During the second quarter of 2024, built-to-suit (BTS) industrial buildings drove the start of construction in the Northwestern region, which includes the markets of Ciudad Juárez, Chihuahua, Hermosillo, Mexicali, Nogales, and Tijuana.
After two quarters (4Q 2023 and 1Q 2024) with construction starts below 2.5 million square feet (ft²) of gross leasable area (GLA), the region reached 3.9 million ft² of GLA between April and June 2024. Of this total, 41% was for BTS buildings, while 59% was for speculative buildings.
Likewise, since 1Q 2023, when it reached 54%, there had not been a high percentage of BTS construction recorded. This trend has now been reactivated by international companies looking to establish operations requiring spaces with specific needs and locations, with the option for future expansions and greater operational efficiency.
Markets
Tijuana led the construction of BTS buildings, adding 800,000 ft² of GLA across two projects—one for rent and one for sale—located in the Florido/Boulevard 2000 submarket. This GLA represented 42% of the total 1.9 million ft² of construction starts in this market.
Mexicali and Chihuahua also recorded the construction of BTS buildings for rent, serving companies in the technology and aerospace sectors. Together, these markets built 800,000 ft² of GLA. However, since they constructed less speculative space, Mexicali reached 870,000 ft² of construction starts, while Chihuahua totaled 510,000 ft² of GLA.
On the other hand, Ciudad Juárez saw construction starts of 560,000 ft² of GLA, but this area consisted entirely of speculative buildings. Meanwhile, Hermosillo did not record any construction starts during 2Q 2024.
Finally, from January to June 2024, construction starts totaled 5 million ft², of which 33% were built-to-suit (BTS) buildings. However, this level of construction was 31% lower compared to the same period in 2023.
It is important to remember that the Northwest region houses two of the most dynamic markets in the country for manufacturing and logistics operations: Tijuana and Ciudad Juárez. For the remainder of the year, BTS buildings will continue to play a significant role in the region’s construction projects, especially in markets like Tijuana.
For more details on BTS building construction starts in the Northwest region, request your demo.
