Lyman Daniels, President, CBRE Mexico & Colombia • Interview

CBRE has a positive outlook for Mexico, one of its fastest-growing markets, and plans to grow through vertical integration, expansion into new submarkets, and new service lines.

How did CBRE react to the tumultuous period in Mexico in 2019?

2019 was a year of changes and modifications. CBRE’s advantage is its ability to react to those changes quickly and proactively and respond to its clients with solutions in times of uncertainty. Our ability to lead our clients through such a changing environment is our forte. Whether one agrees or not, the ecosystem is changing, and those who don’t react accordingly will not survive. We are enabling our clients to react to this change. As a third-party provider, our job is to help our clients with their large portfolios. We do everything from brokerage to project management. We do the administration of property management, facilities management, and valuations. We are bringing in several other business lines to add to our suite of client services.

Investment in Mexico’s construction sector is declining. How is CBRE adapting to this new context?

Investment has only dropped in some segments. Looking at Mexico’s industrial sector, which is a large part of our business, there are two sides: logistics and manufacturing. Both of those are growing tremendously. More importantly, we have seen growth in e-commerce. In fact, Mexico is catching up quickly with the US and Europe in terms of e-commerce. On the other hand, the industrial side is strong and constantly improving. Some sectors have come down and others up, but we are not entering into a dark cloud of no activity. This is the most competitive industrial market I have seen in 25 years.

What factors are behind the growth in the industrial market?

E-commerce is one reason. The auto manufacturing sector in Mexico is larger and stronger than it has ever been. A number of plants have opened up in the country over the last five years, creating demand and growth. There is steady growth countrywide, not just in certain cities, industries, or markets. When I came to Mexico 25 years ago as a developer, there was a steep learning curve in the country.

There were some great buildings being built, though not all of them were super high-quality buildings. Today, the overall quality of the buildings being constructed in Mexico is up there with the best.

What additional services does CBRE plan to offer in the medium term to further diversify the company?

Institutionalization of the market is inevitable. More publicly traded funds and companies are entering the market, such as developers, third-party funds, and banks. These institutions are demanding the kind of institutional-level services CBRE offers in other countries. Part of that includes the ability to finance projects using debt, not just equity. In these cases, CBRE’s role is to be their eyes and ears and take care of their administrative needs. In us, these banks and funds find a partner. Plans are in place to introduce these services in the near future.

What are the biggest challenges facing CBRE’s clients in Mexico?

Many of our clients have to make decisions without enough information. CBRE’s priority in 2020 is to fix that. Businesspeople want to know where the market is moving and what the important market drivers are. CBRE can educate clients on that and much more.

How many deals were you able to close in 2019 as compared to 2018?

They were similar in number, but different in types. We saw many larger deals in 2019, including record-breaking ones. Our international investors and tenants are extremely bullish on Mexico. We have seen global players come back to Mexico for all the right reasons, like location and demographics. This has improved Mexico’s outlook. CBRE’s Mexico branch has historically been one of the fastest growing worldwide for the last 10 years, and I expect that growth to continue. It will come through vertical penetration throughout the market, growth through our operations in various submarkets throughout the country, and amplification of our service lines. ✖

Mexican operation one of the fastest growing CBRE operations worldwide for last years