At the 2001 close, some three million sf was vacant in metro Monterrey. Suppliers are predicted to eat up most of the 10,000-sf to 75,000-sf industrial spaces, says Grubb & Ellis Co.'s Houston office.

Robert Kramp, regional client services manager for the Texas offices of Grubb & Ellis, admits some manufacturing projects were put on hold due to the US recession, but "other US companies seeking to lower their manufacturing costs are actively establishing operations along the US-Mexico border. These favorable conditions bode well for Monterrey in 2002 despite the economic recession engrossing the US."

Monterrey's warehouse-distribution success, Kramp says, will come mainly from "expanding logistics companies, computer assemblers, automotive second-tier suppliers (despite the slump for new vehicles), appliances manufacturers and metal fabricators." Research and development and flex space are high-demand arenas for call centers, a prolific industry in the border towns, which are commanding rents ranging from $5.45 per sf to $5.75 per sf triple net, according to Grubb & Ellis.

Monterrey is and has attracted some key players: LG Electronics, Panasonic and SSW (appliances); C&H Die Casting, Donaldson Co., (metal mechanics); Denso, Delphi Automotive Systems, Visteon (automotive); and Sanyo (electronics). In the third-party logistics lineup, Redwood Systems and Span have elected to set up shop in the bustling border city.

It's big business for the US and Mexico. More than 3,700 maquiladora operations feed the economies along the full length of the border and employ some 1.3 million workers, according to the Texas Department of Economic Development.