GlobeSt.com: Small deals are the ones that seem to be getting done today. Do you see that changing soon on the financing end?

Terlizzi: I formed a consortium of six community banks, and that was basically in response to the demonstrated need for senior-debt liquidity for stabilized assets that need between $20 million and $40 million, where there's very little available today. Smaller banks, between $1 billion and $3 billion, really don't have the access and the expertise on board to produce that kind of business. By acting as a correspondent for those banks, I'm able to find transactions that fit that space. There's clearly a need. Right now the only deals that are getting done in any material volume are the deals that are below $20 million that a single bank can undertake on its own. There are precious few of those.

And the pricing, oddly enough, at 6.5% to 6.75%. The business I'm willing to do is a little higher priced, but we're willing to do non-recourse. There's a bit of a premium that goes with that and you'll see 7.25% to 7.5% being the floor there. Leverage across the board is 65% or less. Nobody can do any more than that. It just doesn't make sense.

GlobeSt.com: Is multifamily the sector that people have the most faith in right now?

Terlizzi: That's where the most liquidity is. That's where the Fannie and Freddie money is still available. From what I'm seeing is that the banks aren't getting a crack at that. The banks are basically looking at office right now.

GlobeSt.com: Are there any sectors that no one wants to touch?

Terlizzi: Hospitality is very out of favor. Retail is very difficult to do. Where you get into the big-box industrial where you have the single user, there's a lot of resistance to taking that single-tenant risk. No one really wants to do that because it's sort of all or nothing, and all of a sudden you have an empty building. It's multi-tenant, and if it's retail it's got to be garden variety, nothing luxury or nothing fashion. People still need to buy groceries and get their clothes cleaned. And you want to have some diversification with your rental stream.

GlobeSt.com: Do you think assistance from the Fed, like TALF can help commercial real estate?

Terlizzi: There's a lot of talk about it. It's designed to create a proxy for the CMBS market, but the problem is that the terms are so vanilla that it's probably going to help other asset classes more than real estate, like auto loans and consumer credit more so than real estate. While the pricing is real attractive, the leverage is too low. You're getting 69% on value, and nobody knows what value is. The CMBS market has to sort of go through an evolutionary step and re-emerge with the business model that requires the issuers to maintain an meaningful stake in the bonds. It's probably going to be 10% or even more, and that means there's going to be more capital required to pull that off and you're going to have less volume on a given platform. It will re-emerge at some point, but it's going to re-emerge with a totally different set of rules. There's clearly an understanding now that price doesn't necessarily mean value.

GlobeSt.com: Is there anything different that ULI is doing locally as a response to the recession for members?

Terlizzi: We've been very circumspect about retaining membership. People trying to conserve on expense money are going to look at memberships and sponsorships and anything they deem unessential. We're going to wind up in that category. Membership is on a individual level. Sponsorship is on a company level. With sponsorships you get complimentary registration fees to the events. We've gone to the firms and said: "You've got six or seven members in your company. Why don't you cut back on memberships so that you can participate in ULI committee activities? If you buy a sponsorship, you can bring more people to these events without increasing your costs." There's been some attempt to make it less financially stressful.

GlobeSt.com: Were there any particular topic at the Urban Marketplace event that attendees were really curious about?

Terlizzi: There was a real interest in stimulus money. How does it work? How do you get it? Where can you use it? There was also a theme toward New Urbanism and walkable urban communities. And energy efficiency. There wasn't a whole lot of talk about capital markets. It was how to shift from a model of suburban sprawl to one of higher density without compromising the quality of life.

GlobeSt.com: So you get the feeling that interest in sustainability hasn't waned as a result of the recession?

Terlizzi: People are believers. There is an overwhelming amount corroboratory evidence that we can't sustain what we've been doing. Even after the recession, we can't go back to the old ways. Things have changed permanently, and we're going to have to figure out a way to work within the new paradigms. Energy efficiency is one of those ways. There is a huge movement toward not only energy efficiency but also figuring out how we can use our time more wisely, like not commuting two hours in traffic getting to and from the office. There's a groundswell of support for those ideas these days.

GlobeSt.com: Do find that the Philadelphia area is holding up well compared to other major cities across the country?

Terlizzi: Absolutely. It goes back to the fact that we have a very diverse economy. We're not a one-industry or two-industry town. We have a very diverse economy, and as a result of that, during boom times, we don't have the big upswings. But when the economy is down, we don't fall off a cliff. We have a pretty even-keel economy here, and it's times like this when you really appreciate that.