May 6, 2009
Pink OTC Markets News Service
North Kansas City, MO—On May 4, 2009, the Board of Trustees of Maxus Realty Trust, Inc. (“MRTI”) held a special meeting of the Board. At the meeting, the Board discussed receipt of a letter regarding the outstanding promissory note secured by Barrington Hills Apartments from Fannie Mae. Barrington Hills is a multi-family apartment complex MRTI owns through Barrington Hills Acquisition, L.L.C., a wholly-owned subsidiary of MRTI’s operating limited partnership.
The letter from Fannie Mae provided notice that Barrington Hills did not currently meet the debt service coverage standard required by the promissory note relating to the 1999 revenues bonds used to finance Barrington Hills. As a result, management understands that the Barrington Hills promissory note, which has an outstanding principal balance of approximately $5,153,000 on March 31, 2009, may become due on August 1, 2009. Management was not aware that the promissory note could become due as a result of Barrington Hills failing to meet the debt service coverage ratio and does not believe Barrington Hills will meet the debt service coverage ratio prior to August 1, 2009. As a result, instead of the promissory note becoming due in 2029 as previously disclosed, it now appears that the promissory note may become due and payable on August 1, 2009.
Management intends to negotiate with Fannie Mae to amend the note to provide for a floating interest rate or refinance the note with a conventional Fannie Mae ten year fixed loan amortized over thirty years, but management cannot provide any assurance as to whether MRTI will be able to negotiate such an arrangement with Fannie Mae.
At the meeting, the Board also approved the potential acquisition of a multi-family apartment complex near Dallas, Texas. The Board authorized management to enter into a purchase agreement for the property if appropriate terms could be negotiated. Management anticipates the purchase price will be approximately $15 million and hopes to finance approximately $12 million of the purchase price.
The Board also decided to suspend the payment of dividends until at least December, 2009. The Board believes it is in MRTI’s best interest to preserve cash at this time because the Board believes there may be investment opportunities in the near future.
The Board also approved holding the 2009 annual meeting of shareholders at 10:00am on May 26, 2009 in the 7th Floor Conference Room at Polsinelli Shughart Law Offices, 700 West 47th Street, Kansas City, Missouri to elect seven Board trustees.
The record date for the shareholders entitled to receive notice of and to vote at the meeting is the close of business on May 8, 2009. The Board anticipates mailing a notice of the annual meeting, a proxy statement and a proxy card to shareholders on or about May 14, 2009.
In connection with the issuance of this news release, MRTI is posting its annual report for the 2008 calendar year at www.pinksheets.com. In addition, MRTI anticipates posting a proxy statement for the 2009 annual meeting of shareholders referenced above at www.pinksheets.com on or about May 15, 2009.