I recently interviewed Christian Perez Giese, Executive Vice President and Director of the CBRE industrial real estate office in El Paso and Ciudad Juarez, to ascertain what is happening in terms of industrial space trends and cross-border trade trends in the El Paso-Santa Teresa-Juarez market. CBRE recently published its 2025 market report on these subjects. Below is part one of the interview.
Q: How did the El Paso-Santa Teresa region’s industrial real estate market do in 2025, and what’s been happening during the past 10 years?
A: It was the second-best year for net absorption that we’ve ever seen for El Paso and Santa Teresa. We’ve seen tremendous growth. That was accelerated by the 2017 and 2018 tariffs, and that had a large impact on our business in Juarez, Mexico. Then coming out of the COVID and supply chain disruptions, that’s when it really started to accelerate on the north side of the border. What we have been seeing is a trend towards larger and more sophisticated real estate requirements. CBRE has been talking about a “flight to quality” across the industrial sector for years now. The flight to quality means larger industrial buildings, buildings built for a higher volume, more sophisticated logistics and distribution, and buildings that meet e-commerce standards. They have more trailer parking, and enhanced floors for higher racking, any type of robotics, and larger power requirements.
Q: How much total industrial space was built in the El Paso-Santa Teresa market in 2025, and how much space does the market have now?
A: The total built in 2025 was approximately 5 million square feet. We just crossed the 80- million-square-foot threshold for the regional market, which is exciting. So far in 2026, six million square feet are under construction, five of which are speculative buildings.
Q: Your report states that there was an average vacancy rate of 10.4% in 2025. Is this traditionally where the market should be?
A: Just above eight percent is our historical average, so 2025 was slightly elevated.
We got as low as one at 1.2 percent in 2022, which was the lowest. One thing that’s important to remember about the industrial segment in El Paso and Santa Teresa, is that between 2005 and 2018, there was not a single speculative industrial building built. If you look at what’s been built from 2018 until today, that represents about 25 percent of the total industrial space. That means only 25 percent of our industrial supply are modern buildings that would be qualified for users that are following this trend of a flight towards quality.
Q: What about the size of spec buildings?
A: They’re getting bigger. We are seeing companies making longer-term investment decisions from a manufacturing perspective in northern Mexico. This is part of a larger story of nearshoring. But if you have companies that are making a longer-term decision to put in modern manufacturing operations in northern Mexico, once those operations are up and running and putting product out the door, then they are looking to the El Paso-Santa Teresa market as their first-mile entry point into the U.S. logistics and supply chains. If you’re making long-term decisions in Mexico, it’s natural that you’re going to be making longer-term decisions on the U.S. side of the border. What that means for our clients is that they are putting a distribution component on top of the normal cross-border warehouse. During the past 25 years, we have been a “make your product in the morning in Juarez,” “a ship across the border to El Paso-Santa Teresa in the afternoon,” and then “move that product over the next couple of days once you’ve consolidated the freight in a regional distribution center.”
Q: Your report states that 11 of the top 15 largest industrial space deals in the region were more than 200,000 square feet. The value of a cargo shipment crossing the Mexican border has increased. Does that also reflect what you’re talking about?
A: Yes. A fundamental change that we were seeing is that in Juarez we’re seeing growth of the consumer electronics business, and specifically the manufacturing and assembly of servers that are going into data centers. Although the auto sector is maintaining its supply and production footprint, this sector has been flat for the last 10 years. The growth that we’re seeing is in these new sectors.
Q: According to your report, the top industries by industrial space absorption were transportation/third-party logistics (48 percent), computer manufacturing (18 percent), electronics, electrical equipment (11 percent), and auto and parts manufactured (9 percent). Are we seeing a shift going on in the market?
A: We are, and these same trends are holding for 2026.
Q: How much industrial space was delivered in Juarez in 2025, and how much industrial space does the Juarez market now have?
A: About 4.4 million square feet were delivered in 2025. The total is about to surpass 100 million square feet, probably this quarter or next quarter. New construction in Juarez has slowed down dramatically, as leasing activity has slowed down over the last two years. That is really being driven by geopolitical uncertainty. Tariffs are one example of that, and the upcoming renegotiation of the USMCA (U.S.-Mexico-Canada Agreement) is another. A lot of businesses are waiting for clarity on some of these issues before they start projects.
Q: There is talk that due to the loss of jobs in the maquila industry the past three years that it’s a good time to be manufacturing in Juarez because now space is available and turnover is down.
