What’s going on in Monterrey? Should we be concerned about the state of its industrial real estate market? During the first quarter of this year, Mexico’s largest industrial market —with over 18.6 million square meters of inventory— recorded the highest volume of tenant exits since SiiLA began tracking its performance seven years ago. In total, just over 425,000 square meters were vacated by at least 30 companies, half of which left the region entirely.

The most visible effect was a spike in the vacancy rate, which rose to nearly 4.8%, up from just over 3.0% at the end of 2024. Paradoxically, this increase came despite strong gross absorption —around 470,000 square meters— which even outpaced the nearly 370,000 square meters of new inventory delivered.

In essence, it was the scale of the move-outs that disrupted the balance between supply and demand. As a result, net absorption for the quarter barely reached 40,385 square meters —its lowest level since mid-2019.

While most of the space vacated consisted of mid-sized areas —around 15,000 square meters— a few large-scale exits, such as Bosch’s 30,000-square-meter facility, significantly skewed the quarterly metrics.

This is a market adjustment amplified by U.S. trade tensions and a broader economic slowdown in North America, though it cannot be explained by these factors alone. Similar trends had already begun to surface in late 2024, with rising vacancies and a pace of growth even sharper than during the worst moments of the pandemic.

Still, what happened late last year was different. Tenant exits were far fewer —just 78,000 square meters were vacated— and their impact was limited. Throughout 2024, new deliveries consistently outpaced absorption, primarily driven by increased speculative development. The share of speculative space in new deliveries rose from 8.3% in 2023 to 20.4% in 2024, lengthening exposure periods —how long a building remains vacant— and pushing the vacancy rate upward.

Now, however, the pressure on the market stems from a more complex equation: speculative inventory on the rise; a clear cooling of nearshoring momentum, where demand continues but with less intensity than during the 2021–2024 boom; and vacancy driven by more restrictive U.S. trade policies, particularly affecting the automotive sector. In this context, some investments were canceled or postponed —such as Tesla’s— leading to AGP Glass vacating a 100,000-square-meter facility in Santa Catarina.

Beyond these cancellations, the same pressures triggered adjustments among already established companies. Many of these moves involved firms like Branco Industries, Michelin, Remsa, and SB Logistics, which operate in highly mobile sectors subject to strategic decisions made outside of Mexico. Most are multinationals responding to global business logic rather than local conditions. As such, their exits reflect a shift in production strategy —not a loss of regional appeal.

This becomes even more evident when considering that nearly three-fifths of the companies that vacated space in Monterrey either maintained or relocated operations to other parts of the country, confirming this is not an exodus from Mexico, but rather a domestic reallocation.

Indeed, while vacancy also rose in other northern regions —particularly in border zones— markets like Mexico City, Guadalajara, Guanajuato, and Querétaro saw vacancy rates decline during the same period. This regional divergence suggests that the industrial market’s realignment is not following a single cycle, but is shaped by local dynamics —namely each region’s exposure to global forces and its specific operational structure.

Despite it all, Monterrey remains a stable market, with asking rents on an upward trend —proof of a landlord-driven environment still supported by strong demand and the structural importance of the region. What’s happening is not a breakdown, but an adjustment that will force stakeholders to rethink their priorities. Because in a world where the U.S. is pulling back, reindustrializing, and reasserting control over its supply chains, the game is no longer about space —it’s about the strategic role that space plays in the choreography of power.

Today, companies are not just looking for square footage; they want functionality —proximity, speed, talent, and proven infrastructure. And in that delicate balance between efficiency and sovereignty, Monterrey still offers a hard-to-beat combination: strategic proximity to the U.S., high-density road and rail connectivity, skilled labor, and an industrial ecosystem already embedded in advanced manufacturing chains. But that edge is not guaranteed.

To sustain and grow it, Monterrey will need to move beyond proximity and invest in automation, deepen its technological integration, ensure energy reliability, and streamline industrial land management. That’s the only way it will remain competitive —because, in the new economic order, being close isn’t enough. You have to be ready.

If you want to stay ahead of the curve, visit SiiLA REsource or contact us at contacto@siila.com.mx.