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Developers in the Portland area are tackling new challenges as they’re increasingly being asked by clients to renovate and upgrade existing buildings 鈥� often warehouses, and sometimes traditional office spaces 鈥� into creative, flexible office spaces.

鈥淭here are myriad challenges working with old buildings,鈥� said Noel Johnson, vice president at Vancouver-based development firm Killian Pacific. 鈥淓specially with respect to historic rehabilitation of old spaces, you never know what the challenges, and the budget, are going to be.鈥�

With Portland’s office vacancy rate at a record low of 9.6 percent 鈥� the second-lowest total market vacancy in the country, behind New York’s 9.5 percent and ahead of San Francisco’s 9.8 percent 鈥� rents on the rise and opportunities for new construction limited, adaptive reuse is under way all over the city.

鈥淲e haven’t had anyone ask for traditional office space in years,鈥� Johnson said. 鈥淭here’s just not a need for more vanilla office space in Portland.鈥�

One of Killian Pacific’s buildings featuring adaptive reuse, at 1510 Technology Center on S.E. Water Ave., is just weeks from opening. Killian Pacific purchased the building from Portland General Electric and, in a $4.5 million renovation, stripped it to its shell for reuse as headquarters for an expanding local company, Viewpoint Construction Software.

The new tenant wanted the 106-year-old building gutted and completely transformed; the former machine and maintenance shop for PGE 鈥� complete with highly-toxic chemicals 鈥� will soon house 150 tech workers after workers spent more than a year decontaminating and rebuilding. Johnson said tackling the unknowns 鈥� like retrofitting heating and cooling systems or removing contaminated concrete flooring 鈥� requires a certain type of developer.

鈥淭he challenge in Portland is finding a developer who’s small and nimble enough to be flexible when challenges arise, but who’s also big enough to be capable to handle the changes in the budget those challenges bring,鈥� he said. 鈥淲e’re at an advantage because we’re local and small enough to be flexible, but big enough that we can handle the risk.鈥�

Portland-based YBA Architects is working on a $32 million adaptive reuse project at a Northwest Portland property that, when complete, will incorporate about 50 percent of the former tilt-up warehouse in a new seven-story, mixed-use building called Q21.

鈥淵ou just can’t replicate the features in those old buildings,鈥� said YBA Architects Principal Alex Yale, Q21’s lead designer. 鈥淧eople don’t want hermetically sealed offices anymore; they want open spaces with shuffleboard and foosball tables.鈥�

A former warehouse at Northwest Overton Street and 17th Avenue is scheduled for an adaptive reuse similar to what Johnson and Yale described.

When Rose City Awning and Flag LLC was purchased and moved, its former building was renovated into creative office space.

The 55-year-old, 25,000-square-foot warehouse has been redesigned by Doug Skidmore with Portland-based Beebe Skidmore Architects. Skidmore has applied to the Portland Bureau of Development Services for a design review hearing to approve extensive alterations.

Design information submitted to the city indicates the renovations will include separating the three interior spaces into five retail or office areas, creating a common lobby and semi-private courtyard for tenants, and punching out new windows.

Skidmore said he couldn’t talk about the owner’s plans for the new spaces, but Johnson said the concept is one that Portland developers can expect to continue to hear requests for.

鈥淧eople just aren’t looking to move into a place because of its prestige,鈥� he said. 鈥淭hey want to create someplace their employees want to be.鈥�

Yale said the Portland Made movement 鈥� a collective of Portland-based designers, artists, retailer and manufacturers focused on fostering local relationships between businesses 鈥� is changing the way designers and developers are thinking of office space.

鈥淚t’s taken a while to change people’s perception of what a work space needs to be,鈥� Yale said. 鈥淏ut we’re going to keep seeing these renovations of old buildings that include flexible office concepts with caf茅s and a lot of shared space.鈥