In Mexico City’s Office Market, Higher Absorption Doesn’t Mean Greater Appeal
- In Mexico City, available space can shape where office absorption concentrates. SiiLA examined this relationship across more than 600 buildings.
In the third quarter of 2026, Corporativo AM, located at Reforma 445, accounted for nearly a quarter of Mexico City’s office space absorption. However, far from being an isolated case, absorption has repeatedly concentrated in a small number of buildings over the past seven years.
According to a SiiLA analysis, between September 2019 and September 2026, the 10% of buildings with the highest absorbed area accounted for an average of 46.5% of quarterly absorption, while the 10% with the most transactions accounted for just 25.0% of leases.
This difference matters because a handful of large transactions can account for a substantial share of quarterly absorption, even when numerous buildings record leases. As a result, absorbed space does not always reflect how widespread leasing activity is across the market’s buildings.
The underlying question, then, is why absorption concentrates in so few buildings. Is it because they attract more demand or, at least in part, because they have more available space to accommodate it?
To investigate, SiiLA cross-referenced absorption records with office availability data for more than 600 buildings in Mexico City. The results show that properties with more available space at quarter-end were more likely to record transactions the following quarter and tended to absorb more square footage. For example, hypothetically doubling the available space across the properties analyzed increases the average estimated probability of recording absorption from 17.0% to 20.4%, even after accounting for building size, location, and the quarter analyzed.
While this does not rule out a property’s individual appeal influencing tenants’ decisions, it highlights the importance of the opportunities available space provides. A building may attract demand, but its ability to convert that demand into occupied square footage is limited by the amount and distribution of space it has to offer¹.
What Absorption Reveals About the Office Market
What happens, then, when we use absorption to evaluate building performance or demand strength? If available space relates to how much space a property absorbs, higher absorption does not necessarily mean the property is more attractive to tenants.
This is particularly important when comparing buildings or interpreting market trends, since a property that absorbs 10,000 square meters may appear more successful than one that absorbs 2,000. However, the comparison would change if the first had 20,000 square meters available and the second just 2,500. In that case, the first would have filled half its available space, while the second would have leased 80%.
This does not mean absorption is no longer a relevant indicator for the office market; rather, interpreting it requires considering the conditions under which transactions occur. After all, absorbed square footage reflects the space tenants actually occupied, but not necessarily all the space they sought, since some space requirements may go unmet and other negotiations may never result in a deal. Thus, observed absorption depends not only on demand but also on the market’s ability to meet it.
To learn more about Mexico’s office market, visit SiiLA Market Analytics or email us at contact@siila.com.mx.
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¹ As an additional test, SiiLA ran 2,000 simulations for each of the 28 comparable quarters, allocating transactions among buildings based on their previously available space while preserving transaction sizes. In this transaction set, the top 10% of buildings by absorbed area accounted for an average of 40.8% of absorption in the simulations, compared with 41.9% in the actual records. None of the quarters analyzed showed statistically significant differences after adjusting for multiple comparisons.
