Cristina Hermosillo, a 2012 BMC MSRE alum and partner with Hermosillo y Arquitectos Asociados S.C., said NAFTA has been a positive thing for Mexico and the US. California has taken second place behind Texas as the state with the most exported goods to Mexico ($26 billion), and there is concern about a NAFTA repeal. Tijuana, in particular, depends greatly on the manufacturing industry, she added, and business in Tijuana is booming, with the industrial real estate sector at record levels of net absorption (4 million square feet) in 2016. Rental rates are at 40 cents per square foot, and developers are preparing to build spec industrial space.

Residential units are also strong, as is medical tourism, with the first binational hospital, a joint venture between Scripps Health and Mexico's SIMNSA clinics, under construction, Hermosillo said. She added that we need to seek out business opportunities between the two regions and that Tijuana is well posed to provide advanced manufacturing space, which would encourage a whole new generation of jobs in that city as well as residential real estate as an option for affordable housing. “Manufacturing capabilities are just over the border.”

Greg McKee, president and CEO of CONNECT, a San Diego-based business that helps innovative companies and entrepreneurs scale and grow, said the innovation economy in San Diego represents a wide variety of companies and a total of 400,000 jobs here in some of the highest-paying fields. Innovation firms represent 30% of the jobs here, but 42% of the total earned income in San Diego. In 2014, the number of startups in the region grew to more than 400 and covered fields from aerospace to clean tech and software, which saw a huge increase. Many entrepreneurs are flocking to the Downtown San Diego market. McKee said there's a lot of breadth to the innovation economy, and it's a massive job engine for all of us to capture. It will drive job growth down the road—in the area of genomics, in particular.

Captain Frank Jones, chief of staff of Navy Region Southwest, spoke of the strength of the military presence in San Diego, which helps define the region. He mentioned the opportunity for a lot of crossover between civilian and military uses for products and services here.

McKee said one of the attractions for startups here is their access to talent. There's generally a shortage of software engineers. He agreed with Jones that there is the potential for a lot of crossover between what the military organization SPAWAR does and civilian applications of products.

Cafferty said the experience of the region, international tourism and the binational culture here, is what attracts many people and businesses. Terzi said, “San Diego is my home. Our relationship with Mexico is more important than ever.” He said the creation of the Cross Border Xpress or CBX, an enclosed pedestrian skywalk bridge exclusively for Tijuana Airport passengers who cross the US/Mexico border as part of their trip, has greatly increased the ability to fly in and out of the region, although more air service is needed for our community. “The cooperative things we are doing with Tijuana” and the “interaction between the two countries” mean travelers are “coming to a region, not just to San Diego,” said Terzi.

Hermosillo agreed that CBX has “set us on the map—it's the first of its type.” She said we should continue looking for projects like this one and the binational hospital to bring us together as a region. “San Diego and Tijuana can be the North American capital for medical innovation.”

Cafferty concluded that you do not see this level of collaboration in other places. “That's San Diego.”

SAN DIEGO—Mexico, innovation, tourism and the military present a unique combination of opportunity for San Diego, which has a level of collaboration not seen in other markets, San Diego Regional Economic Development Corp.'s president and CEO Mark Cafferty told attendees at BMC's 21^st Annual Real Estate Conference here last week. Cafferty, who moderated the panel “The Mega-Region and its Impact on Real Estate,” highlighted these four areas as a combination unique to San Diego's economy.

Joe Terzi, president and CEO of the San Diego Tourism Authority, said tourism is serious business. Last year, 35 million people came into San Diego, and the majority of them were here for tourism. San Diego's tourism sector has had record performance over the last two years and is a top-25 performing market along with L.A., San Francisco and Anaheim. San Diego is one of the top international destinations in the country, and the city is looking at ways to increase hotel product, with thousands of rooms being built in the Downtown market currently.

In fact, Terzi said the tourism market is “a little concerned about the new inventory coming into the market.” While “convention business and tourism are big components of our economy,” we don't currently have enough direct flights into our market—L.A. has 13 million direct international seats coming in each year, while San Diego has 400,000. “We need more flights.”

Terzi added that San Diego's tourism sector is working more with Mexico to capitalize on growth in the region and is getting ready for a program to encourage our market to be more welcoming.

Cristina Hermosillo, a 2012 BMC MSRE alum and partner with Hermosillo y Arquitectos Asociados S.C., said NAFTA has been a positive thing for Mexico and the US. California has taken second place behind Texas as the state with the most exported goods to Mexico ($26 billion), and there is concern about a NAFTA repeal. Tijuana, in particular, depends greatly on the manufacturing industry, she added, and business in Tijuana is booming, with the industrial real estate sector at record levels of net absorption (4 million square feet) in 2016. Rental rates are at 40 cents per square foot, and developers are preparing to build spec industrial space.

Residential units are also strong, as is medical tourism, with the first binational hospital, a joint venture between Scripps Health and Mexico's SIMNSA clinics, under construction, Hermosillo said. She added that we need to seek out business opportunities between the two regions and that Tijuana is well posed to provide advanced manufacturing space, which would encourage a whole new generation of jobs in that city as well as residential real estate as an option for affordable housing. “Manufacturing capabilities are just over the border.”

Greg McKee, president and CEO of CONNECT, a San Diego-based business that helps innovative companies and entrepreneurs scale and grow, said the innovation economy in San Diego represents a wide variety of companies and a total of 400,000 jobs here in some of the highest-paying fields. Innovation firms represent 30% of the jobs here, but 42% of the total earned income in San Diego. In 2014, the number of startups in the region grew to more than 400 and covered fields from aerospace to clean tech and software, which saw a huge increase. Many entrepreneurs are flocking to the Downtown San Diego market. McKee said there's a lot of breadth to the innovation economy, and it's a massive job engine for all of us to capture. It will drive job growth down the road—in the area of genomics, in particular.

Captain Frank Jones, chief of staff of Navy Region Southwest, spoke of the strength of the military presence in San Diego, which helps define the region. He mentioned the opportunity for a lot of crossover between civilian and military uses for products and services here.

McKee said one of the attractions for startups here is their access to talent. There's generally a shortage of software engineers. He agreed with Jones that there is the potential for a lot of crossover between what the military organization SPAWAR does and civilian applications of products.

Cafferty said the experience of the region, international tourism and the binational culture here, is what attracts many people and businesses. Terzi said, “San Diego is my home. Our relationship with Mexico is more important than ever.” He said the creation of the Cross Border Xpress or CBX, an enclosed pedestrian skywalk bridge exclusively for Tijuana Airport passengers who cross the US/Mexico border as part of their trip, has greatly increased the ability to fly in and out of the region, although more air service is needed for our community. “The cooperative things we are doing with Tijuana” and the “interaction between the two countries” mean travelers are “coming to a region, not just to San Diego,” said Terzi.

Hermosillo agreed that CBX has “set us on the map—it's the first of its type.” She said we should continue looking for projects like this one and the binational hospital to bring us together as a region. “San Diego and Tijuana can be the North American capital for medical innovation.”

Cafferty concluded that you do not see this level of collaboration in other places. “That's San Diego.”