The densification of Houston is evident in the growing number of cranes and construction sites in the urban core, with a third of all new development underway inside the city’s Inner Loop, according to CoStar Group.

The combined Neartown/River Oaks submarket is the busiest in the city, with 7.3M SF of commercial projects under construction. That accounts for 15% of total construction in Houston. Other Inner Loop areas with significant construction underway include Downtown Houston (12%), Medical Center/West University (6%) and the Heights (4%).

CoStar Director of Market Analytics Justin Boyar told Bisnow that the flurry of activity in Neartown/River Oaks is a reflection of the higher rate of mixed-use and multifamily projects underway in the area, particularly along the Allen Parkway, West Dallas and Washington Avenue corridors.

“The area along Allen Parkway is seeing an unprecedented amount of mixed-use construction in a relatively small area. This supports the thesis of pedestrian-oriented development, playing off proximity to Buffalo Bayou Park,” Boyar said. “The overall theme via increased density will mean increased property values and thus taxes. Houston’s urban core is densifying rapidly.”

Several large mixed-use projects along Allen Parkway have received fanfare, including DC Partners’ The Allen, Hanover and Lionstone’s Autry Park and GID’s Regent Square.

The second-busiest area for construction by square footage is Waller County, accounting for 5.6M SF. Activity in that area is being driven by large-scale industrial projects, such as the Ross Stores Distribution build-to-suit project, Empire West Business Park. and The Uplands Twinwood DC 1 industrial park. Waller County encompasses a large part of the west and northwest region of Houston, including parts of Katy.

“In Houston’s furthest outlying areas, such as Brookshire, farmland is being converted into large big-box distribution facilities. The increase in jobs there will likely spur rooftop development and later retail, multifamily, health care, etc. development to serve that population growth. The Grand Parkway is also supporting development on the west side,” Boyar said.

Construction activity is well underway in Northwest Houston, which comes in third at 4.5M SF. Notable projects in the area include the HPE headquarters and campus, Nexus Park Northwest and Creekside Park.

The next largest submarkets by square footage under construction are Sugar Land/Missouri City at 3.5M SF; Downtown Houston at 2.9M SF; the Texas Medical Center/West University submarket at 2.8M SF; Southwest Houston at 2.5M SF; and Lake Houston at 2.2M SF.

Boyar noted that in the Texas Medical Center and Midtown, there has been a major push in the direction of life sciences and tech incubators, as well as large mixed-use projects that will serve the need for lab space. Some of that activity may spill over into the East End, he added.

“As Houston’s urban core densifies, the need for infrastructure and mass transit improvements will intensify as population growth and densification place added pressure on Houston’s ailing roads and utilities and as densification increases traffic congestion,” Boyar said. “TxDOT and METRO have massive plans to address these needs, although they still face challenges from the local communities that these megaprojects will impact.”