##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-K
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2010
 OR
 o
    
    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.
  Georgia
    
    58-2122873(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer
Identification No.)450 Northridge Parkway, Suite 302
Atlanta, Georgia
    
    30350(Address of principal executive offices)
    
    (Zip Code)
 (770) 394-6000  (Registrants telephone number, including area code)
  Title of each class
    
    Name of each exchange on which registeredCommon Stock, $.01 par value per share
    
    NYSE Amex Equities
  Yes o No þ
 o þ
 þ o
 o o
 o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
(Do not check if a smaller reporting company)
    
    Smaller reporting company þ
 o þ
   Class
    
    Outstanding at March 8, 2011Common Stock, $.01 par value per share
    
    10,357,831 shares
 DOCUMENTS INCORPORATED BY REFERENCE
 Document
    
    Parts into which incorporatedNone
    
    N/A




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##### 



TABLE OF CONTENTS
 PAGENOTE REGARDING FORWARD-LOOKING STATEMENTS
    
    
    2PART I
    
    
    3ITEM 1. BUSINESS
    
    
    3ITEM 1A. RISK FACTORS
    
    
    13ITEM 1B. UNRESOLVED STAFF COMMENTS
    
    
    23ITEM 2. PROPERTIES
    
    
    24ITEM 3. LEGAL PROCEEDINGS
    
    
    28ITEM 4. (REMOVED AND RESERVED)
    
    
    28PART II
    
    
    29ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY,
RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES
    
    
    29ITEM 6. SELECTED FINANCIAL DATA
    
    
    30ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION
    
    
    31ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK
    
    
    40ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
    
    
    41ITEM 9. CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
    
    
    41ITEM 9A. CONTROLS AND PROCEDURES
    
    
    41ITEM 9B. OTHER INFORMATION
    
    
    42PART III
    
    
    43ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND
CORPORATE GOVERNANCE
    
    
    43ITEM 11. EXECUTIVE COMPENSATION
    
    
    47ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
    
    
    49ITEM 13. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS, AND DIRECTOR INDEPENDENCE
    
    
    51ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
    
    
    57PART IV
    
    
    59ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
    
    
    59Exhibit 21Exhibit 23Exhibit 31Exhibit 32




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NOTE REGARDING FORWARD-LOOKING STATEMENTS
       2




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PART I
 
 ITEM 1.
    
    BUSINESS.
 General
  
    
    five tracts of land totaling 106 acres that are zoned for 1,232 multifamily units;
 
    
    three retail shopping centers; and
 
    
    one office building.
  Recent Developments
 Loan Renewals
  
    
    On December 29, 2010, we renewed and extended our $3,000,000 Bradley Park land loan
to April 30, 2012.
 
    
    On October 29, 2010, we renewed our Highway 20 land loan and paid down the principal
amount of the loan by $185,000. The renewed $3,315,000 Highway 20 loan has a maturity
date of April 8, 2012.
 
    
    On September 30, 2010, we renewed the $2,898,333 loan for our Northridge office
building and extended the loans maturity date to August 10, 2013.
 
    
    On June 21, 2010, we renewed our $8,175,000 Peachtree Parkway land loan and extended
its maturity date to July 31, 2011.
 Grand Pavilion Retail Center Nonrecourse Loan
   3




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Sale of Addison Place Shops Retail Center and Westside Land
   Liquidity Outlook
  Principal AmountLand
    
    Carrying Value (1)
    
    
    of Land LoansNorthridge
    
    $
    6,517,178
    
    
    UnencumberedNorth Springs
    
    
    13,100,000
    
    
    
    (2)Bradley Park
    
    
    7,066,457
    
    
    $
    3,000,000Peachtree Parkway
    
    
    10,418,758
    
    
    
    8,175,000Highway 20
    
    
    5,834,374
    
    
    
    3,225,000Totals
    
    $
    42,936,767
    
    
    $
    14,400,000
 
 (1)
    
    Carrying value means the book value of the properties as reflected on our
financial statements.(2)
    
    The North Springs land also secures the Peachtree Parkway loan.   4




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Business Plan
 Overview and Outlook
  Development and Construction of Multifamily Communities
  
    
    Rents for the Class A or upscale apartments communities of the type that we
build should increase appreciably during 2011, and the current high level of rental
concessions should decrease over time as the market continues to improve.
 
    
    Occupancy rates for Class A apartments in Atlanta should continue to increase in
2011.
 
    
    The number of new apartments constructed in Atlanta was substantially lower in
2010 than in recent years and is expected to remain low in 2011.
 
    
    Employment in metro Atlanta is expected to grow, although slowly compared to
historical levels.
 
    
    Nationally, home ownership rates are declining, and we believe that this trend,
coupled with rising interest rates and larger required down payments for
single-family home loans, will lead to higher demand for apartments generally and
in our market areas.
   1.
    
    Northridge, an 11-acre site located close to the GA 400 and Northridge
Road interchange in Sandy Springs zoned for 220 multifamily units. We have
purchased the land disturbance permit, completed clearing, and commenced grading
the site.
  5




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2.
    
    Bradley Park, a 22-acre site located in Forsyth County zoned for 154
multifamily units. We have completed our architectural drawings, purchased our
land disturbance permit, and are ready to begin grading the site.
 3.
    
    Peachtree Parkway, a 25-acre site fronting Peachtree Parkway (Highway
141) in Gwinnett County zoned for 292 multifamily units that is located across the
street from The Forum, a 580,000 square foot upscale shopping center.
 4.
    
    Highway 20, a 38-acre site located in Cumming zoned for 210 multifamily
units. We have started the necessary design and development work for this
community.
 5.
    
    North Springs, a 10-acre site located on Peachtree Dunwoody Road in
Sandy Springs across from the North Springs commuter rail station; the property is
zoned for 356 multifamily units, 210,000 square feet of office space, and 56,000
square feet of retail space.
    Retail Centers and Office Building
  1.
    
    Bassett Shopping Center, a 19,949 square foot retail center located
directly across from the Mall of Georgia in Gwinnett County that is 82.9% occupied.
  6




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2.
    
    Spectrum at the Mall of Georgia, a 30,050 square foot retail center
located directly across from the Mall of Georgia in Gwinnett County that is 56.8%
occupied.
 3.
    
    Grand Pavilion, a 62,323 square foot retail center located in Johns
Creek that is 15.0% occupied. As previously explained, we are no longer making
payments on the nonrecourse loan secured by this retail center, and we are seeking
to transfer it to the lender as soon as possible in satisfaction of the $6,433,286
principal amount of debt secured by the property.
 4.
    
