Everyone know that office and RD space in greater Boston is facing a “tight” market.

There are well over 2,000,000 square feet of office and RD space within the 495 band, according to Tom Hynes (CEO of Colliers International, presenting at the Thursday morning ACG breakfast). Boston itself contains about 30% of that space, and Boston A buildings draw an average of $58/sq. ft.; Cambridge A space, with only a 3% vacancy rate, draws an average of $64/sq. ft.

Real estate is affected by a variety of economic factors external to Boston, including but not limited to the attractiveness of investing in our buildings for foreign government funds and investors from China, Japan, Canada, Norway, Qatar and Australia. But the principal local drivers for the real estate market are our innovation and life science economy, and the growth of Boston-based hospitals. The largest general draw seems to be MIT (not Harvard); MIT was the institution cited by GE in its relocation to Boston.

Current construction plans are generally known, spear-headed by the $1,000,000,000 Wynn Casino but including redevelopment of garages at Winthrop Square, Harbor Towers and Bullfinch Crossing, as well as proposals for One Dalton Street, Back Bay Station and South Station.

One problem is to provide affordable housing; the City itself, having peaked in population at 801,000 in 1950, fell to about 562,000 in 1980 but now has recovered to 667,000. Can housing (and our shaky transportation infrastructure) effectively support this continuing influx? The economics of constructing affordable residential housing in Boston are daunting.

Asked about the difference between the “bid” and “ask” for class A high-rise space in Boston, Hynes thought that there was very little spread and not nearly the kind of spread that obtained in the past. [I do however note that, per a recent meeting with the senior leasing folks at Cushman and Wakefield, selective opportunities for modest front-end free rent and enhanced build-out allowances in certain sectors of the market were still available.]

Finally, Hynes noted the real risk presented by climate change, citing the flooding in other cities where recent storms hit head-on and with back-up generators and other support facilities often housed in basements. Real estate expansion in Boston needs to think long and hard about climate change in our law-lying coastal city.