Mexicali Recycles Space Faster Than It Consolidates Industry

Between 2022 and 2023, Mexicali averaged roughly 10,000 square meters per move-in transaction and operated with 15 active subindustries. Between 2024 and 2026, however, the average fell to just under 6,000 square meters—a 42% decline—while the number of subindustries increased to 18. The market therefore continued moving, but increasingly through smaller transactions and a more dispersed sector base.

That fragmentation also began to show up in occupancy stability. Of the 70 move-outs recorded during the period, 54 show detectable re-occupancy afterward—a rate close to 77%—with an average time between move-out and new occupancy of barely half a quarter, indicating that Mexicali continues to absorb vacancies quickly. But in 90.7% of those cases, the new tenant belonged to a different subindustry than the one that left.

That means a growing share of recent demand has depended less on cumulative expansion within the same sectors and more on replacements across different industries. Under that dynamic, the market increasingly relies on substitution to sustain occupancy, making it potentially more sensitive to sector shifts, economic slowdowns, or isolated large-scale movements.

Perhaps no asset illustrates that behavior better than stand-alone building El Robledo, a Class B industrial facility of just under 45,000 square meters that rotated five times in three years, with four different tenants and three different subindustries. Altogether, it accumulated nearly 200,000 square meters of total rotation, of which more than 110,000 corresponded to move-outs, almost a quarter of all vacated space recorded in Mexicali during the analyzed period.

Without that property, several quarters with negative net absorption change substantially in profile, revealing that, in a market the size of Mexicali, a single building can materially alter the statistics and expose how narrow the foundation supporting market stability can be.

That fragility, however, is not limited to isolated assets. A similar dynamic has also begun to appear in some sectors that historically served as anchors of Mexicali’s industrial market. Electronics is the clearest example. By the first quarter of 2026, the subindustry occupied roughly 440,000 square meters—equivalent to 14.6% of the market’s total industrial inventory. Yet between 2022 and 2026, it recorded more than 102,000 square meters of gross absorption and around 103,000 square meters of move-outs, leaving a virtually flat net balance.

Electronics remains, by a wide margin, the market’s main occupancy base. And although the sector continues to absorb space and maintains a dominant presence in Mexicali, it no longer manages to expand consistently. In fact, the subindustry’s recent recovery depended heavily on isolated large-scale transactions, particularly movements associated with companies such as Amphenol and LG Electronics. Without them, the sector’s net performance would have remained practically stagnant.

At the same time, other sectors began showing equally abrupt shifts over relatively short periods. Business Products and Services, for example, contributed nearly 139,000 square meters of positive net absorption between 2022 and 2023—the largest in the market during that period. But between 2024 and 2026, it became the leading source of move-outs, with net absorption turning negative by roughly 29,000 square meters.

The shift not only reflects the speed at which some of the sectors driving recent growth have begun to pressure vacancy. It also describes a market whose scale remains limited in absorbing sector movements without disrupting its operational balance. That helps explain why the vacancy rate reached 6.6% in 2026—its highest level since SiiLA began tracking the market—even as industrial rents increased by roughly 5% annually during the analyzed period.

At its core, the problem is not a lack of demand. Mexicali still retains several attributes that have historically supported its industrial appeal: cross-border integration, competitive costs, and a consolidated manufacturing base.

The question is whether, as the data suggest, the market is passing through the interval between one generation of industrial anchors and the next, or whether it is simply undergoing a temporary reshuffling of dominant sectors in a more uncertain environment. Either way, the cost has already begun showing up in vacancy and occupancy stability: precisely the variables that ultimately define the long-term value of an industrial asset.

More information on industrial markets, vacancy, and occupancy trends in Mexico is available through SiiLA Market Analytics or at contacto@siila.com.mx.