2 Executives Buy Debt-Laden SDC Development : Acquisition: The longtime Southland developer of shopping centers hit a slump after it diversified in 1986.

Two executives at SDC Development Co., a mid-size developer hit hard by the real estate slump, said Monday that they have acquired the company’s real estate and other assets.

James Watson and Joe Seitz, senior vice presidents, said the purchase includes millions of dollars worth of undeveloped land, shopping centers, industrial parks and office buildings in California, Nevada and Arizona. No price was disclosed.

Watson said that after months of negotiations, the two executives persuaded the company’s lenders to restructure its large debt as part of the deal.

The new company relocated over the weekend to the Newport Beach headquarters of the Koll Co. and will pay the giant developer for accounting and other services once performed by some of SDC’s 50 employees. The company now employs only 20.

SDC’s story isn’t that different from other developers who got caught in the real estate downturn with debt-laden property that wasn’t bringing in enough rent to repay the lenders. But SDC is somewhat different in that it has a relatively long and venerable history for a Southern California developer, having started 30 years ago.

SDC was a subsidiary of Los Angeles’ Santa Anita Cos., the publicly traded racetrack concern, until 1986. Then developers Gary Hamilton and William Steele bought it, piling on debt to do so. The company also diversified from its traditional base of shopping centers into industrial buildings, and observers say it grew rather rapidly in the late 1980s.

Perhaps too rapidly, Watson says now: Shopping centers in Arizona suffered when the Phoenix real estate market went down the tubes.

Hamilton bought out Steele’s stake in the company in 1990, and now with the deal with Watson and Seitz concluded, Hamilton no longer has any ownership interest.

Also included in the deal is Sunwest Asset Management Co., a property manager that oversees 15 million square feet of buildings. Koll had been negotiating to buy that company, but the deal fell through, Watson said.

Watson, whose experience is in industrial development, and Seitz, with experience in retail buildings, will run the new company.