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Pacific Northwest real estate firm Capstone Partners and joint venture partner Premier Properties U.S.A. have acquired two blocks in the Central Eastside Industrial District for a creative office project to be completed later this year.

The two existing buildings, known as the Custom Blocks, will hold 72,000 square feet of office space that will be marketed to creative and technology firms. The parcels are bound by Southeast Madison and Salmon streets, and Ninth and 10th avenues.

Capstone and Premier are looking to do the project quickly, with construction beginning this month and tenancy available by November.

The south block holds the larger of the two buildings, with 48,804 rentable square feet. The north block’s building has 22,790 rentable square feet. The north block project will not involve the space used by New Deal Distillery, which will remain.

Capstone co-founder Chris Nelson said job growth and migration into Portland continue to support creative-office renovations.

鈥淭he demand fundamentals right now are very strong,鈥� he said. 鈥淲e also feel the size of the project in terms of the square footage we’ll be delivering is manageable and modest.鈥�

Part of the attraction of the project, Nelson said, is that it can be completed this year. Projects scheduled for completion later face more uncertainty, he explained.

鈥淭he economic cycle is a little bit long in the tooth,鈥� he said. 鈥淲e’re anxious to get the buildings to the market as soon as possible.鈥�

The Custom Blocks will add to the creative-office renaissance taking place in the Central Eastside. Developers including Killian Pacific and Beam Development have found a ready market for modern renovations of old industrial spaces. Developers continue to identify parcels ripe for redevelopment, such as the former Oregonian offices on Broadway and the Towne Storage building near the Burnside Bridge.

A recent analysis by Jones Lange LaSalle found creative-office spaces attracted lease rates 15 to 20 percent higher than comparable Class A spaces.

鈥淭enants 鈥� particularly creative and technology-type tenants 鈥� are looking for buildings with an authenticity and history and story to them,鈥� Nelson said. These buildings in particular, he said, have 鈥渢hose kinds of characteristics and intrinsics.鈥�

The buildings, formerly home to Custom Stamping and Manufacturing Co., feature exposed wooden beams, 18-foot ceilings and industrial windows. The renovation involves a full seismic retrofit.

The Custom Blocks is the fourth project with Capstone and Premier 鈥� a domestic subsidiary of a Swiss-based investment firm 鈥� as partners. They previously worked together on the Cannery Row Apartments in Sherwood, the Attwell off Main Apartments in Tigard and the Burnside 26 apartment complex in East Portland.

Peter Grimm of Scott | Edwards Architecture is the lead designer of the project. Fortis Construction Inc. is serving as general contractor.

Cushman & Wakefield‘s Portland office, led by senior director Brad Carnese, is marketing the Custom Blocks. Nelson said the property had already attracted interest from potential tenants.