Category: News

The life sciences industry is betting on Texas. Developers should too

Posted on by Mia Goulart

The State of Texas is a natural mooring for life sciences companies. It has one of largest clusters of biotech and pharmaceutical professionals in the country, and a network of universities and institutions focused on building strong biochemistry, biophysics and technology-based programs designed to churn out highly skilled talent. Texas has the makings of a mature market, but a void of turn-key manufacturing, lab/R&D real estate is slowing momentum. Together, the state’s three largest metros, Dallas-Fort Worth, Houston and Austin, boast an aggregated population of over 15.5 million but only nine million square feet of inventory, a fraction of other dynamic life sciences markets.  

So, what is driving the disconnect? Texas seems to be caught in the middle of a chicken-or-the-egg riddle. While biotech companies are waiting for the arrival of new state-of-the-art facilities, developers are standing by for the arrival of biotech companies. To resolve the standoff, developers can look to evidence of the impending real estate demand to justify breaking into this technical market. There are three key trends that will ensure the continued expansion of the life sciences sector in the state, and each is reason alone to motivate new development.

Economic incentives
The Cancer Prevention & Research Institute of Texas (CPRIT) has been a substantial driver of the industry’s expansion. The $6 billion grant program has helped to recruit 285 researchers and 16 companies to the state since launching in 2007. PanTher Therapeutics is a recent example of how the grant program is supporting growth. The clinical-stage oncology company, which focuses on treating solid tumors, received $14.2 million from CPRIT to expand the development of its clinical therapies. A taxpayer-funded program, CPRIT currently has capacity to deliver significant funding grants like this through 2027.

In addition to CPRIT, the Texas Medical Center Innovation Institute funds a series of programs to support the growth of early-stage life sciences companies, providing advisory and essential amenities. Both of these programs illustrate the state’s ardent investment in expansion of the life sciences industry. As more companies take advantage of funding opportunities and state-supported services, it will be imperative that there are quality facilities in place to meet demand.

Utility infrastructure
Like real estate availability, power is a major need for life sciences companies, many of which utilize substantially more power and water than a standard office tenant. Life sciences companies are looking for reassurance that Texas power and water utilities can meet their needs given its checkered reliability history—and many local municipalities are meeting the moment. Cities throughout Texas have committed to accelerating the expansion of substations and bringing in larger water and sewer infrastructure.

CenterPoint Energy is investing and expanding its electrical infrastructure in the Texas Medical Center area, which has helped to support an expansion of TMC Innovation Factory Labs, scheduled to open sometime this year. In addition, Xcel Energy is building new substations throughout Northern Texas, another hotspot for life sciences activity in the state, to ensure the region’s power grid can accommodate growth. These are just a few of the ways utility companies are supporting the industry’s growth.

Business-friendly suburbs
Austin, Dallas-Fort Worth and Houston are expectedly in the biotech spotlight. The three cities have established life sciences networks and a ripe pool of professional talent. However, the surrounding suburbs are presenting tremendous opportunity for developers. Markets like The Woodlands, Taylor, and Round Rock have quickly captured demand due to their business-friendly environment and commitment to infrastructure support. There has been a steady migration to these metros, foreshadowing further momentum to come. With ample land for new development in these suburban areas, there is a unique opportunity to create life science campuses that most tenants prefer to settle into, being close to other likeminded companies and talent.

There are many examples of this suburban flight. In partnership with Nurix Therapeutics, Alexandria Equities is developing 12 acres of life sciences real estate in The Woodlands, representing an investment of $200 million, and NexPoint has announced plans to develop a 200-acre “cutting-edge” life science project known as the Texas Research Quarter in Plano, representing a $3.8 billion investment. . Plus, Dallas’s Pegasus Park has reimagined the former corporate campus of jeweler Zale Corp. as a life science hub, adding 135,000 square feet of lab and office space to the development, which includes tenants like UT Southwestern, TAYSHA Gene Therapies, McKesson, Colossal, ReCode, etireaRX and BioNTX Each of these projects will attract new demand from companies that support these global giants and that want to establish a presence in the area.

The expansion of the life sciences industry marks a new era in commercial real estate, with the introduction of light-industrial, technology-enabled properties. The asset class is a new horizon for the industry, and undoubtedly, forward-thinking real estate developers have an opportunity to support the industry’s expansion throughout the state. However, even the most discerning developers can overlook demand cues. Having a partner that is embedded in local market dynamics and that deeply understands the nuanced fundamentals that inform development decisions is essential to drive strategic decisions and capitalize on this tremendous opportunity.

Project Management Advisors, Inc. Senior Project Manager Grayson Mann specializes in tenant improvement and ground-up development for biotech, pharma and the distribution industries.

Connection Park Logistics Center trades in San Antonio

Posted on by Mia Goulart

JLL Capital Markets arranged the sale, joint-venture equity, and financing for Connection Park Logistics Center, a newly developed, Class A distribution center totaling 490,083 square feet in San Antonio, Texas.

JLL marketed the property on behalf of the seller, Triten Real Estate Partners, and procured the buyer, CAPSTAR Real Estate. Additionally, JLL arranged an equity partnership between CAPSTAR Real Estate and an undisclosed investor, and secured a floating-rate, interest-only loan from Prime Finance for the acquisition of the property.

Connection Park Logistics Center is situated on 42.23 acres and includes 36-foot clear heights, six ramped doors and 348 trailer and car parking spaces. The cross-dock configured warehouse was completed in early 2023.

Located at 6851 Cal Turner Drive, the distribution center sits within an established industrial park, offering proximity to major national and global distribution centers. Connection Park’s location offers immediate access to three major regional highways allowing for tenants to easily access the entire metropolitan area in addition to Houston (via IH-10) and Austin (via IH-35). Given its exceptional distribution reach, this industrial pocket is one of the most infill logistics locations in San Antonio.

