Industrial Portfolio Brings Investors South of the Border

As manufacturing bounces back in Mexico due to cheaper labor, two companies have decided to take advantage of the upswing and buy a Class A industrial portfolio south of the border.

Finsa and Walton Street Capital have teamed to acquire the Verde Northern Mexico Industrial Portfolio, a 35-property Class A portfolio, from IDI Gazeley Brookfield Logistics Properties for $302 million.

JLL’s Capital Markets team represented the seller in the transaction.

“Manufacturing in the border towns of Mexico have really bounced back in the last couple of years as the labor rates have increased and, therefore a lot of U.S. manufacturers have moved back into Mexico,” John Huguenard, JLL’s international director, told Commercial Property Executive. “Brookfield bought the portfolio about two and a half years ago and it was at a much different pricing level based on where the economy was in Mexico at the time.”

The portfolio consists of 5.7 million square feet with buildings located in Juarez, Tijuana, Reynosa and Chihuahua, Mexico and consists of approximately 446 acres of land. In total, there are 43 different tenants represented across the properties.

“Finsa and Walton Street Capital invest in Mexico on an on-going basis together and the economy is much better than it was 24 months ago, so it was an opportune time for Broofield to sell,” Huguenard added. “This is the largest portfolio that’s traded down there in several years.”

The buyers are planning to paint the exteriors of the facilities that need it and do other small improvements in the year ahead.

At the time of the closing, the portfolio was close to 90 percent occupied.

According to Huguenard, Mexico’s growing economy plus the property’s locations near the United States position the portfolio to benefit from a significant amount of trade between the two countries.

Joining Huguenard on the deal was JLL managing director Michael Hochanadel and senior vice president Sean Devaney in conjunction with JLL national director Gerardo Ramírez and director Alberto León of the JLL Mexico team.