Three former Wells Fargo & Co. bankers are now sitting on the other side of the table, taking on some of the risk in real estate projects.

Their Pacific Coast Capital Partners LLC takes mezzanine and equity positions in commercial real estate projects-complex deals that require "a higher level of sophistication than traditional real estate investments," principal Donald H. Kuemmeler said.

But Mr. Kuemmeler said he and his partners were never mere lenders.

In 1994, Mr. Kuemmeler, Aaron A. Giovara, and Nicholas V. Colonna helped found Wells Fargo's real estate merchant banking department, which buys distressed debt and makes higher-risk loans, such as participation loans.

Before that, Mr. Kuemmeler and Mr. Colonna worked out troubled loans for Wells during the real estate recession in the early 1990s.

Mr. Kuemmeler said he and his colleagues are differentiated from other equity investors by their pedigrees in lending and law-client-oriented fields. Developers may find it easier to work with them, he said.

"Much of partnership financing is very confrontational," Mr. Kuemmeler said. "If you bring a customer-driven focus to it, it can be a better financing experience for both parties."

Last year, the trio of Wells alumni teamed up with William R. Lindsay, formerly a partner at the law firm Gibson, Dunn & Crutcher LLP, to form Pacific Capital, with offices in Los Angeles and San Francisco. Mr. Lindsay's clients have included real estate finance heavyweights such as Wells, Morgan Stanley, and Nomura Asset Capital Corp., later known as Capital America.

Since setting up offices in San Francisco and Los Angeles, the firm has funded more than $150 million of transactions. Most recently, it provided $14 million in equity and standby credit facilities for the acquisition and renovation of a San Francisco warehouse, and a $3.7 million "mezzanine construction" loan for an apartment complex in Phoenix.

Pacific Coast's partner in the San Francisco project, Telecom Center SF LLC, is converting an industrial building into office space suitable for telecommunications companies. Besides equity, the firm provided credit lines to fund tenant improvements and lease commissions, which it expects to be refinanced by a bank.

In the apartment deal, Pacific Coast's loan buffers a more traditional $20 million loan made by an undisclosed bank. During construction, developer SNK Realty Inc. will draw funds first from Pacific Coast, then from the bank, but pay them back in reverse order.

What these deals share, Mr. Kuemmeler said, is that "they're special situations that aren't easily described. They don't fit easily into somebody's canned product (line)."

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