Over the past year, Mexico’s office vacancy rate dropped by 15%. At the same time, market rent fell nearly 4% in nominal terms and 8% in real terms¹. How is it possible that while occupancy improves, prices keep sliding?

To understand this apparent contradiction, one must look beyond averages and consider where each market stands in the cycle.

While the national vacancy rate hovers around 16%, zooming in on the four largest markets reveals a telling contrast: in Mexico City and Querétaro, where vacancy stands at 17% and 15%, respectively, the decline was under 20%. In contrast, in Guadalajara and Monterrey, with vacancy at 10.5% and 13%, the drop exceeded 30%.

When examining pricing, the pattern shifts. In the more dynamic markets—Mexico City and Monterrey, where rents are near the national average of $22 per square meter—the decline was less than 5% in nominal terms. In contrast, in Guadalajara and Querétaro—where rents average between $17 and $22—the drop exceeded that threshold.

The relationship between vacancy and pricing reveals more than just a supply-demand equation: it exposes each market’s degree of maturity.

In Guadalajara and Querétaro, where recent industrial growth has fueled new corporate zones, office demand is rising but still lacks the depth to sustain upward rents. That’s why, despite sharp declines in vacancy rates, prices have also dropped—not due to weakness, but rather due to competition among new developments and an operational base still in formation.

In contrast, Mexico City, its metro area, and Monterrey have already gone through the industrial absorption peak that typically drives corporate demand. These are two of the country’s key economic hubs, where the curve began stabilizing earlier, and although rents also declined, they did so more moderately, reflecting both resilience and caution. The broader pattern is clear: the market is not undergoing substantial expansion, but rather a reorganization, at different speeds, with prices still reacting to uncertainty.

Another crucial layer is tenant turnover.

In Mexico City, for instance, gross absorption exceeds 400,000 square meters annually; however, high tenant churn cuts net absorption in half, mitigating its actual impact on occupancy. Yet, the limited delivery of new inventory acts as a counterweight, containing vacancy and stabilizing rents, which now serve more as a negotiation lever than an expansion signal. Monterrey follows a similar logic, albeit at smaller volumes—under 100,000 square meters annually.

This delicate balance between move-ins and move-outs is clearly reflected in some of the year’s most visible transactions. While Crown Holdings and Grupo Gigante took up more than 23,000 square meters in the former Axtel headquarters and Miyana Tower II, Neoris and Mexico’s Attorney General vacated over 32,000 square meters in the Edificio Gris and Torre Glorieta. The net result highlights how even the most high-profile moves can be diluted in a market that remains in flux.

In Guadalajara, absorption also comfortably outpaces new deliveries, but high turnover limits its net effect, explaining why, despite falling vacancy, rents haven’t bounced back. Querétaro, by contrast, exhibits a steadier trend: gross absorption also surpasses supply, albeit with lower turnover, enabling occupancy to rise more gradually and rents to adjust at a gentler pace.

In the end, however, what’s taking shape is not a linear recovery, but a map of asynchronous transitions: some markets are consolidating, others just beginning to adjust, and all—without exception—are tweaking rents with the caution of those who know the cycle is not yet over.

Want deeper insight into Mexico’s office metrics by market? Visit SiiLA Market Analytics or contact us at contacto@siila.com.mx.

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¹ Based on an annual inflation rate of 4.32% as of June 2025, according to INEGI. The real price adjustment was calculated using the deflation formula: Real price = Nominal price / (1 + annual inflation).