Border Boom: Industrial Real Estate Thrives as Mexico Tops US Imports

Border Boom: Industrial Real Estate Thrives as Mexico Tops US Imports

Changing Trade Dynamics Fuel Demand for Industrial Spaces Along the Southern US Border

Tenant demand for industrial space along the US's southern border, particularly in San Diego and Laredo, Texas, is proving to be a game-changer. Recent trends indicate a strong competitive advantage in these regions specifically from growing imports and the nearshoring of manufacturing to Mexico. For the first time in two decades, imports from Mexico into the United States have surpassed those from China for three consecutive months. This shift in import dynamics traces back to 2018 when tariffs were imposed on Chinese goods, causing their US Customs fees to more than double from $35 billion in 2017 to $74 billion in 2019.

Fast forward to February 2023, and Mexico has emerged as a leading source of imports to the US, marking a pivotal moment in international trade. This shift not only signifies a diversification of import sources but also underscores a reduced reliance on China.

Cities along the US-Mexico border are on the cusp of remarkable growth as they reap the benefits of this changing trade landscape. With increased trade volume, industrial space is becoming an essential factor in these high-traffic areas. 

San Diego, in particular, is poised for continued expansion as it takes center stage as the initial touchpoint for land-based imports, further distinguishing itself from the bustling ports of Los Angeles.

Original Publication Credit: CoStar

Image Credit: Times of San Diego

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