Even in a real estate slump, the Urban Land Institute's fall meeting is a must-attend event. The 2010 fall meeting, held this week, sounded two themes for sustainable real estate:

1. Green real estate has gone mainstream; and
2. Finding financing in a climate of constraint is the key challenge for both  green and conventional projects.

As to the first theme: Green is increasingly a driver in corporate occupancy. New projects, designed to entice upper-end, knowledge industry firms, are both amenity-rich (on-site retail, restaurants and daycare are top draws) and sustainable, said Dave Paul of developer JBG and William Walsh, a partner at law firm Hunton Williams who specializes in corporate real estate leasing. Corporate employees aged 35 and below are driving tenant demand for green space, observed Walsh.

Financing also was a top topic at the meeting this year, both for sustainable and conventional developers. The tone was set by FDIC Chair Sheila Bair in a keynote address. While the federally-insured banking sector has stabilized -- bank failures have been reduced since 2009 and balances at small institutions are holding steady -- debt liqudity (loan volume) remains far lower than desirable, Bair noted. The challenge for Bair and other regulators: ensuring capital adequacy and strong asset quality while encouraging lenders to extend credit.

But if you can get it, lock in your debt financing now. That's the judgment of top real estate economist Ken Rosen, chairman of Rosen Consulting Group and professor emeritus at the Haas School of Business at the Unversity of California at Berkeley.

Rosen's view: The real estate cycle has bottomed, and a slow, lengthy recovery is beginning. The strongest markets, like Washington, D.C., will begin to recover in late 2011. New York City will follow in 2012 and early 2013. Weaker markets will take up to five years to return to health. At the same time, interest rates are at record lows -- but that won't last "Inflation's coming back, so lock in your debt structure now," Rosen told me.

Sustainable real estate finance experts who presented at the conference are trying to do just that.

Wendy Rowden, managing director of Jonathan Rose Companies, has been successful in raising favorably priced debt from a foundation partner and from CRA (Conmunity Reinvestment Act) lenders for green, socially responsible projects in Seattle, Washington and New Haven, Connecticut.

Capital costs on CRA loans can frequently be reduced with New Markets Tax Credits, Rowden said. While today's interest rates are favorable, tougher lender underwriting standards and lower loan-to-value ratios (which require real estate owners to put up additional project capital) make the 2010 financing environment challenging, Rowden observed.

The Fannie Mae/Freddie MAC kibosh on PACE (property assessed clean energy) financing hasn't helped raise capital, but green finance experts haven't given up on the concept.