What Repeated Cross-Border Manufacturing Movements Teach Us About Industrial Real Estate
The simplest picture of cross-border trade is an arrow: a product moves from Mexico into the United States.
The operating reality is more complicated.
Materials, components, packaging, tooling, information, and finished goods may cross at different stages of production. A product can move south for finishing or assembly, return north for distribution, and then travel hundreds of miles through a domestic fulfillment network. The same route repeats nightly, weekly, or monthly.
We saw this firsthand while managing supply-chain operations for a dental-products manufacturer in Southern California. Truckloads left the U.S. facility at night carrying pastes, liquids, and related materials to a manufacturing operation in Mexicali. The Mexico facility completed additional processing and packaging. Depending on production lead time, finished products returned to the U.S. between one and fourteen days later, where they were received, packed, and shipped to distributors or directly to dental offices.
The border was not the beginning or end of that supply chain. It was one handoff inside a production network.
That experience now informs our real estate thesis:
The most durable cross-border properties are not simply close to a port of entry. They perform a necessary function in a repeated operating loop.
Nearshoring is physical, not conceptual
Nearshoring is often presented as a boardroom strategy: move production closer to U.S. customers, reduce exposure to distant suppliers, and shorten response times.
But the strategy becomes real only when freight can cross the border, clear customs, wait safely, transfer between carriers, undergo inspection, enter production, and move onward to the next destination.
Those activities require infrastructure and property.
The scale is already substantial. U.S. Census Bureau data show that the United States exported approximately $338 billion in goods to Mexico and imported approximately $535 billion in 2025. The Bureau of Transportation Statistics reported that Laredo handled approximately $296 billion of U.S.–Mexico truck freight that year—about 46% of the total value moved by truck. The Ysleta Port of Entry in the El Paso region accounted for another $112 billion, while Nogales handled more than $25 billion.
The goods were not limited to one industry. Leading trucked commodities included computer-related machinery and parts, vehicles, electrical machinery, plastics, pharmaceuticals, and measuring and testing instruments.
That mix matters to our underwriting. It suggests that a well-positioned property can support several sectors rather than depending entirely on one commodity cycle.
A nightly truck reveals more than an annual trade statistic
Large trade numbers show the importance of the corridor. Operating details show what kinds of property the corridor needs.
Our Mexicali production loop depended on coordination between two facilities and several processes:
- Materials had to be staged and documented before departure
- Loads needed reliable transportation and border access
- Production schedules on both sides had to remain synchronized
- Finished products required receiving, storage, and outbound fulfillment in the United States
- Information had to move alongside the physical goods
- Variations in a one-to-fourteen-day production cycle had to be absorbed somewhere in the network
That last point is easy to overlook. Variability consumes space.
When lead time changes, materials and finished goods do not disappear. They wait in production areas, staging zones, trailers, warehouses, or distribution facilities. A property that can handle those fluctuations safely and efficiently may be more valuable to an operator than a newer building with a less useful layout or location.
Old processes and new technology coexist
One of the most striking features of cross-border logistics was the contrast between systems.
Parts of the customs and documentation process still depended on paper and established relationships. At the same time, production and distribution networks were adopting technologies such as 3D printing, digital tracking, application programming interfaces, and increasingly automated scheduling.
That coexistence creates a practical warning for real estate investors. A high-tech tenant does not eliminate ordinary physical requirements.
Even an advanced manufacturer may still need:
- Secure outdoor staging
- Small warehouse or flex bays for suppliers and service providers
- Space for customs brokers, freight forwarders, and inspection activities
- Reliable truck circulation and trailer parking
- Repair and maintenance capacity
- Redundant power and communications
- Room to hold inventory when paperwork, inspections, production, or transportation falls out of sequence
Technology can improve visibility and throughput. It cannot make the physical handoffs disappear.
The investable opportunity sits around the headline project
Major factory announcements attract attention, but the surrounding network may offer a more durable real estate opportunity.
A large plant can pull dozens or hundreds of smaller participants into its orbit: component suppliers, packaging companies, tooling specialists, machine repair firms, transportation providers, testing services, customs intermediaries, and temporary-storage operators.
Many of those businesses do not need a million-square-foot distribution center. They need functional small-bay industrial or flex space with appropriate access, power, loading, security, and proximity to customers.
This supports our preference for properties that can serve multiple users and multiple industries. A flexible building may house an automotive supplier today, an aerospace service company tomorrow, and a logistics or robotics business later. The goal is not to predict one corporate winner. It is to own useful capacity in a corridor where many operators need it.
Three border systems, not three isolated markets
Our target geography includes three distinct cross-border networks.
Laredo and the Texas Triangle
Laredo is the dominant U.S.–Mexico truck gateway. Its value extends beyond the border because freight continues north through San Antonio and into the broader Texas Triangle.
