By Robbie Whelan and Erica E. Phillips / Wall Street Journal
The U.S. presidential election is still days away but the impact of the campaign and its outsized focus on Mexico already are being felt in the market for warehouses and factories in border towns like Tijuana, Juarez, Monterrey and Saltillo.
Leasing of industrial space along Mexico’s northern border has slowed sharply as uncertainty has grown over how the election’s outcome—particularly a victory by Republican candidate Donald Trump—would affect demand.
Mexico’s industrial real-estate market has exploded since the North American Free Trade Agreement took effect in 1994 and created a unified market between Canada, the U.S. and Mexico, making it easier for manufacturers to take advantage of cheap labor, low costs and less-stringent business regulations south of the border. In the past decade alone, it has nearly tripled to more than 710 million square feet of space.
But the election of Trump—who has called for the U.S. to pull out of NAFTA—could have a chilling effect on the market in the short term, experts say.
If NAFTA were done away with, “on the Mexican side of the border a lot of the facilities will go vacant, rents per square foot will drop substantially,” said Tom Fullerton, an economics professor at the University of Texas at El Paso. “It’s not hard to imagine about a 30% to 40% vacancy rate collectively on both sides of the border.”
NYT – In 2014, Cascade Investment, the private investment firm of Bill Gates, the Microsoft co-founder, bought 48 acres of undeveloped beachfront land and the Four Seasons hotel site in Punta Mita, a gated residential resort on the Riviera Nayarit, 40 minutes north of Puerto Vallarta.
“Bill Gates buying land in the area has had a real impact,” said Aaron Fisher, the sales director at Punta Sayulita, another residential development on the Riviera Nayarit. “We needed high-end clients and now they’re coming.”
El Sol de Mexico -Neighbors in Chapultepec are protesting the construction of a multimodal transfer center in that area. Plans are to build two hotels and an office tower of 49 levels on land that was Bosque de Chapultepec.
Sentido Comun – Fibra Danhos, a specialist in building and managing various real estate ventures, announced the start of operations in two of the three office towers in the Bullfight Central Park complex.
InSight Crime – A new study by the Inter-American Development Bank finds that violence disproportionately affects the real estate value of homes in poor neighborhoods in Mexico, an illustration of how crime exacerbates wealth inequality.
Sentido Comun – Grupo Gigante, a conglomerate with retail, real estate and restaurant interests, is contemplating real estate expansion of about 2,650 million pesos ($156 million) to build two real estate developments in the capital over the next four years.
Design Boom – The winner of a national architecture competition for the Papalote Children’s Museum in Mexico City is the joint team of Barcelona-based studio MX_SI and SPRB, a practice based in Guadalajara.
Sentido Comun – Promecap Development Capital, an investment fund that buys company assets or shares and provides financing, has received government approval to proceed with its plan to acquire a portfolio of Quintana Roo property.
Reuters – It might not look its best after a visit a few days ago by Hurricane Patricia, but this is Costa Careyes, home to some of the world’s most exclusive holiday homes. The Mexican playground of the rich and famous has been ravaged by the storm.
Sentido Comun – Three skyscrapers apparent along Paseo de la Reforma give the capital a new aura of modernity and development. Soon, in that small urban space that some are calling the Little Mexican Manhattan, a new 50-story tower will be erected.
Sentido Comun – The real estate company controlled by the wealthiest entrepreneur Mexico, Maria Asuncion Aramburuzabala, won the legal battle that pitted a group of Polanco neighbors who opposed a housing project in the capital .
Counter Punch – Todos Santos on the Baja California peninsula is getting a mega-development called Tres Santos to build 4,472 homes over twenty-five years, leading to an estimated indirect population growth of more than 60,000 new residents, quite a leap for a town whose population in 2010 hovered just above 5,000.
Sentido Comun – Fibra Macquarie closed the purchase of 10 industrial properties for $105 million. The properties are located in f Monterrey, Tijuana, Reynosa, Saltillo and Ciudad Juarez and currently have an occupancy rate of 93.9 percent.