Lovett Industrial broke ground last week on the second phase of its 610 Business District in Houston. The new phase will add 537,000 square feet across four shallow-bay buildings that are between 53,000 and 219,000 square feet. The site, near Mykawa and Dixie just south of Loop 610, offers access to the port, labor pools and key distribution corridors. Phase I leased quickly after delivery last year. Full buildout will bring the project to 1.5 million square feet by early 2026.

The new start comes at a time when most developers are holding off. Across the country, high vacancy and slower absorption have paused speculative construction. But, Houston hasn’t followed suit. As of June, 14.8 million square feet was under construction in the metro — up 5% from the previous month and more than double year-over-year, according to Yardi Matrix.

Additionally, vacancy stood at 6.5% through the end of the second quarter. That’s well below the national average of 9% and low enough to hold off any oversupply concerns, at least for now.

Notably, a growing share of new development is tied to manufacturing users. In the first half of the year, Apple, Nvidia, Tesla, and Foxconn announced major facilities across the region focused on AI hardware, power storage and advanced computing systems. Several of those projects are clustered in northwest Harris County around the Fairbanks North Houston Road and Fallbrook Pines Drive corridor.

Specifically, Foxconn’s Ingrasys unit has spent roughly $142 million acquiring 1.02 million square feet and nearly 86 acres in that area, including a $33 million building believed to be tied to AI component production. Apple is also building a 250,000-square-foot server plant within the same park, while Nvidia (in partnership with Foxconn) has selected a nearby site for its U.S. supercomputing program.

Meanwhile, Tesla is expanding Megapack production farther west in Brookshire, adding battery storage to the region’s growing base of large-scale, infrastructure-heavy industrial users.