Real Estate Central

LOS ANGELES, May 13 /PRNewswire-FirstCall/ — Meruelo Maddux
Properties, Inc. (Nasdaq: MMPI), a self-managed, full-service real estate
company that develops, redevelops and owns commercial and residential
properties, today announced results for the three months ended March 31,
2008.



Recent Business Highlights
— Since commencing leasing activities for the recently completed 92-unit
Union Lofts residential property in February, to date the company has
signed 16 leases with an average term of 13.5 months at rental rates of

.71 per square foot per month with concessions.
— Closed seven loans during the first quarter with total loan proceeds of
$81.0 million at an average interest rate of 5.54%. Six of these
transactions were refinancing of existing loans and one was a new loan.
Subsequent to the end of the first quarter, the company has refinanced
two additional loans for a total of

4.3 million with an interest rate
of 7.76%.
— Rental income increased to $6.6 million, a 15.1% increase compared to
the same period last year.
— Completed the sale of one non-strategic property for a net gain of
$6.9 million.

“The financial performance of our operating portfolio was in line with
expectations,” said Richard Meruelo, Chairman and Chief Executive Officer
of MerueloMaddux. “During the first quarter, annualized cash lease revenue
increased by a solid 5.9% compared to annualized lease revenue as of the
prior quarter. In addition, I continue to be encouraged by strong early
demand for our recently completed Union Lofts residential property, which
has resulted in leases signed for a total of 16 units during the first ten
weeks of leasing activity.”

Mr. Meruelo concluded, “Enhancing our liquidity position remains a top
priority. While the ongoing difficulties in the broader credit markets have
made it difficult to secure large scale construction and permanent loans,
similar to prior periods, we continue to have success in funding our
business through the refinancing of current loans and in obtaining new
loans on our properties. We will continue to monitor the credit markets and
availability of capital and make adjustments to our development strategies
as appropriate.”

Financial and Operating Results

Results from operations described herein relate to the combined
financial statements of the Company’s predecessor business as well as those
of the Company.

For the three months ended March 31, 2008, total revenue decreased 2.2%
to $7.0 million compared to $7.2 million in the same period in 2007. The
decrease was primarily due to lower interest income in the period. This was
partially offset higher rental income in the most recent quarter, which
increased 15% to $6.6 million, compared to rental income of $5.7 million in
the same quarter last year. Total expenses in the first quarter of 2008
were

0.3 million, or 89.7% higher than total expenses of $10.7 million in
the first quarter of 2007. Included in total expenses in the first quarter
of 2008 is a $10.2 million impairment loss on real estate assets. There was
no corresponding expense in the comparable period in 2007. Excluding the
impairment loss on real estate assets, expenses were $10.1 million, or $0.6
million less than total expenses for the first quarter of 2007. The
decrease is primarily due to lower interest expense resulting from the
payoff of the CalPERS credit facility and other mortgage debt using
proceeds from the Company’s January 2007 initial public offering. The
Company recorded a $6.9 million gain on sale of real estate in the first
quarter of 2008. There was no corresponding gain in the comparable period
in 2007. Net loss was $(4.0) million, or $(0.05) per basic and diluted
share, for the three months ended March 31, 2008 compared to a net loss of
$(3.5) million for the same period in 2007.

Company’s Portfolio

As of March 31, 2007, the Company owns, leases with rights to purchase
and has rights to acquire interests in 28 development and redevelopment
projects and 27 projects that have been developed that are primarily
located in or around the downtown area of Los Angeles. All of the projects
in the portfolio are in Southern California.

Recent Leasing Activity

The Company completed or renewed a total of thirty five leases during
the first quarter for a net total increase of 13,105 square feet of leased
space. In addition, the Company leased building signage space to Van Wagner
Communications and replaced the lessor of two of its commercial parking
lots, significantly increasing those properties’ rental income. The largest
new lease was to Michael Distributors, Inc., who leased 5,000 square feet
in the Barstow Produce Center property. Paola, Inc. leased 4,601 square
feet and Super Fine-L LLC leased 3,000 square feet of space at the 2131
Humboldt Street property.

