A recent $25.25 million real estate sale in Davis Square is a sign of a growing demand for commercial property in Somerville, say local realtors.

     The hefty sales price reported by the Boston-based trade publication Banker & Tradesman was for the 101,257-square-foot Harvard Vanguard Medical building at 20-40 Holland St., next to the Davis Square T station.

     The property was sold by A.H.E. of Somerville, operated by California-based Health Care Property Investors, to Kadima Medical Properties. The transaction was completed in February as part of a package sale of 17 properties throughout the Northeast, said Talya Nevo-Hacohen, senior vice president of business development for Health Care Property. She would not comment specifically on the building, but she said the total sales price for all 17 properties was $127.5 million.

     David Friedman, vice president of operations for Kadima, said there are no plans to change the building's tenant base, which is anchored by three floors of Harvard Vanguard Medical. Nordblom will continue to be the local managing agent, and CB Richard Ellis will continue to manage the leasing.

     Robert Fitzgerald, first vice president and partner with CB Richard Ellis/Whittier Partners, said a price as high as $25 million may be unusual for Somerville, but it makes sense for Davis Square.

     ''The fact that it sold for so much is just indicative of it being a strong submarket," he said.

     Fitzgerald said that the Holland Street building is especially valuable because it is one of only two large commercial properties in Davis Square.

     The other is the Citizens Bank building at 212 Elm St. John Caldwell, managing director of Paradigm Properties, which owns 212 Elm St., said demand for Davis Square commercial real estate is on the rise.

     ''We're getting lease rates in Davis Square that are above some of the things we're seeing in East Cambridge," he said. ''It's a tiny marketplace, and it's just a great place to have an office."

     Friedman agreed. ''Its position in terms of location in the Davis Square area is perfect," he said. ''It's got great access to public transportation, and the building has a very solid tenant base."

     Caldwell said he thinks that Davis Square is a lot like the way Harvard Square used to be, with one exception.

     ''I think it may end up better than Harvard Square," he said. ''Davis Square won't get so out of control with commercial use in the way that Harvard Square has. It's become overgrown and lost some of its personality, and we're making sure Davis Square keeps its sense of self."
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