MIAMI—After a long period of hesitancy, commercial real estate investors are getting back in the game and banks are starting to support that by offering more commercial loans. In fact, recent data suggests US banks are seeing some of the lowest loss rates of the past six years on commercial real estate and construction loans, boosting their case for increased lending activity in the sector.

The question is why have commercial real estate loans become less risky—and how can real estate investors leverage the trend? GlobeSt.com caught up with Avi Benamu and Jack Hazan, co-founders Winchester Equities, a $400 million-backed real estate investment management firm, to get some answers in part one of this exclusive interview.

GlobeSt.com: Why have commercial real estate loans have become less risky for banks and lenders?

Benamu: Since the end of the credit crisis in 2008, lenders have taken a more conservative and balanced approach towards lending. Old fashioned underwriting is the new modus operandi.

Hazan: Banks today are looking more carefully at so many variables such as location, asset type, quality of the asset, quality of the tenants and cash flow, reasonable loan to value and debt coverage scenarios and most importantly the quality of the Sponsor. All of this combined makes a potential loan less risky for a lender now that sponsors have more skin in the game.

GlobeSt.com: How can real estate investors can take advantage of this phenomenon?

Benamu: Now that lending has come back to the market in a strong way, borrowers are encouraged to go out and source deals. The challenge, however, is to find deals that have strong cash flow with potential for upside.

Hazan: The market is a self-sufficient pricing mechanism and as lending became more available demand for real estate spiked causing cap rate compression. The challenge is how to acquire an asset with a low cap and add value somehow by improving the asset and elevate the cap rate to a more profitable model. That's where the contacts and experience of sponsor comes in.