The industrial real estate linkage across North America is stronger than ever, thanks in part to the re-shoring and near-shoring of manufacturing and assembly, as well as the surge in e-commerce and consumer demand for fast delivery, said Thomas Bisacquino, president and CEO, NAIOP, the Commercial Real Estate Development Association.

Given Mexico’s close proximity to the U.S. -the countries share 1,989 miles or land border- and the U.S. consumer’s penchant for goods- consumer spending comprises 68 percent of the U.S. economy- developing and operating industrial real estate facilities in Mexico is an outstanding opportunity, declared Thomas Bisacquino.

“Near-shoring, which is defined as the transfer of business processes to companies or facilities in a nearby country, where both parties expect to benefit from geographic proximity, and cultural, linguistic and economic linkages, is especially advantageous for real estate developers in Mexico and businesses and retailers in the U.S., as product originating in Mexico can reach U.S. customers in less than one week, as opposed to three or four weeks from Asia. Naturally, the close location between the two countries reduces transportation costs of actually moving the goods from manufacturing to consumer, increases speed to market and lowers inventory costs. In short, it is a valuable partnership that provides jobs, infrastructure and investment in Mexico that helps meet consumer demand in the U.S.,” explained NAIOP president and CEO.

Bisacquino referenced Mexico’s strong trade relationships that give exporters duty-free entry into 45 countries, and that’s valuable for Mexico. By combining this trade advantage with lower-cost land and a skilled, eager workforce, Mexico is attracting auto and aerospace manufacturing facilities, among others. “These type of facilities are especially advantageous for Mexico and the opportunities for real estate are immense, particularly for logistics and building facilities that are in close proximity with one another with access to major transportation routes.”

The publication Americas Quarterly noted that 35,000 new airplanes will be needed to meet world demand over the next dozen years -and each Boeing 747, for example, is composed of 6 million individual pieces. That’s boasted the country’s aerospace component manufacturers to approximately 300, shortening the supply chain between the Mexico-based facilities and U.S. airplane assembly plants from Seattle to Mobile, Alabama.

Adding extra benefit to the regions where manufacturing facilities are expanding, the nearby communities are benefiting with infrastructure, schools and amenities to support the workers’ families. 

Lessons learned from U.S.
For real estate developers in Mexico seeking lessons learned from stateside industrial facilities, recent success in the U.S. relating to industrial facilities has centered on e-commerce structures. While Mexico does not have as robust an e-commerce delivery system as the U.S., Mexican developers would be wise to focus on the automation taking place in these facilities as it is only expected to expand to traditional warehouse and distribution centers over the coming decades, said NAIOP president and CEO.

Among best practices, to accommodate automation, floor slabs must be perfectly level in order to enable sensitive equipment to operate effectively, and they also must be able to handle extra loads from mezzanine stacking that goes up three and four levels. Ceilings are being built to 36 and 40 foot clear heights to accommodate material handling equipment and mezzanines, and roofs must also be stronger to support large heating, venting and air conditional systems (HVAC) and material handing exchange (MHE), Bisacquino added.

“Capacity is no longer being measured in square footage alone, but also in cubic space and ‘throughout’ of materials, that measure the number of units that can be processed at a facility over some period of time.

Conceptualizing and building vertically, to take advantage of cubic space, can be more cost effective than building in a traditional horizontal manner,” he explained.

Beyond industrial facilities, there’s tremendous value in investing in ‘human capital’ in today’s knowledge-based economy. Technology makes it possible for an innovator from Mexico to partner with a U.S. business and a Canadian investor, and this is a true reflection of a global economy where ideas, capital and goods traverse, concluded NAIOP president and CEO.

For real estate developers in Mexico seeking lessons  learned from stateside industrial facilities, recent success in the U.S. relating to industrial facilities has entered one commerce structures.