U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K

              ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
(Mark One)

|X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
    OF 1934

For the fiscal year ended December 31, 2000.

|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
    ACT OF 1934

For the transition period from _________ to _________.

                        Commission file number 001-13183

                         ROBERTS REALTY INVESTORS, INC.
                     -------------------------------------
                 (Name of small business issuer in its charter)

                GEORGIA                            58-2122873
--------------------------------------       --------------------------------
   (State or Other Jurisdiction of         (I.R.S. Employer Identification No.)
     Incorporation or Organization)

      8010 ROSWELL ROAD, SUITE 120
      ATLANTA, GA                                                      30350
-------------------------------------------------------              --------
         (Address of Principal Executive Offices)                    (Zip Code)

Issuer's telephone number: (770) 394-6000

Securities registered under Section 12(b) of the Act:  NONE

  Title of each class:                Name of each exchange on which registered:
  -------------------                 ------------------------------------------
             N/A                      N/A

Securities registered under Section 12(g) of the Exchange Act:

                                  Common Stock
                                 -------------
                                (Title of Class)

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes |X| No |_|

         Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. |_|

         State the aggregate market value of the voting common equity held by
non-affiliates of the registrant. The aggregate market value shall be computed
by reference to the price at which the common equity was sold, or the average
bid and asked prices of such common equity, as of a specified date within 60
days prior to the date of the filing of the Form 10-K/A. (See definition of
affiliate in Rule 405.)

                                   $27,584,976

         Note: If a determination as to whether a particular person or entity is
an affiliate cannot be made without involving unreasonable effort and expense,
the aggregate market value of the common stock held by non-affiliates may be
calculated on the basis of assumptions reasonable under the circumstances,
provided that the assumptions are set forth in this Form.

         Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date. 4,846,228 shares of
common stock (as of March 23, 2001).

         Documents Incorporated by Reference.  None
<PAGE>


                                TABLE OF CONTENTS

                                                                         PAGE

PART I...............................................................      2

         ITEM 1.      BUSINESS.......................................      2

         ITEM 2.      PROPERTIES.....................................      9

         ITEM 3.      LEGAL PROCEEDINGS..............................     21

         ITEM 4       SUBMISSION OF MATTERS TO A VOTE OF
                      SECURITY HOLDERS...............................     21

PART II..............................................................     22

         ITEM 5.      MARKET FOR REGISTRANT'S COMMON EQUITY AND
                      RELATED STOCKHOLDER MATTERS....................     22

         ITEM 6.      SELECTED FINANCIAL DATA........................     23

         ITEM 7.      MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                      FINANCIAL CONDITION AND RESULTS OF OPERATIONS..     25

         ITEM 7A.     QUANTITATIVE AND QUALITATIVE DISCLOSURES
                      ABOUT MARKET RISK..............................     37

         ITEM 8.      FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA....     38

         ITEM 9.      CHANGES IN AND DISAGREEMENTS WITH
                      ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
                      DISCLOSURE.....................................     38

PART III.............................................................     39

         ITEM 10.     DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT  39

         ITEM 11.     EXECUTIVE COMPENSATION.........................     41

         ITEM 12.     SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
                      OWNERS AND MANAGEMENT..........................     42

         ITEM 13.     CERTAIN RELATIONSHIPS AND RELATED
                      TRANSACTIONS...................................     44

PART IV..............................................................     47

         ITEM 14.     EXHIBITS, FINANCIAL STATEMENT SCHEDULES,
                      AND REPORTS ON FORM 8-K........................     47

<PAGE>

                                     PART I

ITEM 1.       DESCRIPTION OF BUSINESS.

GENERAL

         Roberts Realty Investors, Inc. owns and operates multifamily
residential properties as a self-administered, self-managed equity real estate
investment trust, or REIT. We conduct our business through Roberts Properties
Residential, L.P., which we refer to as the operating partnership. The operating
partnership owns all our properties. As of March 23, 2001, Roberts Realty owns a
66.9% interest in the operating partnership and is its sole general partner. We
expect to continue to conduct our business in this organizational structure,
which is sometimes called an "umbrella partnership" or "UPREIT."

         As of March 23, 2001, we own seven existing multifamily apartment
communities containing a total of 1,481 apartment homes and three communities
under construction that will contain approximately 854 apartment homes. Seven of
our communities - River Oaks, Plantation Trace, Preston Oaks, Highland Park,
Crestmark, Addison Place phase one, and Bradford Creek - containing a total of
1,481 apartment units, are stabilized. Addison Place's second phase, totaling
285 apartment homes, Ballantyne, totaling 319 apartment homes, and Old Norcross,
totaling 250 apartment homes, are under construction. All of our communities are
located in metropolitan Atlanta, Georgia, except the Ballantyne community, which
is located in Charlotte, North Carolina.

         We consider a community to have achieved stabilized occupancy on the
earlier of (a) attainment of 95% occupancy as of the first day of any month, or
(b) one year after completion of construction. As of December 31, 2000, we owned
eight stabilized communities containing a total of 1,633 apartment homes that
had a physical occupancy rate of 95.9%. We sold the 152-unit Rosewood Plantation
Community on January 4, 2001.

         Roberts Realty is a Georgia corporation formed in July 1994. We expect
to continue to qualify as a REIT for federal income tax purposes. A REIT is a
legal entity that holds real estate interests and, through its payment of
distributions, is able to reduce or avoid incurring federal income tax at the
corporate level. This structure allows shareholders to participate in real
estate investments without the "double taxation" of income - i.e., at both the
corporate and shareholder levels - that generally results from an investment in
shares of a corporation. To maintain our qualification as a REIT, we must, among
other things, distribute annually to our shareholders at least 95% (90% for 2001
and thereafter) of our taxable income. Our common stock is traded on the
American Stock Exchange under the symbol "RPI."

         We have engaged two entities owned by Mr. Charles S. Roberts, our
Chairman of the Board, Chief Executive Officer, and President, to perform
services for the operating partnership. These entities are Roberts Properties,
Inc. and Roberts Properties Construction, Inc., which we sometimes refer to as
the Roberts Companies. The Roberts Companies developed and constructed each of
our seven existing communities, except the 24-unit second phase of Preston Oaks,
which was constructed by an independent contractor. We expect that affiliates of
Mr. Roberts will continue to develop future properties and construct properties
where feasible. Roberts Construction started construction of the Ballantyne
community, is currently acting as the general contractor, and will oversee
construction of the community.

         Our executive offices are located at 8010 Roswell Road, Suite 120,
Atlanta, Georgia 30350, and our telephone number is (770) 394-6000. As of March
23, 2001, we have 45 full-time employees.

THE OPERATING PARTNERSHIP

         We conduct our business and own all of our real estate assets through
the operating partnership. We control the operating partnership as its sole
general partner. Our ownership interest in the operating partnership entitles us
to share in cash distributions from, and in the profits and losses of, the
operating partnership generally in proportion to our ownership percentage. In
this report we refer to units of limited partnership interest in the operating
partnership

                                       2
<PAGE>

as "units." The holders of units are: former limited partners in the limited
partnerships that were merged into the operating partnership, Mr. Roberts, and
the former owner of one of the retail centers we formerly owned.

         Holders of units in the operating partnership, sometimes referred to in
this report as unitholders, generally have the right to require the operating
partnership to redeem their units. A unitholder who submits units for redemption
will receive, at our election, either an equal number of shares or cash in the
amount of the average of the daily market prices of the common stock for the 10
consecutive trading days before the date of submission multiplied by the number
of units submitted. We have adopted a policy of acquiring units in exchange for
shares. We also have the right, at our election, to issue shares in exchange for
all outstanding units. Our articles of incorporation limit ownership by any one
holder to 6% of the outstanding shares of our common stock, par value $0.01 per
share, other than by Mr. Roberts, who is limited to 25%. As a result,
unitholders cannot redeem their units if doing so would violate those ownership
limits. Shares issued for units are registered with the SEC and are freely
transferable, other than by affiliates.

         Whenever we issue shares, we are obligated to contribute the net
proceeds from that issuance to the operating partnership, and the operating
partnership is obligated to issue the same number of units to us. The operating
partnership agreement permits the operating partnership, without the consent of
the unitholders, to sell additional units and add limited partners.

GROWTH STRATEGIES

         Our business plan and growth strategy are focused on creating cash flow
and capital appreciation by building and managing new apartment homes of the
highest quality and value in excellent high-growth neighborhoods. Our business
objectives are:

         o   to maximize the current return to our shareholders in the form of
             quarterly dividends through increases in cash flow; and

         o   to increase long-term total returns to our shareholders through
             appreciation in the value of the common stock.

         To achieve these objectives, we intend to pursue the following growth
strategies:

         (a) maximize cash flow from operations by seeking through intensive
             management to maintain high occupancy levels, obtain regular rent
             increases, manage resident turnover efficiently and control
             operating expenses; and

         (b) develop new multifamily apartment communities in metropolitan
             Atlanta, North Carolina, Florida and other parts of the Southeast.

We will engage others, including the Roberts Companies, to help us pursue these
strategies, which are described in more detail below.

         PROPERTY MANAGEMENT STRATEGY. We believe that managing our communities
intensively is a fundamental element of our growth strategy. As of March 23,
2001, we employ 44 property management personnel, including property managers,
leasing managers, leasing consultants, maintenance supervisors and technicians,
and accounting personnel. We believe our property management expertise will
enable us to continue to deliver quality services, thereby promoting resident
satisfaction, maintaining high resident retention, and enhancing the value of
each of the communities. Our property management strategy will continue to be:

        o    to increase the average occupancy and rental rates as market
             conditions permit;


                                       3
<PAGE>


        o    to minimize resident turnover and delinquent rental payments
             through strict review of each applicant's creditworthiness; and

        o    to control operating expenses to increase net operating income at
             each of the communities.

         DEVELOPMENT STRATEGY. We intend to continue to develop high quality
apartment communities for long-term ownership. During the past 16 years, the
Roberts Companies have developed, constructed, and/or managed over 4,200
residential units. We believe that the number and quality of the apartment units
developed by the Roberts Companies, the relationships Mr. Roberts and employees
of the Roberts Companies have developed with local permitting and governmental
authorities, and the Roberts Companies' experience with the development,
construction and financing process will minimize the barriers to new development
often faced by less experienced developers and national developers attempting to
enter the Atlanta market. These barriers include governmental growth control, a
difficult rezoning and permitting process, and the limited availability of
well-located sites. We believe that these restraints on construction, coupled
with the predicted continued growth in population, job growth, and household
formations, present an excellent opportunity for us to achieve favorable returns
on the development of well-located, high quality apartment home communities.

         Roberts Properties is developing the Addison Place phase two,
Ballantyne and Old Norcross communities. We expect that Roberts Properties will
continue to develop communities for us in the future, including a 220 - unit
apartment community on a 10.7 acre property located on Northridge Parkway that
we plan to acquire from Roberts Properties. Although the experience of the
Roberts Companies will be most helpful to us in the Atlanta area, we believe
that experience will enable us to develop multifamily apartment communities in
other areas in the Southeast, including Charlotte.

         Although we presently intend to engage the Roberts Companies in our
development and construction activities, we may hire other development or
construction companies in Atlanta and elsewhere if we deem it to be in our best
interests to do so. The most likely development scenario for the operating
partnership is for it to acquire properties already under development from
Roberts Properties and/or an entity formed by Mr. Roberts or his affiliates. We
may engage the Roberts Companies to develop properties on a fee basis, we may
enter into joint venture agreements with the Roberts Companies, or we may
acquire communities developed by the Roberts Companies and owned by other
affiliates of Mr. Roberts. We may also enter into similar arrangements with
others who are independent of Mr. Roberts.

         In analyzing the potential development of a particular community, we
will evaluate geographic, demographic, economic, and financial data, including:

         o   households, population and employment growth;

         o   prevailing rental and occupancy rates in the immediate market area
             and the perceived potential for growth in those rates;

         o   costs that affect profitability of the investment, including
             construction, financing, operating and maintenance costs;

         o   income levels in the area;

         o   existing employment bases;

         o   traffic volume, transportation access, proximity to commercial
             centers and regional malls; and

         o   proximity to and quality of the area's schools.

We will also consider physical elements regarding a particular site, including
the probability of zoning approval (if required), availability of utilities and
infrastructure, and other physical characteristics of the site.


                                       4
<PAGE>


         For information regarding the development and construction of Addison
Place phase two, Ballantyne, and Old Norcross, see Part I, Item 2, Properties.

ENVIRONMENTAL AND OTHER REGULATORY MATTERS

         Under various federal, state, and local laws and regulations, an owner
of real estate is liable for the costs of removal or remediation of hazardous or
toxic substances on the property. Those laws often impose liability without
regard to whether the owner knew of, or was responsible for, the presence of the
hazardous or toxic substances. The costs of remediation or removal of the
substances may be substantial, and the presence of the substances, or the
failure to promptly remediate the substances, may adversely affect the owner's
ability to sell the real estate or to borrow using the real estate as
collateral. In connection with its ownership and operation of the communities
and its other real estate assets, the operating partnership may be potentially
liable for:

         (a)      those remediation and removal costs; and

         (b)      damages to persons or property  arising from the existence or
                  maintenance  of those  hazardous or toxic substances.

         We have conducted preliminary evaluations of the environmental
condition of our communities and surrounding properties.

         In April 1998, Wallace Enterprises, Inc., an adjacent landowner,
notified us that a petroleum product release had been discovered on the property
adjacent to our Crestmark community. Wallace repaired the source of the release
and the Georgia Environmental Protection Division, or EPD, has approved its
corrective action plan. Our environmental attorneys and consultants have advised
us that Wallace is responsible for cleaning up the release to the extent
required by the EPD regulations. Our environmental consultants have informed us
that despite a possible groundwater impact at Crestmark, no threat to human
health or safety is suggested. We and our environmental consultants are
monitoring the EPD files to ensure Wallace's compliance with the EPD
regulations.

         The preliminary environmental assessments of our other communities and
other real estate assets have not revealed any environmental liability that we
believe would have a material adverse effect on our business, assets, or results
of operations, nor are we aware of any liability of that type. Nevertheless,
these assessments may not have revealed all environmental liabilities, and we
may have material environmental liabilities that we do not know about. Future
uses or conditions - including changes in applicable environmental laws and
regulations - may cause us to have environmental liability.

COSTS OF COMPLIANCE WITH AMERICANS WITH DISABILITIES ACT AND SIMILAR LAWS

         Under the American with Disabilities Act of 1990, or the ADA, all
places of public accommodation are required to meet federal requirements related
to access and use by disabled persons. Although we believe that the communities
are substantially in compliance with present requirements of the ADA, we may
incur additional costs of complying with the ADA. A number of additional
federal, state and local laws may also require modifications to the communities,
or restrict further renovations to them, with respect to access by disabled
persons. For example, the Fair Housing Amendments Act of 1988 requires apartment
communities first occupied after March 13, 1990 to be accessible to the
handicapped. Noncompliance with this Act could result in the imposition of fines
or an award of damages to private litigants. We believe that the communities
that are subject to the Act comply with that law.

      Additional legislation may impose further burdens or restrictions on
owners with respect to access by disabled persons. We cannot estimate the
ultimate amount of the cost of compliance with the ADA or that legislation, and,
while those costs are not expected to have a material adverse effect on us,
those costs could be substantial. Limitations or restrictions on the completion
of renovations may limit application of our investment strategy in some
instances or reduce overall returns on our investments.


                                       5
<PAGE>


INSURANCE

         We carry comprehensive general liability, fire, extended coverage and
rental loss insurance on all of our existing communities, with policy
specifications, insured limits and deductibles customarily carried for similar
properties. We carry similar insurance with respect to our properties under
development or properties under construction, but with appropriate exceptions
given the nature of these properties. We believe that our communities are
adequately covered by insurance. There are, however, some types of losses (such
as losses arising from acts of war) that are not generally insured because they
are either uninsurable or not economically insurable. If an uninsured loss or a
loss in excess of insured limits occurs, we could lose our capital invested in a
property, as well as the anticipated future revenues from the property, and
would continue to be obligated on any mortgage indebtedness or other obligations
related to the property. Any loss of that kind would adversely affect us.

INVESTMENT, FINANCING, AND CONFLICT OF INTEREST POLICIES

         The investment policies, financing policies and conflict of interest
policies set by our board of directors are summarized below. Our board may amend
or revise them from time to time without a vote of our shareholders or any vote
of the partners of the operating partnership, except that:

         (a)      we cannot change our policy of holding our assets and
                  conducting our business exclusively through the operating
                  partnership without amending the operating partnership
                  agreement, which will generally require the consent of the
                  holders of a majority in interest of the limited partners in
                  the operating partnership including, if applicable, Roberts
                  Realty; and

         (b)      changes in our conflicts of interest policies must be approved
                  by a majority of the independent directors and otherwise be
                  consistent with legal requirements.

INVESTMENT POLICIES

         INVESTMENTS IN REAL ESTATE OR INTERESTS IN REAL ESTATE. We conduct all
of our investment activities through the operating partnership and will do so
for so long as the operating partnership exists. (The agreement of limited
partnership of the operating partnership provides that it is not required to be
dissolved until 2093.) Our investment objectives are to achieve stable cash flow
available for distributions and, over time, to increase cash flow and portfolio
value by continuing to develop multifamily apartment communities for long-term
ownership.

         Our policy is to develop assets where we believe that favorable
investment opportunities exist based on market conditions at the time of the
investment.

         We expect to pursue our investment objectives primarily through the
direct ownership of properties by the operating partnership, although, as
discussed below, we may also pursue indirect property ownership opportunities.
We intend to develop multifamily apartment communities primarily in the Atlanta
and Charlotte metropolitan areas, Florida, and other parts of the Southeast.
Future development or investment activities will not be limited by our governing
documents to any geographic area, product type, or specified percentage of our
assets.

         POSSIBLE ACQUISITION OF COMMUNITIES DEVELOPED BY MR. ROBERTS OR HIS
AFFILIATES. Mr. Roberts and Roberts Properties have been engaged in the
development of residential and commercial real estate since the early 1970s, and
Mr. Roberts expects that he and Roberts Properties will continue to engage in
real estate development. Provided that any transaction or agreement must comply
with the policies discussed under "Conflict of Interest Policies," we and/or the
operating partnership may engage in transactions of various types with Mr.
Roberts, Roberts Properties, and/or other affiliates of Mr. Roberts to develop
or acquire real estate. Those transactions may include:

         o   hiring Mr. Roberts or Roberts Properties to develop real estate
             under a fee arrangement;


                                       6
<PAGE>

         o   acquiring undeveloped property from Mr. Roberts or his affiliates
             for future development; or

         o   acquiring from Mr. Roberts or his affiliates partially or
             completely constructed properties, whether in their lease-up phase
             or already leased-up.

No particular arrangements have been determined, other than the communities now
under construction and development as described elsewhere in this report.

         SECURITIES OF OR INTEREST IN PERSONS PRIMARILY ENGAGED IN REAL ESTATE
ACTIVITIES AND OTHER ISSUERS. We and the operating partnership also may invest
in securities of other entities engaged in real estate activities or invest in
securities of other issuers, including investments by us and the operating
partnership for the purpose of exercising control over those entities. We or the
operating partnership may acquire all or substantially all of the securities or
assets of other REITs or similar entities where those investments would be
consistent with our investment policies. We do not currently intend to invest in
the securities of other issuers. In making any of the investments described in
this paragraph we intend to comply with the percentage of ownership limitations
and gross income tests necessary for REIT qualification under the Internal
Revenue Code. Also, we will not make any investments if the proposed investment
would cause us or the operating partnership to be an "investment company" under
the Investment Company Act of 1940.

         NO INVESTMENTS IN MORTGAGES. We do not own any mortgages and do not
currently intend to invest in mortgages or to engage in originating, servicing,
or warehousing mortgages.

FINANCING POLICIES

         Our organizational documents do not limit the amount of indebtedness we
may incur. We have an informal policy that we will not incur indebtedness in
excess of 75% of what the board of directors believes is the fair market value
of our assets at any given time. We may, however, from time to time re-evaluate
our borrowing policies in light of then current economic conditions, relative
costs of debt and equity capital, market value of the operating partnership's
real estate assets, growth and acquisition opportunities and other factors.
Modification of this policy may adversely affect the interests of our
shareholders.

         To the extent that the board of directors determines to seek additional
capital, we may raise capital through additional equity offerings, debt
financing, or retention of cash flow, or a combination of these methods. Our
retention of cash flow is subject to provisions in the Internal Revenue Code
requiring a REIT to distribute a specified percentage of taxable income, and we
must also take into account taxes that would be imposed on undistributed taxable
income. As long as the operating partnership is in existence, we will contribute
the net proceeds of all equity capital we raise to the operating partnership in
exchange for units or other interests in the operating partnership.

         We have not established any limit on the number or amount of mortgages
on any single property or on the operating partnership's portfolio as a whole.

CONFLICT OF INTEREST POLICIES

         The board of directors is subject to provisions of Georgia law that are
designed to eliminate or minimize potential conflicts of interest. We can give
no assurances, however, that these policies will always eliminate the influence
of those conflicts. If these policies are not successful, the board could make
decisions that might fail to reflect fully the interests of all shareholders.

         Under Georgia law, a director may not misappropriate corporate
opportunities that he learns of solely by serving as a member of the board of
directors. In addition, under Georgia law, a transaction effected by us or any
entity we control (including the operating partnership) in which a director, or
specified related persons and entities of the director, have a conflicting
interest of such financial significance that it would reasonably be expected to
exert an

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<PAGE>

influence on the director's judgment may not be enjoined, set aside or give rise
to damages on the grounds of that interest if either:

         o        the transaction is approved, after disclosure of the interest,
                  by the affirmative vote of a majority of the disinterested
                  directors, or by the affirmative vote of a majority of the
                  votes cast by disinterested shareholders; or

         o        the transaction is established to have been fair to us.

The board of directors has adopted a policy that all conflicting interest
transactions must be authorized by a majority of the disinterested directors,
but only if there are at least two directors who are disinterested with respect
to the matter at issue.

OTHER POLICIES

         We and the operating partnership have authority to offer our securities
and to repurchase and otherwise reacquire our securities, and we may engage in
those activities in the future. We have adopted a policy that we will issue
shares to unitholders who exercise their rights of redemption. In the future, we
may make loans to joint ventures in which we participate to meet working capital
needs. We have not engaged in trading, underwriting, agency distribution, or
sale of securities of other issuers, and we do not intend to do so. We intend to
make investments in a manner so that we will not be treated as an investment
company under the Investment Company Act of 1940.

         We announced our intention to repurchase up to 300,000 shares of our
outstanding common stock on September 3, 1998. We repurchased 152,588 shares in
2000 for $1,156,000; 121,200 shares in 1999 for $909,000; and 19,300 shares in
1998 for $145,000. During 1999, we paid $28,000 to redeem 3,917 units from
unitholders who resided outside the state of Georgia. We did not redeem any
shares in the year ended December 31, 2000. In October 2000, we announced our
intention to repurchase another 50,000 shares.

         At all times, we intend to make investments in a manner to be
consistent with the requirements of the Internal Revenue Code for us to qualify
as a REIT unless, because of changing circumstances or changes in the Internal
Revenue Code or in applicable regulations, the board of directors decides that
it is no longer in our best interests to qualify as a REIT.

         For a description of the competition we face, see Part 1, Item 2,
Properties - Competition.


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<PAGE>



ITEM 2.       PROPERTIES.

GENERAL

         As of March 23, 2001, we own seven existing multifamily apartment
communities containing a total of 1,481 apartment homes, and three communities
under development or construction that will contain approximately 854 apartment
homes. Seven of our existing communities - River Oaks, Plantation Trace, Preston
Oaks, Highland Park, Crestmark, Addison Place phase one, and Bradford Creek -
containing a total of 1,481 apartment units, are stabilized. Addison Place's
second phase, totaling 285 apartment homes, Old Norcross, totaling 250 apartment
homes, and Ballantyne, totaling 319 apartment homes, are under construction. All
of our communities are located in metropolitan Atlanta, Georgia, except the
Ballantyne community, which is located in Charlotte, North Carolina.

         As of December 31, 2000, we owned eight stabilized communities
containing a total of 1,633 apartment homes that had a physical occupancy rate
of 95.9%. We sold the 146-unit Ivey Brook community on June 23, 2000 and the
152-unit Rosewood Plantation community on January 4, 2001.

         We believe that the demand for multifamily housing in Atlanta will
increase due to Atlanta's growing population. According to the Atlanta Regional
Commission, which we refer to as the ARC, both population and job growth in
Atlanta are projected to be above the national average for the foreseeable
future. The ARC is the regional planning and governmental coordination agency
for the 10-county Atlanta Region, which is comprised of Fulton, DeKalb,
Gwinnett, Cobb, Clayton, Rockdale, Henry, Douglas, Cherokee, and Fayette
counties.

         The following information is based on statistical estimates published
by the ARC. The population of the Atlanta Region is projected to grow 40.9% for
the period from 1990 to 2010, from 2,557,800 persons in 1990 to 3,603,000
persons in 2010. The estimated population of the Atlanta Region increased by
29.2% from 2,557,800 persons in 1990 to 3,304,000 persons in 2000, making it one
of the largest metropolitan areas in the country and the largest in the
Southeast.

         Employment of the Atlanta Region is projected to grow 54.7% for the
period from 1990 to 2010, from 1,426,000 jobs in 1990 to 2,206,000 jobs in 2010.
Estimated employment of the Atlanta Region increased by 34.5% from 1,426,000
jobs in 1990 to 1,918,500 jobs in 1999. According to the Georgia Department of
Labor, the estimated December 2000 unemployment rate of the Atlanta Region was
2.4%, which was below the estimated December 2000 Georgia unemployment rate of
3.0% and the estimated December 2000 U.S. unemployment rate of 3.7%.

         Housing units in the Atlanta Region increased an estimated 30.5%, from
1,052,430 units in 1990 to 1,373,058 units in 2000. Multifamily homes in the
Atlanta Region increased 21.7% from 342,441 units in 1990 to 416,682 units in
2000.


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The following table summarizes basic information about our communities.
<TABLE>
<CAPTION>

                                 THE COMMUNITIES

                                     Year                                                     December 2000        Average Physical
                                    Completed    Number    Approximate       Average       Average Rental Rates    Occupancy for the
                                    or to be       of     Rentable Area     Unit Size                Per Square     12 Months Ended
       Community         Location   Completed     Units    (Square Feet)   (Square Feet)   Per Unit    Foot            Dec. 31, 2000
       ---------         --------   --------     -----    -------------   -------------   ---------------------    -------------

Existing Communities:
<S>                  <C>          <C>         <C>        <C>              <C>           <C>          <C>               <C>
  Plantation Trace (1)    Atlanta   1990/1998    232        310,956          1,340         $  994       $0.74            93.7%
  Plantation Trace                   1990        182        229,202          1,259

  River Oaks              Atlanta    1992        216        276,046          1,278            953        0.75            97.3

  Crestmark (2)           Atlanta   1993/1997    334        360,284          1,079            845        0.78            94.6



  Preston Oaks (3)        Atlanta   1995/1998    213        257,180          1,207          1,038        0.86            98.2

  Highland Park           Atlanta     1995       188        231,634          1,232            986        0.80            97.7



  Bradford Creek          Atlanta     1998       180        243,941          1,355            987        0.73            93.6

  Addison Place

     Phase I              Atlanta     1999       118        200,194          1,697         $1,288       $0.76          N/A (4)
                                               -----       --------

    Subtotal/Average                           1,481      1,880,235          1,270
                                               =====      =========

Communities Under
Construction:

Addison Place                         2001      285         403,312          1,415           N/A         N/A             N/A
     Phase II             Atlanta

Ballantyne                Charlotte   2001      319         413,538          1,296           N/A         N/A             N/A
Old Norcross              Atlanta     2001      250         330,196          1,321           N/A         N/A             N/A
                                               ----         -------

    Subtotal/Average                            854       1,147,046
                                               ====       =========
</TABLE>

(1)  Plantation Trace was completed in two phases. The 182-unit first phase was
     completed in 1990 and the 50-unit second phase was completed in 1998.
(2)  Crestmark was completed in two phases. The 248-unit first phase was
     completed in 1993 and the 86-unit second phase was completed in 1997.
(3)  Preston Oaks was completed in two phases. The 189-unit first phase was
     completed in 1995 and the 24-unit second phase was completed in 1998.
(4)  The 118-unit first phase of Addison Place completed its lease-up phase in
     May 2000, and its 12-month historical occupancy percentage is not
     comparable.


