< Previous6 JULY 2024 SITE SELECTION insider July 2024 Mark Your Calendar … www.iamc.org BOARD OF DIRECTORS Fall 2023 - Fall 2024 Chair Betsy K. Power PepsiCo Vice Chair Cary Hutchings BNSF Railway Company Secretary-Treasurer Matt M. Boehlke Xcel Energy Past Chair Karen L. Shchuka Penske Transportation Solutions James Chavez South Carolina Power Team Alan Darner WK Kellogg Co William DeBoer Kohler Co. Connie Fricke Land O’Lakes Lindsay Friedman Prologis Jim P. Horigan Corning Inc. Robert Kontur EnerSys Amy Madison Pflugerville Community Development Corp Dave Quinn, CEcD Fairview Texas EDC Eric Zahniser Cresa IAMC President & CEO J. Tate Godfrey, CEcD Sustainability Includes Sustaining an Organization his letter serves as my valedictory address. As some of my fellow IAMC members can no doubt attest, a year today seems to go by faster than years used to. Looking back on the time I’ve been privileged to serve as IAMC chair, I am filled with pride in what we continue to accomplish as an association and with humility knowing the wealth of knowledge we collectively possess. I also continue to relish the connections you and I continue to build through Forums, local and international meetings as well as digital channels. This issue of Site Selection focuses on such themes as smart cities, innovation and sustainability, a theme dear to me in my work at PepsiCo alongside priorities I’ve addressed in past letters that include diversity, equity and inclusion. When I think about sustaining ecosystems, I don’t think only of the rainforest or the ocean. I think of the talent and knowledge ecosystems we seek to cultivate. What are we doing to further those ecosystems? Are we mentoring to the level we should? Are we welcoming some form of apprenticeship in the corporate real estate field. And, to revisit another theme, are we incorporating women into leadership roles in real estate and construction? I was pleased to learn in June of a summer program being conducted in the Philadelphia area by Mentoring young Women In Construction (MyWIC) for the 15th straight year that invites girls entering 7th through 12th grade to attend one of two free construction camps. Supported by organizations such as MLB’s Philadelphia Phillies and New Jersey–based facilities management company NEST, the program includes engagement with trades including carpenters, sheet metal, finishing trades, plumbers, laborers and electricians. “Women currently represent less than 10% of the construction workforce, but the sector is ripe with opportunities for fulfilling careers,” said Mary Gaffney, president of the NAWIC Philadelphia Foundation. Associated Builders and Contractors reports that the construction industry needs to hire an additional 500,000 workers in 2024 alone to meet labor demands. “Our aim is to show these talented young women the opportunities available and inspire them as future leaders in these fields,” said Rob Almond, CEO of NEST. “We want to elevate the skilled trades as high-paying, honorable, and often heroic career paths that require a rejuvenated workforce.” I challenge my fellow IAMC members to view their own professions as honorable and maybe even heroic in certain circumstances. It might inspire that talented next generation of women and men to lead us in ways we can’t imagine toward goals unthinkable in years past. In the meantime, as BNSF’s Cary Hutchings takes the helm as IAMC chair, I hand over the gavel with confidence in the years to come for IAMC, an honorable organization with its own ecosystem of collegiality, intelligence and human connections. Betsy K. Power LETTER FROM THE CHAIR8 JULY 2024 SITE SELECTION earshoring is in full swing in Nuevo León, home state to the dynamic metro of Monterrey (pictured) where IAMC held an event earlier this summer. More than three-quarters of nearshoring investments in Mexico have gone to Nuevo León — including some projects from IAMC member companies. (For more, see. p. 12 of this issue.) The overall Mexican nearshoring trend was well documented in a 2023 white paper from IAMC member organization Maersk, “Nearshoring North America: Supply Chain Considerations for When Closer is Better.” “Just beyond the U.S. border, Mexico has been bathing in the ‘nearshoring’ spotlight as hundreds of businesses have registered their interest with the Mexican government to move production from Asia to Mexico,” the white paper states. “The companies have been attracted by Mexico’s manufacturing-based economy and lower-cost labor, its participation in North American free trade agreements, and lower-cost real estate with close proximity to the United States.” The report cites statistics that showed FDI in Mexico exceeded $32 billion during the first nine months of 2022 — the highest investment rate since 2013. How’s it been doing since? The first quarter of 2024 saw $10.6 billion in U.S. FDI into Mexico, the Mexican government reports, led by Ciudad de Mexico, Chihuahua and Estado de Mexico. Nuevo León welcomed $284 million in U.S. FDI during the quarter, bringing the state’s total since January 1999 to $30.4 billion, second