Update on Baja California (Tijuana Tecate Mexicali Ensenada) commercial real estate markets for 2013

1. BAJA CALIFORNIA
INDUSTRIAL REAL ESTATE
January 16, 2013
January 16 2013
Presented by JP de Kervor www.Cushwake.com (858) 220.0640
©JP de Kervor
All rights reserved

2. REAL ESTATE
ABOUT │ Cushman & Wakefield IN BAJA
• World’s largest Privately held commercial real estate firm
g y
• 253 offices in 60 countries
• 14,000 employees worldwide
• Worldwide transaction value (2010) $766 billion (US)
• Worldwide revenue (2010) $1.04 billion (US)
• 5 offices in Mexico
D.F.
Monterrey
Juarez
Tijuana
Guadalajara
• 32 brokers in Mexico
Jean‐Paul de Kervor ‐ Lic. #01037619 Director M +1 (858) 220‐0640 T +1 (858) 334‐4042 F +1 (858) 452‐ 3206

3. REAL ESTATE
IN BAJA
MEXICALI City Map │ Industrial Parks
Jean‐Paul de Kervor ‐ Lic. #01037619 Director M +1 (858) 220‐0640 T +1 (858) 334‐4042 F +1 (858) 452‐ 3206

4. REAL ESTATE
IN BAJA
MEXICALI Total Market Area│ Square Feet
Sahuaro Calafia II
Calafia II
Calafia I 1 million 36,000 P.I. Progreso
518,000 6% 0%
3% 900,000
5%
Cucapa
270,000
270 000
Grupo IAMSA 1%
3.4 million Grupo Maran
18% 2.1 million
11%
CPA
Grupo Nelson 1.3 million
4.7 million 7%
25%
Grupo PIMSA
Grupo PIMSA
4.5 million
24%
Jean‐Paul de Kervor ‐ Lic. #01037619 Director M +1 (858) 220‐0640 T +1 (858) 334‐4042 F +1 (858) 452‐ 3206

5. REAL ESTATE
IN BAJA
MEXICALI │ Vacancy
Total Available Building Inventory (Sq. Ft.):
Total Available Building Inventory (Sq Ft ):
2.3 Million
Total Land Inventory (Sq. Ft.):
21.8 Million
21 8 Million
Jean‐Paul de Kervor ‐ Lic. #01037619 Director M +1 (858) 220‐0640 T +1 (858) 334‐4042 F +1 (858) 452‐ 3206

6. REAL ESTATE
IN BAJA
MEXICALI Major Transactions│ 2012
Type Sector Location Size (SF)
New Investment
N I t t Aerospace
A PIMSA I 80,000
80 000
GKN
Expansion Electonics PIMSA IV 88,424
Expansion Consumables Progreso 100,000
Expansion Automotive PIMSA I 110,000
Expansion
E i Aerospace
A Colorado
C l d 164,000
164 000
Jean‐Paul de Kervor ‐ Lic. #01037619 Director M +1 (858) 220‐0640 T +1 (858) 334‐4042 F +1 (858) 452‐ 3206

7. REAL ESTATE
IN BAJA
MEXICALI Sample Availability│ 150K+
Industrial Park Building Available Space (SF)
Colorado Industrial Park Videocon 973,173
MAG Building 230,000
Cosmo Cosmo 420,000
Desarrollo d
ll de Activos
i 187,077
Jean‐Paul de Kervor ‐ Lic. #01037619 Director M +1 (858) 220‐0640 T +1 (858) 334‐4042 F +1 (858) 452‐ 3206

8. REAL ESTATE
IN BAJA
MEXICALI Sample Availability │ 150K+
Videocon
Maran
Cosmo Accuride
Jean‐Paul de Kervor ‐ Lic. #01037619 Director M +1 (858) 220‐0640 T +1 (858) 334‐4042 F +1 (858) 452‐ 3206

9. REAL ESTATE
IN BAJA
NEW Industrial Park │ Nicoya Technology Park
Nicoya Group has a development base on 9 years of
experience in International Manufacturing with world
buildings and the shelter concept A Soft landing in Mexico
buildings and the shelter concept "A Soft landing in Mexico"
Nicoya’s location is perfect for the R&D Developments,
Aerospace and Electronic Manufacturing.
Jean‐Paul de Kervor ‐ Lic. #01037619 Director M +1 (858) 220‐0640 T +1 (858) 334‐4042 F +1 (858) 452‐ 3206

10. REAL ESTATE
IN BAJA
SAN Luis Rio Colorado│ Industrial Zones
Newest Port of Entry
Jean‐Paul de Kervor ‐ Lic. #01037619 Director M +1 (858) 220‐0640 T +1 (858) 334‐4042 F +1 (858) 452‐ 3206

11. BAJA CALIFORNIA
INDUSTRIAL
TIJUANA│ Industrial Zones REAL ESTATE
Jean‐Paul de Kervor ‐ Lic. #01037619 Director M +1 (858) 220‐0640 T +1 (858) 334‐4042 F +1 (858) 452‐ 3206

