LOS ANGELES, Aug. 5 /EMWNews/ -- Meruelo Maddux Properties

(Nasdaq: MMPI), a self-managed, full-service real estate company that

develops, redevelops and owns commercial and multi-family residential

properties, today announced results for the three and six months ended June

30, 2008.



    Recent Business Highlights



    -- On July 31, 2008, the Company entered into an $84.0 million

construction loan for its 717 W. Ninth St. project. This flexible

construction loan is for a term of between 18 and 48 months. No additional

borrowings are projected to be needed to complete this project.



    -- The Company has reduced its short-term refinancing exposure. In the

second quarter, the Company reduced its loans coming due within one year to

$192.2 million and has subsequently further reduced the loans coming due

within one year to $114.3 million. In total since March 31, 2008, (i) six

loans have been extended by a minimum of one year, (ii) a seventh loan of

$20.5 million is under letter of intent to be extended for an additional

three year term and (iii) an eighth loan for $7.0 million has an option to

be extended for an additional one year term.



    -- The Company has continued to reduce the number and amount of loans

secured by land. During the second quarter we began substituting some of

the land loans with previously unencumbered income producing assets and

negotiated longer terms on these loans. Currently, the company has three

land loans with a total principal amount of $47.6 million, representing a

29% decline in land loan exposure from the first quarter. The maturity

dates of the three land loan were extended by one year.



    -- The Company further reduced its one year forward liquidity needs by

securing an acquisition loan commitment for $14.5 million in net loan

proceeds to acquire Overland Terminal and removing the need for

approximately $72.8 million in funds by deciding not to pursue the

acquisition of 3000 E. Washington Blvd.



    -- The net impact of these positive liquidity events has reduced the

Company's one year forward liquidity needs by $245.2 million since the

first quarter of 2008.



    -- During the second quarter of 2008, the Company entered into a

related party interim financing transaction associated with its 2000 San

Fernando Road (FedEx) property, resulting in $15.0 million in net cash

proceeds. As part of the resale agreement and subsequent resale of the

FedEx property that is expected to close August 15, 2008, the Company

expects to receive an additional $5.0 million in cash proceeds.



    -- Since June 30, 2008, the Company also received $14.2 million in cash

proceeds from the resolution of the Taylor Yards matter.



    "We had an extremely successful quarter enhancing our liquidity

position," said Richard Meruelo, Chairman and Chief Executive Officer of

Meruelo Maddux Properties. "Securing the $84.0 million construction loan

and extending land loans out a year have been especially difficult to

accomplish in today's credit markets. These positive liquidity events will

allow us to re-focus our efforts on completing our development activities

such as at 717 W. Ninth St. and to continue to improve our operating

results on our stabilized projects."



    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 June 30, 2008, total revenue increased 0.4%

to $6.33 million compared to $6.30 million in the same period in 2007. The

increase was primarily due to higher rental income attributable to rental

operations at projects acquired during 2007, which had partial or no

operations in the prior period. This was partially offset by lower interest

income in the most recent quarter.



    Total expenses in the second quarter of 2008 were $13.6 million, or

35.5% higher than total expenses of $10.1 million in the second quarter of

2007. Included in total expenses in the second quarter of 2008 is a $3.9

million impairment loss on real estate assets related to the 3000 E.

Washington Blvd. project. There was no corresponding expense in the

comparable period in 2007. Excluding the impairment loss on real estate

assets, expenses were $9.7 million, or $0.4 million less than total

expenses for the second quarter of 2007. The decrease is primarily the

result of lower interest expense due to the reduction of interest rates on

the Company's consolidated debt.



    Net loss was $(6.4) million, or $(0.07) per basic and diluted share,

for the three months ended June 30, 2008 compared to a net loss of $(3.6)

million, or $(0.04) per basic and diluted share for the same period in

2007.



