Tijuana learned to build at the pace of global demand: what went up was quickly occupied, and what was planned usually found a tenant almost immediately. But over the past year, that momentum has moderated, partly because of a slowdown in company relocations—especially from the United States—and partly due to Washington’s more aggressive tariff policy on certain manufactured and steel imports.

That moderation has reshaped construction dynamics. In the past, pressure to deliver as quickly as possible compressed timelines and drove up costs; today, with more inventory available and less immediate demand, developers are moving with greater flexibility, adjusting schedules at a more strategic pace.

Even so, the border city remains one of Mexico’s most dynamic industrial markets, supported by its specialized production base and the strong logistical dependence of the U.S. Southwest—particularly in aerospace, agriculture, automotive, medical devices, electronics, and light manufacturing.

The shift in timelines is real. Two years ago, what could be completed in 9 to 12 months now often takes longer when a tenant isn’t secured from the outset. According to SiiLA, at least eight projects ranging from 10,000 to 30,000 square meters are advancing under this more deliberate approach. It is not a halt, but a recalibration: developers are adjusting their pace in response to less predictable demand, and that sequence is beginning to create a funnel of future supply that could raise availability, temper rent growth, and test the region’s industrial development discipline.

What do the numbers show?

Between 2019 and 2024, new industrial inventory in Tijuana grew at a compound annual rate of 27%. This year, however, could be the first in five years in which that growth stabilizes—or even ends up as much as 15% below the previous year—confirming a shift in the cycle. And from 2026 onward, nearly 1.4 million square meters are planned or under construction, a volume three times that of 2025.

Not long ago, this scenario seemed unlikely. Tijuana had reached near-zero industrial vacancy. In early 2023, finding space required luck or connections, rather than a budget. Even by the end of that year, vacancy barely exceeded 1%. Demand absorbed everything that came to market, and construction proceeded quickly, confident that any building would be leased before the floor was poured. But throughout 2024, a different pace emerged. The vacancy rate rose to 4.1% and is now around 6.1%.

Behind this shift, the past two years have shared a clear pattern: both demand and construction pace have declined, but tenant turnover has increased. In 2024, absorption was half that of 2023, and in the first nine months of 2025, it fell nearly 30% compared to the same period the previous year. At the same time, new supply also declined—first slightly in 2024, then more significantly in 2025. However, with higher turnover and lower net absorption, available space ultimately exceeded demand, resulting in increased vacancy and reduced urgency to build without a confirmed lease.

This explains the partial, not total, slowdown in speculative projects, the postponement of new starts, and the longer delivery timelines. Yet, investment interest has not withdrawn: land acquisition and site preparation continue, as does the planning of new industrial parks. What changed was the logic. Tijuana remains a strategic market, historically inclined toward speculative development, but new construction is now oriented toward build-to-suit projects or developments that wait for a pre-lease before breaking ground, while available inventory is being released to the market more gradually.

Prices reflect this adjustment as well. In the third quarter of 2025, annual rent growth was 4%, roughly one-third of the rate seen in 2024. Rents are still rising, but more cautiously.

The slowdown is not limited to Tijuana. Statewide, Baja California shows the same shift in pace. According to ENEC-INEGI data, the value of construction output in the state had been growing at a real compound annual rate of 28% between 2020 and 2024; however, in the first eight months of 2025, it saw a real year-over-year decline of nearly 14%. There may be a rebound toward year-end, but the signal is clear: the cycle is losing speed. This pattern is also visible in other northern markets, although it is more pronounced in Tijuana, partly due to its heavy export orientation.

In a market where urgency has been left behind, understanding the pace matters more than ever. For more details, visit SiiLA Market Analytics or contact us at contacto@siila.com.mx.