Monterrey: a Leading Nearshoring Real Estate Market

Monterrey has emerged as a premier hub for nearshoring, driving unprecedented growth in Mexico’s real estate market. With its strategic location, advanced industrial infrastructure, and proximity to the United States, Monterrey offers unparalleled opportunities for businesses seeking to optimize supply chains and establish operations closer to key consumer markets.

Mexico Real Estate Market Trends and Opportunities

The industrial real estate market in Mexico has seen remarkable growth in 2024, fueled by nearshoring investment and increased foreign manufacturing expansion. Monterrey, as a leading nearshoring destination, exemplifies the strategic opportunities available in this evolving market.

Surging Demand and Rent Growth

• Industrial vacancy rates in primary markets like Monterrey, Guadalajara, and Mexico City remain below 4%.
• Industrial rents have risen by 39% since 2022, according to PGIM Real Estate, reflecting strong demand driven by nearshoring activities.
• Monterrey has seen a particularly pronounced increase in large-scale industrial transactions, as businesses seek customized facilities to accommodate their expanding operations.

Vacancy Rates and Expanding Markets

Expanding Markets Beyond Monterrey

• Saltillo, just an hour from Monterrey, is emerging as a hub for electric vehicle manufacturing, benefiting from spillover demand.
• By 2025, secondary markets will integrate further into the nearshoring ecosystem, adding supply chain flexibility.
• Monterrey continues to absorb the largest share of nearshoring investments due to its infrastructure, strategic location, and skilled workforce.
  
  

Nearshoring as a Key Driver

The nearshoring boom, accelerated by geopolitical shifts and trade disruptions, has placed Mexico’s industrial hubs—Monterrey, Ciudad Juárez, and the Bajío region—at the center of manufacturing expansion.

Key Data on Nearshoring Real Estate Trends

• 40% of Mexico’s industrial space absorption since 2020 is driven by nearshoring investments.
• Monterrey and Ciudad Juárez alone have seen 50% growth in demand over the past four years.
• 70% of new industrial activity in Monterrey comes from the expansion of existing businesses established within the last three years.

This shift validates nearshoring as a sustainable business strategy for multinational companies.

Growth in High-Value Manufacturing

Mexico’s industrial market is increasingly focused on high-value manufacturing, attracting tenants such as Stellantis, Tesla, Toyota, and Honeywell. For the first time, in August 2024, Mexico surpassed other countries as the top exporter of advanced technologies to the United States. This milestone reflects the country’s ability to support innovation-driven sectors like electric vehicles, renewable energy, and precision manufacturing.

Mexico as Top Supplier to United States

Monterrey: a Leading Nearshoring Market

Why Monterrey?

Monterrey stands out as Mexico’s top nearshoring real estate hub due to:

• Strategic proximity to the U.S. with highways, railways, and airports optimizing logistics.
• Advanced infrastructure supporting large-scale manufacturing and industrial expansion.
• Skilled workforce, producing 5,800 engineers and 11,000 technicians annually.
• 40% of Mexico’s largest companies are headquartered in Monterrey.
• Accounts for 11.5% of Mexico’s manufacturing exports and 15.4% of the national manufacturing GDP.
  
  

Monterrey: Site Selection Advantage

Monterrey has a strategic location, strong infrastructure, and an available skilled workforce, making it a top choice for nearshoring investments. The decision of many companies investing in the metropolitan area is determined by validating a large set of data points that support the business plan of the investment. Start your site selection dashboard free trial.

Nearshoring Investment in Monterrey

According to Deloitte Econosignal, Monterrey received 22% of total nearshoring investment from 2021 to 2024. These investments have been concentrated in:

• Electronics
• Automotive
• Toys & consumer goods

With a growing number of industrial parks, Monterrey continues to attract nearshoring-focused real estate development.

