Campeau to Sell Lake Forest Property : Real estate: Two firms agree to buy $10 million in office buildings from debt-ridden Canadian developer-retailer.

LAKE FOREST —  Campeau Corp. is selling off about $10 million worth of Orange County real estate in an office park here as the Canadian developer and retailer struggles to get out from under a crushing load of debt.

Two development and real estate investment firms--Burnham USA Equities Corp. of Newport Beach and the Lewis Co. of Los Angeles--agreed to buy 17 small office buildings on nine acres, Burnham said Monday.

Campeau owns the buildings with the big Laguna Niguel developer Birtcher, which is not in financial straits. But Birtcher said it wasn’t interested in buying out its partner and in fact wants to spend more time building bigger office buildings and industrial parks.

Campeau began shopping the small buildings around to other prospective buyers earlier this year. The deal with Burnham and Lewis--about four months in the making--is expected to close today.

Toronto-based Campeau has been hamstrung by billions of dollars of debt it shouldered when in May, 1988, it bought Federated Department Stores Inc., which owns the Ralphs grocery store chain, Bloomingdale’s and other big department store chains.

Scarcely 18 months before, Campeau bought another department store chain, Allied Stores Corp.

Last year Campeau sold half a billion dollars worth of real estate in what had begun several years earlier as a program to sell off its less profitable properties. This year the company will have sold an additional $526 million worth of real estate, a spokesman said, mostly to reduce its crushing debt.

Little of that property is in California, the Campeau spokesman said, since the company never became a major player in the state’s market for commercial real estate.

Campeau is selling mostly older buildings and vacant land left over from the days when it also built houses and industrial buildings.

It’s not just real estate Campeau has been selling. Last year it sold the Bullock’s, I. Magnin and Filene’s department store chains, all divisions of Federated. Now, with its debt problems mounting, Campeau has put Federated’s crown jewel--Bloomingdale’s--on the block, too.

Campeau is a major Canadian developer with dozens of office buildings and shopping centers across the United States and Canada, including some of Toronto’s biggest office buildings. Altogether the company owns nearly 6 million square feet of shopping center space and nearly 9 million square feet of office buildings.

Birtcher’s relationship with Campeau goes back to the mid-1970s when, Birtcher said, it introduced Campeau to the California market by developing parts of a big office park in the Silicon Valley area with the Canadian company.

That park has been sold, and Campeau is in the process of selling to its partners several other industrial buildings Birtcher developed for it in the Silicon Valley area. Once those are sold, Birtcher and Campeau will own no more buildings together.

Birtcher officials said small office parks like the one in Lake Forest are more difficult to manage than bigger buildings and have a lot more turnover. That’s why the company is getting out.

“Birtcher really wants to focus on larger projects,” said Robert M. Anderson, Birtcher vice president of operations. Among its local projects are Lakeshore Towers, two office towers planned on a small lake near John Wayne Airport.

Burnham, the Newport Beach real estate investor, said the Lake Forest buildings it is buying are nearly fully leased. Between 3,400 and 6,000 square feet each, they are occupied by white-collar businesses, including small architects’ firms, management consultants, computer companies and home builders.

The total space for the buildings is 117,000 square feet, or the equivalent of about five floors or so in the average high-rise office building.

With several million dollars worth of improvements, the buildings will be worth about $18 million, said Scott T. Burnham, president of Burnham USA Equities, especially since the office park is close to the San Diego and Santa Ana freeways.

Burnham owns or manages $230 million worth of property in Southern California.

Called the Birtcher Business Center, the Lake Forest office park was developed in the early 1980s with Birtcher as the managing partner and Campeau providing the money to build the project as financial partner and majority owner. The property--which includes an additional 11 buildings that have already been sold--has been renamed Lake Forest Business Park by the new owners.