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 Click here to view the full 2009 Second Quarter Market Summary for El Paso, Texas and Cd. Juarez, Mexico.
El Paso, Texas - Total Market Size: 54,230,000 SF
- Total Activity: 665,000 SF
- Positive Absorption: 169,000 SF
- Net Absorption: -548,000 SF
- New Construction: 0 SF
- Industrial Vacancy: 14.2%
El Paso’s industrial real estate market took another step backwards in the 2nd quarter. There was a total of 716,000 SF that become vacant in the past three months, driving the vacancy rate to 14.2%. This is the highest vacancy rate since 2004/2005. The total amount of vacant industrial space in the greater El Paso area is 7,900,000 SF. The only real bright spot has been Santa Teresa, where vacancy is well below the rest of the market as companies continue to look for space to service Foxconn. The only two significant new transactions in EI Paso in the 2nd quarter were Thyssen Krupp's lease of 80,000 SF from Five Star in the Vista Del Sol area and Franklin Connections lease of 88,500 SF from Plexxar in the Northwest Corporate Center. There was over 500,000 SF of additional activity but this was from lease renewals. The key transactions were Mitsui-Soko’s renewal of 100,000 SF, Epson's of 153,000 SF, Panalpina’s of 116,000 SF and Expeditors' of 128,000 SF. The main vacancies were Moduslink, Avon Automotive, Invensys, Quadriga and Commodity Specialists among others. Moduslink and Quadriga vacated facilities on both sides of the border. | 
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TeamNAFTA expects leasing activity to remain slow in the 3rd quarter across EI Paso with some potential new transactions at 100,000 SF or slightly larger, but it is likely that overall absorption will continue to be negative with more space being vacated than occupied. Companies that can reposition their real estate footprint through lease renewals or relocations will be able to take advantage of a very strong tenants' market. We expect renewal activity to continue to be consistent and lease rates to remain low. Cd. Juarez, Mexico - Total Market Size: 58,168,000 SF
- Totol Activity: 513,000 SF
- Positive Absorption: 653,000 SF
- Net Absorption: -737,000 SF
- New Construction: 207,000 SF
- Industrial Vacancy: 11.3%
Industrial real estate activity continued to be poor in the 2nd quarter, with overall absorption being negative 737,000 SF. Market vacancy rose substantially to 1 1.3% and it would have been worse if not for the fires at the former Kimball building and Complejo Zaragoza. This removed 500,000 SF from the industrial supply and forced several companies into other facilities across town. The key transaction over the post three months was MCS’s lease of 233,000 SF from ProLogis in the Centro Industrial Juarez. MCS was affected by the Kimball fire ended up leasing one of the largest available industrial buildings in Cd. Juarez. Roger’s Foam was another former tenant in the Kimball building and relocated to Verde’s space in the Bermudez Park. The only two transactions not related to the Kimball fire were the relocation of Von Wiese into the Neptuno Industrial area after vacating a larger building on Eje Juan Gabriel and PetroPac’s lease of 33,000 SF from ProLogis. |
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The list of companies vacating industrial space includes johnson Controls, Yazaki, Burner Systems, Lear, Foster Electric, Quadriga, Kane Magnetics, Moduslink and several others. Industrial vacancy in Cd. juarez is at on all time high with 80 facilities currently on the market. For the first time since 2004 there are also a number of industrial buildings on the market for sale, which will create further competition for the institutional developers as companies looking for space have legitimate options to purchase buildings rather than lease. TeamNAFTA expects the industrial market to stabilize before the end of the year, but it is not likely that any significant absorption will toke place until 2010 Rental rates will continue to be very competitive for at least the next six months and any new requirements coming to Cd. Juarez will have excellent leverage to negotiate their real estate position. |
