As 2023 begins, The Woodlands area is riding a wave of announcements from companies moving to or expanding their presence to the area, including several from California, following a trend experts said is just getting started in Texas and the Greater Houston area.

Since 2019, The Woodlands has seen shifts among employment sectors as energy-related companies have downsized their presence or withdrawn from the area, and health care employment has grown along facility expansion, according to The Woodlands Area Economic Development Partnership.

Area economic experts said these and factors such as a business-friendly climate broadened the region’s appeal for many out-of-state companies, particularly those in the life sciences sector.

A 2022 study by the Hoover Institution at Stanford University showed from 2018-21, at least 132 companies moved from California to Texas overall.

This is more than four times as many as the state with the next-highest number of relocations from California, Tennessee, which saw 31 corporate relocations.

Gil Staley, president of The Woodlands Area EDP, said the interest from science and technology companies is creating a new burst of activity in an area originally envisioned for these kinds of businesses by George Mitchell and The Woodlands’ founders.

“We see it as a rebirth of [the] Research Forest [corridor],” Staley said.

In 2022, two life science companies from California announced they will move their headquarters to or create a presence in The Woodlands.

Cellipont Bioservices, a company which develops and manufactures cell therapies for other companies, began work in November on a 76,000-square-foot manufacturing facility at 9501 Lakeside Blvd.

In late December, work also began on space for Nurix Therapeutics at 8800 Technology Forest Place as part of a larger life sciences complex.

Joel Marcus, executive chair and founder of California-based Alexandria Real Estate Equities Inc., which is developing the complex, said upon completion, the campus will include a total of nearly 318,000 square feet.

The first phase will be completed in the first quarter of 2023.

“There will be nothing like this in Houston, a one-of-a-kind safe and cost-effective campus,” Marcus said.

Life sciences sector

In an area that previously housed energy companies such as Anadarko, the energy sector has seen its share of local nonretail jobs among major employers drop from 27% to 8% since 2019. As of early 2022, health care made up more than 30%, according to information from The Woodlands Area EDP.

This growth in health care is part of what has made the region attractive for life sciences, said Katie Pryor, chief development officer and senior vice president for member engagement with the Greater Houston Partnership, at the Dec. 13 Future of the Houston Region event.

“The rising economic development interests in the area, particularly in Montgomery County, recently have created incredible opportunities for innovation and growth in sectors in industries and technology,” Pryor said at the event.

California-based companies took notice, and Cellipont President and CEO Deborah Wild said The Woodlands fit the company economically as well as logistically.

“We performed a regional analysis ... and found that The Woodlands from an economic perspective was a great place for employees to live,” Wild said. “Employees are more likely to stay if the schools are fantastic; it’s a beautiful, safe area.”

Stella Vnook, chief scientific officer for Cellipont, said the region is ideal for companies such as Cellipont with its proximity to the Texas Medical Center and Houston-area airports as well as sites where a scientific community of research and innovation is growing.

Texas is also a central location within the country—an important factor when delicate biological materials must be shipped quickly across long distances, she said.

“A lot of innovation is coming out of the Texas region. ... It’s critical for us to continue to develop and grow cell therapy in this very important region.” Vnook said.

Wild said the company has 70 employees in San Diego, and while some executives will move to the new location, most of the hires will be local. As it expects to expand on-site with a manufacturing component, it will have about 200 employees when complete, she said.

An even larger complex is planned at the Technology Forest Place site previously occupied by Lexicon Pharmaceuticals, which moved to Technology Forest Boulevard.

The former 260,000-square-foot site is being developed into a life sciences campus offering more than 300,000 square feet of office and laboratory space as well as amenities, including conference space, a fitness center and pickleball courts, according to Marcus.

“We choose The Woodlands to redevelop and develop a one-of-a-kind Alexandria-branded, mission-critical multitenant collaborative campus, which will bring to the Greater Houston market for the first time a highly cost-effective and safe work-play-live environment for life science and other advanced technology entities,” Marcus said in an email.

The first company announced to be leasing space at the site is Nurix Therapeutics, headquartered in San Francisco. According to The Woodlands Area EDP, the company held a groundbreaking Dec. 13 for the project. According to Alexandria, the company works in the field of protein modulation to treat cancer. The company will operate its research and development facility at the site.

National interest

Jim Carman, president of The Howard Hughes Corp.’s Houston region, said 33 companies have announced relocations or expansions into The Woodlands among its leasing agreements since 2020, representing more than 500,000 square feet of office space and 2,000 new residents following those jobs.

Howard Hughes leases space in the 31- and 32-story The Woodlands Towers at The Waterway, formerly the Anadarko towers, which it acquired at the end of 2019.

The tower at 9950 Woodloch Forest Drive will house several new headquarters or corporate offices, including Obagi Cosmeceuticals—moving from California—and Centric Infrastructure Group, moving from within The Woodlands. A New York cryptocurrency company, NYDIG, also is establishing office space there.

“We have seen definitely over the last couple years particularly a diversification in our customer organizations,” Carman said. “One of the most interesting is really several companies in the renewable company sector.”

Those companies include Lancium Technologies, which located from within Texas to a full floor at The Woodlands Towers in 2022. The company works with renewable energy infrastructure and technology, according to its website.

Other technology companies moving to The Woodlands from out of state include SmartDraw Software, which relocated from California in 2022 to Hughes Landing, and SI Group, which works in the chemical and pharmaceutical fields, and relocated from New York in the fall, according to Howard Hughes.

Carman said despite a shift to remote work among many companies, he believes the need for office space is still strong. According to third-quarter information from real estate brokerage firm Colliers, office space leasing in The Woodlands was more robust than the Houston metro area with a 16.6% vacancy rate in The Woodlands compared to 23.3% in the metro overall.

Companies relocating to The Woodlands are also attracted by the proximity of the community to work sites and amenities, he said.

“The real estate needs of these companies hasn’t changed considerably; they need the same square footage,” Carman said. “The difference is a growing focus on amenities. If we’re going to have our employees come to the office, we’re going to give them more of a reason to be here than a paycheck and a desk.”

Educating future workers

Staley said companies relocating to The Woodlands will largely be hiring locally.

“They want to see a very educated workforce for recruitment of employees,” Staley said.

According to the five-year estimates from the 2021 U.S. Census Bureau American Community Survey, 64.3% of The Woodlands residents age 25 and older had a bachelor’s degree or higher, compared to the national average of 33.7%,.

The presence of companies in new sectors such as life sciences could also spur further development of educational programs, he said.

Staley said the EDP planned to begin discussions with the Lone Star College System in early 2023 to discuss life sciences programs.

Linda Head, senior assistant vice chancellor at LSCS, said programs could include medical lab and manufacturing technicians as well as clean room instruction and ongoing worker training.

“We’re working very quickly to design the right programs and labs and modify what we have already so that we’re ready in six months or so,” Head said.

Editor's note: An attribution in this story was updated.