Corporacion Inmobiliaria Vesta (NYSE:VTMX) executives said 2025 was a “transition year” marked by slower decision-making early on, followed by a notable acceleration in leasing activity in the second half that management believes signals a turning point heading into 2026. On the company’s fourth-quarter 2025 earnings call, CEO Lorenzo Berho said Vesta’s focus during the year was disciplined capital allocation, selective development, and deepening its presence in what it views as Mexico’s most dynamic markets, including Mexico City, Guadalajara, and Monterrey.
Leasing rebounded in the second half as manufacturing demand strengthened
Berho said leasing activity improved materially as 2025 progressed. Vesta signed roughly 1.4 million square feet of new leasing in the second half of the year compared with 500,000 square feet in the first half. For the full year, leasing activity totaled 6.9 million square feet with a weighted-average lease term of seven years, including 1.9 million square feet of new leases and 5.0 million square feet of renewals, which management described as the highest level of renewals in the past three years.
Management pointed to emerging demand drivers tied to AI-related infrastructure, describing increased manufacturing demand for equipment supporting data centers, including HVAC systems, racking, cabling, and microchip-related assembly. Berho said Guadalajara is benefiting from these trends and that existing clients, including Foxconn, are actively expanding their footprint.
Fourth-quarter activity included new leases, renewals, and development starts
In the fourth quarter, Vesta reported leasing activity of 1.9 million square feet, including 770,000 square feet of new leases across electronics, aerospace, and automotive tenants. Lease renewals totaled 1.2 million square feet with a weighted-average lease term of approximately five years.
Total portfolio occupancy ended the quarter at 89.7%, while stabilized and same-store occupancy were 93.6% and 95%, respectively. Berho said occupancy moderated in certain submarkets due to “normal tenant rotation” and isolated shutdowns, which he characterized as non-structural.
On development, Vesta began construction on two new buildings during the quarter—an inventory building in Guadalajara and a build-to-suit project in Querétaro. The company ended the quarter with 800,000 square feet under construction, representing an estimated investment of approximately $60 million and an expected yield on cost of 9.9%.
Regional commentary: Monterrey land position, Juárez inflection point, and Mexico City logistics
Berho emphasized Monterrey as a standout market, citing building momentum into 2026. He said Vesta Park Apodaca, completed in the third quarter, is now being actively marketed and is drawing interest from advanced manufacturing and logistics tenants. He also noted that Vesta Park Apodaca Building 8 received first place in the GRI Global Awards 2025 in the Industrial and Logistic Project of the Year category.
Management provided additional detail on a land acquisition in Monterrey’s airport highway corridor, stating that infrastructure work is scheduled to begin in the first half of 2026 on the 330 acres acquired. In response to an analyst question, Berho said the transaction included seller financing and was not paid all at once, and that Vesta has conditions to extend the land for a second phase.
Elsewhere, Berho said Ciudad Juárez reached an “inflection point” with strengthened activity and robust interest from electronics and supply chain integration tenants. He added that Tijuana has stabilized with constructive tenant dialogue. Across markets, management said it continues to see rents increasing, supported by disciplined supply.
In Mexico City, Berho said Vesta is in discussions with major logistics players and described its Vesta Park Punta Norte project as ramping up to become the largest cross-docking operation in Latin America among e-commerce players in the region.
Financial results: revenue growth exceeded guidance; margins remained high
CFO Juan Felipe Sottil said Vesta exceeded the upper end of its 2025 revenue guidance. Rental revenues increased 11.8% year over year to $273.6 million, while total rental income increased to $283.2 million. For the full year, adjusted NOI margin was 94.8% and adjusted EBITDA margin was 84.4%. Funds from operations (FFO) totaled $174.9 million, up 9.2% from $160.1 million in 2024.
For the fourth quarter, total revenues rose 17.2% year over year to $76.4 million, which Sottil attributed primarily to rental income from new leases and inflationary adjustments. He said 89.9% of fourth-quarter rental revenues were denominated in U.S. dollars, compared with 88.7% a year earlier.
- Adjusted NOI: $69.4 million, up 17.2% year over year; adjusted NOI margin of 94.6%.
- Adjusted EBITDA: $61.1 million, up 18.2% year over year; margin of 83.3%.
- FFO (excluding corporate tax): $39.3 million, compared with $41.1 million in the prior-year quarter, with the decrease tied primarily to higher interest expense.
- Pre-tax income: $98.5 million versus $81.2 million in 2024, driven by higher gains on revaluation of investment properties, exchange gains variance, and higher interest income, partially offset by higher interest expense.
On the balance sheet, Vesta ended the year with $337 million in cash and cash equivalents and total debt of $1.28 billion. Net debt to EBITDA was 4.4x and loan-to-value was 28.1%. Sottil also said that after quarter-end in February, Vesta prepaid the remaining $118 million MetLife III facility, leaving the company with no secured debt and completing its transition to a fully unsecured capital structure.
2026 outlook: revenue growth of 10% to 11% with lower margin assumptions
For 2026, management guided for rental revenue growth of 10% to 11% year over year, with expected adjusted NOI margin of 93.5% and adjusted EBITDA margin of 83%.
In Q&A, management said the revenue outlook incorporates leases signed through December that will begin paying rent in early 2026, anticipated stabilization of occupied buildings, and continued leasing progress. Executives also pointed to inflation indexation in existing leases and mark-to-market rent increases on renewals as contributors to growth.
When asked about margins, Sottil cited a stronger Mexican peso as a challenge because most revenue is in dollars while a large portion of expenses—particularly employee costs—are in pesos, adding that cost control would be a key focus. He said the company used an exchange rate forecast of 17.50 pesos per dollar for budgeting purposes, while acknowledging the peso has been stronger than expected.
Management reiterated that development starts would remain disciplined and calibrated to demand by market, while also signaling that infrastructure investment to make recently acquired land “shovel-ready” would be a capital allocation focus in 2026. Executives also said asset recycling would remain part of the strategy and that the company plans to continue paying dividends, noting a $0.38 per-share cash dividend paid on January 15, 2026 for the fourth quarter.
About Corporacion Inmobiliaria Vesta (NYSE:VTMX)
Corporación Inmobiliaria Vesta, trading as VTMX on the New York Stock Exchange, is a Mexico-based real estate investment trust (REIT) specializing in the development, acquisition and management of industrial properties. The company’s portfolio primarily consists of warehouses, distribution centers and manufacturing facilities tailored to multinational corporations, logistics operators and other businesses seeking modern, well-connected industrial space in Mexico.
Vesta’s core business activities include the design and construction of build-to-suit projects, the leasing of speculative and multi-tenant properties, and sale-leaseback transactions that convert existing facilities into long-term lease arrangements.