During the first quarter, annualized cash lease revenue increased by
$1.3 million to

3.8 million, an increase of 5.9% compared to annualized
lease revenue as of the prior quarter. On a GAAP basis, annualized lease
revenue increased by $0.2 million to

4.2 million, an increase of 0.7%
compared to the prior quarter.

Recent Financing Activity

During the first quarter the company closed seven secured, real
property financing transactions with aggregate loan proceeds of $81.0
million at an average interest rate of 5.54%. Six of these transactions
were refinancing transactions for existing commercial properties and one
was a new loan. Subsequent to the end of the first quarter, the company
refinanced one additional loan for a total of

4.3 million for an interest
rate of 7.76%.

Conference Call and Webcast

A conference call with simultaneous webcast to discuss MerueloMaddux’s
2008 first quarter results will be held on Wednesday, May 14, 2008 at 1:00
p.m. Eastern / 10:00 a.m. Pacific. Interested participants and investors
may access the teleconference call by dialing 800-240-4186 (domestic) or
303-262-2050 (international). There will also be a live webcast of the call
available on the Investor Relations section of MerueloMaddux’s web site at
http://www.meruelomaddux.com. Webcast participants are encouraged to go to
the web site at least 15 minutes prior to the start of the call to
register, download and install any necessary audio software.

MerueloMaddux’s management team will discuss the Company’s financial
results, business highlights and industry outlook. After the live webcast,
a replay will remain available in the Investor Relations section of
MerueloMaddux’s web site. A replay of the teleconference will be available
at 800-405-2236 (domestic) or 303-590-3000 (international) through May 21,
2008; the conference pass code is 11114220.

Supplemental Information

Supplemental financial information for the Company’s first quarter
financial results will be available on the Company’s Website,
http://www.meruelomaddux.com, in the Investor Relations section under the
heading ‘Presentations & Webcasts’.

About Meruelo Maddux Properties

MerueloMaddux Properties is a self-managed, full-service real estate
company that develops, redevelops and owns commercial and residential
properties in downtown Los Angeles and other densely populated urban areas
in California that are undergoing demographic or economic changes.
MerueloMaddux Properties is committed to socially responsible investment.
Through its predecessor business, MerueloMaddux Properties has been
investing in urban real estate since 1972.

Safe Harbor Statements

This press release, together with other statements and information
publicly disseminated by the Company, contains certain forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933,
as amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. The Company intends such forward-looking statements to be covered
by the safe harbor provisions for forward-looking statements contained in
the Private Securities Litigation Reform Act of 1995 and includes this
statement for purposes of complying with these safe harbor provisions.
Forward-looking statements relate to expectations, beliefs, projections,
future plans and strategies, anticipated events or trends and similar
expressions concerning matters that are not historical facts. In some
cases, you can identify forward-looking statements by the use of
forward-looking terminology such as “believes,” “expects,” “may,” “will,”
“would,” “could,” “should,” “seeks,” “approximately,” “intends,” “plans,”
“projects,” “estimates” or “anticipates” or the negative of these words and
phrases or similar words or phrases. Forward-looking statements in this
press release include, among others, statements about the real estate
market in the greater Los Angeles area, project development or
redevelopment schedules and budgets and financings. You should not rely on
forward-looking statements since they involve known and unknown risks and
liquidity, uncertainties and other factors that are, in some cases, beyond
the Company’s control and which could materially affect actual results,
performances or achievements. The Company’s business, financial condition,
liquidity and results of operations may vary materially from those
expressed in the Company’s forward-looking statements. You should carefully
consider these risks before you make an investment decision with respect to
the Company’s common stock, along with the following factors that could
cause actual results to vary from the Company’s forward-looking statements:
(i) the general volatility of the capital markets, (ii) changes in the
Company’s business and investment strategy, (iii) availability, terms and
deployment of capital, (iv) perception of the commercial and residential
subsegments of the real estate industry, (v) changes in supply and demand
dynamics within the commercial and residential subsegments of the real
estate industry, (vi) availability of qualified personnel, (vii) change in
costs associated with development or redevelopment and repositioning of
projects, (viii) changes in interest rates, (ix) changes in applicable laws
and regulations (including land use entitlement processes), (x) changes in
political climates that may affect the Company’s proposed development and
redevelopment projects, (xi) state of the general economy and the greater
Los Angeles economy in which the Company’s projects are located, and (xii)
the degree and nature of the Company’s competition. Accordingly, there is
no assurance that the Company’s expectations will be realized. Except as
otherwise required by the federal securities laws, the Company disclaims
any obligation or undertaking to publicly release any updates or revisions
to any forward-looking statement contained herein (or elsewhere) to reflect
any change in the Company’s expectations with regard thereto or any change
in events, conditions or circumstances on which any such statement is
based.




