Houston named a top life science emerging market

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A new report from a real estate firm has Houston high on its list for emerging life science hubs. Photo by Dwight C. Andrews/Greater Houston Convention and Visitors Bureau

Houston is moving up the life sciences ladder.

In October, commercial real estate services company CBRE ranked Houston second on its list of the top emerging clusters for life sciences in the U.S. Pittsburgh took the No. 1 spot, while Austin sat at No. 3.

Now, commercial real estate services company JLL also is giving Houston's life sciences sector some love. JLL recently issued a report identifying Houston as one of the top emerging markets in the U.S. for life sciences.

Among the markets covered in the JLL report, Houston ranked seventh for the number of STEM degrees among people 25 and older (409,354). The gives Houston an edge in terms of life sciences talent.

JLL puts Houston at No. 8 in another life sciences category: wage positioning. This refers either to wages above the industry average that entice life sciences talent or wages below the industry average that attract cost-conscious employers.

"Traditional top life science markets will likely retain their positions; however, it's encouraging that Houston, home to one of the world's largest medical centers, continues to rise on the list of markets for further advancements in the life sciences sector," JLL says.

According to the Greater Houston Partnership, Houston has more than 1,760 life sciences companies, hospitals, health care facilities, and research institutions with a workforce exceeding 320,000. Houston's major corporate employers in life sciences include Abbott, Bayer, Fisher Scientific, Merck, Mylan, Novartis, and Philips.

Of course, the Texas Medical Center — the world's largest medical complex — plays a critical role in the region's life sciences sector. The medical center's TMC3 life sciences hub, set to open in 2022, promises to lift Houston's life sciences profile even more. The 30-acre, 1.5-million-square-foot TMC3 campus is projected to create 30,000 jobs and generate an economic impact of $5.2 billion.

Houston-based real estate developer Hines also is getting in on the life sciences game. It is leading establishment of a 52-acre life sciences hub, Levit Green, adjacent to the Texas Medical Center.

In February, commercial real estate firm NAI Partners pinpointed these as the Houston area's current and potential hotspots for life sciences:

1,345-acre Texas Medical Center complex
4,200-acre Generation Park mixed-use development
Katy
League City
New Caney
Pearland
Sugar Land
The Woodlands

NAI Partners noted that life sciences clusters ranking above Houston in the CBRE report sit on the East Coast or West Coast. That makes Houston "the essential location for top-tier, forward-thinking life sciences companies interested in expanding into new geographies," says Holden Rushing, senior vice president of NAI Partners and a member of its life sciences and health care team.

NAI Partners says Houston has affirmed its reputation as one of the most appealing places in the U.S. for life sciences properties.

"Between its highly educated talent pool, nationally regarded health care industry, and business-friendly environment — including being one of the few states without a personal, state, or corporate income tax — Houston's cost-effective tax structure makes it a choice location for any company looking to establish a presence or expand its current footprint," says Travis Rodgers, chief operating officer and executive vice president of NAI Partners.

Fuse Workspace is the latest coworking concept for the west side of town. Photo courtesy of Fuse

Dallas coworking company to open its first location in Houston

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Dallas-based Fuse Workspace is gearing up to open the first of what could be several coworking spaces in the Houston area as various coworking providers ramp up their Bayou City presence.

Fuse will unveil its first Houston location March 2 at CityCentre, a 47-acre, mixed-use development on the former site of Town & Country Mall in the Memorial City district. The grand opening is set for April 30.

Included in the 29,000-square-foot Fuse space, at 12848 Queensbury Ln., will be Houston's first showroom for Varidesk, a Coppell-based provider of standing desks and other office equipment.

John Herring, brand manager and director of operations at Fuse, says Houston, Austin, and Dallas are the company's target markets. A Fuse space is scheduled to open in July in the Austin suburb of Bee Cave.

"We love Houston and see a great future for our brand here, with multiple locations," Herring tells InnovationMap. "We don't have definitive plans to announce yet, but we have several strategic locations in the area that on our list."

Fuse is a division of DPG Partners LLC, a developer, owner, and operator of coworking spaces in Texas, as well as Hilton and Marriott hotels in Texas and Arkansas.