    Northridge Office Building, a 37,864 square foot building located in
Sandy Springs that is 64.5% occupied. We occupy a portion of the building as our
corporate headquarters.
    Possible Sale, Merger, or Business Combination of the Entire Company
  Transactions with Charles S. Roberts and His Affiliates
   7




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##### Table of Contents



Number
    
    
    Year
    
    
    
    
    
    
    Sales PriceName of Community
    
    of Units
    
    
    Sold
    
    
    Sales Price
    
    
    Per Unit+ * Addison Place Townhomes (Phase I)
    
    
    118
    
    
    
    2008
    
    
    $
    20,000,000
    
    
    $
    169,492+ * Addison Place Apartments (Phase II)
    
    
    285
    
    
    
    2008
    
    
    
    40,000,000
    
    
    
    140,351+ * Ballantyne Place
    
    
    319
    
    
    
    2005
    
    
    
    37,250,000
    
    
    
    116,771* St. Andrews at The Polo Club
    
    
    200
    
    
    
    2004
    
    
    
    36,000,000
    
    
    
    180,000+ * Preston Oaks (Phase I)
    
    
    189
    
    
    
    2004
    
    
    
    23,762,500
    
    
    
    125,728+ * Preston Oaks (Phase II)
    
    
    24
    
    
    
    2004
    
    
    
    3,017,500
    
    
    
    125,728+ * Bradford Creek
    
    
    180
    
    
    
    2004
    
    
    
    18,070,000
    
    
    
    100,389+ * Veranda Chase
    
    
    250
    
    
    
    2004
    
    
    
    23,250,000
    
    
    
    93,000+ * Plantation Trace (Phase I)
    
    
    182
    
    
    
    2004
    
    
    
    16,866,400
    
    
    
    92,673+ * Plantation Trace Townhomes (Phase
II)
    
    
    50
    
    
    
    2004
    
    
    
    4,633,600
    
    
    
    92,673+ * River Oaks
    
    
    216
    
    
    
    2004
    
    
    
    20,000,000
    
    
    
    92,593+ * Highland Park
    
    
    188
    
    
    
    2003
    
    
    
    17,988,143
    
    
    
    95,682+ * Rosewood Plantation
    
    
    152
    
    
    
    2001
    
    
    
    14,800,000
    
    
    
    97,368+ * Crestmark Club (Phase I)
    
    
    248
    
    
    
    2001
    
    
    
    18,562,874
    
    
    
    74,850+ * Crestmark Club (Phase II)
    
    
    86
    
    
    
    2001
    
    
    
    6,437,126
    
    
    
    74,850+ * Ivey Brook
    
    
    146
    
    
    
    2000
    
    
    
    14,550,000
    
    
    
    99,658+ * Bentley Place
    
    
    117
    
    
    
    1999
    
    
    
    8,273,000
    
    
    
    70,709* Windsong
    
    
    232
    
    
    
    1998
    
    
    
    9,750,000
    
    
    
    42,026* Laurelwood
    
    
    207
    
    
    
    1997
    
    
    
    10,601,000
    
    
    
    51,213+ Wynfield Trace
    
    
    146
    
    
    
    1995
    
    
    
    10,865,000
    
    
    
    74,418+ Bridgewater
    
    
    532
    
    
    
    1995
    
    
    
    39,535,000
    
    
    
    74,314+ Autumn Ridge
    
    
    113
    
    
    
    1995
    
    
    
    7,750,000
    
    
    
    68,584+ Governors Pointe
    
    
    468
    
    
    
    1986
    
    
    
    29,739,000
    
    
    
    63,545Total
    
    
    4,648
    
    
    
    
    
    
    $
    431,701,143
 
 +
    
    The communities marked with a + were built on raw land that was purchased, zoned and
developed by the Roberts Companies.*
    
    The communities marked with an * were designed, developed, constructed, renovated and managed
by the Roberts Companies for Roberts Realty Investors, Inc.   8




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Investment Policies
  Financing Policies
   Other Policies
   Tax Structure
   9




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The Operating Partnership
     Competition
 Multifamily Communities
   10




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Office Building and Retail Centers
  Environmental and Other Regulatory Matters
    11




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Insurance
  Segment Information
  
    
    the retail/office segment consisting of three retail centers and one office
building;
 
    
    the land segment consisting of five tracts of land totaling 106 acres that are
in various phases of development and construction; and
 
    
    the corporate segment consisting primarily of operating cash and cash
equivalents plus miscellaneous other assets.
  Corporate Information
   12




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ITEM 1A.
    
    RISK FACTORS
  
    
    financing risks;
 
    
    real estate related risks;
 
    
    tax risks;
 
    
    environmental and other legal risks; and
 
    
    risks for investors in our stock.
  Financing Risks
 We face the maturity of an $8,175,000 loan on July 31, 2011, and we may be unable to refinance or
extend this debt.
  If we are unable to meet mortgage payments on any mortgaged property, the mortgage holder could
foreclose upon the property and take other actions.
  We may not be able to obtain the debt and equity we need to carry out our planned development and
construction program.
   13




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Rising interest rates could materially and adversely affect the cost of our indebtedness.
  We face the normal risks associated with debt financing.
  Increased debt and leverage could affect our financial position and impair our ability to make
distributions to our investors.
  
    
    increase our vulnerability to general adverse economic and industry conditions;
 
    
    limit our flexibility in planning for, or reacting to, changes in our business,
which may place us at a competitive disadvantage compared to our competitors that have
less debt; and
 
    
    limit, along with the possible financial and other restrictive covenants in our
indebtedness, our ability to borrow additional funds.
   14




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We could be negatively affected by the condition of Fannie Mae or Freddie Mac
  Real Estate-Related Risks
 Our business currently operates at a loss
  Real estate properties are illiquid and are difficult to sell in a poor market environment like the
present.
   15




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Construction risks inherent in the development and construction of new properties could negatively
affect our financial performance.
  
    
    increased costs for or any unavailability of materials or labor;
 
    
    environmental impact studies by the government;
 
    
    weather delays;
 
    
    increased interest costs due to rising interest rates; and
 
    
    any financial instability of the developer (Roberts Properties), general contractor
(Roberts Construction) or any subcontractor.
  We face leasing risks in our planned development and construction program.
  We are currently concentrated in metropolitan Atlanta, and adverse changes in economic or market
conditions in Atlanta could negatively affect our financial performance and condition.
  
    
    the failure of the employment rate to rebound to prior levels;
 
    
    declining neighborhood values in the submarkets in which our properties are located;
 
    
    additional zoning and other regulatory conditions;
 
    
    competition from other properties;
 
    
    increasing property taxes;
 
    
    weather problems, including periods of prolonged drought;
 
    
    limited future economic growth due to judicial or other governmental action that
restricts withdrawals from Lake Lanier, Atlantas primary water supply; and
 
    
    price increases for materials or labor.
   16




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We face conflicts of interest because of our business dealings with our Chief Executive Officer and
his affiliates.
  
    
    the possibility that the Roberts Companies might incur severe financial problems or
even become bankrupt;
 
    
    the possibility that the Roberts Companies may at any time have economic or business
interests or goals that are or that become inconsistent with our business interests or
goals; or
 
    
    the possibility that the Roberts Companies may be in a position to take action
contrary to our instructions or requests or contrary to our policies or objectives.
  We face substantial competition.
  The ability of our potential residents to buy single-family homes at depressed prices could
adversely affect our revenues from the multifamily communities we develop and construct.
  Changes in market or economic conditions may affect our business negatively.
   17




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Our office and retail tenants may go bankrupt or be unable to make lease payments.
  Losses from natural catastrophes may exceed our insurance coverage.
  Our business depends on key personnel.
  If we are unable to increase our occupancy and rental rates at our office and retail properties,
the performance of those properties will continue to suffer.
  Our real estate assets may be subject to further impairment charges.
   18




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Terrorism could impair our business.
  Tax Risks
 Our company may fail to qualify for REIT status under federal income tax laws.
   Our operating partnership may fail to be treated as a partnership for federal income tax purposes.
   19




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We may choose to pay dividends in our own stock, in which case shareholders may be required to pay
tax in excess of the cash they receive.
  A redemption of units is taxable.
  Environmental and Other Legal Risks
 We may have liability under environmental laws.
  
    
    we may have to pay for property damage and for investigation and clean-up costs
incurred in connection with the contamination;
 
    
    the law typically imposes clean-up responsibility and liability regardless of
whether the owner or operator knew of or caused the contamination;
 
    
    even if more than one person may be responsible for the contamination, each person
who shares legal liability under the environmental laws may be held responsible for all
of the clean-up costs; and
 
    
    governmental entities or other third parties may sue the owner or operator of a
contaminated site for damages and costs.
   20




