SILVER SPRING, MD-As GlobeSt reported, last month Radnor, PA-based REIT Brandywine Realty Trust entered into an agreement to buy a three-office portfolio here called Station Square for $120.6 million.  In many ways it was a typical transaction, but when considered from a broader perspective it also pointed to a growing trend. Increasingly, institutional capital is coming to appreciate the Silver Spring submarket. That, at least, is the conclusion of CBRE’s Bill Prutting, who helped broker the Station Square deal.

“Folger Pratt, Blackrock, Brookfield and now Brandywine have all become interested in this submarket in recent months,” he says. The reasons are obvious: less than 10 miles from the District, it is an established, mature work-live-play destination.

Office, however, isn’t usually the asset class a commercial real estate investor will have in mind when considering Silver Spring. In fact, retail is. But Prutting argues that is more an issue of perception than reality.

“I don’t think institutional investors, especially those based outside of the DC area, are that familiar with the market,” he said, at least not compared to Rosslyn-Ballston Corridor in Northern Virginia. But that is starting to change, he says, pointing to growing inquiries about the area, which offers many value add, opportunistic and even core plays for investors. Market sources are putting the recent trade of Station Square at a mid 7% cap rate, for example.

Other recent trades include an office/flex building for $21.3 million, which Corporate Office Properties Trust sold to a joint venture between Finmarc Management, and the Goldstar Group and Spectrum Partners acquired, via a joint venture with Bernstein Management, an office/flex portfolio in Silver Spring for $31.1 million.