Fuse Workspace is the latest coworking concept for the west side of town. Photo courtesy of Fuse

The Fuse location at CityCentre will feature about 23,000 square feet of Class A office space, along with about 6,000 square feet of outdoor space. Highlights include:

90 private offices
Three specialty suites, including one already leased by Varidesk
Four terraces
Seven conference rooms, including a podcast studio
Event space accommodating up to 100 people

"Our goal is to create an outstanding experience in the office through décor, amenities, programming, conference space, and our concierge staff," Herring says.

Fuse is joining a number of coworking providers that have set up shop in and around Memorial City. For instance, Life Time Work, affiliated with a nearby Life Time Fitness gym, opened last year at City Centre. Memorial City also is home to The Cannon, a 120,000-square-foot coworking campus.

Commercial real estate services provider JLL predicts 30 percent of the U.S. office market will be "flexible" space, such as coworking setups, by 2030. That compares with less than 5 percent in early 2019.

In the Houston market, 1.9 percent of office space was considered "flexible" in early 2019, according to JLL, versus 2.8 percent in Austin and 1.7 percent in Dallas.

"Our research, and our conversations with corporate executives across the globe, indicate that flexible work is not just a passing trend — it's woven into the fabric of the future of work," Scott Homa, senior vice president and director of U.S. office research at JLL, said in a 2019 release. "Even though some markets are better positioned for rapid growth, this still leaves significant runway for expansion across all U.S. office markets."

An October 2019 report from Yardi Matrix, a provider of real estate data, shows the Houston market with 113 coworking spaces encompassing more than 2.2 million square feet. By comparison, Dallas-Fort Worth had 159 coworking spaces exceeding 3.5 million total square feet, and Austin had 47 spaces surpassing 1.2 million total square feet.

"The penetration of coworking is highest in markets with new-market economies and tight vacancy rates," the Yardi Matrix report states.

According to JLL, the office vacancy rate in the Houston market stood at 22.8 percent in the fourth quarter of 2019. But office occupancy is improving, according to a JLL report, as more than 1.85 million square feet of space was absorbed in the Houston market during the fourth quarter of 2019. For Houston, that marked a 20-year high for positive net absorption in a single quarter, the report states.

Houston's industrial development has grown, and a contributing factor is the rise of e-commerce activity. Getty Images

E-commerce growth is sparking some changes in Houston's industrial real estate market

Making moves

With retail e-commerce sales in the U.S. projected to soar from $501 billion in 2018 to $740 billion in 2023, it's no wonder that Houston's industrial market is expanding faster than Santa's bag of toys.

E-commerce is one of the main drivers of an upturn in industrial construction in the Houston area. Estimates from four commercial real estate services companies show that during the third quarter, anywhere from 13.3 million square feet to 18.5 million square feet of industrial space was under construction in the region. That volume is up considerably from the second quarter of 2019 and from the same period in 2018.

Around the country, the "need for speed and choice" to appease shoppers is driving a lot of the increased demand for industrial space, Hamid Moghadam, chairman and CEO of industrial REIT Prologis, recently told Wall Street analysts. That, he said, is because "the more choices you want and the quicker you want them, the more inventory you need to position near the customers."

Rob Stillwell, executive managing director in the Houston office of commercial real estate services company Newmark Knight Frank, says many of the local industrial facilities geared toward e-commerce are being built in and around pockets of residential growth. This includes a swath from I-10 West in Katy to I-45 North toward The Woodlands. Among the facilities popping up in that corridor are massive projects for Amazon, FedEx, and UPS, according to Stilwell.

"E-commerce is likely a contributing factor to many distribution operations in Houston, but not the sole reason for the strong demand seen in the market," Stilwell says. Many new or expanding industrial tenants in the market do have an e-commerce component, he adds, yet won't be leasing space just for e-commerce purposes.

In Houston, e-commerce-fueled construction of industrial space is especially prevalent near George Bush Intercontinental Airport, according to commercial real estate services company Cushman & Wakefield. However, Houston's northwest submarket is seeing the most industrial construction in the area, with 5.5 million square feet underway in the third quarter.

