Little new or subleasing space caused Ventura County’s office vacancy rate to drop further into single digits during the fourth quarter.

Virtually all of the 220,000 square feet of office space completed during 2004 has already been absorbed, helping push the market’s vacancy rate to 8.6 percent, down from 9.3 percent in the previous quarter.

Net absorption during the fourth quarter alone was 109,592 square feet, according to CB Richard Ellis.

“We anticipated the vacancy going to single-digits at the end of 2004, so it is not a surprise our vacancy is as low as it is,” said Tom Dwyer, CB Richard Ellis’ senior vice president for office properties. “The overall market had very little sublease space available and minimal large blocks of space were available. The demand was very healthy for space.”

Meanwhile, the industrial vacancy rate dropped to 8.8 percent, from 10 percent in the July-September period, marking the first time that market has hit a single-digit rate since the second quarter of 2003.

Several multi-million-dollar sales and leasing agreements in both sectors were signed during the fourth quarter.

The largest deal was struck by Selvin Properties, which paid $10 million for the 62,000-sqaure-foot Village Oaks Center office complex at 3625 Thousand Oaks Blvd. in Thousand Oaks in October. The property was 95 percent occupied at the time of the deal.

HMS Capital Inc. shelled out $7 million for a five-year lease on 58,316 square feet at 1 Baxter Way in Westlake Village last month.

And Tekelec agreed to terms on a 10-year, 22,409-square-foot lease at 4580 East Thousand Oaks Blvd. in Westlake Village in December. The deal was valued at $6.3 million.

Ventura County has been increasingly shedding its image as a rural, bedroom community since an influx of businesses from the San Fernando Valley began in the mid-1980s. The companies followed their executives and employees as they sought an enhanced quality of life of better schools, lower crime rates and more open space.

Along with that increase in demand came higher lease rates, particularly in the prime office sub-markets.

Rates for Class-A space in the high-end East County sector were $2.25 to $2.35 per square foot in the October-December period, while the same quality space in the Valley’s prime locations Encino and the Warner Center in Woodland Hills hovered between $2.10 and $2.20 for the same period.

“Ventura County back 10 years ago was a lot less expensive,” said John Battle, a principal with brokerage firm Lee & Associates L.A. North Inc. “It was more of an area that people went to in order to pay the least amount possible, to have more economic value for their money.”

But the days of low vacancy rates could be coming to an end. East County rates are expected to rise to 9.5 percent, from the current 7.5 percent, by the end of 2005 as 240,000 square feet is expected to come onto the market.

“Developers are able to sell to their financial partner or the bank that a project is actually needed in the market,” said Dwyer. “(Developers) have a strong confidence level that their projects will be leased up within a short period of time.”

Prospective tenants will also have the chance to absorb 60,000 square feet of space in Oxnard that FedEx Corp. will vacate this summer as part of the express transportation giant’s plans to consolidate its FedEx Kinko’s Office and Print Services Inc. operation to corporate headquarters in Dallas.

FedEx, which bought Kinko’s last year, has already vacated a 50,000-square-foot site in Ventura.

The industrial side showed its strength in December when Deckers Outdoor Corp. signed a five-year lease on 175,000 square feet of space in a 310,000-square-foot freestanding building at 3001 Mission Oaks Blvd. in Camarillo. The deal was valued at $6.2 million.

Deckers will use the space which has a 28-foot clearance to store and distribute the trendy Ugg sheepskin boots the company imports from Australia.

The space had only been empty since the summer, when Technicolor Inc. vacated the entire building. It had used the space to warehouse and distribute VHS tapes.

“In the market, there are not too many buildings like this,” said Sam Wagner, senior vice president and partner at Told Partners Inc., which brokered the deal for landlord Mission Oaks Associates LLC of Santa Monica. “We really had only four months of vacancy and that’s not a lot of vacancy for such a large building.”

In other industrial activity, JTI Partners bought a 56,500-square-foot building in the Camarillo Business Park at 4001 Calle Tecate in Camarillo for $4.6 million in November.

And Weiser Litho Inc. paid $2.9 million for a 12,695-square-foot freestanding building at 3592 Willow Lane in Westlake Village in October.