The value of an industrial buildings in a discounted cash flow (DCF) model depends, above all, on three assumptions: projected rent and its growth, submarket availability — which determines vacancy risk — and the Cap Rate used both for discounting and for estimating the reversion value.
In other words: how much the space will rent for over time, how easy (or difficult) it will be to keep it occupied, and at what rate the market is willing to pay for that cash flow. Small variations in any of the three can move the asset’s final value, which is why the quality of the data behind each assumption matters just as much as the formula.
When these assumptions are built on generic criteria — national averages, outdated comparables, or figures from other markets — the result may sound reasonable on paper while being far from what the real market is actually willing to pay or lease at.
1. Rent
The rent assumption is a trajectory that depends on the specific submarket, the asset class, and the cycle that particular area is in.
Mexico’s industrial market has shown in recent quarters exactly why this assumption is so sensitive. According to Datoz’s proprietary data, the national average asking rent closed Q2 2026 at $6.72 USD/m²/month. However, in Mexico City corridors such as Cuautitlán, Tepotzotlán, and Tlalnepantla, asking rents already exceed $11.00 USD/m²/month, while other regions of the country show markedly different ranges. Using a single national figure to value an asset in a premium submarket introduces a bias that translates directly into the final value.
2. Vacancy
Vacancy — the existing inventory that has not yet been leased — is the second assumption, and it defines how long a space would take to be absorbed and how much negotiating power the landlord would have relative to the market.
A submarket with low vacancy supports assumptions of faster lease-up and less downward pressure on rents at renewal. A submarket with higher vacancy demands more conservative assumptions around time on market and tenant concessions. Datoz reported that national vacancy stood at 6.6 million m² at the close of Q2 2026, with a vacancy rate of 6.8%. However, rates vary significantly across regions — border markets such as Ciudad Juárez and Nuevo Laredo posted double-digit availability rates of 10% and 11%, respectively, while other markets show tighter figures.
Ignoring this heterogeneity — or smoothing it with a national average — is one of the most common ways a valuation loses precision without it being immediately apparent.
3. Cap Rate
The Cap Rate is used to estimate the reversion value at the end of the projection period. For that reason, it is, of the three assumptions, the one with the greatest leverage effect on the final result.
Using a generic Cap Rate, or one from a prior cycle, without adjusting it to the specific submarket and risk profile of the asset, is one of the most common errors in a valuation.
DCF Value Opinion
Rent, vacancy, and Cap Rate are the three assumptions that most significantly move the value of an industrial building in a DCF model. None of the three behaves homogeneously at the national level, and treating them as though they do is one of the most frequent causes of valuations that fail to hold up under rigorous review. The quality of a value opinion depends, ultimately, on the quality of the data behind each assumption.
That is the logic behind Datoz’s DCF Value Opinion — a tool that combines discounted cash flow methodology with proprietary rent, vacancy, and market behavior data by submarket to build well-supported value opinions. Rather than relying on assumptions imported from other markets or outdated comparables, each of the three assumptions is anchored in Datoz’s proprietary database on the Mexican industrial market, updated month by month.
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