When a Microsoft-leased office building in Redmond and the adjacent 600-plus apartment units are completed, no fossil fuels will be used to power them.

This will make it the Northwest’s largest privately funded carbon-neutral commercial development, according to Mike Hubbard, a principal at Seattle-based Capstone Partners, one of the project’s developers.

The office and apartments make up the final phase of Esterra Park, the $1.3 billion development just south of Microsoft’s headquarters. Previous phases of the 28-acre project have included two hotels and 2,000 apartments.

Making the last phase carbon neutral will be more expensive for Capstone and its joint venture partner, New Jersey-based PGIM Real Estate, said Hubbard. But Capstone and PGIM — the asset management business of Prudential Financial, Inc. — think it will help drive tenant demand, he said.

Demand for environmentally sustainable buildings has evolved over the last 20 years when the LEED (Leadership in Energy and Environmental Design) development standard started to become more common.

“A lot of people scratched their heads. (Green building) was an investor thing,” Hubbard said. “Carbon neutral is completely different in that I think demand will come from the tenants themselves.”

He declined to say how much extra it is costing to build the $600 million phase but said deciding to not use fossil fuels in the operation of the buildings meant having to rethink all of the building mechanical systems and changing building operational standards. The project will have to buy green power and buy carbon offsets, “and those are expensive,” he said.

The 634 apartment units in the last phase are called Verde at Esterra Park. Half the units will open in late spring of 2022 and the other half about six months later. Greystar will manage the rental housing.

The One Esterra Park office building is to be completed this month. The phase also includes the overall project’s centerpiece, a 3-acre park.

U.S Bank provided the debt for ZGF-designed One Esterra Park and Verde at Esterra Park, which Runberg Architecture Group designed. Exxel Pacific and JTM Construction are the contractors.

Esterra Park is rising on the site of the former Group Health Cooperative’s Overlake Hospital. About three years after the 2008-close of the facility, the city of Redmond hired Capstone to write a redevelopment plan. In 2013, the company paid $32.55 million for the property and razed the hospital in what was at the time the region’s second-largest demolition after the Kingdome.

Roads and other infrastructure were built and lots sold, with AvalonBay Communities and Lincoln Properties building multifamily housing and CSM of Minneapolis developing a dual-branded Aloft and Element hotel next to a light rail stop that’s scheduled to open in 2023.