U.S. Industrial Market Slows, But Laredo Is Accelerating Construction — Why?

Amid a nationwide slowdown in industrial development, Laredo’s Q1 2025 vacancy rate hit just 3.8%, far below the U.S. average of 7.0%–7.3%.

Why is Laredo accelerating construction and defying the downturn?

Nationwide vs. Laredo: A Sharp Contrast in Industrial Development

While rising interest rates, tariffs, and soft demand are cooling the U.S. market—with total space under construction dropping from 383M to 300M sq. ft.—Laredo is accelerating construction.

Its pipeline jumped from 3.2M sq. ft. in mid-2024 to 11.3M in 2025, a 247% increase, marking its second construction boom of the decade.

Key Projects Driving Laredo Accelerating Construction

Development clusters north of downtown, led by the 1.2M sq. ft. Killam East Industrial Park, plus 11 buildings ranging from 400K to 550K sq. ft. Notable names include Pinnacle Logistics Center, Port Laredo Trade Center, and Port Grande. (CoStar.com)

High Vacancy, High Conviction

Despite 85% of space being unleased, developers are betting on rising demand from nearshoring as strained U.S. trade relations push manufacturers toward northern Mexico and the Laredo border.

The Tariff Loophole Fueling Laredo Accelerating Construction

The U.S. imposes 25% tariffs on Mexican imports, but numerous exemptions cut rates to 10% or zero for many products. In contrast, tariffs on China are far more sweeping and punitive.

This fuels the nearshoring boom—Laredo accelerating construction as the largest U.S. land port and a key Pan-American Highway hub. Industrial investment here continues to surge.