 |
|
|
 Puerto Vallarta Real Estate | October 2006 
San Antonio Firm Rides Mexico's Commercial Real Estate Boom
 David Hendricks - San Antonio Express-News
The business path into Mexico is fraught with challenges and traps, but companies have no choice when their clients need them there.
For one San Antonio company, being led into Mexico was the best thing to ever happen, thanks to Mexico's booming commercial real estate market.
FAS Construction Management Inc. is an 11-year-old company that ensures construction completion for lenders and project owners. Three years after it started, a New York financial company wanted FAS to oversee a Mexico construction project.
By 2002, Mexico's construction market was drawing so much investment that FAS jumped in permanently by opening an office in Monterrey.
FAS now earns no less than 40 percent of its revenue from its Mexico activities.
The company has six of its 30 employees in Mexico — five in Monterrey and one in the Los Cabos resort mecca. It's looking at expanding to Mexico City and Guadalajara, said Mark Flinn, executive vice president.
FAS holds down construction risks for clients, usually lenders and project owners, by reviewing and monitoring contracts with contractors and suppliers. It also ensures contractors are paid to maintain workflow. That avoids liens that often stall or kill projects.
The company's products are Internet-based so that all parties can monitor a project's status around the clock.
With the help of 500 contract consultants, FAS operates in all 50 states, Canada and the Caribbean, but it is Mexico that has driven the its growth, especially during the past two years.
U.S. banks, pension funds and real estate investment trusts are flowing money into Mexican shopping centers, industrial buildings, resorts and residential/office towers. European money is flooding Mexico, too. The reason should not be a surprise.
"Investors receive a higher rate of return than they can find in the United States," Flinn said.
Expanding into Mexico is never easy, but FAS was lucky to be a San Antonio company. In 2002, it used the city's Casa San Antonio office in Monterrey, at little cost, to find the projects that made its first Mexico office worthwhile.
Flinn gives credit to Elena Villarreal for accelerating his company's entry into Mexico. Villarreal, who now works in San Antonio for the city's International Affairs Department, headed the Casa office at the time. Casa San Antonio even organized a conference that brought U.S. lenders and investors together with Mexican landowners and developers.
FAS formed a joint venture with a Mexican partner, Grupo Aconsa, and later established its own Mexican company. It also created an employee-leasing firm — which leases workers only to FAS — for tax purposes.
The transition did not always unfold smoothly. FAS once put out a brochure in Spanish with a few translation problems. Mexican businesses told FAS that the brochure portrayed it as a "loan shark," Flinn recalled.
Flinn said FAS had no competition its first three years in Mexico, but rival companies appeared a year ago.
"Competition is good," Flinn said. "We don't take our clients for granted."
Business nevertheless is growing more quickly than expected. FAS now has 30 clients. Six have signed this year, and the company's 2006 goal was to find just two.
"Mexico's market conditions will dictate FAS' expansion in Mexico," Flinn said. For now, it's just happy it found Mexico at the right time.
dhendricks@express-news.net |
| |
|
Vallarta Weddings
Tell a Friend
Site Map
Print this Page
Email Us