The Living Building Challenge is generally considered one of the top green building certification programs in terms of both prestige and rigor. In short, that’s why Mahlum Architects chose to follow that path for its new office in inner Southeast Portland.

Now, Mahlum selected for its new home an existing warehouse that had been converted into office space. There was no chance for the project team to obtain full Living Building certification from the International Living Future Institute.

However, one of the challenge’s seven “petals” – materials – appeared to be within reach. That is where Mahlum chose to focus.

“Petal certification has been around since the beginning of the standard, but it’s allowed (the ILFI) to scale the program,” said Jay Hindmarsh, a Seattle-based Mahlum associate principal and head of the Living Building Challenge portion of the renovation, which covered a 7,500-square-foot office space. “The materials petal is insanely difficult, but for Mahlum it was a way for us to embrace our values around walking the talk. We’ve been advocating for our clients about better materials and lower-carbon materials, and we looked at each other and said our new space should be beautiful but also should be super healthy and have a low-carbon footprint.”

Mahlum’s new space is located in the Custom Blocks‘ south building, at 1380 S.E. Ninth Ave. The single-level building was at one time a metal stamping shop, but was gutted, renovated and seismically retrofitted.

“We were trying to find a place in Portland that would allow us to be near clients and the community,” Hindmarsh said. “The interesting thing about the space is that it had just fairly recently gotten a core and shell upgrade, but in a lot of ways there was a great historic shell there, and it was interesting to see a space where we could envision quantifying all materials we were bringing in.”

The space could not be retrofitted to achieve net-zero energy or water use. But that wasn’t a problem for either Mahlum.

“The most sustainable buildings are the ones that are already built,” Hindmarsh said, paraphrasing Carl Elefante, a past American Institute of Architects president. “Aside from cost issues, clearly we were going to be renovating a space. This concept of net-zero material impacts is where a renovation typology suits itself to the materials petal. We’re not touching the enclosure, so there was a chance for us to not focus on new construction type components and try to promote investment in local economy.”

Slightly more than 50 percent of the products came from within 500 kilometers of the site, with some of the biggest gains coming from sourcing wood salvaged from the existing building. Also, by working with Salvage Works, a Portland supplier of reclaimed wood products, the project team used lumber originally used to build Fort Vancouver to create wall cladding, display cases and more. Such accents complement the existing heavy timber in the former warehouse, as well as a host of Forest Stewardship Council-certified wood products sourced by another Portland firm, Sustainable Northwest Wood. The latter were mainly plywood and lumber used to frame the new space.

“There’s a threshold for salvage products and we vastly exceeded that,” Hindmarsh said. “This embraces the philosophy of not having superfluous materials. Materials should be true to themselves, especially with the Living Building Challenge. If you’re adding in and designing in things that need to be vetted you’re making things hard for yourself.”

Working under Living Building Challenge version 3.1, Mahlum staff vetted over 350 products and materials for red list compliance. One that fit the bill was EcoSmart drywall manufactured by USG, which is known for its popular Sheetrock brand.

“We had never used this one, as it has just come on the market,” Hindmarsh said. “But it lists a 20 percent reduction in carbon emissions for the drywall, and it’s also made in Rainier (Oregon), so it was win-win for all.”

Portland’s Quartertwenty crafted custom workstations to serve Mahlum’s 50-plus employees in the new office.

“We had to catalog all the pieces of wood and steel, the nuts and bolts, the coating on the steel, the weight,” Hindmarsh said. “And getting that done was a huge lift. We were able to get something that met all our design and ergonomic needs and ended up being LBC compliant.”

Finally, waste diversion is required for certification; debris can’t simply be carted to the landfill. In the end, however, the project team managed to recycle close to 95 percent of waste materials generated on site.

General contractor Perlo Construction finished the project last year. Mahlum moved in this past November, and petal certification was achieved on March 17.

It was a very valuable learning experience for the Mahlum team, Hindmarsh said.

“I think my recommendation would be do your homework and understand what it will take,” he said. “It is a great opportunity for architecture firms and design firms to really put their process in a petri dish and look at it and their materials library and reflect on their practices.”

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Capstone Partners‘ Custom Blocks project has gained its first tenant.

Archrival, an advertising agency with a focus on youth culture, will lease 5,000 square feet at the southwest corner of the development located at 1350 S.E. 10th Ave. in Portland’s Central Eastside Industrial District.

Custom Blocks encompasses 72,000 square feet of commercial space formed from eight separate buildings. Capstone Partners hired Scott | Edwards Architecture to design a renovation to join the structures on two blocks.

