Towering ambition: sometimes success is measured a few feet at a time. That is certainly the case for Mexico City's Torre Mayor. When finished in December, it will be the tallest building in Latin America—by one meter

Latin CEO: Executive Strategies for the Americas, March-April, 2002 by Larry Luxner

SEVEN MONTHS AFTER the destruction of New York's World Trade Center, one might suspect that flashy, ostentatious office towers which dwarf everything else around them have become about as popular as all-inclusive vacation packages to Afghanistan.

Tell that to Arturo Aispuro, vice-president of development at REISO Services S.A. de C.V., the Mexican subsidiary of Reichmann International. The Canadian real-estate giant--famous for glitzy projects ranging from London's Canary Wharf to Toronto's First Canadian Place--is now racing to finish Latin America's tallest structure, in the heart of Mexico City.

When completed in December, the 55-story Torre Mayor will poke 225 meters (738 feet) into the sky That will eclipse the twin towers of Venezuela's Parque Central (which currently holds the region's record) by one meter.

"The height of our building is certainly its most impressive characteristic, but for us it's not the most important," says Aispuro, who's managing the US$250 million project for Reichmann. "We're trying to create a new symbol for Mexico City, and we truly believe that the city has made the right decision in trying to stop flight to the suburbs and bring business back to the center."

Aispuro says Torre Mayor began as a 50-50 venture between Reichmann and local construction conglomerate ICA. "We made the decision to build Torre Mayor back in 1993, when the Mexican economy was doing well," he says, noting that the original investors paid US$18 million for the parcel of land along Paseo de la Reforma, one of Mexico City's leading boulevards. "We suspended the project after the peso crisis in December 1994, a delay that cost us 15 to 20 million dollars. Then, in 1997, when the economy was growing again, we decided to restart it."

In the interim, ICA ran into financial problems, and sold its interest in the project to Reichmann for an undisclosed amount--leaving Torre Mayor as one of the few totally foreign-owned real-estate ventures in Mexico. Aispuro says it will take 10 to 15 years for Reichmann to break even on its US$210 million investment (a figure that doesn't include a projected US$40 million in tenant-financed improvements).

"We are absolutely confident that the economy is coming back again," says the executive. "Reforma is the most important corridor in Mexico City, and this location in particular is the heart of the city" At the moment, more than 1,000 workers are engaged in building Torre Mayor, whose official website offers netsurfers a new camera view of the construction site every 60 seconds.

So far, the project has two confirmed tenants: Deloitte Consulting, which will lease 10,000 square meters (107,600 square feet) on the first nine floors, and Marsh & McLennan Companies Inc., which is leasing 8,000 square meters (86,000 square feet). Together, the two multinationals will take 25 percent of the building's usable space. At least two more US multinationals and three large Mexican companies are negotiating leases.

"The financial market is doing quite well right now," says Aispuro, 42, an architect by profession. "We expect to fill [the building] completely within two-and-a-half to three years.

One challenge the developers must overcome is the hesitancy of major Mexican corporations to lease space in a mega high-rise they don't own.

"We need to convince them that this is a high-quality building," says Aispuro. "This is the first building in Mexico City that really offers world-class quality. But in Mexico, most developers build the building and then sell it, so they don't have to worry about maintenance. In Reichmann's case, we own the building, so we'll be responsible for maintenance. That makes a really big difference." Aispuro predicts, nonetheless, that 60 to 65 percent of the building's 25 or so expected tenants will be non-Mexican companies.

Even with 7,000 employees eventually filling the building, not everybody is awestruck over the steel-and-glass skyscraper rising in their midst. "The Reichmann tower is very nice, hut it's just another office building," scoffs Jose Gamboa de Buen, general director of Grupo Dahnos, which is constructing a US$300 million hotel-office-residential complex a few blocks away "Our development is a mixed-use development like the ones you see in Chicago, New York and London. It will be a piece of the city."

Francisco Ruiz Herrera, director-general of strategy and tourism development at Setur, Mexico City's tourism secretariat, has his own concerns. "When you build towers so big, it has a positive impact, but it also puts demand on water, parking and traffic," he says. "The government has to resolve these problems. We will have to widen the streets around Torre Mayor and maybe build a few bridges."

Most people, however, believe Torre Mayor will be a net benefit for Latin America's largest metropolis. "I think it's very good for Mexico City to have buildings like these," says Francisco Cordero, marketing director at Jones Lang LaSalle, a local real-estate firm that's developing its own office/mixed-use project at Reforma 115. "Torre Mayor is going to fill up pretty quickly, and the best thing about it is that it's bringing Reforma back to life. It's going to be a landmark."