                                       10
<PAGE>


         Annual operating data regarding our stabilized communities at December
31, 2000 are summarized in the following table. The second phases of Crestmark,
Preston Oaks, and Plantation Trace are described separately for this purpose.
(Ivey Brook and Rosewood Plantation are omitted due to their sales in June 2000
and January 2001, respectively.) Except for those figures noted with an
asterisk, the occupancy rates shown represent the average physical occupancy of
the applicable community calculated by dividing the total number of vacant days
by the total possible number of vacant days for each year and then subtracting
the resulting number from 100%. The figures noted with asterisks reflect the
applicable data on December 31 of the specified year and are not annualized
because the applicable community was under construction and in its initial
lease-up period during at least a portion of that year. During lease-up, units
are leased as they are constructed and made ready for occupancy building by
building, thus annualization of data is not possible during that period.
Throughout this table, "N/A" means "not applicable," i.e., no unit in the
community was available to be occupied during the relevant year.
<TABLE>
<CAPTION>

                               Physical Occupancy Rate                 Average Effective Annual Rental Rates
                               -----------------------                 -------------------------------------
                  Month                                   1996        1997           1998            1999            2000
                Completed                                ----        ----           ----            ----            ----
                Initial                                       Per   Per    Per     Per     Per     Per    Per     Per    Per    Per
    Community   Leaseup  1996   1997   1998     1999   2000   Unit Sq. Ft. Unit  Sq. Ft.  Unit   Sq. Ft. Unit   Sq. Ft. Unit Sq. Ft.
    ---------   -------- ----   ----   ----     ----   ----   ---- ------- ----  -------  ----   ------- ----   ------- ----  ------

<S>           <C>      <C>      <C>    <C>     <C>    <C>    <C>   <C>     <C>    <C>      <C>     <C>    <C>   <C>    <C>    <C>
 Plantation     9/90     99%     93%    94%     90%    93.7%  $821  $0.65   $867  $0.69    $867    $0.69  $956  $0.71   $994  $0.74
 Trace

 Plantation     11/98    N/A    N/A    92%*     N/A     N/A    N/A    N/A $1,171* $0.72* $1,171*   $0.72*  N/A   N/A    N/A    N/A
 Trace
 Phase II (1)

 River Oaks     2/93     98%     96%    98%     93%    97.3%  $859  $0.67   $910  $0.71    $910    $0.71  $930  $0.73   $953  $0.75


 Preston Oaks   8/95     99%     97%    98%     98%    98.2%  $892  $0.72   $981  $0.79    $981    $0.79  $994  $0.82 $1,038  $0.86

 Highland Park  3/96     96%*    96%    97%     97%    97.7%  $805  $0.65   $920  $0.75    $920    $0.75  $950  $0.77   $986  $0.80

 Crestmark      4/94     98%     87%    91%     95%    94.6%  $736  $0.72   $787  $0.73    $787    $0.73  $807  $0.75   $845  $0.78

 Crestmark      9/97     N/A     96%*   N/A     N/A     N/A    N/A    N/A   N/A     N/A     N/A     N/A    N/A   N/A     N/A   N/A
 Phase II (2)

 Preston Oaks   7/98     N/A    N/A    100%*    N/A     N/A    N/A    N/A   $799* $0.83*   $799*   $0.83*  N/A   N/A     N/A   N/A
 Phase II (1)

 Bradford       8/98     N/A    N/A     94%*    93%    93.6%   N/A    N/A   $926* $0.68*   $926*   $0.68*  $949  $0.70  $987  $0.73
 Creek
 Addison Place  5/00     N/A    N/A     N/A     N/A    97.4%*  N/A    N/A   N/A    N/A      N/A     N/A    N/A   N/A  $1,288* $0.76*
 Phase I
</TABLE>


(1)  Plantation Trace Phase II completed its lease-up phase in November 1998 and
     Preston Oaks Phase II completed its lease-up in August 1998. Beginning with
     1999, both phases of Plantation Trace and Preston Oaks are combined.
(2)  We acquired Crestmark in June 1996. Phase II of Crestmark completed its
     lease-up in September 1997. Beginning with 1998, both phases of Crestmark
     are combined.

                                       11
<PAGE>

         As described below, our Atlanta communities are located in Gwinnett,
Fulton and Douglas Counties and six submarkets, or geographic areas, within
these counties. We also have one community in Charlotte. The Ballantyne
community now under construction in Charlotte is described after the Georgia
properties. Each heading identifies the community or communities within the
specified county and submarket. We obtained population and employment data for
each Atlanta submarket from the ARC. Multiple communities are located in each of
the Duluth and Perimeter Center/North Springs submarkets; thus those communities
compete not only with unaffiliated apartment communities but also with each
other. Please see "Summary of Debt Secured by the Communities," which follows
the description of the individual communities, for an explanation of the terms
of our secured indebtedness.

GWINNETT COUNTY

         Gwinnett County was one of the fastest growing counties in the U.S. in
the 1980's, and from 1985 until 1990 it ranked first in the nation in growth
among counties with a population of more than 100,000. Since 1990, Gwinnett's
population has increased 59% to a current level of 562,300. Gwinnett's strong
employment base, transportation networks, excellent public education system, and
affordable home prices contribute to the county's remarkable growth. Gwinnett is
home to approximately 235 international firms, over 750 manufacturing and 758
high technology firms that generate many of its 339,060 jobs. Since 1990,
Gwinnett has added 187,060 jobs, which is second only to Fulton County in the
Atlanta region. The average household income of the county is approximately
$78,000. Gwinnett County is home to communities located in the City of Duluth
and unincorporated Gwinnett.

     Duluth Area - Plantation Trace, River Oaks, and Bradford Creek Communities

         DULUTH. The City of Duluth is located in central Gwinnett County and is
home to the Plantation Trace, River Oaks, and Bradford Creek communities. Duluth
has exceeded even Gwinnett County as a whole in percentage of population growth;
based on estimates, its population has increased more than 200% since 1990.
Duluth is located near I-85 and Gwinnett Place Mall, a 1,100,000 square foot
regional mall.

         PLANTATION TRACE. Plantation Trace is a 232-unit garden apartment
community that was completed in two phases: a 182-unit first phase in 1990 and a
50-unit second phase in 1998, sometimes referred to below as Phase II.
Plantation Trace consists of 31 two and three story Nantucket-style stone and
wood sided buildings located on a 29.2-acre site on Pleasant Hill Road
approximately one-half mile west of its intersection with Peachtree Industrial
Boulevard. In 1990, the 182-unit first phase received the Aurora Award from the
Southeast Builders' Conference for "Best Rental Apartment Community in the
Southeast."

         The Plantation Trace community, with its award-winning traditional
architecture and landscaped grounds, features a clubhouse, a modern fitness and
exercise facility, two lighted tennis courts, sand volleyball court,
multi-station playground, two free-form swimming pools, a small wading pool, a
stone paver pool deck and a covered whirlpool spa. In addition to upscale
amenities, Plantation Trace offers such interior features as nine foot ceilings,
crown molding, pickled wood cabinetry in the kitchen and bath, marble vanity
tops, fireplaces, vaulted ceilings and Palladian windows in select units,
designer wallcoverings and full laundry rooms with washer and dryer connections.
Phase II provides the Plantation Trace community direct access to the
Chattahoochee River, as well as to jogging trails around the existing lake and
nature areas along the river.

         Plantation Trace has a variety of floor plans, including 28 one bedroom
units ranging from 901 to 929 square feet, 48 two bedroom standard and 66 two
bedroom roommate units ranging from 1,228 to 1,298 square feet, and 40 three
bedroom units ranging from 1,471 to 1,494 square feet. Phase II contains 7 one
bedroom units of approximately 966 square feet each, 6 two bedroom units of
approximately 1,433 square feet each, 18 two bedroom townhouses of approximately
1,490 square feet each, 12 three bedroom townhouses of approximately 1,948
square feet each, 7 four bedroom townhouses of approximately 2,314 square feet
each, and 33 garages of 200 square feet each. The weighted average unit size is
1,340 square feet. As of December 31, 2000, rental rates ranged from $785 to
$1,790 per month, with a weighted average monthly rent of $994 per unit and
$0.74 per square foot. Local real estate taxes were $222,000 in 2000. The
physical occupancy rate for the entire Plantation Trace community as of December
31, 2000 was 98.3%.

                                       12
<PAGE>

         RIVER OAKS. River Oaks, which was completed in 1992, consists of 22 two
and three story Charleston-style brick and wood sided buildings located on a
31.6 acre site on Pleasant Hill Road adjacent to the Chattahoochee River to the
west and the Plantation Trace community to the east. The River Oaks community,
with its traditional architecture and landscaped grounds, features a large
clubhouse with a fitness center, two lighted tennis courts, sand volleyball
court, multi-station playground, free-form swimming pool, stone paver pool deck,
and whirlpool spa. In addition to upscale amenities, River Oaks offers such
interior features as nine foot ceilings, crown molding, garden tubs, pickled
pine cabinetry in the kitchen and bath, marble vanity tops, fireplaces and
vaulted ceilings in select units, designer wallcoverings, and full laundry rooms
with washer and dryer connections.

         River Oaks has a variety of floor plans, including 40 one bedroom units
at approximately 907 square feet, 32 two bedroom roommate units, 24 two bedroom
deluxe units, and 48 two bedroom standard units ranging from 1,276 to 1,309
square feet, and 72 three bedroom units with approximately 1,457 square feet.
The weighted average unit size is 1,278 square feet. As of December 31, 2000,
the community was 98.5% occupied, and rental rates ranged from $830 to $1,075
per month, with a weighted average monthly rent of $953 per unit and $0.75 per
square foot. Local real estate taxes were $199,000 in 2000.

         BRADFORD CREEK. Bradford Creek, which was completed in 1998, consists
of 9 two and three story buildings located on an approximately 22.5 acre
property near the southeast corner of Peachtree Industrial Boulevard and Howell
Ferry Road in Duluth, approximately one-mile southeast of Plantation Trace and
River Oaks. The Bradford Creek community, with its unique mountain lodge
architecture and traditional landscaping, features a large clubhouse with a
fitness center, clubroom, laundry room, two lighted tennis courts, free-form
swimming pool, stone paver pool deck, a 12-acre nature area, a courtyard
highlighted by a water fountain, and a gated entrance. In addition to the
upscale amenities, Bradford Creek offers such interior features as nine foot
ceilings and a computer room in select units, crown moldings, garden tubs, white
raised-panel cabinetry in the kitchen and bath, marble vanity tops, breakfast
bars, designer wallcoverings, and full laundry rooms with washer and dryer
connections. Each building was constructed using cobblestone and vinyl siding
and offers private patios or balconies along with gables and varying paint
colors.

         Bradford Creek contains 28 one bedroom units of approximately 1,001
square feet each, 46 two bedroom standard units of approximately 1,302 square
feet each, 47 two bedroom roommate units of approximately 1,344 square feet
each, and 59 three bedroom units of approximately 1,589 square feet each. The
weighted average unit size is 1,355 square feet. As of December 31, 2000, the
community was 95.8% occupied, and rental rates ranged from $840 to $1,130 per
month, resulting in a weighted average monthly rent of $987 per unit and $0.73
per square foot. Local real estate taxes were $175,000 in 2000.

     Unincorporated Gwinnett - Old Norcross

         The Old Norcross community will be located on a 35.3 acre site at the
intersection of Old Norcross Road and Herrington Road in unincorporated Gwinnett
County near the western Lawrenceville area. This community will have
approximately 250 garden-style apartments. The site for the community is located
near I-85, GA-316, and Gwinnett Place Mall, an 1,100,000 square foot regional
mall. We estimate the total construction cost of this project to be
approximately $16,000,000, which we plan to finance by obtaining a construction
loan.

         Old Norcross will have 73 one-bedroom units with 970 square feet, 45
two bedroom standard units with 1,340 square feet, 66 two-bedroom units with
1,385 square feet, 46 three-bedroom units with 1,636 square feet and 20
three-bedroom units with a bay window with 1,621 square feet.

         Old Norcross' amenities include a clubhouse offering an exercise room
with weight equipment. The recreational area includes a swimming pool, lighted
tennis court, children's playground, walking trails through the nature area, and
a lake.

                                       13
<PAGE>



FULTON COUNTY

         Fulton County is the largest county in the Atlanta Region in terms of
population, employment, housing units, and land area. Between 1990 and 1999,
Fulton's net population increase, 96,000 persons, ranked third in the region
behind Gwinnett and Cobb Counties. Unemployment in Fulton County was 3.7% in
2000, which was below the national rate of 4.0%.

Perimeter Center/North Springs Area - Preston Oaks and Highland Park Communities

         PERIMETER CENTER/NORTH SPRINGS. The Perimeter Center/North Springs area
offers convenient proximity and access to both urban and suburban employment
bases and retail conveniences. Georgia 400 and I-285 provide direct access
within minutes to major regional malls such as North Point Mall and Perimeter
Center Mall. The Phipps Plaza/Lenox Mall/Buckhead area and downtown Atlanta's
Central Business District are readily accessible via the Georgia 400 extension,
which connects to I-85 South near downtown Atlanta.

         Within this corridor is a large base of residential, commercial and
office developments. The south quadrant of the area includes medical facilities
such as Northside Hospital, St. Joseph's Hospital, and Egleston Scottish Rite
Children's Hospital. Perimeter Center encompasses office developments that
exceed 18,500,000 square feet of space, with such upscale facilities as Ravinia,
Northpark Town Center, Concourse, and Perimeter Center Office Park. Several
prominent companies such as Holiday Inn, UPS, and Hewlett-Packard have located
their worldwide or regional headquarters within the Perimeter Center area.

         This area, which includes portions of Fulton and DeKalb Counties, has
an average household income of approximately $99,000, which is considerably
higher than the metropolitan Atlanta average of $44,913. The median value of a
single-family home in this area exceeds $200,000.

         PRESTON OAKS. Preston Oaks is a 213-unit garden apartment community
that was completed in two phases: a 189-unit first phase in August 1995, and a
24-unit second phase in 1998. Preston Oaks consists of nine two and three story
buildings located on Mt. Vernon Highway in the Perimeter Center area. The
traditional architecture consists of stacked stone and vinyl siding
incorporating details of gabled roofs, Palladian windows, columns, and bay
windows.

         The community is located on an 11.5-acre site and features extensive
landscaping. The amenities are similar to those of the other existing
communities, with custom swimming pool, lighted tennis court, fitness center
with individual workout stations, and a large clubhouse. Interior features
include garden tubs, oversized walk-in closets, pickled pine cabinetry in the
kitchen and bath, crown molding, mirrored walls, and chair railing in the dining
rooms. Phase one consists of 36 one-bedroom units, 92 two-bedroom units, and 61
three-bedroom units. Phase two consists of 24 one bedroom apartment units with
959 square feet each.

         Preston Oaks is conveniently located less than one mile from Perimeter
Mall, a 1,200,000 square foot regional mall, and in close proximity to the
area's numerous office developments. Several stand-alone restaurants and major
retail centers either exist or are being developed near the community.

         As of December 31, 2000, Preston Oaks was 99.1% occupied, and its
rental rates ranged from $885 to $1,255 per month, resulting in a weighted
average monthly rent of $1,038 per unit and $0.86 per square foot. Local real
estate taxes were $235,000 in 2000.

         HIGHLAND PARK. This community consists of 188 upscale apartment units
in a total of eight buildings on a 10.9-acre site. Located on Dunwoody Place in
the North Springs area of Sandy Springs, Highland Park benefits from its close
proximity to Georgia 400, which provides direct access within minutes to major
retail and employment areas to the north such as North Point Mall and the
Windward mixed use project, and to the south such as Perimeter Mall and
Perimeter Center.

                                       14
<PAGE>

         Highland Park has 42 one-bedroom units with 902 square feet, 32 two
bedroom standard units with 1,225 square feet, 62 two-bedroom roommate units
with 1,285 square feet, and 52 three bedroom units with 1,440 square feet. The
weighted average unit size is 1,232 square feet.

         The buildings are of a traditional design with stacked stone accents
and vinyl siding with the facades varying from building to building. Exterior
features include gables, bay windows, various paint colors with white trim, and
private patios or balconies. Extensive landscaping includes mature trees,
flowers, and shrubbery. The interiors feature crown molding in the living/dining
rooms, designer wallcoverings, separate laundry rooms, breakfast bars, garden
tubs, and private balconies. Recreational amenities include a swimming pool,
tennis court, and fitness center.

         As of December 31, 2000, Highland Park was 98.3% occupied and its
monthly rental rates ranged from $855 to $1,165 per month, resulting in a
weighted average monthly rent of $986 per unit and $0.80 per square foot. Local
real estate taxes were $194,000 in 2000.

     Alpharetta Area - Addison Place Community

         Alpharetta. The Alpharetta area offers convenient proximity and access
to both urban and suburban employment bases and retail conveniences. Georgia 400
provides direct access within minutes to major regional malls such as North
Point Mall and Perimeter Center Mall. The Phipps Plaza/Lenox Mall/Buckhead area
and downtown Atlanta's Central Business District are readily accessible via the
Georgia 400 extension, which connects to I-85 South near downtown Atlanta.

         Within this corridor is a large base of residential, commercial and
office developments. North Point Mall's success accelerated the already high
rate of residential development, which caters to the upscale consumer. North
Fulton's prestigious neighborhoods have been a major factor in the emergence of
the Georgia 400 corridor as a center for corporate headquarters. Between 1990
and 2000, North Fulton added approximately 124,100 residents and 41,401 housing
units. The average household income of North Fulton County in 1999 was $117,000.
The Windward project, which straddles Georgia 400, is the region's largest
mixed-use development.

         ADDISON PLACE PHASE I. The 118-unit first phase of Addison Place is
located on 19.2 acres on Abbotts Bridge Road near the intersection of Abbotts
Bridge and Jones Bridge roads. This first phase contains 60 two bedroom
townhouses of approximately 1,497 square feet each and 58 three bedroom
townhouses of approximately 1,903 square feet each. As of December 31, 2000, the
first phase of Addison Place was 97.5% occupied and rental rates ranged from
$1,185 to $1,450 per month, with a weighted average monthly rent of $1,288 per
unit and $0.76 per square foot. The architectural style, land planning,
landscaping, and amenities of this first phase are similar to those of our other
communities. Local real estate taxes were $196,000 in 2000.

         The construction of this first phase was completed under a cost-plus
10% construction contract with Roberts Properties Construction providing for 5%
profit and 5% overhead. The total cost of construction, including the fee to
Roberts Properties Construction, was approximately $9,647,000. We anticipate
that there was approximately $874,000 in net profit to Roberts Properties
Construction on the construction contract. We funded the development and
construction of this first phase from our working capital and a $9,500,000
construction loan.

         ADDISON PLACE PHASE II. The second phase of Addison Place will contain
285 garden-style apartment homes. It will include 11 different floor plans,
including 60 one bedroom ranging from 765 to 1,034 square feet, 147 two bedroom
units ranging from 1,150 to 1,550 square feet, 58 three bedroom units at
approximately 1,706 square feet, and 20 four bedroom units at approximately
2,074 square feet, along with 40 direct-entry garages. The weighted average unit
size will be 1,415 square feet. The architectural style, land planning, and
landscaping of Phase II will be similar to Phase I. The amenities in Phase II
will feature a free-form swimming pool, 2 tennis courts, a modern fitness and
exercise facility, a business center, men's and women's saunas, and a
playground.

         We estimate the total construction cost for the second phase of Addison
Place to be approximately $20,605,000, which we plan to finance by obtaining a
permanent loan.


                                       15
<PAGE>

DOUGLAS COUNTY

         Douglas County, one of the 10 counties in the Atlanta Region, is
located west of Atlanta and encompasses 202 square miles. The county is
surrounded by Fulton, Cobb, Carroll, and Paulding Counties, with the
Chattahoochee River as its southeastern border. Its population was estimated at
93,500 in 1999, an increase of 30% since 1990. Between 1990 and 1998, Douglas
County added 9,150 jobs and between 1990 and 1999, the county added 21,800
persons and 8,300 housing units. Douglas County benefits from its accessibility
to downtown Atlanta to the east via I-20 and to Hartsfield International Airport
to the southeast via Thornton Road/Camp Creek Parkway. Just across the county
line to the east lies the Fulton Industrial District, the Southeast's largest
contiguous industrial park. The Fulton Industrial District consists of more than
50,000,000 square feet of both manufacturing and warehouse space and stretches
six miles north and south along Fulton Industrial Boulevard. It represents 20%
of Atlanta's total inventory of warehouse/industrial space, and an additional
1,000,000 square feet is under construction. Numerous Fortune 500 companies are
represented in the Fulton Industrial District, employing more than 100,000
people.

     Thornton Road/I-20 Area - Crestmark Community

         THORNTON ROAD/I-20 AREA. Thornton Road is the third exit west of I-285
on I-20 and connects I-20 with Hartsfield International Airport to the southeast
and the significant residential base of Douglas, West Cobb, and Paulding
counties to the north and east. Several office and business parks that total
more than 2,000,000 square feet of space and house corporations such as
BellSouth, Mitsubishi, Robert Bosch Corporation, TDK Electronics, and
Saab-Scania contribute to a large employment base of approximately 20,000 people
within the Thornton Road area. Restaurant, hospitality and retail conveniences
support the existing employment and residential base in the Thornton Road
corridor. The area also benefits from its close proximity to the Fulton
Industrial District as well as the Six Flags Over Georgia amusement park, both
of which are less than three miles away. At the northwest corner of the Thornton
Road/I-20 interchange is the Columbia/HCA Parkway Medical Center, a 320-bed
acute care medical facility that employs approximately 600 people.

         CRESTMARK. Crestmark is a 334-unit garden apartment community that was
completed in two phases: a 248-unit first phase in 1993 and an 86-unit second
phase in 1997. Crestmark consists of 16 three and four story stacked stone and
wood sided buildings, 17 garages and 24 storage units located on a 32.2 acre
site on Thornton Road, approximately one-half mile north of its intersection
with I-20 in Douglas County. In 1993, Crestmark received two Aurora Awards from
the Southeast Builders' Conference, one for "Best Landscape Design in the
Southeast" and another for "Best Recreational Facility in the Southeast."

         The Crestmark community, with its award-winning traditional
architecture and landscaped grounds, features a large 14,000 square foot
clubhouse with a club room, full kitchen, fitness center and aerobics room, a
business center and conference room, two lighted tennis courts, multi-station
playground, walking and jogging trail, two free-form swimming pools, stone paver
pool decks, and a whirlpool spa. In addition to the upscale amenities, Crestmark
offers such interior features as nine foot ceilings, crown and chair-rail
molding, pickled wood cabinetry in the kitchen and baths, marble vanity tops,
fireplaces, vaulted and trey ceilings, Palladian and bay windows in select
units, designer wallcoverings, and full laundry rooms with washer and dryer
connections.

         Crestmark has a variety of floorplans including 29 one bedroom standard
units with 704 square feet, 50 one bedroom deluxe units with 816 square feet, 19
one bedroom units of 901 square feet in the second phase, 33 two bedroom
standard units with 1,005 square feet, 86 two bedroom deluxe units with 1,110
square feet, 21 two bedroom standard units of 1,223 square feet in the second
phase, 22 two bedroom roommate units of 1,285 square feet in the second phase,
50 three bedroom units with 1,295 square feet and 24 three bedroom units of
1,437 square feet in the second phase. The weighted average unit size is 1,079
square feet. As of December 31, 2000, the community was 97.9% occupied, and
rental rates ranged from $775 to $1,015 per month, with a weighted average
monthly rent of $845 per unit and $0.78 per square foot. Local real estate taxes
were $215,000 in 2000.


                                       16
<PAGE>

CHARLOTTE, NORTH CAROLINA - BALLANTYNE

         The following information is based on statistics and estimates
published by the Charlotte Chamber of Commerce. Between 1990 and 2000,
Charlotte's population grew by 33.2%, which was well above the national
estimated growth rate of 10%. Since 1988, employment in Charlotte has grown 24%.
Nine of the nation's top 200 banks operate in Charlotte, including Bank of
America, N.A. and First Union Corporation. Other major employers include
Carolinas Healthcare System, Charlotte-Mecklenburg School System, Duke Energy
Corporation, and USAirways. Additionally, nearly 300 of the nation's largest
industrial and service corporations listed by FORTUNE magazine have facilities
in the area.

         The Ballantyne community will be located on a 23.8-acre site at the
intersection of Lancaster Highway (old NC-521) and John J. Delaney Drive. The
Ballantyne area is the largest mixed-use development in Mecklenburg County. This
community will have 319 garden-style apartments. The Ballantyne community will
consist of 110 one-bedroom units ranging from 765 square feet to 1,034 square
feet, 143 two-bedroom units ranging from 1,150 square feet to 1,550 square feet,
48 three-bedroom units at 1,706 square feet, and 18 four-bedroom units at 2,074
square feet, along with 36 direct-entry garages. We estimate the cost of
construction on this development to be $23,100,000. The community is located
near I-485 and I-77, which offers convenient access to downtown Charlotte and
I-85.

         The table on the following page summarizes the amenities of each of the
existing communities and Addison Place Phase II, Old Norcross, and Ballantyne,
which are now under construction.


                                       17
<PAGE>
<TABLE>
<CAPTION>




                                                         SUMMARY OF AMENITIES OF THE COMMUNITIES


                                                               CLUB-
              PATIO,  WASHER                                   HOUSE                         SAND
              PORCH   & DRYER GARDEN  FIRE-   VAULTED SWIMMING FITNESS WHIRL- CAR  TENNIS  VOLLEY-  PLAY-    LAUNDRY
   COMMUNITY BALCONY HOOK-UPS  TUBS  PLACES* CEILINGS*   POOL  CENTER  POOL  WASH  COURT(S)   BALL  GROUND   ROOM   OTHER
   --------- ------- --------  ----  ------ ---------   ----   ------  ----  ----  --------   ----  ------   ----   -----

Existing
Communities:

<S>           <C>    <C>    <C>      <C>      <C>     <C>      <C>  <C>     <C>   <C>     <C>     <C>      <C>    <C>
Plantation      Yes      Yes   Yes(1)   Yes(2)    Yes     Yes    Yes  Yes(2)   Yes  Yes-2     Yes     Yes     Yes   Riverfront.
Trace                                                                                                               Lake, Nature
                                                                                                                    Preserve

River Oaks      Yes      Yes     Yes     Yes      Yes     Yes    Yes    Yes    Yes  Yes-2     Yes     Yes     Yes   Riverfront,
                                                                                                                    Nature Preserve

Preston Oaks    Yes      Yes     Yes     No       Yes     Yes    Yes    No     Yes  Yes-1      No     No      Yes

Highland        Yes      Yes     Yes     No       Yes     Yes    Yes    No     Yes  Yes-1      No     Yes     Yes
Park

Crestmark       Yes      Yes     Yes     Yes      Yes     Yes    Yes    Yes    Yes  Yes-2      No     Yes     Yes   Nature Preserve,
                                                                                                                    Jogging Trail

Bradford Creek  Yes      Yes     Yes     No       Yes     Yes    Yes    No     Yes  Yes-2      No     Yes     Yes   Nature Preserve

Addison Place   Yes      Yes     Yes     No       No      Yes    No     No     Yes  Yes-1      No     No      Yes   Lake,
Phase I                                                                                                             Nature Trail

Communities
  Under
Construction:

Addison Place   Yes      Yes     Yes     Yes      No      Yes    Yes    No     Yes  Yes-2      No     Yes     Yes   Lake,
Phase II                                                                                                            Nature Trail

Ballantyne      Yes      Yes     Yes     Yes      No      Yes    Yes    No     Yes  Yes-2      No     No      Yes   Walking Trail,
                                                                                                                    Lakes - 2

Old Norcross    Yes      Yes     Yes     No       Yes     Yes    Yes    No     Yes  Yes-2      No     Yes     Yes   Nature Trail


</TABLE>

* In select units
(1)      Phase II only
(2)      Phase I only


                                       18
<PAGE>



COMPETITION

         All of the communities are located in developed areas, and numerous
other apartment projects are located within the market area of each community.
The number of competitive apartment communities in the area could have a
material adverse effect on our ability to lease our apartments at the rental
rates anticipated, and we can give no assurances regarding the development of
additional competing multifamily communities in the future. The remainder of
this section summarizes the competition for each of the communities. The
following information reflects our study of apartment communities in each
submarket that we believe to be closely competitive with our community or
communities within that submarket. This section includes summary information we
obtained from various sources - including developers and real estate brokers, as
well as on-site visits - regarding those apartment communities. Although we have
attempted to verify the information and believe that it is substantially
accurate on the whole, information regarding a particular community may be
incorrect due to the sources relied upon or erroneous information supplied by
competitors.

         PLANTATION TRACE, RIVER OAKS, AND BRADFORD CREEK. The Duluth submarket,
which we consider to include the area within a two mile radius from these
communities, currently consists of approximately 17 multifamily communities,
including River Oaks, Plantation Trace, and Bradford Creek. Although the
Bridgewater apartment community - which was previously developed and sold by an
affiliate of Mr. Roberts - is located more than two miles from Plantation Trace,
it is also included in the Duluth market area because it offers units with
attached garages and its architecture and amenities are similar to Plantation
Trace. Of the approximately 17 existing communities in the area, five were
completed in the last three years, including Bradford Creek and the second phase
of Plantation Trace. Due to the quality of construction, age of the communities,
type of amenities, resident profiles and rental rates, we believe that only nine
of the other 14 communities are in direct competition with Plantation Trace,
River Oaks and Bradford Creek.

         PRESTON OAKS. We believe that the north central Perimeter multifamily
submarket includes the area within a two-mile radius around this community. It
is generally bounded by Roswell Road to the west, Ashford Dunwoody Road to the
east, Spalding Drive to the north and Glenridge Drive to the south, and it
currently consists of approximately 26 multifamily communities, including
Preston Oaks. Of the 25 other existing communities in the market area, only six
were built before 1983. The remaining 19 communities range from approximately
two to nine years of age. We believe that Preston Oaks competes with all 25 of
these communities.

         HIGHLAND PARK. We believe the North Springs multifamily submarket
includes the area within an approximately two-mile radius around this community.
It is generally bounded by the Chattahoochee River to the north and west,
Georgia 400 to the east and Dalrymple Road to the south, and currently consists
of 34 communities, including Highland Park. Of the approximately 34 existing
communities in the market area, only five have been built since 1989. The
remaining communities range in age from 13 years to over 20 years. We believe
Highland Park will draw residents from all of the other 33 communities located
in the market area, but only 11 of the 33 communities will compete closely with
Highland Park.

         CRESTMARK. We consider the Thornton Road multifamily submarket to be
the area within an approximately two-mile radius around the Crestmark community.
It is generally bounded by I-20 to the south, Blairs Bridge Road to the east,
and Georgia Highway 78 to the north and west, and it currently consists of
approximately nine communities, including Crestmark. Of the approximately nine
existing communities in the market area, four have been built since 1990. We
believe that Crestmark will draw residents from all of the approximately eight
other communities located in the market area, but due to their amenities,
quality of construction and resident profile, only five of the eight other
communities will compete closely with Crestmark.

