GlobalAutoIndustry.com’s latest Audio Interview “Automotive Investments in Mexico: Changes during past 12 months – China, Nearshoring, Ukraine, Chips Act, Semiconductors” features Gary Swedback. Mr. Swedback is CEO of NAI Mexico and NAI PanAmericas, part of the NAI Global network, a leading industrial and commercial real estate firm. NAIMexico operates 25 offices across Mexico and Latin America, and works with many global customers, including those in the auto industry. Gary is a sought-after speaker on Mexico & Latin America industry and business issues.
Audio Interview Guest:
Mr. Gary Swedback, CEO
NAI Mexico and NAI PanAmericas
MEXICO INDUSTRIAL MARKET TRENDS REPORTS – To view reports, please visit here.
MEXICO SUPPLY CHAIN NEARSHORING SUMMIT – March 9, 2023 (El Paso, TX) – visit here.
CHALLENGES OF SOURCING CRITICAL AUTOMOTIVE COMPONENTS IN MEXICO – access recorded webinar here.
In the 18-minute Audio Interview, Mr. Swedback discusses these questions:
• You specialize in migrating global firms and expanding them in Mexico and Latin America. What changes have you observed in the status of the industrial market for sites and real estate across Mexico during the last 12 months?
• What are the locations in Mexico where you see most of the automotive activity, and which companies are moving in?
• Right now, new attention is focused on semiconductor manufacturing for automotive in North America. What factors contribute to the activity?
• Do you see Political Risk as a limiting factor for automotive activity in Mexico?
• North America looks to be in a unique new position in the global automotive market. Where do you think this will go over the next 3 to 5 years?
Ron Hesse (host):
Welcome to the globalautoindustry.com audio interview series. I’m Ron Hesse, and today I’m interviewing Gary Sweptback. Gary is CEO of Nai Mexico and Nai Pan Americas, part of the Nai Global Network, a leading industrial and commercial real estate firm. Nai Mexico operates 25 offices across Mexico. And works with many global customers, including those in the automotive industry. Garry’s A sought after speaker on Mexico and Latin America. Industry and business issues. Today, we’ll discuss what are the biggest changes in global automotive investments in Mexico between February 2022 and February 2023. How you doing, Gary?
Gary Swedback (guest expert):
Hi, Ron. Good morning. It’s a good day to catch up. Friday was a pretty full day. As you know, we had the 1st anniversary of the Ukraine invasion. Russia turned off the Drujba pipeline to Poland, Mexican President AMLO stated that he may not approve Tesla moving to Monterrey, and I had a pretty good meeting with the US trade and commerce. Department regarding semiconductors for automo.
Sounds like a fascinating day, Gary, let me start off with your first question. You specialize in migrating global firms and expanding them into Mexico and Latin America. What changes have you observed in the status of the industrial market for sites and real estate across Mexico during the last 12 months?
While quarterly, we tracked 24 industrial cities in Mexico run and that’s about 1 billion square feet. So I get to have a pretty good perspective and I have a pretty good idea what’s happening regionally, but also at the national level in the last 12 months and 2022 in the national. Level we saw for total available space and this affects site selection and and locations. In Q 12021, which is really more about almost 24 months ago, there were 47 million square feet of available industrial buildings in that quarter. By the end of 2022, there were 26 million square feet available, showing that the availability has dropped really significantly and that’s really mostly because of the high demand. And activity from global automotive folks and you know in other users in different sectors taking down the inventories of available. Base and I guess the construction really working hard to keep up. So now we’re seeing developers in Mexico moving quickly to identify new land for industrial. Another thing I’ve seen with lease rates, which is really interesting, is that they’ve scaled up in the last 24 months. So from Q 12021, the average monthly rental rate on an industrial building across the country. OK, was around $0.42 per square foot and now it’s at $0.49 per square foot per month. So that’s like a 16% increase in lease rates across the country. There are some markets that are less expensive and some that are more, but that’s the average. So it’s remarkable, it’s noticeable and that we can observe. What other changes? So for the first time last year, Monterrey, which is Mexico’s third largest city, captured more expansions and new automotive investors in …
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About Gary Swedback:
CEO, NAIMexico and CEO, NAIPanAmericas
As CEO of NAI Mexico, Mr. Swedback manages all 25 NAI Mexico offices. As a commercial real estate specialist in Mexico for over +25 years he has personally completed over 500 transactions, including land sales, facility leases, and build to suit construction. NAI Mexico and NAI NAFTA offices have completed over 50 million square feet of office, retail, and industrial transactions. He and his teams specialize in owner representation, multi-market analysis and feasibility projects for global and domestic firms in Mexico.