But the developer doesn't think insurance companies will stop writing terrorism coverage. "I believe that in the end, they will write it," says Livingston, a longtime committee member of FIABCI, the international corporate real estate organization based in Paris.

"The corporate real estate guys are very concerned" over the terrorism coverage issue, Livingston says. "They are all looking at ways to minimize the (premium) cost."

However, if the carriers follow through on their threat to stop writing terrorism coverage altogether, "it will affect deals," either pending or in the near future, Livingston tells GlobeSt.com.

How the insurance firms will structure their terrorism coverage premiums is "too early to say," the developer says. "My guess is that everyone will adjust and it will be business as usual."

Livingston says the terrorism coverage topic is "mostly a lender issue." But "the perceived risk (to developers and owners) will matter" because they will wonder if they are "a likely target or not."

He tells GlobeSt.com the federal government "may have to become the reinsurance company of last resort" for the real estate industry. "Some European countries are already doing that."

Reinsurance backup would be good for the development industry, Livingston says. But reinsurance may not be an option, at least in the short run, he says. "They (reinsurance companies) really got hurt" in the 1980s and 1990s.

Regardless of how the terrorism coverage issue is resolved, property owners and tenants "have to look at who they are dealing with" in the building itself, Livingston tells GlobeSt.com.

"High-risk tenants will have to pay more," the developer says. "Who else is (renting) in the building" will become an equally important caution flag for the owner in the near future.

So will the adjustment of pass-through costs to tenants. "There are many new issues to be worked through" because of the terrorism coverage cloud, Livingston says.