BUSINESS AND ORGANIZATION	3 Months Ended
Mar. 31, 2013
BUSINESS AND ORGANIZATION
BUSINESS AND ORGANIZATION	1. BUSINESS AND ORGANIZATION Roberts Realty Investors, Inc. (“Roberts Realty”), a Georgia corporation, was formed on July 22, 1994 to serve as a vehicle for investments in, and ownership of, a professionally managed real estate portfolio of multifamily residential communities. Roberts Realty owns and manages its real estate assets as an equity real estate investment trust (“REIT”). Roberts Realty conducts all of its operations and owns all of its assets in and through Roberts Properties Residential, L.P., a Georgia limited partnership (the “operating partnership”), or the operating partnership’s three wholly owned subsidiaries, two of which are Delaware limited liability companies and one is a Georgia limited liability company. Roberts Realty controls the operating partnership as its sole general partner and had an 84.57% ownership interest in the operating partnership at March 31, 2013 and an 82.74% ownership interest in the operating partnership at March 31, 2012. At March 31, 2013, Roberts Realty owned the following real estate assets, all of which are located in the north Atlanta metropolitan area: · two tracts of land totaling 60 acres in various phases of development and construction; · three tracts of land totaling 22 acres that are held for sale; one of these tracts totaling 11 acres is currently under contract to be sold (see Management’s Business Plan below, Note 7 — Related Party Transactions, and Note 11 — Subsequent Events); · two neighborhood retail centers totaling 49,999 square feet; and · one commercial office building totaling 37,864 square feet that is held for sale. Management’s Business Plan. During the last year, management has significantly reduced Roberts Realty’s debt and decreased its ongoing operating expenses, and Roberts Realty intends to continue to focus on improving its liquidity and balance sheet. Roberts Realty’s primary liquidity requirements are related to its continuing negative operating cash flow and maturing short-term debt. Roberts Realty’s negative operating cash flow is primarily due to its ownership of tracts of land that do not produce ongoing revenue but incur carrying costs of interest expense and real estate taxes, coupled with the low occupancy rates at its Spectrum retail center and Northridge Office Building. As of the filing date of this report, Roberts Realty has two loans with a total principal balance of $4,890,000 that are scheduled to mature within the next 12 months: (a) the $2,000,000 Northridge land loan that matures on May 22, 2013 (which Roberts Realty can extend to August 22, 2013 by paying the $60,000 in interest that would accrue during the extension period and a 1.0% extension fee); and (b) the $2,890,000 Highway 20 loan that matures on October 8, 2013. Management plans to repay the $2,000,000 Northridge land loan from the $4,373,789 of proceeds from the sale of the Northridge property, which is scheduled to occur by June 30, 2013. See Note 11 — Subsequent Events. Management plans either to pay off the $2,890,000 Highway 20 land loan with the remaining sales proceeds from the sale of the Northridge property and other cash on hand or to renew the Highway 20 land loan and extend its maturity date at least 12 months. Management believes that Roberts Realty’s long history of operating and developing real estate, its current plans for developing some of its existing land and selling certain of its real estate assets will allow it to successfully extend this loan or find alternative funding. Management has listed the 37,864 square foot Northridge Office Building for sale at a price of $5,750,000 and plans to pay off the $2,498,334 Northridge Office Building loan from the sale proceeds. Management has also listed the North Springs property, which we own debt free, for sale at a price of $16,600,000. See Note 11 — Subsequent Events. Management’s primary objectives for 2013 are to continue to seek to sell certain real estate assets as described above to provide the equity capital to develop the Bradley Park and Highway 20 multifamily apartment communities while continuing to reduce Roberts Realty’s debt and decrease its operating expenses. Management’s plans to accomplish these objectives are outlined below. Sale of the North Springs Property. Roberts Realty has retained CBRE, Inc., a global full service real estate firm, to market and sell the North Springs transit station property for a sales price of $16,600,000 under an exclusive marketing agreement. The North Springs property is a 10-acre site located on Peachtree Dunwoody Road across the street from the North Springs rail station in Sandy Springs. The North Springs property is zoned for a mixed-use development consisting of 356 multifamily units, 210,000 square feet of office space, and 56,000 square feet of retail space. Roberts Realty believes the current market and demand for a transit-oriented, mixed-use site like North Springs provides it with an excellent opportunity to sell this asset. Roberts Realty owns the North Springs property debt free, and this sale would significantly increase Roberts Realty’s cash available for investment in the development and construction of the Bradley Park and Highway 20 multifamily apartment communities. Sale of the Northridge Office Building. Roberts Realty has also retained CBRE, Inc. to sell its 37,864 square foot Northridge Office Building for a price of $5,750,000. Roberts Realty believes the market and demand for high quality