Pacific Security Cos., a longtime Spokane-based commercial real estate developer and real estate receivables investor, has changed its name to Pacific Security Financial Inc. to reflect a shift in emphasis.


We are aggressively pursuing commercial real estate financing as a major focus of our business activity, says David Guthrie, the companys president. We are moving out of the receivables market and shifting toward interim lending.


Pacific Security claims it was one of the first companies in the Pacific Northwest to begin acquiring collateralized real-estate receivables in the secondary market years ago, meaning it bought real estate contracts and notes secured by deeds of trust as investments. However, Guthrie says, The number of investors acquiring secured real-estate receivables has dramatically increased with a corresponding decline in yields.


He says, Our new focus on interim financing in the Western U.S. has generated immediate returns and shows great promise for the future. We will also continue to exploit selective development opportunities throughout the West, in markets that we feel offer above-average, long-term growth.


Interim financing refers to short-term, higher-interest loans that real estate developers typically obtain from banks or other lenders to build a project. Such loans normally are replaced with longer-term, lower-interest loanscalled permanent, or takeout, financingby the time construction is finished.


Pacific Security carries out its lending activity through a wholly owned subsidiary, Cornerstone Realty Advisors Inc., that it formed last year. Cornerstone specializes in providing interim real estate loans to qualified borrowers who are unable to obtain funding through conventional sources due to inadequate prelease commitments or the need to meet short financing deadlines. It makes loans ranging in size from $250,000 to $3 million, typically for periods of 12 to 24 months. It also will arrangebut not providepermanent financing for all types of commercial properties.


Since its inception, Cornerstone already has made loan commitments totaling more than $30 million in Washington, Idaho, Oregon, Arizona, Alaska, and California, says John Lloyd, its president. Cornerstones lending activity in the Western U.S. received attention recently in a nationally recognized industry publication called The Crittenden Report.


We have been extremely pleased with the results and have exceeded our expectations, Lloyd says.


Projects in Spokane and Eastern Washington that Cornerstone has financed recently include construction of the DeCaro River Center at the south end of the Division-Ruby couplet, a remodel of the former U.S. Bank student loan center building on East Sprague, and construction of a new Office Depot store in Wenatchee.


Pacific Security was founded in 1957 by longtime Spokane entrepreneur Wayne Guthrie. The company always has focused on real-estate development as a major business activity. It owns the Peyton Building, at 10 N. Post, and the Hutton Building, at 9 S. Washington, as well as numerous other office retail, and apartment buildings. It began offering investment securities publicly in Washington state in 1969 and, over the years since then, has attracted participation by more than 1,000 investors.


In the last year, Pacific Security has formed three new companies.


They include Cornerstone Properties & Development Inc., which invests in and develops commercial real estate; Pacific Realty Management Inc., which manages its own properties and also provides management services to others; and Pacific Security Foundation, which is developing programs aimed at promoting the spirit of free enterprise among Inland Northwest youths.