"It's amazing what $100 oil does for the Texas economy," Dotzour said.

The energy industry is helping to boost demand in Houston, said Dennis Friedrich, president of U.S. commercial operations for New York-based Brookfield Office Properties Inc. Sales in the largest Texas city rose 55 percent in the first quarter, according to CoStar.

'Reasonable' Prices

Unilev Capital Corp. in February paid $176 million for three office towers in Houston and is interested in buying more properties in the city, said Daniel Levy, president of the Beverly Hills, California-based company. It owns office and retail properties in several submarkets of Houston, including One and Three Riverway, a complex that has about 880,000 square feet (81,750 square meters) of rentable office space.

"We are looking to even grow more in Houston," Levy said in a telephone interview. "The prices are very reasonable compared to the other parts of the country."

In Denver, KBS Real Estate Investment Trust II purchased Granite Tower, a 31-story downtown property, in December for $149 million, the biggest office transaction in the city last year. The building is about 95 percent leased, with tenants including Anadarko Petroleum Corp.

The tower is near Coors Field, where Major League Baseball's Colorado Rockies play, and the redeveloped Union Station. The location is at the edge of the city's lower downtown historic neighborhood, which has a mix of residential buildings, bars, restaurants and shopping.

Denver Growth

KBS is attracted to Denver in part because of its diversified economy, said Christopher Aust, senior vice president and director of acquisitions for the southwest region. The population is also increasing, climbing 8.2 percent from 2000 to 2010, according to the U.S. Census Bureau.

"I see it as an opportunity to be in the path of growth," said Aust, whose company is based in Newport Beach, California.

Among interior cities, only Phoenix had a bigger increase in sales by dollar volume in the first quarter than Minneapolis, Dallas and Denver, according to CoStar. Some of those may have been driven by distressed deals. The area has the third-highest percentage of commercial properties seized by banks among the top 25 U.S. metropolitan areas, according to data compiled by Bloomberg based on loans that were packaged into securities.

San Francisco led the biggest markets in the first quarter as deals more than tripled from a year earlier in dollar value, according to CoStar. The data are based on 23 U.S. metro areas.

Las Vegas Slump