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.