The Mercantile Place, a 48,500-square-foot research and development building at 1300 Mercantile Lane in the Largo Park subdivision, is 75 percent occupied, according to the leasing agent Realty Service Co.

Medsource Inc., which has leased the most space, operates residential homes and workshops for handicapped citizens. It chose Mercantile Place because of versatile space accommodations and had its 6,470 square feet divided between a work area and office.

Construction is under way on an expansion that will add 48,500 square feet to the building. Knollwood Development Corp. is the construction company, and completion is scheduled for September 1986.

"The rental space is custom-fitted," said a spokesman from Realty Service Co. "We have our own in-house architectural staff that can design for the individual tenants."

The building has been leased to a variety of tenants, including Prudential Insurance Co., Medsource Inc., RE/MAX 100, Knollwood Development Corp., the ARC Group, Preference Homes, Foster Medical, Visiting Nurse Association, E. M. S. Consultants and Associates Legal Title.

Other recent developments in commercial realty in the Washington metropolitan area:

* Watkins Johnson Co., based in Palo Alto, Calif., has leased 38,000 square feet at the Corridor 32 Business Center in Howard County.

* Prospect Associates, a health-care consulting firm, has leased 24,339 square feet at 1801 Rockville Pike for its expanding office.

* Two companies have leased space at the Tysons Executive Plaza on 2000 Corporate Ridge in McLean. United Technologies Corp., based in Hartford, Conn., leased 14,470 square feet, and Institutional Communications Co. Inc. leased 10,621 square feet.

* E. D. S. Realty Corp. leased 16,102 square feet of space at 15825 Shady Grove Rd. in Rockville for its recruiting and management development center.

* International Business Machines Corp. has renewed a lease for 30,992 square feet at 15 Firstfield Rd. in Gaithersburg.

* Micronetic Design Corp., a computer-software design corporation, leased 3,291 square feet at 5 Choke Cherry Rd. in Rockville.

* Capital Technology Corp. has leased 1,642 square feet at 4 Research Place in Rockville for computer-software sales and software.

* Educational Services Inc., a publishing company, has relocated to 1725 K St. NW with an aggregate lease value of $125,000.

* Halcyon Inc., a national real estate development consulting firm, has relocated and expanded it offices to 1000 Connecticut Ave. NW with an aggregate lease value of $300,000.

* CBN News, a subsidiary of the Christian Broadcast Network, has subleased 3,700 square feet at 1301 Pennsylvania Ave. NW with an aggregate lease value of $400,000.

* Perfect Solution Inc. leased 1,900 square feet at 1100 15th St. NW from the Prudential Insurance Co. of America. The lease value is in excess of $188,000.

* Temporary Resources Inc. has leased 2,500 square feet at 1120 19th St. NW from 1120 19th St. Associates with a value of more than $500,000.

* CompuServe has leased 1,500 square feet at Cascades Executive Center in Reston for its Northern Virginia Marketing Division.