The industrial real estate sector in Mexico is weathering a challenging 2025. New U.S. tariffs have contributed to a noticeable slowdown in the absorption of industrial buildings, yet experts suggest that recovery is on the horizon.

According to the real estate consultancy Datoz, the second quarter of 2025 saw 7.5 million square feet of industrial space absorbed—a figure in line with Q1 2025, but almost 50% lower than the final quarter of 2024. This sharp decline reflects both the effects of tariffs and broader macroeconomic uncertainty.

Tariffs and Market Adjustments: A Temporary Brake on Expansion

Although U.S. tariff policy has created obstacles for many projects, analysts stress that this slowdown is more of a market correction than a structural decline.

“We’re seeing developers recalibrate their strategies due to oversupply of industrial buildings, but that doesn’t mean demand is gone,” said Pablo Quezada, CEO of Datoz. “Tariff threats are real, but they no longer cause the same panic. Some projects are already resuming—indicating investor confidence is still present.”

During Q2, 2.5 million square feet of new industrial space entered the market. Combined with recent vacancies, this pushed total availability to 7 million square feet nationwide.

Nearshoring in Mexico Continues—Just at a Slower Pace

Despite the temporary slowdown, Quezada emphasized that nearshoring in Mexico remains a long-term trend.

“This isn’t the end of nearshoring. If anything, the U.S. tariffs reinforce the need to diversify away from Chinese imports. We’re watching the emergence of a regional production ecosystem in the Americas.”

Indeed, the northeastern industrial corridor—which includes Monterrey, Matamoros, Saltillo, and Reynosa—saw industrial space absorption rise from 2.3 million to 3 million square feet between Q1 and Q2 2025.

What Markets Will Recover First?

According to Silvia Gómez, research lead at Datoz, recovery will be uneven across the country. She expects Monterrey, Tijuana, Guadalajara, and Querétaro to lead the rebound in industrial real estate demand.

“These cities benefit from infrastructure, connectivity, and investor trust,” she said. “Meanwhile, secondary markets may see a strategic pause, but this creates an opportunity to acquire land at more attractive prices.”

She adds that smart developers are already preparing for the next industrial building cycle by securing land and aligning with logistics trends.

A Rebalancing Year for Industrial Buildings in Mexico

The massive growth seen during the height of Mexico’s nearshoring boom between 2022–2024 was never meant to be permanent. The 50% decline in industrial space absorption during the first half of 2025 reflects a necessary rebalancing rather than collapse.

If macroeconomic factors stabilize and policy direction becomes clearer—especially regarding U.S.-Mexico trade relations—industry players anticipate a gradual uptick in demand before the year ends.

Conclusion: Strategic Patience and Preparedness

While Mexico’s industrial building market faces headwinds, its fundamentals remain strong. Developers who adopt a long-term view of nearshoring in Mexico, prepare wisely, and invest in high-demand zones are likely to benefit as the next growth wave begins.