By Taylor Williams
Everybody always remembers the one who got away, but what if they’d never shown up to the party in the first place? Or in the case of the Texas commercial development boom, is it possible that one specific asset class simply never took root, or is it more likely that it just hasn’t happened yet?
The mystery party guest/asset class could only be life sciences — a sector that is somehow a quasi-subcategory of healthcare real estate, a longshot end use for an industrial conversion, a property type that represents the evolution of commercial-grade lab space and an investment vehicle that has captured billions of capital in coastal markets — all rolled into two basic words. And while the big-money question surrounding life sciences growth in Texas is not “what?” but “when?,” examining what the field actually already encompasses in the state is important to understanding the potential for a future boom. After all, it’s not as life sciences is nonexistent in Texas.
According to a 2025 report from JLL titled, “Why Texas Life Sciences?” there are already some 8,700 life sciences companies employing more than 150,000 people in the state. More than $1.5 billion in combined public and private funding has flowed into those enterprises over the past three years, prompting the development of more purpose-built life sciences facilities in Dallas, Houston and Austin. The JLL report highlights one such project per market. Combined, these projects are expected to bring about 1,500 new jobs to the state:
• Evolve Biologics’ 230,000-square-foot manufacturing facility in Dallas
• Bionova Scientifics’ 70,000-square-foot plasmid DNA facility in metro Houston
• BillionToOne’s 220,000-square-foot high-capacity diagnostic lab in Austin
You don’t have to be a scientist to understand those three facilities house three distinctly different uses that incorporate medical, industrial and laboratory functions. And that point of diversity — along with a plethora of academic and medical research institutions, development-friendly policies and a growing force of qualified laborers — could help spur growth of the product type in Texas.
“A lot of other markets are very big into advanced therapies — cell and gene therapy, immunology — very advanced, precise medicine,” says Sam Johnson, principal at Montgomery Street Partners. The firm is the co-developer of Pegasus Park, a 26-acre life sciences campus in northwest Dallas that is a redevelopment of the former headquarters of jewelry retailer Zale Corp.
“Those are huge drivers in the sector, but what we’ve seen in Dallas is a broader, more diverse form of demand,” Johnson continues. “It’s not just academic institutions and providers of precision medicinal treatments, but other modalities like diagnostics and oncology, as well as more traditional uses like manufacturing and office. We want to be able to capture all of that within the next phase of the development.”
J Small Investments is the other co-developer of Pegasus Park. Steve Davis, the firm’s president, believes that proximity to key research institutions on the local front and overbuilding in established markets on the non-local front have worked in tandem to put the project on the map.
“We believe that some of the major markets that were oversaturated and had been building life sciences product for a long time are in a transitional period in which they need to figure out what to do with the glut of space,” says Davis. “But we, for better or worse, are a nascent market. Having a presence from these Tier 1 universities in North Texas — not just UT Southwestern Medical Center, where there’s a staggering amount of medical research being done that is an incredible resource for the region — has been key to our success.”
Multiple local academic institutions share a presence at the development via the 135,000-square-foot Bridge Labs at Pegasus Park. Although the nature of the work and research that these universities are conducting at Pegasus Park can sometimes overlap, Davis believes that the campus-like setting and shared spaces keep things copacetic.
“It’s a neutral place where they can convene rather than worry about the territoriality of universities,” he says.
An Institutional Anchor
Just as proximity to the broader Dallas Medical District has paid dividends for Pegasus Park, leaning on the location, resources and density of the Texas Medical Center (TMC) has been key for life sciences users in Houston. A couple years ago, the first dedicated life sciences facility, a 250,000-square-foot structure known as the TMC3 Collaborative Building, opened within the 37-acre Helix Park on the TMC campus. Helix Park is ultimately planned to feature some 5 million square feet of healthcare and life sciences development.
Tim Gregory, executive vice president at JLL’s Houston office and head of its healthcare and life sciences real estate advisory group, sees tremendous potential for life sciences growth in Houston and credits the TMC and Texas energy infrastructure as the crucial driving forces.
“Over the last 10 years, Texas life sciences employment grew 38 percent, while the balance of the U.S. life sciences employment markets grew at 22 percent,” Gregory says. “In addition, there are 10 million patient encounters per year at the TMC. With biotechnology startups alone, there’s about 425 such companies in and around the TMC.”
Gregory stresses the 10 million figure as a key metric for life sciences companies. This is because within those patient encounters are unparalleled resources for building and refining artificial intelligence (AI) models that are capable of detecting disease, predicting patient outcomes and implementing treatments.
“There will be a lot of new AI companies coming in and partnering with the TMC institutions, and those companies will demand an extreme amount of power,” Gregory notes. “With Texas as an oil and gas producer and the infrastructure we have and the headway that’s being made to revamp the grid, that will be a big part of the story.”
With all that said, Gregory thinks it’s still too soon for a speculative life sciences building spree in Houston.
“We have an impressive story that’s been a long time in the making, and in several years, we could really start to see the golden age of life sciences for Texas,” he says. “We’re seeing it start in real time now, but eventually it’s going to explode, and energy/power is going to be the key differentiator for Texas versus other markets. When we see some of the larger AI-driven medical research companies move to Texas, that will be a great sign for us.”
Leveraging The Lifestyle
Sources say that like many commercial users, life sciences companies are drawn to campus-style developments that offer access to amenities, nature and the opportunity to engage with other tenants. That holds true across most markets, in Texas and beyond. But in Austin, the culture of entrepreneurship and collaborative innovation is a behind-the-scenes driver of growth in both life sciences and traditional healthcare facilities.
