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More major manufacturing companies are moving to Pearland

Tool-Flo Manufacturing chose Pearland for its approachability. Photo courtesy of PEDC

You may already be familiar with why major life sciences companies are putting down roots in Pearland's Lower Kirby, but did you know that manufacturing companies are also following suit?

Current manufacturing companies in Lower Kirby include Tool-Flo Manufacturing, Mitsubishi Heavy Industries Compressor International Corporation, and Dover Energy, along with life science manufacturers Lonza, Merit Medical, and Cardiovascular Systems, Inc.

Tool-Flo Manufacturing produces tools and products for the oil and gas, automotive, aerospace, and medical industries. When the team at Tool-Flo was searching for a location, the approachability of Pearland’s Lower Kirby stood out.

“We spent a lot of time searching for property and when we drove into Pearland on Kirby Drive, it immediately felt like we were at home,” says former Tool-Flo president Dennis Flolo.

Mitsubishi Heavy Industries Compressor International Corporation (MHI) also selected Lower Kirby for its office, manufacturing, and service facility, and the first U.S.-based manufacturing and service location for the Japanese-owned company.

The 180,000-square-foot facility located on Kirby Drive houses packaging and assembly, vertical and horizontal rotor storage, repair and maintenance services, administrative offices, and a training center. MHI also constructed a 49,500-square-foot warehouse facility.

Dover Energy is the energy division of diversified global manufacturer Dover Corporation, and a manufacturer of specialized products and valves. Dover Energy opened a 150,000-square-foot manufacturing and operations facility in Pearland’s Lower Kirby with a facility that consolidated multiple Texas locations into one regional location that's home to over 200 employees.

“Dover was looking to consolidate the manufacturing and operations of several stand-alone businesses into one site that was convenient and would best position it for future growth, and we found a great location for them that will suit all of their needs in a modern business park environment,” says executive vice president Jarrett Venghaus, regional director at Jones Lang LaSalle (which represented Dover in its purchase of the land).

Merit Medical Systems, Inc. serves hospitals worldwide by manufacturing more than 2,000 proprietary, disposable medical devices used in diagnostic and interventional cardiology and radiology procedures.

Merit Medical chose Lower Kirby as the site for its new research and development and manufacturing facility due to an educated workforce and proximity to Houston. Approximately 400 of Merit’s 6,000 employees work out of the company’s 120,000-square-foot facility.

“Merit was looking for a large growing workforce, an educated community, an array of services immediately around the facility for the employees, and the proximity to the Greater Houston area,” says Merit Medical Systems managing director Richard Jepson.

Cardiovascular Systems, Inc. (CSI), a leading medical device manufacturer of innovative interventional treatment systems for vascular disease, selected Lower Kirby as the home of its second manufacturing facility in the U.S. CSI manufactures a minimally invasive medical device.

Lower Kirby is a 1,200-acre mixed-use development in northwest Pearland, at the intersection of South Beltway 8 and State Highway 288, that is home to office, retail, commercial, and industrial projects and is continuing to expand. In addition to manufacturing, Lower Kirby is also the location for several biotech and energy companies.

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Building Houston

 
 

A recent real estate report found that, following healthy gains, Houston's medical office market might see less action in the near future. Photo via Getty Images

Houston’s medical office market is on a roll.

A report from commercial real estate services company JLL shows net absorption and transaction volume saw healthy gains in 2022:

  • The annual absorption total of 289,215 square feet was 50.5 percent higher than the five-year average.
  • Transaction volume notched a 31.7 percent year-over-year increase.

Meanwhile, net rents held steady at $26.92 per square foot, up 1.3 percent from the previous year. The fourth-quarter 2022 vacancy rate stood at 15.9 percent.

Despite those numbers, the report suggests a slowdown in medical office rentals may be underway.

“Tenants who may have previously considered building out or expanding their lease agreements are now in a holding pattern due to increased construction costs and higher interest rates,” the report says. “These factors are having a direct impact on financial decisions when it comes to lease renewals, making it more likely that tenants will remain in their existing location for the foreseeable future.”

Still, the report notes “a number of bright spots for the future of healthcare in Houston.” Aside from last year’s record-high jump in sales volume, the report indicates an aging population coupled with a growing preference for community-based treatment “will lift demand even higher in coming years.”

The report shows that in last year’s fourth quarter, 527,083 square of medical office space was under construction in the Houston area, including:

  • 152,871 square feet in the Clear Lake area.
  • 104,665 square feet in the South submarket.
  • 103,647 square feet in Sugar Land.
Last fall, JLL recognized Houston as a top city for life sciences. According to that report, the Bayou City lands at No. 13 in JLL’s 2022 ranking of the country’s top 15 metro areas for life sciences. JLL says Houston “is poised for further growth” in life sciences.

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