Washington's beleaguered office-leasing market has started to revive as bargain-hunting tenants try to lock up fire-sale deals while developers still are sitting on large amounts of empty space.

An estimated 700,000 square feet of space was rented during the summer, an amount roughly equal to all the space rented during the first half of the year, according to three of the city's major leasing firms.

After a year of retrenchment, law firms signed up for much of the space. Developer giveaways even lured some out of addresses west of Connecticut Avenue to new space in the city's fraying 14th Street area.

"People are coming out now because the deals are so good," said Fern Barrueta of Smithy Braedon.

Stephen Goldstein of Julien J. Studley added, "No doubt, tenants are taking advantage of this buyer's market, which is quickly disappearing. As the economy has bristled along, so has office leasing, and now owners are feeling optimistic about the market."

A lawyer with a leading firm that recently signed a lease in a new building agreed. "A number of law firms finalized arrangements for new space in the summer because, in their view, the oversupply of space--particularly in good buildings--was beginning to diminish," the lawyer said.

Many of the deals that were wrapped up in July and August have been under negotiation since earlier this year when developers started lowering rents and giving away some office improvements, such as upgraded carpeting and paneling, to attract tenants. The concessionary deals began as it became widely known that office space leasing had dropped sharply in 1982 at the same time that about a dozen new office buildings, totaling close to 4 million square feet of space, were under construction around Franklin Park, the city's porno district.

The latest leasing figures reflect many of the "icebreaker" deals made by developers to entice large space users--those needing a floor or more--into a virtually empty building, said some leasing agents. To attract these lead tenants, many developers were willing to give as much as a year's free rent or packages of several months of no rent plus increased and upgraded improvements, according to several agents.

The impact of the improved leasing market can be seen at buildings such as 1400 Eye St. NW, which is atop one of the entrances of the McPherson Square subway station and across the street from some of the city's best known striptease establishments.

In May, only 5 percent of the high-rise building was leased, said Barrueta, the building's leasing agent. Now, 40 percent of the space has been taken, he said.

The new tenants include United Press International, which took two floors in a deal that included "substantial free rent" and a 5 percent ownership in the building, according to other leasing agents.

A few blocks away at 1220 L St., there was only one tenant at the end of May, the American Petroleum Institute, which had taken about half the building to move its headquarters from 2101 L St. NW, said Mike Glosserman of JBG Associates, the building owner and leasing agent.

During the summer, another 20 percent of the building was leased or committed to five additional tenants, said Glosserman.

The West End had been another slow area. At 1255 23rd St. NW, a new Oliver T. Carr building, there were no leases or letters of commitment by the end of May, said marketing Vice President Steven Bralower. Today nearly 70 percent of the space has been committed although no leases have been signed, he said.

Law firms have been primary tenants for space in new buildings. And such well-known firms as Caplin and Drysdale; Becker, Gurman, Lucas & Meyers; Jones, Day, Reavis and Pogue, and Metzger, Shadyac & Schwartz have signed commitments to give up space near Connecticut Avenue and move east of 15th Street.

"There's less stigma to the lower 14th Street area now than a year ago," said Richard Hollander of Cushman & Wakefield. "Tenant perception has really changed. That's because of the brokers educating people to the attractiveness of the area and a result of tenants moving there. As more people come, others don't have fears of pioneering."

In addition, tenants make a distinction between Metropolitan Square, the new Oliver T. Carr building on 15th Street just opposite the Treasury Building, and newer buildings a block or two east.

"We don't feel we are moving into a pioneering area" because it is a block from the White House, in the same block as Garfinckel's department store, and a block from Pennsylvania Avenue, said a spokesman for Kirkland and Ellis, a firm which has taken 44,000 square feet of space at Metropolitan Square.

Kirkland and Ellis, now at 1776 K St. NW, is one of four major law firms that will leave space west of 15th Street for new and expanded space in Metropolitan Square. Although the most attractive deals are being offered east of 15th Street, even some major buildings in the Connecticut Avenue corridor have offered enticements to tenants.

"We were able to negotiate for attractive terms" that included a long-term lease in excess of 10 years, said Richard Dashefsky, a partner in the Washington office of Gibson, Dunn and Crutchfield, a law firm that signed up to take approximately 44,000 square feet of space at Washington Square, a new building at Connecticut and L Sts. He would not comment on the details of the lease.

"We have outgrown our present facilities and we had been seriously looking for more than a year," and the deals were "very attractive" earlier this year, said Dashefsky, who was involved in negotiating the new lease.

The firm's offices are currently at 1776 G St. NW in 22,000 square feet of space, Dashefsky said. Its headquarters are in Los Angeles. Attorney General William French Smith was a partner before he joined the Reagan cabinet.

The burst of activity is welcomed, but some brokers such as Goldstein cautioned that "there are still some rough times ahead."

Nearly 5 million square feet of office space was added in Washington last year, another 4.1 million is under construction for this year, and 3 million is planned for next year, according to Cushman & Wakefield.

Last year, only 1.2 million square feet of new space was leased; in good years the amount is usually about 2 million, according to leasing agents.

Cushman & Wakefield recently forecast "that the vacancy rate will continue to run over 10 percent east of 15th Street" compared with 5 percent west of 15th. "Even with these recent transactions, there still remains a one- to two-years' supply of available office space in the marketplace, primarily east of 15th Street," Cushman & Wakefield said in a recent report on leasing activity. "This area remains a very soft tenant's market."