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We face risks in complying with Section 404 of the Sarbanes-Oxley Act of 2002.
   Failure to comply with the Americans with Disabilities Act or other similar laws could result in
substantial costs.
  Risks for Investors in Our Stock
 We do not pay regular quarterly dividends, and we do not anticipate making distributions to
investors for the indefinite future, other than possibly to preserve our REIT status if so
required.
  The market price of our stock is subject to fluctuation as a result of our operating results, the
operating results of other REITs, and changes in the stock market in general.
   21




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Additional issuances of equity securities may dilute the investment of our current shareholders.
  Restrictions on changes of control could prevent a beneficial takeover for investors.
   
    
    our classified board of directors, which may render more difficult a change in
control of the company or removal of incumbent management, because the term of office
of only one-third of the directors expires in a given year;
 
    
    the ability of our board of directors to issue preferred stock;
 
    
    provisions in the articles of incorporation to the effect that no transaction of a
fundamental nature, including mergers in which the company is not the survivor, share
exchanges, consolidations, or sale of all or substantially all of the assets of the
company, may be effectuated without the affirmative vote of at least three-quarters of
the votes entitled to vote generally in any such matter;
 
    
    provisions in the articles of incorporation to the effect that they may not be
amended (except for certain limited matters) without the affirmative vote of at least
three-quarters of the votes entitled to be voted generally in the election of
directors;
 
    
    provisions in the bylaws to the effect that they may be amended by either the
affirmative vote of three-quarters of all shares outstanding and entitled to vote
generally in the election of the directors, or the affirmative vote of a majority of
the companys directors then holding office, unless the shareholders prescribed that
any such bylaw may not be amended or repealed by the board of directors;
 
    
    Georgia anti-takeover statutes under which the company may elect to be protected;
and
    
    provisions to the effect that directors elected by the holders of common stock may
be removed only by the affirmative vote of shareholders holding at least 75% of all of
the votes entitled to be cast for the election of directors.
  22




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ITEM 1B.
    
    UNRESOLVED STAFF COMMENTS.
   23




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ITEM 2.
    
    PROPERTIES.
 General
  Retail and Office
  1.
    
    Bassett Shopping Center, a 19,949 square foot retail center located
directly across from the Mall of Georgia in Gwinnett County that is 82.9% occupied.
 2.
    
    Spectrum at the Mall of Georgia, a 30,050 square foot retail center
located directly across from the Mall of Georgia in Gwinnett County that is 56.8%
occupied.
 3.
    
    Grand Pavilion, a 62,323 square foot retail center located in Johns
Creek that is 15.0% occupied. As explained in Item 1 above, we are no longer
making payments on the nonrecourse loan secured by this retail center, and we are
seeking to transfer it to the lender in satisfaction of the loan.
 4.
    
    Northridge Office Building, a 37,864 square foot building located in
Sandy Springs. We occupy a portion of the third floor of the building as our
corporate headquarters, and we have entered into leases for the remaining space on
the third floor with Roberts Properties and Roberts Construction. In addition, we
have signed leases with two unrelated companies for portions of the first and
second floors. The building is 64.5% occupied.
 Land
 Land Parcels Held for Development and Construction
 1.
    
    Northridge, an 11-acre site located close to the GA 400 and Northridge
interchange in Sandy Springs zoned for 220 multifamily units.
 2.
    
    Bradley Park, a 22-acre site located in Forsyth County zoned for 154
multifamily units.
 3.
    
    Peachtree Parkway, a 25-acre site fronting Peachtree Parkway (Highway
141) in Gwinnett County zoned for 292 multifamily units.
 4.
    
    Highway 20, a 38-acre site located in Cumming zoned for 210 multifamily
units.
 5.
    
    North Springs, a 10-acre site located on Peachtree Dunwoody Road in
Sandy Springs zoned for 356 multifamily units, 210,000 square feet of office space,
and 56,000 square feet of retail space.
  24




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Demographic Data
   Approximate
    
    
    Average
    
    
    PhysicalRetail or
    
    
    
    
    
    Rentable
    
    
    Base Rent
    
    
    OccupancyOffice
    
    
    
    Year
    
    Area
    
    
    per
    
    
    as ofProperty
    
    Location
    
    Acquired (1)
    
    (Square Feet)
    
    
    Square Foot
    
    
    12/31/10Retail:Bassett Center
    
    Gwinnett County
    
    2005
    
    
    19,949
    
    
    $
    19.56
    
    
    
    100.0
    %Spectrum Center
    
    Gwinnett County
    
    2005
    
    
    30,050
    
    
    
    26.30
    
    
    
    56.8
    %Grand Pavilion (2)
    
    Johns Creek
    
    2005
    
    
    62,323
    
    
    
    18.69
    
    
    
    15.0
    %Total Retail
    
    
    
    
    
    
    112,322
    
    
    $
    21.87
    
    
    
    41.3
    %Northridge
Office Building(3)
    
    Sandy Springs
    
    2001
    
    
    37,864
    
    
    $
    19.83
    
    
    
    64.5
    %
 
 (1)
    
    We acquired the retail properties listed in this table from unrelated sellers.(2)
    
    As disclosed elsewhere in this report, the Grand Pavilion loan is in default, and we are
seeking to transfer the property securing the loan to the lender in satisfaction of the loan.
The loan is nonrecourse, and we do not intend to make any further payments on this loan.(3)
    
    Our corporate headquarters occupies 7,084 square feet of the Northridge office building.  Expiring
    
    
    % of TotalNumber of
    
    
    Approximate
    
    
    Approximate
    
    
    Expiring
    
    
    % of TotalExpiring
    
    
    Rentable Area
    
    
    Rentable Area
    
    
    Annualized
    
    
    AnnualizedYear
    
    Leases (1)
    
    
    (Square Feet)
    
    
    (Square Feet)
    
    
    Base Rent
    
    
    Base Rent2011
    
    
    4
    
    
    
    10,956
    
    
    
    20.1
    %
    
    $
    190,591
    
    
    
    15.6
    %2012
    
    
    9
    
    
    
    13,469
    
    
    
    24.8
    %
    
    
    369,865
    
    
    
    30.2
    %2013
    
    
    3
    
    
    
    21,821
    
    
    
    40.2
    %
    
    
    480,292
    
    
    
    39.2
    %2014
    
    
    2
    
    
    
    6,901
    
    
    
    12.7
    %
    
    
    152,840
    
    
    
    12.5
    %2015
    
    
    1
    
    
    
    1,200
    
    
    
    2.2
    %
    
    
    31,200
    
    
    
    2.5
    %Total
    
    
    19
    
    
    
    54,347
    
    
    
    100.0
    %
    
    $
    1,224,788
    
    
    
    100.0
    %
 
 (1)
    
    Lease expiration table does not include option periods.  25




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Fulton County
  Johns Creek
  Perimeter Center/North Springs Area
  North Springs.
 Northridge Office Building
 Northridge Multifamily Community.
  26




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Gwinnett County
  Peachtree Corners Area
  Peachtree Parkway.
 Mall of Georgia Area
  Bassett Shopping Center.
 Spectrum Shopping Center.
 Forsyth County/Cumming
  Bradley Park
  27




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Highway 20
 Summary of Debt Secured by Our Properties
  Possible Additional Communities to Be Developed
  
 ITEM 3.
    
    LEGAL PROCEEDINGS.
  
 ITEM 4.
    
    (REMOVED AND RESERVED).
  28




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PART II
 
 ITEM 5.
    
    MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF
EQUITY SECURITIES.
 Market Data for 2010 and 2009
  DividendsYear
    
    Quarter Ended
    
    High
    
    
    Low
    
    
    Declared2010
    
    First Quarter
    
    $
    1.70
    
    
    $
    1.16
    
    
    NoneSecond Quarter
    
    
    2.61
    
    
    
    1.25
    
    
    NoneThird Quarter
    
    
    1.84
    
    
    
    1.40
    
    
    NoneFourth Quarter
    
    
    1.55
    
    
    
    1.25
    
    
    None2009
    
    First Quarter
    
    $
    1.40
    
    
    $
    0.62
    
    
    NoneSecond Quarter
    
    
    1.44
    
    
    
    0.73
    
    
    NoneThird Quarter
    
    
    1.74
    
    
    
    0.75
    
    
    NoneFourth Quarter
    
    
    1.70
    
    
    
    1.20
    
    
    None
 Shareholder Data
   Distribution Policy
    29




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##### Table of Contents



Stock Repurchase Plan
  Sales of Unregistered Shares
  
 ITEM 6.
    
    SELECTED FINANCIAL DATA.
   30




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##### Table of Contents



ITEM 7.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION.
 Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995. The
statements in this report that are not historical facts are forward-looking statements that involve
a number of known and unknown risks, uncertainties, and other factors, all of which are difficult
or impossible to predict and many of which are beyond our control, that may cause our actual
results, performance, or achievements to be materially different from any future results,
performance, or achievements expressed or implied by those forward-looking statements. These risks
are detailed in Part I, Item 1A, Risk Factors, in this report and our other SEC filings. Please
also see the cautionary statements included in the Note Regarding Forward-Looking Statements at the
beginning of this report.
 Overview
  Recent Developments
 Loan Renewals
  
    
    Our $3,000,000 Bradley Park land loan now matures on April 30, 2012.
 
    
    Our $3,315,000 Highway 20 loan now matures on April 8, 2012.
 
    
    Our $2,898,333 Northridge office building loan now matures on August 10, 2013.
 
    
    Our $8,175,000 Peachtree Parkway land loan now matures on July 31, 2011.
 Grand Pavilion Retail Center Nonrecourse Loan
  Sale of Addison Place Shops Retail Center and Westside Land
   31




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##### Table of Contents



Continuing Negative Operating Cash Flow and Maturing Short-Term Debt
    Results of Operations
 Comparison of 2010 to 2009
  Years Ended December 31,
    
    
    Increase2010
    
    
    2009
    
    
    (Decrease)TOTAL OPERATING REVENUES
    
    $
    1,798,764
    
    
    $
    1,963,821
    
    
    $
    (165,057
    )OPERATING EXPENSES:Property operating expenses
    
    
    797,576
    
    
    
    965,042
    
    
    
    (167,466
    )General and administrative expenses
    
    
    1,866,594
    
    
    
    1,890,475
    
    
    
    (23,881
    )Impairment loss on real estate assets
    
    
    4,825,595
    
    
    
    12,226,412
    
    
    
    (7,400,817
    )Depreciation and amortization expense
    
    
    783,997
    
    
    
    718,118
    
    
    
    65,879Total operating expenses
    
    
    8,273,762
    
    
    
    15,800,047
    
    
    
    (7,526,285
    )LOSS FROM OPERATIONS
    
    
    (6,474,998
    )
    
    
    (13,836,226
    )
    
    
    (7,361,228
    )OTHER EXPENSE
    
    
    (4,444,086
    )
    
    
    (1,299,455
    )
    
    
    3,144,631LOSS FROM CONTINUING OPERATIONS
    
    $
    (10,919,084
    )
    
    $
    (15,135,681
    )
    
    $
    (4,216,597
    )
  32




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##### Table of Contents




    
    a $3,975,273 non-cash impairment loss on our North Springs land;
 
    
    a $1,411,000 non-cash impairment loss on our Grand Pavilion retail center;
 
    
    a $3,754,907 non-cash impairment loss on our Peachtree Parkway land;
 
    
    a $2,385,284 non-cash impairment loss on our Northridge land; and
 
    
    a $699,948 non-cash impairment loss on our Bassett retail center.
   
    
    A $2,989,396 loss on the extinguishment of debt from the sale of Westside.
 
    
    A $115,074 increase in interest expense from $1,255,794 for 2009 to $1,370,868
for 2010. This increase was due to $59,750 of interest related to the Bradley Park
property being expensed in 2010 rather than capitalized, along with higher interest
rates on some of our loans. This increase was partially offset by the sale of
Westside and a $623,159 reduction in the outstanding principal amount of our loans
during 2010.
 
    
    An $80,118 decrease in interest income from $121,901 in 2009 to $41,783 in 2010.
This decrease was due primarily to a reduction in our cash balances over the past
12 months and lower interest rates earned on those cash balances.
  33




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##### Table of Contents



Liquidity and Capital Resources
 Overview
     
    
    We own five tracts of land totaling 106 acres with an aggregate carrying value
of $42,936,767 that secure land loans totaling $14,400,000. Because land does not
generate revenue, a substantial portion of our negative cash flow is a result of
the carrying costs (interest expense and real estate taxes) on our land.
 
    
    Due to the continued weakness in the national and local economy, two of our
three retail centers and our office building are producing negative cash flow, and
the other retail center is positively cash flowing.
 
    
    Our general and administrative expenses for 2010 were $1,866,594 and included
the costs of being an SEC reporting company and having our shares listed on the
NYSE Amex Equities exchange. These costs include accounting and related fees to
our independent auditor as well as to another accounting firm required for our
compliance with Section 404(a) of the Sarbanes-Oxley Act, legal fees, listing fees,
director compensation, and directors and officers insurance premiums. We estimate
that these additional costs related to being a publicly traded company are
approximately $515,000 per year.
 Short- and Long-Term Liquidity Outlook
   34




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##### Table of Contents



Comparison of 2010 to 2009
    
    
    $90,755 decrease in cash used in discontinued operations due to the sale of the
Addison Place retail center;
 
    
    a $1,138,270 decrease in cash used for development and construction of real
estate assets;
 
    
    a $451,106 decrease in the change in restricted cash; and
 
    
    a $57,904 decrease in the change of accounts payable and accrued expenses
related to investing activities.
  
    
    a $2,360,397 decrease in distributions paid to shareholders and unitholders (we
did not make any distributions in 2010 compared to $2,360,397 in 2009);
 
    
    a $365,193 decrease in repayment of debt (we repaid $988,352 of debt during 2009
compared to $623,159 in 2010); and
 
    
    a decrease of $55,446 in the purchase of treasury stock (we did not purchase any
shares of treasury stock in 2010 compared to the purchase of $55,446 of treasury
stock in 2009).
 Debt Summary
   35




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##### Table of Contents



ROBERTS REALTY INVESTORS, INC.
DEBT SUMMARY SCHEDULE
(Listed in order of maturity by type of loan)
 As of December 31, 2010
 Interest
    
    
    Maturity
    
    Balance at
    
    
    Monthly
    
    
    Dec. 31, 2010Interest Terms
    
    Rate (1)
    
    
    Date
    
    Maturity
    
    
    Payment (1)
    
    
    BalancePermanent Mortgage LoansGrand Pavilion Shopping Center (2)(3)(5)
    
    Fixed-rate permanent
    
    
    5.43
    %
    
    07/11/13
    
    $
    6,016,331
    
    
    $
    40,565
    
    
    $
    6,433,286Northridge Office Building (4)
    
    LIBOR plus 300 b. p.
    