A: Yes, and part of the availability are the workers in older generation and less sophisticated.plants that are being moved out of the northern border region. The minimum and maquila wages have increased. The older auto wire harness assembly operations are competing with the more modern, sophisticated operations coming in that are focused on higher-skilled labor. I think the geopolitical uncertainty has also slowed down the new investment that is going to absorb a lot of that labor. During the next three years there is a great set-up where you have labor availability, and you have labor available that’s coming from workers with experience in the maquila industry. These aren’t new people coming into the workforce, but a trained workforce.
Q: What about the top industries by industrial space absorption in Juarez?
A: Number one was electronics and electrical equipment, and number two was computer manufacturing. Between 2015 and 2019, electronics and electrical equipment represented eight percent of the net absorption. Last year, it was 28 percent. Computer manufacturing pre-COVID was three percent. Last year it was 26 percent. This is the best example of this trend towards more sophisticated manufacturing and higher-value manufacturing. We are seeing the number of truck crossings remain relatively flat, but the value of what’s coming across from those trucks into the U.S. is rising. The entire El Paso sector, including Santa Teresa, is the fastest-growing border port district. Laredo is number one based on total volume, but if you look at value and growth it’s the El Paso region by a larger margin.
Q: In 2024, the Santa Teresa Port of entry led all southern ports with a growth of 44 percent in terms of value of trade.
A: Three trends are impacting Santa Teresa. One has been the closure of some of the normal operating hours at the Bridge of the Americas in El Paso, and that’s pushing volume through Santa Teresa. Foxconn is sitting right across the border and moving its products through Santa Teresa. Then the trend that we don’t talk about a lot is the industrial growth in Chihuahua City during the last 10 years. There’s a good aerospace segment down there, and a great auto industry just like in all northern Mexico, and consumer electronics. Those trucks are not going through Juarez. The easiest route is to cross at Santa Teresa to get into the U.S. supply chain.
Q: A surprising statistic in your report is that Taiwanese companies accounted for the most industrial space leased in Juarez last year at 29 percent, followed by China at 20 percent, and third was the U.S. at 19 percent. I don’t think I have ever seen the U.S. not be number one.
A: I don’t think it’s ever happened before, and there’s so many different, interesting stories behind this. The Chinese figure was really driven by one company called TCL, that has grown its television manufacturing business dramatically in Juarez and leased a fair amount of space. The Taiwanese growth is what we’ve seen coming out of the 2017 and 2018 tariffs. The Taiwanese firms were in Juarez before those tariffs were put into place. They all implemented very large growth strategies that were related, but not driven, by COVID. They have put in triple or quadruple their production capacity and are continuing to grow. They are really the first movers of what everyone is referring to as this wave of nearshoring. They’re making higher-value products that can absorb the location shift coming out of southeast Asia and into northern Mexico.
Q: Your report states that in 2025 about $50 billion dollars in electronic computers and related products were imported in the El Paso-Santa Teresa. That ranks higher than major cities such as Chicago, Los Angeles, Laredo, and San Francisco.
A: The El Paso region is the number one entry point for that category coming into the U.S. This comes from Juarez and a little bit from Chihuahua City. Number two is Chicago because of the O’Hare Airport and air freight coming in from southeast Asia to Chicago, which is the largest industrial market in the U.S. Next is Los Angeles, which has the Ports of Long Beach and Los Angeles. This category is being driven by the manufacturing of servers, and our region is a major cluster for server manufacturing. Over the next 20 to 30 years this will be important, as data centers are being constructed across the country. We happen to have a couple of them in our market. One of them is Project Jupiter in Santa Teresa, which is estimated to be a $165 billion project. The majority of this category is the replacement of the servers that are in the data centers. We happen to be the region that is manufacturing the majority of the servers in North America.
Q: What can we expect to see in 2026?
A: We’re still seeing some uncertainty. Tariffs are part of the story. On July 1, we have a formal review process for the USMCA. If you are a corporation, you have more reasons to wait, rather than to act in terms of starting new manufacturing operations in northern Mexico or the U.S. I think we’re going to see a bit of a slow start to the year, and then depending on what happens with some of these trade agreements and some of these geopolitical issues, we could potentially see a large and active second half of the year. There are two caveats to that. One is we are seeing an incredible amount of activity being driven by Project Jupiter contractors and suppliers that are taking up space. We are on track to have a near-record, if not a record first-quarter of net absorption. Once there’s clarity for a corporation to make a decision, it is uncertain how quickly they can actually implement that decision, because these are more sophisticated buildings. They take longer to negotiate, and in some cases, they are going to have to build new space, or build-out space. Whether that shows up this year or next year, I’m not certain, but our clients are working on plans to react, once there is clarity to make a decision to move forward.
