Mexico City’s Office Sector Faces 40% Occupancy Decline Amid Economic Uncertainty

Mexico’s office real estate sector began 2025 with a sharp slowdown, driven by economic uncertainty tied to escalating trade tensions with the United States.

The implementation of new tariffs, introduced by U.S. President Donald Trump on March 4, further eroded business confidence and impacted corporate leasing activity from January onward.

Data from consultancy firm Solili reveals that office leasing activity between January and February 2025 reached 118,000 square meters (m²), marking a 27% decline compared to the same period in 2024.

Analysts attribute this drop to cautious investment sentiment as companies monitor market conditions before committing to new leases or projects. Solili’s report highlights that the additional tariffs have disrupted optimism, creating a challenging environment for Mexico’s office market.

This downturn has also discouraged new construction projects. By February’s end, Guadalajara led new developments with just 1,600 m² of office space under construction, followed by Mexico City with only 1,000 m². These figures reflect a broader hesitancy across the sector.

Mexico’s Office Market

Mexico City remains the largest office market, accounting for 64% of all leasing transactions nationwide. However, it has also been the hardest hit by trade tensions.

Office occupancy in the capital dropped by 40% annually during the first two months of 2025. Of the 56,000 m² of office space vacated across Mexico during this period, 80% was concentrated in Mexico City.

Guadalajara also faced challenges, with a 31% annual decline in office leasing during the same timeframe. In contrast, Monterrey bucked the trend by doubling its demand for office space compared to early 2024.

This divergence underscores regional disparities in how cities are adapting to shifting economic conditions. The total inventory across Mexico’s eight major office markets stood at 17.5 million m² as of February.

Solili’s analysis emphasizes that market instability is slowing demand for corporate spaces and delaying new projects. Adapting to these commercial shifts has become critical for navigating the evolving landscape.

As businesses weigh their options amid ongoing trade tensions, Mexico’s office market faces an uncertain future shaped by external pressures and cautious investment strategies.