12. BAJA CALIFORNIA
INDUSTRIAL
TIJUANA│ Market Overall REAL ESTATE
• Tijuana has 65 million SF of Industrial Real Estate
of which 8.8 Million SF are vacant.
• Currently available: 149 buildings down from 219
Buildings 2 years ago.
• Vacancy Rate is at 14% down from 16% 1 year ago
d f
down from 18% 2 years ago.
• Ab
Absorption is positive – A
i i ii Approx. 1.5 Million SF
1 5 Milli SF
were absorbed in 2012.
Jean‐Paul de Kervor ‐ Lic. #01037619 Director M +1 (858) 220‐0640 T +1 (858) 334‐4042 F +1 (858) 452‐ 3206

13. BAJA CALIFORNIA
INDUSTRIAL
TIJUANA│ Over 100,000 Square Feet REAL ESTATE
• 24 Available Buildings are over 100 000 SF
24 Available Buildings are over 100,000 SF
• The largest is 429,000 SF
• Two 300,000 SF Plus buildings came on
the market in 2012
• Basically no new construction, some expansions and
TI’s have kept the construction industry above water.
• 1 New Industrial Park is planned.
• 3 buildings in Pacifico and one in Otay is under
contract for under $20/SF.
Jean‐Paul de Kervor ‐ Lic. #01037619 Director M +1 (858) 220‐0640 T +1 (858) 334‐4042 F +1 (858) 452‐ 3206

14. BAJA CALIFORNIA
INDUSTRIAL
TIJUANA│ Otay Mesa Total REAL ESTATE
72 Buildings
Ave. 50k SF
Class C,
101 Buildings
101 Buildings
3,637.00
Ave. 126k SF
Class B,
5,477.00 Class A,
12,762.00
73 Buildings
73 Buildings
Ave. 75k SF
Jean‐Paul de Kervor ‐ Lic. #01037619 Director M +1 (858) 220‐0640 T +1 (858) 334‐4042 F +1 (858) 452‐ 3206

15. BAJA CALIFORNIA
INDUSTRIAL
TIJUANA│ Otay Mesa Total SF Available REAL ESTATE
16 Buildings
16 Buildings 8 buildings
8 buildings Class A
Cl A
Ave. 57K SF Ave. 120K SF
Class B
Class C
15 Buildings
Ave. 59K SF
• Of a total 2.7 million SF available in Otay, most is still Class A or B.
• Biggest comp (under contract) is at less than $20/SF.
Jean‐Paul de Kervor ‐ Lic. #01037619 Director M +1 (858) 220‐0640 T +1 (858) 334‐4042 F +1 (858) 452‐ 3206

16. BAJA CALIFORNIA
INDUSTRIAL
GDP PER CAPITA│ Vietnam, China, Mexico REAL ESTATE
$12,000
$ ,
$10,000
$8,000
Vietnam
$ ,
$6,000 China
Mexico
$4,000
Firing Costs
Firing Costs
$2,000
Mexico 52 Weeks
US 0
$
$‐ Vietnam 87
2008 2009 2010 2011 China 91
http://data.worldbank.org/indicator/NY.GDP.PCAP.CD?order=wbapi_data_value_2011+wbapi_data_value+wbapi_data_value‐last&sort=asc
Jean‐Paul de Kervor ‐ Lic. #01037619 Director M +1 (858) 220‐0640 T +1 (858) 334‐4042 F +1 (858) 452‐ 3206

17. BAJA CALIFORNIA
INDUSTRIAL
Baja California│ Trends REAL ESTATE
• Medical is growing
• China is getting more expensive, but other Asian
Chi i tti i b t th A i
Locations will continue to provide low cost labor.
• Housing starts should start to increase, and that
• Housing starts should start to increase and that
should boost Maquilas (furniture, Construction
Materials)
• Most Growth will be expansions by existing Maquilas
– Many that do Subcontracting
• Strong Peso Continues to increase costs in Mexico
Jean‐Paul de Kervor ‐ Lic. #01037619 Director M +1 (858) 220‐0640 T +1 (858) 334‐4042 F +1 (858) 452‐ 3206

18. BAJA CALIFORNIA
INDUSTRIAL
Baja California│ Conclusions REAL ESTATE
• Pi
Prices are increasing especially in Otay.
i i i ll i O
• Users ‐ Time to buy if you can take advantage of
low financing costs.
l fi i t
• Empty buildings selling for less than $20/SF but
that may be over.
that may be over
• Leased buildings at 9 ‐ 10% cap for LT leased
with solid US corporate guarantee.
with solid US corporate guarantee
• We expect to see 1.4 million SF of net
absorption in 2013.
absorption in 2013
Jean‐Paul de Kervor ‐ Lic. #01037619 Director M +1 (858) 220‐0640 T +1 (858) 334‐4042 F +1 (858) 452‐ 3206

19. REAL ESTATE
Cushman & Wakefield IN BAJA
• Commercial Real estate services:
Macro /Micro Site Selection
Lease or purchase analysis
Facilities requirements analysis
Due diligence
Purchase and lease negotiation and closing
Valuation Services
l
Supply Chain optimization and consulting
Jean‐Paul de Kervor ‐ Lic. #01037619 Director M +1 (858) 220‐0640 T +1 (858) 334‐4042 F +1 (858) 452‐ 3206