ORLANDO-It’s not what you know, but clearly, who you know if you are shopping for a commercial real estate loan today because the mound of available money isn’t easy to find or sort out, Christopher Larkin, senior associate, R.J. Twitty & Co. II, Orlando, tells GlobeSt.com.

“Underwriting is certainly more prudent (today) and market conditions have slipped somewhat, particularly in the office and hotel sectors, both factors affecting new loan prospects,” says Larkin.

To get to the loan trove quickly, “it pays to have strong relationships with capital providers or mortgage bankers” who can quickly underwrite and close on a new financing, the mortgage banker says.

Treasury rates are at their lowest since the 1960s. The rates are at 4.37% today, up from July 24 when they were at 4.31%. That was a drop of 54 basis points in the last three weeks.

“Most industry experts think the 10-year will fluctuate in a range from the low at 4.3% to 5% for many months,” Larkin tells GlobeSt.com. “Nobody believes the rate can go much lower, but it may be interesting to watch.”

For developers/owners, the Treasury rates translate to interest rates of 5.91% to 6.31% for a 10-year loan.

“Spreads for most property types, excluding hotels and health care projects, will command spreads of 200 basis points over the comparable Treasury or less,” Larkin says.

Apartment loans of 80% loan-to-value are “as low as 160 (basis points) over Treasuries,” the mortgage banker says. A basis point is a yield of 1/100th of 1% annually.

Shorter term, fixed-rate loans are available at even lower rates than the 5.91%-to-6.31% range for three-year, five-year and seven-year terms, he says. Floating rate loans on an interest-only basis and low-leverage, fixed-rate loans can be had at still lower rates.

Among lenders ready to do deals are life insurance companies, securitized conduit lenders, credit companies, banks and pension funds, Larkin says. He works closely on the deals with R.J. Twitty president Mark L. Findura.

“Many lenders do have floor rates or minimum coupons they will charge, but these are negotiable,” Larkin says.

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