We integrate multipath exploitation with adaptive waveform design in order to increase the tracking performance of a vehicle moving in urban terrain. Mitigation of both clutter and strong multipath returns can result in increased target detection. However, exploiting multiple bounces from obstacles such as buildings can be shown to increase radar coverage and scene visibility, especially in the absence of direct line-of-sight paths. For this purpose, we formulate the multipath propagation of an arbitrary number of specular bounces in urban terrain for three-dimensional motion. We then further exploit and optimize multipath returns by dynamically selecting the parameters of the transmitted waveform to minimize the predicted mean-squared tracking error. We demonstrate our proposed approach in a realistic urban environment by varying the type of measurement to include regions of obscuration and different number of multipath bounces.