    
    4.50
    %
    
    08/10/13
    
    $
    2,445,000
    
    
    $
    24,409
    
    
    
    2,858,333Spectrum Shopping Center (2)(5)
    
    Fixed-rate permanent
    
    
    5.68
    %
    
    05/01/14
    
    
    4,545,747
    
    
    
    31,273
    
    
    
    4,881,585Bassett Shopping Center (2)(5)
    
    Fixed-rate permanent
    
    
    8.47
    %
    
    10/01/19
    
    
    1,943,344
    
    
    
    21,853
    
    
    
    2,524,305Subtotal
    
    
    
    
    
    
    
    
    
    $
    14,950,422
    
    
    $
    118,100
    
    
    $
    16,697,509Land LoansPeachtree Parkway (6)
    
    LIBOR plus 300 b. p.
    
    
    5.00
    %
    
    07/31/11
    
    $
    8,175,000
    
    
    $
    35,198
    
    
    $
    8,175,000Highway 20 (7)
    
    Prime rate
    
    
    5.50
    %
    
    04/08/12
    
    
    2,955,000
    
    
    
    45,384
    
    
    
    3,225,000Bradley Park (8)
    
    LIBOR plus 300 b. p.
    
    
    4.50
    %
    
    04/30/12
    
    
    3,000,000
    
    
    
    11,625
    
    
    
    3,000,000Subtotal
    
    
    
    
    
    
    
    
    
    $
    14,130,000
    
    
    $
    92,207
    
    
    $
    14,400,000Grand Totals
    
    
    
    
    
    
    
    
    
    $
    29,080,422
    
    
    $
    210,307
    
    
    $
    31,097,509
 
 (1)
    
    The interest rates and monthly payments are as of December 31, 2010.(2)
    
    The lender acts as trustee for the registered holders of commercial mortgage-backed
securities.(3)
    
    As disclosed elsewhere in this report, the Grand Pavilion loan is in default, and we
are seeking to transfer the property securing the loan to the lender in satisfaction of
the loan. The loan is nonrecourse, and we do not intend to make any further payments on
this loan.(4)
    
    This loan has an interest rate floor of 4.50% and the monthly payment on this loan
consists of a fixed principal amount of $13,333 per month plus interest at the stated
rate on the unpaid balance.(5)
    
    This loan has a 30-year amortization schedule and additional monthly payments are
required to sustain escrow reserves.(6)
    
    This loan has an interest rate of LIBOR plus 3.00%, with a floor of 5.0%.(7)
    
    This loan bears interest at the prime rate with a floor of 5.50%.(8)
    
    This loan has an interest rate floor of 4.50%.  36




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##### Table of Contents



Debt Maturities
  Debt Maturity Schedule
 Total
    
    
    Principal
    
    
    Nonrecourse
    
    Principal
    
    
    RecoursePrincipal
    
    
    Payments on
    
    
    Loans with
    
    Payments
    
    
    Loans withPayments
    
    
    Nonrecourse
    
    
    Balloon
    
    on Recourse
    
    
    BalloonYear
    
    Per Year
    
    
    (CMBS) Loans
    
    
    Payments
    
    Loans
    
    
    Payments2011
    
    $
    8,931,451
    
    
    $
    326,451
    
    
    
    
    $
    8,605,000
    
    
    Peachtree Pkwy2012
    
    
    6,412,738
    
    
    
    297,738
    
    
    
    
    
    6,115,000
    
    
    Highway 20, Bradley Park2013
    
    
    8,795,313
    
    
    
    6,256,980
    
    
    Grand Pavilion(1)
    
    
    2,538,333
    
    
    Northridge Office2014
    
    
    4,644,299
    
    
    
    4,644,299
    
    
    Spectrum2015
    
    
    66,124
    
    
    
    66,124Thereafter
    
    
    2,247,584
    
    
    
    2,247,584
    
    
    BassettTotal
    
    $
    31,097,509
 
 (1)
    
    As discussed elsewhere in this report, the Grand Pavilion loan is in default, and we are
seeking to transfer the property securing the loan to the lender in satisfaction of the loan.
The loan is nonrecourse, and we do not intend to make any further payments on this loan. The
table above reflects the original July 11, 2013 maturity date of the Grand Pavilion loan. If
this loan were shown as payable as of January 1, 2011, the principal payments in 2011 would
increase by $6,239,318, while principal payments would decrease by $145,992 in 2012 and
$6,093,326 in 2013. Short-Term Debt
  Long-Term Debt
  Effect of Floating Rate Debt
   37




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##### Table of Contents



Contractual Commitments
  No Quarterly Dividends
  Critical Accounting Policies and Estimates
  Cost Capitalization
  Interest Capitalization of Interest
  38




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##### Table of Contents



Asset Impairment Evaluation
 Property, Plant, and Equipment  Overall
    Recent Accounting Pronouncements
   39




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##### Table of Contents



Stock Repurchase Plan
  
 ITEM 7A.
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
   40




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##### Table of Contents



ITEM 8.
    
    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
  Report of Independent Registered Public Accounting Firm
    
    
    F-1Consolidated Financial Statements as of December 31, 2010 and
2009 and for the Years Ended December 31, 2010 and 2009:Consolidated Balance Sheets
    
    
    F-2Consolidated Statements of Operations
    
    
    F-3Consolidated Statements of Shareholders Equity
    
    
    F-4Consolidated Statements of Cash Flows
    
    
    F-5Notes to Consolidated Financial Statements
    
    
    F-7
 
 ITEM 9.
    
    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.
  
 ITEM 9A.
    
    CONTROLS AND PROCEDURES.
 Disclosure Controls and Procedures
  Managements Report on Internal Control over Financial Reporting
    41




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##### Table of Contents



Internal
Control over Financial Reporting Guidance for Smaller Public Companies
  Changes in Internal Controls
   
 ITEM 9B.
    
    OTHER INFORMATION.
   42




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##### Table of Contents



PART III
 
 ITEM 10.
    
    DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
 Directors and Executive Officers
  Term asDirectorName
    
    Age
    
    Expires
    
    PositionCharles S. Roberts
    
    64
    
    2012
    
    Chairman of the Board, Chief Executive Officer, and PresidentCharles R. Elliott
    
    57
    
    2012
    
    Director, Chief Financial Officer, Secretary, and TreasurerWm. Jarell Jones
    
    62
    
    2011
    
    Director, Chairman of Audit Committee and Chairman of Nominating and Governance CommitteeJohn L. Davis
    
    45
    
    2013
    
    Director, Chairman of the Compensation Committee
 Biographical Information
 Charles S. Roberts
     43




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##### Table of Contents



John L. Davis
  Charles R. Elliott
  44




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##### Table of Contents



Wm. Jarell Jones
  Section 16(a) Beneficial Ownership Reporting Compliance
  Code of Ethics and Business Conduct
  
    
    honest and ethical conduct, including the ethical handling of corporate
opportunities and actual or apparent conflicts of interest between personal and
professional relationships;
  45




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##### Table of Contents




    
    full, fair, accurate, timely, and understandable disclosure in reports and documents
that we file with, or submit to, the SEC and in other public communications we make;
 
    
    compliance with applicable governmental laws, rules, and regulations;
 
    
    confidentiality;
 
    
    protection and proper use of company assets;
 
    
    equal employment opportunities and prohibition of discrimination or harassment;
 
    
    the prompt internal reporting of violations of the code to an appropriate person or
persons identified in the code; and
 
    
    accountability for adherence to the code.
  Audit Committee
   46




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##### Table of Contents



ITEM 11.
    