Media Contact: Investors/Analysts:
Michael Bustamante Lasse Glassen
Corporate Communications Investor Relations
213.291.2800 (Office) 213.486.6546
lglassen@frbir.com


-Financial Tables to Follow-


MERUELO MADDUX PROPERTIES, INC. AND MERUELO MADDUX PROPERTIES
PREDECESSOR
CONSOLIDATED AND COMBINED STATEMENT OF OPERATIONS

Meruelo Maddux
Properties, Inc. Predecessor

Period Period
Quarter January 30, January 1,
Ended 2007 through 2007 through
March 31, March 31, January 29,
2008 2007 2007
Revenue:
Rental income $6,612 $3,786 $1,957
Management fees 73 47 12
Interest income 203 1,043 205
Other income 109 78 28
Total Revenue 6,997 4,954 2,202
Expense:
Rental expenses 3,512 2,373 999
Interest expense 2,456 1,551 2,205
Depreciation and amortization 1,693 923 374
Impairment loss on real estate
assets 10,245 - -
General and administrative 2,396 1,650 628
Total Expense 20,302 6,497 4,206
Gain on sale of real estate 6,897 - -
Loss before income taxes and
minority interests (6,408) (1,543) (2,004)
Minority interests (1,360) - -
Loss before income taxes (7,768) (1,543) (2,004)
Provision (benefit) for income taxes (3,729) - -
Net loss $(4,039) $(1,543) $(2,004)
Basic and diluted loss per share $(0.05) $(0.02) N/A
Weighted average common shares
outstanding - basic and diluted 85,746,786 84,045,736 N/A




MERUELO MADDUX PROPERTIES, INC.
CONSOLIDATED BALANCE SHEETS

March 31, 2008 December 31, 2007
ASSETS
Cash and cash equivalents $12,347 $3,030
Restricted cash 7,299 7,104
Accounts receivable 2,152 2,610
Rental properties, net 305,149 306,096
Real estate held for development 469,278 461,789
Other assets, net 3,611 3,551
Total assets $799,836 $784,180

LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable $19,465 $8,585
Accrued expenses and other liabilities 9,565 8,045
Notes payable secured by real estate 316,570 307,394
Deferred taxes, net 37,371 41,101
Total liabilities 382,971 365,125

Commitments and contingencies - -

Minority interests 1,360 -

Common stock, $.01 par value, 200,000,000
shares authorized, 86,682,900 share issued
and outstanding as of March 31, 2008 867 858
Additional paid in capital 444,760 444,280
Affiliate notes receivable (14,214) (14,214)
Retained earnings (deficit) (15,908) (11,869)
Total stockholders’ equity (deficit) 415,505 419,055
Total liabilities and stockholders’ equity $799,836 $784,180



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Source: Real Estate Newswire