Monterrey’s Industrial Real Estate Market in 2024

Monterrey’s industrial real estate sector has seen:

• Unprecedented build-to-suit transactions fueling absorption rates beyond market averages.
• Apodaca leading industrial growth, but rising costs pushing demand into emerging submarkets like Escobedo, Ciénega de Flores, and Santa Catarina.
• Entering 2025 with over 20 million SF of available industrial space—the highest in the past five years.

This increased supply is expected to stabilize pricing and leasing terms, creating new opportunities for tenants and investors.

Yearly Comparative Absorption

Information prepared by Prodensa from own sources.

Industrial Growth Absorption & Submarket Absorption

Information prepared by Prodensa from own sources.

Most Representative Transactions in Monterrey in 2024

Information prepared by Prodensa from own sources, additional transactions not shown in graph.

Notably, the quantity of Build-to-Suite (BTS) projects is a special characterization of the Monterrey metropolitan area market. The types and scale of projects like Volvo and Bobcat for example, reflect a tendency of limited availability of brownfield options, and a need to customize operations for their current business plan, and the growth expected down the road.

Instead of looking 3-5 years ahead to make decisions, we are seeing companies elongating that timeline to 7-10 years in the future. Despite what may be challenging in the short-term, investing companies are still looking at Mexico as a strategic manufacturing location for the long-term.  - Ismael Villa, Sr. Industrial Advisor

Monterrey Market Challenges

Talent Retention & Labor Costs

• High competition for skilled workers is driving higher wages.
• Companies must become Employers of Choice to attract and retain top talent.

Energy Demand & Infrastructure

• Rising demand for higher KVA per square foot is prompting investment in energy efficiency and storage solutions.
• Prodensa Energy is helping companies mitigate power risks with battery storage solutions.

Outlook for 2025 and Beyond

Alejandro Mendoza, President of Real Estate Solutions at Prodensa, summarizes key trends to be expected in the Monterrey market.

Key Projections:

• A slow start to 2025. The year is expected to start slower, depending on the development of binational relations adjustments and companies in wait-and-see mode. Reactivation of business investment strategies are expected around Q2 of 2025.
• Political uncertainty and investment trends. Capital investments, particularly in machinery and advanced manufacturing like EV production, will be influenced by political shifts.
• Asian, particularly Chinese investments will not be prevalent. Wile large direct Chinese investments are unlikely due to the focus from current administrations, some firms may enter through partnerships or subsidiaries.
• Large Built-to-Suite projects with a supplier strategy. Many large-scale projects are being designed with supplier integration in mind, creating industrial campuses rather than isolated facilities. Although the goal is to incorporate local suppliers, this will not be immediately available for certain large-scale investments.
• Continued growth in exports. Despite alarmist narratives and wait-and-see attitudes, growth in Mexican exports is not expected to slow down any time soon. 

Conclusion: The Future of Nearshoring Real Estate in Mexico

Mexico’s industrial real estate market is booming, driven by nearshoring investment and global supply chain shifts. Addressing infrastructure and energy challenges will unlock additional opportunities, securing Mexico’s position as a premier industrial hub.

For companies exploring nearshoring real estate opportunities, Prodensa provides expert guidance and data-driven solutions to support strategic site selection and industrial expansion in Mexico.

Get Early Access to Prodensa's Interactive Real Estate Dashboard

With our AI-powered interactive tools, Prodensa provides business and operations stakeholders with unparalleled access to real-time Mexico real estate data that can be seamlessly integrated into business strategies. This tool empowers companies to make data-driven strategic decisions with precision and efficiency.

Key Features & Benefits:

• Custom Reports & Comparisons – Build and download tailored reports that fit your specific business needs.

• Market Investigation & Trend Analysis – Access comprehensive insights into real estate trends, availability, and absorption.

• Operationally Focused Real Estate Insights – View labor market indicators, cost structures, and infrastructure analytics to align with your expansion strategy.

• User-Friendly Dashboard – An intuitive interface designed for efficiency and strategic decision-making.

Contact us today to learn Prodensa can support your nearshoring journey and help your business capitalize on Mexico’s growing industrial potential.