    EXECUTIVE COMPENSATION.
 Compensation of Executive Officers
  Summary Compensation Table for 2010 and 2009
 Name and Principal
    
    
    
    
    
    Salary
    
    
    Bonus
    
    
    TotalPosition
    
    Year
    
    
    ($)
    
    
    ($)
    
    
    ($)Charles S. Roberts,
    
    
    2010
    
    
    
    225,000
    (1)
    
    
    240,000
    (2)
    
    
    465,000Chief Executive Officer,
    
    
    2009
    
    
    
    225,000
    (1)
    
    
    
    
    
    
    225,000President, and Chairman
of the BoardCharles R. Elliott,
    
    
    2010
    
    
    
    18,805
    (3)
    
    
    
    
    
    
    18,805Chief Financial Officer,
    
    
    2009
    
    
    
    49,990
    (3)
    
    
    
    
    
    
    49,990Secretary, and Treasurer
 
 (1)
    
    We do not compensate Mr. Roberts for his service as a director.(2)
    
    On December 20, 2010, the compensation committee of our board of directors approved the
payment of a $115,000 bonus for the specific achievements accomplished in 2009 and a $125,000
bonus for the achievements accomplished in 2010. The compensation committee took into account
Mr. Roberts efforts in leading (a) our renewals and extensions of various maturing loans in
the total amount of $17.4 million in a volatile credit environment and a deteriorating real
estate market and (b) our sale of a retail center and a land parcel for the $12.0 million of
debt secured by those properties. The compensation committee also considered that Mr. Roberts
has not received an increase in his annual salary since January 2007, and that we have never
provided him with any employee benefits such as medical and life insurance, retirement plan
contributions, deferred compensation, vacations, or holidays. Mr. Roberts also does not
receive any auto allowance or reimbursement for mileage.(3)
    
    We pay Mr. Elliott $70 per hour for his service as our Chief Financial Officer, Secretary,
and Treasurer. Mr. Elliott receives no employee benefits, such as medical and life insurance,
retirement plan contributions, deferred compensation, vacation or holidays, and we pay him
only for the actual number of hours he works. In addition, Mr. Elliott received our standard
director fees of $18,000 during each of 2010 and 2009, which amounts are included in the
salary amounts shown in the table.  47




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##### Table of Contents



Compensation of Directors
  Director Compensation for 2010
 Fees Earnedor Paid in Cash
    
    
    TotalName
    
    ($)
    
    
    ($)John L. Davis (1)
    
    
    18,000
    
    
    
    18,000Wm. Jarell Jones
    
    
    30,000
    
    
    
    30,000
 
 (1)
    
    Mr. Davis earned $24,000 for additional work he performed as a director in 2009 that we
paid to him on January 29, 2010.   48




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##### Table of Contents



ITEM 12.
    
    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
 Ownership of Common Stock and Units
  
    
    each person or entity known by us to be the beneficial owner of more than 5% of the
outstanding shares of common stock;
 
    
    each director and our named executive officers; and
 
    
    our directors and executive officers as a group.
     49




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##### Table of Contents



Number ofSharesNumber of
    
    
    UnderlyingShares
    
    
    UnitsName of
    
    Beneficially
    
    
    Beneficially
    
    
    
    
    
    
    Percent ofBeneficial Owner
    
    Owned
    
    
    Owned
    
    
    Total
    
    
    Class (1)Charles S. Roberts
    
    
    3,228,504
    
    
    
    1,166,920
    (2)
    
    
    4,395,424
    
    
    
    38.14
    %John L. Davis
    
    
    27,852
    
    
    
    0
    
    
    
    27,852
    
    
    
    *Wm. Jarell Jones
    
    
    53,130
    (3)
    
    
    0
    
    
    
    53,130
    
    
    
    *Charles R. Elliott
    
    
    46,200
    
    
    
    0
    
    
    
    46,200
    
    
    
    *All directors and
executive officers
as a group: (4
persons)
(3)
    
    
    3,355,686
    
    
    
    1,166,920
    
    
    
    4,522,606
    
    
    
    39.24
    %
 
 *
    
    Less than 1%.(1)
    
    The total number of shares outstanding used in calculating this percentage is 10,357,831, the
number of shares outstanding as of March 8, 2011.(2)
    
    Reflects Mr. Roberts beneficial ownership of 708,512 units, each of which is exchangeable
for 1.647 shares of our common stock.(3)
    
    Includes 3,332 shares owned by Mr. Jones wife, to which Mr. Jones disclaims beneficial
ownership.  50




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##### Table of Contents



Equity Compensation Plan Information
  Equity Compensation Plan Information
 Number ofsecurities
    
    
    Weighted-to be issued
    
    
    average
    
    
    Number of securitiesupon exercise of
    
    
    exercise price of
    
    
    remaining available for futureoutstanding
    
    
    outstanding
    
    
    issuances under equityoptions, warrants
    
    
    options, warrants
    
    
    compensation plans (excludingand rights
    
    
    and rights
    
    
    securities reflected in column (a)Plan category
    
    (a)
    
    
    (b)
    
    
    (c)Equity compensation
plans approved by
security holders
    
    
    N/A
    
    
    
    N/A
    
    
    
    596,212Equity compensation
plans not approved
by security holders
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/ATotal
    
    
    
    
    
    
    
    
    
    
    596,212
  
 ITEM 13.
    
    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND
DIRECTOR INDEPENDENCE.
 General
   51




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##### Table of Contents



Transactions with the Roberts Companies
 Overview
 Number
    
    
    Year
    
    
    
    
    
    
    Sales PriceName of Community
    
    of Units
    
    
    Sold
    
    
    Sales Price
    
    
    Per Unit+ * Addison Place Townhomes (Phase I)
    
    
    118
    
    
    
    2008
    
    
    $
    20,000,000
    
    
    $
    169,492+ * Addison Place Apartments (Phase II)
    
    
    285
    
    
    
    2008
    
    
    
    40,000,000
    
    
    
    140,351+ * Ballantyne Place
    
    
    319
    
    
    
    2005
    
    
    
    37,250,000
    
    
    
    116,771* St. Andrews at The Polo Club
    
    
    200
    
    
    
    2004
    
    
    
    36,000,000
    
    
    
    180,000+ * Preston Oaks (Phase I)
    
    
    189
    
    
    
    2004
    
    
    
    23,762,500
    
    
    
    125,728+ * Preston Oaks (Phase II)
    
    
    24
    
    
    
    2004
    
    
    
    3,017,500
    
    
    
    125,728+ * Bradford Creek
    
    
    180
    
    
    
    2004
    
    
    
    18,070,000
    
    
    
    100,389+ * Veranda Chase
    
    
    250
    
    
    
    2004
    
    
    
    23,250,000
    
    
    
    93,000+ * Plantation Trace (Phase I)
    
    
    182
    
    
    
    2004
    
    
    
    16,866,400
    
    
    
    92,673+ * Plantation Trace Townhomes (Phase
II)
    
    
    50
    
    
    
    2004
    
    
    
    4,633,600
    
    
    
    92,673+ * River Oaks
    
    
    216
    
    
    
    2004
    
    
    
    20,000,000
    
    
    
    92,593+ * Highland Park
    
    
    188
    
    
    
    2003
    
    
    
    17,988,143
    
    
    
    95,682+ * Rosewood Plantation
    
    
    152
    
    
    
    2001
    
    
    
    14,800,000
    
    
    
    97,368+ * Crestmark Club (Phase I)
    
    
    248
    
    
    
    2001
    
    
    
    18,562,874
    
    
    
    74,850+ * Crestmark Club (Phase II)
    
    
    86
    
    
    
    2001
    
    
    
    6,437,126
    
    
    
    74,850+ * Ivey Brook
    
    
    146
    
    
    
    2000
    
    
    
    14,550,000
    
    
    
    99,658+ * Bentley Place
    
    
    117
    
    
    
    1999
    
    
    
    8,273,000
    
    
    
    70,709* Windsong
    
    
    232
    
    
    
    1998
    
    
    
