4. NOTES PAYABLE

Roberts Realty has two types of debt:

1. mortgage notes secured by its operating properties; and

2. land loans.

For the land loans and the Northridge Office Building loan, the operating partnership or one of its wholly owned subsidiaries is the borrower and Roberts Realty is the guarantor. The other two permanent mortgage notes are nonrecourse, and a wholly owned subsidiary of the operating partnership is the borrower.

Mortgage Notes. The mortgage notes payable secured by Roberts Realty’s operating properties at September 30, 2013 and December 31, 2012 were as follows (in order of maturity date):

		Interest
		Rate as of		Principal Outstanding
Property Securing Mortgage	Maturity	9/30/13		9/30/13		12/31/12

Bassett Retail Center(1)	10/01/19	8.47	%	$	2,406,883	$	2,426,003

Total Mortgage Notes Payable				2,406,883		2,426,003

Spectrum Retail Center(2)	N/A	N/A		—		4,691,528
Northridge Office Building (3)	8/10/14	4.75	%	2,432,943		2,538,334

Totals				$	4,839,826	$	9,655,865

(1)	The interest rate shown is the stated interest rate of the note. As disclosed elsewhere in this report, the non-recourse loan is in default and interest is being accrued at the default rate of 13.47%.
(2)	The Spectrum Retail Center has been transferred to the lender in satisfaction of the debt, and its mortgage note is classified as liabilities related to discontinued operations in the condensed consolidated balance sheets. See Note 3 — Real Estate Assets Held for Sale and Discontinued Operations.
(3)	The Northridge Office Building mortgage note is classified as liabilities related to real estate assets held for sale in the condensed consolidated balance sheets. See Note 11 — Subsequent Events.

Land Loans. The loans secured by Roberts Realty’s land parcels at September 30, 2013 and December 31, 2012 were as follows (in order of maturity date):

		Interest
Land Parcel		Rate as of		Principal Outstanding
Securing Loan	Maturity	9/30/13		9/30/13		12/31/12

Bradley Park	8/10/14	3.68	%	$	3,000,000	$	3,000,000
Highway 20	10/08/14	5.0	%	2,615,000		2,910,000

Total Land Loans				5,615,000		5,910,000

Peachtree Parkway (1)(2)	N/A	N/A		—		7,000,200
Northridge (2)	N/A	N/A		—		2,000,000
North Springs (2)	7/17/14	13.0	%	5,500,000		—

Total Land Loans for Real Estate Assets Held for Sale				5,500,000		9,000,200

Totals				$	11,115,000	$	14,910,200

(1)	The Peachtree Parkway property has been sold and the loan has been paid in full. See Note 3 — Real Estate Assets Held for Sale and Discontinued Operations.
(2)	The Peachtree Parkway, Northridge, and North Springs land loans are classified as liabilities related to real estate assets held for sale in the condensed consolidated balance sheets.

On September 27, 2013, Roberts Realty renewed and extended its Highway 20 land loan to October 8, 2014. At closing, Roberts Realty made a $250,000 principal payment and established a $130,000 interest reserve to pay the monthly interest payments at the prime rate plus 1.75% with a floor of 5.0% per annum. Roberts Realty will continue to make fixed principal payments of $5,000 per month and also provided the lender with a security interest in the one-acre Johns Creek commercial site.

On July 19, 2013, Roberts Realty repaid its $2,000,000 Northridge land loan in full. The Northridge land, which has a book value of $4,373,789, is now unencumbered and owned debt free.

On July 18, 2013, Roberts Realty closed a $5,500,000 loan secured by the North Springs property. At closing, Roberts Realty paid a 3.0% origination fee to the lender and established a $755,000 interest reserve to pay the monthly interest only payments at an interest rate of 13% per annum. Roberts Realty can extend the loan to January 17, 2015 through two 3-month extensions by paying a 1.0% extension fee for each 3-month extension. Upon the sale of the North Springs property, Roberts Realty will pay a 1% exit fee to the lender.

On April 24, 2013, Roberts Realty renewed and extended its Northridge Office Building loan to August 10, 2014. The renewed loan requires monthly payments consisting of a fixed principal amount of $10,410 with interest at the 30-day LIBOR rate plus 300 basis points, with an interest rate floor of 4.75% per annum through December 31, 2013. Commencing on January 1, 2014 through the maturity date, the loan will bear interest at the 30-day LIBOR rate plus 300 basis points, with an interest rate floor of 5.25% per annum.

On April 24, 2013, Roberts Realty renewed and extended its Bradley Park land loan to August 10, 2014. The renewed loan requires monthly interest only payments at an interest rate equal to 350 basis points over the 30-day LIBOR rate through March 31, 2014. Commencing on April 1, 2014 through the maturity date, the loan will bear interest at the 30-day LIBOR rate plus 350 basis points, with an interest rate floor of 4.75%.

Maturing Short-Term Debt. As of the filing date of this report, Roberts Realty has four loans with a total principal balance of $13,532,533 that mature within the next 12 months. For an explanation of management’s plan to address Roberts Realty’s maturing short-term debt, see Note 1 — Business and Organization — Management’s Business Plan and Note 11 — Subsequent Events.