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Business is booming in Mexico, and the demand for Baja California industrial real estate is outpacing supply. The Mexican state has several manufacturing clusters located in a handful of important border cities. Infrastructure and facilities here are highly modern, but finding space is becoming a challenge.

The international manufacturing for export so critical to the state and that has made this region one of the most economically significant for Mexico and North America is growing. These cities boast a large array of warehouses, factories, and state-of-the-art industrial parks. However, almost none of these are vacant at any given time as more and more companies look to nearshore to Mexico.

Baja California Manufacturing

Just south of San Diego, Baja California is a vibrant manufacturing dynamo for heavy-hitting brands in the US, Asia, and Europe. Key industrial hubs currently manufacturing in Baja California include:

  • Medical devices
  • Electronics
  • Solar energy
  • Aerospace
  • Consumer products
  • Molded plastics
  • Machines metals
  • Automotive

World-leading brands like Daewoo and Honeywell take advantage of premium Baja California industrial real estate to design, fabricate, and assemble their products for global export.  These industrial properties are centralized within several key cities, especially:

  • Tijuana
  • Tecate
  • Ensenada
  • Mexicali
  • Rosarito Beach

Manufacturing Capacity in Baja’s Cities

Each city in Baja has its own strengths. Rosarito Beach is a small, niche manufacturing community with extremely modern technology and cutting-edge facilities without the crowds. Ensenada on the other hand, is an extremely crowded port city that has served as an alternative to the US port of Long Beach and Los Angeles

Mexicali is the capital of Baja California and boasts 23 secure and modern industrial parks with over 100 active maquiladoras. Tecate also has over 100 active maquiladoras located in just three industrial parks. But the city’s large, deeply rooted populace serves as an additional pool of skilled labor for nearby Tijuana.

With over 600 maquiladoras, Tijuana is the crown jewel of Mexican manufacturing and the largest city in Baja California. The city is home to the San Ysidro port of entry, one of the busiest land crossings in the world and the reason Tijuana is known as the Gateway to Mexico. 

Baja California Industrial Real Estate Challenges

All told, Baja California industrial real estate includes nearly 1,000 maquiladoras. Yet only less than 1% of its many industrial facilities are currently vacant. The demand is so high that in Tijuana, rent is currently at $0.50 MX per square foot. 

Many new players in the area are building to suit rather than leasing existing space. However, a new industrial facility can take two years to build, unless the company partners with a Mexican partner who already has connections in place to expedite the process.

Tijuana, especially, has an impressive array of industrial space. But the manufacturing hub simply cannot keep pace with demand. The city currently holds approximately 65 million square feet of industrial real estate inventory in over 45 industrial parks. Approximately 2.5 million square feet of these buildings are Class A and Class B. Rising demand in this city means manufacturers can expect to pay more for real estate and experience higher turnover rates than in many other cities.

Overall, Baja California industrial real estate as of 2020 includes:

  • 60 industrial parks
  • 23 micro parks
  • 8 industrial parks under construction

Most of the facilities constructed in Mexico are highly modern and reflect US standards, even down to handicap accessibility. Class A, B, and C buildings are offered with energy-efficient lighting and fixtures, concrete tilt-up construction, and securely gated perimeters. Most facilities include basic amenities and features like:

  • Fire protection systems
  • Telephone and high-speed internet infrastructure
  • Employee recreational facilities
  • Paved parking and sidewalks
  • Streetlights
  • Sanitary drainage systems

Mexico is committed to investing in infrastructure and expansion of industrial real estate. But with some areas experiencing boom-town-like conditions, Baja California industrial real estate will continue to be in high demand and short supply for the time being. Companies seeking to leverage the benefits of manufacturing in this region are encouraged to plan ahead and seek strategic help.

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