Insurgentes Builds Big, but Absorbs Small

The delivery of Espacio Condesa returns Insurgentes to construction levels not seen in seven years, but it also exposes a deeper contradiction: Mexico City’s largest office submarket continues to develop at scale in an environment where small spaces sustain occupancy.

The project—68,000 sqm of Class A+ mixed-use space whose construction began a decade ago—marks the highest quarterly volume of new inventory since 2019, in a submarket that concentrates more than 1.8 million sqm of office space, nearly one-fifth of the city’s total.

This addition increased vacancy from 12.4% to 14.2%. However, the submarket’s underlying dynamics point in the opposite direction: available space tends to decline in a context where net absorption has remained positive and occupied space has gained weight relative to vacated space, with the gap between the two growing at a compound annual rate of 4% since 2019.

Over the past year alone, gross absorption averaged 45,000 sqm per quarter and returned to pre-pandemic levels, while rents rose 10%, surpassing $24 per square meter per month and—contrary to broader market trends—posting real appreciation.

This dynamic is supported by a specific occupier profile. Insurgentes is dominated by government institutions and financial firms, which account for more than half of the submarket’s office space.

Beyond that concentration, occupancy is not defined by large leases but by a broad base of smaller users: more than two-thirds of companies operate in spaces under 1,000 sqm, with a median close to 650 sqm. This implies that, while large leases exist, they do not define market dynamics; under this structure, absorption is gradual, limiting the market’s ability to sustain continuous delivery cycles.

Accordingly, although the submarket has added 23 Class A and A+ buildings totaling more than 430,000 sqm since 2019, their delivery over time has been uneven, with cycles between 2019 and 2021 slowing to a near halt between 2022 and 2025.

Currently, with a pipeline exceeding 33,600 sqm in addition to what was delivered in the first quarter of 2026, Insurgentes is poised to continue growing. However, the stabilization of large-scale developments depends on the accumulation of a high volume of contracts¹, which introduces structural friction into absorption timelines that, in practice, extend to a horizon of close to three years². In this context, the scale of what is built continues to diverge from the scale at which space is occupied.

Further detail on these dynamics—and their impact on occupancy and absorption timelines—can be found in SiiLA Market Analytics or via contacto@siila.com.mx.

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¹The number of contracts required is approximated by dividing the size of the project by the median occupancy size in the submarket. With a median of 650 sqm, absorbing a 68,000 sqm development is, in order of magnitude, equivalent to around 100 contracts. This indicator reflects the contract intensity required to stabilize a given volume and approximates the number of leasing decisions that must converge, without implying that they correspond to a single asset or occur within the same period.

²The theoretical absorption time is approximated as the ratio between available inventory and average quarterly net absorption—defined as gross absorption minus vacated space—using recent moving averages to smooth seasonal effects; under recent rates, this indicator stands at around 2.6 quarters. By contrast, exposure time corresponds to the number of consecutive quarters a space remains available and captures the effective time to lease, which in the submarket stands at around 10–12 quarters. The gap between the two reflects that, while the market has the aggregate capacity to absorb that volume, in practice, demand is distributed across multiple buildings, spaces, and contracts, so it does not concentrate in a single development, and stabilization timelines are extended.