DANA POINT, CA-What appears to be an uptick in retail leasing inSouthern California may bode well for the market, but it also posesquestions for landlords in how aggressive they should be in seekingnew lease terms. Founder Terry Bortnick of locally based ArgentRetail Advisors tells GlobeSt.com that the company has negotiatedmore than 110,000 square feet of retail leases in SouthernCalifornia in recent months in a significant uptick from the sametime last year. However, Bortnick adds, the apparent improvement inmarket conditions—which also includes strong activity by local andregional retail chains—also presents some strategic questions forlandlords as they figure out how to proceed in future leasenegotiations.

"There is still a large shadow inventory looming," Bortnicksays. He explains that "shadow inventory" is space that is nowoccupied by retailers who have enjoyed lower rents and otherconcessions from landlords who have been intent on keeping theirshopping centers occupied.

If the market is in fact improving—and signs point to thatbecause some of the vacant retail space is beginning tofill—landlords who provided rent relief and concessions to tenantsto keep their centers full may want to go back to some of thosetenants and renegotiate. Therein lies a dilemma for landlords,Bortnick says. "To go back to those tenants now and try to startmoving rents up presents a real slippery slope because landlordsmay end up putting more space back on the market by doing that," ifthe tenants balk at the proposed rent increases and decide tovacate their spaces he says.