As supply chains increasingly shift away from China and closer to the U.S., Mexico has laid down the welcome mat for U.S. and foreign companies looking to relocate their operations near to the U.S. border but with lower costs. The nearshoring strategy has succeeded to the point where net absorption of industrial space in Mexico's six main markets has doubled in three years, according to a recent report from Prologis. Much of the space under construction is already pre-leased, and rents have shot up.

The trend has created a parallel demand for warehouse space in U.S. cities along the border, with manufacturing concentrating in Mexico and distribution in the U.S., GlobeSt.com has reported. 

Prologis identified many signs that nearshoring is the underlying driver of demand for logistics space in Mexico. Annual absorption of leased logistics space for manufacturing to supply the U.S. market rocketed from 3 million SF in 2019 to 16 million SF in 2022, rising from 8% to 26% of gross absorption in the country. Tier 2 nearshoring absorption by domestic suppliers and third-party logistics providers also shot up from 15 million SF in 2019 to 29 million SF in 2022.