only to the $87.7 billion that’s poured into Ciudad de Mexico, home to 9.2 million people. Nuevo León’s population grew by 24.3% between 2010 and 2020 and IAMC Meets In Major Mexican Nearshoring Destination Photo by Wirestock: Getty Images SITE SELECTION JULY 2024 9 is closing in on 5.8 million, with Monterrey proper accounting for just over 1.1 million of that total. As for the state’s international trade, the accompanying graph from the Mexican government says it all. However, any company diversifying from Asia with Mexican nearshoring may find Asian companies themselves doing the same thing. According to the Mexico Secretary of the Economy’s office, the United States accounted for 39.7% of trade origins for Monterrey’s $8.3 billion in trade in 2023. China accounted for 29.1%. Since January 2023, Site Selection’s Conway Projects Database has tracked nearly 300 corporate end-user facility investments in Mexico worth upwards of $31 billion and accounting for 34 million sq. ft. and 100,000 jobs (where figures were available). The most active sectors are automotive (65 of those projects); business and financial services (48); machinery, equipment and construction (41); and electronics (27). IAMC is actively planning future international events, including repeat stops in Mexico City in August, São Paulo, Brazil, in October and London in November. Attendance at IAMC International events in those cities plus Monterrey in the previous cycle totaled more than 570, with corporate end- users representing around 30% of attendees. Meanwhile, look for more information online about IAMC’s Fall 2024 Forum taking place in September in another international destination: Québec City. — Adam Bruns Graph courtesy of Government of Mexico10 JULY 2024 SITE SELECTION his spring a very useful update to a 20-year-old tool was published by NAIOP. “Commercial Real Estate Terms and Definitions,” despite its snoozy title, is immediately helpful and downright compelling to anyone encountering new terms or what sounds like jargon in news stories, books, reports, discussions or on a conference stage. The 2024 edition (online glossary available at www.naiop.org/education-and-career/industry-terms- and-definitions/) features nearly 250 terms that include such newly added entries as eGrid, speed bay, pit leveler, gateway fulfillment centers and colocation data centers. Then there are the older terms for which people think they know the definitions but may discover they really don’t. “We know that if commercial real estate firms use commonly understood terms, collaboration is easier, deals will close more quickly, and our industry can continue evolve into a more modern marketplace,” said NAIOP President and CEO Marc Selvitelli. A sampling of terms in the news: Conversion: “A building that is changed from one use to another (e.g., an office building that is converted to a multifamily building). Space being converted is removed from current inventory and included in the under- construction category for the planned future use (e.g., an office building being converted to a multifamily building will be removed from office inventory and included under multifamily space, or number of units, under construction). (Synonym: Adaptive Reuse)” Transit Score: “A number between 0 and 100 that measures the relative usefulness of nearby Coming to Terms: You Can Learn a Few Things from the New NAIOP Glossary Photo: Getty Images SITE SELECTION JULY 2024 11 routes. “Usefulness” is typically measured by a weighted algorithm of characteristics such as distance to the nearest stop; mode of the route such as bus, ferry or rail; and frequency of service. 90–100 Rider’s Paradise: World-class public transportation 70–89 Excellent Transit: Transit convenient for most trips 50–69 Good Transit: Many nearby public transportation options 25–49 Some Transit: A few nearby public transportation options 0–24 Minimal Transit: Possible to get on a bus” eGrid: “The Emissions & Generation Resource Integrated Database (eGRID) tracks the environmental characteristics of the electricity generated across most of the United States. The data include the composition of the generation from gas, coal, nuclear, hydro, wind, biomass, solar, oil, geothermal and other fossil/non-fossil fuels. Many greenhouse gas voluntary and compliance reporting standards require localized eGRID data for reporting.” Creative Office Space: “Most often connotes a space different from a ‘traditional’ office ring on the exterior of a floor plate with cubicles in the middle. It may include exposed columns, brick and wood décor, and high ceilings (frequently from converted former industrial space). Creative space often has collaborative workspace through much of the footprint with lounge, quiet and conference areas throughout. The space often caters to technology, advertising, media and information tenants (TAMI).” Shadow Space: “A portion of leased space that is not being used by the tenant. This area can include unused space that a tenant leased and is holding for expected future growth. It can also include unused space that was previously occupied but is no longer used as a result of downsizing the company’s workforce. Shadow space is difficult to measure because it is not officially marketed or tracked in industry databases. (Synonym: Phantom Space)” 12 JULY 2024 SITE SELECTION f you think border immigration issues at the Mexican border are impeding commercial activity, think again. ere’s a reason, after all, Chicago-based real estate investment fi rm Brennan Investment Group has created a new U.S. Border division that the fi rm says will make investments in the U.S. and across the entire U.S.