Commercial real estate services company JLL pegs the southeast submarket as the hottest, with its third-quarter report showing 3.5 million square feet of new industrial projects underway there.

Aside from e-commerce, the Port of Houston and the petrochemical sector are propelling industrial construction in the area, Cushman & Wakefield says.

Around the Houston area, nine of the 89 industrial spaces under construction in the third quarter exceeded 500,000 square feet, Cushman & Wakefield says. Several of those lack a specific e-commerce element. This includes a 1 million-million-square-foot manufacturing facility for Coca-Cola, a more than 770,000-square-foot distribution center for Home Depot, and a nearly 550,000-square-foot distribution center for Costco.

Cushman & Wakefield warns that Houston's industrial market could suffer from an oversupply of space, as well as from a drop in shipping activity prompted by ongoing trade disputes and a decline in oil prices. Although industrial vacancy is expected to rise slightly through 2021, the company says, "demand continues for more modern, state-of-the-art facilities and market fundamentals remain healthy."

During the third quarter, only one-fourth of the space under construction in the Houston area was preleased, according to commercial real estate services company Colliers International. However, another 10 percent to 25 percent of that inventory should be preleased before the facilities are completed, the company says.

The area's industrial vacancy rate rose to 7.7 percent in the third quarter as new projects came online, Cushman & Wakefield says. Once more supply arrives, the vacancy rate is expected to tick up.

"Low interest rates and robust investor demand are expected to continue generating strong interest for Houston industrial assets. On the fundamentals side, the market is closely watching new inventory additions," JLL says.

The MKT expects to revolutionize the live-work-play model with everything from retail and restaurant to office and coworking space. Courtesy of The MKT

Massive mixed-use project to bring creative office and coworking space to the Houston Heights

Meet The MKT

On a stroll or a spin down the Heights Hike and Bike Trail, you might not notice a complete transformation is eminent. The MKT — a mixed-use renovation and build out project — is getting ready to break ground.

The five-building, 200,000-square-foot project will bring 30 retail and restaurant concepts, and 100,000 square feet of office space together along with four acres of green space, parking, and an outdoor venue alongside 1,000 linear feet of the trail between North Shepherd Drive and Herkimer Street. The MKT name comes from the Missouri-Kansas-Texas railroad — later known as the Katy Railroad — that was transformed into the Heights Hike and Bike Trail.

MKT is a joint partnership between Houston-based Radom Capital, which is behind Heights Mercantile down the street, and Triten Real Estate Partners with capital partner, Long Wharf. The architect behind the project is Austin-based Michael Hsu Office of Architecture. Shop Companies is doing the retail leasing, and JLL's Houston office is coordinating the office leasing space.

"There's nothing in Houston that's like this that's upscale creative office space with a huge retail and restaurant component that's located on a major hike and bike trail right in the city," Russell Hodges, managing director of agency leasing at JLL, tells InnovationMap.

Ultimately, the project, which will break ground in the next 60 to 90 days, is a renovation, as the five industrial buildings that make up The MKT currently exist and were built in the '70s. The transformation will include redoing the facades of the buildings and incorporating green space.

The creative office space, which will be in three of the buildings, is doing something a little different than most office buildings in Houston. Originally, Hodges says they expected interest from TAMI tenants — which stands for technology, advertising, media, and information companies — but the interest they have had so far has been diverse.

"The project caters to the tenant that's looking for something different — looking for, honestly for lack of a better word, cool space," Hodges says. "Someone looking for something to help differentiate their business to leverage their office space to recruit and retain talent."

Another unexpected interested party — coworking tenants. Hodges says the project could house anywhere from 20,000 to 50,000 square feet of coworking space if the right coworking operator comes around.

"I don't think we were necessarily looking for coworking, per say," Hodges says. "But, we've had significant interest from coworking operators. Based on that level of interest, we think that there's demand for coworking in the area. We're looking for the right operator who's brand aligns with the brand of the project. I don't think that's every coworking brand, necessarily."

The team behind The MKT are also planning a second phase of the project for a large space just east of phase one. That concept has yet to be designed, and there aren't any specifics currently available.