         ADDISON PLACE. We believe the Alpharetta multifamily submarket includes
the area within an approximately two-mile radius around the Abbotts Bridge
community. It is generally bounded by the Chattahoochee River to the east, Old
Alabama to the south, Georgia 400 to the west, and Windward Parkway to the
north, and it currently consists of approximately 15 communities, including
Addison Place. We believe that Addison Place will draw residents from



                                       19
<PAGE>

all of the approximately 14 other communities located in the market area, but
due to their amenities, quality of construction and resident profile, only 13 of
the 14 other communities will compete closely with Addison Place.

         BALLANTYNE. We consider the Ballantyne multifamily submarket to include
the area within an approximately two-mile radius around the community. It is
generally bounded by the Providence Road to the east, Providence Road West to
the south, Lancaster Highway (old NC-521) to the west, and I-485 to the north,
and it currently consists of approximately nine communities, including
Ballantyne. We believe that once construction of Ballantyne is complete, it will
draw residents from all of the approximately eight other existing communities
located in the market area and will compete with the four communities under
construction in the market area.

         OLD NORCROSS. We believe the Old Norcross multifamily submarket
includes the area within an approximately two-mile radius around the Old
Norcross community. It is generally bounded by Herrington Road to the east, Club
Drive to the south, Steve Reynolds Boulevard to the west, and Sugarloaf to the
north and east, and it currently consists of approximately 24 communities,
including Old Norcross. We believe that Old Norcross will draw residents from
all of the approximately 23 other communities located in the market area, but
due to their amenities, quality of construction and resident profile, only 15 of
the 23 other communities will compete closely with Old Norcross.

SUMMARY OF DEBT SECURED BY THE COMMUNITIES

         Information regarding our indebtedness secured by the communities at
December 31, 2001 is as follows (excluding the Ivey Brook and Rosewood
Plantation communities because the properties were sold in June 2000 and January
2001, respectively, and the mortgage debts repaid):
<TABLE>
<CAPTION>

                       Principal                          Principal         Fixed                               Monthly
                       Balance at          Maturity       Balance at        Interest    Amortization         Principal and
         Community     Dec. 31, 2000       Date           Maturity          Rate        Schedule           Interest Payment
         ---------     -------------       ----------     ------------      ----------  ---------------    ----------------

<S>                     <C>             <C>            <C>              <C>            <C>                 <C>
Plantation Trace          $11,632,000      10-15-08       $10,313,000(1)    7.09%           30-year            $  79,892
River Oaks                  8,833,000      11-15-03         8,513,000(2)    7.15            30-year               62,475
Preston Oaks                8,198,000      10-15-02         8,025,000(2)    7.21            30-year               59,188
Highland Park               7,740,000      02-15-03         7,544,000(2)    7.30            30-year               56,066
Crestmark                  15,586,000      10-01-08        13,690,000(3)    6.57            30-year              101,869
Bradford Creek              8,181,000      06-15-08         7,290,000(2)    7.15            30-year               56,734
Addison Place Ph. I         9,492,000      11-15-09         8,387,000(1)    6.95            30-year               62,885
------------------
</TABLE>

(1)      Each of the loans secured by the Plantation Trace and Addison Place
         Phase I communities may be prepaid upon payment of a premium equal to
         the greater of (a) 1% multiplied by a fraction having as its numerator
         the number of months to maturity and its denominator the number of
         months in the full term of the loan, or (b) the present value of the
         loan less the amount of principal and accrued interest being repaid.
         Each loan may be prepaid in full during the last 30 days before its
         maturity date without any prepayment premium.

(2)      Each of the loans secured by the River Oaks, Preston Oaks, Highland
         Park and Bradford Creek communities may be prepaid in full upon payment
         of a premium equal to the greater of (a) 1% of the outstanding
         principal balance of the loan, or (b) the sum of the present value of
         the scheduled monthly payments to the maturity date and the present
         value of the balloon payment due on the maturity date, less the
         outstanding principal balance of the loan on the date of prepayment.
         Each loan may be prepaid in full during the last 90 days before its
         maturity date without any prepayment premium.

(3)      The loan secured by the Crestmark community may be prepaid upon the
         payment of a premium equal to the greater of (a) 1% of the outstanding
         principal balance, or (b) the product obtained by multiplying the
         amount of principal being prepaid by the excess (if any) of the monthly
         note rate over the assumed reinvestment rate by the present value
         factor. If the loan is prepaid after expiration of the yield
         maintenance period, but more than 90 days before the maturity date, the
         prepayment premium shall be 1% of the unpaid principal balance of the
         note. The loan may be prepaid in full during the last 90 days before
         its maturity date without any prepayment premium.

                                       20
<PAGE>


POSSIBLE ADDITIONAL COMMUNITIES TO BE DEVELOPED

         From time to time Roberts Properties plans the development of other
apartment communities to be located on property owned by Roberts Properties or
other affiliates of Mr. Roberts, or on property that one of those entities is
interested in acquiring. Mr. Roberts may elect to raise the required equity by
syndicating a limited partnership or limited liability company. Alternatively,
we may seek to raise the equity required to purchase and develop the community
by selling shares. If Mr. Roberts elects to raise equity through a limited
partnership or limited liability company, Mr. Roberts may seek to cause the
partnership to be merged into the operating partnership at a later date. A
transaction of that nature would require the consent of a majority in interest
of the limited partners of the partnership and of a majority of the
disinterested members of our board of directors, and we can give no assurances
regarding whether Mr. Roberts will ultimately determine to seek a merger in that
manner, or whether such a merger would in fact be approved by the requisite
majority in interest of limited partners in the partnership and by a majority of
the disinterested members of the Board.

         As described above in Part I, Item 1, Description of Business - Growth
Strategies - Development Strategy, three other multifamily apartment communities
that are anticipated to total 854 apartment homes are in the development or
construction stage.  We also plan to acquire a 10.7 acre parcel on Northridge
Parkway in north Atlanta from Roberts Properties for the development and
construction of a 220-unit community. See Part III, Item 13, Certain
Relationships and Related Transactions - Payments to the Roberts Companies -
Pending Transactions with Affiliates of Mr. Roberts for more information about
this transaction.

OTHER REAL ESTATE ASSETS

         The operating partnership sold its two retail centers totaling 15,698
square feet on July 17, 1998 for $2,400,000 in cash resulting in a gain, net of
minority interest, of $300,000. Net sales proceeds were $2,182,000, after
deducting for closing costs and prorations of $218,000. We reinvested the net
proceeds in new apartment communities. The purchaser was unaffiliated with us,
and the transaction was negotiated at arms-length. The net book value of the
property was $1,715,000 at June 30, 1998. We paid Roberts Properties $92,500 for
consulting fees in connection with the sale. The retail centers together
composed less than 1% of our assets and generated less than 2% of our gross
revenues for 1998.

         As noted in Part III, Item 13, Certain Relationships and Related
Transactions - Payments to the Roberts Companies - Pending Transactions with
Affiliates of Mr. Roberts, we intend to develop a 47,200 square foot retail
center near our Addison Place community.

ITEM 3.       LEGAL PROCEEDINGS.

         Neither Roberts Realty, the operating partnership, nor the communities
are presently subject to any material litigation nor, to our knowledge, is any
material litigation threatened against any of them. Routine litigation arising
in the ordinary course of business is not expected to result in any material
losses to us or the operating partnership.

ITEM 4.       SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

         No matter was submitted to a vote of security holders during the fourth
quarter of 2000.


                                       21
<PAGE>


                                     PART II

ITEM 5.       MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

         The common stock trades on the American Stock Exchange, or AMEX, under
the symbol "RPI." The following table sets forth the quarterly high and low
closing sales prices per share reported on the AMEX, as well as the quarterly
dividends declared per share:

                                                                     Dividends
                     Quarter Ended           High         Low         Declared
                     -------------           ----         ---         --------
         2000
                     First Quarter           7.6875       6.5625     $0.1350
                     Second Quarter          7.1250       6.5625      0.3850*
                     Third Quarter           7.7500       7.1250      0.1100
                     Fourth Quarter          7.9375       7.6875      0.1100
         1999

                     First Quarter          $7.6250      $7.1250     $0.1500
                     Second Quarter          7.7500       7.2500      0.1500
                     Third Quarter           8.5000       7.5000      0.6500**
                     Fourth Quarter          7.8125       7.3125      0.1350

         * Includes a special dividend of $0.25 per share.
        ** Includes a special dividend of $0.50 per share.

         On March 23, 2001 there were approximately 479 holders of record of the
common stock.

         As of March 23, 2001, we had 4,846,228 shares outstanding. In addition,
2,381,728 shares are reserved for issuance to unitholders from time to time upon
their exercise of redemption rights as explained in Part I, Item 1, Description
of Business - The Operating Partnership. There is no established public trading
market for the units. As of March 1, 2001, the operating partnership had 281
unitholders of record.

         We depend upon distributions from the operating partnership to fund our
distributions to shareholders. Distributions by the operating partnership, and
thus distributions by us, will continue to be at the discretion of the board of
directors and will be equal in amount for each unit and share. We and the
operating partnership declared quarterly distributions for 1999 that totaled
$1.085 per share/unit per annum, including a special distribution of $0.50 per
share/unit in August 1999 as a result of the sale of our Bentley Place
community. We and the operating partnership declared quarterly distributions for
2000 that totaled $0.7400 per share/unit per annum, including a special
distribution of $0.25 per share/unit in June 2000 as a result of the sale of our
Ivey Brook community. Approximately 23.85% of those 2000 distributions
represented ordinary income, 57.14% represented capital gain, and the remaining
19.01% represented a return of capital.

         We elected to become a REIT beginning with the partial year ended
December 31, 1994. To maintain our qualification as a REIT under the Internal
Revenue Code, we must make annual distributions to shareholders of at least 95%
of our taxable income, which does not include net capital gains. Under some
circumstances, we may be required to make distributions in excess of cash
available for distribution to meet those distribution requirements.

         During the fourth quarter of 2000, we issued a total of 5,745 shares of
restricted common stock to seven employees as incentive compensation. The
restrictions on transfer lapse at specified dates ranging between three and four
years after the respective grant date. The grants were exempt from registration
as private placements under section 4(2) of the Securities Act. We affixed
appropriate legends to the share certificates we issued in these transactions.
All recipients of these securities had adequate access, through their
relationships with us, to information about us. All of these securities are
deemed to be restricted securities for purposes of the Securities Act.

                                       22
<PAGE>
<TABLE>
<CAPTION>



ITEM 6.  SELECTED FINANCIAL DATA.

OPERATING DATA:

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

------------------------------------------------------------------------------------------------------------------------------------
                                                                                           YEARS ENDED DECEMBER 31,
                                                                     2000          1999           1998       1997          1996
                                                                     ----          ----           ----       ----          ----
OPERATING DATA:
--------------
Revenues:
<S>                                                              <C>          <C>            <C>        <C>          <C>
Rental operations                                                    $18,768      $ 18,163       $ 16,521   $ 16,831     $  14,651
Other operating income                                                 1,410         1,221            833        741           546
                                                                     -------       -------       --------    -------      --------

Total revenues                                                        20,178        19,384         17,354     17,572        15,197
                                                                     -------       -------       --------    -------      --------

Expenses:
Property operating and maintenance expense (exclusive of
depreciation and amortization) (1)                                     6,759         6,688          6,192      5,504         5,091
Depreciation of real estate assets                                     5,463         5,529          5,017      5,708         4,974
Management fees to related party (2)                                       0             0              0        211           760
Interest expense                                                       4,951         5,244          4,555      4,670         3,724
Interest income                                                         (214)         (159)          (384)      (395)         (353)
Amortization of deferred financing costs                                 209           219            139        122           141
Other amortization expense                                                 0            11             52         65            67
General and administrative                                             2,197         1,964          1,727      1,714           926
Acquisition of Roberts Properties Management, LLC (3)                      0             0              0      5,900             0
Loss on disposal of assets                                                83            81             94        156             0
                                                                     -------       -------       --------    -------      --------

Total expenses                                                        19,448        19,577         17,392     23,655        15,330
                                                                     -------       -------       --------    -------      --------

INCOME  (LOSS) BEFORE MINORITY INTEREST, GAINS ON SALE OF
REAL ESTATE ASSETS, AND EXTRAORDINARY ITEMS                              730          (193)           (38)    (6,083)         (133)
MINORITY INTEREST OF UNITHOLDERS
IN THE OPERATING PARTNERSHIP                                            (246)           70             15      2,646            52
                                                                     --------      -------       --------    -------      --------

INCOME  (LOSS) BEFORE GAINS ON SALE OF REAL ESTATE
ASSETS AND EXTRAORDINARY ITEMS                                           484          (123)           (23)    (3,437)          (81)
GAINS ON SALE OF REAL ESTATE ASSETS, net of minority interest
of unitholders in the operating partnership                            2,416         1,023          1,218      1,012             0
                                                                     -------       -------       --------    -------      --------

INCOME (LOSS) BEFORE EXTRAORDINARY ITEMS                               2,900           900          1,195     (2,425)          (81)
EXTRAORDINARY ITEMS, loss on early extinguishments of debt, net
of minority interest of unitholders in the operating partnership(4)      (68)         (184)          (487)      (184)          (99)
                                                                     --------      -------       --------    -------      --------

Net income (loss)                                                     $2,832       $   716       $    708    $(2,609)     $   (180)
                                                                      ======        ======       =========    ======      ========

INCOME (LOSS) PER COMMON SHARE - BASIC AND DILUTED:
Income (loss) before extraordinary items                               $0.59       $  0.19       $    0.26   $ (0.58)     $  (0.02)

Extraordinary items                                                    (0.01)        (0.04)          (0.11)    (0.04)        (0.03)
                                                                       ------       ------        --------   -------       -------
Net income (loss)                                                      $0.58       $  0.15        $   0.15   $ (0.62)     $  (0.05)
                                                                       =====       =======        ========   =======      ========

Dividends declared (5)                                               $0.7400       $1.0850        $ 0.5775   $0.5760      $ 0.4813
                                                                     =======       =======        ========   =======      ========



                                       23
<PAGE>
                                                                                                    DECEMBER 31,
                                                                        2000          1999           1998       1997          1996
                                                                        ----          ----           ----       ----          ----
   BALANCE SHEET DATA:
   ------------------
     Real estate assets, before accumulated depreciation           $123,680     $ 128,898      $ 122,830   $111,778   $   110,800

     Real estate assets, net of accumulated depreciation             99,619       107,869        105,916     98,337       101,885
     Total assets                                                   131,529       127,078        125,090    118,350       116,815
     Total debt                                                      93,690        88,850         79,973     67,951        63,342
     Minority interest of unitholders in the operating partnership   10,607        12,013         15,579     18,861        19,322
     Shareholders' equity                                            21,437        22,310         26,526     26,697        29,226

</TABLE>

<TABLE>
<CAPTION>
   OTHER DATA:
   ----------
 <S>                                                        <C>             <C>            <C>             <C>        <C>
  Cash flow provided from (used in):
       Operating activities                                       $   6,485     $   5,917      $   5,295   $  5,469     $   5,567

       Investing activities                                          (4,896)       (7,003)       (18,235)    (1,537)      (16,309)
       Financing activities                                          (1,767)       (1,347)         9,929         23        12,500
                                                                     -------    ---------      ---------   --------     ---------
     Net increase (decrease) in cash and cash equivalents              (178)       (2,433)        (3,011)     3,955         1,758
     Cash and cash equivalents, beginning of year                     1,673         4,106          7,117      3,162         1,404
     Cash and cash equivalents, end of year                           1,495         1,673          4,106      7,117         3,162

     Funds from operations (6)                                    $   6,276     $   5,417      $   5,114   $  5,746    $    4,908

     Weighted average common shares outstanding - basic           4,881,601     4,737,008      4,638,265  4,187,013     3,799,567
     Weighted average common shares outstanding - diluted         7,367,068     7,448,757      7,547,978  7,404,323     6,244,513

     Total stabilized communities (at end of year)                        8             9              9          9             9
     Total stabilized apartments (at end of year)                     1,633         1,779          1,778      1,756         1,731
     Average physical occupancy (stabilized communities) (7)           95.9%         93.7%          96.3%      95.4%         97.2%
</TABLE>
     (1)     Property operating expenses include personnel, utilities, real
             estate taxes, insurance, maintenance, landscaping, marketing, and
             property administration expenses (real estate taxes include an
             adjustment of $588,000 in 1997 to reduce estimated property tax
             accruals for two properties that received favorable tax
             assessments).

     (2)     Because we acquired Roberts Properties Management, LLC on April 1,
             1997, we paid no management fees to a related party after April 1,
             1997; however, we incurred additional general and administrative
             expenses as a result of managing our properties internally.

     (3)     On April 1, 1997, we acquired Roberts Management, the property
             management company that managed our multifamily apartment
             communities since our inception. The operating partnership issued
             590,000 units valued at $10.00 per unit or $5,900,000 to purchase
             Roberts Management. We manage our own properties using Roberts
             Management's property management systems and the property
             management personnel formerly employed by Roberts Management.
             Although we no longer pay 5% of gross property revenues to Roberts
             Management for property management services, we do bear the actual
             overhead cost of managing the properties internally. Because
             Roberts Management, a related party, managed only properties we
             owned, the transaction was accounted for as the settlement of a
             contract and expensed for the year ended December 31, 1997.

     (4)     The extraordinary items resulted from costs associated with the
             early extinguishment of indebtedness. The extraordinary items have
             been reduced by the portion related to the minority interest of the
             unitholders.

     (5)     We began paying dividends and distributions on our common stock and
             units beginning on April 15, 1996.

     (6)     Funds from Operations, or FFO, is defined by the National
             Association of Real Estate Investment Trusts as net income (loss),
             computed in accordance with generally accepted accounting
             principles, excluding gains (or losses) from debt restructuring and
             sales of property and non-recurring items, plus real estate related
             depreciation and amortization. We use the current NAREIT definition
             of FFO. Effective January 1, 2000, NAREIT amended its definition of
             FFO to include all non-recurring items, except those defined as
             extraordinary items under GAAP and gains and losses from sales of
             depreciable operating property. We consider FFO to be an important
             measure of our operating performance; however, FFO does not
             represent amounts available for management's discretionary use for
             payment of capital replacement or expansion, debt service
             obligations, property acquisitions, development and distributions,
             or other commitments and uncertainties. FFO should not be
             considered as an alternative to net income (determined in
             accordance with GAAP) as an indication of our financial performance
             or cash flows from operating activities (determined in accordance
             with GAAP) as a measure of our liquidity, nor is it indicative of
             funds available to fund our cash needs, including our ability to
             make distributions. We consider FFO to be an important measure of
             our operating performance. While FFO does not represent cash flows
             from operating, investing or financing activities as defined by
             GAAP, FFO does provide investors with additional information with
             which to evaluate the ability of a REIT to pay dividends, meet
             required debt service payments and fund capital expenditures. We
             believe that to gain a clear understanding of our operating
             results, FFO should be evaluated in conjunction with net income
             (determined in accordance with GAAP). FFO represents funds from
             operations available for shareholders and unitholders. We did not
             use the current NAREIT definition of FFO to compute the 1997
             figure. The 1997 figure was calculated using the old NAREIT
             definition of FFO which excluded non-recurring items.

(7)          Represents the average physical occupancy of the stabilized
             communities calculated by dividing the total number of vacant days
             by the total possible number of vacant days for each period and
             subtracting the resulting number from 100%.
                                       24
<PAGE>


ITEM 7.       MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
              RESULTS OF OPERATION.

         This report contains "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. These statements relate to future economic performance,
plans and objectives of management for future operations and projections of
revenues and other financial items that are based on the beliefs of our
management, as well as assumptions made by, and information currently available
to, our management. The words "expect," "estimate," "anticipate," "believe" and
similar expressions are intended to identify forward-looking statements. Those
statements involve risks, uncertainties and assumptions, including industry and
economic conditions, competition and other factors discussed in this and our
other filings with the SEC. If one or more of these risks or uncertainties
materialize or underlying assumptions prove incorrect, actual outcomes may vary
materially from those indicated. See "Disclosure Regarding Forward-Looking
Statements" at the end of this Item for a description of some of the important
factors that may affect actual outcomes.

OVERVIEW

         We own multifamily residential properties as a self-administered and
self-managed equity real estate investment trust. At December 31, 2000, we owned
eight completed and stabilized multifamily apartment communities, consisting of
1,633 apartment homes.

         As part of our business plan and growth strategy, we sold our 117-unit
Bentley Place community in August 1999 and our 232-unit Windsong community in
January 1998. Our decision to sell these two communities was based on their age
and locations in markets that are not included in our long-term growth strategy.
In July 1998, we sold our two small retail centers because we decided to exit
all businesses not related to the long-term ownership of high quality apartment
homes. We sold our 146-unit Ivey Brook community in June 2000 and our 152-unit
Rosewood Plantation community in January 2001. Our decision to sell these two
communities was based on their small size and our decision to redeploy the net
cash proceeds into new properties where we expect the yield and long-term growth
to be greater.

         In June 1998, we used the equity from the sale of Windsong and cash to
purchase three separate parcels of land for $11.3 million. We are developing and
building three new multifamily communities totaling 854 apartment homes, which
will increase the size of our portfolio 58% from 1,481 to 2,335 apartment homes.
One of our communities under construction is located in Charlotte, North
Carolina, and is the first step in our diversification strategy. The other two
communities are located in north Atlanta. We began construction of the 285-unit
second phase of Addison Place Phase II during the third quarter of 1999, and we
commenced construction of a 250-unit apartment home community located in north
Atlanta during the July 2000.

RESULTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2000, 1999, AND 1998

         For the year ended December 31, 2000, we recorded net income of
$2,832,000 or $0.58 per share compared to net income of $716,000 or $0.15 per
share for the year ended December 31, 1999 and net income of $708,000 or $0.15
per share for the year ended December 31, 1998. The $2,116,000 increase in net
income from $716,000 in 1999 to $2,832,000 in 2000 is due primarily to the
following:

         (a)      Addison Place Phase I becoming stabilized on July 1, 2000;

         (b)      a $161,000 increase in water revenue from $357,000 in 1999 to
                  $518,000 in 2000;

         (c)      lower interest expense as a result of a decrease in total debt
                  due to the sale of Ivey Brook and an increase in construction
                  period interest due to having more properties under
                  construction in 2000 than in 1999;

                                       25
<PAGE>


         (d)      the increase in the gain on sale of real estate assets due to
                  the sale of Ivey Brook in June 2000 compared to the gain on
                  the sale of Bentley Place in August 1999; and

         (e)      the increase in average stabilized occupancy from 93.7% in
                  1999 to 95.9% in 2000;

                  offset by:

         (f)      higher general and administrative costs; and

         (g)      a  $135,000 increase in personnel costs from $1,785,000 in
                  1999 to $1,920,000 in 2000.

The $8,000 increase in net income from $708,000 in 1998 to $716,000 in 1999 is
due primarily to the following:

         (a)      the start of leasing operations at Addison Place Phase I in
                  April 1999;

         (b)      the completion of the initial lease-up phase at Bradford Creek
                  in August 1998 and the second phases of Preston Oaks in July
                  1998 and Plantation Trace in November 1998; and

         (c)      a $307,000 increase in water revenue from $50,000 in 1998 to
                  $357,000 in 1999;

                  offset by:

         (d)      higher interest expense due to:

                  o  the permanent financing of Bradford Creek in June 1998;

                  o  the refinancing of Rosewood Plantation for a higher loan
                     amount in June 1998;

                  o  the refinancing of Plantation Trace for a higher loan
                     amount in September 1998;

                  o  the refinancing of Crestmark for a higher loan amount in
                     September 1998;

                  o  construction loan interest on Addison Place Phase I in 1999
                     1999; and

                  o  the permanent financing of Addison Place Phase I in October
                     1999;

          (e)      higher general and administrative costs;

          (f)      increased depreciation expense; and

          (g)      the decline in average stabilized occupancy from 96.3% in
                   1998 to 93.7% in 1999.

Our operating performance for all communities is summarized in the following
table:
<TABLE>
<CAPTION>

                                                   YEAR ENDED DECEMBER 31,             YEAR ENDED DECEMBER 31,
                                                   ----------------------              ----------------------
(dollars in thousands)
                                                                       %                                    %
                                                 2000       1999     CHANGE           1999       1998     CHANGE
                                                 ----       ----     ------           ----       ----     ------
<S>                                       <C>      <C>             <C>       <C>        <C>            <C>
   Total operating revenues                 $  20,178  $  19,384       4.1%      $  19,384  $  17,354      11.7%
   Property operating expenses (1)          $   6,759  $   6,688       1.1%      $   6,688  $   6,192       8.0%
   General and administrative expenses      $   2,197  $   1,964      11.9%      $   1,964  $   1,727      13.7%
   Net operating income (2)                 $  13,419  $  12,696       5.7%      $  12,696  $  11,162      13.7%
   Depreciation of real estate assets       $   5,463  $   5,529      (1.2)%     $   5,529  $   5,017      10.2%
   Average stabilized occupancy (3)             95.9%      93.7%       2.2%          93.7%      96.3%      (2.6)%
   Operating expense ratio (4)                  33.5%      34.5%      (1.0)%         34.5%      35.7%      (1.2)%

   (footnotes begin on following page)
</TABLE>

                                       26
<PAGE>

(1)        Property operating expenses include personnel, utilities, real estate
           taxes, insurance, maintenance, landscaping, marketing, and property
           administration expenses.
(2)        Net operating income is equal to total operating revenues minus
           property operating expenses.
(3)        Represents the average physical occupancy of our stabilized
           properties calculated by dividing the total number of vacant days by
           the total possible number of vacant days for each period and
           subtracting the resulting number from 100%. The calculation includes
           the following: (a) the second phase of Preston Oaks beginning August
           1, 1998, Bradford Creek beginning September 1, 1998, and the second
           phase of Plantation Trace beginning December 1, 1998, which are the
           dates each community achieved stabilized occupancy; (b) Windsong only
           through January 9, 1998, which is the date the property was sold, (c)
           Ivey Brook only through June 23, 2000, which is the date the property
           was sold; and (d) Bentley Place only through August 23, 1999, which
           is the date the property was sold.
(4)        Represents the total of property operating expenses divided by
           property operating  revenues,  expressed as a percentage.

         Our 2000 same-property operating performance, when compared to 1999,
includes a 7.1% increase in operating revenues, an 8.8% increase in net
operating income, a 1.4% increase in average occupancy from 94.4% to 95.8%, and
a 2.8% decline in our lease renewal percentage. Same-property results for the
seven communities that were fully stabilized during both years ended December
31, 2000 and 1999 (Crestmark, Bradford Creek, Highland Park, River Oaks,
Rosewood Plantation, and the first phases of Plantation Trace and Preston Oaks)
are summarized in the table below.

         Our 1999 same-property operating performance, when compared to 1998,
included a 4.2% increase in operating revenues, a 5.6% increase in net operating
income, a 0.6% decrease in average occupancy from 94.9% to 95.5%, and a 3.6%
decrease in our lease renewal percentage. Same-property results for the seven
communities that were fully stabilized during both years ended December 31, 1999
and 1998 (Bentley Place, Highland Park, River Oaks, Rosewood Plantation, and the
first phases of Crestmark, Plantation Trace, and Preston Oaks) are summarized in
the following table:
<TABLE>
<CAPTION>

                                                    YEAR ENDED DECEMBER 31,             YEAR ENDED DECEMBER 31,
                                                    -----------------------             -----------------------
    (dollars in thousands)                                              %                                    %
                                                  2000       1999     CHANGE           1999       1998     CHANGE
                                                  ----       ----     ------           ----       ----     ------
<S>                                          <C>        <C>             <C>       <C>        <C>             <C>
   Rental income                             $  16,406  $  15,450       6.2%      $  14,441  $  14,149       2.1%
   Total operating revenues                  $  17,621  $  16,450       7.1%      $  15,402  $  14,785       4.2%
   Property operating expenses (1)           $   5,760  $   5,548       3.8%      $   5,255  $   5,180       1.4%
   Net operating income (2)                  $  11,861  $  10,902       8.8%      $  10,147  $   9,605       5.6%
   Average stabilized occupancy (3)              95.8%      94.4%       1.4%          94.9%      95.5%      (0.6)%
   Operating expense ratio (4)                   32.7%      33.7%      (1.0)%         34.1%      35.0%      (0.9)%
   Average monthly rent per apartment home   $     959  $     922       4.0%      $     920  $     895       2.8%
   Lease renewal percentage (5)                  53.6%      56.4%      (2.8)%         55.7%      59.3%      (3.6)%
</TABLE>

(1)        Property operating expenses include personnel, utilities, real estate
           taxes, insurance, maintenance, landscaping, marketing, and property
           administration expenses.
(2)        Net operating income is equal to total operating revenues minus
           property operating expenses.
(3)        Represents the average physical occupancy of the stabilized
           communities calculated by dividing the total number of vacant days by
           the total possible number of vacant days for each period and
           subtracting the resulting number from 100%.
(4)        Represents the total of property  operating  expenses divided by
           property  operating revenues expressed as a percentage.
(5)        Represents the number of leases renewed divided by the number of
           leases expired during the period presented, expressed as a
           percentage.


                                       27
<PAGE>

         The following discussion compares our statements of operations for the
years ended December 31, 2000, 1999 and 1998.

         Property operating revenue increased $794,000 or 4.1% from $19,384,000
for the year ended December 31, 1999 to $20,178,000 for the year ended December
31, 2000. The increase in operating revenue is due primarily to the following:

         (a)      the stabilization of Addison Place Phase I;

         (b)      a 2.2% increase in the average stabilized occupancy rate;

         (c)      a $161,000 increase in water revenue from $357,000 in 1999 to
                  $518,000 in 2000; and

         (d)      a $1,171,000 or 7.1% increase in same-property operating
                  revenue;

                  offset by:

         (e)      the sale of Ivey Brook in 2000 compared to the sale of Bentley
                  Place in 1999.