    9,750,000
    
    
    
    42,026* Laurelwood
    
    
    207
    
    
    
    1997
    
    
    
    10,601,000
    
    
    
    51,213+ Wynfield Trace
    
    
    146
    
    
    
    1995
    
    
    
    10,865,000
    
    
    
    74,418+ Bridgewater
    
    
    532
    
    
    
    1995
    
    
    
    39,535,000
    
    
    
    74,314+ Autumn Ridge
    
    
    113
    
    
    
    1995
    
    
    
    7,750,000
    
    
    
    68,584+ Governors Pointe
    
    
    468
    
    
    
    1986
    
    
    
    29,739,000
    
    
    
    63,545Total
    
    
    4,648
    
    
    
    
    
    
    $
    431,701,143
 
 +
    
    The communities marked with a + were built on raw land that was purchased, zoned and
developed by the Roberts Companies.*
    
    The communities marked with an * were designed, developed, constructed, renovated and managed
by the Roberts Companies for Roberts Realty Investors, Inc.  52




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##### Table of Contents



Lease of Office Space in Northridge Office Building
   Restrictive Covenant on Peachtree Parkway Land
  Purchase of Property Adjacent to Peachtree Parkway Land
   53




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##### Table of Contents



Restrictive Covenant on North Springs Land Parcel Development Fees
 Development Fees
 Total
    
    
    Amounts
    
    
    Amounts
    
    
    RemainingContract
    
    
    Incurred in
    
    
    Incurred in
    
    
    ContractualAmount
    
    
    2009
    
    
    2010
    
    
    CommitmentBradley Park
    
    $
    770,000
    
    
    $
    308,000
    
    
    $
    
    
    
    $
    Highway 20
    
    
    1,050,000
    
    
    
    
    
    
    
    225,000
    
    
    
    725,000$
    1,820,000
    
    
    $
    308,000
    
    
    $
    225,000
    
    
    $
    725,000
  54




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##### Table of Contents



Construction Contracts.
 Amounts
    
    
    Amounts Incurred forIncurred for
    
    
    5% Profit andLabor and Materials Costs
    
    
    5% Overheadfor the Twelve Months
    
    
    for the Twelve MonthsEnded December 31,
    
    
    Ended December 31,2010
    
    
    2009
    
    
    2010
    
    
    2009Bradley Park
    
    $
    39,039
    
    
    $
    298,840
    
    
    $
    3,904
    
    
    $
    29,884Northridge
    
    
    160,148
    
    
    
    205,541
    
    
    
    16,015
    
    
    
    20,554Peachtree Parkway
    
    
    2,981
    
    
    
    4,993
    
    
    
    298
    
    
    
    499North Springs
    
    
    8,039
    
    
    
    73,691
    
    
    
    804
    
    
    
    7,369Highway 20
    
    
    
    
    
    
    288
    
    
    
    
    
    
    
    29Totals
    
    $
    210,207
    
    
    $
    583,353
    
    
    $
    21,021
    
    
    $
    58,335
 Other Payments to Roberts Construction.
 Other Fees & Reimbursements to Roberts Properties
  Determination of Director Independence
   55




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##### Table of Contents



Approval of Transactions with Related Persons
   
    
    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
 
    
    the transaction is established to have been fair to us.
    
    
    any significant ownership interest in any service provider;
 
    
    any consulting or employment relationship with any service provider, supplier, or
competitor;
 
    
    any outside business activity that detracts from an individuals ability to devote
appropriate time and attention to his or her responsibilities with the company;
 
    
    the receipt of excessive entertainment or other than nominal gifts from any company
with which the company has current or prospective business dealings;
 
    
    being in the position of supervising, reviewing, or having any influence on the job
evaluation, pay, or benefit of any immediate family member; and
 
    
    selling anything to the company or buying anything from the company.
   56




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##### Table of Contents



ITEM 14.
    
    PRINCIPAL ACCOUNTING FEES AND SERVICES.
  Audit Fees
 For 2010
  For 2009
  Audit-Related Fees
  Tax Fees
 For 2010
   57




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##### Table of Contents



For 2009
  All Other Fees
  Pre-Approval Policy
  General.
 Audit Services.
 Audit-related Services.
 Tax Services.
 All Other Services
 Pre-Approval Fee Levels
  58




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##### Table of Contents



PART IV
 
 ITEM 15.
    
    EXHIBITS, FINANCIAL STATEMENT SCHEDULES.
 (a)
    
    (1) and (2). Financial Statements and Schedules.
 The financial statements listed below are filed as part of this annual report on the pages
indicated.
 INDEX TO FINANCIAL STATEMENTS
 PageREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
    
    
    F-1CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2010 AND 2009 AND FOR THE YEARS
ENDED DECEMBER 31, 2010 AND 2009:Consolidated Balance Sheets
    
    
    F-2Consolidated Statements of Operations
    
    
    F-3Consolidated Statements of Shareholders Equity
    
    
    F-4Consolidated Statements of Cash Flows
    
    
    F-5Notes to Consolidated Financial Statements
    
    
    F-7
  59




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##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
     
  F-1




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##### Table of Contents



ROBERTS REALTY INVESTORS, INC.
 
 CONSOLIDATED BALANCE SHEETS
 December 31,
    
    
    December 31,2010
    
    
    2009ASSETSREAL ESTATE ASSETS:Land
    
    $
    9,268,326
    
    
    $
    9,268,326Buildings and improvements
    
    
    14,163,327
    
    
    
    16,343,959Furniture, fixtures and equipment
    
    
    460,909
    
    
    
    447,28323,892,562
    
    
    
    26,059,568Less: accumulated depreciation
    
    
    (4,136,145
    )
    
    
    (3,426,076
    )Operating real estate assets
    
    
    19,756,417
    
    
    
    22,633,492Construction in progress and real estate under development
    
    
    42,936,767
    
    
    
    44,440,391Land held for investment
    
    
    
    
    
    
    9,009,124Net real estate assets
    
    
    62,693,184
    
    
    
    76,083,007CASH AND CASH EQUIVALENTS
    
    
    3,716,393
    
    
    
    7,905,771RESTRICTED CASH
    
    
    1,229,040
    
    
    
    1,292,328INVESTMENTS
    
    
    
    
    
    
    38,177DEFERRED FINANCING & LEASING COSTS  Net of accumulated amortization
of $190,193 and $449,640 at December 31, 2010 and December 31, 2009, respectively
    
    
    180,559
    
    
    
    214,590LEASE INTANGIBLES  Net of accumulated amortization
of $324,847 and $467,850 at December 31, 2010 and December 31, 2009, respectively
    
    
    128,326
    
    
    
    203,808OTHER ASSETS  Net
    
    
    231,831
    
    
    
    157,053ASSETS RELATED TO DISCONTINUED OPERATIONS
    
    
    
    
    
    
    6,486,629$
    68,179,333
    
    
    $
    92,381,363LIABILITIES AND SHAREHOLDERS EQUITYLIABILITIES:Mortgage notes payable
    
    $
    16,697,509
    
    
    $
    17,045,668Land notes payable
    
    
    14,400,000
    
    
    
    20,675,000Accounts payable and accrued expenses
    
    
    484,853
    
    
    
    472,535Due to affiliates
    
    
    38,305
    
    
    
    52,193Security deposits and prepaid rents
    
    
    80,036
    
    
    
    107,292Liabilities related to discontinued operations
    
    
    
    
    
    
    6,103,103Total liabilities
    
    
    31,700,703
    
    
    
    44,455,791COMMITMENTS AND CONTINGENCIES (Note 11)NONCONTROLLING INTEREST  OPERATING PARTNERSHIP
    
    
    6,372,817
    
    
    
