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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Report: Texas rises through the ranks of most innovative states

moving on up

The Lone Star State has again taken a step up on an annual report that ranks the most and least innovative states in the country — this time cracking the top 15.

Texas ranked No. 15 in personal finance site WalletHub's 2023’s Most and Least Innovative States ranking. It's a steady improvement for the state, which ranked No. 16 in 2022 and No. 17 in 2021.

The report analyzed the 50 states and the District of Columbia and how each performed across 22 key metrics, including population of STEM professionals, venture capital investment activity, number of technology companies, patents per capita, and more. The data was pulled from the U.S. Census Bureau, Bureau of Labor Statistics, National Science Foundation, National Center for Education Statistics, United States Patent and Trademark Office, and other records.

Here's how Texas performed at a glance:

  • No. 18 for share of STEM professionals
  • No. 16 for projected STEM job demand by 2030
  • No. 25 for eighth grade math and science performance
  • No. 21 – for share of science and engineering graduates aged 25 or older
  • No. 13 – for share of technology companies
  • No. 31 – for R&D spending per capita
  • No. 18 – venture capital funding per capita
For the 11th year, Texas won Site Selection Magazine's Governor's Cup, the governor's office announced earlier this year. The award, which Texas has won 19 times since its inception in 1978, recognizes the nation’s top-performing state for job-creating business relocations and expansions.

"Texas truly is America’s economic engine, and we stand apart as a model for the nation. When choosing where to relocate or expand their businesses, more and more innovative industry leaders find themselves at home in our state," Governor Greg Abbott says in a news release about the award.

"I congratulate the exceptional economic development teams at the local, regional, and state level who have worked so diligently to attract and retain these growing businesses and the jobs they create in diverse communities across this great state," he continues.

The most innovative states included the District of Columbia, which ranked at No. 1, followed by Massachusetts, Washington, Maryland, and California, respectively. The least innovative state was identified as Mississippi, followed by Louisiana, North Dakota, West Virginia, and Arkansas, respectively.

Source: WalletHub

Access to quality education is a significant contributor to each state's innovation economy, the experts say in the report.

"Investing in education, particularly K-12 but also at the University level, it is no accident that innovative ecosystems develop in states with strong education systems and research universities," says David L. Deeds, professor at the University of St. Thomas in Minneapolis. "These institutions build strong capable modern workforces that attract capital, and jobs and create innovations. The benefits do not happen overnight, in fact, they take years if not decades, but consider what The UC’s or the University of Texas at Austin have meant for the development of premier innovative ecosystems."

Investor advocates now is the time to position Houston as a leading biomanufacturing hub

houston innovators podcast episode 178

Houston has all the ingredients to be a successful synthetic biology hub, says Veronica Wu. She believes so strongly in this that she relocated to Houston from Silicon Valley just over a year ago to start a venture capital firm dedicated to the field. Since then, she's doubled down on her passion for Houston leading in biotech — especially when it comes to one uniquely Houston opportunity: biomanufacturing.

While Houston's health care innovation scene is actively deploying synthetic biology applications, Wu points to Houston-based Solugen, a plant-based chemical producer, as an example of what Houston has to offer at-scale industrial biomanufacturing. Houston has the workforce and the physical space available for more of these types of biomanufacturing plants, which have a huge potential to move the needle on reducing carbon emissions.

"This is really fundamental technology that's going to change the paradigm and whole dialogue of how we are making a significant impact in reducing a carbon footprint and improving sustainability," says Wu, founder and managing partner of First Bight Ventures, on the Houston Innovators Podcast.

Several aspects — government funding, corporate interest, advances in technology — have converged to make it an ideal time for synthetic biology innovators and investors, Wu explains on the show, and she has an idea of what Houston needs to secure its spot as a leader in the space: The BioWell.

First introduced at a Houston Tech Rodeo event at the Texas Medical Center's Innovation Factory, The BioWell is a public-private partnership that aims to provide access to pilot and lab space, mentorship and programming, and more support that biomanufacturing innovators critically need.

"The way we envision The BioWell is it will provide a holistic, curated support for startups to be able to get across the Valley of Death," Wu says, explaining that startups transitioning from research and development into commercialization need extra support. The BioWell will provide that, as well as allow more engagement from corporations, investors, and other players.

Now that her plans for The BioWell have been announced, Wu is looking for those who want to be a part of it.

She shares more about her mission and what's next for First Bight Ventures on the podcast. Listen to the interview below — or wherever you stream your podcasts — and subscribe for weekly episodes.

California-founded biotech startup relocates to join Houston's emerging bioeconomy

new to hou

Cameron Owen had an idea for a synthetic biology application, and he pitched it to a handful of postdoctoral programs. When he received the feedback that he didn't have enough research experience, he decided to launch a startup based in San Diego around his idea. He figured that he'd either get the experience he needed to re-apply, or he'd create a viable company.

After three years of research and development, Owen's path seems to have taken him down the latter of those two options, and he moved his viable company, rBIO, to Houston — a twist he didn't see coming.

“Houston was not on my radar until about a year and a half ago,” Owen says, explaining that he thought of Houston as a leading health care hub, but the coasts still had an edge when it came to what he was doing. “San Diego and the Boston area are the two big biotech and life science hubs.”

But when he visited the Bayou City in December of 2021, he says he saw first hand that something new was happening.

“Companies from California like us and the coastal areas were converging here in Houston and creating this new type of bioeconomy,” he tells InnovationMap.

Owen moved to Houston last year, but rBIO still has an academic partner in Washington University in St. Louis and a clinical research organization it's working with too, so he admits rBIO's local footprint is relatively small — but not for long.

"When we look to want to get into manufacturing, we definitely want to build something here in Houston," he says. "We’re just not to that point as a company."

In terms of the stage rBIO is in now, Owen says the company is coming out of R&D and into clinical studies. He says rBIO has plans to fundraise and is meeting with potential partners that will help his company scale and build out a facility.

With the help of its CRO partner, rBIO has two ongoing clinical projects — with a third coming next month. Owen says right now rBIO is targeting the pharmaceutical industry’s biologics sector — these are drugs our bodies make naturally, like insulin. About 12 percent of the population in the United States has diabetes, which translates to almost 40 million people. The demand for insulin is high, and rBIO has a way to create it — and at 30 percent less cost.

This is just the tip of the iceberg — the world of synthetic biology application is endless.

“Now that we can design and manipulate biology in ways we’ve never been able to before,” Owen says, "we’re really only limited by our own imagination.”

Synthetic biology is a field of science that involves programing biology to create and redesign natural elements. While it sounds like science fiction, Owen compares it to any other type of technology.

“Biology really is a type of software,” he says. “Phones and computers at their core run on 1s and 0s. In biology, it’s kind of the same thing, but instead of two letters, it’s four — A, C, T, and G.”

“The cool thing about biology is the software builds the hardware,” he continues. “You put that code in there and the biology builds in and of itself.”

Owen says the industry of synthetic biology has been rising in popularity for years, but the technology has only recently caught up.

“We’re exploring a brave new world — there’s no doubt about that,” Owen says.