office buildings has significantly improved, providing it with the opportunity to sell this asset. This sale would pay off the $2,498,334 loan secured by the Northridge Office Building and reduce Roberts Realty’s ongoing operating expenses by approximately $210,000 per year. Sale of the Northridge Land. As previously reported, Roberts Realty has entered into a contract to sell its 11-acre Northridge land parcel. Under the terms of the sales contract as amended, the purchase price is $4,070,000, plus the reimbursement of $303,789 in development and construction expenses. The closing is scheduled to occur on or before June 30, 2013. This sale would pay off $2,000,000 in debt secured by the Northridge land and reduce Roberts Realty’s operating expenses by approximately $300,000 per year. Sale of the Other Land Parcel. Roberts Realty also continues to actively market for sale a one-acre commercial site in Johns Creek that has a book value of $500,000, which it owns debt free. Disposition of the Retail Centers. As Roberts Realty has previously stated in its annual and quarterly reports, its objective is to exit the retail business to focus exclusively on developing, constructing, and managing multifamily apartment communities. Given that objective, in February 2013, Roberts Realty notified the lender of its intent to transfer the Spectrum retail center, which has a current independent appraised value of $4,700,000, to the lender in satisfaction of the $4,691,528 in debt secured by the property. Because the loan is non-recourse, Roberts Realty would have no further obligations to the lender for this loan. This transaction would reduce Roberts Realty’s debt by $4,691,528 and reduce its operating expenses by approximately $165,000 per year. To complete its exit from the retail shopping center business, Roberts Realty also intends to sell the Bassett retail center, which has a current independent appraised value of $3,160,000 and is encumbered by a $2,411,713 loan. If Roberts Realty is ultimately unable to sell the Bassett retail center for a sales price at least equal to the debt, Roberts Realty may transfer the Bassett retail center to the lender in satisfaction of the debt. Because the loan is non-recourse, Roberts Realty would have no further obligations to the lender for this loan. Roberts Realty believes that divesting the retail centers and Northridge Office Building will make it easier to consummate a sale, merger, or other business combination. Land Parcels Held for Development and Construction. Roberts Realty intends to move forward with the development and construction of its Bradley Park and Highway 20 multifamily apartment communities. Management believes this is an opportune time to create new multifamily assets and that Roberts Realty can create value for shareholders as it has historically done through developing, constructing, managing, and selling high quality multifamily apartment communities for cash flow and long-term capital appreciation. Roberts Realty intends to use the sales proceeds from the sale of the North Springs property, the Northridge Office Building, the Northridge land and the other land parcel to provide the equity to develop and construct the Bradley Park and Highway 20 multifamily apartment communities. The Bradley Park land has a current independent appraised value of $4,500,000 and is encumbered by a $3,000,000 land loan. The Highway 20 land has a current independent appraised value of $6,100,000 and is encumbered by a $2,890,000 land loan. Roberts Realty is also in discussions with possible joint venture participants such as pension funds, life insurance companies, hedge funds, foreign investors, and local investors to provide part of the equity need to develop and construct the Bradley Park and Highway 20 multifamily apartment communities. Roberts Realty may also form a new affiliate that would raise private equity for the specific purpose of purchasing these two remaining land parcels and constructing multifamily apartment communities. Roberts Realty may also sell one or both of these land parcels to Roberts Properties or to a newly formed affiliate of Roberts Properties as it has agreed to do with the Northridge land parcel. Possible Sale, Merger, or Other Business Combination. As previously reported, in addition to the above transactions, Roberts Realty continues to work on numerous strategic alternatives that would maximize shareholder value through a sale, merger, or other business combination. Roberts Realty has engaged in discussions with both private companies and individuals regarding a possible sale, merger, or other business combination and has entered into mutual confidentiality agreements with 68 different entities. Roberts Realty remains in active discussions with several companies that have expressed a desire to become a public company through a transaction with Roberts Realty. As of the filing date of this report, Roberts Realty has not entered into any definitive agreement for such a transaction. Management continues to pursue and work diligently on any sale, merger, or other business combination that would reward shareholders and maximize their value. The completion of Roberts Realty’s planned property sales and the accomplishment of its 2013 business plan would further reduce Roberts Realty’s debt by $11,601,575, decrease its operating expenses by another $675,000, and significantly increase its capital resources. In addition, the completion of each of these transactions will make the company a more attractive merger candidate.

