative use – are larger than 20,000 square feet, Mark said. But several creative office projects are in the works.

One is Guerrilla Development‘s approximately 35,000-square-foot Dumbbell building planned on East Burnside Street. Also, Beam Development reopened its remodeled 97,000-square-foot Convention Plaza building nearby. Other examples are farther from downtown.

“They’re doing this out in Kruse Way now,” Mark said. “Who would have thought that? That’s about as traditional an office (market) as is out there.”

Meanwhile, Goodman is watching employment and hoping for improvement. New construction of office space may not be imminent, but he said increased investment activity indicates demand is growing.

Just this month the California State Teacher’s Retirement System purchased Regence BlueCross BlueShield of Oregon‘s two downtown office buildings at First and Main. Kevin Shannon, vice chairman and managing director for CBRE in El Segundo, Calif., brokered that deal and said Regence planned to continue to lease two-thirds of the approximately 296,000 square feet. The remainder will become creative office space, which Shannon said factored heavily in the sale. CalSTRS isn’t reporting the sales price, but public records value the property at approximately $49.5 million.

“We had over a dozen bids,” Shannon said. “Most capital is looking at repositioning creative, so many (competing buyers) picked up on this as an opportunity for that strategy.”

Meanwhile, TMT Development and its president, Vanessa Sturgeon, are moving ahead with Park Avenue West. Mark said a few of his firm’s clients are looking at its office space.

“The buzz I’m hearing is pretty positive,” he said. “I think Vanessa’s timing is excellent. I think it’s going to prove to be very successful.”