Big picture

Courtesy of The MKT

On the project's website, this rendering can be interacted with to see 3D designs and before and after shots.

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Houston startup rolls out B2B program for onboarding new hires

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After seeing success with her internship training and matchmaking platform, Allie Danziger, founder and CEO of Ampersand Professionals, has expanded the concept to include a new hire training service that allows employers to better optimize the onboarding process and have a well-trained new staff member from day one.

In just over a year, Ampersand has worked with over 7,000 professionals through its original concept of upskilling and matching young professionals to internship programs. A few months ago, Danziger and her team expanded to include career development training for students first entering the workforce with the City of Houston's Hire Houston Youth program. Danziger says it was developing out the platform for this program that proved there was a need for this type of training.

"While we have focused on matching professionals with businesses for paid internships, we recognized a further gap with employers that have their own recruiting/talent acquisition teams, or just their own preferred way of bringing on entry-level talent, and didn’t have a need for our matching platform," Danziger tells InnovationMap. "But, they recognized the benefit of our proven training platform that pre-vets and de-risks their hires, and still wanted access to the training for their own hires."

The new program has evolved from training interns to new hires, so parts of the program that focuses on interviewing or applying for a job have been removed. Instead, the 8.5 hours of training focuses on networking, best practices for working with a manager and team, performance reviews, common software training, and more.

Danziger says usually new hires need the most experienced mentor or manager, but they don't usually get that support — especially when it comes to businesses that don't have their own built-out mentorship or training program.

"Ampersand’s new training product fills that gap — it gives employers of any size any easy solution to provide basic job readiness training to employees, access to our team of dedicated coaches, and a detailed report at the end of their training summarizing how their new hire did in the training and any trends recognized and tips for managing this employee based on what the platform uncovered," she says. "Businesses can also sign up for additional coaching sessions and customize training materials, as an add-on if interested."

The program costs the employer $100 per new employee, and checkout online takes less than a minute. Through both this program and the original internship program, Ampersand is constantly evolving its training content.

"These professionals are going through the same training experience that we have proven out over the last year, and we are constantly adding to based on data we see in the user experience," Danziger says.

Danziger recently joined the Houston Innovators Podcast discuss some of the benchmarks she's met with Ampersand, as well as the importance of investing in Gen Z hires. Listen to that episode below.

Houston thought leaders look for extraterrestrial intelligence at Future Focus event

Out of This World

The latest Future Focus discussion held by alliantgroup was out of this world! The company teamed up with InnovationMap to host Dr. Seth Shostak from the SETI Institute at alliantgroup headquarters in the Galleria area. The conversation focused on how new technology is helping in the search for extraterrestrial intelligence.

Dr. Robert Ambrose, alliantgroup strategic advisory board member, was the moderator for the night. He recently retired from NASA as the chief of software, robotics, and the simulation division, and clarified why it is crucial we have these conversations with Dr. Shostak about space and ask the question: Do aliens exist?

“We should be looking up. We should be thinking about what is coming and how we are going to be a part of it. It is an exciting time in space,” said Dr. Ambrose.

Dr. Shostak has been the senior astronomer and director at the SETI Institute in San Francisco for the past 20 years. He explained to the audience there is a difference between the search for aliens and the search for life in the universe.

“SETI stands for Search for Extraterrestrial Intelligence, but it's not the same as the search for life, which it's often confused with,” explained Dr. Shostak. “You might find life on Mars, but it's not going to be very clever. But when you look for extraterrestrial intelligence, you are looking for the kind of aliens you might see on television or in the movies. Are they intelligent, can they communicate with us, and can they hold a conversation?”

Dr. Shostak believes we can infer aliens exist because of the number of planets and stars there are in the universe. But he also believes the search is heating up thanks to new technology and satellites currently being developed.

“Do I think we probably will find them in our lifetime? I honestly do," he said. "You could say that's just wishful thinking and perhaps it is, but it's more than that. It is the fact that the equipment is getting better very quickly."

He bets that by 2035 we will have found and communicated with extraterrestrial intelligence. Both Dr. Shostak and Dr. Ambrose agree, once we have found this life, our world will change for the better.