“Much like the tech industry, life sciences companies like to interact with each other,” says Kevin Norman, principal and life science sector lead at DES, a multi-disciplinary architecture and engineering firm with a national presence. “We really don’t have life sciences clusters yet in Austin, but we expect them to emerge because these companies like to create a sense of community and a collaborative, networking environment.”
“The campus environment with amenities like foodservice and fitness are becoming just as important in the life sciences world as they are in the tech world,” Norman continues. “These companies feed off of one another; even if they don’t discuss their proprietary information, they do like to talk in general about the science. So there’s an energy that results from them coming together and forming a community.”
The same could be said of traditional healthcare facilities.
“There is a real desire and need for employers in Austin to have a full-service, live-work-play environment that includes healthcare, whether it’s a campus feel or a centralized community across the MSA,” adds Marshall Thurmond, vice president of the healthcare advisory services team at Transwestern’s Austin office.
But if Houston’s model is any indication, then Austin first needs more established healthcare districts in order to generate organic, synergized life sciences growth. Thurmond says that the groundwork is there for major growth of traditional healthcare facilities in the state capital. It just hasn’t all come together yet.
“As Austin has grown, there’s been such a focus and rush from developers to put all of their money and resources into office, industrial and multifamily that healthcare has lagged behind,” Thurmond says. “So from a healthcare perspective, development of outpatient facilities and medical office buildings is well outpaced by tenant demand, and across Austin, we see demand for space from numerous specialty providers that have limited options.”
Like with life sciences, academic and medical research programs and institutions should play a big role in supporting growth of healthcare facilities in Austin, Thurmond says.
“A major factor is UT Austin, which has partnered with MD Anderson on a new hospital within the UT Austin Medical Center, expanding an existing innovation district near the university,” Thurmond says. “It’s a clear example of the healthcare, academic and tech sectors coming together to improve care across the region.”
There are other parallels that future healthcare and life sciences users and developers in Austin can borrow from the tech sector, such as the need for turnkey space. Much like with tech startups, as soon as new drug or therapeutic treatment companies obtain financing or receive regulatory approvals for their products, they’re on the clock with investors.
“A lot of tenants don’t go looking for space until they get their next round of funding or have cleared a regulatory approval. At that point, they’re looking for space and need to get up and running as fast as they can,” Norman says. “So if they can find turnkey space, that’s a big benefit.”
Some developers have tried to get out in front of that need by delivering speculative lab space, but that trend remains in its infancy in Austin. Norman sees value in that strategy but cautions that spec lab facilities need to be designed with flexibility in mind to allow users with specific requirements to modify the lab to fit their needs.
A Slow Journey
The insights provided by healthcare and life sciences experts in both Austin and Houston have one major grievance in common: The booms — healthcare in Austin, life sciences in Houston — just aren’t quite there yet, even if the infrastructure, sponsorship and economic fundamentals are. The story seems to be the same in Dallas for life sciences.
As co-chair of the real estate industry group at Dallas-based law firm Winstead PC, Andy Dow has seen the slow, often stymied evolution of life sciences from traditional healthcare firsthand. He says the expectation of a life sciences boom in Dallas really started to gain traction a few years ago — a time in which public health was on everyone’s mind.
“We noticed a few years ago that some of our healthcare clients were getting interested and involved in life sciences, thinking there would be a lot of overlap,” Dow recalls. “Five years later, that hasn’t really been the case. A lot of investments were made, but the problem is that the tenants aren’t always the most well-capitalized — a lot of startups, not a lot of credit behind the leases, and a lot of them fail.”
Dow suggests that there’s also been a sort of realization among traditional healthcare developers and investors that just because life sciences companies use labs, conduct scientific research and cater to the health of the general public, their real estate needs can differ dramatically.
“Some life sciences buildings look like laboratories; others look like warehouses; some look like office buildings,” he says. “The design of life sciences facilities is specific to the precise use within the building, so it’s tough to take a one-size-fits-all approach to that asset class.
“Healthcare on the other hand is a very stable tenant base; once you get a physician group or healthcare provider in a building, they rarely leave,” Dow continues. “Life sciences differs on that, plus the asset class has been dominated by a few select markets, and it remains to be seen what will be the next life sciences capital. If Texas is going to emerge as a life sciences hub, it will probably revolve around a large academic or medical research center, because that’s where the asset class really intersects with traditional healthcare.”
Still, real estate development is not for the impatient, even in a state like Texas in which the fundamentals are remarkable and the regulatory obstacles are minimal. Perhaps a shift in the capital markets will be the catalyst for a life sciences boom. Perhaps it will be federal legislation that earmarks fresh funding for life sciences ventures. Perhaps it will be oversaturation of capital in other asset classes.
Whatever the spark may be, there’s no question that if a boom materializes, Texas will be well-positioned to receive it.
“Overall, we’re very bullish on this product type in Texas, because we’ve seen evidence of companies in less business-friendly states that are waking up to the fact that labor is available in Texas that’s backed by good institutions and local government support,” says Johnson of Montgomery Street. “So we should see renewed interest from companies setting up shop, not just as temporary landing spots to take advantage of research portfolios, but because they really think this is the best place to grow the business. And that’s a different paradigm shift relative to the past 10 years.”
— This story first appeared in the August 2025 issue of Texas Real Estate Business magazine.