    Second Quarter 2008 Cash Flow Sources and Uses



    Cash inflows during the second quarter of 2008 were comprised primarily

of approximately $15.0 million of cash from the related party interim

financing of our 2000 San Fernando Road project, $8.8 million in proceeds

from a loan on part of our Pomona project and a $2.0 million in released

deposit money from the pending sale of 801 E. Seventh Street. Cash outflows

during the second quarter of 2008 were comprised primarily of $22.6 million

of investments in real estate ($15.3 million were for our 717 W. Ninth St.

project), $2.7 million of a loan balance reduction related to a refinance

of a land loan, $0.7 million in scheduled amortizations of loan principal,

$2.0 million in restricted cash reserves provided to lenders and $1.9

million to cover net operating shortfalls.



    Company's Portfolio



    As of June 30, 2008, the Company owns, leases with rights to purchase

and has rights to acquire interests in 28 development and redevelopment

projects and 26 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 38 commercial and

residential leases during the second quarter for a total of 94,861 square

feet of leased space. During the same period, commercial leases totaling

99,697 square feet expired. Of the 38 leases, 29 were completed with

commercial tenants and 9 were with residential tenants. The annualized cash

rents during the quarter decreased by approximately $314,000. The

annualized GAAP rents during the quarter decreased by approximately

$228,000.



    Union Lofts currently has 19 out of 92 units leased with gross rental

rates of $2.88 per rentable square foot per month and $2.66 per rentable

square foot per month net of concessions. Leasing activity has slowed

temporarily due to a nearby condo project going rental and delays in

completing the rooftop skyline lounge and gym amenity deck at the Union

Lofts.



    Recent Financing Activity



    On July 31, 2008, the Company entered into an $84.0 million

construction loan for its 717 W. Ninth St. project. This flexible

construction loan is for a term of between 18 and 48 months.



    Subsequent to March 31, 2008, the Company: (i) extended five land loans

totaling $64.3 million at June 30, 2008, each for an additional one year

term; (ii) extended a sixth loan totaling $5.5 million for an additional

one year term; (iii) received a letter of intent to extend a seventh loan

of $20.5 million for an additional three year term; and (iv) obtained an

option for an eighth loan for $7.0 million to be extended for an additional

one year term. As a result, the Company currently has nine loans totaling

$114.3 million that are due by June 30, 2009. Eight of these loans are

secured by income producing property and one is secured by land.



    During the second quarter ended June 30, 2008, the Company closed two

new financing transactions. The first was an $8.8 million loan with a new

lender secured by an office building on part of the Company's Pomona Park

property. The second was a related party interim financing transaction

involving the Fedex property at 2000 San Fernando Road. The Company

received $15.0 million in proceeds from the interim financing.



    Also after the end of the second quarter, the Company was successful in

securing an acquisition loan commitment for $14.5 million to acquire

Overland Terminal.



    As of June 30, 2008, using the Company's notes payable secured by real

estate and its total assets from the consolidated balance sheet, the

Company's debt-to-total assets ratio is 38.8%. The Company's weighted

average interest rate decreased from 7.47% as of December 31, 2007 to 6.94%

as of June 30, 2008.



    Conference Call and Webcast



    A conference call with simultaneous webcast to discuss Meruelo Maddux's

2008 second quarter results will be held on Wednesday, August 6, 2008 at

1:00 p.m. Eastern / 10:00 a.m. Pacific. Interested participants and

investors may access the teleconference call by dialing 800-240-8621

(domestic) or 303-262-2050 (international). There will also be a live

webcast of the call available on the Investor Relations section of Meruelo

Maddux'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.



    Meruelo Maddux'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 Meruelo

Maddux's web site. A replay of the teleconference will be available at 800-

405-2236 (domestic) or 303-590-3000 (international) through August 13,

2008; the conference pass code is 11118175.



    Supplemental Information



    Supplemental financial information for the Company's second 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



    Meruelo Maddux 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. Meruelo

Maddux Properties is committed to socially responsible investment. Through

its predecessor business, Meruelo Maddux 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, Company's liquidity, financings for

its projects and its acquisition financing activity. 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







                         -Financial Tables to Follow-







                       MERUELO MADDUX PROPERTIES, INC.

               CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

             (unaudited and in thousands, except per share data)



                                                Quarter Ended    Quarter Ended

                                                June 30, 2008    June 30, 2007

     Revenues:

       Rental income                                $5,987            $5,176

       Management fees                                  69                73

       Interest income                                 222               986

       Other income                                     50                67

                   Total Revenues                    6,328             6,302

     Expenses:

       Rental expenses                               3,524             3,319

       Interest expense                              2,242             2,466

       Depreciation and amortization                 1,490             1,787

       Impairment loss on real estate assets         3,895                 -

       General and administrative                    2,486             2,489

                   Total Expenses                   13,637            10,061

     Discontinued operations

       Income from discontinued operations              94               140

     Loss before income taxes and

      minority interests                            (7,215)           (3,619)

       Minority interests                               29                 -

     Loss before income taxes                       (7,186)           (3,619)

     Provision (benefit) for income taxes             (778)                -

     Net loss                                      $(6,408)          $(3,619)

     Basic and diluted loss per share               $(0.07)           $(0.04)

     Weighted average common shares

      outstanding - basic and diluted           86,422,172        85,478,164







  MERUELO MADDUX PROPERTIES, INC. AND MERUELO MADDUX PROPERTIES PREDECESSOR

         CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS

             (unaudited and in thousands, except per share data)







                                               Meruelo Maddux      Predecessor

                                               Properties, Inc.       Period

                                                                    January 1,

                                                          Period        2007

                                           Six Months   January 30,   through

                                           Ended June  2007 through   January

                                            30, 2008   June 30, 2007  29, 2007

     Revenues:

       Rental income                          $11,741       $8,962    $1,957

       Management fees                            142          120        12

       Interest income                            425        2,029       205

       Other income                               159          145        28

                   Total Revenues              12,467       11,256     2,202

     Expenses:

       Rental expenses                          6,955        5,691       999

       Interest expense                         4,561        4,017     2,205

       Depreciation and amortization            2,998        2,710       374

       Impairment loss on real estate assets   14,140            -         -

       General and administrative               4,868        4,139       628

                   Total Expenses              33,522       16,557     4,206

     Discontinued operations

       Income from discontinued operations        535          140         -

       Gain on sale of real estate              6,897            -         -

     Loss before income taxes and

      minority interests                      (13,623)      (5,161)   (2,004)

       Minority interests                      (1,331)           -         -

     Loss before income taxes                 (14,954)      (5,161)   (2,004)

     Provision (benefit) for income taxes      (4,507)           -         -

     Net loss                                $(10,447)     $(5,161)  $(2,004)

     Basic and diluted loss per share          $(0.12)      $(0.06)      N/A

     Weighted average common shares

      outstanding - basic and diluted      85,746,786   84,903,308       N/A







                       MERUELO MADDUX PROPERTIES, INC.

                    CONDENSED CONSOLIDATED BALANCE SHEETS

                                (in thousands)



                                              June 30, 2008  December 31, 2007

                                                 (Unaudited)

                       ASSETS

     Cash                                           $8,284            $3,030

     Restricted cash                                 9,288             7,104

     Accounts receivable                             2,123             2,610

     Rental properties, net                        284,593           306,096

     Real estate held for development              488,281           461,789

     Other assets, net                               3,468             3,551

     Total assets                                 $796,037          $784,180



         LIABILITIES AND STOCKHOLDERS' EQUITY

     Accounts payable                              $18,753            $8,585

     Accrued expenses and other liabilities         12,482             8,045

     Notes payable secured by real estate          308,522           307,394

     Deferred gain                                   9,044                 -

     Deferred taxes, net                            36,594            41,101

     Total liabilities                             385,395           365,125



     Commitments and contingencies                       -                 -



     Minority interests                              1,042                 -



     Common stock, $.01 par value, 200,000,000

      shares authorized, 86,685,167 and 85,837,900

      shares issued and outstanding as of June 30,

      2008 and December 31, 2007, respectively         867               858

     Additional paid in capital                    445,263           444,280

     Affiliate notes receivable                    (14,214)          (14,214)

     Retained earnings (deficit)                   (22,316)          (11,869)

     Total stockholders' equity (deficit)          409,600           419,055

     Total liabilities and stockholders' equity   $796,037          $784,180