May 11, 2010—Industrial Real Estate in Ambos Nogales

By Denisse Angulo, PICOR

TREND REPORT

May 11, 2010

Two Countries, Two States, Two Cities, One Community…

Despite being separated by the border line, Nogales, Sonora and Nogales, Arizona, commonly known as “Ambos Nogales”, has been a community of industry and economic growth. The Maquila Program was initiated by the Mexican Government in 1965 as a mean of attracting foreign investment, increasing exports and fostering industrialization along the US-Mexico border. However, it wasn’t until the early 1980s, when hundreds of foreign, mostly U.S.-owned factories known as maquiladoras, moved to the border to take advantage of Mexico’s low wages and less stringent environmental regulations. By the year 2000, more than 4,000 maquiladoras had been established in Mexico with nearly 100 of those in Nogales.

Nogales, Sonora has class A industrial parks hosting numerous companies, the majority Fortune 500, like Kimberly Clark, Black & Decker, Master Lock, Daher, among others. For years, companies have realized that Nogales is the place to be for those wanting to take advantage of excellent labor with minimal turnover and cheaper costs of operation.

Regarding available real estate, a company can find excellent industrial parks around the city, with state-of-the-art facilities that easily compare to ones found in the States: high quality infrastructure with standard or customized specifications, security and one-stop-shop employment services to begin operations.

Dealing with real estate in Nogales is similar to the process a company might use to operate markets in the States: contracts, terms, services, incentives and even the language are similar to give new customers the confidence they need to get started. It is well known that real estate has become an important part of economic growth for owners in the region who understand how to provide a smooth transition for clients bringing their operations from different parts of the world. Although Nogales is becoming a broker friendly community, it is important a company hires an industrial real estate broker that knows the region and understands the culture in order to provide the best understanding of the transaction; it is another country after all!

When coming from the South to the North and crossing from Mexico to the US, we arrive at Nogales, Arizona; a small community of about 25,000 people that has invaluable synergy with the Sonora, Mexico side. In Nogales, Arizona we can find numerous warehouses that serve the maquiladora industry in Sonora. All the products made in Sonora, through the Maquila Program, return to the States and are finished and shipped from Arizona to the world, injecting money and economic growth into the region.

There is no doubt that there are many opportunities waiting for investors to create and provide new services for the maquiladora industry in this region. Today, as an example, the expansion of the Mariposa Commercial Port of Entry is under construction with the support of both, US and Mexican, Federal Governments.

While companies are experiencing savings in their operational costs when coming to Nogales, the region is growing and benefiting from increase retail activity.

There is no doubt that ambos Nogales is a region of economic growth. It is difficult for one to exist without the other.

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BIOGRAPHY

Denisse Angulo, 520.546.2736
Commercial Properties – Regional Marketing Specialist
Denisse Angulo’s affiliation with PICOR Commercial Real Estate Services began with an internship with the University of Arizona in January 2005. She is originally from Sonora, Mexico. Her career started at PICOR as coordinator of the Alpha Group where she focused her efforts in the industrial market in Southern Arizona and Sonora, Mexico. She is currently a regional marketing specialist helping companies and owners on both sides of the border by providing commercial real estate services in both English and Spanish.