Many publicly traded Los Angeles real estate companies have been hit hard lately, but Meruelo Maddux Properties Inc. has suffered more than most.

Downtown's largest landowner, with a portfolio of several dozen industrial projects, has seen its stock price dip below $1 in recent weeks. That's down from highs of around $10 when the company went public in early 2007. Shares are off nearly one-third in the last month alone. The stock closed at 92 cents Oct. 7.

So what's up with Meruelo Maddux, besides the overall market sell-off?

Liquidity issues and slow leasing have hurt the company, which posted a $4 million net loss in the first quarter and a $6.4 million net loss in the second quarter. In May, a plan by Meruelo Maddux to increase liquidity by selling up to $300 million in stock, debt and a chunk of its portfolio wasn't universally popular. Some industry observers said that the properties were being offered at heavily discounted prices.

Still, the stock is not totally on the outs. In a poll of four analysts by Bloomberg News, one rated it a "buy," two a "hold" and only one a "sell."

Wilkes Graham of Friedman Billings Ramsey & Co. Inc., who has the "buy" rating, said in an August research note that the company was experiencing "muted leasing" at its properties, including its sole residential building that is open, the Union Lofts. But Graham added that Meruelo Maddux had addressed its liquidity issues and rated the stock "outperform."

Andrew Murray, the company's chief financial officer, said he has no doubt that the company is being severely undervalued amid the crash of the stock and real estate markets.

Murray, a former investment banker who joined the company in April, noted that as of the second quarter, the company's total shareholder equity was about $410 million. With a share price of about $1, he said Wall Street is highly undervaluing the company.

"The market is saying our real estate is worth 42 percent less than what we have it on our books for and that's a massive disconnect," Murray said.

The company has its first ground-up residential project under construction, a 35-story tower at 717 W. Ninth St. That also may be a turnoff for Wall Street, but unlike other downtown developers its projects are rental developments, which are faring better than for-sale properties in the current market. The company has several residential development sites in downtown.

Industrial Sale

The U.S. subsidiary of China National Aero-Technology Import and Export Corp., a state-run Chinese company, has purchased an industrial building in Pomona for $3.3 million.

The 22,234-square-foot building, at 1623 W. Second St., is part of the Mission-71 Business Park, owned by Long Beach-based industrial developer Seventh Street Development.

The sale breaks down to $148 a foot, which was below the developer's asking price. However, Seventh Street principal Craig Furniss said that pricing at the 11-building development has been holding despite the slumping economy.

"There is still demand for industrial in the San Gabriel Valley and the supply of buildings is shrinking," he said.

China National Aero-Tech USA relocated from the City of Industry and moved into the building at the end of September, shortly after the all-cash deal closed. The company, which makes aviation and defense equipment and technology, will use the building for warehousing and distribution.

Seventh Street has plans for a 213,000-square-foot second phase of the business park, which would add three buildings to the development.

The buyer was represented by Jeff Chen of Jibbco Real Estate; and Seventh Street was represented by Barbara Emmons, Lynn Knox, John Privett and Lyn Eisenhower of CB Richard Ellis Group Inc.

Downtown Lofts

After a considerable delay, the Roosevelt lofts project in downtown is set to open later this month. And these days even that counts as good news.

"It feels like a major accomplishment to finish the project, especially after seeing other developers stop their projects or change them," said M. Aaron Yashouafar, chief executive of developer and investor Milbank Real Estate Services Inc.

The condominiums were supposed to open in March 2007, according to the Milbank Web site. But it turned out the $150 million project was far trickier than first imagined.

The commercial office building, at 727 W. Seventh St., was built in 1927 and is on the National Register of Historic Places. Converting the rooms to residential, including some to two-story units, as well as adding parking wasn't easy.

"The building is a very, very historically significant building and the project we have undertaken is extremely complicated in nature," said Yashouafar, whose company bought the property in 1998 and operated it for a few years as offices before beginning the conversion.

But now that the project is done Milbank probably has its biggest challenge: selling the 222 units.

Pre-sales began about two years ago before the market crash and 40 percent of the building's units have been sold at prices ranging from $500,000 to about $2.5 million. However, downtown condo prices are now well off their peak.

Staff reporter Daniel Miller can be reached at or (323) 549-5225, ext. 263.

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