         Property operating revenue increased $2,030,000 or 11.7% from
$17,354,000 for the year ended December 31, 1998 to $19,384,000 for the year
ended December 31, 1999. The increase in operating revenue is due primarily to
the following:

         (a)      the start of leasing operations at Addison Place Phase I in
                  April 1999;

         (b)      the completion of the initial lease-up phase at Bradford Creek
                  in August 1998 and the second phases of Preston Oaks in July
                  1998 and Plantation Trace in November 1998;

         (c)      a $617,000 or 4.2% increase in same-property operating
                  revenue; and

         (d)      a $307,000 increase in water revenue from $50,000 in 1998 to
                  $357,000 in 1999, with $255,000 of the $307,000 increase being
                  attributable to the seven properties that were stabilized
                  during both 1998 and 1999;

                  offset by:

         (e)      the sale of the two retail centers in 1998 compared to the
                  sale of Bentley Place in 1999; and

         (f)      decreased average physical occupancy from 96.3% in 1998 to
                  93.7% in 1999.

         During 1998, we implemented a program to bill residents for their
individual water consumption. We completed the installation of water-metering
equipment in the fourth quarter of 1998 at a total cost of $377,000. Water
revenues were $518,000 during 2000, $357,000 during 1999 and $50,000 during
1998. We expect to install water-metering equipment in all new apartment homes
we develop.

         Property operating expenses (excluding depreciation and general and
administrative expenses) increased $71,000 or 1.1% from $6,688,000 for the year
ended December 31, 1999 to $6,759,000 for the year ended December 31, 2000. The
increase in property operating expenses is due primarily to the following:

         (a)      Addison Place Phase I operating for 12 months in 2000 while
                  operating only 9 months in 1999; and

         (b)      same property operating expenses increasing 3.8% or $212,000
                  from $5,548,000 in 1999 to $5,760,000 in 2000;

                                       28
<PAGE>
                  offset by the sales of Ivey Brook in 2000 and Bentley Place in
                  1999.

         Property operating expenses (excluding depreciation and general and
administrative expenses) increased $496,000 or 8.0% from $6,192,000 for the year
ended December 31, 1998 to $6,688,000 for the year ended December 31, 1999. The
increase in property operating expenses is due primarily to the following:

         (a)      the start of leasing operations at Addison Place Phase I in
                  April 1999;

         (b)      the completion of the initial lease-up phase at Bradford Creek
                  in August 1998 and the second phases of Preston Oaks in July
                  1998 and Plantation Trace in November 1998; and

         (c)      a $75,000, or 1.4% increase in same-property operating
                  expenses;

                  offset by the sales of Bentley Place in 1999 and the two
                  retail centers in 1998.

         General and administrative expenses increased $233,000 or 11.9% from
$1,964,000 for the year ended December 31, 1999 to $2,197,000 for the year ended
December 31, 2000 and include legal accounting and tax fees, marketing and
printing fees, salaries, director fees and other costs. This increase is due
primarily to increased legal costs and incentive based employee trips. General
and administrative expenses as a percentage of operating revenues increased from
10.1% for the year ended December 31, 1999 to 10.9% for the year ended December
31, 2000.

         General and administrative expenses increased $237,000 or 13.7% from
$1,727,000 for the year ended December 31, 1998 to $1,964,000 for the year ended
December 31, 1999 and include legal, accounting and tax fees, marketing and
printing fees, salaries, director fees, and other costs. The increase is due
primarily to increased personnel costs including amortization of restricted
stock, accounting and tax fees related to the registration statement we filed
with the SEC that became effective in August 1999, expenses of SEC and other
shareholder reports, marketing, and directors fees. General and administrative
expenses as a percentage of operating revenues increased from 10.0% for the year
ended December 31, 1998 to 10.1% for the year ended December 31, 1999.

         Depreciation expense decreased $66,000 or 1.2% from $5,529,000 for the
year ended December 31, 1999 to $5,463,000 for the year ended December 31, 2000.
This decrease is due primarily due to the sales of Ivey Brook in 2000 and
Bentley Place in 1999.

         Depreciation expense increased $512,000 or 10.2% from $5,017,000 for
the year ended December 31, 1998 to $5,529,000 for the year ended December 31,
1999. The increase is due primarily to the completion of construction of
Bradford Creek and the second phases of Preston Oaks and Plantation Trace in
1998 and the completion of construction of the first phase of Addison Place in
1999, offset by the sale of the two retail centers in 1998 and the sale of
Bentley Place in 1999.

         Interest expense decreased $293,000 or 5.6% from $5,244,000 for the
year ended December 31, 1999 to $4,951,000 for the year ended December 31, 2000.
This decrease is due primarily to a decrease in total debt due to the sale of
Ivey Brook and an increase in construction period interest as a result of having
more properties under construction in 2000 than in 1999.

         Interest expense increased $689,000 or 15.1% from $4,555,000 for the
year ended December 31, 1998 to $5,244,000 for the year ended December 31, 1999.
The increase is due primarily to:

         (a)      the financing of Bradford Creek in June 1998 and the first
                  phase of Addison Place in October 1999;

         (b)      the refinancing of the mortgage loan secured by the Rosewood
                  Plantation community in June 1998 for a higher loan amount;
                  and


                                       29
<PAGE>


         (c)      the refinancing of the mortgage loans secured by the
                  Plantation Trace and Crestmark communities in September 1998,
                  each for higher loan amounts, offset by the mortgage note that
                  we repaid when we sold Bentley Place in 1999.

         On January 9, 1998, we completed the sale of the Windsong community for
$9,750,000 in cash resulting in a gain, net of minority interest, of $918,000 on
the sale of real estate assets. Net sales proceeds were $5,194,000 after
deduction for loan repayment of $3,959,000, closing costs of $458,000, and
prorations of $139,000. We paid Roberts Properties a consulting fee of $288,000
at closing. We reinvested the net cash proceeds from the sale of Windsong in
undeveloped land in June 1998 as part of a Section 1031 tax-deferred exchange.

         On July 17, 1998, we completed the sale of two retail centers for
$2,400,000 in cash resulting in a gain, net of minority interest, of $300,000.
Net sales proceeds were $2,182,000, after deducting for closing costs of
$183,000 and prorations of $35,000. We paid Roberts Properties a consulting fee
of $92,500 at closing.

         On August 23, 1999, we sold the Bentley Place community for $8,273,000
in cash resulting in a gain, net of minority interest, of $1,023,000. Net sales
proceeds were $3,726,000 after deduction for loan repayment, including
prepayment fee, of $4,166,000, and closing costs, accrued interest, and
prorations totaling $381,000. Partnership profits interests of $242,000 were
paid to Roberts Properties under the amended partnership agreement of the
operating partnership. We used the remaining net sales proceeds of $3,484,000 to
fund a special distribution to shareholders and unitholders on August 30, 1999.
Unamortized loan cost of $93,000 and a prepayment fee of $198,000 payable at
closing were charged to expense as an extraordinary item. The extraordinary item
(early extinguishment of debt) for the year ended December 31, 1999 was $291,000
(including the minority interests' share of $107,000).

         On June 23, 2000, we sold the Ivey Brook community for $14,550,000 in
cash resulting in a gain, net of minority interest, of $2,285,000. Net sales
proceeds were $8,097,000 after deduction for the loan assumed by the buyer of
$6,190,000, and closing costs and accrued interest, totaling $263,000.
Partnership profits interests of $726,000 were paid to Roberts Properties under
the amended partnership agreement of the operating partnership. We used the
remaining net proceeds of $7,371,000 to fund a special distribution to
shareholders and unitholders on July 27, 2000 and to fund construction projects.
Unamortized loan costs of $103,000 were charged to expense as an extraordinary
item, including the minority interests' share of $35,000. In addition, during
the fourth quarter of 2000, the Company received $198,000 from a settlement
relating to the sale of Bentley Place which was recorded as an additional gain
(before minority intersts of $67,000).

         On January 4, 2001, we sold our 152-unit Rosewood Plantation community
for $14,800,000. The sale resulted in a gain of $5,188,000, net of minority
interest of unitholders in the operating partnership. We acquired the community
in October 1994. Net sale proceeds were $5,789,000 after deduction for loan
repayment of $7,875,000, profits interests of $740,000 paid to Roberts
Properties, and closing costs and prorations of $396,000.

         We refinanced the mortgage notes payable secured by the Rosewood
Plantation and Crestmark communities in June and September 1998, respectively,
before their contractual maturity. We charged the yield maintenance fee and the
unamortized loan costs related to the mortgage notes payable at the time of the
refinancing to expense as an extraordinary item. The extraordinary item (early
extinguishment of debt), including the extraordinary gain of $110,000 on the
buyer's assumption of debt related to the sale of Windsong, for the year ended
December 31, 1998 was $792,000 (including the minority interests' share of
$305,000).


                                       30

<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

         COMPARISON OF YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998. Cash and
cash equivalents decreased $178,000 from $1,673,000 as of December 31, 1999 to
$1,495,000 as of December 31, 2000. The decrease was due to an increase in cash
used by financing activities, offset by a decrease in cash used in investing
activities and an increase in cash provided by operating activities. Cash and
cash equivalents decreased $2,433,000 from $4,106,000 as of December 31, 1998 to
$1,673,000 as of December 31, 1999. The decrease was due to a decrease in cash
used in investing activities and an increase in cash provided by operating
activities, offset by an increase in cash used in financing activities.

         A primary source of liquidity for us is cash flow from operations.
Operating cash flows have historically been determined by the number of
apartment homes, rental rates, and operating expenses with respect to those
apartment homes. Net cash provided by operations increased $568,000 from
$5,917,000 during 1999 to $6,485,000 during 2000. The increase in cash flow from
operations is due primarily to additional cash flow from the communities leased
up in 1999 and the stabilization of the first phase of Addison Place in 2000,
offset by the sale of Ivey Brook in 2000. Net cash provided by operating
activities increased $622,000 from $5,295,000 during 1998 to $5,917,000 during
1999. The increase in cash flow from operations is due primarily to additional
cash flow from the communities leased-up in 1998 and the commencement of leasing
operations at the first phase of Addison Place in 1999, offset by the sales of
the two retail centers in 1998 and Bentley Place in 1999.

         Net cash used in investing activities increased $4,562,000 from
$7,003,000 during 1999 to $11,565,000 during 2000. This increase is due
primarily to the following:

         (a)      proceeds of $7,569,000 from the sale of Ivey Brook and from a
                  settlement relating to the sale of Bentley Place in 2000
                  compared to proceeds of $7,918,000 in 1999 from the sale of
                  Bentley Place; and

         (b)      construction and development costs of $17,496,000 in 2000
                  related to the first and second phases of Addison Place, Old
                  Norcross and Ballantyne, compared to construction and
                  development costs of $13,971,000 in 1999 related to Bradford
                  Creek, the first and second phases of Addison Place, and the
                  second phase of Plantation Trace.

         Net cash used in investing activities decreased $11,232,000 from
$18,235,000 during 1998 to $7,003,000 during 1999. This decrease is due
primarily to the following:

         (a)      the purchase of three separate parcels of land for $11,359,000
                  in 1998; and

         (b)      construction costs of $12,915,000 in 1999 related to the first
                  and second phases of Addison Place, Bradford Creek, and the
                  second phase of Plantation Trace, compared to construction
                  costs of $13,913,000 in 1998 related to Bradford Creek, the
                  second phases of Preston Oaks and Plantation Trace, and the
                  first phase of Addison Place;

                  offset by:

         (c)      proceeds of $7,918,000 from the sale of Bentley Place in 1999
                  compared to proceeds of $7,521,000 in 1998 in from the sales
                  of Windsong and the two retail centers.

         Net cash provided by financing activities increased $6,249,000 from net
cash used in financing activities of $1,347,000 during 1999 to net cash provided
by financing activities of $4,902,000 during 2000. This increase is due
primarily to the following:

         (a)      proceeds from the construction loan on the second phase of
                  Addison Place of $14,152,000;


                                       31
<PAGE>


         (b)      a decrease of $2,501,000 in distributions and dividends paid
                  from $8,148,000 in 1999 to $5,647,000 during 2000; and

         (c)      proceeds of $2,000,000 from the land loan secured by our Old
                  Norcross property;

                  offset by:

         (d)      the payoff of the Addison Place land loan of $3,000,000 from
                  the proceeds of the construction loan on the second phase of
                  Addison Place; and

         (e)      the payoff of the line of credit balance of $2,000,000.

         Net cash provided by (used in) financing activities decreased
$11,276,000 from $9,929,000 of net cash provided in 1998 to $1,347,000 of net
cash used during 1999. This decrease is due primarily to the following:

         (a)      the closing of a $9,500,000 loan in October 1999 on Addison
                  Place Phase I with a fixed interest rate of 6.95% per annum
                  and a term of ten years, which provided net cash proceeds of
                  $1,321,000 after paying off the construction loan ($8,019,000)
                  and accrued interest ($38,000); the $1,321,000 net proceeds
                  will be used to pay the balance of construction costs; the
                  lender required us to obtain a letter of credit in the amount
                  of $843,000 until the property obtains 95% physical occupancy
                  (at December 31, 1999, the physical occupancy of the property
                  was 55.9%);

         (b)      the closing of a $3,000,000 land loan secured by Addison Place
                  Phase II with a variable interest rate of LIBOR plus 150 basis
                  points, a one-year term, which provided net cash proceeds of
                  $2,977,000; the proceeds will be used to fund the initial
                  construction of the second phase of Addison Place; and

         (c)      net borrowings of $1,235,000 from the $2,000,000 line of
                  credit;

                  offset by:

         (d)      the closing of an $8,400,000 loan in June 1998 on Bradford
                  Creek with a fixed interest rate of 7.15% per annum and a term
                  of ten years, which provided net cash proceeds of $8,282,000;

         (e)      the refinancing of a $6,317,000 loan on Rosewood Plantation in
                  June 1998 for $8,100,000 with a fixed interest rate of 6.62%
                  per annum (compared with 7.38% per annum on the old loan), a
                  term of ten years, which provided net cash proceeds of
                  $1,474,000;

         (f)      the refinancing of a $7,686,000 loan on Plantation Trace in
                  September 1998 for $11,900,000 (which included the 50-unit
                  second phase of Plantation Trace), with a fixed interest rate
                  of 7.09% per annum (compared with 7.75% per annum on the old
                  loan), a term of ten years, which provided net cash proceeds
                  of $3,092,000; an additional $150,000 was escrowed by lender
                  until completion of construction of the additional amenities,
                  which occurred during the second quarter of 1999;

         (g)      the refinancing of two loans totaling $13,520,000 on Crestmark
                  in September 1998; the new loan amount is $16,000,000 with a
                  fixed interest rate of 6.57% per annum (compared with 7.54%
                  per annum on the old loans), a term of ten years, and net cash
                  proceeds of $1,680,000; and

         (h)      an increase of $3,826,000 in dividends and distributions paid,
                  from $4,322,000 during 1998 to $8,148,000 during 1999.

                                       32
<PAGE>


         EXISTING DEBT STRUCTURE AS OF DECEMBER 31, 2001. The following facts
highlight our existing debt structure:

         (a)      each of our eight communities is financed with fixed-rate
                  debt;

         (b)      the average interest rate for all nine communities is 6.97%
                  per annum as of December 31, 2000;

         (c)      no debt is scheduled to mature before October 2002;

         (d)      the average term to maturity is six years; and

         (e)      debt principal will amortize at a rate of approximately
                  $1,000,000 per year.

         The following table summarizes the mortgage debt for each of our eight
communities:
<TABLE>
<CAPTION>
                                         FIXED INTEREST                             PRINCIPAL
                                           RATE AS OF                              OUTSTANDING
                                            12/31/00             MATURITY           12/31/00
                                          -------------          --------           -----------

<S>                                      <C>                <C>               <C>
         Addison Place Phase I                 6.95%              11/15/09       $    9,492,000
         Bradford Creek                        7.15%              06/15/08            8,181,000
         Crestmark                             6.57%              10/01/08           15,586,000
         Highland Park                         7.30%              02/15/03            7,740,000
         Plantation Trace                      7.09%              10/15/08           11,632,000
         Preston Oaks                          7.21%              10/15/02            8,198,000
         River Oaks                            7.15%              11/15/03            8,833,000
         Rosewood Plantation                   6.62%              07/15/08            7,876,000
                                                                                      ---------

                                                                                 $   77,538,000
</TABLE>
         Each of our existing mortgage loans will require balloon payments (in
addition to monthly principal amortization) coming due over the years 2002 to
2009 as summarized below:

                                2002            $    8,025,000
                                2003                16,057,000
                                2008                38,232,000
                                2009                 8,387,000
                                                     ---------

                               Total            $   70,701,000
                                                ==============

         We anticipate that we will repay only a small portion of the principal
of that indebtedness before maturity and that we will not have funds on hand
sufficient to repay that indebtedness at maturity. Therefore, it will be
necessary for us to refinance that debt through (a) debt financing
collateralized by mortgages on individual communities or groups of communities
and/or (b) equity offerings.

         On May 3, 2000, we closed on a $22,500,000 construction loan to fund
the construction of the second phase of Addison Place. The loan has a 5-year
term and bears an interest rate of LIBOR plus 150 basis points. When the loan
closed, we entered into an interest rate swap agreement that synthetically fixed
the interest rate at 8.62%. At December 31, 2000, $14,152,000 was drawn on the
loan.


                                       33
<PAGE>


         On February 1, 2000, we closed a $2,000,000 land loan to fund the
initial construction of the Old Norcross community. The loan is secured by the
Old Norcross land, has a 12-month term, and bears an interest rate of LIBOR plus
150 basis points. We renewed the loan in February 2001 for an additional six
month period. We plan to pay off the land loan with the proceeds of a
construction loan.

         The Company renewed a $2,000,000 revolving unsecured line of credit in
June 2000 to provide funds for short-term working capital purposes. The line of
credit has a one-year term and bears an interest rate of LIBOR plus 150 basis
points. There was no outstanding balance on the line of credit at December 31,
2000.

         On February 1, 2001, we refinanced the Preston Oaks mortgage note with
a new $12,700,000 loan having a seven-year term with a fixed interest rate of
7.18% payable in monthly installments of $86,034 based on a 30-year amortization
schedule.

         On February 27, 2001, we signed an exchange agreement with Real Estate
Exchange Services to acquire land previously owned by Roberts Properties Jones
Bridge, LLC., a non-owned affiliate. We loaned Real Estate Exchange Services
$3,514,000 to acquire the property and hold title until July 2, 2001. We intend
that on July 2, 2001, a qualified intermediary for federal income tax purposes
will purchase the property and then sell it to us to complete a Section 1031
tax-deferred exchange funded from the net proceeds from our sale of Rosewood
Plantation.

         We anticipate that each community's rental and other operating revenues
will be adequate to provide short-term (less than 12 months) liquidity for the
payment of direct rental operating expenses, interest and amortization of
principal on related mortgage notes payable and capital expenditures. We expect
to meet our other short-term liquidity requirements generally through our net
cash provided by operations, which we believe will be adequate to meet our
operating requirements in both the short term and in the long term (greater than
12 months). We also expect to fund improvements and renovations at existing
communities from property operations. We expect to meet our long-term liquidity
requirements, including future developments and debt maturities, from the
proceeds of construction and permanent loans.

HEDGING STRATEGY

         We generally enter into fixed rate debt instruments; however, in
certain situations, we may utilize derivative financial instruments in the form
of interest rate swaps to hedge interest rate exposure on variable debt. We do
not utilize such instruments for trading or speculative purposes.


STOCK REPURCHASE PLAN

         On September 3, 1998, we issued a press release announcing that our
board of directors had authorized the repurchase of up to 300,000 shares of our
outstanding common stock. We repurchased 152,588 shares in 2000 at a total cost
of $1,156,000; 121,200 shares in 1999 at a total cost of $909,000; and 19,300
shares in 1998 at a total cost of $145,000. In October 2000, we issued a press
release announcing that our board of directors had authorized the repurchase of
up to an additional 50,000 shares of our outstanding common stock. We intend to
repurchase our shares from time to time by means of open market purchases
depending on availability, our cash position, and price per share.

REDEMPTIONS OF UNITS FOR CASH

         During the years ended December 31, 1999, and 1998, a total of 3,917
and 14,341 units were redeemed for cash of $28,000 and $122,000, respectively,
from unitholders who resided outside the state of Georgia. We redeemed no units
for cash in the year ended December 31, 2000.

                                       34
<PAGE>


SUPPLEMENTAL DISCLOSURE OF FUNDS FROM OPERATIONS

         Funds from Operations, or FFO, is defined by the National Association
of Real Estate Investment Trusts as net income (loss), computed in accordance
with generally accepted accounting principles, excluding gains (or losses) from
debt restructuring and sales of property and non-recurring items, plus real
estate related depreciation and amortization. We compute FFO in accordance with
the current NAREIT definition, which may differ from the methodology for
calculating FFO utilized by other equity REITs and, accordingly, may not be
comparable to those other REITs. FFO does not represent amounts available for
management's discretionary use for payment of capital replacement or expansion,
debt service obligations, property acquisitions, development and distributions,
or other commitments and uncertainties. FFO should not be considered as an
alternative to net income (determined in accordance with GAAP) as an indication
of our financial performance or cash flows from operating activities (determined
in accordance with GAAP) as a measure of our liquidity, nor is it indicative of
funds available to fund our cash needs, including our ability to make
distributions. We consider FFO to be an important measure of our operating
performance. While FFO does not represent cash flows from operating, investing
or financing activities as defined by GAAP, FFO does provide investors with
additional information with which to evaluate the ability of a REIT to pay
dividends, meet required debt service payments and fund capital expenditures. We
believe that to gain a clear understanding of our operating results, FFO should
be evaluated in conjunction with net income (determined in accordance with
GAAP). FFO represents funds from operations available for shareholders and
unitholders. The following table reconciles net income to FFO (dollars in
thousands).
<TABLE>
<CAPTION>


                                                                               TWELVE MONTHS ENDED DECEMBER 31,
                                                                              -------------------------------------

                                                                            2000             1999              1998
                                                                            ----             ----              ----

<S>                                                                    <C>              <C>               <C>
Net income                                                             $   2,832        $     716         $     708
Minority interest of unitholders in the operating partnership                246              (70)              (15)
Extraordinary item                                                            68              184               487
Amortization (real estate related)                                             0                0                41
Loss on disposal of real estate - related assets                              83               81                94
Gain on sale of real estate assets                                        (2,416)          (1,023)           (1,218)
Depreciation expense                                                       5,463            5,529             5,017
                                                                       ---------        ---------         ---------
Funds From Operations                                                  $   6,276        $   5,417         $   5,114
                                                                       =========        =========         =========

Weighted average shares and units
         outstanding during the period                                 7,367,068        7,448,757         7,547,978
</TABLE>

NEW ACCOUNTING PRONOUNCEMENTS

         In June 1998, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 133 ("SFAS"), "Accounting for Derivative
Instruments and Hedging Activities." The effective date of this statement was
delayed by SFAS No. 137 and the statement was amended by SFAS No. 138. SFAS No.
133, as amended, requires us to recognize all derivatives on the balance sheet
at fair value. Because we have an interest rate swap that we designated as a
hedge of our exposure to changes in the LIBOR rate on our $22,500,000
construction loan, and the swap was deemed to be highly effective in hedging our
exposure, the adoption of SFAS No. 133, as amended, is not expected to have a
material impact on our results of operations, but it is expected to result in a
$842,000 decrease in shareholders' equity (accumulated other comprehensive
income) relating to the estimated fair value of the swap at January 1, 2001. We
have no other derivative instruments or hedging activities.

         The SEC issued Staff Accounting Bulletin No. 101 ("SAB 101"), Revenue
Recognition, which provides guidance on the recognition, presentation, and
disclosure of revenue in financial statements. SAB 101 was required to be
implemented in the fourth quarter of 2000. The adoption of SAB 101 did not have
any impact on our results of operations and our financial position.

                                       35
<PAGE>


INFLATION

         Substantially all apartment leases are for an initial term of not more
than 12 months and thus may enable us to seek increases in rents after the
expiration of each lease. The short-term nature of these leases serves to reduce
the risk to us of the adverse effects of inflation.

DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

         This report contains "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. These statements appear in a number of places in this
report and include all statements that are not historical facts. Some of the
forward-looking statements relate to our intent, belief, or expectations
regarding our strategies and plans for operations and growth, including
development and construction of new multifamily apartment communities in our
existing markets and elsewhere in the Southeast. Other forward-looking
statements relate to trends affecting our financial condition and results of
operations, and our anticipated capital needs and expenditures. These
forward-looking statements are not guarantees of future performance and involve
risks and uncertainties, and actual results may differ materially from those
that are anticipated in the forward-looking statements. These risks include the
following:

         o    Unfavorable changes in market and economic conditions in Atlanta
              and Charlotte could hurt our occupancy and rental rates.

         o    Increased competition in the Atlanta and Charlotte markets could
              limit our ability to lease our apartments homes or increase or
              maintain rents.

         o    Conflicts of interest inherent in business transactions between or
              among Roberts Realty and/or the operating partnership on one hand,
              and Mr. Roberts and/or his affiliates on the other hand, could
              result in our paying more for property or services than we would
              pay an independent seller or provider.

         o    Construction and lease-up risks inherent in our development of the
              Addison Place, Ballantyne and Old Norcross communities, and the
              other communities we may develop in the future could adversely
              affect our financial performance.

         o    We might not be able to obtain replacement financing to make
              balloon payments on our fixed-rate debt, or we might have to
              refinance our debt on less favorable terms.

         o    Because our organizational documents do not limit the amount of
              debt we may incur, we could increase the amount of our debt as a
              percentage of the estimated value of our properties.

         o    Our operations could be adversely affected if we lost key
              personnel, particularly Mr. Roberts.

         o    We could incur costs from environmental problems even though we
              did not cause, contribute to, or know about them.

         o    Compliance or failure to comply with the Americans with
              Disabilities Act and other similar laws could result in
              substantial costs.

      In addition, the market price of the common stock may from time to time
fluctuate widely as a result of, among other things:

         o    our operating results;
         o    the operating results of other REITs, particularly apartment
              REITs; and
         o    changes in the performance of the stock market in general.

      Investors should review the more detailed description of these and other
possible risks contained in the "Risk Factors" section of the prospectus
included in the S-3 Registration Statement we filed with the SEC on August 2,
1999.

                                       36
<PAGE>

ITEM 7A.      QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

      We are exposed to market risk from changes in interest rates, which may
adversely affect our financial position, results of operations and cash flows.
In seeking to minimize the risks from interest rate fluctuations, we manage
exposures through our regular operating and financing activities. In order to
reduce our interest rate risk, we entered into an interest rate swap agreement
to hedge exposure to the LIBOR rate for the construction loan. This agreement
synthetically fixed the interest rate at 8.62% (see Note 4 to the Consolidated
Financial Statements). We do not use financial instruments for trading or other
speculative purposes. We are exposed to interest rate risk primarily through our
borrowing activities, which are described in Note 4 to the Consolidated
Financial Statements. All of our long-term borrowings are under fixed rate
instruments, and our line of credit rate and land loan rates are 150 basis
points over the three-month LIBOR. We have determined that there is no material
market risk exposure to our consolidated financial position, results of
operations or cash flows.

      The table below presents principal reductions and related weighted average
interest rates by year of expected maturity for our debt obligations.
<TABLE>
<CAPTION>

                                                                                                                  FAIR VALUE
                                                                                                                  DECEMBER 31,
                                                                                                                ----------------

(DOLLARS IN             2001       2002       2003        2004        2005      THEREAFTER        TOTAL        2000         1999
------------            ----       ----       ----        ----        ----      ----------        -----        ----         ----
THOUSANDS)

<S>                <C>        <C>          <C>        <C>         <C>          <C>            <C>          <C>         <C>
Principal            $  1,001   $  9,015     $16,826    $    790    $     846    $  49,060      $  77,538    $  77,538   $   84,613
reductions in
mortgage notes

Average interest         7.01%      6.96%       6.89%       6.89%        6.89%        6.96%          6.97%        6.97%        6.99%
rates

Principal            $      0   $      0     $     0    $      0    $       0    $       0      $       0    $       0   $    1,235
reductions in line
of credit

Principal            $  2,000    $     0     $     0    $      0    $       0    $       0      $   2,000    $   2,000   $    3,000
reductions in land
loan

Principal            $      0    $    73     $   145    $    152    $  13,782    $       0      $  14,152    $  14,152   $        0
reductions in
construction loan

Interest Rate Swap:
(Notional Principal
Amount)
Pay fixed/ Receive   $      0    $    73     $   145    $    152    $  13,782    $       0      $  14,152    ($842,000)  $        0
variable
Average Pay rate         8.62%      8.62%       8.62%       8.62%        8.62%          N/A          8.62%        8.62%  $        0
Receive rate             LIBOR      LIBOR       LIBOR       LIBOR        LIBOR          N/A          LIBOR        LIBOR  $        0
</TABLE>

      We estimate that the fair value of our debt approximates carrying value
based upon our effective current borrowing rate for issuance of debt with
similar terms and remaining maturities. At December 31, 2000, the fair value of
our interest rate swap was ($842,000).


                                       37
<PAGE>



ITEM 8.       FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

The financial statements are listed under Item 14(a) and are filed as part of
this annual report on the pages indicated.

        Report of Independent Public Accountants (Arthur Andersen LLP)......F-1

        Consolidated Financial Statements and Schedule as of
           December 31, 2000 and 1999 and for the Years Ended
           December 31, 2000, 1999 and 1998:

        Balance Sheets......................................................F-2

        Statements of Operations............................................F-3

        Statements of Shareholders' Equity..................................F-4

        Statements of Cash Flows............................................F-5

        Notes to Financial Statements ......................................F-6

        Schedule III - Real Estate and Accumulated Depreciation.............S-1


ITEM 9.       CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
              FINANCIAL DISCLOSURE.

