The life sciences are booming, and so is life science-related construction. On the last day of August, Texas Medical Center (TMC) announced it had officially broken ground on TMC3, a 6 million-square-foot development devoted exclusively to the life sciences and supporting industries. Woven between the massive science buildings will be a park planned to resemble the double-helix structure of DNA, a fitting and relaxing place for scientists to gather and share ideas.
TMC3 will hold the title for the largest life sciences park in the world, but maybe not for long. It's only one of many going in in Houston, let alone across the country, in the wake of the coronavirus pandemic. Levit Green, for example, is another mixed-use life science development appearing soon in Houston. These two, along with Rice University's The Ion and Texas A&M's Innovation Plaza, seem to show that there's a lot of appetite for commercial real estate dedicated to science and technology.
What does TMC3 have to offer?
As part of the Texas Medical Center, which already contains over 60 institutions and employs over 100,000 workers (making it already the largest medical center in the world), TMC3 will provide space for Fortune 100 life science companies to work more closely with the medical center and its expansive staff.
Phase One includes two buildings with a total of 950,000 square feet, divided between a 700,000-square-foot research facility and a 250,000-square-foot collaborative building developed by a partnership between Braidwell, a life sciences investment firm, and Beacon Capital Partners. A total of $1.8 billion in financing has already been secured to complete this first phase of TMC3.
Along with science facilities, Phase One will also include a hotel with over 500 keys, conference space totaling 65,000 square feet, more than 2,000 parking spaces, and 18.7 acres of public space, including the Helix Gardens, those DNA-shaped parks everybody is eager to see in action. A 350-unit residential structure is also intended to go up during this initial construction phase, which is estimated to be largely completed by late summer 2023.
TMC3 is projected to create more than 23,000 permanent jobs when it's finished, as well as $5.4 billion in economic growth each year for the state of Texas. Levit Green, a 53-acre mixed-use life sciences district, will go up adjacent to the TMC campus, adding another section of life science space with laboratories, office space, a conference center, fitness facilities, outdoor gardens, and restaurant space.
Why Houston is drawing the life science industry in a big way
JLL Research recently took a deep dive into what makes a good life science market with both its Life Sciences Emerging Markets Index and 2021 Life Sciences Real Estate Outlook. And although areas like Boston, San Francisco, and San Diego are still strong places for life science work to take place, they're becoming increasingly inaccessible to investors. However, there are lots of opportunities for new life science industry markets to emerge.
Houston is a favorite in many categories, including wage positioning and total STEM degrees. Not only is it an affordable city for wages, with a 0.96 indexed median wage, putting it just below the national median for wages, it ranked seventh in total STEM degrees, at 409,354, meaning there are plenty of qualified workers already in the area.
Along with having the right people, in the right place, at the right price point, the Houston area boasts something most other heavily populated areas can't: lots of empty land. Because the Texas Medical Center has been a longtime owner of the property upon which TMC3 will be built, complete and total master planning is possible from the get-go.
In Houston, there's no trying to change multiple acres of different zoning types, purchasing old buildings to tear down, or being forced to build these impressive facilities around existing property owners who refuse to sell -- it's all one large parcel of land, ready to be turned into something wonderful. And it's not the only one. Like they say, everything's bigger in Texas, including the available chunks of ground.
The Millionacres bottom line
COVID-19 may be wreaking havoc on tons of industries, including restaurants and hotels, but one area it's only made more important and valuable is life sciences. After all, we're still in the middle of a pandemic, and that means we still need a lot of everything life sciences have to offer to fight the war against COVID-19. Of course, other medical advances are important, too, which is why places like Houston are seeing so much investment in the development of gargantuan multiuse life sciences campuses.
The need for medical advances is only getting stronger as we all age. Baby boomers are reaching a time in their lives when they're going to benefit most from new medical technologies, be those drugs, medical devices, or surgical techniques, but millennials aren't getting any younger, either. Both groups make up an incredible number of people who will be reaching middle age or beyond in the near-term (remember, older millennials started turning 40 this year), when medical treatments are more commonly needed and chronic illnesses often emerge.
Now is absolutely the time to invest in ground-floor life science real estate, if you can get in at all. Not only will you be ensuring that teams have the right facilities to develop life-saving and life-prolonging treatments, you'll own real estate investments that are in massive demand and should be for the long term.