Up to 20,000 trucks loaded with auto parts, avocados, and other goods pass through the Port of Laredo every day, and warehouses store these goods before shipping them to manufacturing plants and distribution centers in cities like Toronto, Dallas, and Monterrey. It plays an important role in storing. ,Mexico.
The growth in U.S.-Mexico trade at the Port of Laredo, now the country’s No. 1 port, is driving significant growth in local industrial real estate, according to real estate market analyst Adrian Ponsen. This market remains extremely tight. real estate data company CoStar;
“Laredo is actually in a situation where retailers and logistics companies are gobbling up space as fast as developers are building there,” Ponsen said.
Available storage space is decreasing at a Nippon Express warehouse operated by a Japanese logistics company in Laredo, Texas. Trey Hughes said towering orange racks were recently added to the 100,000-square-foot space, allowing pallets of auto parts like oil filters and Tesla seat fabric to be stacked high in the warehouse, creating more space. They say they now have space to store their products. warehouse manager.
“We can’t handle our business in this space, and I’m sure many companies cannot,” he said.
To that end, Nippon Express plans to break ground on two new warehouses in Laredo in the coming months.
The company is just one of several companies expanding their industrial footprint in Laredo as supply chains become more localized and trade with Mexico expands. Mexico recently overtook China as the United States’ largest trading partner.
The port city along the Rio Grande is experiencing global supply disruption caused by Chinese tariffs, a new North American trade agreement, pandemic-related disruptions, and recent U.S. industrial policies aimed at boosting regional manufacturing. It has benefited from chain restructuring.
Laredo’s once-marginal industrial storage market has expanded since the signing of the North American Free Trade Agreement in 1992, but the recent The growth in trade through Laredo is opening up new opportunities, he said. Killam Development is the company he has worked for for almost 30 years.
“We’re going to see a dramatic amount of industrial space built in this community,” he says. “And it all comes from this nearshoring concept and supply chain reliability.”
In Laredo, local industrial real estate inventory has increased about 20% over the past five years, CoStar’s Ponsen said.
“This is twice the growth rate of industrial space in the entire United States,” he said.
While the industrial real estate market has cooled nationally, Laredo is bucking that trend, Ponsen said. The city’s available industrial real estate space is less than 3%, compared with 4% to 8% in other major markets in the country.
“Laredo is definitely countering the slowdown in industrial markets that we’re seeing in other parts of the United States,” he said, noting that its strategic location on the Mexican border attracts a lot of manufacturing for the U.S. market. He said that is the reason.
Ponsen said Koster has one industrial property available for lease in Laredo with more than 200,000 square feet located in the Pinnacle Industry Center, one of several industrial parks that have sprung up in Laredo in recent years. He said he had made a list.
AJ Kraus, CEO of Pinnacle Industry Center, said he doesn’t expect the property to be leased soon, and further development is planned.
He and his father started buying ranch land to develop an industrial park in 2016 and have continued to do so.
“We knew we were going to need these bigger lots, so we built these lots and they sold like hotcakes,” he said.
Kraus recalled a time when a 100,000-square-foot building was attracting attention in Laredo.
“It’s the little things. Now you can easily see buildings that are 200, 300, 400 square feet and even 500,000 to 600,000 square feet,” he said.
He called the industrial park off Mines Road in Laredo “the Valley of the Giants” because of the huge warehouses that dominate the landscape.
Across the border in Mexico, developers in Nuevo Laredo are also eager to free up space to accommodate the increased flow of goods passing through the area.
Although the industrial business has been performing well, Real estate developer Guillermo Fernández de Jauregui said the past two years have been the biggest growth since the 1990s.
“We have grown significantly since COVID-19,” he said. Before the pandemic, he had three facilities, but that number will soon triple.
“We’re building a ninth distribution center because we need to improve our supply chain and move supplies here,” he said.
There’s a lot going on in the world. For everything, Marketplace is here for you.
You use the Marketplace to analyze world events and communicate how they affect you in a factual and approachable way. We rely on your financial support to continue making that possible.
Your donation today helps power the independent journalism you depend on. For as little as $5 a month, you can help sustain our marketplace. This allows us to continue reporting on the things that matter to you.