More than 400,000 square feet of office space is springing up in Ventura County with another 1.2 million on the way.

That’s a sizable addition to a market that currently boasts 10.3 million square feet of office space online, according to figures from CB Richard Ellis Group Inc. And brokers say the building boom will not only increase inventory, but asking rates as well. That’s mixed news for a market that has long prided itself as an affordable alternative to pricey Los Angeles County.

With vacancy at 7.1 percent in Eastern Ventura County (Thousand Oaks, Moorpark and Simi Valley) and 12.2 percent in the west (Ventura, Camarillo, Oxnard), tenants needing space have few options.

“There’s a wave of construction like we haven’t seen,” says John DiGrinis, senior vice president for Colliers International. “Pent-up demand has induced developers to get these buildings up.”

The most anticipated project is the redevelopment of The Arbors of Thousand Oaks. Sares-Regis Group, a diversified real estate company, acquired the former industrial development for $34 million from the Hileman Co.

The site includes two office buildings totaling 133,464 square feet. One of them is 100 percent leased to a single tenant, semiconductor manufacturer Skyworks Solutions.

The structure’s other tenants include a health benefits provider and an auto insurance company. One new tenant was signed shortly after the sale. Savvis Communications group leased 12,000 square feet in a $1.8-million transaction.

The parcel also includes 8 acres of already entitled land allowing for the construction of two additional office buildings totaling 136,832 square feet.

Other new office projects are under way in Westlake Village and Agoura Hills on the Los Angeles side of the Conejo Valley.

Though the added capacity is good news for tenants needing more space, it comes at a price.

But will landlords be able to attract tenants with average asking rates for Class A space in the $2.40-per-square-foot range in the east and the $2.10 range in the west?

“They’re going to have to,” DiGrinis says. “They need at least $2.75 to make the deals pencil.”

DiGrinis breaks down the pricing this way: “Seventy-five percent of that increase is higher construction costs,” he says, “When you add land costs that get passed through to tenants, it adds up to much higher prices. You can expect to pay $2.85 to $3.05 per square foot for anything built in 2006. So, anybody looking for new space will be sticker-shocked. These are West L.A. rates.”

He’s not far off. West Los Angeles’ Class A buildings were asking $2.87 per square foot as recently as the second quarter of 2005, and were seeking $3.05 in the first quarter of 2006.

Even users who didn’t seek newly constructed facilities encountered higher rates at the start of the year, particularly in eastern Ventura County. “East County asking rents rose 14 percent in the first quarter,” notes Tom Dwyer, senior vice president for CB Richard Ellis. Class A asking rates rose from $2.40 per square foot in the fourth quarter to $2.45 in the first.

Few notable office deals were executed with the exception of RBF Consulting, which leased 12,000 square feet at 5051 Verdugo Way in Camarillo in a $2.2-million transaction.

The dearth of new deals was exacerbated by several thousand square feet in put-backs, says Mark Leonard, a principal with Lee & Associates.

Absorption is likely to stay low as new spec developments come on line near year-end. The FedEx/Kinko’s lease expirations in Oxnard and Ventura and the County of Ventura’s planned office consolidation won’t help raise vacancies, either.

DiGrinis also worries about the housing forecast and its impact on the local office market. “If mortgage lending drops, that will spell a slowdown in housing growth and financing,” he says. “How will that affect the hundreds of thousands of square feet of office space occupied by housing finance companies?”

But Sam Monempour, associate vice president of Grubb & Ellis Co. remains bullish.

Lease velocity was brisk in the industrial sector with several deals completed in the opening quarter.

Two transactions closed in Oxnard. Commonwealth Inc., a warehousing and distribution company, leased two spaces totaling 53,500 square feet at 1950 Williams Dr. Berry Pack, an agricultural products wholesaler and distributor, expanded its Oxnard operations into 13,000 square feet at 810 Mercantile St. in Oxnard. The lease values were not reported.

Simi Valley also recorded several deals. Promotional products maker SafeHaven Products Inc. consolidated from three Moorpark facilities into one 19,932-square-foot space at 2160 Union Place. Simi Valley Wholesale Electric inked a five-year, 10,744-square-foot lease at the Simi Valley Business Center (2635 Park Center Drive). Residential window-maker American Vision Windows closed a 7.5-year lease for 35,000 square feet at 2125 Madera Road. Lease rates were not disclosed.