The investable system therefore includes more than warehouses immediately beside an international bridge. It can include transload and staging facilities near the crossing, supplier and service properties along the corridor, and distribution capacity closer to San Antonio, Austin, Dallas–Fort Worth, and Houston.
El Paso, Ciudad Juárez, and the inland network
El Paso and Ciudad Juárez operate as a paired manufacturing region. The Ysleta gateway's 2025 truck-freight value illustrates the scale of that relationship. The wider network also includes rail, interstate access, nearby Santa Teresa, and connections east toward the Texas Triangle and west toward Arizona and California.
Properties in this system should be evaluated according to the customers, crossings, and transportation options they can actually serve—not merely their distance from the border.
Nogales, Sonora, Tucson, and Phoenix
Arizona's freight plan describes the state's border ports as gateways not just for Arizona but for businesses in other U.S. states. Nogales is associated with time-sensitive produce, but the Arizona–Sonora network also supports manufacturing, vehicles and parts, electronics, minerals, and other freight.
The corridor continues north through Tucson toward Phoenix. That creates potential demand at several operating stages: near-border inspection and transfer, regional staging in Tucson, and larger-scale distribution and manufacturing support in metropolitan Phoenix.
What we test before believing the growth story
Cross-border trade creates demand, but it does not rescue every property.
We want to know:
- Which recurring movement does the facility support?
- Is the tenant tied to one customer or part of a broader supplier ecosystem?
- How sensitive is the operation to crossing delays or policy changes?
- Does the property have functional loading, circulation, security, power, and yard capacity?
- Can the building accommodate more than one use without extensive reconstruction?
- Is the location useful to several crossings or freight corridors, or only one?
- Does current cash flow support conservative debt assumptions?
- Can the investment work without relying on permanent rent growth or a speculative exit?
Border markets can produce extraordinary throughput and equally extraordinary enthusiasm. We are interested in the former, not dependent on the latter.
Our preference remains fixed-rate, long-term debt or appropriately structured seller financing, a minimum 1.25 debt-service coverage ratio, and a credible path to operating the property through experienced local management.
The border is where manufacturing becomes visible
A trade agreement may enable production. A corporate announcement may describe it. The border is where the operating system becomes visible.
Every repeated crossing reveals dependencies: a supplier, a schedule, a staging area, a transfer point, a warehouse, a broker, a repair function, or a final distribution node. Those dependencies create real estate demand—but only where the property performs a practical role.
That is why we study production loops instead of treating nearshoring as a slogan.
We want to understand what moves, why it moves, where it waits, and what the operator cannot afford to lose. Then we look for the durable physical infrastructure around that need.
Bring us the property that makes the loop work
Draymoor Ventures is seeking cash-flowing and value-add small-bay industrial, flex, logistics, storage, light-manufacturing, and adaptive-reuse properties across the Texas and Arizona cross-border networks.
We are particularly interested in overlooked assets, succession situations, sale-leasebacks, and facilities whose value comes from an operating role that may not be obvious in a conventional offering memorandum.
If your property helps materials, components, equipment, or people move through the U.S.–Mexico production network, we want to understand the loop it supports.
Share an opportunity: Steven@DraymoorVentures.com
Sources
- U.S. Census Bureau, U.S. International Trade in Goods and Services, December and Annual 2025. The annual highlights report identifies approximately $338.0 billion of U.S. exports to Mexico and $534.9 billion of imports from Mexico in 2025. https://www.census.gov/foreign-trade/statistics/highlights/AnnualPressHighlights.pdf
- Bureau of Transportation Statistics, Transborder Freight Data Annual Report: 2025. BTS reports U.S.–Mexico truck-freight values by port and leading commodities, including Laredo, Ysleta, El Paso, Santa Teresa, and Nogales. https://www.bts.gov/newsroom/transborder-freight-data-annual-report-2025-0
- Bureau of Transportation Statistics, Border Crossing Data Annual Release: 2025. BTS reports that Laredo handled 38.8% of inbound commercial trucks from Mexico in 2025. https://www.bts.gov/newsroom/border-crossing-data-annual-release-2025
- Texas Department of Transportation, Texas–Mexico Border Transportation Master Plan Update. TxDOT describes the border plan as binational, multimodal, and focused on moving goods across the border region and beyond. https://www.txdot.gov/projects/planning/international-trade-border-planning/btmp.html
- Arizona Department of Transportation, Arizona State Freight Plan. ADOT describes Arizona's border gateways, cross-border commodity flows, and their role in serving businesses outside the state. https://azdot.gov/sites/default/files/2023-05/ADOT-Freight-Plan-Final.pdf
- U.S. International Trade Administration, Mexico Advanced Manufacturing. The Commercial Service connects nearshoring with Mexico's manufacturing role and demand for automation and production technology. https://www.trade.gov/country-commercial-guides/mexico-advanced-manufacturing