Foreign Direct Investment and Commercial Property Development in a US-Mexico Border City.

Studies of foreign direct investment (FDI), particularly in producer services, manufacturing, retailing, and mergers/acquisitions, are important within the literature on globalization. Still open to debate is the feasibility that FDI can be directed toward the development of commercial real estate property, including office space, shopping centers, and industrial/warehouse facilities. While investment across the globe in large-scale office buildings and shopping centers by commercial real estate development firms has been recognized, especially in the "world cities," little mention is made of more modest projects in small or mid- sized cities. This paper presents the results of a study of investment in commercial real estate in the mid-sized US-Mexico border city of Laredo. Warehousing dominates much of the landscape of Laredo's suburban zone, because the city handles some 40 percent of the cargo crossing between the two countries. Retailing also has expanded due to the growth of Laredo's population and the continued popularity of the city as a destination for Mexican shoppers. Thus, Mexican money is invested quite heavily in warehousing and retail space. A business class exists that promotes and facilitates this type of investment, and whose efforts are largely directed toward investors from Monterrey and Mexico City. Methodologically the study required interviews, given that public records of property development do not indicate the national origin of investors, and given that the phenomenon is not transparent.