New Mexico's Industrial Market Attracts New Companies

Southern New Mexico’s industrial market, specifically Dona Ana County, remained stable throughout 2013. We project solid growth in this arena for 2014. We have not seen much growth in the first quarter of 2014, though the industrial market has remained stable. Rents have also remained about the same. They have decreased in some instances as landlords compete for the few new tenants entering the market.

Fortunately, Southern New Mexico has experienced an uptick as a few companies entered the market from different states, which is obviously a positive sign. A food processing company just signed a lease/purchase agreement for 40,000 square feet. This company will create 150 to 200 jobs, a significant amount for Dona Ana, which has a population of about 225,000 people.

A majority of the growth has occurred in the Santa Teresa area. Union Pacific is wrapping up its 2,200-acre facility, where it has invested $500 million to create the largest intermodal inland port in the United States. Union Pacific’s Intermodal ramp, refueling and crew change station was fully operational in early April. This facility has the lift capacity to facilitate 220,000 intermodal containers annually. It will provide rail access from Mexico’s interior and Pacific Ports to the West Coast (Long Beach/Oakland/Lathrop); Pacific Northwest (Seattle/Tacoma); Midwest (Chicago/Joliet); and Southeast (Memphis/New Orleans/Atlanta/Charlotte).

This project has resulted in 3,000 construction jobs and more than $40 million to New Mexico contractors thus far. It is expected to create more than 600 permanent jobs in the next several years throughout the mechanical, electrical, architectural, utilities, track and civil engineering industries.

Santa Teresa’s intermodal station has started to create significant dialogue with major companies for distribution and warehouse properties. Growth in Santa Teresa is further fueled by the proximity to the Mexican border, where many of these same companies operate maquiladora plants on the other side of the border. After much discussion, it is encouraging to see some of the infrastructure coming to fruition. So far, three new water treatment facilities, a new wastewater treatment plant (under design), an expanded wastewater treatment plant (under design), two new storage tanks, six new upgraded water wells and an upgraded airport industrial park fire pump station are all in some stage of planning, design or development.

All of this activity has produced an increase in residential growth as well. There are 482 developed lots in different Santa Teresa subdivisions, with another 307 lots under construction.

The rest of 2014 looks positive for Southern New Mexico, with many new companies eyeing the state for potential growth opportunities.

By Jacob Slavec, Associate Broker, NAI 1st Valley. This article originally appeared in the May 2014 issue of Western Real Estate Business magazine.

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