         None

                                       38
<PAGE>


                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

DIRECTORS AND EXECUTIVE OFFICERS

         Charles S. Roberts, age 54, has served as our Chairman of the Board,
Chief Executive Officer, and President since July 1994. Mr. Roberts' term as a
director expires at the 2003 annual meeting of shareholders. Mr. Roberts owns,
directly or indirectly, all of the outstanding stock of, and is the president
and sole director of, Roberts Properties, Inc. and Roberts Properties
Construction, Inc. Mr. Roberts also owned substantially all of the outstanding
interests in Roberts Properties Management, L.L.C. until its acquisition by
Roberts Properties Residential, L.P. on April 1, 1997.

         In October 1970, Mr. Roberts established Roberts Properties, Inc. to
develop, construct, and manage real estate. Beginning in 1985, Mr. Roberts and
Roberts Properties began to focus on developing upscale multifamily residential
communities and have won numerous local, regional and national awards for the
development of these communities. Mr. Roberts is a frequent national speaker on
the topic of developing upscale multifamily housing and has been recognized as a
leader in this industry. In April 1995, Roberts Properties Management, Inc. was
recognized as the Property Management Company of the Year by the National
Association of Home Builders. On a regional level, Roberts Properties was
awarded the prestigious Southeast Builders Conference Aurora Award for the best
rental apartment community eight out of nine years during the period 1988
through 1996. On a national level, Roberts Properties was awarded the
prestigious Pillars of the Industry Award from the National Association of Home
Builders for the best low-rise apartments in 1991 and 1992. In 1993, Roberts
Properties was awarded the coveted Golden Aurora Award for best overall
development in the Southeast.

         James M. Goodrich, age 60, a director since October 1994, is a
consulting engineer and private investor. Dr. Goodrich's term expires at the
2003 annual meeting of shareholders. Dr. Goodrich is a trustee of the North
American Electric Reliability Council, whose mission is to promote the
reliability of the electricity supply for North America. In 1975, Dr. Goodrich
founded Energy Management Associates, which provides operations and financial
planning software and related consulting services to the electric and gas
utility industries. Dr. Goodrich was Executive Vice President of Energy
Management Associates from 1975 until October 1993 and was a member of its board
of directors until 1992, when it was sold to Electronic Data Systems
Corporation. Prior to his experience with Energy Management Associates, Dr.
Goodrich served in the United States Navy for five years as an officer on the
staff of Admiral Hyman Rickover; this position involved technical support of the
design and development of nuclear power plants for the Navy. Dr. Goodrich holds
a Ph.D. in Nuclear Engineering, a master's degree in Engineering-Economic
Systems, and a bachelor of arts degree, all from Stanford University. He also
holds a master's degree in Engineering Science from George Washington
University. Dr. Goodrich has appeared as an expert witness before numerous state
public utility commissions, the Federal Energy Regulatory Commission, federal
courts, and arbitration panels.

         Wm. Jarell Jones, age 52, a director since October 1994, is an attorney
and has practiced law with the firm of Wm. Jarell Jones, P.C., in Statesboro,
Georgia since November 1993. Mr. Jones' term expires at the 2002 annual meeting
of shareholders. Mr. Jones is also a Certified Public Accountant, and in 1976 he
formed the public accounting firm of Jones & Kolb in Atlanta, Georgia and served
as Senior Tax Partner and Co-Managing Partner until December 1988. In 1990 Mr.
Jones moved to Statesboro and practiced law with the firm of Edenfield, Stone &
Cox until November 1992 and then with the firm of Jones & Rutledge from November
1992 until November 1993. Mr. Jones is the Chief Executive Officer of JQUAD,
Inc., a family owned holding company of timber, farming, and development
interests. Mr. Jones was a former director for six years and the former Chairman
for two years of the Downtown Statesboro Development Authority.

         Ben A. Spalding, age 66, a director since October 1994, is Executive
Vice President of DHR International, Inc., an executive search firm. Mr.
Spalding was the sole shareholder of Spalding & Company, a former NASD member
broker-dealer that served from 1980 to 1996 as the exclusive broker-dealer for
limited partnerships sponsored by Mr. Roberts. Mr. Spalding's term expires at
the 2001 annual meeting of shareholders. Mr. Spalding served as President of
Spalding & Company from 1980 until 1994. For the 20-year period through 1983,




                                       39
<PAGE>

Mr. Spalding served in several positions with Johnson & Johnson in the health
care field, most recently as Healthcare Division Sales Manager for several
states in the Southeast. Mr. Spalding has a bachelor's degree in Business
Administration from Bellarmine College. He has served in numerous positions with
civic and charitable organizations, including serving as a National Trustee of
the Cystic Fibrosis Foundation and a member of the Board of Trustees of the
Metro-Atlanta Crime Commission. He received the Cystic Fibrosis Dick Goldschmidt
Award in 1986 for his efforts on behalf of the Cystic Fibrosis Foundation.

         George W. Wray, Jr., age 64, a director since February 1995, is a
private investor and Senior Partner of the Wray Partnership, a family investment
group. Mr. Wray's term expires at the 2001 annual meeting of shareholders. He
was employed with International Silver Company from the early 1960s to July
1993, most recently as a Vice President engaged in sales management for the
eastern United States. From the July 1993 acquisition of International Silver
Company by World Crisa Corporation (a division of Vitro S.A.) through September
1997, Mr. Wray was an independent sales agent for the successor organization.
Mr. Wray also served as a Vice President of Spalding & Company, an NASD
registered broker-dealer, from 1991 to 1997 and was a registered associate of
Spalding & Company from 1983 to 1997. Mr. Wray holds a bachelor's degree in
Industrial Relations from the University of North Carolina at Chapel Hill and
serves as an elder of the Peachtree Presbyterian Church in Atlanta.

         Dennis H. James, age 53, a director since June 1995, is a Managing
Director of L. J. Melody & Company (formerly Shoptaw-James, Inc.), a commercial
mortgage banking firm. Mr. James' term expires at the 2002 annual meeting of
shareholders. Mr. James has over 25 years experience in the mortgage banking
industry and has been involved in the production of income property straight
debt loans, participating mortgages, debt/equity joint ventures and sales. As
Managing Director of L. J. Melody & Company, he is responsible for the Southeast
Region's overall production and investor relations. He has served on both the
Allstate Life Insurance Company Correspondent Advisory Council and State Farm
Life Insurance Advisory Council. Mr. James has a bachelor's degree in Industrial
Management from Georgia Tech, and his professional education includes attendance
at numerous real estate institutes.

         Weldon R. Humphries, age 63, a director since February 1998, is a
private investor. Mr. Humphries' term expires at the 2001 annual meeting of
shareholders. Mr. Humphries recently retired from a distinguished twenty-year
career with Manor Care, Inc. (NYSE: MNR), where he was employed from January
1978 to November 1997 as Senior Vice President responsible for asset management,
acquisitions and development, and with Choice Hotels International, Inc. (NYSE:
CHH), where he served as Senior Vice-President responsible for asset management,
acquisitions and development from November 1997 to January 1998. Mr. Humphries
began his career as a senior mortgage analyst with Connecticut General Life
Insurance Company and later worked for Arvida Corporation, where he was
responsible for all real estate financing, development and marketing. Mr.
Humphries has a BBA in Marketing from the University of Houston and an MBA in
Finance from the University of Hartford. He also served as an officer in the
United States Marine Corps.

         Charles R. Elliott, age 47, Roberts Realty's Secretary and Treasurer
since its inception, is our Chief Financial Officer and has served in that
capacity since April 1995. Mr. Elliott also served as a director of Roberts
Realty from October 1994 to February 1995 and he again became a director in
2000. He worked for Hunneman Real Estate Corporation in Boston, Massachusetts
from 1979 to 1993, most recently as a Senior Vice-President of Accounting and
Finance. Mr. Elliott joined Roberts Properties in August 1993 as Chief Financial
Officer and served in that role until April 1995. He holds an undergraduate
degree in Accounting and a master's degree in Finance.

         Ronald L. Johnson, age 44, has served as our Vice President - Property
Maintenance since January 1999. He also served as a Vice President of Quality
Management from April 1997 through 1998. He worked for Roberts Properties
Management, L.L.C. as Vice President of Quality Management from 1996 to April
1997 (when we acquired Roberts Properties Management) and as Maintenance
Supervisor from 1991 to 1996.



                                       40
<PAGE>

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

         Section 16(a) of the Securities Exchange Act of 1934 requires Roberts
Realty's directors and executive officers and persons who own beneficially more
than 10% of our outstanding common stock to file with the SEC initial reports of
ownership and reports of changes in their ownership of our common stock.
Directors, executive officers and greater than 10% shareholders are required by
SEC regulations to furnish us with copies of the forms they file. To our
knowledge, based solely on a review of the copies of such reports furnished to
us, during the fiscal year ended December 31, 2000, except for Ronald Johnson,
our directors, executive officers and greater than 10% shareholders complied
with all applicable Section 16(a) filing requirements. Mr. Johnson, our Vice
President - Property Maintenance, failed to file a Form 3 in January 1999 when
he became an officer of our company, as well as three Forms 4 in 2000 after
exchanging units for shares and selling shares.

ITEM 11.  EXECUTIVE COMPENSATION.

COMPENSATION OF EXECUTIVE OFFICERS

         Mr. Charles S. Roberts, our Chairman of the Board, Chief Executive
Officer and President, and Mr. Charles R. Elliott, our Secretary and Treasurer
since inception and our Chief Financial Officer since April 1995, are our only
executive officers whose total salary and bonus exceeded $100,000 during 2000.
Mr. Roberts and Mr. Elliott are our "named executive officers."

                                           SUMMARY COMPENSATION TABLE

                                                  Annual Compensation
                                            ---------------------------------
      Name and Principal Position           Year     Salary ($)      Bonus ($)
      ---------------------------           ----     ----------      ---------

      Charles S. Roberts                    2000      $150,000      $      0
        Chairman of the Board, Chief        1999       150,000             0
        Executive Officer, and President    1998       155,769             0

      Charles R. Elliott                    2000       123,000        30,000
        Secretary, Treasurer and            1999       101,577        30,000
        Chief Financial Officer             1998        93,642        30,000

         We are not a party to any employment agreements. Certain fees and other
payments are payable to affiliates of Mr. Roberts under various agreements and
arrangements. See Part III, Item 13, Certain Relationships and Related
Transactions - Payments to the Roberts Companies.

COMPENSATION OF DIRECTORS

         We pay our directors who are not officers of Roberts Realty fees for
their services as directors. Mr. Roberts and Mr. Elliott, who are the only
directors who are officers, are not paid any director fees. Non-officer
directors receive an annual fee of $12,000 for attendance, in person or by
telephone, at meetings of the Board of Directors. In addition, we reimburse our
directors for reasonable travel expenses and out-of-pocket expenses incurred in
connection with their activities on our behalf.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

         The Compensation Committee of the Board of Directors is composed of Mr.
Humphries, Mr. James and Mr. Jones. None of them was during 2001, or at any
previous time, an officer, or employee of Roberts Realty or Roberts Properties
Residential, L.P.



                                       41
<PAGE>

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

         The following table describes the beneficial ownership of shares of our
common stock as of March 23, 2001 for:

         o    each person or entity known by us to be the beneficial owner of
              more than 5% of the outstanding shares of common stock;

         o    each director and each of our named executive officers; and

         o    our directors and executive officers as a group.

         Except as noted in the footnotes, the person owns all shares and
partnership units directly and has sole voting and investment power. Each of the
persons known by us to beneficially own more than 5% of the common stock has an
address in care of our principal office. The Number of Shares Owned column in
the table includes the shares owned by the persons named but does not include
shares they may acquire by exchanging units of partnership interest in Roberts
Properties Residential, L.P., our operating partnership, for shares of common
stock as explained in the following paragraph. The Number of Units Beneficially
Owned column in the table reflects all shares that each person has the right to
acquire by exchanging units for shares. Under SEC rules, the shares that can be
acquired in exchange for units are deemed to be outstanding and to be
beneficially owned by the person or group holding those units when computing the
percentage ownership of that person or group, but are not treated as outstanding
for the purpose of computing the percentage ownership of any other person or
group.

         Except as described in this paragraph, unitholders generally have the
right to require the operating partnership to redeem their units. Our articles
of incorporation limit ownership by any one holder to 6% of our outstanding
shares, other than by Mr. Roberts, who is limited to 25%. Accordingly, a
unitholder cannot redeem units if upon their redemption he would hold more
shares than permitted under the applicable percentage limit. Given the total
number of shares and units they own, each of Mr. Roberts, Dr. Goodrich and Mr.
Wray may be unable to redeem all the units they own unless and until other
unitholders redeem a sufficient number of units to cause the number of
outstanding shares of common stock to be increased to a level sufficient to
permit their redemption. A unitholder who submits units for redemption will
receive, at our election, either (a) an equal number of shares or (b) cash in
the amount of the average of the daily market prices of the common stock for the
10 consecutive trading days before the date of submission multiplied by the
number of units submitted. Our policy is to issue shares in exchange for units
submitted for redemption.
<TABLE>
<CAPTION>

                 NAME OF                       NUMBER OF SHARES       NUMBER OF UNITS                          PERCENT OF
             BENEFICIAL OWNER                     OWNED              BENEFICIALLY OWNED        TOTAL            CLASS(1)
             ----------------                  ----------------       ----------------         -----            ---------

<S>                                                <C>                <C>              <C>              <C>
Charles S. Roberts(2)                                758,860                 738,012          1,496,872        30.9%

George W. Wray, Jr.(3)                               247,880                 119,266            367,146         7.6

James M. Goodrich(4)                                 258,651                  54,910            313,561         6.5

Ben A. Spalding(5)                                    21,252                  27,318             48,570         1.0

Dennis H. James                                       53,546                   2,405             55,951         1.2

Wm. Jarell Jones                                       3,917                       0              3,917          *

Weldon R. Humphries(6)                                38,000                       0             38,000          *

Charles R. Elliott                                    11,875                       0             11,875          *

All directors and executive officers as a
group: (9 persons)(7)                              1,398,106                 941,911          2,340,017        48.3%

</TABLE>

-------------------------------------------
*Less than 1%.
(Footnotes begin on following page.)

                                       42
<PAGE>



(1) The total number of shares outstanding used in calculating this percentage
is 4,846,228, the number of shares outstanding as of March 23, 2001.

(2) Includes 2,744 shares owned by Mr. Roberts' minor daughter. A trust for his
minor daughter of which he is the sole trustee owns 29,500 units.

(3) Includes 214,065 shares owned by a partnership, over which shares Mr. Wray
has voting and investment power as the managing partner of such partnership;
27,257 shares owned by his wife and 5,058 shares owned by a trust of which she
is a co-trustee. Mr. Wray disclaims beneficial ownership of the 27,257 shares
owned by Mrs. Wray and 5,058 shares owned by a trust of which she is a
co-trustee. The partnership previously referenced owns 95,568 units.

(4) Includes 110,507 shares owned jointly by Dr. Goodrich and his wife; 108,478
shares owned by Goodrich Enterprises, Inc., all of the outstanding shares of
which are owned by Dr. and Mrs. Goodrich and their sons; and 24,879 shares owned
by a trust for the benefit of a son of Dr. and Mrs. Goodrich and of which Mrs.
Goodrich is trustee. Dr. Goodrich's beneficial ownership of units includes
48,075 units owned jointly by Dr. and Mrs. Goodrich and 6,835 units owned by a
trust for the benefit of a son of Dr. and Mrs. Goodrich of which Mrs. Goodrich
is trustee. Dr. Goodrich disclaims beneficial ownership of the units and shares
owned by the trust.

(5) Includes 7,564 shares owned by partnerships of which Mr. Spalding's wife is
the managing partner. Mr. Spalding's beneficial ownership of units includes
2,917 units owned by Mrs. Spalding and 24,401 units owned by partnerships of
which Mrs. Spalding is the managing partner. Mr. Spalding disclaims beneficial
ownership of all units and shares owned by his wife or partnerships of which she
is the managing partner.

(6) Owned by a trust of which Mr. Humphries is a co-trustee along with his
spouse.

(7) Includes 256,985 shares and 50,992 units as to which directors share voting
and investment power with another family member; also includes an aggregate of
64,758 shares and 34,153 units beneficially owned by three directors' wives, as
to which shares such directors disclaim beneficial ownership.

                                       43
<PAGE>



ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

GENERAL

         Roberts Realty conducts its business through Roberts Properties
Residential, L.P., which we refer to as the operating partnership; owns a 66.9%
interest in it; and is its sole general partner. Mr. Charles S. Roberts owns all
of the outstanding shares of both Roberts Properties, Inc. and Roberts
Properties Construction, Inc., which we refer to together as the Roberts
Companies. These companies perform certain services for us as explained below.
Notes 1 and 9 to our Consolidated Financial Statements provide further detail
regarding some of the transactions described in this section.

PAYMENTS TO THE ROBERTS COMPANIES

         Overview. We have paid substantial fees to the Roberts Companies for
various types of services and will continue to do so in the future. These
various arrangements are summarized below.

         Development Fees. From time to time we pay Roberts Properties fees for
various development services that include market studies, business plans,
design, finish selection, interior design and construction administration. The
operating partnership paid Roberts Properties a fee of $1,595,000, or $5,000 per
unit, for designing, developing, and overseeing construction of our 319-unit
Ballantyne community in Charlotte, North Carolina. The operating partnership
paid Roberts Properties a fee of $2,015,000, or $5,000 per unit, for designing,
developing, and overseeing construction of our 403-unit Addison Place project in
Atlanta, Georgia. The operating partnership will pay Roberts Properties a fee of
$1,250,000, or $5,000 per unit, for designing, developing, and overseeing
construction of our 250-unit Old Norcross project in Gwinnett County, Georgia.
Through December 31, 2000, Roberts Realty had incurred $1,141,250 of the
$1,250,000 development fee.

         Construction Contracts. Roberts Realty enters into contracts in the
normal course of business with Roberts Properties Construction, Inc. ("Roberts
Construction").

                  Ballantyne. We have entered into a cost plus 10% contract with
Roberts Construction for construction of our Ballantyne community. Roberts
Construction started construction of the Ballantyne community in the fourth
quarter of 1999, and we have paid Roberts Construction $1,360,000 through March
31, 2001 for its initial work on the project. Roberts Construction will serve as
the general contractor for the construction of this community. We estimate the
cost of construction to be $23,100,000.

                  Old Norcross. We have entered into a cost plus 10% contract
with Roberts Construction for construction of our Old Norcross community.
Through March 31, 2001 we paid Roberts Construction $1,088,000 for its initial
work on the Old Norcross project. We estimate the cost of construction on this
project to be $16,000,000.

                  Other Communities. The following table summarizes certain
information regarding payments to Roberts Construction for other construction
projects through March 23, 2001. Under all of these contracts, we pay Roberts
Construction its cost, plus a fee of 10% of its cost.


                                       44
<PAGE>
<TABLE>
<CAPTION>


                                    ACTUAL/                                     AMOUNT
                                    ESTIMATED                                  INCURRED          ESTIMATED
                                    TOTAL                  TOTAL                 FROM            REMAINING
                                    CONTRACT              AMOUNT              1/1/1999 TO       CONTRACTUAL
                                    AMOUNT               INCURRED             3/23/2001        COMMITMENT
                                    ---------            --------             -----------      ------------

<S>                              <C>                 <C>                <C>                  <C>
Addison Place - Phase I            $ 9,647,000         $ 9,647,000           $ 8,642,000         $         0
Addison Place - Phase II            20,605,000          17,066,000            17,066,000           3,539,000
Ballantyne                          23,100,000           1,360,000             1,360,000          21,740,000
Old Norcross                        16,000,000           1,088,000             1,088,000          14,912,000
Plantation Trace - Phase II          4,908,000           4,908,000               395,000                   0
                                     ---------       -------------          ------------       -------------
                                   $74,260,000         $34,069,000           $28,551,000         $40,191,000
                                   ===========       ==============         ============        ============

</TABLE>

         We paid Roberts Construction $33,000 in 2000 for labor and materials to
perform repairs and maintenance for our communities.

         Partnership Profits Interest. Between 1994 and 1996, the operating
partnership acquired nine limited partnerships of which Mr. Roberts was the sole
general partner. Each partnership owned an apartment community that had been
developed or was in the development process. As a part of each acquisition, the
operating partnership assumed an existing financial obligation to an affiliate
of Mr. Roberts. That financial obligation has been formalized as a profits
interest in the operating partnership. As the holder of the profits interest,
Roberts Properties may receive distributions in certain circumstances. Upon a
sale of any of the acquired properties, Roberts Properties will receive a
distribution of a specified percentage of the gross sales proceeds, or, in the
case of the Crestmark Phase II land, a maximum amount of $86,775. Pursuant to
this arrangement, Roberts Properties received distributions of $726,000 (or 5%
of gross proceeds) upon the sale of Ivey Brook in June 2000 and $740,000 (or 5%
of the gross proceeds) upon the sale of Rosewood Plantation in January 2001.
Upon a change in control of Roberts Realty or the operating partnership, Roberts
Properties will receive a distribution of the applicable percentages of the fair
market value of each of the properties, or in the case of the Crestmark Phase
II, land, up to the maximum amount. The amount to be distributed to Roberts
Properties with respect to each affected property will be limited to the amount
by which the gross proceeds from the sale of that property, or, in connection
with a change in control, its fair market value, exceeds the sum of:

         o    the debt assumed, or taken subject to, by the operating
              partnership in connection with its acquisition of the property;
         o    the equity issued by the operating partnership in acquiring the
              property; and
         o    all subsequent capital improvements to the property made by the
              operating partnership.

         The percentages that apply to the sales proceeds, or fair market value,
of the affected properties are shown in the following table:

                   River Oaks                                         5%
                   Preston Oaks Phase I                               5%
                   Highland Park                                      5%
                   Crestmark Phase I                                  5%
                   Plantation Trace Phase I                           6%

         In the case of the Crestmark Phase II land, the maximum amount would be
$86,775.

         If Roberts Realty exercises its option to acquire all of the
outstanding units for shares, it must simultaneously purchase the profits
interest for cash in the amount the holder of that interest would receive if a
change in control occurred at that time.


                                       45
<PAGE>


         Except for units and the partnership profits interest related to the
original nine limited partnerships acquired between 1994 and 1996, no
partnership interests have been, or are presently expected to be, issued or
assumed by the operating partnership.

         During 2000, we made a profits interest distribution of $726,000 to
Roberts Properties.

         Pending Transactions with Affiliates of Mr. Roberts. On February 27,
2001, we signed an exchange agreement with Real Estate Exchange Services to
acquire land previously owned by Roberts Properties Jones Bridge, LLC, of which
Mr. Roberts owns the majority of the equity interest. The 6.84 acre property is
located at the intersection of Abbotts Bridge Road and Jones Bridge Road near
Addison Place. We loaned Real Estate Exchange Services $3,514,000 to acquire the
property and hold title until July 2, 2001. We intend that on July 2, 2001, a
qualified intermediary for federal income tax purposes will purchase the
property and then sell it to us to complete a Section 1031 tax-deferred
exchange. We plan to develop 47,200 square foot retail center on the property.

         On March 20, 2001, our board of directors approved our purchase from
Roberts Properties of 10.7 acres on Northridge Parkway in north Atlanta adjacent
to our Highland Park community for the construction of a 220-unit apartment
community. The purchase price will be $4,700,000. We plan to retain Roberts
Properties to design, develop, and oversee construction of the project for a fee
of $1,100,000, or $5,000 per unit,. We also plan to enter into a cost plus 10%
contract with Roberts Construction for construction of the project. The
independent members of our board of directors approved the foregoing
arrangements with Roberts Properties after reviewing two independent appraisals.

         Other Fees. During 2000, we paid affiliates of Mr. Roberts
miscellaneous fees and cost reimbursements totaling $192,000.


                                       46
<PAGE>


ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.

(a)      1. and 2.  Financial Statements and Schedules.

         The financial statements and schedules listed below are filed as part
         of this annual report on the pages indicated.




INDEX TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

                                                                           PAGE

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS (Arthur Andersen LLP).............F-1

CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULE AS OF DECEMBER 31, 2000 AND 1999
AND FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998:

           Balance Sheets..................................................F-2

           Statements of Operations........................................F-3

           Statements of Shareholders' Equity..............................F-4

           Statements of Cash Flows........................................F-5

           Notes to Financial Statements...................................F-6

           Schedule III - Real Estate and Accumulated Depreciation.........S-1


                                       47

<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


To Roberts Realty Investors, Inc.:

We have audited the accompanying consolidated balance sheets of Roberts Realty
Investors, Inc. (a Georgia corporation) and its subsidiary as of December 31,
2000 and 1999 and the related consolidated statements of operations,
shareholders' equity, and cash flows for each of the three years in the period
ended December 31, 2000. These financial statements and the schedule referred to
below are the responsibility of the Company's management. Our responsibility is
to express an opinion on these financial statements and schedule based on our
audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Roberts Realty Investors, Inc.
and its subsidiary as of December 31, 2000 and 1999 and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 2000 in conformity with accounting principles generally accepted in
the United States.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedule listed in the index to
financial statements is presented for purposes of complying with the Securities
and Exchange Commission's rules and is not part of the basic financial
statements. This schedule has been subjected to the auditing procedures applied
in the audits of the basic financial statements and, in our opinion, fairly
states in all material respects the financial data required to be set forth
therein in relation to the basic financial statements taken as a whole.

/s/ ARTHUR ANDERSEN LLP


Atlanta, Georgia
March 5, 2001


                                       F-1
<PAGE>
<TABLE>
<CAPTION>


ROBERTS REALTY INVESTORS, INC.

CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

------------------------------------------------------------------------------------------------------------------------------------

                                                                                         DECEMBER 31,        DECEMBER 31,
ASSETS                                                                                       2000                 1999
                                                                                         ----------          --------
REAL ESTATE ASSETS - At cost:

<S>                                                                                   <C>                 <C>
     Land                                                                                 $  18,743           $  21,120
     Buildings and improvements                                                              93,371              96,124
     Furniture, fixtures and equipment                                                       11,566              11,654
                                                                                          ---------           ---------
                                                                                            123,680             128,898
     Less accumulated depreciation                                                          (24,061)            (21,029)
                                                                                          ---------           ----------

         Operating real estate assets                                                        99,619             107,869

        Land held for future development                                                          0               2,559
     Construction in progress and real estate under development                              28,439              12,393
                                                                                          ---------           ---------

         Net real estate assets                                                             128,058             122,821

CASH AND CASH EQUIVALENTS                                                                     1,495               1,673

RESTRICTED CASH                                                                                 388               1,202

DEFERRED FINANCING COSTS - Net of accumulated amortization of
     $500 and $425 at December 31, 2000 and, 1999, respectively                                 890               1,031

OTHER ASSETS - Net                                                                              698                 351
                                                                                          ---------           ---------
                                                                                          $ 131,529           $ 127,078
                                                                                          =========           =========

LIABILITIES AND SHAREHOLDERS' EQUITY

LIABILITIES:
     Mortgage notes payable                                                               $  77,538           $  84,615
     Construction note payable                                                               14,152                   0
     Land note payable                                                                        2,000               3,000
     Line of credit                                                                               0               1,235
     Accounts payable and accrued expenses                                                    1,496               1,238
     Dividends and distributions payable                                                        815               1,010
     Due to affiliates (including retainage payable of $915 and $216 at
         December 31, 2000 and 1999, respectively)                                            2,994               1,214
     Security deposits and prepaid rents                                                        490                 443
                                                                                          ---------           ---------

         Total liabilities                                                                   99,485              92,755
                                                                                          ---------           ---------

COMMITMENTS AND CONTINGENCIES (Note 10)

MINORITY INTEREST OF UNITHOLDERS IN THE OPERATING PARTNERSHIP                                10,607              12,013
                                                                                          ---------           ---------

SHAREHOLDERS' EQUITY:
     Preferred shares, $.01 par value, 20,000,000 shares authorized, no shares
         issued and outstanding                                                                   -                   -
     Common shares, $.01 par value, 100,000,000 shares authorized, 5,161,299 and
         4,959,697 shares issued at December 31, 2000 and 1999, respectively                     52                  49
     Additional paid-in capital                                                              23,741              25,354
     Less treasury shares, at cost (293,088 shares and 140,500 shares at
         December 31, 2000 and 1999, respectively)                                           (2,210)             (1,054)
     Unamortized deferred compensation                                                         (146)               (136)
     Accumulated deficit                                                                          0              (1,903)
                                                                                          ---------           ---------
         Total shareholders' equity                                                          21,437              22,310
                                                                                          ---------           ---------

                                                                                          $ 131,529           $ 127,078
                                                                                          =========           =========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.

