Mexico City's Office Availability Drops to 17.2% in 1Q26

Mexico City’s corporate real estate market entered a strategic consolidation phase in early 2026, with vacancy rates dropping to 17.2% and the Central Business District tightening to 11.1%. This shift, driven by high demand from the IT, pharmaceutical, and corporate services sectors, reflects Mexico City's dominance in attracting 54.8% of national foreign direct investment. The scarcity of contiguous prime space now compels firms to choose between infrastructure renovations in central corridors or relocating to suburban submarkets like Santa Fe.

__________

Mexico City’s office market recorded a vacancy rate of 17.2% by the end of 1Q26, reports the US–based real estate services firm CBRE. According to the company, this reduction in available space happened while the sector recorded increases in occupied corporate area, with the IT, pharma, and corporate services sectors driving most of the space demand in the market.

CBRE’s MarketReview noted that the Mexico City office market concluded 1Q26 with a total inventory of 7.4 million m² of Class A and A+ space, reflecting a 1% annual growth. According to the firm, the sector recorded a vacancy rate of 17.2%, which represents a decrease of 2.3 percentage points compared to 1Q25. This reduction in available space occurred alongside an increase in occupied corporate area, which reached 6.2 million m² by the end of March 2026.

The firm considered that economic indicators supporting this real estate activity include Mexico City’s position as the primary recipient of FDI in the country. By the end of 2025, the capital attracted 54.8% of the national total, amounting to US$22.38 billion. Furthermore, employment data from the Mexican Social Security Institute (IMSS) reported 3.7 million formal workers in the city as of February 2026, marking a 7% annual increase. The generation of new roles was led by business services and trade, maintaining the most competitive average daily wage in the country at MXN$821.57 (US$47.4).

Lyman Daniels, President, CBRE Mexico, notes that Mexico City’s corporate real estate market is crossing a turning point following years of adjustments and a gradual recovery. According to the executive, current indicators suggest the sector has moved past uncertainty to enter a new cycle where the city is not only regaining its rhythm but redefining priorities to favor quality and strategic location. “Today, the country's capital is not only recovering its pace, but is redefining its priorities under a demand dynamic that favors quality and strategic location above all else,” Daniels stated.

Daniels noted that market dynamics show a distinct preference for the Central Business District (CBD), where the vacancy rate has tightened to 11.1%. Within this district, the scarcity of space is even more pronounced in specific submarkets. Reforma presents the lowest vacancy rate at 10.19% with average rents of US$27.46/m², followed by Polanco with 11.5% vacancy and rents at US$27/m². While Lomas-Palmas maintains a vacancy rate of 11.52%, it commands the highest prices in the city at US$28.51/m².

“The fact that the CBD has less and less contiguous space poses a logistical challenge for companies looking to grow their footprint in Mexico City. This limitation could force an evolution in property search strategies, such as migration to Class B buildings within the same CBD if they offer attractive renovations, or the exploration of suburban submarkets like Santa Fe or Insurgentes to capture the demand that no longer fits in the center,” Daniels noted.
Gross absorption reached 110,000m² during 1Q26, with 75% of this demand originating from renewals, expansions, sub-leasing, and pre-leasing transactions. The Central Business District (CBD), comprising the Polanco, Lomas Palmas, and Reforma corridors, concentrated 44% of the net absorption, while the Insurgentes submarket accounted for 36%. Technology and IT companies were the most active participants, representing 42% of the quarter’s transactions, followed by the pharmaceutical industry at 18% and corporate services at 16%.

Office Construction Indicators
CBRE detailed that construction activity remains steady with 351,000m² currently in development across nine active projects slated for delivery between 2026 and 2028. Approximately 28% of this pipeline is already pre-leased. For the remainder of 2026, the market anticipates the incorporation of 318,000m² of new supply, primarily located in the Bosques, Insurgentes, Lomas Palmas, Reforma, and Polanco corridors. This upcoming supply includes 102,000m² in Polanco that were previously not classified for office use.

Market dynamics show a distinct preference for the CBD, where the vacancy rate has tightened to 11.1%. In contrast, large contiguous spaces exceeding 9,000m² are increasingly scarce, representing only 8.5% of the total vacant buildings in the city. The majority of these large-format options are now concentrated in the Santa Fe and Perinorte corridors. 

Additionally, the market has adapted to changing tenant requirements by offering half of all available spaces in flexible formats, such as fully conditioned suites, Plug & Play offices, or sub-lease opportunities. “The data is clear: the appetite for the CBD is insatiable, but the supply is finite. The success of corporations in the coming years will depend on their agility to secure spaces in an environment where availability will be the most sought-after asset,” Daniels concluded.