Faced with rising vacancy rates, local developers are aggressively trying to attract tenants to their new suburban projects.

But one local developer, Madison Property Inc. of Woodbridge, Va., is trying to smoke out a segment of the leasing population with its most recent project.

The company will break ground this week for Madison Square, which company officials call the area's first private office building that will prohibit smoking. The 34,493-square-foot building will be located at 1308 Devils Reach Rd., at the intersection of Route 123 and I-95 in Woodbridge.

"It's just a perception that I've had for some time that there is a large segment of the business public interested in a nonsmoking environment," said Madison President Ronald E. Moitzfield. Moitzfield, who quit smoking two years ago, said he is not "a militant nonsmoker by any means."

Moitzfield cited studies warning that nonsmokers face health risks from breathing coworkers' smoke. Nonsmoking sections in restaurants and airplanes show the growing demand for smoke-free environments, he added.

Last February, a tobacco industry official criticized a developer's plan to build the nation's first office building banning smoking. Brennan Moran of the Tobacco Institute said the proposed Amherst, N.Y., building sounded "like a builder acting as Big Brother."

Moitzfield said Madison Square's nonsmoking policy will be stipulated in the building's lease agreement. "We're not going to have some sort of militaristic security force about it," he added.

Signs banning smoking will be placed throughout the building, a Madison spokeswoman said.

Offices sizes will range from 1,600 to 21,000 square feet. Moitzefield did not disclose lease rates for the project, but he said "there's certainly no added increment because the building is nonsmoking."

The developer has received a "great deal of interest from some premier companies in the area that have made nonsmoking commitments," the Madison spokeswoman said.

Madison, which owns and operates 18 hotels and commercial properties nationwide, will move its headquarters into the building when it is completed in the spring of 1988.

In other developments in commercial realty:

Casde Corp., a computer systems management company, leased 17,091 square feet at Shirlington Gateway, 2800 Shirlington Rd., Alexandria, from Weissberg Corp. Coldwell Banker was the leasing agent.

Washington Institute for Legal Studies, a school for paralegals, also leased 17,091 square feet at Shirlington Gateway, 2800 Shirlington Rd., Alexandria, from Weissberg Corp. Cushman & Wakefield was the leasing agent.

Daniel, Mann, Johnson & Mendenhall, an architectural and engineering firm, leased 20,990 square feet at 1900 M St. NW. from Ashland Oil Inc. Coldwell Banker was the leasing agen