What opportunities and challenges are present in the real estate sector in Mexico?

Mexico offers significant opportunities, primarily driven by its vast scale and the nature of multifamily developments, which thrive on scale. The demographic and socioeconomic trends in Mexico align with our criteria for entering a new market, including a substantial middle and high-income sector, large corporations with significant workforces, and noteworthy demographic trends such as delayed marriage and childbearing. A particularly promising opportunity lies in the mismatch between the growing demand for rental housing and the limited supply of purpose-built rental buildings. Despite around a third of the population renting their homes, there are few purpose-built rental properties in Mexico City, creating a gap that we see as a substantial opportunity for development.

The real estate market in Mexico is facing unprecedented circumstances. Communication challenges with government agencies, bureaucratic hurdles, and negative perceptions about the real estate sector, often labeled as a ‘real estate cartel,’ pose significant challenges. Developers in Mexico contend with a damaged reputation, stemming from issues like property monopolies, corruption allegations, and disloyal practices. Efforts to address these challenges include collaborative initiatives with organizations like Mejor Ciudad, focused on building a better city. However, the market dynamics and the need for substantial change highlight the complexity of the current environment.

What advantages does your firm bring to the Mexican real estate landscape?

Our firm, Greystar, strategically targets specific demographics and socioeconomic groups in Mexico. Our developments cater to young professionals, roommates, executives, companies, and dual-income-no-kids couples (DINKs) or couples with a small child. By offering smaller units, we provide affordable living options, allowing individuals who might not afford larger apartments to enjoy our amenities and quality living spaces. We aim to provide housing solutions that evolve with people’s needs, enabling them to grow with Greystar—from studio apartments to one-bedroom units and beyond. While we currently focus on the A and B socioeconomic groups, our long-term vision involves diversifying our offerings to address various target markets and building types.

Our firm adopts a distinctive approach in the real estate landscape. Operating as a boutique entity, we maintain selectivity, working with a limited number of clients. Unlike traditional developers, we handle all aspects of the development process in-house. From business conceptualization, design, and permitting to construction and operation of the buildings, we ensure comprehensive control over the projects. This integrated model allows us to offer a unique and tailored experience. While maintaining a boutique identity, we also adapt our operating models for longer-term projects, showcasing a commitment to flexibility and innovation in the Mexican real estate sector.