DENVER—A third-quarter office market study from Savills Studley indicates that Denver's office market has weathered an energy industry slowdown that has impacted other markets.

When the pullback in the oil and gas markets really gathered traction roughly nine months ago, there was a lot of understandable second-guessing about the sustainability of the expansion in the Denver economy and office market.

"Second-guessing the sustainability of leasing in Downtown Denver, and the ability of the market to digest $40-plus rents, has proven to be misguided, says Peter Knisely, associate director for Savills Studley, Denver. "Demand for new product as well as for re-purposed creative space has been sustained, supporting record rent levels."

During the past nine months, layoffs have occurred among energy companies, but Denver has so far held up relatively well and its office market maintained momentum during the third quarter, the report says. Leasing volume was quite steady, exceeding 2.0 msf for the second quarter in a row. Tenants have leased 5.6 msf year-to-date, just less than

The region's overall availability rate, 15.7%, dipped by 0.3 pp for both the quarter and the year. The class A rate, 16.8%, inched up by 0.1 pp quarter-on-quarter and by 0.4 pp year-on-year. Overall asking rent increased quarterly by 2.3% to $25.12 and registered a 7.6% yearly gain. Class A asking rent ($29.50) rose by 2.0% for the quarter and by 7.5% for the year.

 Meanwhile Overall leasing totaled 2.2 msf, a drop of 3.6% from last quarter but an increase of 9.3% from the third quarter of 2014. On a trailing four-quarter basis, overall leasing attained 7.2 msf, up by 2.6% for the quarter but down by 10.2% for the year.

Demand for space downtown, particularly in LoDo, Central Platte Valley and Cherry Creek, as well as in emerging areas such as River North and the Highlands, has been sustained. Companies from California and other states continue to explore setting up operations in Denver. Additionally, downtown is still poaching Suburban Denver companies, as well as businesses from Boulder, challenged by a very tight market. Suburban Denver nonetheless continues to register steady activity among larger professional/business services and healthcare companies.

Click here to see the full report from Savills Studley.