Sustained winds are at 80 mph, making the storm a Category 1 hurricane on the Saffir-Simpson scale.
Central and northern portions of the Yucatan Peninsula may get 4 to 8 inches of rainfall with isolated amounts of up to 12 inches, which could lead to flash and urban flooding.
Swells across the area are likely to cause life-threatening surf and rip current conditions, according to the NHC.
The current track of the storm has it exiting into the Bay of Campeche as a tropical storm after losing some strength over the Yucatan. It is then forecast to regain intensity over open waters and will threaten the Mexican mainland by Friday night into Saturday, potentially again as a Category 1 hurricane.
Hurricane Grace is expected to strike Mexico’s Yucatan Peninsula Thursday