Core and shell completion is on track for late February or early March.

The North Block contains 22,790 rentable square feet; spaces range from 1,200 square feet to 10,000 square feet, including 7,111 square feet for a brewery, production kitchen or event space.

The South Block is 48,804 square feet, with spaces available from approximately 9,000 square feet to 23,000 square feet.

Capstone and Premium Property USA are partners in the joint venture.

Rob Moneyhan of Urban Works Real Estate represented Archrival in the lease negotiations. Brad Carnese, Mark Carnese and Doug Deurwaarder of Cushman & Wakefield represented Capstone and Premium Property USA.

Archrival has worked with advertisers such as Red Bull and Adidas. The agency currently operates out of Washington High School and expects to move to Custom Blocks by July, according to a news release.

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Tucked among industrial buildings in the Central Eastside, the Custom Blocks from Capstone Partners are due to be delivered in late November.

The development is an adaptive reuse of two buildings stitched together from two blocks and multiple pre-existing structures built in the 1940s and ’50s. The property was most recently home to Custom Stamping and Manufacturing Co.

In all, the development includes 72,000 square feet of creative office space targeted at tech firms or similar tenants – save for about 3,000 square feet of retail space envisioned as a brewpub.

The south block is the larger of the two properties, with 48,804 rentable square feet. The north block has 22,790 rentable square feet.

The blocks are bound by Southeast Madison and Salmon streets, and Ninth and 10th avenues.

Inside the south block building, massive wooden bow trusses support the roof. Capstone opted to keep the Douglas fir timber in place, sandblasting it to revitalize the wood’s appearance.

Large windows were removed and will be replaced with modern and energy-efficient windows that reflect the vintage industrial aesthetic. A full sprinkler system was installed.

Capstone’s renovation involves full seismic upgrades on both blocks. The developer is keeping in place some of the interior walls that were reinforced with rebar.

Capstone secured a conditional-use permit to allow for office space in the industrial neighborhood.

“The change of use triggered a full seismic upgrade,” said Chris Nelson, co-founder of Capstone Partners.

Nelson said he wants to give each tenant the chance to customize their spaces, including with murals instead of exterior signage if they choose.

A roof deck on the south block building will have views of downtown, Mount Hood and other landmarks. A smaller, cube-shaped glass office will intrude from the second story.

Peter Grimm, principal at Scott | Edwards Architecture, was the designer. He said the adaptive reuse project involved “getting out of the way, and letting the building tell its own story.”

“There’s just a wow factor that you can’t fake,” he said. “It’s there; it’s baked into the original architecture.”

Capstone purchased a massive industrial stamping machine from Custom Stamping. The machine – nearly a story tall – will decorate the south block building.

Creative-office projects have sprung up in the Central Eastside, often serving as a boutique alternative to pricey downtown offices. Developers such as Beam Development and Killian Pacific have specialized in finding large, underutilized industrial buildings to transform into office properties.

Office space in the close-in Eastside had average asking rents of $31.06 per square foot during the second quarter, according to Jones Lang LaSalle. The vacancy rate was 6 percent. Developers had 425,155 square feet of office space under construction.

Capstone Partners is asking $29.50 on a triple-net basis for space in the Custom Blocks.

Tenant spaces of 8,930 square feet to 23,047 square feet are available in the south block. The north block has spaces of 1,242 square feet to 10,199 square feet to rent. All the spaces have three-phase power and ceiling heights up to 24 feet or 30 feet.

Cushman & Wakefield brokers Brad Carnese, Mark Carnese and Doug Deurwaarder are representing the property.

Capstone is in discussions with brewpub operators to take over the small retail space, Nelson said. There’s enough room for a 10-barrel brewing system, he said.

Capstone has had success with brewpubs before. The developer worked out an agreement with Breakside Brewery to open a large brewery and restaurant in Northwest Portland’s Slabtown neighborhood.

Fortis Construction is serving as general contractor for the Custom Blocks. Capstone obtained investment from Premier Properties U.S.A. in a joint-venture partnership.

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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.

“The demand fundamentals right now are very strong,” he said. “We also feel the size of the project in terms of the square footage we’ll be delivering is manageable and modest.”

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.

“The economic cycle is a little bit long in the tooth,” he said. “We’re anxious to get the buildings to the market as soon as possible.”

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.

“Tenants – particularly creative and technology-type tenants – are looking for buildings with an authenticity and history and story to them,” Nelson said. These buildings in particular, he said, have “those kinds of characteristics and intrinsics.”

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 – a domestic subsidiary of a Swiss-based investment firm – 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.

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