Mexican real estate

Monday 19 January, 2009

I attended this morning seminar  Real Estate Investing in Mexico/DIVERSIFICATION IN DIFFICULT TIMES: REAL ESTATE INVESTMENT IN MEXICO sponsored by the US-Mexico Chamber of Commerce & Business Network Chicago held @ Baker & McKenzie’s offices.

I found the most valuable presentation ridge-us-mex-chamber-of-commerce-01-14-093 to be given by Ray Kivett, EVP/CIO of Ridge Property Trust on commercial & industrial real estate opportunties.  Their focus is from the heartland of Mexico to the ports.  His most emphatic point was to find Mexican partners, such as lawyers & accountants,  to understand the business culture.  Insurance company AIG partnered with a friendly competitor which was a big change for them.  Another competitor of theirs tried to build a platform on a Mexican employee base but never became unified.  Ridge found partners on the border & in Monterrey, & is seeking a partner in Mexico City.  There is tons of growth beyond the macquiadoras.  Rockwell hired 1500 people in Monterry-700 were engineers.  He contends the bloom is off of the China rose.  Mexico is a good alternative which offers a stable government & banking system with declining interest rates.  Plus the goverment is dumping lots of dollars into infrastructure.

Bruce Greenburg made a good presentation usrecessioneffectsmexico0105091 on how the recession is affecting real estate in Mexico. I requested a copy of the presentation on managing foreign exchange risk, but have yet to receive it.  I offered to put up B&M’s presentation on Mexico’s legal framework, but haven’t heard back.  There were other presentations made on more residential opportunities in tourism, medical tourism, & for retirees, but didn’t request them since they were simply just commercials for their ventures anyway.

There are great opportunities to pick up some lovely real estate south of the border, but I think you still need to be wary.  I have colleagues who’ve tried to invest in real estate abroad, & real estate can be such a tangled mess even here, you need to be very well aware of all the legal entrapments wherever you go.  This is 1 area where hiring good local legal counsel is an absolute must.  Specifically in Mexico, there are restricted & unrestricted zones for residential & non-residential uses which require trust agreements with a Mexican bank, government approval & must be navigated.


One comment

  1. I have been a commercial real estate broker, in Monterrey, for 20 years now, and have closed deals for several dozen industrial sites in Mexico. We have done site selection, for companies such as Kraft General Foods, Bardahal, AMOCO BP, among others. There are great opportunites right now to capitalize on the exchange rate. To give you an idea of what kind of industrial properties are available at Monterrey right now, you may follow this link…

    Or for instance if you are interested, in cash flow generating units we have this medical clinic, with an actual 7% NOI, at about 50% occupancy, so there is hughe room for improvement.

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