A quiet revolution took place this year on the top floor of Holyoke Center, headquarters for Harvard Real Estate, Inc. (HRE), the University's internal property management firm.

Although the "Old Guard" is still in place--Sally H. Zeckhauser remains HRE's first and only president after nine years at the helm--a close reading of the real estate section of any local newspaper revealed a marked change in the way HRE conducted business this year.

For while HRE continued in 1986 to sell off small, residential properties from its extensive real estate portfolio, Cambridge's largest landlord got even larger by sinking at least $27.4 million into six major property acquisitions. Harvard also made a $4 million bid on yet another piece of property, the St. Paul's parking lot, and attempted to negotiate several local land acquisitions which later fell through.

All that activity, say observers both in and outside of the University, marks a new, aggressive era of expansion into Cambridge by Harvard. That growth has attracted practically no attention from those traditionally opposed to University growth, such as students and the Cambridge City Council.

"We're getting out of the neighborhoods and selling off our small pieces of property," says HRE's Zeckhauser. "Now we're concentrating our efforts on the Harvard Square area."

But now as the dust begins to settle after the University's flurry of real estate activity in the last 12 months, HRE's detractors are beginning to ask how Harvard financed the property purchases, what Harvard ultimately plans to do with its new parcels, why the University is not forthcoming about the sales, and what it all means for future prices in the Square's expensive real estate sweepstakes.

Harvard's higher profile in the Square's property market is the result of a new strategy worked out jointly by the Planning Office, the Office of Government and Community Affairs, and HRE both to combat the community's negative perception of Harvard as a bad landlord and to locate additional space to meet the University's growing needs, officials say.

Zeckhauser calls this current stage of expansion a "consolidation phase" in which HRE is "keeping [its] ear to the ground" in the hopes of acquiring more property holdings in Harvard Square. In Zeckhauser's words, Harvard is "landbanking" property for the future--that is, depositing large parcels of commercial property into its real estate portfolio. Landbanked properties are used either as investments or for future academic purposes. Last year, the University acquired several landbanked properties, including The Architects Collaborative Office Building and the O'Brien Family Properties.

The second component of this so-called consolidation phase involves the construction of faculty housing, such as those Harvard proposes to build on the newly-acquired 245 Concord Ave. site.

The University bought that land "with professors in mind," says HRE's president. "Harvard has not done anything for faculty housing since it built the Botanic Gardens in 1949. So Harvard thought they ought to try and experiment now."

When the project is completed two summers from now, Zeckhauser says, HRE expects to be selling the 22 faculty-designated townhouses at prices ranging from $250,000 to $350,000.

The third component of consolidating Harvard's properties in the Square concerns the construction of small-scale, "in-fill" housing on minor plots of land already owned by the University. Six months ago, for instance, Harvard completed construction on three such townhouses on Gerry St.--a project which Zeckhauser says may become a model for others in the Square.

How all this represents a radical departure for Harvard can best be understood by reexamining HRE's brief, but controversial, history of overtures in the local real estate market.

At its inception, HRE assumed responsibility for an estimated 2500 commercial and residential units of property, 900 of which are regulated by the city's stringent system of rent control. By concentrating on rent-controlled housing, Harvard quickly became a lightning rod for a wide range of complaints about the scarcity of housing for low and moderate-income tenants and the high real estate prices in the Square area.

By the early 1980s, HRE had left an extensive trail of litigation and community dissatisfaction over rent control disputes at places like 7 Sumner Rd., 1306 Massachusetts Ave., the Craigie Arms apartment complex, and most recently, 8-10 Mt. Auburn St.