Background on the Situation
The Mexico City office building sector has been marked by caution since the 2020 pandemic. The city boasts the largest corporate space inventory in the country (7.4 million square meters), but investment for new constructions has been virtually nonexistent.
According to Colliers data, the growth of inventory in Mexico City between 2024 and 2025 was only 1.44%, far from the 6% annual expansion rates before the pandemic. The reason for this slowdown is a mix of high availability, structural changes in work patterns, and economic uncertainty.
Current Development Projects
Currently, only 13 developments are underway in the capital, mainly located in the Insurgentes, Reforma, and Polanco submarkets. This totals 392,000 square meters in construction.
In contrast, before the crisis sanitaria, there were up to 85 developments in progress with over 1.8 million square meters under simultaneous construction.
Additionally, there are 22 more developments in the planning phase that would add up to 731,000 square meters. However, it’s unclear when they might start due to the low dynamism in space absorption.
“We believe there will continue to be much caution in speculative investments. There is still no clear recovery of demand indicators that would justify starting new projects,” said Ausencio Lomelín, Colliers CDMX director.
Mixed Signals in the Sector
The overall sector’s outlook shows mixed signals: availability has slightly decreased, moving from 25% in 2023 to 22% in 2025, indicating improved occupation levels. However, this hasn’t been enough to trigger new supply or solidify market recovery.
In the first quarter of this year, net absorption activity fell 40%, from 81,000 square meters in the first quarter of 2024 to 49,000 square meters in 2025.
The primary factor behind this deceleration is the lack of certainty, as companies are still reluctant to make long-term decisions due to factors like U.S. commercial tariffs and global macroeconomic changes.
Moreover, the consolidation of hybrid work schemes and the rise of flexible models like coworking spaces have contributed to this slowdown.
“Many tenants are opting for schemes that allow quicker adaptation, such as collaborative spaces offering short-term contracts,” explained Lomelín.
Price Wars Amidst Oversupply
One effect of oversupply is downward pressure on prices, as building owners show flexibility to attract new tenants.
List prices remain relatively stable, but Colliers has detected that the closing contract price can be up to 25% lower for large operations (over 3,000 square meters), reflecting the urgency of owners to keep their properties occupied.
“We see the aggressiveness with which owners negotiate to retain and maintain their tenants. Today, companies have the opportunity to access state-of-the-art office buildings with technology, functionality, and amenities at very competitive prices,” noted Lomelín.
This has made the market more attractive for companies looking to establish a strong presence in Mexico without overspending. However, until absorption recovers sustainably, developers are unlikely to bet on large-scale new projects.
As a result of demand contraction, the office real estate sector may become more selective in developing new projects, favoring strategically located, highly efficient, and professionally managed developments to remain competitive.
Key Questions and Answers
- What is the current state of office building investments in Mexico City? Investment in new office buildings has been virtually nonexistent due to high availability, structural changes in work patterns, and economic uncertainty.
- How many development projects are currently underway in Mexico City? Only 13 developments are underway, totaling 392,000 square meters.
- What factors have contributed to the slowdown in new office building projects? The primary factors are the lack of certainty, U.S. commercial tariffs, global macroeconomic changes, and the rise of hybrid work schemes and flexible models like coworking spaces.
- How have prices in the Mexico City office building market been affected? While list prices remain stable, closing contract prices for large operations can be up to 25% lower due to owners’ urgency to maintain occupancy.
- What does the future hold for office building development in Mexico City? The sector may become more selective, favoring strategically located, highly efficient, and professionally managed developments to remain competitive.