-Mexico border, which covers , miles and includes ports of entry. “ e nearshoring phenomenon, driven by geopolitics, labor cost diff erences and robotics, will be a signifi cant part of our business for years to come,” said Troy MacMane, managing principal for Brennan’s Texas Region, at the March announcement of a new cross-dock facility on acres at Pinnacle Business Park in Laredo. “Mexico overtook China in late to become the number one exporter to the United States with the value of goods approaching $ billion,” said Brennan Investment Group Chairman and Managing Principal Michael Brennan. “Of equal importance, Laredo has the number one port in North America. We are pleased with our strategic decision to invest here.” e company’s border division is led by Brennan Vice President for U.S. Border Investments Hildeberto Moreno, who previously has worked for Iron Horse in El Paso and for IDI Gazeley and Prologis on industrial projects along the U.S.-Mexico border. Moreno also serves as a committee member on the Border Industrial Association (BIA) and Mesilla Valley Economic Development Alliance in New Mexico. “Our location within Laredo could not be better,” Moreno said in March. “We are between the two primary commercial trading bridges in Laredo, the World Trade and Columbia bridges.” Asked to characterize the level of global occupier interest in locations on both sides of the border, Moreno tells me % of Mexico foreign investment is going into state of Nuevo León (Monterrey). at amounted to million sq. ft. of space absorbed in the state in , approximately million sq. ft. of that total occupied by Chinese companies. “Usually around -% of the absorbed space in Monterrey refl ects in Laredo,” he says, in terms of warehouse and third-party logistics activity. Is it accurate to say that mutually benefi cial economic development and commerce continue to grow along the border regardless of illegal immigration debates? Moreno says, “Yes, still very active with impressive absorption and buildings under construction in Laredo and El Paso.” Moreno says his division also is looking to invest in the El Paso region and, in the mid-term, in the McAllen area. Led by manufacturing, U.S. FDI in Mexico was $ . bil- lion in , a .% increase from , according to the Of- fi ce of the U.S. Trade Representative. Goods imports of $. by ADAM BRUNS adam.bruns@siteselection.com U.S.—MEXICO BORDER CORRIDOR I Hildeberto Moreno, Vice President for U.S. Border Investments, Brennan Investment Group Arriving commercial vehicles wait in line to pass through the Multi-Energy Portal (MEP) system at the Port of Mariposa in Nogales, Arizona, on November 9, 2023. Photo by by Jerry Glaser courtesy of U.S. CBP SITE SELECTION JULY 2024 13 billion in were up nearly % from the year before and % from a decade earlier. Movement on Goods Movement Infrastructure A fact sheet from the U.S.-Mexico High-Level Economic Dialogue (HLED) Mid-Year Review in April said border accomplishments include “the modernization and expansion of the Otay Mesa Port of Entry (POE) in January ; completion of the enhanced feasibility study for the modernization and expansion of the Bridge of the Americas POE in November ; the completion of the Program Development Study on the Bipartisan Infrastructure Law-funded Brownsville Gateway project; and the start of southbound transit of empty commercial vehicles at the Donna POE.” Among other highlights: • e United States signed a memorandum of understanding allowing project sponsors to move forward with the % design of the Otay Mesa East POE. Mexico’s Secretariat of National Defense (SEDENA) reports a progress of almost % on the Mexican side of the construction of the new border crossing at Otay Mesa II. It is expected to be completed by September , . • GSA expects to complete the Environmental Impact Statement regarding a new commercial crossing at the Douglas Agua Prieta POE where Arizona meets Sonora in May , with the project design-build process starting this summer. • Regarding Piedras Negras-Eagle Pass II between Maverick County, Texas, and Coahuila, Mexico, the Mexican Secretariat of National Defense (SEDENA) expected to complete works by early June . • Mexico’s Secretariat of Infrastructure, Communications, and Transportation (SICT) expects to conclude the construction on the Mexican side for the second span of the Nuevo Amanecer (Reynosa)-Pharr international bridge at the Texas-Tamaulipas border by October . Pharr ranks third in the nation for trade with Mexico, behind only Laredo