                                      F-2
<PAGE>

<TABLE>
<CAPTION>

ROBERTS REALTY INVESTORS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
------------------------------------------------------------------------------------------------------------------------------------
                                                                                             YEARS ENDED DECEMBER 31,
                                                                                             ------------------------
                                                                                      2000             1999            1998
                                                                                      ----             ----            ----
<S>                                                                               <C>              <C>             <C>
OPERATING REVENUES:
     Rental operations                                                            $ 18,768         $ 18,163        $ 16,521
     Other operating income                                                          1,410            1,221             833
                                                                                    ------          -------          ------

          Total operating revenues                                                  20,178           19,384          17,354
                                                                                    ------          -------          ------

OPERATING EXPENSES:
     Personnel                                                                       1,920            1,785           1,777
     Utilities                                                                       1,243            1,301           1,178
     Repairs, maintenance and landscaping                                            1,200            1,180           1,090
     Real estate taxes                                                               1,561            1,574           1,393
     Marketing, insurance and other                                                    835              848             754
     General and administrative expenses                                             2,197            1,964           1,727
     Depreciation expense                                                            5,463            5,529           5,017
                                                                                    ------         --------          ------

          Total operating expenses                                                  14,419           14,181          12,936
                                                                                    ------         --------          ------

INCOME FROM OPERATIONS                                                               5,759            5,203           4,418
                                                                                    ------          -------          ------

OTHER INCOME (EXPENSE):
     Interest income                                                                   214              159             384
     Interest expense                                                               (4,951)          (5,244)         (4,555)
     Loss on disposal of assets                                                        (83)             (81)            (94)
     Amortization of deferred financing costs                                         (209)            (219)           (139)
     Other amortization expense                                                          0              (11)            (52)
                                                                                    ------         --------         -------

          Total other expense                                                       (5,029)          (5,396)         (4,456)
                                                                                   -------         --------         -------

INCOME (LOSS) BEFORE MINORITY INTEREST, GAINS ON SALE OF
    REAL ESTATE ASSETS AND EXTRAORDINARY ITEMS                                         730             (193)            (38)

MINORITY INTEREST OF UNITHOLDERS IN THE OPERATING PARTNERSHIP                         (246)              70              15
                                                                                    -------         -------           -----

INCOME (LOSS) BEFORE GAINS ON SALE OF REAL ESTATE ASSETS
    AND EXTRAORDINARY ITEMS                                                            484             (123)            (23)

GAINS ON SALE OF REAL ESTATE ASSETS, net of minority interest
    of unitholders in the operating partnership                                      2,416            1,023           1,218
                                                                                    ------          -------           -----

INCOME BEFORE EXTRAORDINARY ITEMS                                                    2,900              900           1,195

EXTRAORDINARY ITEMS - Loss on early extinguishment of debt, net of
    minority interest of unitholders in the operating partnership                      (68)            (184)           (487)
                                                                                    -------         -------           -----

NET INCOME                                                                          $2,832          $   716            $708
                                                                                   =======          =======            ====


INCOME (LOSS) PER COMMON SHARE - BASIC AND DILUTED (NOTE 7):
     Income before extraordinary items                                              $  0.59          $ 0.19           $0.26

     Extraordinary items                                                              (0.01)          (0.04)          (0.11)
                                                                                    -------         -------          ------

     Net income                                                                      $ 0.58          $ 0.15          $ 0.15
                                                                                    =======         =======          ======

     Weighted average common shares - basic                                       4,881,601       4,737,008       4,638,265

     Weighted average common shares - diluted                                     7,367,068       7,448,757       7,547,978
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

                                      F-3
<PAGE>

<TABLE>
<CAPTION>

ROBERTS REALTY INVESTORS, INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(DOLLARS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
------------------------------------------------------------------------------------------------------------------------------------


                                                   COMMON SHARES        ADDITIONAL                                         TOTAL
                                               NUMBER OF                 PAID-IN     TREASURY  DEFERRED    ACCUMULATED SHAREHOLDERS'
                                             SHARES ISSUED    AMOUNT      CAPITAL    SHARES  COMPENSATION    DEFICIT      EQUITY
                                             --------------------------------------------------------------------------------------

<S>                    <C> <C>                   <C>               <C>       <C>           <C>      <C>      <C>          <C>
BALANCE AS OF DECEMBER 31, 1997                  4,420,508         $44       $29,980       $0       $0       ($3,327)     $26,697
          Conversion of units to shares            330,468           3         2,002                                        2,005
          Dividends declared ($0.5775 per share)                              (2,702)                                      (2,702)
          Adjustment for minority interest in
               the operating partnership                                          66                                           66
          Repurchase of units                                                   (122)                                        (122)
          Restricted shares issued to employees     13,061                       111              (111)                         0
          Amortization of deferred compensation                                                     19                         19
          Treasury shares (19,300 shares at cost)                                        (145)                               (145)
          Net income                                                                                             708          708
                                             ------------------------------------------------------------------------------------

BALANCE AS OF DECEMBER 31, 1998                  4,764,037          47        29,335     (145)     (92)       (2,619)      26,526
          Conversion of units to shares            185,858           2           955                                          957
          Dividends declared ($1.085 per share)                               (5,134)                                      (5,134)
          Adjustment for minority interest in
               the operating partnership                                         147                                          147
          Repurchase of units                                                    (28)                                         (28)
          Restricted shares issued to employees      9,802                        79               (79)                         0
          Amortization of deferred compensation                                                     35                         35
          Treasury shares (121,200 shares at cost)                                       (909)                               (909)
          Net income                                                                                             716          716
                                             ------------------------------------------------------------------------------------

BALANCE AS OF DECEMBER 31, 1999                  4,959,697          49        25,354   (1,054)    (136)       (1,903)      22,310
          Conversion of units to shares            191,341           3           941                                          944
          Dividends declared ($0.74 per share)                                (2,705)                           (929)      (3,634)
          Adjustment for minority interest in
               the operating partnership                                          74                                           74
          Restricted shares issued to employees     10,261                        77               (77)                         0
          Amortization of deferred compensation                                                     67                         67
          Treasury shares (152,588 shares at cost)                                     (1,156)                             (1,156)
          Net income                                                                                           2,832        2,832
                                             ------------------------------------------------------------------------------------

BALANCE AS OF DECEMBER 31, 2000                  5,161,299         $52       $23,741  ($2,210)   ($146)           $0      $21,437
                                             ====================================================================================

</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

                                      F-4
<PAGE>
<TABLE>
<CAPTION>

ROBERTS REALTY INVESTORS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                YEARS ENDED DECEMBER 31,
                                                                                                ---------------------------
                                                                                             2000         1999           1998
                                                                                             ----         ----           ----
OPERATING ACTIVITIES:
<S>                                                                                  <C>             <C>              <C>
     Net income                                                                         $   2,832     $     716     $     708
     Adjustments to reconcile net income to net cash provided by operating activities:
          Minority interest of unitholders in the operating partnership                       246           (70)          (15)
          Gain on sale of real estate assets                                               (2,416)       (1,023)       (1,218)
          Loss on disposal of assets                                                           83            81            94
          Depreciation and amortization                                                     5,700         5,759         5,208
          Extraordinary items, net of minority interest of
               unitholders in the operating partnership                                        68           184           487

          Amortization of deferred compensation                                                67            35            19
     Changes in assets and liabilities:
          (Increase) decrease in restricted cash                                              (29)          (39)          148
          (Increase) decrease in other assets                                                (375)           52           (34)
          Increase (decrease) in accounts payable and accrued expenses relating
               to operations                                                                  262           114           (23)
          Increase (decrease) in security deposits and prepaid rent                            47           108           (79)
                                                                                         ----------    -----------  ---------

               Net cash provided by operating activities                                    6,485         5,917         5,295
                                                                                         ----------    -----------  ---------
INVESTING ACTIVITIES:
     Proceeds from sale of real estate assets                                               7,569         7,918         7,521
     Acquisition and construction of real estate assets                                   (19,134)      (14,921)      (25,756)
                                                                                         --------      -------      ---------

               Net cash used in investing activities                                      (11,565)       (7,003)      (18,235)
                                                                                          -------      --------      --------
FINANCING ACTIVITIES:
     Proceeds from mortgage notes payable                                                       0         9,500        44,400
     Proceeds from land note payable                                                        2,000         3,000             0
     Payoff of land note payable                                                           (3,000)            0             0
     Proceeds from mortgage notes payable held in escrow                                      843          (693)         (150)
     Payoff of mortgage notes, including prepayment penalty                                     0        (4,166)      (28,291)
     Principal repayments on mortgage notes payable                                          (887)         (890)         (788)
     Payment of loan costs                                                                   (168)         (248)         (653)
     Proceeds from short-term loan                                                            765         3,085           350
     Payoff of short-term loan                                                             (2,000)       (1,850)         (350)
     Proceeds from construction loan                                                       14,152         8,019             0
     Payoff of construction loan                                                                0        (8,019)            0
     Repurchase of units                                                                        0           (28)         (122)
     Repurchase of treasury stock                                                          (1,156)         (909)         (145)
     Payment of dividends and distributions                                                (5,647)       (8,148)       (4,322)
                                                                                         --------       -------      ---------

               Net cash provided by (used in) financing activities                          4,902        (1,347)        9,929
                                                                                         --------       --------     ---------

NET DECREASE IN CASH AND CASH EQUIVALENTS                                                    (178)       (2,433)       (3,011)

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR                                                1,673         4,106         7,117
                                                                                         --------       -------      ---------

CASH AND CASH EQUIVALENTS, END OF YEAR                                                  $   1,495     $   1,673      $  4,106
                                                                                         ========      ========      =========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

     Cash paid for interest                                                             $   5,964     $   5,852      $  5,079
                                                                                         ========      ========      =========

</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.

                                      F-5

<PAGE>

ROBERTS REALTY INVESTORS, INC.

NOTES TO FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

1.       BUSINESS AND ORGANIZATION OF THE COMPANY

         Roberts Realty Investors, Inc. (the "Company"), a Georgia corporation,
         was formed July 22, 1994 to serve as a vehicle for investments in, and
         ownership of, a professionally managed real estate portfolio of
         multifamily apartment communities. The Company owns and operates
         multifamily residential properties as a self-administered, self-managed
         equity real estate investment trust (a "REIT"). All of the Company's
         completed apartment homes are located in the Atlanta metropolitan area.

         The Company 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"), of which the Company is the
         sole general partner and had a 66.9% and 65.0% ownership interest at
         December 31, 2000 and 1999, respectively. As the sole general partner
         and owner of a majority interest of the Operating Partnership, the
         Company controls the Operating Partnership.

         The Company, as the general partner of the Operating Partnership, does
         not hold any limited partner interests in the Operating Partnership.
         Units of limited partnership interest ("Units") in the Operating
         Partnership outstanding at December 31, 2000 and 1999 were 2,403,495
         and 2,594,836, respectively. Units held by the minority interest as a
         percentage of total Units and shares of common stock ("Shares") of the
         Company outstanding were 33.1% and 35.0% at December 31, 2000 and 1999,
         respectively. The minority interest percentage reflects the number of
         Shares and Units outstanding and will change as additional Shares and
         Units are issued.

         At December 31, 2000, the Company owned eight completed multifamily
         apartment communities totaling 1,633 apartment homes in Atlanta, and an
         additional 854 apartment homes were under construction (535 in Atlanta
         and 319 in Charlotte). On June 23, 2000, the Company sold a 146-unit
         apartment community located in Atlanta, Georgia.

2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         BASIS OF PRESENTATION. The accompanying consolidated financial
         statements include the consolidated accounts of the Company and the
         Operating Partnership. All significant intercompany accounts and
         transactions have been eliminated in consolidation. The financial
         statements of the Company have been adjusted for the minority interest
         of the unitholders in the Operating Partnership.

         The minority interest of the Unitholders in the Operating Partnership
         on the accompanying balance sheets is calculated based on the minority
         interest ownership percentage multiplied by the Operating Partnership's
         net assets (total assets less total liabilities). The minority interest
         percentage reflects the number of Shares and Units outstanding and will
         change as additional Shares and Units are issued. The minority interest
         of the Unitholders in the earnings or loss of the Operating Partnership
         on the accompanying statements of operations is calculated based on the
         weighted average number of Units outstanding during the period, which
         was 33.7%, 36.4% and 38.5% for the years ended December 31, 2000, 1999
         and 1998, respectively. The minority interest of the Unitholders was
         $10,607,000 and $12,013,000 at December 31, 2000 and 1999,
         respectively.

         Holders of Units generally have the right to require the Operating
         Partnership to redeem their Units for Shares. Upon submittal of Units
         for redemption, the Operating Partnership has the option either (a) to
         acquire those Units in exchange for Shares, on a one-for-one basis, or
         (b) to pay cash for those Units at their fair market value, based upon
         the then current trading price of the Shares. The Operating Partnership
         has adopted a policy that it will issue Shares in exchange for all
         future Units submitted.


                                       F-6
<PAGE>



         USE OF ESTIMATES. The preparation of financial statements in conformity
         with accounting principles generally accepted in the United States
         requires management to make estimates and assumptions that affect the
         reported amounts of assets and liabilities and disclosure of contingent
         assets and liabilities at the date of the financial statements and the
         reported amounts of revenues and expenses during the reporting period.
         Actual results could differ from those estimates.

         REAL ESTATE ASSETS AND DEPRECIATION. Real estate assets are recorded at
         depreciated cost less reductions for impairment, if any. In identifying
         potential impairment, management considers such factors as declines in
         a property's operating performance or market value, a change in use, or
         adverse changes in general market conditions. In determining whether an
         asset is impaired, management estimates the future cash flows expected
         to be generated from the asset's use and its eventual disposition. If
         the sum of these estimated future cash flows on an undiscounted basis
         is less than the asset's carrying cost, the asset is written down to
         its fair value. None of the Company's real estate assets have required
         write-downs.

         Expenditures directly related to the development, acquisition and
         improvement of real estate assets are capitalized at cost as land,
         buildings and improvements. Ordinary repairs and maintenance are
         expensed as incurred. Major replacements and betterments are
         capitalized and depreciated over their estimated useful lives.
         Buildings are generally depreciated over 27.5 years. Land improvements
         are depreciated over 15 years, and furniture, fixtures and equipment
         are depreciated over 5 to 7 years.

         REVENUE RECOGNITION. The Company leases its residential properties
         under operating leases with terms generally one year or less. Rental
         income is recognized when earned, which is not materially different
         than revenue recognition on a straight-line basis.

         CASH AND CASH EQUIVALENTS. All investments purchased with an original
         maturity of three months or less are considered to be cash equivalents.

         RESTRICTED CASH. Restricted cash consists of resident security deposits
         ($388,000). The 1999 restricted cash consists of resident security
         deposits ($359,000) and monies restricted by lenders from proceeds on
         mortgage financings ($843,000). Because the physical occupancy of
         Addison Place phase I was less than 95% at the time of closing, the
         lender required the Company to obtain a letter of credit in the amount
         of $843,000.

         DEFERRED FINANCING COSTS. Deferred financing costs include fees and
         costs incurred to obtain financings and are amortized on the
         straight-line method over the terms of the related debt.

         INTEREST AND REAL ESTATE TAXES. Interest and real estate taxes incurred
         during the construction period are capitalized and depreciated over the
         estimated useful lives of the constructed assets. Interest capitalized
         was $1,477,000, $621,000 and $580,000 for the years ended December 31,
         2000, 1999, and 1998, respectively.

         INCOME TAXES. The Company elected to be taxed as a REIT under the
         Internal Revenue Code of 1986, as amended (the "Code"), commencing with
         the taxable year ended December 31, 1994. As a result, the Company
         generally will not be subject to federal and state income taxation at
         the corporate level to the extent it distributes annually at least 95%
         of its taxable income, as defined in the Code, to its shareholders and
         satisfies certain other requirements. As a result of recently enacted
         tax legislation, effective for tax years beginning after December 31,
         2000, the distribution requirement has been reduced from 95% to 90% of
         a REIT's ordinary taxable income. Provided we maintain our
         qualification as a REIT, the Company generally will not be subject to
         federal income tax on distributed net income in the future.
         Accordingly, no provision has been made for federal and state income
         taxes in the accompanying consolidated financial statements.

         EARNINGS PER SHARE. Basic earnings per share is computed based upon the
         weighted average number of common Shares outstanding during the period.
         Diluted earnings per share is computed to reflect the potential
         dilution of all instruments or securities which are convertible into
         Shares of common stock.


                                      F-7
<PAGE>




         NEW ACCOUNTING PRONOUNCEMENTS. In June 1998, the Financial Accounting
         Standards Board issued Statement of Financial Accounting Standards No.
         133 ("SFAS") "Accounting for Derivative Instruments and Hedging
         Activities." The effective date of this statement was delayed by SFAS
         No. 137, and the statement was amended by SFAS No. 138. SFAS No. 133,
         as amended, requires the Company to recognize all derivatives on the
         balance sheet at fair value. Since the Company has an interst rate swap
         that it has designated as a hedge of its exposure to changes in the
         LIBOR rate on its $22,500,000 construction loan, and the swap was
         deemed to be highly effective in hedging the Company's exposure, the
         adoption of SFAS No. 133, as amended, is not expected to have a
         material impact on the Company's results of operations, but is expected
         to result in a $842,000 decrease in shareholders' equity (accumulated
         other comprehensive income) relating to the estimated fair value of the
         swap at January 1, 2001. Roberts Realty has no other derivative
         instruments or hedging activities.

         The Securities and Exchange Commission ("SEC") issued Staff Accounting
         Bulletin No. 101 ("SAB 101"), Revenue Recognition, which provides
         guidance on the recognition, presentation, and disclosure of revenue in
         financial statements. SAB 101 was required to be implemented in the
         fourth quarter of 2000. The adoption of SAB 101 did not have any impact
         on the Company's results of operations and financial position.

         RECLASSIFICATIONS. Certain prior years amounts have been reclassified
         to conform with the 2000 presentation.


3.       ACQUISITIONS AND DISPOSITIONS

         On January 9, 1998, the Company completed the sale of the Windsong
         community for $9,750,000 in cash resulting in a gain, net of minority
         interest, of $918,000 on the sale of real estate assets and an
         extraordinary gain, net of minority interest, of $68,000 on the buyer's
         assumption of related mortgage indebtedness. Net sales proceeds were
         $5,194,000 after deduction for loan repayment of $3,959,000 and closing
         costs and prorations totaling $597,000. Partnership profits interests
         of $288,000 were paid to Roberts Properties, Inc. The Company
         reinvested the net sales proceeds in replacement properties in
         connection with a Section 1031 tax-deferred exchange as described
         below. The purchaser is not affiliated with the Company. See Note 9 -
         Related Party Transactions.

         On June 22, 1998, the Company purchased approximately 23.8 acres of
         undeveloped land in the Ballantyne area of Charlotte, North Carolina
         for $3,540,000 from a local Charlotte investment group. The Company
         began construction of a 319-unit multifamily apartment community on the
         property during the fourth quarter of 1999. See Note 9 - Related Party
         Transactions.

         On June 24, 1998, the Company purchased approximately 49.1 acres of
         undeveloped land located in north Fulton County, Georgia for $5,294,000
         from Roberts Properties, Inc. ("Roberts Properties"), an affiliate
         owned by Mr. Roberts. The Company is constructing a 403-unit
         multifamily apartment community on the property. Construction of the
         118-unit first phase began in the third quarter of 1998 and was
         completed in the fourth quarter of 1999. Construction of the 285-unit
         second phase began in the second quarter of 1999. See Note 9 - Related
         Party Transactions.

         On June 25, 1998, the Company purchased approximately 35.3 acres of
         undeveloped land located in Gwinnett County, Georgia for $2,525,000
         from Roberts Properties Old Norcross, Ltd. The Company is constructing
         a 250-unit multifamily apartment community on the property, which began
         in the second quarter of 2000. See Note 9 - Related Party Transactions.

         On July 17, 1998, the Company completed the sale of its two retail
         centers for $2,400,000 in cash resulting in a gain, net of minority
         interest, of $300,000. Net sales proceeds were $2,182,000, after
         deducting for closing costs and prorations of $218,000. Partnership
         profits interests of $92,500 were paid to Roberts Properties. The
         purchaser is unaffiliated with the Company. See Note 9 - Related Party
         Transactions.


                                      F-8
<PAGE>




         On August 23, 1999, the Company sold the Bentley Place community for
         $8,273,000 in cash resulting in a gain, net of minority interest, of
         $1,023,000. Net sales proceeds were $3,726,000 after deduction for loan
         repayment and including prepayment fee, totaling $4,166,000, and
         closing costs, accrued interest, and prorations totaling $381,000.
         Partnership profits interests of $242,000 were paid to Roberts
         Properties under the amended partnership agreement of the Operating
         Partnership. The Company used the remaining net sales proceeds of
         $3,484,000 to fund a special distribution to shareholders and
         unitholders on August 30, 1999. The purchaser is not affiliated with
         the Company. See Note 9 - Related Party Transactions.

         On June 23, 2000, the Company completed the sale of its Ivey Brook
         community to Ivey Brook Apartments, Inc. for $14,550,000. Ivey Brook is
         a 146-unit apartment community located in Atlanta, Georgia. Net cash
         proceeds were $7,371,000, resulting in a gain, net of minority
         interest, of $2,285,000 after deducting $6,190,000 for the mortgage
         note payable which was assumed by the buyer, $263,000 for closing
         costs, and accrued interest and $726,000 for a partnership profits
         interest paid to Roberts Properties in July 2000. We used the net
         proceeds of $7,371,000 to fund a special distribution to shareholders
         and unitholders on July 27, 2000 and to fund construction projects. See
         Note 9 - Related Party Transactions.

         In the fourth quarter of 2000, the Company received $198,000 from a
         settlement relating to the sale of Bentley Place which was recorded as
         an additional gain (before minority intersts of $67,000).

         Unaudited pro forma amounts for the years ended December 31, 2000 and
         1999 assuming the sales of Ivey Brook and Bentley Place had taken place
         as of January 1 for the periods presented, are presented below (dollars
         in thousands, except per share amounts). The unaudited pro forma
         information is not necessarily indicative of the results of operations
         of the Company had the acquisition and sales occurred at the beginning
         of the periods presented, nor is it indicative of future results.

                                                             2000         1999
                                                             ----         ----

Total operating revenues                                  $19,286      $16,859
         Income (loss) before extraordinary items             515         (370)
         Net income (loss)                                    515         (370)

         Per Share Data - Basic and Diluted

                  Loss before extraordinary items           $0.11       $(0.08)
                  Net loss                                   0.11        (0.08)


4.       NOTES PAYABLE

         LINE OF CREDIT. The Company renewed a $2,000,000 revolving unsecured
         line of credit (the "Line") in June 2000 to provide funds for
         short-term working capital purposes. The Line has a one-year term and
         bears an interest rate of LIBOR plus 150 basis points. The amount
         outstanding under the Line was $0 and $1,235,000 at December 31, 2000
         and 1999, respectively.

         MORTGAGE NOTES. Mortgage notes payable were secured by the following
         communities at December 31, 2000 and 1999:


                                      F-9

<PAGE>

<TABLE>
<CAPTION>


         FIXED INTEREST    PRINCIPAL OUTSTANDING
-------------------------------------------------------------------------------------------------------------------
                                                                   RATE AS OF
         PROPERTY SECURING MORTGAGE              MATURITY           12/31/00          12/31/00            12/31/99
         --------------------------              --------           --------          --------            --------
<S>                                           <C>            <C>              <C>              <C>
         Addison Place - phase I                 11/15/09            6.95%          $ 9,492,000       $   9,500,000
         Bradford Creek                          06/15/08            7.15             8,181,000           8,273,000
         Crestmark                               10/01/08            6.57            15,586,000          15,778,000
         Highland Park                           02/15/03            7.30             7,740,000           7,844,000
         Ivey Brook                              02/15/07            7.14                     0           6,228,000
         Plantation Trace                        10/15/08            7.09            11,632,000          11,760,000
         Preston Oaks                            10/15/02            7.21             8,198,000           8,313,000
         River Oaks                              11/15/03            7.15             8,833,000           8,946,000
         Rosewood Plantation                     07/15/08            6.62             7,876,000           7,973,000
                                                                                  -------------      --------------

                                                                                    $77,538,000         $84,615,000
                                                                                  =============      ==============
</TABLE>

         CONSTRUCTION LOAN. On May 3, 2000, the Company closed a $22,500,000
         construction loan to fund the construction of the second phase of
         Addison Place. The loan has a 5-year term and bears an interest rate of
         LIBOR plus 150 basis points. When the loan closed, the Company entered
         into an interest rate swap agreement that synthetically fixed the
         interest rate at 8.62% (Note 2). At December 31, 2000, $14,152,000 was
         drawn on the loan.

         LAND LOANS. In October 1999, the Company closed a $3,000,000 land loan
         to fund the initial construction of the second phase of Addison Place.
         The loan was secured by the land for the second phase of Addison Place,
         had a six-month term, and an interest rate of LIBOR plus 150 basis
         points. The loan was repaid from the proceeds of a construction loan on
         the second phase of Addison Place - as discussed above.

         On February 1, 2000, the Company closed a $2,000,000 land loan to fund
         the initial construction of the Old Norcross community. The loan is
         secured by the Old Norcross land, has a 12-month term and bears an
         interest rate of LIBOR plus 150 basis points. The loan was renewed in
         February 2001 for an additional six month term.

         The scheduled principal payments of all debt outstanding at December
         31, 2000 for each of the years ending December 31 are as follows:

                         2001                                         $3,001,000
                         2002                                          9,088,000
                         2003                                         16,971,000
                         2004                                            942,000
                         2005                                         14,628,000
                         Thereafter                                   49,060,000
                                                                      ----------

                         Mortgage notes payable                      $93,690,000
                                                                      ==========

         Real estate assets having a combined depreciated cost of approximately
         $93,881,000 serve as collateral for the outstanding mortgage debt at
         December 31, 2000.


                                      F-10
<PAGE>

5.       EXTRAORDINARY ITEMS

         The 2000 extraordinary item relates to the write-off of unamortized
         loan costs for the extinguishment of the mortgage loan secured by the
         Ivey Brook community, which the Company sold on June 23, 2000. This
         extraordinary item is net of $35,000 which was allocated to the
         minority interest of the unitholders in the Operating Partnership, and
         calculated based on the weighted average number of partnership Units
         outstanding during the period.

         The 1999 extraordinary item relates to the write-off of unamortized
         loan costs and prepayment fee to the lender for the extinguishment of
         the mortgage loan secured by the Bentley Place community, which the
         Company sold on August 23, 1999. This extraordinary item is net of
         $107,000, which was allocated to the minority interest of the
         unitholders in the Operating Partnership, and calculated based on the
         weighted average number of partnership Units outstanding during the
         period.

         The 1998 extraordinary items are comprised of (1) the write-off of
         unamortized debt premium associated with the January 9, 1998 buyer's
         assumption of the mortgage note secured by the Windsong community upon
         sale of the property, (2) the write-off of unamortized loan costs and
         prepayment fee to the lender for the refinancing of the mortgage note
         secured by the Rosewood Plantation community on June 23, 1998, and (3)
         the write-off of unamortized loan costs and prepayment fee to the
         lender for the refinancing of the mortgage notes secured by the
         Crestmark community on September 30, 1998. These extraordinary items
         are net of $306,000, which was allocated to the minority interest of
         the unitholders in the Operating Partnership, based on the weighted
         average number of Units outstanding during the period.

6.       FAIR VALUE DISCLOSURE OF FINANCIAL INSTRUMENTS

         The following disclosures of estimated fair value were determined by
         management using available market information and appropriate valuation
         methodologies. Because considerable judgment is necessary to interpret
         market data and develop the related estimates of fair value, the
         estimates presented herein are not necessarily indicative of the
         amounts that could be realized upon disposition of the financial
         instruments. The use of different market assumptions and/or estimation
         methodologies may have a material effect on the estimated fair value
         amounts.

         The fair value of the Company's interest rate swap on its construction
         loan was ($842,000) at December 31, 2000.

         Cash and cash equivalents, accounts payable, accrued expenses, security
         deposits and other liabilities, due to their short-term nature, are
         carried at amounts which reasonably approximate their fair values at
         December 31, 2000 and 1999. Fixed rate mortgage debt, the construction
         loan, the variable rate line of credit, and the variable rate land loan
         with carrying values of $93,690,000 and $88,850,000 at December 31,
         2000 and 1999, respectively, are estimated by management to approximate
         fair value based upon interest rates available to the Company for debt
         with similar terms and maturities.

7.       SHAREHOLDERS' EQUITY

         EXCHANGES OF UNITS FOR SHARES. During the years ended December 31,
         2000, 1999, and 1998, a total of 191,341 185,858, and 330,468 Units,
         respectively, were exchanged for the same number of Shares. Each
         conversion was reflected in the accompanying consolidated financial
         statements at book value.


                                      F-11
<PAGE>


         REDEMPTIONS OF UNITS FOR CASH. During the years ended December 31,
         1999, and 1998, a total of 3,917 and 14,341 Units were redeemed for
         cash of $28,000 and $122,000, respectively. No Units were redeemed for
         cash in 2000.

         RESTRICTED SHARE AWARDS. During the years ended December 31, 2000,
         1999, and 1998, the Company granted 10,261, 9,802 and 13,061 Shares of
         restricted stock to certain employees. The market value of these
         restricted stock grants totaled $77,000, $79,000 and $111,000,
         respectively, which was recorded as unamortized deferred compensation
         and is shown as a separate component of shareholders' equity. These
         restricted Shares vest 100% at the end of a three or four-year vesting
         period and are being amortized to compensation expense ratably over the
         vesting period.

         TREASURY SHARE REPURCHASES. During the years ended December 31, 2000,
         1999, and 1998, the Company repurchased 152,588, 121,200 and 19,300
         Shares at a total cost of $1,156,000, $909,000 and $145,000,
         respectively.

         DIVIDENDS. On December 19, 2000, the Company's board of directors
         declared a quarterly distribution in the amount of $0.11 per common
         Share and Unit payable on January 12, 2001 to shareholders and
         unitholders of record on December 29, 2000. Of the total dividends
         declared for 2000 totaling $0.74 per share, approximately $0.18 per
         share represents ordinary income, $0.42 per share represents capital
         gain and $0.14 per share represents a return of capital to the
         shareholders. On November 16, 1999, the Company's board of directors
         declared a quarterly distribution in the amount of $0.135 per common
         Share and Unit payable on January 14, 2000 to shareholders and
         unitholders of record on December 30, 1999. Of the total dividends
         declared for 1999 totaling $1.085 per share, approximately $0.12 per
         share represents ordinary income, $0.21 per share represents capital
         gain and $0.75 per share represents a return of capital to the
         shareholders. On December 15, 1998, the board of directors declared a
         quarterly distribution in the amount of $0.145 per common Share and
         Unit payable on January 15, 1999 to shareholders and unitholders of
         record on December 31, 1998. Of the total dividends declared for 1998
         totaling $0.5775 per share, approximately $0.16 per share represents
         ordinary income, $0.05 per share represents capital gain and $0.37 per
         share represents a return of capital to the shareholders.

