Life Sciences Companies Are 'In Good Hands' If They Come Develop In Houston
Houston may be somewhat overlooked in the national life sciences market today, but industry experts believe a prominent place on the map is just around the corner.
And though currently dominated by markets like Boston, concentrated efforts from Houston developers and technology companies are shaking up the geography of the life sciences sector.
According to panelists at Bisnow's Future of Houston Life Sciences & Healthcare Innovation Feb. 17, the city has been seen as an emerging market for life sciences for several years, but it has bloomed recently, with the likes of JLL and others citing its deep talent pool and wage positioning among the conditions making the metro ripe for life sciences growth.
Jose Rivera, Central Region life science leader at DPR Construction, said the days of clients flying over Texas as a place for life sciences development are over. Rivera and others pointed repeatedly to the enormous Texas Medical Center as an obvious source of life sciences growth, with the center's upcoming TMC3 campus set to inject a flurry of activity into the quiet Houston market.
"We have world-class expertise in designing and building life sciences facilities in Houston, Texas," McCord Development General Counsel Shawn Cloonan said. "These guys know how to do it, there's 50M SF in the medical center. The market needs to know that. They need to know they're in good hands when they come here."
On the other hand, TMC is such an obvious, well-known source for medical research that it can be hard to build life sciences projects outside of it, Cloonan added.
"Everyone knows how to get services in and out of the medical center, he said. "Whereas [if] you're on the side of I-10 somewhere, and all of a sudden you have a vendor that's supplying this company, they don't even know how to find them. Some of those can die on the vine."
Cloonan said the industry is working hard to fill gaps that are holding back more development.
"I think we have enormous raw resources, they've been cultivated, we've identified our gaps, [and] we're seeing some of those gaps come online in the brick-and-mortar, in that Class-A research space," he said. "I think the market's come towards us."
Covid-19, which fueled funds into vaccine development and other research, is spurring both development created from scratch and conversion projects. But Bisnow's panel warned those players wanting to jump into a growing market are finding it's not as easy as they may expect to simply convert an office into a life sciences facility.
A facility that needs chemical storage and other temperature-sensitive material can't pick a high-rise, said Justin Brasell, Transwestern healthcare and life science executive vice president. The challenge becomes finding a one- or two-story building in an appealing area. Transwestern is working on about 1M SF of life sciences conversion, many unannounced, he said.
Much of Houston's strength is in its available talent pool, experts said, singling out the number of young workers at startups and other early career positions. What it doesn't have, however, according to Craig Laher, senior vice president and head of healthcare and life sciences at The Signorelli Co., is midlevel managers.
"Yes, we have a strong workforce in Houston, but what about those who can scale an R&D operation?" Laher asked.
Laher said more midlevel workers will need to be recruited to Houston, but experts think that won't be a large challenge, with Houston's easy marketability as a family- and business-friendly city on the rise. Many companies and workers are coming from other states, Brasell said.
One major draw for potential new Houstonians, panelists said, is the Center for Device Innovation at Texas Medical Center, a partnership with Johnson & Johnson Medical Device Cos., Johnson & Johnson Innovation and the medical center.
"This is, dare I say, a very sexy market, and everybody out there wants life science, because they're filling a legacy industry," Cloonan said. "Everybody's out there hunting for life sciences. We need to be competitive and have the tools available."
