juarez / el paso industrial real estate report · the basics: •foreign companies can own or lease...
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Juarez / El Paso Industrial Real Estate Report
Mexico's Manufacturing Supply Chain Summit
El Paso, Texas
April 11 2013
Andres Sandoval
Vice President
CBRE
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• CBRE (NYSE: CBG) is the world's premier, full-service real
estate services company
• 37,000 employees, 300 offices worldwide, 60 countries - from
Argentina to Vietnam
• Operating globally, the firm holds a leadership position in virtually
all of the world's key business centers.
About CBRE
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The Basics:
• Foreign companies can own or lease
• NNN structure – tenant pays for real estate taxes, building
insurance, and maintenance
• Lease guaranty from the parent company
• The Juarez market is a sophisticated, institutional market
• There is a lot of industrial space available in Juarez today.
Industrial Real Estate in Mexico
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El Paso / Juarez Regional Map
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Industrial Market Statistics – Cd. Juarez
Market Size: 60.5 million square feet
Number of Buildings: 537
Number of Industrial Parks: 35
Average Asking Rates: $4.02 per sf per year, NNN
Average NNN Cost: $0.30 per sf per year
Vacancy Rate: 14.1%
Current Vacancy: 8.6 million sf
Number of Vacant Buildings: 102
Land Cost: $2.30 - $3.25 per sf
Construction Cost: $30.00 - $38.00 per sf
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Industrial Market Statistics – El Paso
Market Size: 54.4 million sf
Number of Buildings: 578
Number of Industrial Parks: 27
Average Asking Rates: $3.59 per sf per year, NNN
Average NNN Cost: $1.15 per sf per year
Vacancy Rate: 14.1%
Current Vacancy: 7.7 million sf
Number of Vacant Buildings: 141
Land Cost: $2.00 - $2.50 per sf
Construction Cost: $38.00 - $42.00 per sf
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Number of Industrial Buildings Available in Different
Size Ranges:
40,000 to 60,000 square feet: 27
80,000 to 120,000 square feet: 51
>200,000 square feet: 7
Industrial Building Availability – Cd. Juarez
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Net Absorption & Vacancy
5%
7%
9%
11%
13%
15%
(2,200,000)
(1,900,000)
(1,600,000)
(1,300,000)
(1,000,000)
(700,000)
(400,000)
(100,000)
200,000
500,000
800,000
1,100,000
1,400,000
2007 2008 2009 2010 2011 2012 2013
Absorp
tion S
F
Q1 Q2 Q3 Q4 Total Annual Net Absorption Vacancy Rate
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1. Lear
2. Delphi
3. Align
4. Sumitomo
5. OEQF
6. Cequent
7. Flexsteel
8. Salter Labs
9. Werner Ladder
10. Tatung
Recent Projects in Juarez
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A Vacancy Rate of 14% = Buyer’s or
Tenant’s Market
While the market balances to about an
8% vacancy, the leverage is still on the
tenant or the buyer.
Vacancy Rate
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Main Developments
Guadalupe POE
New University Campus in Southeast Juarez
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Manufacturing Employment
Source: INEGI
150,000
160,000
170,000
180,000
190,000
200,000
210,000
220,000
230,000
Total IMMEX Employment Cd. Juarez
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Trends
Increasing activity in 2013 as the US economy improves –
Industrial building supply will decrease
Near-Shoring
Aggressive investment from institutional investors (Macquarie of
Australia just acquired $1.2 billion portfolio in Mexico)
While the vacancy rate decreases it will still be a
buyer’s/tenant’s market
Growing pent-up demand from many established operations
30,500 new jobs in Juarez in 2012-2013
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