Global Field Intensive: Mexico City Real Estate Market Overview

By Issayas Tesfai, MSRE Candidate ’25

Jul 11, 2025

In May 2025, graduate students from NYU’s Schack Institute of Real Estate, as part of the Master of Science in Real Estate program, traveled to Mexico City for the Global Field Intensive led by Professor Dustin Jones. Over the course of a week, we met with leading developers, investment managers, architects, and advisors to explore the city’s evolving real estate landscape. Through these conversations and site visits, we gained a deeper understanding of how projects are shaped by local market forces, regulatory frameworks, and capital strategies in Latin America’s most important urban market.

Engagement with Industry

We began with a macro-level briefing from Yadira Torres, a Managing Director at CBRE Mexico, who covered key performance indicators across the office, industrial, retail, and residential sectors. Her team also shared a regional breakdown, highlighting which states in Mexico are experiencing heightened demand and increased investment activity. These insights were presented alongside shifting demographics, the evolving landscape of foreign market entry and corporate expansion, and the growing impact of U.S. tariffs on Mexico’s logistics and manufacturing sectors. These factors, along with the rise of nearshoring and industrial growth, helped set the tone for a week of in-depth, site-level learning.

Subsequent site visits and meetings included:

Thor Urbana & BOVIS – We toured Chapultepec Uno, a flagship mixed-use tower that includes the Ritz-Carlton, office space, high-end restaurant and a retail component. (Fun fact: Tom Cruise had just stayed there while promoting his latest action film.) BOVIS, the general contractor, walked us through the complex permitting and construction process unique to Mexico City and we got a chance to take photos at the Helipad.
Gensler – We met with Eduardo Ramos, Principal, and his team to discuss Gensler’s extensive 40+ year history. As the world’s largest architecture firm, their global perspective and local experience offered a valuable lens into how major design firms navigate urban development in Mexico City and Latin America.
City Express – We met with Santiago Parra, CFO, who walked us through the origin and growth of City Express’ 150+ hotel portfolio, culminating in its recent acquisition by Marriott, marking a significant expansion of the hospitality giant’s footprint in Latin America. We toured a variety of hotel asset types and met with members of their operating teams to better understand their market segmentation and site selection strategy.
Newmark – We met with Giovanni D’Agostino, President of Newmark Mexico, along with several of his regional directors. They shared insights on the markets within Mexico that are seeing the most activity and discussed emerging asset classes, including the growing interest in data centers, which face development challenges due to the country’s energy infrastructure constraints. We also discussed potential alternatives to the Panama Canal and various scenarios for improving logistics efficiency for larger ships, particularly in the context of Mexico’s growing role in global supply chains.
FIBRA Danhos – We met with the design team behind Parque La Mexicana, one of the most striking urban parks we have seen. It is surrounded by high-end multifamily towers, each featuring unique architectural styles, and seamlessly incorporates restaurants, retail, and public gathering spaces. Located in Santa Fe, the park was developed on a former quarry site that sat as an open void for nearly 50 years. Following extensive negotiations, a public-private agreement was reached that allocated 70 percent of the 40-hectare site for public use and 30 percent for private residential development. As part of the agreement, developers were responsible for funding the park and surrounding infrastructure.
O’Donnell 888 – We met with John David O’Donnell, founder and CEO of O’Donnell Capital Management, one of Mexico’s leading industrial real estate investment and development firms. He gave us a tour of OD888, a recently acquired logistics complex in the Bondojito area of Mexico City. John walked us through the firm’s value-add strategy, which involved upgrading the site to meet last-mile logistics needs.
MIRA – We met with Robert Pulido Mier, who gave us a tour of the future site of the Armani Residences in Polanco. Located in one of the most prestigious neighborhoods in Mexico City, the project is a partnership with Armani and is set to become one of the city's premier condominium developments. We learned about the site’s history, including challenges related to land assemblage and the preservation of existing structures that could not be demolished. The visit also provided insight into the condominium development model in Mexico.
Urban Hub – As the largest rental housing operator in Mexico City, Urban Hub is helping to shape the city’s emerging multifamily rental market. Their model focuses on delivering amenitized apartment living at carefully selected sites, targeting higher-income tenants through efficient operations and premium design. We learned about their approach to site selection, unit mix and sizing, amenity programming, and pricing strategies. They also invest heavily in technology to streamline leasing and management, practices that closely mirror what we see in New York’s residential market.
DD3 – We met with Martin Werner, Co-Founder, and Alejandro Ramirez Saenz, a director and an NYU Schack alumnus. DD3 is a Mexico City-based financial services firm specializing in debt structuring, capital advisory, and real estate financing. The firm also operates DD360, a vertically integrated PropTech platform that supports developers and homebuyers throughout the project lifecycle, from pre-development to mortgage origination. We were able to get a demo of one of their proprietary search engines, which felt like a blend of Zillow and CoStar but tailored to Mexico’s residential market.

