Case | HBS Case Collection | May 2010 (Revised January 2014)

Water Shortage and Property Investing in Mexico City

by John D. Macomber, Regina Garcia-Cuellar and Griffin James

Abstract

A commercial property company evaluates water risks including the government's ability to remedy, the company's operating exposure and mitigation, and whether to relocate because of water risk. A real estate fund manager assesses investment prospects in Mexico City in the context of a major water supply and distribution crisis facing one of the world's largest cities. Can the investment manager understand the water problems so she can make a decision whether to invest in Mexico City? What will she learn about how water is sourced and distributed in Mexico City? And how might the potential public-private partnerships being discussed affect her investment prospects? The fund's investors are seeking real estate exposure in major world cities, particularly Mexico City. How can they assess and mitigate this exposure? How can they extend this thinking to other cities and countries?

Keywords: Private Equity; Investment; Risk Management; Infrastructure; Privatization; Business and Government Relations; Partners and Partnerships; Financial Services Industry; Real Estate Industry; Utilities Industry; Mexico City;

Citation:

Macomber, John D., Regina Garcia-Cuellar, and Griffin James. "Water Shortage and Property Investing in Mexico City." Harvard Business School Case 210-085, May 2010. (Revised January 2014.)