“We are going to learn all sorts of things about physics and the rules of the universe that we’ve never uncovered,” explained Dr. Ambrose. “Imagine everything we could have taught humans about the universe a couple hundred years ago. What if we can find someone who could teach us those lessons today? What an acceleration we would have.”

This was just the second Future Focus discussion alliantgroup has hosted, and CEO Dhaval Jadav said he hopes to continue to lead these innovative conversations around technology.

“We started this future focus series of roundtables to engage thought leaders and industry experts on topics related to the development of new technologies," Jadav said. "We are living in a most exciting and heady time, with the adoption of new technologies and platforms accelerating at an unprecedented rate.

"In order for us to stay abreast of all these exciting innovations — from web 3 to sportstech, blockchain, AI/quantum computing, the metaverse and our ever-expanding universe, including the search for extraterrestrial intelligence – we must continue to hold thought-provoking dialogues to further explore and chart our path to the future."

You can click here to learn more about alliantgroup’s previous event and what’s to come.

Courtesy photo

Houston hospital ranked best in state according to recent report

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It’s a three-peat for Houston Methodist Hospital.

For the third in a row, Healthgrades has named Houston Methodist the best hospital in Texas and one of the 50 best hospitals in the country. It’s the only Texas hospital in the top 50. Houston Methodist, a 907-bed facility at the Texas Medical Center, earned the same recognition in 2020 and 2021.

Four other hospitals in the Houston area made Healthgrades’ list of the top 250 hospitals in the U.S.:

Baylor St. Luke’s Medical Center
Houston Methodist Baytown Hospital
Houston Methodist Willowbrook Hospital
Memorial Hermann – Texas Medical Center

Four Houston hospitals also excelled in several of Healthgrades’ specialty categories:

Memorial Hermann Memorial City Medical Center, No. 3 in the state for heart surgery.
Memorial Hermann – Texas Medical Center, No. 1 in the state for stroke care and No. 2 for coronary intervention.
Houston Methodist Hospital, No. 2 in the state for critical care and No. 2 for pulmonary care.
Texas Orthopedic Hospital, No. 1 in the state for joint replacement.

Healthgrades, an online platform for finding physicians, hospitals, and other health care providers, rates hospitals based on clinical outcomes such as rates for patient deaths and treatment complications. For this year’s list, Healthgrades evaluated clinical performance at nearly 4,500 hospitals.

“For almost 25 years, our mission has been to provide consumers with clear and accessible information to make more informed health care decisions,” Dr. Brad Bowman, chief medical officer and head of data science at Healthgrades, says in a news release.

The Healthgrades rankings “provide consumers with increased transparency regarding the care in their areas, and empowers them to make more confident care decisions for themselves and their families,” Bowman adds.

For Houston Methodist, kudos like those from Healthgrades are common. For instance, the hospital last year landed at No. 16 on U.S. News & World Report’s national honor roll for the best hospitals, up from No. 20 the previous year. It was the top-rated Texas hospital on the list.

“These national accolades are something to be proud of, but most important, our patients are benefiting from all of our hard work. Ultimately, they are the reason we need to be one of the best hospital systems in the country,” Dr. Marc Boom, president and CEO of Houston Methodist, said last year in a news release about the U.S. News award.

The Healthgrades honor is one of several pieces of good news for Houston Methodist this year.

The hospital recently unveiled plans for the 26-story Centennial Tower. Scheduled to open in 2027, the $1.4 billion tower will include a larger emergency department and hundreds of patient beds, among other features. The new tower will replace the Houston Main building and West Pavilion.

Shortly after that announcement, the Houston Methodist system said it had received an anonymous $50 million gift. It’s the second largest donation in the system’s 102-year history.

Joining Houston Methodist Hospital in Healthgrades’ national top 250 this year are:

Baylor Scott & White Medical Center – McKinney
Baylor Scott & White Medical Center – Temple
Doctors Hospital at Renaissance in Edinburg
Hendrick Medical Center in Abilene
Medical City Arlington
Medical City McKinney
Methodist Hospital in San Antonio
St. David’s Medical Center in Austin
St. David’s South Austin Medical Center
William P. Clements Jr. University Hospital in Dallas

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