The JLL Capital Markets Debt and Equity Placement team representing CAPSTAR Real Estate was led by Director Jarrod McCabe and Analyst Blake Jones.

The JLL Capital Markets Investment Advisory team representing the seller was led by Senior Managing Director Trent Agnew and Director Josh Villarreal.

Cushman & Wakefield arranges sale of two Houston-area multifamily communities

Posted on by Mia Goulart

Cushman & Wakefield has arranged the sale of two multifamily communities—Amalfi at Tuscan Lakes and Sorrento at Tuscan Lakes. The communities are in League City, Texas, and together total 532 units.

John Carr, Jennifer Campbell, Ben Fuller, Josh Hoffman, Avery Klatt, Asher Hall, and Grant Raymond of Cushman & Wakefield represented the seller in the transaction. Both multifamily communities were sold by Sachs Companies.

Amalfi Tuscan Lakes and Sorrento Tuscan Lakes have 328 and 204 units, respectively, and are located at 1450 E. League City Pkwy and 1455 Louisiana Ave. Both communities are strategically positioned in the rapidly growing Houston suburb of League City where residents enjoy convenient access to an abundance of employment centers and retail establishments. The communities were built in 2008 but represent a timeless portfolio with attractive architecture, well-groomed landscaping, and a multitude of community amenities such as pools, fitness centers, dog parks and picnic areas.

  • 1450 E. League City Pkwy
  • 1455 Louisiana Ave.

Partners Real Estate arranges the sale of 13,530-square-foot industrial property in Dallas

Posted on by Mia Goulart

Partners Real Estate, one of the largest independent commercial real estate firms in Texas, has arranged the sale of a 13,530-square-foot industrial property located at 2300 Penn Street in Irving, Texas.

Partners’ Hanes Chatham Jr. and Graham Dressel represented the seller in the transaction. Rad Realty Group LLC represented the buyer, Garcia Laser Screeding LLC in the transaction. Partners’ Quinn Conway provided debt for the buyer.

Fort Worth-based Street Realty unveils plans for new 12-acre, 140,000-square-foot light industrial business park in White Settlement

Posted on by Mia Goulart

Street Realty, a Fort Worth-based full-service commercial real estate firm, has acquired a 12-acre site with 1,100 feet of frontage along West Loop 820 near Clifford Road in White Settlement, Texas, located in northwest Tarrant County. The site will be the future home of West Loop Business Park, a 140,000-square-foot light industrial business park composed of 14 modern buildings that offer shallow-bay flex space for a wide variety of businesses and tenants. Construction will commence in late 2023 with completion slated for Q3 2024.

Each building will offer 9,900 square feet, with standard units ranging from 975 square feet to 1,950 square feet, and include sought-after industrial features, such as grade-level overhead doors, LED lighting, storefront glass entries, flex/office space, clear span warehouses, heavy power, and more. West Loop Business Park will also offer ample parking, site lighting, prominent signage, security fencing, and a sustainable landscape design plan with drought-tolerant trees, native shrubs, grasses, and water-conservation technologies. Custom unit sizes and finish-outs up to 9,900 square feet will also be available for larger users.

West Loop Business Park will be located at 724 W. Jim Wright Freeway in White Settlement, Texas. Street Realty’s brokerage team will oversee project leasing, while its management team will oversee property management.

Project financing was provided by FirstBank Southwest in Fort Worth by loan office Scott Whitaker. Whitaker has financed multiple Street Realty projects, most recently the company’s Downtown Arlington mixed-use project, Front Street Village.

KBS & Transwestern sign 38,000 square feet with two regional firms at Class A office in Dallas

Posted on by Mia Goulart

KBS, one of the largest owners and operators of premier commercial real estate buildings in the nation, and Transwestern Real Estate Services (TRS), announced that they have signed 38,501 square feet in lease agreements with two regional firms at Providence Towers, a 524,143-square-foot, LEED Gold-certified Class A office building in Dallas, Texas.

The transactions include a lease expansion with Tower Street Insurance, a Texas-based independent insurance agency—the company is expanding from 5,000 square feet to 24,399 square feet—and a new 14,102-square-foot lease with Fieldwork, a market research services company that is relocating to Providence Towers from another Dallas office building.

The leasing activity demonstrates the ongoing viability of premier office properties in key U.S. markets.

Providence Towers is located at a prestigious business address along the Tollway and has been the chosen place of business for some of the country’s most prominent companies. The 12-story property has been extensively upgraded under KBS ownership, including a complete redesign of the grand east and west tower lobbies, creating luxury entrances.

KBS is currently completing a multi-million-dollar renovation of the property that includes various indoor amenity upgrades. In 2021, the firm completed a completely reimagined tenant lounge and café and is currently underway on renovations for an upgraded fitness center, expanded conferencing facility and elevated common areas. The renovated tenant lounge includes hospitality-inspired amenities such as lounge with a fireplace, collaborative working space, pool tables, shuffleboard and a private dining room. Additional Class A amenities at the property include a wine bar and putting green.

Transwestern’s Kim Brooks, Justin Miller, Scott Walker and Laney Delin represented KBS in the lease negotiations.

Tower Street Insurance’s new lease agreement at the property essentially quintuples its space at Providence Towers.

KBS owns and operates several other Class A office properties in the Dallas market, including 3811 Turtle Creek, Highland Park Place, Legacy Town Center, Preston Commons, Tollway North Office Park, and Sterling Plaza.

Providence Towers is located at 5001 Spring Valley Road in Dallas, Texas.