LPA's Capital Recycling Pivot: Selling Lima Sur to Bankroll a Mexico Build-Out
A landmark asset sale above appraisal funds a strategic tilt toward Mexico, adding fee income and optionality to a fully occupied, high-growth logistics platform.
LPA · Earnings Call · 2026-08-13
A Breakthrough Quarter on All Fronts
Logistic Properties of the Americas (LPA) delivered what CEO Esteban Gaviria called “a breakthrough quarter” — and the evidence backs that up. Revenues accelerated 26.1% year-over-year, NOI grew 27%, same-property NOI jumped 14.5%, and occupancy held at 100% across the portfolio. The average rent per square foot rose 10% to $8.88, capturing the pricing power of scarce Class A logistics space in its e commerce-driven markets. The Lima Sur Park sale, however, is the real news: a $145 million divestment at an in-place cap rate of ~7%, roughly 18% above its appraised carrying value. As Gaviria put it on the call:
We sold Lima Sur at roughly 18% above its independently appraised carrying value in our books. That premium and the cap rate behind it are hard and clear evidence of our ability to execute on what we have set out to do with discipline and resolve.
That premium is not just a one-off. It validates the company's vertically integrated model — developing, leasing up, and then monetizing assets at a profit. The proceeds (~$65 million net after debt repayment and taxes) are earmarked for Mexico, where LPA intends to deploy capital at cap rates of 8%–9% in key logistics corridors. The company has already signed a programmatic agreement to acquire Central Park 57, a 2.1 million square foot portfolio in Greater Mexico City, with $200 million in total potential investment.
The Mexico Pivot and a New Fee-Income Engine
This is not a new theme — LPA has been signaling its Mexico ambitions for several quarters. What's changed is the execution. The sale of Lima Sur to FIBRA Prime is the first concrete step in a deliberate capital recycling strategy. As Gaviria explained when asked about further divestitures:
“We have signaled that, yes. We want to grow in Mexico and grow in Mexico fast. And that might require … a pruning of our own portfolio.” — Esteban Gaviria, Chief Executive Officer · 2026-08-13
The FIBRA Prime alliance adds a new dimension: LPA will manage and operate Lima Sur on behalf of Prime, generating ongoing fee income. This is a capital-light revenue stream that can scale with future divestitures — a structural shift toward an asset-light model in foundational markets while the balance sheet tilts toward Mexico. The optionality to repurchase the park in four years is another lever Gaviria emphasized:
“We retain that option just again, because we think optionality and being able to aggregate a portfolio … scale is something that we want to achieve fast.” — Esteban Gaviria, Chief Executive Officer · 2026-08-13
The Mexico opportunity is reinforced by macro tailwinds. LPA sees nearshoring, e-commerce penetration (only ~20% of retail sales), and data center build-out as structural drivers. Management notes that each $1 trillion of data center investment can generate 30–40 million square feet of incremental logistics demand. Demand for logistics space now exceeds manufacturing space in Mexico for the first time in years — a clear signal for LPA's focus.
Operational Momentum and Conservative Guardrails
Beyond the strategic pivot, the quarter's operating results were robust. Peru's rental revenue surged 50.4% thanks to PepsiCo's occupancy at a new LEED Gold facility, while Colombia rose 29.3% on a re-lease to PriceSmart (excluding FX, ~11%). The development pipeline is on schedule: 440,000 square feet at Parque Logistico Callao, 92% pre-leased, with development yields of ~13%. The company also reiterated its commitment to its foundational markets even as it pivots to Mexico, calling them “integral to LPA's seamless cross-border offering.”
Notably, Gaviria acknowledged the recent earthquake in Colombia, confirming that all personnel and facilities were safe and fully operational — a reminder of the geopolitical and natural-disaster risks inherent in the region. On the cost side, G&A declined 8.7%, and management expects operating leverage to improve as the platform scales.
Prior quarters' themes — the Central Park 57 acquisition, the Fortem partnership, and the general push into Mexico — are now coming to fruition. As Gaviria said in the Q1 call:
“When we look at how to process which assets to divest, we think, which are already stabilized, mature and have benefited from our development activity.” — Esteban Gaviria, Chief Executive Officer · 2026-05-14
That philosophy is now being executed. The market's response remains muted — LPA's share price trades at a significant discount to the $8.62 per share intrinsic value (up 16% YoY) that Gaviria highlighted. But with three new research firms initiating coverage (BTG Pactual, Water Tower, Sidoti), the company is actively working to close that gap.
Why It Matters
LPA is a small-cap (market cap ~$104M) real estate operator that has just proven its ability to monetize assets above appraisal, recycle capital into higher-yield growth markets, and create new fee-income streams. If the Mexico program executes as planned, the company could materially re-rate. The risk, of course, is execution in an environment of USMCA uncertainty and currency fluctuations (20% of the portfolio is Colombian peso-denominated, unhedged). But the combination of full occupancy, embedded rental growth, and a now-proven capital recycling model makes this a name worth watching.