1. BUSINESS AND ORGANIZATION

Roberts Realty Investors, Inc. (“Roberts Realty”), a Georgia corporation, was formed on July 22, 1994 to serve as a vehicle for investments in, and ownership of, a professionally managed real estate portfolio of multifamily residential communities. Roberts Realty owns and manages its real estate assets as an equity real estate investment trust (“REIT”).

Roberts Realty conducts all of its operations and owns all of its assets in and through Roberts Properties Residential, L.P., a Georgia limited partnership (the “operating partnership”), or the operating partnership’s three wholly owned subsidiaries, two of which are Delaware limited liability companies and one is a Georgia limited liability company. Roberts Realty controls the operating partnership as its sole general partner and had an 84.57% ownership interest in the operating partnership at March 31, 2013 and an 82.74% ownership interest in the operating partnership at March 31, 2012.

At March 31, 2013, Roberts Realty owned the following real estate assets, all of which are located in the north Atlanta metropolitan area:

· two tracts of land totaling 60 acres in various phases of development and construction;

· three tracts of land totaling 22 acres that are held for sale; one of these tracts totaling 11 acres is currently under contract to be sold (see Management’s Business Plan below, Note 7 — Related Party Transactions, and Note 11 — Subsequent Events);

· two neighborhood retail centers totaling 49,999 square feet; and

· one commercial office building totaling 37,864 square feet that is held for sale.

Management’s Business Plan. During the last year, management has significantly reduced Roberts Realty’s debt and decreased its ongoing operating expenses, and Roberts Realty intends to continue to focus on improving its liquidity and balance sheet. Roberts Realty’s primary liquidity requirements are related to its continuing negative operating cash flow and maturing short-term debt. Roberts Realty’s negative operating cash flow is primarily due to its ownership of tracts of land that do not produce ongoing revenue but incur carrying costs of interest expense and real estate taxes, coupled with the low occupancy rates at its Spectrum retail center and Northridge Office Building. As of the filing date of this report, Roberts Realty has two loans with a total principal balance of $4,890,000 that are scheduled to mature within the next 12 months: (a) the $2,000,000 Northridge land loan that matures on May 22, 2013 (which Roberts Realty can extend to August 22, 2013 by paying the $60,000 in interest that would accrue during the extension period and a 1.0% extension fee); and (b) the $2,890,000 Highway 20 loan that matures on October 8, 2013.

Management plans to repay the $2,000,000 Northridge land loan from the $4,373,789 of proceeds from the sale of the Northridge property, which is scheduled to occur by June 30, 2013. See Note 11 — Subsequent Events. Management plans either to pay off the $2,890,000 Highway 20 land loan with the remaining sales proceeds from the sale of the Northridge property and other cash on hand or to renew the Highway 20 land loan and extend its maturity date at least 12 months. Management believes that Roberts Realty’s long history of operating and developing real estate, its current plans for developing some of its existing land and selling certain of its real estate assets will allow it to successfully extend this loan or find alternative funding.

Management has listed the 37,864 square foot Northridge Office Building for sale at a price of $5,750,000 and plans to pay off the $2,498,334 Northridge Office Building loan from the sale proceeds. Management has also listed the North Springs property, which we own debt free, for sale at a price of $16,600,000. See Note 11 — Subsequent Events.

Management’s primary objectives for 2013 are to continue to seek to sell certain real estate assets as described above to provide the equity capital to develop the Bradley Park and Highway 20 multifamily apartment communities while continuing to reduce Roberts Realty’s debt and decrease its operating expenses. Management’s plans to accomplish these objectives are outlined below.

Sale of the North Springs Property. Roberts Realty has retained CBRE, Inc., a global full service real estate firm, to market and sell the North Springs transit station property for a sales price of $16,600,000 under an exclusive marketing agreement. The North Springs property is a 10-acre site located on Peachtree Dunwoody Road across the street from the North Springs rail station in Sandy Springs. The North Springs property is zoned for a mixed-use development consisting of 356 multifamily units, 210,000 square feet of office space, and 56,000 square feet of retail space. Roberts Realty believes the current market and demand for a transit-oriented, mixed-use site like North Springs provides it with an excellent opportunity to sell this asset. Roberts Realty owns the North Springs property debt free, and this sale would significantly increase Roberts Realty’s cash available for investment in the development and construction of the Bradley Park and Highway 20 multifamily apartment communities.

