Paradigm Buys 63,000-SF Office Building

Hoping to grab a stake in the up-and-coming Somerville office sector, Paradigm Properties has acquired 212 Elm St., a 63,000-sf building in Davis Square. The four-story structure was bought for $13 million from Citizen’s Bank. “Davis Square is a hot little market right now,” says Paradigm president Kevin McCall, whose firm has tried to focus on emerging markets and multi-tenanted properties. The purchase, McCall says, “is pretty consistent with what we like to do.”

CB Richard Ellis/Whittier Partners principal Curtis M. Cole says the mostly retail district has become a popular destination for companies seeking office space, especially those being uprooted by scarce supply and rising rents in the abutting Cambridge market. Internet startups and other high-tech concerns who want to be near the Massachusetts Institute of Technology and Harvard University are attracted by the Red Line subway, says Cole, given that the line runs through both Harvard and Kendall Squares, as well as into Downtown Boston.

“I really look at Davis Square as an enclave of Cambridge,” adds Insignia/ESG Director Daryll Morse. The location “is very attractive from a recruiting standpoint,” he says. He recently represented Spotfire, a software company, in its 28,000-sf lease at 212 Elm St., a deal that coincided with Paradigm’s purchase of the building. Morse says the competition for the space was fierce, with his client ultimately winning out. While he would not discuss specifics, a source say the lease was inked above $40 per sf, a price that would have been virtually unimaginable just a year ago.

According to Cole, who brokered the sale of the building with CB/Whittier colleagues Biria St. John and Charles P. Kavoogian, companies also like Davis Square because of the eclectic mix of coffeehouses, restaurants and nightclubs, which provide the 24/7 atmosphere coveted by the modern workforce. In many respects, he says, the district is similar to Harvard Square of 10 to 15 years ago, long before much of the retail in that area was overtaken by major brand names such as HMV Records and Pizzeria Uno.

Although Davis Square has a limited supply of office space, the city itself has seen a wave of developers swoop in during the past year hoping to feed off the Cambridge demand. As for 212 Elm St., Cole calls it “a great little building,” one featuring floorplates of 17,000 sf and modern amenities. The property was developed in 1989 and served as home to Somerset Savings Bank and US Trust before those banks were absorbed by Citizens. A private real estate investment firm, Boston-based Paradigm has been on an active buying spree in the area during the past two years, having earlier this year purchased such properties as 99 Summer St. and 40 Court St., both in Downtown Boston.