         EARNINGS PER SHARE. Reconciliations of income available to common
         shareholders and weighted average Shares and Units used in the
         Company's basic and diluted earnings per share computations are
         detailed below (dollars in thousands).
<TABLE>
<CAPTION>

                                                                                  2000              1999            1998
                                                                                  ----              ----            ----

<S>                                                                          <C>               <C>             <C>
         Income before extraordinary items - basic                           $   2,900         $     900       $    1,195
         Minority interest of Unitholders in the Operating
            Partnership in income before extraordinary items                     1,478               520              748
                                                                             ---------         ---------       ----------

         Income before extraordinary items - diluted                         $   4,378         $   1,420       $    1,943
                                                                             =========         =========       ==========


         Net income - basic                                                  $   2,832         $     716       $      708
         Minority interest of Unitholders in Operating
          Partnership in net income                                              1,443               413              442
                                                                             ---------         ---------       ----------

         Net income - diluted                                                $   4,275         $   1,129       $    1,150
                                                                             =========         =========       ==========


         Weighted average Shares - basic                                     4,881,601         4,737,008        4,638,265
         Dilutive Securities - weighted average Units                        2,485,467         2,711,749        2,909,713
                                                                             ---------         ---------       ----------

         Weighted average Shares - diluted                                   7,367,068         7,448,757        7,547,978
                                                                             =========         =========       ==========
</TABLE>

                                      F-12

<PAGE>


8.       SEGMENT REPORTING

         SFAS No. 131 established standards for reporting financial and
         descriptive information about operating segments in annual financial
         statements. Operating segments are defined as components of an
         enterprise about which separate financial information is available that
         is evaluated regularly by the chief operating decision maker in
         deciding how to allocate resources and in assessing performance. The
         Company's chief operating decision maker is its chief executive
         officer.

         The Company owns, operates, and develops multifamily apartment
         communities in two major markets located in Georgia and North Carolina.
         These apartment communities generate rental revenue and other income
         through leasing of apartment homes to a diverse group of residents. The
         Company evaluates the performance of each of its apartment communities
         on an individual basis. However, because each of the apartment
         communities have similar economic characteristics, residents, and
         products and services, the apartment communities have been aggregated
         into one reportable segment. This segment comprises 100%, 100% and 99%,
         respectively, of the Company's total revenues for each of the three
         years ended December 31, 2000, 1999, and 1998.

         The primary financial measure for the Company's reportable business
         segment is net operating income ("NOI"), which represents total
         property revenues less total property operating expenses, excluding
         general and administrative and depreciation expenses. Current year NOI
         is compared to prior year NOI and current year budgeted NOI as a
         measure of financial performance. NOI from apartment communities
         totaled $13,419,000, $12,696,000, and $11,162,000 for the years ended
         December 31, 2000, 1999 and 1998, respectively. All other segment
         measurements are disclosed in the Company's consolidated financial
         statements.

9.       RELATED PARTY TRANSACTIONS

         LAND ACQUISITIONS. On June 22, 1998, the Company purchased the
         Ballantyne land for $3,540,000 from a local Charlotte investment group
         unrelated to the Company. As part of the closing costs, the Operating
         Partnership paid Roberts Properties an acquisition fee of $166,000 for
         finding the property, negotiating the sales contract, conducting due
         diligence and closing the transaction. In addition, the Operating
         Partnership paid Roberts Properties a fee of $1,595,000, or $5,000 per
         unit, for designing, developing, and overseeing construction of the
         Ballantyne project. The independent members of the board of directors
         approved the foregoing arrangements with Roberts Properties.

         On June 24, 1998, the Company purchased the Addison Place land for
         $5,294,000 from Roberts Properties. As part of the closing costs, the
         Operating Partnership paid Roberts Properties an acquisition fee of
         $250,000 for finding the property, negotiating the sales contract,
         conducting due diligence and closing the transaction. In addition, the
         Operating Partnership paid Roberts Properties a fee of $2,015,000, or
         $5,000 per unit, for designing, developing, and overseeing construction
         of the Addison Place project. The independent members of the board of
         directors approved the foregoing arrangements with Roberts Properties
         after reviewing two independent appraisals. Roberts Properties acquired
         the property for $4,343,000 on March 6, 1997.


                                      F-13
<PAGE>

         On June 25, 1998, the Company purchased the Old Norcross land for
         $2,525,000 from Roberts Properties Old Norcross, Ltd.. Mr. Roberts, who
         was the general partner of Roberts Properties Old Norcross, Ltd.,
         received none of the sale proceeds as general partner or otherwise. As
         part of the closing costs, the Operating Partnership paid Roberts
         Properties an acquisition fee of $119,250 for finding the property,
         negotiating the sales contract, conducting due diligence and closing
         the transaction. In addition, the Operating Partnership will pay
         Roberts Properties a fee of $1,250,000, or $5,000 per unit, for
         designing, developing, and overseeing construction of the Old Norcross
         project. Through December 31, 2000, the Company had paid $1,141,250 of
         the $1,250,000 development fees. The independent members of the board
         of directors approved the foregoing arrangements with Roberts
         Properties after reviewing two independent appraisals.

         CONSTRUCTION CONTRACTS. The Company enters into contractual commitments
         in the normal course of business related to the construction of real
         estate assets with Roberts Properties Construction, Inc. ("Roberts
         Construction"). Mr. Roberts owns all of the outsatnding shares of
         Roberts Construction. Roberts Construction constructed the first phase
         of Addison Place under a cost plus 10% contract. Roberts Construction
         is currently constructing the second phase of Addison Place, consisting
         of 285 apartment homes, under a cost plus 10% arrangement. Roberts
         Construction started construction of the Ballantyne community in 1999
         and is the general contractor on the project. In 2000, the Company
         entered into a contract with Roberts Construction related to
         construction of the Old Norcross project in Atlanta. Under both the
         Ballantyne and Old Norcross contracts, the Company will pay Roberts
         Construction cost plus 10%. The contractual amounts for projects
         started and/or completed with Roberts Construction during the last
         three years, from inception through December 31, 2000 are summarized in
         the following table:
<TABLE>
<CAPTION>
                                                          ACTUAL/
                                                         ESTIMATED                                   ESTIMATED
                                                           TOTAL                                     REMAINING
                                                         CONTRACT               AMOUNT              CONTRACTUAL
                                                          AMOUNT               INCURRED             COMMITMENT
                                                        ----------             --------             -----------
<S>                                                  <C>                   <C>                 <C>
                  Bradford Creek                       $10,394,000           $10,394,000         $           0
                  Plantation Trace - Phase II            4,908,000             4,908,000                     0
                  Ballantyne                            23,100,000             1,358,000            21,742,000
                  Old Norcross                          16,000,000               844,000            15,156,000
                  Addison Place - Phase I                9,647,000             9,647,000                     0
                  Addison Place - Phase II              20,605,000            14,998,000             5,607,000
                                                     -------------         -------------          ------------

                                                       $84,654,000          $ 42,149,000           $42,505,000
                                                     =============          ============          ============
</TABLE>

         The Company paid Roberts Construction for labor and materials to
         perform capital improvements for the communities in the amount of
         $33,000, $420,000 and $52,000 in 2000, 1999 and 1998, respectively.

         DEVELOPMENT FEES. Roberts Properties received fees for various
         development services including market studies, business plans, design,
         finish selection, interior design and construction administration
         (including amounts described in "Land Acquisitions" above). Fees
         incurred totaled $2,148,000, $2,603,000 and $0 for the years ended
         December 31, 2000, 1999 and 1998, respectively.

         PARTNERSHIP PROFITS INTEREST. Between 1994 and 1996, the Operating
         Partnership acquired nine limited partnerships of which Mr. Roberts was
         the sole general partner. As a part of each acquisition, the Operating
         Partnership assumed an existing financial obligation to an affiliate of
         Mr. Roberts. That financial obligation has been formalized as a profits
         interest in the Operating Partnership ("Profits Interests").


                                      F-14
<PAGE>


         As the holder of the Profits Interests, Roberts Properties may receive
         distributions in certain circumstances. Upon a sale of any of the
         acquired properties, Roberts Properties will receive a distribution of
         a specified percentage of the gross sales proceeds, or, in the case of
         the Crestmark Phase II land, a specified amount. Upon a change in
         control of the Company, or the Operating Partnership, Roberts
         Properties will receive a distribution of the applicable percentages of
         the fair market values of all of the properties and the specified
         amount with respect to the Crestmark Phase II land. The amount to be
         distributed to Roberts Properties with respect to each affected
         property will, however, be limited to the amount by which the gross
         proceeds from the sale of that property, or, in connection with a
         change in control, its fair market value, exceeds the sum of:

         o   the debt assumed, or taken subject to, by the Operating Partnership
             in connection with its acquisition of the property;

         o   the equity issued by the Operating Partnership in acquiring the
             property; and

         o   all subsequent capital improvements to the property made by the
             Operating Partnership.

        The percentages that apply to the sales prices, or fair market values,
        of the affected properties are shown in the following table:

                           River Oaks                                         5%
                           Rosewood Plantation                                5%
                           Preston Oaks Phase I                               5%
                           Highland Park                                      5%
                           Crestmark Phase I                                  5%
                           Plantation Trace Phase I                           6%

         In the case of the Crestmark Phase II land, the specified amount is
         $86,775.

         If the Company exercises its option to acquire all of the outstanding
         Units for Shares, it must simultaneously purchase the Profits Interests
         for cash in the amount the holder of that interest would receive if a
         change in control occurred at that time.

         Except for Units and the partnership profits interest related to the
         original nine limited partnerships acquired between 1994 and 1996, no
         partnership interests have been, or are presently expected to be,
         issued or assumed by the Operating Partnership.

         During 2000, 1999, and 1998, Profits Interests of $726,000, $242,000,
         and $348,000, respectively, were paid to Roberts Properties.

         OTHER FEES. During 2000, 1999 and 1998, affiliates of Mr. Roberts
         received fees and cost reimbursements for services related to (1)
         leasing administration services at the Shoppes of River Oaks and
         Shoppes of Plantation Trace ($21,000), (2) the acquisition and rezoning
         of a 1.1 acre parcel of undeveloped land located adjacent to the
         existing Preston Oaks community ($25,000), (3) the sale of the Shoppes
         of River Oaks ($33,000), and (4) miscellaneous fees and cost
         reimbursements ($728,000). These fees and costs incurred totaled
         $192,000, $242,000, and $373,000 for the years ended December 31, 2000,
         1999 and 1998, respectively.

         LOAN ORIGINATION FEES. A director of the Company is executive vice
         president of a commercial mortgage banking firm that has originated
         loans for the Company. Loan origination fees incurred totaled $0, $0,
         and $63,000 for the years ended December 31, 2000, 1999 and 1998,
         respectively.

                                      F-15

<PAGE>


         10.      COMMITMENTS AND CONTINGENCIES

         The Company and the Operating Partnership are subject to various legal
         proceedings and claims that arise in the ordinary course of business.
         While the resolution of these matters cannot be predicted with
         certainty, the Company believes that the final outcome of these matters
         will not have a material adverse effect on the Company's financial
         position or results of operations.

         As a result of the mergers of various limited partnerships into the
         Operating Partnership, the former partners of these limited
         partnerships received Units. Holders of Units have the right to require
         the Operating Partnership to redeem their Units for Shares, subject to
         certain conditions. Upon submittal of Units for redemption, the
         Operating Partnership will have the option either (a) to pay cash for
         those Units at their fair market value, which will be based upon the
         then current trading price of the Shares, or (b) to acquire those Units
         in exchange for Shares (on a one-for-one basis). The Company has
         adopted a policy that it will issue Shares in exchange for all future
         Units submitted. There were 2,403,495 Units outstanding at December 31,
         2000 that could be exchanged for Shares, subject to the conditions
         described above.

         The Company enters into contractual commitments in the normal course of
         business related to the development of real estate assets. Management
         does not believe that the completion of these commitments will result
         in a material adverse effect on the Company's financial position or
         results of operations.

11.      SUPPLEMENTAL CASH FLOW INFORMATION

         Non-cash investing and financing activities for the years ended
         December 31, 2000, 1999, and 1998 were as follows:

         A. On January 9, 1998, the Company sold the Windsong community. As a
         condition of the sale, the purchaser assumed the mortgage note payable
         associated with the property in the amount of $3,959,000.

         B. On June 23, 2000, the Company sold the Ivey Brook community. As a
         condition of the sale, the purchaser assumed the mortgage note payable
         associated with the property in the amount of $6,190,000.


12.      SUBSEQUENT EVENTS

         On January 4, 2001, the Company sold the Rosewood Plantation community
         for $14,800,000. The sale resulted in a gain of $5,188,000, net of
         minority interest of Unitholders in the Operating Partnership. The
         Company acquired the community in October 1994. Rosewood Plantation is
         a 152-unit apartment home community located in Gwinnett County in the
         Atlanta metropolitan area. Net sale proceeds were $5,789,000 after
         deduction for loan repayment of $7,875,000, Profits Interests of
         $740,000 and closing costs and prorations of $396,000. The purchaser,
         is not affiliated with the Company.

         On February 1, 2001, the Company refinanced the mortgage note with
         Primary Capital Advisors which serves as permanent financing for the
         Preston Oaks community. This $12,700,000 loan has a 7 year term with a
         fixed interest rate of 7.18% payable in monthly installments of $86,034
         based on a 30-year amortization schedule.

         On February 27, 2001, the Company signed an exchange agreement with
         Real Estate Exchange Services to acquire land previously owned by
         Roberts Properties Jones Bridge, LLC. At the time the agreement was
         entered into, the Company loaned Real Estate Exchange Services
         $3,514,000 to acquire the property and hold title until July 2, 2001.
         On July 2, 2001, a Qualified Intermediary will purchase the property
         and then sell it to the Company in order to complete a Section 1031
         tax-deferred exchange. The Company will use the net proceeds from the
         Rosewood Plantation sale to purchase this property.

                                      F-16
<PAGE>
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION

ROBERTS REALTY INVESTORS, INC.
<TABLE>
<CAPTION>
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2000
(DOLLARS IN THOUSANDS)
------------------------------------------------------------------------------------------------------------------------------

                                              Initial Cost to Company                               Carried at Close of Period
                                              -----------------------                               ---------------------------
                                                                              Improvements
                                                                               Capitalized
                                                                                     After
                                                             Buildings and     Acquisition/                Buildings and
Description                Encumbrance          Land          Improvements    Construction         Land     Improvements    Total
-----------                -----------          ----          ------------    -----------          ----     ------------    -----
<S>                        <C>          <C>                 <C>              <C>            <C>        <C>           <C>
River Oaks                    $  8,833     $   1,837           $     9,718      $     851      $  1,837   $ 10,569      $  12,406
Rosewood Plantation              7,876         1,310                 7,120            220         1,310      7,340          8,650
Preston Oaks                     8,198         2,570                11,278            287         2,570     11,565         14,135
Highland Park                    7,740         1,827                10,003            177         1,827     10,180         12,007
Addison Place Flats (A)         14,152           696                 5,168              0           696      5,168          5,864
Plantation Trace                11,632         2,385                15,802            700         2,385     16,502         18,887
Old Norcross (A)                 2,000             0                     0              0             0          0              0
Bradford Creek                   8,181         1,672                12,174             95         1,672     12,269         13,941
Crestmark                       15,586         4,366                20,397            138         4,366     20,535         24,901
Addison Place Townhomes          9,492         2,080                10,440            369         2,080     10,809         12,889
                              --------     ---------             ---------      ---------     ---------  ---------      ---------
Total                         $ 93,690     $  18,743           $   102,100      $   2,837      $ 18,743   $104,937      $ 123,680
                              ========     =========           ===========      =========     =========  =========      =========


                                                  Life on which                                 Date of
                           Accumulated             Depreciation                      Date      Original
Description               Depreciation              is Computed                  Acquired  Construction
-----------               ------------              -----------                  --------  ------------
River Oaks                    $  3,708           3 - 27.5 Years                  Oct - 94          1992
Rosewood Plantation              2,599           3 - 27.5 Years                  Oct - 94          1994
Preston Oaks                     3,192           3 - 27.5 Years                  Oct - 94          1995
Highland Park                    2,900           3 - 27.5 Years                  Oct - 94          1995
Addison Place Flats                125           3 - 27.5 Years                  Jun - 98          1999
Plantation Trace                 3,839           3 - 27.5 Years                  May - 95          1990
Bradford Creek                   1,914           3 - 27.5 Years                  Mar - 96          1998
Crestmark                        4,798           3 - 27.5 Years                  Jun - 96          1996
Addison Place Townhomes            986           3 - 27.5 Years                  Sep - 99          1999
                              --------
Total                         $ 24,061
                              ========
</TABLE>

                                       S-1


<PAGE>


The accompanying notes are an integral part of this schedule.

(A)      A portion of Addison Place phase two and the Old Norcross property were
         under construction as of December 31, 2000. Construction in progress
         and real estate under development of $28,439 as of December 31, 2000
         (which is excluded from Schedule III) includes these properties as well
         as the Ballantyne development in Charlotte, NC, which was unencumbered
         at December 31, 2000.

(B)      The Company enters into contractual commitments in the normal course of
         business related to the construction of real estate assets with Roberts
         Construction - see Note 9 to the Consolidated Financial Statements.

(C)      Gross capitalized costs of real estate assets are summarized as
         follows:
<TABLE>
<CAPTION>
                                                                   2000             1999              1998
                                                                   ----             ----              ----

<S>                                                        <C>              <C>             <C>
         Balance at beginning of period                        $128,898         $122,830        $  111,778
              Additions during period:
                  Other additions                                 6,555           12,915            21,323
                  Improvements                                      902              950               792
                                                             ----------       ----------         ---------
                      Total Additions                             7,457           13,865            22,115
                                                             ----------       ----------         ---------

              Deductions during period:
                  Sales                                         (12,068)          (7,459)          (10,781)
                  Other disposals                                  (607)            (338)             (282)
                                                             -----------      ----------         ---------
                      Total disposals                           (12,675)          (7,797)          (11,063)
                                                             ----------       ----------         ---------

         Balance at close of period                          $  123,680         $128,898          $122,830
                                                              =========       ==========         =========

(D) Accumulated depreciation on real estate assets is as follows:

                                                                   2000             1999              1998
                                                                   ----             ----              ----

         Balance at beginning of period                      $   21,029       $   16,914        $   13,401

              Additions during period:
                  Depreciation expense                            5,463            5,529             5,017
                                                              ---------         --------          --------

              Deductions during period

                  Sales                                          (1,959)          (1,154)           (1,304)
                  Other disposals:                                 (472)            (260)             (200)
                                                              ---------         --------          --------
                      Total disposals                            (2,431)          (1,414)           (1,504)
                                                              ---------         --------          --------

         Balance at close of period                          $   24,061       $   21,029         $  16,914
                                                              =========        =========          ========

</TABLE>
                                      S-2


<PAGE>

         3.       Exhibits.

         We have filed some of the exhibits required by Item 601 of Regulation
S-K with previous registration statements or reports. As specifically noted in
the following Index to Exhibits, those previously filed exhibits are
incorporated into this annual report on Form 10-K by reference. All exhibits
contained in the following Index to Exhibits that are designated with an
asterisk are incorporated into this annual report by reference from our initial
Registration Statement on Form 10-SB filed with the SEC on March 22, 1996; the
applicable exhibit number in that Registration Statement is provided beside the
asterisk.

         WE WILL PROVIDE A COPY OF ANY OR ALL OF THE FOLLOWING EXHIBITS TO ANY
SHAREHOLDER WHO REQUESTS THEM, FOR A COST OF TEN CENTS PER PAGE.

EXHIBIT
  NO.                                     DESCRIPTION
-------                                   ------------

    3.1              Articles of Incorporation of Roberts Realty Investors, Inc.
                     filed with the Georgia Secretary of State on July 22, 1994.
                     [* 2.1]

    3.2              Bylaws of Roberts Realty Investors, Inc.  [* 2.2]

    4.1              Agreement of Limited Partnership of Roberts Properties
                     Residential, L.P., dated as of July 22, 1994. [* 3.1]

    4.1.1            First Amended and Restated Agreement of Limited Partnership
                     of Roberts Properties Residential, L.P., dated as of
                     October 1, 1994. [* 3.1.1]

    4.1.2            Amendment #1 to First Amended and Restated Agreement of
                     Limited Partnership of Roberts Properties Residential,
                     L.P., dated as of October 13, 1994. [* 3.1.2]

    4.1.3            Amendment #2 to First Amended and Restated Agreement of
                     Limited Partnership of Roberts Properties Residential, L.P.
                     [Incorporated by reference to Exhibit 10.1 from our
                     Registration Statement on Form S-3 filed July 8, 1999,
                     registration number 333-82453.]

    4.2              Certificate of Limited Partnership of Roberts Properties
                     Residential, L.P. filed with the Georgia Secretary of State
                     on July 22, 1994. [* 3.2]

    4.2.1            Certificate of Merger filed with the Georgia Secretary of
                     State on October 13, 1994, merging Roberts Properties River
                     Oaks, L.P.; Roberts Properties Rosewood Plantation, L.P.;
                     Roberts Properties Preston Oaks, L.P.; and Roberts
                     Properties Highland Park, L.P. with and into Roberts
                     Properties Residential, L.P. (1994 Consolidation). [*
                     3.2.1]

    4.2.2            Certificate of Merger filed with the Georgia Secretary of
                     State on March 24, 1995, merging Roberts Properties Holcomb
                     Bridge, L.P. with and into Roberts Properties Residential,
                     L.P. (Holcomb Bridge Merger). [* 3.2.2]

    4.2.3            Certificate of Merger filed with the Georgia Secretary of
                     State on May 16, 1995, merging Roberts Properties
                     Plantation Trace, L.P. with and into Roberts Properties
                     Residential, L.P. (Plantation Trace Merger). [* 3.2.3]

    4.2.4            Certificate of Merger filed with the Georgia Secretary of
                     State on September 27, 1995, merging Roberts Properties-St.
                     Simons, L.P. with and into Roberts Properties Residential,
                     L.P. (Windsong Merger). [* 3.2.4]


                                       48
<PAGE>


    4.2.5            Certificate of Merger filed with the Georgia Secretary of
                     State on March 21, 1996, merging Roberts Properties Bentley
                     Place, L.P. with and into Roberts Properties Residential,
                     L.P. (Bentley Place Merger). [Incorporated by reference to
                     Exhibit 4.2.5 from our quarterly report on Form 10-QSB for
                     the quarter ended June 30, 1996.]

    4.2.6            Certificate of Merger filed with the Georgia Secretary of
                     State on June 26, 1996, merging The Crestmark Club, L.P.
                     with and into Roberts Properties Residential, L.P.
                     (Crestmark Merger). [Incorporated by reference to Exhibit
                     4.2.6 from our quarterly report on Form 10-QSB for the
                     quarter ended June 30, 1996.]

    4.2.7            Certificate and Articles of Merger filed with the Georgia
                     Secretary of State on April 1, 1997 merging Roberts
                     Properties Management, L.L.C. with and into Roberts
                     Properties Residential, L.P. [Incorporated by reference to
                     Exhibit 4.2.7 from our current report on Form 8-K dated
                     April 1, 1997.]

   10.1.1            Real Estate Note executed by Roberts Properties
                     Residential, L.P. in favor of Nationwide Life Insurance
                     Company, dated September 20, 1995, in the original
                     principal amount of $8,711,000.00 (Preston Oaks). [*
                     6.11.1]

   10.1.2            Deed to Secure Debt and Security Agreement executed by
                     Roberts Properties Residential, L.P. in favor of Nationwide
                     Life Insurance Company, dated September 20, 1995, and
                     related collateral documents (Preston Oaks). [* 6.11.2]

   10.2.1            Real Estate Note A executed by Roberts Properties
                     Residential, L.P. in favor of Nationwide Life Insurance
                     Company, dated January 31, 1996, in the original principal
                     amount of $6,678,000.00 (Highland Park). [* 6.18.1]

   10.2.2            Real Estate Note B executed by Roberts Properties
                     Residential, L.P. in favor of Employers Life Insurance
                     Company of Wausau, dated January 31, 1996, in the original
                     principal amount of $1,500,000.00 (Highland Park). [*
                     6.18.2]

   10.2.3            Deed to Secure Debt and Security Agreement executed by
                     Roberts Properties Residential, L.P. in favor of Nationwide
                     Life Insurance Company and Employers Life Insurance Company
                     of Wausau, dated January 31, 1996, and related collateral
                     documents (Highland Park). [* 6.18.3]

   10.3.1            Real Estate Note A executed by Roberts Properties
                     Residential, L.P. in favor of Nationwide Life Insurance
                     Company, dated October 17, 1996, in the original principal
                     amount of $7,250,000.00 (River Oaks). [Incorporated by
                     reference to Exhibit 10.3.3 from our annual report on Form
                     10-KSB for the year ended December 31, 1996.]

   10.3.2            Real Estate Note B executed by Roberts Properties
                     Residential, L.P. in favor of Nationwide Life & Annuity
                     Insurance Company, dated October 17, 1996, in the original
                     principal amount of $2,000,000.00 (River Oaks).
                     [Incorporated by reference to Exhibit 10.3.4 from our
                     annual report on Form 10-KSB for the year ended December
                     31, 1996.]

   10.3.3            Deed to Secure Debt and Security Agreement executed by
                     Roberts Properties Residential, L.P. in favor of Nationwide
                     Life Insurance Company and Nationwide Life & Annuity
                     Insurance Company, dated October 17, 1996, and related
                     collateral documents (River Oaks). [Incorporated by
                     reference to Exhibit 10.3.5 from our annual report on Form
                     10-KSB for the year ended December 31, 1996.]

   10.4.1            Promissory Note executed by Roberts Properties Residential,
                     L.P. in favor of The Prudential Insurance Company of
                     America, dated September 29, 1998, in the original
                     principal amount of $11,900,000 (Plantation Trace).
                     [Incorporated by reference to Exhibit 10.07.04 from our
                     quarterly report on Form 10-Q for the quarter ended
                     September 30, 1998.]

                                       49
<PAGE>


   10.4.2            Deed to Secure Debt and Security Agreement executed by
                     Roberts Properties Residential, L.P. in favor of The
                     Prudential Insurance Company of America, dated September
                     29, 1998, and related collateral documents (Plantation
                     Trace). [Incorporated by reference to Exhibit 10.07.05 from
                     our quarterly report on Form 10-Q for the quarter ended
                     September 30, 1998.]

   10.4.3            Limited Guaranty executed by Roberts Realty Investors, Inc.
                     in favor of The Prudential Insurance Company of America,
                     dated September 29, 1998 (Plantation Trace). [Incorporated
                     by reference to Exhibit 10.07.06 from our quarterly report
                     on Form 10-Q for the quarter ended September 30, 1998.]

   10.5.1            Real Estate Note executed by Roberts Properties
                     Residential, L.P. in favor of Nationwide Life Insurance
                     Company, dated June 1, 1998, in the original principal
                     amount of $8,400,000.00 (Bradford Creek). [Incorporated by
                     reference to Exhibit 10.8.6 from our quarterly report on
                     Form 10-Q for the quarter ended June 30, 1998.]

   10.5.2            Deed to Secure Debt and Security Agreement executed by
                     Roberts Properties Residential, L.P. in favor of Nationwide
                     Life Insurance Company of America, dated June 1, 1998, and
                     related collateral documents (Bradford Creek).
                     [Incorporated by reference to Exhibit 10.8.7 from our
                     quarterly report on Form 10-Q for the quarter ended June
                     30, 1998.]

   10.5.3            Guaranty between Roberts Realty Investors, Inc. and
                     Nationwide Life Insurance Company of America, dated June 1,
                     1998 (Bradford Creek). [Incorporated by reference to
                     Exhibit 10.8.8 from our quarterly report on Form 10-Q for
                     the quarter ended June 30, 1998.]

   10.6.1            Real Estate Note executed by Roberts Properties
                     Residential, L.P. in favor of Freddie Mac, dated September
                     30, 1998, in the original principal amount of $16,000,000
                     (Crestmark). [Incorporated by reference to Exhibit 10.10.06
                     from our quarterly report on Form 10-Q for the quarter
                     ended September 30, 1998.]

   10.6.2            Deed to Secure Debt and Security Agreement executed by
                     Roberts Properties Residential, L.P. in favor of Freddie
                     Mac, dated September 30, 1998, and related collateral
                     documents (Crestmark). [Incorporated by reference to
                     Exhibit 10.10.07 from our quarterly report on Form 10-Q for
                     the quarter ended September 30, 1998.]

   10.6.3            Guaranty executed by Roberts Realty Investors, Inc. in
                     favor of Freddie Mac, dated September 30, 1998 (Crestmark).
                     [Incorporated by reference to Exhibit 10.10.08 from our
                     quarterly report on Form 10-Q for the quarter ended
                     September 30, 1998.]

   10.7.1            Amended and Restated Consulting Agreement between Roberts
                     Properties Residential, L.P. and Roberts Properties, Inc.,
                     dated June 26, 1996. [Incorporated by reference to Exhibit
                     10.23.1 from our quarterly report on Form 10-QSB for the
                     quarter ended June 30, 1996.]