and El Paso. A fl yer from the Pharr Bridge Board said there was $47 billion in global trade at the international bridge in 2022, with a growth rate of 3% monthly in 2023. A second span is on the way. Photo courtesy of Pharr International BridgeOne province hopes to come out on top in the Canadian push to advance green hydrogen production. J ust six months into , the province of Newfoundland and Labrador has made signifi cant strides in its renewable hydrogen production goals as new clean energy projects begin to move forward. e geographical positioning of the Atlantic Canada region itself — encompassing the provinces of New Brunswick, Newfoundland and Labrador, Nova Scotia and Prince Edward Island — brings great advantage to hydrogen production pursuits. Across all four, government offi cials have identifi ed that nuclear hydrogen, mixed feedstock hydrogen, hydro and renewable hydrogen production present the best economic opportunities. In May , Minister of Industry, Energy and Technology (IET) Andrew Parsons released Newfoundland and Labrador’s new Hydrogen Development Action Plan. “Our plan provides a focused approach to hydrogen development in the province, and sends a strong signal to residents, businesses and investors,” said Parsons. “ is approach will increase the province’s competitiveness and lead to increased employment and economic diversifi cation, including in rural areas.” Building upon the department’s Renewable Energy Plan and the Climate Change Action Plan, this addition specifi cally caters to four target areas: export and domestic markets; partnership, innovation and industry support; training and jobs; and regulatory framework. In the offi cial Hydrogen Development Plan, it is noted that global demand for hydrogen is expected to grow from million metric tons (Mt) in to million Mt by . As current top producers such as China and the U.S. take more aggressive approaches to boosting the industry and their respective green hydrogen strategies, now is the time to become more competitive. A study conducted by independent energy research company Rystad Energy showed that by , Canada is projected to produce nearly . million Mt of green hydrogen. Newfoundland and Labrador in particular has one of the greatest opportunities to excel in the international market due to marine access. In addition, natural resources such as wind, water, land availability and underground storage make it ideal for large-scale production. by ALEXIS ELMORE alexis.elmore@siteselection.com ATLANTIC CANADA 14 JULY 2024 SITE SELECTION Got Hydrogen? Canada Does. SITE SELECTION JULY 2024 15 It Gets Windy Currently, four projects selected through the Crown Land Call for Bids for Wind Energy Projects are under development throughout the province. The largest wind hydrogen project will cover almost 667 acres on the Burin Peninsula. This site, operated by EverWind NL Company, will bring a wind farm production facility with storage capacity for hydrogen and ammonia produced. Toqlukuti’k Wind and Hydrogen (ABO) will be located slightly north on 267 acres of the Isthmus region. ABO will be jointly developed alongside Braya Renewable Fuels, who recently began commercial operations at the newly converted Come By Chance Refinery. In February 2024, Braya began its renewable diesel fuel and sustainable aviation fuel production, with an initial capacity of 18,000 barrels of renewable diesel per day. The site is well positioned in terms of local feedstocks and proximity to U.S. and European markets. As the company looks to add green hydrogen to its roster in future years, the ABO wind farm becomes a valuable asset. “As an experienced pioneer in the development of renewable energy projects, ABO Wind will be a great partner in Braya’s mission to meet the growing global demand for renewable fuels,” said Braya Renewable Fuels CEO Frank Almaraz. “Securing the land for our joint project is a significant milestone toward realizing Braya’s vision to become a world leader in renewable fuels production. We look forward to working with ABO Wind to add green hydrogen to our portfolio.” To the west of both EverWind and ABO, World Energy GH2’s wind project will largely cover three different areas of its 264 acres. The company will place wind turbines throughout each area with storage facilities in place. In April 2024, IET announced it would extend a wind reserve consideration letter to Argentia Renewables Wind LP (Pattern) to introduce wind turbines on over 6,000 acres of the Wind Energy Contingency Land Reserve. The IET’s approval of this land would allow the company to support operations at its 300-megawatt wind-hydrogen project being constructed at the Port of Argentia, if needed. Overall, all of the projects are expected to bring a $206 billion economic impact to the province’s GDP over the next 40 years and create more than 13,000 direct and indirect jobs. Mistaken Point Ecological Reserve is one of five UNESCO World Heritage Sites in Newfoundland and Labrador, Canada. Photo by Barrett & MacKay Photography © Mistaken Point Ambassadors Inc, courtesy of UNESCONext >