These engagements offered both top-down and bottom-up perspectives on how capital, regulation, and local market forces interact.

Market Takeaways

Mexico City presents a compelling case study in urban density, supply constraints, and policy friction. Key observations included:

Tariffs and US Policies: We heard from both CBRE and Newmark about how some U.S. firms have scaled back leasing or expansion plans in Mexico due to shifting trade policy. For example, Tesla had planned to build a manufacturing plant but paused its plans in response to potential auto tariffs. This uncertainty has created openings for other firms to step in and secure space or market share while conditions remain favorable. A key fact shared during our meetings: approximately 95 percent of automobiles manufactured in Mexico are exported to the United States, making the sector highly sensitive to U.S. policy changes.
Geotechnical Constraints: The center of Mexico City is built on a former lakebed, which makes foundation work for large-scale developments complex and costly. Developers must address groundwater and soil stability issues to create sealed, secure structures. In contrast, SantaFe sits at a higher elevation on bedrock, making it more straightforward and cost-efficient for large-scale construction.
Transit Limitations and Market Impact: Mexico City's vast geography, varying elevations, and seismic activity make subway construction complex and costly. Above-ground infrastructure is also expensive and limited, contributing to widespread congestion and long commute times. Traffic along major corridors such as Reforma during peak hours was often debilitating. During our visit to Santa Fe, a district filled with new luxury residential and office towers, we learned that vacancy rates remain between 30 and 40 percent. Much of this is due to potential employees facing commutes of up to two hours each way. This also discourages employers from leasing office space in the area. While some transit improvements are in the planning stage, transportation remains a major obstacle to more balanced urban growth.
Performance Metrics: Industrial and logistics assets continue to perform strongly, with low vacancy rates across key markets. Border states such as Monterrey report vacancies around 5.1 percent, while Mexico City is even tighter at 1.3 percent. The overall national average stands at approximately 4.3 percent, reflecting sustained demand driven by nearshoring and supply chain shifts.
Condominium and Rental Housing: Due to limited access to long-term debt, many developers are opting to build condominiums where capital can be recouped more quickly through unit sales. The rental market remains largely informal, though companies like Urban Hub and Homie.mx are working to formalize the sector by introducing professional management and institutional practices.
Investor Return Metrics: Unlike in the U.S., where commercial properties are frequently traded, developers in Mexico City tend to build and hold long-term. Transaction volume remains limited, and the market requires patient capital. This dynamic was not surprising given that most projects are backed by family offices, private capital groups and Mexican pension funds, rather than traditional institutional investors seeking short-term returns.

Closing Remarks

We’re grateful to all our hosts, and especially to Francisco Andragnes, Adjunct Professor at NYU, who joined us for most of the meetings and site tours and helped provide valuable context throughout the trip. In addition to his experience developing luxury projects in both US and Mexico, Francisco is the founder of Homie.mx, a property management platform overseeing over 5,000 units. Additionally, special thanks to Professor Dustin Jones for curating a thoughtful and engaging itinerary. This experience deepened our understanding of how global policies affect local dynamics, and how real estate practitioners must navigate that complexity with both strategic insight and ethical responsibility.

Personal Reflection

Of all the GFI trips I’ve taken, including Kenya and Japan, Mexico City stood out to me the most. Its proximity to the United States with deep economic ties, and the counties growing role in global supply chains make it one of the most strategically important cities in the Western Hemisphere. With a large and dynamic population, a maturing real estate sector, and increasing foreign capital interest, Mexico has the potential to become one of the world’s top economies. Experiencing that momentum firsthand and seeing how developers are responding to both opportunity and constraint made this trip impactful. I hope to return every chance I get. On a lighter note, getting lost while searching for a mariachi band and ending up eating some of the best tacos of the trip with my copilot Metehan made it all the more unforgettable.