Sale of the Northridge Office Building. Roberts Realty has also retained CBRE, Inc. to sell its 37,864 square foot Northridge Office Building for a price of $5,750,000. Roberts Realty believes the market and demand for high quality office buildings has significantly improved, providing it with the opportunity to sell this asset. This sale would pay off the $2,498,334 loan secured by the Northridge Office Building and reduce Roberts Realty’s ongoing operating expenses by approximately $210,000 per year.

Sale of the Northridge Land. As previously reported, Roberts Realty has entered into a contract to sell its 11-acre Northridge land parcel. Under the terms of the sales contract as amended, the purchase price is $4,070,000, plus the reimbursement of $303,789 in development and construction expenses. The closing is scheduled to occur on or before June 30, 2013. This sale would pay off $2,000,000 in debt secured by the Northridge land and reduce Roberts Realty’s operating expenses by approximately $300,000 per year.

Sale of the Other Land Parcel. Roberts Realty also continues to actively market for sale a one-acre commercial site in Johns Creek that has a book value of $500,000, which it owns debt free.

Disposition of the Retail Centers. As Roberts Realty has previously stated in its annual and quarterly reports, its objective is to exit the retail business to focus exclusively on developing, constructing, and managing multifamily apartment communities. Given that objective, in February 2013, Roberts Realty notified the lender of its intent to transfer the Spectrum retail center, which has a current independent appraised value of $4,700,000, to the lender in satisfaction of the $4,691,528 in debt secured by the property. Because the loan is non-recourse, Roberts Realty would have no further obligations to the lender for this loan. This transaction would reduce Roberts Realty’s debt by $4,691,528 and reduce its operating expenses by approximately $165,000 per year.

To complete its exit from the retail shopping center business, Roberts Realty also intends to sell the Bassett retail center, which has a current independent appraised value of $3,160,000 and is encumbered by a $2,411,713 loan. If Roberts Realty is ultimately unable to sell the Bassett retail center for a sales price at least equal to the debt, Roberts Realty may transfer the Bassett retail center to the lender in satisfaction of the debt. Because the loan is non-recourse, Roberts Realty would have no further obligations to the lender for this loan. Roberts Realty believes that divesting the retail centers and Northridge Office Building will make it easier to consummate a sale, merger, or other business combination.

Land Parcels Held for Development and Construction. Roberts Realty intends to move forward with the development and construction of its Bradley Park and Highway 20 multifamily apartment communities. Management believes this is an opportune time to create new multifamily assets and that Roberts Realty can create value for shareholders as it has historically done through developing, constructing, managing, and selling high quality multifamily apartment communities for cash flow and long-term capital appreciation.

Roberts Realty intends to use the sales proceeds from the sale of the North Springs property, the Northridge Office Building, the Northridge land and the other land parcel to provide the equity to develop and construct the Bradley Park and Highway 20 multifamily apartment communities. The Bradley Park land has a current independent appraised value of $4,500,000 and is encumbered by a $3,000,000 land loan. The Highway 20 land has a current independent appraised value of $6,100,000 and is encumbered by a $2,890,000 land loan.

Roberts Realty is also in discussions with possible joint venture participants such as pension funds, life insurance companies, hedge funds, foreign investors, and local investors to provide part of the equity need to develop and construct the Bradley Park and Highway 20 multifamily apartment communities. Roberts Realty may also form a new affiliate that would raise private equity for the specific purpose of purchasing these two remaining land parcels and constructing multifamily apartment communities. Roberts Realty may also sell one or both of these land parcels to Roberts Properties or to a newly formed affiliate of Roberts Properties as it has agreed to do with the Northridge land parcel.

Possible Sale, Merger, or Other Business Combination. As previously reported, in addition to the above transactions, Roberts Realty continues to work on numerous strategic alternatives that would maximize shareholder value through a sale, merger, or other business combination. Roberts Realty has engaged in discussions with both private companies and individuals regarding a possible sale, merger, or other business combination and has entered into mutual confidentiality agreements with 68 different entities. Roberts Realty remains in active discussions with several companies that have expressed a desire to become a public company through a transaction with Roberts Realty. As of the filing date of this report, Roberts Realty has not entered into any definitive agreement for such a transaction. Management continues to pursue and work diligently on any sale, merger, or other business combination that would reward shareholders and maximize their value.

The completion of Roberts Realty’s planned property sales and the accomplishment of its 2013 business plan would further reduce Roberts Realty’s debt by $11,601,575, decrease its operating expenses by another $675,000, and significantly increase its capital resources. In addition, the completion of each of these transactions will make the company a more attractive merger candidate.