   10.7.2            Amended and Restated Consulting Agreement between Roberts
                     Properties Residential, L.P. and Roberts Properties Group,
                     Inc., dated June 26, 1996. [Incorporated by reference to
                     Exhibit 10.23.2 from our quarterly report on Form 10-QSB
                     for the quarter ended June 30, 1996.]

   10.7.3            Design and Development Agreement between Roberts Properties
                     Residential, L.P. and Roberts Properties, Inc. (Addison
                     Place). [Incorporated by reference to Exhibit 10.14.11 from
                     our quarterly report on Form 10-Q for the quarter ended
                     June 30, 2000.]



                                       50
<PAGE>

   10.7.4            Design and Development Agreement between Roberts Properties
                     Residential, L.P. and Roberts Properties, Inc. (Old
                     Norcross). [Incorporated by reference to Exhibit 10.16.04
                     from our quarterly report on Form 10-Q for the quarter
                     ended June 30, 2000.]

   10.7.5            Construction Administration Agreement between Roberts
                     Residential, L.P. and Roberts Properties, Inc. (Old
                     Norcross). [Incorporated by reference to Exhibit 10.16.05
                     from our quarterly report on Form 10-Q for the quarter
                     ended June 30, 2000.]

   10.7.6            Design and Development Agreement between Roberts Properties
                     Residential, L.P. and Roberts Properties, Inc.
                     (Ballantyne). [Incorporated by reference to Exhibit
                     10.17.01 from our quarterly report on Form 10-Q for the
                     quarter ended June 30, 2000.]

   10.7.7            Construction Administration Agreement between Roberts
                     Residential, L.P. and Roberts Properties, Inc.
                     (Ballantyne). [Incorporated by reference to Exhibit
                     10.17.02 from our quarterly report on Form 10-Q for the
                     quarter ended June 30, 2000.]

   10.7.8            Agreement and Plan of Merger by and between Roberts
                     Properties Residential, L.P. and Roberts Properties
                     Management, L.L.C., dated April 1, 1997 [Incorporated by
                     reference to Exhibit 2.1 from our current report on Form
                     8-K dated April 1, 1997.]

   10.8.1            Promissory Note executed by Roberts Properties Residential,
                     L.P. in favor of Compass Bank, dated April 12, 1999, in the
                     original principal amount of $9,500,000 (Addison Place
                     Phase I). [Incorporated by reference to Exhibit 10.14.01
                     from our quarterly report on Form 10-Q dated August 13,
                     1999.]

   10.8.2            Deed to Secure Debt and Security Agreement executed by
                     Roberts Properties Residential, L.P. in favor of Compass
                     Bank, dated April 12, 1999, and related collateral
                     documents (Addison Place Phase I). [Incorporated by
                     reference to Exhibit 10.14.02 from our quarterly report on
                     Form 10-Q dated August 13, 1999.]

   10.8.3            Guaranty executed by Roberts Realty Investors, Inc. in
                     favor of Compass Bank, dated April 12, 1999 (Addison Place
                     Phase I). [Incorporated by reference to Exhibit 10.14.03
                     from our quarterly report on Form 10-Q dated August 13,
                     1999.]

   10.8.4            Promissory Note executed by Roberts Properties Residential,
                     L.P. in favor of The Prudential Insurance Company of
                     America, dated October 25, 1999, in the original principal
                     amount of $9,500,000 (Addison Place Phase I). [Incorporated
                     by reference to Exhibit 10.14.04 from our annual report on
                     Form 10-K for the year ended December 31, 1999.]

   10.8.5            Deed to Secure Debt and Security Agreement executed by
                     Roberts Properties Residential, L.P. in favor of The
                     Prudential Insurance Company of America, dated October 25,
                     1999, and related collateral documents (Addison Place Phase
                     I). [Incorporated by reference to Exhibit 10.14.05 from our
                     annual report on Form 10-K for the year ended December 31,
                     1999.]

   10.8.6            Guaranty executed by Roberts Realty Investors, Inc. in
                     favor of The Prudential Insurance Company of America, dated
                     October 25, 1999 (Addison Place Phase I). [Incorporated by
                     reference to Exhibit 10.14.06 from our annual report on
                     Form 10-K for the year ended December 31, 1999.]

   10.8.7            Promissory Note executed by Roberts Properties Residential,
                     L.P. in favor of First Union National Bank, dated October
                     25, 1999, in the original principal amount of $3,000,000
                     (Addison Place Phase II). [Incorporated by reference to
                     Exhibit 10.14.07 from our annual report on Form 10-K for
                     the year ended December 31, 1999.]


                                       51
<PAGE>


   10.8.8            Deed to Secure Debt and Security Agreement executed by
                     Roberts Properties Residential, L.P. in favor of First
                     Union National Bank, dated October 25, 1999, and related
                     collateral documents (Addison Place Phase II).
                     [Incorporated by reference to Exhibit 10.14.08 from our
                     annual report on Form 10-K for the year ended December 31,
                     1999.]

   10.8.9            Promissory Note executed by Roberts Properties Residential,
                     L.P. in favor of First Union National Bank, dated May 3,
                     2000 (Addison Place phase II). [Incorporated by reference
                     to Exhibit 10.14.09 from our quarterly report on Form 10-Q
                     for the quarter ended June 30, 2000.]

   10.8.10           Deed to Secure Debt, Security Agreement and Assignment of
                     Leases and Rents Agreement executed by Roberts Properties
                     Residential, L.P. in favor of First Union National Bank,
                     dated May 3, 2000 (Addison Place phase II). [Incorporated
                     by reference to Exhibit 10.14.10 from our quarterly report
                     on Form 10-Q for the quarter ended June 30, 2000.]

   10.9.1            Line of Credit Note executed by Roberts Properties
                     Residential, L.P. in favor of Compass Bank, dated June 1,
                     1999, in the original principal amount of $2,000,000.
                     [Incorporated by reference to Exhibit 10.15.01 from our
                     quarterly report on Form 10-Q dated August 13, 1999.]

   10.15.1           Loan Agreement executed by Roberts Properties Residential,
                     L.P. in favor of Compass Bank, dated June 1, 1999.
                     [Incorporated by reference to Exhibit 10.15.02 from our
                     quarterly report on Form 10-Q dated August 13, 1999.]

   10.15.2           Continuing Guaranty executed by Roberts Realty Investors,
                     Inc. in favor of Compass Bank, dated June 1, 1999.
                     [Incorporated by reference to Exhibit 10.15.03 from our
                     quarterly report on Form 10-Q dated August 13, 1999.]

   10.15.3           Line of Credit Note executed by Roberts Properties
                     Residential, L.P. in favor of Compass Bank, dated June 1,
                     2000, in the original principal amount of $2,000,000.
                     [Incorporated by reference to Exhibit 10.15.04 from our
                     quarterly report on Form 10-Q for the quarter ended June
                     30, 2000.]

   10.15.4           Loan Agreement executed by Roberts Properties Residential,
                     L.P. in favor of Compass Bank, dated June 1, 2000.
                     [Incorporated by reference to Exhibit 10.15.05 from our
                     quarterly report on Form 10-Q for the quarter ended June
                     30, 2000.]

   10.15.5           Continuing Guaranty executed by Roberts Properties
                     Residential, L.P. in favor of Compass Bank, dated June 1,
                     2000. [Incorporated by reference to Exhibit 10.15.06 from
                     our quarterly report on Form 10-Q for the quarter ended
                     June 30, 2000.]

   10.16.1           Promissory Note executed by Roberts Properties Residential,
                     L.P. in favor of Compass Bank, dated January 31, 2000 (Old
                     Norcross). [Incorporated by reference to Exhibit 10.16.1
                     from our quarterly report on Form 10-Q for the quarter
                     ended March 31, 2000.]

   10.16.2           Future Advance Deed to Secure Debt, Assignment of Rents and
                     Leases and Security Agreement executed by Roberts
                     Properties Residential, L.P. in favor of Compass Bank,
                     dated January 31, 2000 (Old Norcross). [Incorporated by
                     reference to Exhibit 10.16.2 from our quarterly report on
                     Form 10-Q for the quarter ended March 31, 2000.]

   10.16.3           Continuing Guaranty (Unlimited) executed by Roberts Realty
                     Investors, Inc. in favor of Compass Bank, dated January 31,
                     2000 (Old Norcross). [Incorporated by reference to Exhibit
                     10.16.3 from our quarterly report on Form 10-Q for the
                     quarter ended March 31, 2000.]

   10.17.1           Restricted Stock Award Agreement between Roberts Realty
                     Investors, Inc. and Charles R. Elliott, dated March 20,
                     2001.


                                       52
<PAGE>

   10.17.2           Restricted Stock Award Agreement between Roberts Realty
                     Investors, Inc. and Ronald L. Johnson, dated February 2,
                     2001.

   21                Subsidiaries of the Registrant.

   23.1              Consent of Arthur Andersen LLP.

   24.1              Power of Attorney (contained on the signature page hereof).


(b)      Current Reports on Form 8-K during the quarter ended December 31, 2000.

We filed no Current Reports on Form 8-K during the quarter ended December 31,
2000.


                                       53
<PAGE>



                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

ROBERTS REALTY INVESTORS, INC.


By:   /s/  Charles S. Roberts
    ---------------------------------
       Charles S. Roberts, Chairman of the Board,
       Chief Executive Officer and President

Date:  March 29, 2001

                                POWER OF ATTORNEY

            KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints jointly and severally, Charles S. Roberts
and Charles R. Elliott, and each one of them, his attorneys-in-fact, each with
the power of substitution, for him in any and all capacities, to sign any and
all amendments to this Annual Report (Form 10-K) and to file the same, with
exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
each said attorneys-in-fact, or his substitute or substitutes, may do or cause
to be done by virtue hereof.

              Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on behalf of
the registrant and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
         Signature                                            Title                              Date

<S>                                    <C>                                                <C>
/s/  Charles S. Roberts                              Chairman of the Board, Chief                March 29, 2001
--------------------------------------------         Executive Officer and President
Charles S. Roberts

/s/  Charles R. Elliott                              Secretary, Treasurer, Chief                 March 29, 2001
--------------------------------------------         Financial Officer (Principal Financial
Charles R. Elliott                                   Officer and Principal Accounting Officer)
                                                     and Director


/s/  James M. Goodrich                               Director                                    March 29, 2001
--------------------------------------------
James M. Goodrich

/s/  Dennis H. James                                 Director                                    March 29, 2001
--------------------------------------------
Dennis H. James

/s/  Wm. Jarell Jones                                Director                                    March 29, 2001
--------------------------------------------
Wm. Jarell Jones


                                       54
<PAGE>




/s/  Ben A. Spalding                                 Director                                    March 29, 2001
--------------------------------------------
Ben A. Spalding

/s/  George W. Wray, Jr.                             Director                                    March 29, 2001
------------------------------------
George W. Wray, Jr.


/s/  Weldon R. Humphries                             Director                                    March 29, 2001
---------------------------
Weldon R. Humphries

</TABLE>


                                       55
<PAGE>


                                  EXHIBIT INDEX

         We have filed some of the exhibits required by Item 601 of Regulation
S-K with previous registration statements or reports. As specifically noted in
the following Index to Exhibits, those previously filed exhibits are
incorporated into this annual report on Form 10-K by reference. All exhibits
contained in the following Index to Exhibits that are designated with an
asterisk are incorporated into this annual report by reference from our initial
Registration Statement on Form 10-SB filed with the SEC on March 22, 1996; the
applicable exhibit number in that Registration Statement is provided beside the
asterisk..

EXHIBIT
  NO.                                       DESCRIPTION
-------                                     -----------

    3.1              Articles of Incorporation of Roberts Realty Investors, Inc.
                     filed with the Georgia Secretary of State on July 22, 1994.
                     [* 2.1]

    3.2              Bylaws of Roberts Realty Investors, Inc. [* 2.2]

    4.1              Agreement of Limited Partnership of Roberts Properties
                     Residential, L.P., dated as of July 22, 1994. [* 3.1]

    4.1.1            First Amended and Restated Agreement of Limited Partnership
                     of Roberts Properties Residential, L.P., dated as of
                     October 1, 1994. [* 3.1.1]

    4.1.2            Amendment #1 to First Amended and Restated Agreement of
                     Limited Partnership of Roberts Properties Residential,
                     L.P., dated as of October 13, 1994. [* 3.1.2]

    4.1.3            Amendment #2 to First Amended and Restated Agreement of
                     Limited Partnership of Roberts Properties Residential, L.P.
                     [Incorporated by reference to Exhibit 10.1 from our
                     Registration Statement on Form S-3 filed July 8, 1999,
                     registration number 333-82453.]

    4.2              Certificate of Limited Partnership of Roberts Properties
                     Residential, L.P. filed with the Georgia Secretary of State
                     on July 22, 1994. [* 3.2]

    4.2.1            Certificate of Merger filed with the Georgia Secretary of
                     State on October 13, 1994, merging Roberts Properties River
                     Oaks, L.P.; Roberts Properties Rosewood Plantation, L.P.;
                     Roberts Properties Preston Oaks, L.P.; and Roberts
                     Properties Highland Park, L.P. with and into Roberts
                     Properties Residential, L.P. (1994 Consolidation). [*
                     3.2.1]

    4.2.2            Certificate of Merger filed with the Georgia Secretary of
                     State on March 24, 1995, merging Roberts Properties Holcomb
                     Bridge, L.P. with and into Roberts Properties Residential,
                     L.P. (Holcomb Bridge Merger). [* 3.2.2]

    4.2.3            Certificate of Merger filed with the Georgia Secretary of
                     State on May 16, 1995, merging Roberts Properties
                     Plantation Trace, L.P. with and into Roberts Properties
                     Residential, L.P. (Plantation Trace Merger). [* 3.2.3]

    4.2.4            Certificate of Merger filed with the Georgia Secretary of
                     State on September 27, 1995, merging Roberts Properties-St.
                     Simons, L.P. with and into Roberts Properties Residential,
                     L.P. (Windsong Merger). [* 3.2.4]


                                       56
<PAGE>




    4.2.5            Certificate of Merger filed with the Georgia Secretary of
                     State on March 21, 1996, merging Roberts Properties Bentley
                     Place, L.P. with and into Roberts Properties Residential,
                     L.P. (Bentley Place Merger). [Incorporated by reference to
                     Exhibit 4.2.5 from our quarterly report on Form 10-QSB for
                     the quarter ended June 30, 1996.]

    4.2.6            Certificate of Merger filed with the Georgia Secretary of
                     State on June 26, 1996, merging The Crestmark Club, L.P.
                     with and into Roberts Properties Residential, L.P.
                     (Crestmark Merger). [Incorporated by reference to Exhibit
                     4.2.6 from our quarterly report on Form 10-QSB for the
                     quarter ended June 30, 1996.]

    4.2.7            Certificate and Articles of Merger filed with the Georgia
                     Secretary of State on April 1, 1997 merging Roberts
                     Properties Management, L.L.C. with and into Roberts
                     Properties Residential, L.P. [Incorporated by reference to
                     Exhibit 4.2.7 from our current report on Form 8-K dated
                     April 1, 1997.]

   10.1.1            Real Estate Note executed by Roberts Properties
                     Residential, L.P. in favor of Nationwide Life Insurance
                     Company, dated September 20, 1995, in the original
                     principal amount of $8,711,000.00 (Preston Oaks). [*
                     6.11.1]

   10.1.2            Deed to Secure Debt and Security Agreement executed by
                     Roberts Properties Residential, L.P. in favor of Nationwide
                     Life Insurance Company, dated September 20, 1995, and
                     related collateral documents (Preston Oaks). [* 6.11.2]

   10.2.1            Real Estate Note A executed by Roberts Properties
                     Residential, L.P. in favor of Nationwide Life Insurance
                     Company, dated January 31, 1996, in the original principal
                     amount of $6,678,000.00 (Highland Park). [* 6.18.1]

   10.2.2            Real Estate Note B executed by Roberts Properties
                     Residential, L.P. in favor of Employers Life Insurance
                     Company of Wausau, dated January 31, 1996, in the original
                     principal amount of $1,500,000.00 (Highland Park). [*
                     6.18.2]

   10.2.3            Deed to Secure Debt and Security Agreement executed by
                     Roberts Properties Residential, L.P. in favor of Nationwide
                     Life Insurance Company and Employers Life Insurance Company
                     of Wausau, dated January 31, 1996, and related collateral
                     documents (Highland Park). [* 6.18.3]

   10.3.1            Real Estate Note A executed by Roberts Properties
                     Residential, L.P. in favor of Nationwide Life Insurance
                     Company, dated October 17, 1996, in the original principal
                     amount of $7,250,000.00 (River Oaks). [Incorporated by
                     reference to Exhibit 10.3.3 from our annual report on Form
                     10-KSB for the year ended December 31, 1996.]

   10.3.2            Real Estate Note B executed by Roberts Properties
                     Residential, L.P. in favor of Nationwide Life & Annuity
                     Insurance Company, dated October 17, 1996, in the original
                     principal amount of $2,000,000.00 (River Oaks).
                     [Incorporated by reference to Exhibit 10.3.4 from our
                     annual report on Form 10-KSB for the year ended December
                     31, 1996.]

   10.3.3            Deed to Secure Debt and Security Agreement executed by
                     Roberts Properties Residential, L.P. in favor of Nationwide
                     Life Insurance Company and Nationwide Life & Annuity
                     Insurance Company, dated October 17, 1996, and related
                     collateral documents (River Oaks). [Incorporated by
                     reference to Exhibit 10.3.5 from our annual report on Form
                     10-KSB for the year ended December 31, 1996.]


                                       57
<PAGE>



   10.4.1            Promissory Note executed by Roberts Properties Residential,
                     L.P. in favor of The Prudential Insurance Company of
                     America, dated September 29, 1998, in the original
                     principal amount of $11,900,000 (Plantation Trace).
                     [Incorporated by reference to Exhibit 10.07.04 from our
                     quarterly report on Form 10-Q for the quarter ended
                     September 30, 1998.]

   10.4.2            Deed to Secure Debt and Security Agreement executed by
                     Roberts Properties Residential, L.P. in favor of The
                     Prudential Insurance Company of America, dated September
                     29, 1998, and related collateral documents (Plantation
                     Trace). [Incorporated by reference to Exhibit 10.07.05 from
                     our quarterly report on Form 10-Q for the quarter ended
                     September 30, 1998.]

   10.4.3            Limited Guaranty executed by Roberts Realty Investors, Inc.
                     in favor of The Prudential Insurance Company of America,
                     dated September 29, 1998 (Plantation Trace). [Incorporated
                     by reference to Exhibit 10.07.06 from our quarterly report
                     on Form 10-Q for the quarter ended September 30, 1998.]

   10.5.1            Real Estate Note executed by Roberts Properties
                     Residential, L.P. in favor of Nationwide Life Insurance
                     Company, dated June 1, 1998, in the original principal
                     amount of $8,400,000.00 (Bradford Creek). [Incorporated by
                     reference to Exhibit 10.8.6 from our quarterly report on
                     Form 10-Q for the quarter ended June 30, 1998.]

   10.5.2            Deed to Secure Debt and Security Agreement executed by
                     Roberts Properties Residential, L.P. in favor of Nationwide
                     Life Insurance Company of America, dated June 1, 1998, and
                     related collateral documents (Bradford Creek).
                     [Incorporated by reference to Exhibit 10.8.7 from our
                     quarterly report on Form 10-Q for the quarter ended June
                     30, 1998.]

   10.5.3            Guaranty between Roberts Realty Investors, Inc. and
                     Nationwide Life Insurance Company of America, dated June 1,
                     1998 (Bradford Creek). [Incorporated by reference to
                     Exhibit 10.8.8 from our quarterly report on Form 10-Q for
                     the quarter ended June 30, 1998.]

   10.6.1            Real Estate Note executed by Roberts Properties
                     Residential, L.P. in favor of Freddie Mac, dated September
                     30, 1998, in the original principal amount of $16,000,000
                     (Crestmark). [Incorporated by reference to Exhibit 10.10.06
                     from our quarterly report on Form 10-Q for the quarter
                     ended September 30, 1998.]

   10.6.2            Deed to Secure Debt and Security Agreement executed by
                     Roberts Properties Residential, L.P. in favor of Freddie
                     Mac, dated September 30, 1998, and related collateral
                     documents (Crestmark). [Incorporated by reference to
                     Exhibit 10.10.07 from our quarterly report on Form 10-Q for
                     the quarter ended September 30, 1998.]

   10.6.3            Guaranty executed by Roberts Realty Investors, Inc. in
                     favor of Freddie Mac, dated September 30, 1998 (Crestmark).
                     [Incorporated by reference to Exhibit 10.10.08 from our
                     quarterly report on Form 10-Q for the quarter ended
                     September 30, 1998.]

   10.7.1            Amended and Restated Consulting Agreement between Roberts
                     Properties Residential, L.P. and Roberts Properties, Inc.,
                     dated June 26, 1996. [Incorporated by reference to Exhibit
                     10.23.1 from our quarterly report on Form 10-QSB for the
                     quarter ended June 30, 1996.]

   10.7.2            Amended and Restated Consulting Agreement between Roberts
                     Properties Residential, L.P. and Roberts Properties Group,
                     Inc., dated June 26, 1996. [Incorporated by reference to
                     Exhibit 10.23.2 from our quarterly report on Form 10-QSB
                     for the quarter ended June 30, 1996.]

                                       58
<PAGE>




   10.7.3            Design and Development Agreement between Roberts Properties
                     Residential, L.P. and Roberts Properties, Inc. (Addison
                     Place). [Incorporated by reference to Exhibit 10.14.11 from
                     our quarterly report on Form 10-Q for the quarter ended
                     June 30, 2000.]

   10.7.4            Design and Development Agreement between Roberts Properties
                     Residential, L.P. and Roberts Properties, Inc. (Old
                     Norcross). [Incorporated by reference to Exhibit 10.16.04
                     from our quarterly report on Form 10-Q for the quarter
                     ended June 30, 2000.]

   10.7.5            Construction Administration Agreement between Roberts
                     Residential, L.P. and Roberts Properties, Inc. (Old
                     Norcross). [Incorporated by reference to Exhibit 10.16.05
                     from our quarterly report on Form 10-Q for the quarter
                     ended June 30, 2000.]

   10.7.6            Design and Development Agreement between Roberts Properties
                     Residential, L.P. and Roberts Properties, Inc.
                     (Ballantyne). [Incorporated by reference to Exhibit
                     10.17.01 from our quarterly report on Form 10-Q for the
                     quarter ended June 30, 2000.]

   10.7.7            Construction Administration Agreement between Roberts
                     Residential, L.P. and Roberts Properties, Inc.
                     (Ballantyne). [Incorporated by reference to Exhibit
                     10.17.02 from our quarterly report on Form 10-Q for the
                     quarter ended June 30, 2000.]

   10.7.8            Agreement and Plan of Merger by and between Roberts
                     Properties Residential, L.P. and Roberts Properties
                     Management, L.L.C., dated April 1, 1997 [Incorporated by
                     reference to Exhibit 2.1 from our current report on Form
                     8-K dated April 1, 1997.]

   10.8.1            Promissory Note executed by Roberts Properties Residential,
                     L.P. in favor of Compass Bank, dated April 12, 1999, in the
                     original principal amount of $9,500,000 (Addison Place
                     Phase I). [Incorporated by reference to Exhibit 10.14.01
                     from our quarterly report on Form 10-Q dated August 13,
                     1999.]

   10.8.2            Deed to Secure Debt and Security Agreement executed by
                     Roberts Properties Residential, L.P. in favor of Compass
                     Bank, dated April 12, 1999, and related collateral
                     documents (Addison Place Phase I). [Incorporated by
                     reference to Exhibit 10.14.02 from our quarterly report on
                     Form 10-Q dated August 13, 1999.]

   10.8.3            Guaranty executed by Roberts Realty Investors, Inc. in
                     favor of Compass Bank, dated April 12, 1999 (Addison Place
                     Phase I). [Incorporated by reference to Exhibit 10.14.03
                     from our quarterly report on Form 10-Q dated August 13,
                     1999.]

   10.8.4            Promissory Note executed by Roberts Properties Residential,
                     L.P. in favor of The Prudential Insurance Company of
                     America, dated October 25, 1999, in the original principal
                     amount of $9,500,000 (Addison Place Phase I). [Incorporated
                     by reference to Exhibit 10.14.04 from our annual report on
                     Form 10-K for the year ended December 31, 1999.]

   10.8.5            Deed to Secure Debt and Security Agreement executed by
                     Roberts Properties Residential, L.P. in favor of The
                     Prudential Insurance Company of America, dated October 25,
                     1999, and related collateral documents (Addison Place Phase
                     I). [Incorporated by reference to Exhibit 10.14.05 from our
                     annual report on Form 10-K for the year ended December 31,
                     1999.]

   10.8.6            Guaranty executed by Roberts Realty Investors, Inc. in
                     favor of The Prudential Insurance Company of America, dated
                     October 25, 1999 (Addison Place Phase I). [Incorporated by
                     reference to Exhibit 10.14.06 from our annual report on
                     Form 10-K for the year ended December 31, 1999.]

                                       59
<PAGE>

   10.8.7            Promissory Note executed by Roberts Properties Residential,
                     L.P. in favor of First Union National Bank, dated October
                     25, 1999, in the original principal amount of $3,000,000
                     (Addison Place Phase II). [Incorporated by reference to
                     Exhibit 10.14.07 from our annual report on Form 10-K for
                     the year ended December 31, 1999.]

   10.8.8            Deed to Secure Debt and Security Agreement executed by
                     Roberts Properties Residential, L.P. in favor of First
                     Union National Bank, dated October 25, 1999, and related
                     collateral documents (Addison Place Phase II).
                     [Incorporated by reference to Exhibit 10.14.08 from our
                     annual report on Form 10-K for the year ended December 31,
                     1999.]

   10.8.9            Promissory Note executed by Roberts Properties Residential,
                     L.P. in favor of First Union National Bank, dated May 3,
                     2000 (Addison Place phase II). [Incorporated by reference
                     to Exhibit 10.14.09 from our quarterly report on Form 10-Q
                     for the quarter ended June 30, 2000.]

   10.8.10           Deed to Secure Debt, Security Agreement and Assignment of
                     Leases and Rents Agreement executed by Roberts Properties
                     Residential, L.P. in favor of First Union National Bank,
                     dated May 3, 2000 (Addison Place phase II). [Incorporated
                     by reference to Exhibit 10.14.10 from our quarterly report
                     on Form 10-Q for the quarter ended June 30, 2000.]

   10.9.1            Line of Credit Note executed by Roberts Properties
                     Residential, L.P. in favor of Compass Bank, dated June 1,
                     1999, in the original principal amount of $2,000,000.
                     [Incorporated by reference to Exhibit 10.15.01 from our
                     quarterly report on Form 10-Q dated August 13, 1999.]

   10.15.1           Loan Agreement executed by Roberts Properties Residential,
                     L.P. in favor of Compass Bank, dated June 1, 1999.
                     [Incorporated by reference to Exhibit 10.15.02 from our
                     quarterly report on Form 10-Q dated August 13, 1999.]

   10.15.2           Continuing Guaranty executed by Roberts Realty Investors,
                     Inc. in favor of Compass Bank, dated June 1, 1999.
                     [Incorporated by reference to Exhibit 10.15.03 from our
                     quarterly report on Form 10-Q dated August 13, 1999.]

   10.15.3           Line of Credit Note executed by Roberts Properties
                     Residential, L.P. in favor of Compass Bank, dated June 1,
                     2000, in the original principal amount of $2,000,000.
                     [Incorporated by reference to Exhibit 10.15.04 from our
                     quarterly report on Form 10-Q for the quarter ended June
                     30, 2000.]

   10.15.4            Loan Agreement executed by Roberts Properties Residential,
                     L.P. in favor of Compass Bank, dated June 1, 2000.
                     [Incorporated by reference to Exhibit 10.15.05 from our
                     quarterly report on Form 10-Q for the quarter ended June
                     30, 2000.]

   10.15.5           Continuing Guaranty executed by Roberts Properties
                     Residential, L.P. in favor of Compass Bank, dated June 1,
                     2000. [Incorporated by reference to Exhibit 10.15.06 from
                     our quarterly report on Form 10-Q for the quarter ended
                     June 30, 2000.]

   10.16.1           Promissory Note executed by Roberts Properties Residential,
                     L.P. in favor of Compass Bank, dated January 31, 2000 (Old
                     Norcross). [Incorporated by reference to Exhibit 10.16.1
                     from our quarterly report on Form 10-Q for the quarter
                     ended March 31, 2000.]

   10.16.2           Future Advance Deed to Secure Debt, Assignment of Rents and
                     Leases and Security Agreement executed by Roberts
                     Properties Residential, L.P. in favor of Compass Bank,
                     dated January 31, 2000 (Old Norcross). [Incorporated by
                     reference to Exhibit 10.16.2 from our quarterly report on
                     Form 10-Q for the quarter ended March 31, 2000.]


                                       60
<PAGE>

   10.16.3           Continuing Guaranty (Unlimited) executed by Roberts Realty
                     Investors, Inc. in favor of Compass Bank, dated January 31,
                     2000 (Old Norcross). [Incorporated by reference to Exhibit
                     10.16.3 from our quarterly report on Form 10-Q for the
                     quarter ended March 31, 2000.]

   10.17.1           Restricted Stock Award Agreement between Roberts Realty
                     Investors, Inc. and Charles R. Elliott, dated March 20,
                     2001.

   10.17.2           Restricted Stock Award Agreement between Roberts Realty
                     Investors, Inc. and Ronald L. Johnson, dated February 2,
                     2001.

   21                Subsidiaries of the Registrant.

   23.1              Consent of Arthur Andersen LLP.

   24.1              Power of Attorney (contained on the signature page hereof).


(b)      Current Reports on Form 8-K during the quarter ended December 31, 2000.

We filed no Current Reports on Form 8-K during the quarter ended December 31,
2000.


                                       61