Los Angeles County office leasing climbed to its highest level since 2019 during the third quarter in another sign that the market is slowly stabilizing.

Tenants signed about 4 million square feet of office leases in July, August and September, up 15 percent from a year ago and 0.7 percent from the second quarter, according to Savills. Renewals drove the activity, accounting six of the quarter’s 10 largest deals.

Raytheon signed the third quarter’s largest deal, renewing 144,709 square feet in El Segundo, followed by PwC’s 138,000-square-foot relocation to Century City and Pepperdine University’s 117,495-square-foot renewal near Marina del Rey and Playa Vista. Ad agency Innocean USA also relocated to 101,000 square feet in El Segundo. 

The leasing improvement comes with a decline in available space. Overall availability fell to 26.5 percent, down 110 basis points since the second quarter and 170 basis points from a year ago. Available sublease space fell to 6.3 million square feet from 8.7 million square feet last year for the eighth straight quarter of declining sublease supply.

The biggest improvements were in Century City, Beverly Hills and El Segundo, while several parts of L.A. still carry availability rates above 30 percent. Miracle Mile had the highest office availability at 39.2 percent, followed by Burbank at 37.1 percent and Culver City at 37 percent. 

Average asking rents slipped 0.2 percent from the second quarter but increased 0.6 percent since last year, while Class A rents rose 0.8 percent annually. Century City and Beverly Hills remained the market’s most expensive submarkets, with asking rents averaging $7.61 and $6.71 per square foot per month, respectively.

Savills expects landlords in premier submarkets to retain pricing power as trophy space tightens, and concessions are likely to remain near historic highs.

Gregory Cornfield can be reached at gcornfield@commercialobserver.com.