Though the technology sector might be the heart of today’s office leasing activity, in Boston the life sciences sector is the life blood, as the city’s market attracted eight of the industry’s top 10 firms and is currently experiencing an average vacancy rate of only 5.5 percent.

Life science companies leased almost 2 million sq. ft. in Boston and Cambridge markets in 2015, increasing activity by more than 160 percent from a year prior, according to a recent “bioSTATus” report from real estate services firm Transwestern. The demand is so high that the East Cambridge sub-market now has an availability rate of less than 1 percent.

Further, the market is attracting bigger names outside of the bioscience sector. Microsoft and Google have each set up a major presence in the region. General Electric Co. is moving its headquarters from Farfield, Conn. to the Boston Seaport District, thanks in part to $145 million in state and local incentives.

GE’s decision, along with new move-ins by drug companies such as Selvita, show the region is becoming an epicenter of the new global life sciences/technology economy, says Mark Stewart, senior vice president and branch manager in the Boston office of real estate services firm Savills Studley.

“It’s just extremely tight, especially in the Cambridge area,” Stewart notes. “There’s just barely any availability for lab space, or the office that goes along with it. There’s a strong inflow of companies and growth, with over 75 percent of new construction already pre-leased.”

Increasing demand for new drugs, due to an aging population and improved availability of health insurance and health services, has pushed the strong activity. Global spending on pharmaceuticals should reach a peak of $1.4 trillion by 2019, with biotech drugs one of the strong new industry products, according to Deloitte’s 2016 Global Life Sciences Outlook.

However, the industry also faces challenges due to patent expirations and changes brought on by the Affordable Care Act (ACA). The Boston market benefits due to the availability of a local workforce educated by Harvard and MIT, according to the Transwestern report. Furthermore, M&A and venture capital activity are at a frenzy in the Boston market, with about 100 venture capital deals annually totaling an average of $20 million per deal. Total venture capital investment in the market increased by 7 percent to $2 billion in 2015.

Supply constraints in Boston and Cambridge are currently only somewhat alleviated by new construction. Recently, Novartis completed 550,000 sq. ft. of new space, and Pfizer’s 273,000 sq. ft. facility is expected to deliver later this year. The tight availability of space has caused tenants to look toward the Longwood Medical Area and the western suburbs for quality lab space. The suburbs have attracted a number of real estate investors in 2015, with 34 lab building sales totaling about $3 billion by year-end, according to the Transwestern report.

Boston’s office market, including the life sciences sector, has always suffered from a long development process, according to Stewart. Available space decreased by more than 1 million sq. ft. each quarter last year, with only about 1 million sq. ft. of new life sciences space delivered to the market in 2015.

“A lot of these big pharmaceutical firms are looking to drive growth and innovation for the U.S. life sciences market, and we’re also seeing venture capitalists prospect for new life science start-ups—these two trends are converging on Cambridge, and on the Greater Boston area,” Stewart says. “On the demand side, there are a lot of new drug products that are now in the trial phase, it will be interesting to see which ones break out and how that investment will add or delete space from the market.”