    8,760,795SHAREHOLDERS 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, 10,349,065 and
10,205,749 shares issued and outstanding at December 31, 2010 and December 31,
2009, respectively
    
    
    103,491
    
    
    
    102,058Additional paid-in capital
    
    
    31,305,781
    
    
    
    30,948,377Treasury shares, at cost
    
    
    (71,332
    )
    
    
    (71,332
    )Accumulated other comprehensive income
    
    
    
    
    
    
    9,722(Accumulated deficit) retained earnings
    
    
    (1,232,127
    )
    
    
    8,175,952Total shareholders equity
    
    
    30,105,813
    
    
    
    39,164,777$
    68,179,333
    
    
    $
    92,381,363
   F-2




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##### Table of Contents



ROBERTS REALTY INVESTORS, INC.
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
 Years Ended December 31,2010
    
    
    2009OPERATING REVENUES:Rental operations
    
    $
    1,544,711
    
    
    $
    1,682,503Other operating income
    
    
    254,053
    
    
    
    281,318Total operating revenues
    
    
    1,798,764
    
    
    
    1,963,821OPERATING EXPENSES:Personnel
    
    
    13,905
    
    
    
    33,160Utilities
    
    
    193,217
    
    
    
    179,485Repairs and maintenance
    
    
    148,851
    
    
    
    95,209Real estate taxes
    
    
    377,925
    
    
    
    547,613Marketing, insurance and other
    
    
    75,446
    
    
    
    90,190General and administrative expenses
    
    
    1,866,594
    
    
    
    1,890,475(Gain) loss on disposal of asset
    
    
    (11,768
    )
    
    
    19,385Impairment loss on real estate assets
    
    
    4,825,595
    
    
    
    12,226,412Depreciation and amortization expense
    
    
    783,997
    
    
    
    718,118Total operating expenses
    
    
    8,273,762
    
    
    
    15,800,047LOSS FROM OPERATIONS
    
    
    (6,474,998
    )
    
    
    (13,836,226
    )OTHER (EXPENSE) INCOME:Loss on extinguishment of debt
    
    
    (2,989,396
    )
    
    
    Gain on sale of available for sale securities
    
    
    18,230
    
    
    
    Interest income
    
    
    41,783
    
    
    
    121,901Interest expense
    
    
    (1,370,868
    )
    
    
    (1,255,794
    )Amortization of deferred financing and leasing costs
    
    
    (143,835
    )
    
    
    (165,562
    )Total other expense
    
    
    (4,444,086
    )
    
    
    (1,299,455
    )LOSS FROM CONTINUING OPERATIONS
    
    
    (10,919,084
    )
    
    
    (15,135,681
    )LOSS FROM DISCONTINUED OPERATIONS
    
    
    (519,310
    )
    
    
    (2,304,747
    )NET LOSS
    
    
    (11,438,394
    )
    
    
    (17,440,428
    )LOSS ATTRIBUTABLE TO NONCONTROLLING INTEREST
    
    
    (2,030,315
    )
    
    
    (3,264,848
    )NET LOSS AVAILABLE TO COMMON SHAREHOLDERS
    
    $
    (9,408,079
    )
    
    $
    (14,175,580
    )LOSS PER COMMON SHARE  BASIC AND DILUTED (Note 6):Loss from continuing operations  basic and diluted
    
    $
    (0.88
    )
    
    $
    (1.21
    )Loss from discontinued operations  basic and diluted
    
    
    (0.04
    )
    
    
    (0.19
    )Net loss  basic and diluted
    
    $
    (0.92
    )
    
    $
    (1.40
    )
   F-3




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##### Table of Contents



ROBERTS REALTY INVESTORS, INC.
 
 CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY
 YEARS ENDED DECEMBER 31, 2010 AND 2009
 Common Shares
    
    
    
    
    
    
    
    
    
    
    AccumulatedNumber
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    Totalof Shares
    
    
    
    
    
    
    Paid-In
    
    
    Treasury
    
    
    Comprehensive
    
    
    Retained
    
    
    ShareholdersIssued
    
    
    Amount
    
    
    Capital
    
    
    Shares
    
    
    Income
    
    
    Earnings
    
    
    EquityBALANCE AS OF DECEMBER 31, 2008
    
    
    10,086,769
    
    
    $
    100,868
    
    
    $
    30,389,994
    
    
    $
    (15,886
    )
    
    $
    
    
    
    $
    22,351,532
    
    
    $
    52,826,508Comprehensive incomeOther comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,722
    
    
    
    
    
    
    
    9,722Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (14,175,580
    )
    
    
    (14,175,580
    )Total comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (14,165,858
    )Purchase of treasury shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (55,446
    )
    
    
    
    
    
    
    
    
    
    
    (55,446
    )Conversion of operating partnership
units to common shares
    
    
    118,980
    
    
    
    1,190
    
    
    
    119,578
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    120,768Adjustment for noncontrolling
interest in
the operating partnership
    
    
    
    
    
    
    
    
    
    
    438,805
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    438,805BALANCE AS OF DECEMBER 31, 2009
    
    
    10,205,749
    
    
    $
    102,058
    
    
    $
    30,948,377
    
    
    $
    (71,332
    )
    
    $
    9,722
    
    
    $
    8,175,952
    
    
    $
    39,164,777Comprehensive incomeOther comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9,722
    )
    
    
    
    
    
    
    (9,722
    )Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9,408,079
    )
    
    
    (9,408,079
    )Total comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9,417,801
    )Restricted shares issued
    
    
    50,000
    
    
    
    500
    
    
    
    (500
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Share-based compensation expense
    
    
    
    
    
    
    
    
    
    
    1,174
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,174Conversion of operating partnership
units to common shares
    
    
    93,316
    
    
    
    933
    
    
    
    143,820
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    144,753Adjustment for noncontrolling
interest in
the operating partnership
    
    
    
    
    
    
    
    
    
    
    212,910
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    212,910BALANCE AS OF DECEMBER 31, 2010
    
    
    10,349,065
    
    
    $
    103,491
    
    
    $
    31,305,781
    
    
    $
    (71,332
    )
    
    $
    
    
    
    $
    (1,232,127
    )
    
    $
    30,105,813
   F-4




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##### Table of Contents



ROBERTS REALTY INVESTORS, INC.
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 Years Ended December 31,2010
    
    
    2009OPERATING ACTIVITIES:Net loss
    
    $
    (11,438,394
    )
    
    $
    (17,440,428
    )Adjustments to reconcile net loss to net cash used in operating activities:Loss from discontinued operations
    
    
    519,310
    
    
    
    2,304,747Depreciation and amortization
    
    
    927,832
    
    
    
    883,680Loss on extinguishment of debt
    
    
    2,989,396
    
    
    
    Impairment loss on real estate assets
    
    
    4,825,595
    
    
    
    12,226,412Gain on sale of available for sale securities
    
    
    (18,230
    )
    
    
    Amortization of above and below market leases
    
    
    (11,669
    )
    
    
    10,796Amortization of deferred compensation
    
    
    1,174
    
    
    
    Loss on disposal of assets
    
    
    11,162
    
    
    
    19,385(Increase) decrease in other assets
    
    
    (64,790
    )
    
    
    68,922Increase in due to affiliates
    
    
    9,442
    
    
    
    16,898Increase (decrease)in accounts payable, accrued expenses
and other liabilities relating to operations
    
    
    24,423
    
    
    
    (71,808
    )Net cash used in operating activities from continuing operations
    
    
    (2,224,749
    )
    
    
    (1,981,396
    )Net cash used in operating activities from discontinued operations
    
    
    (129,184
    )
    
    
    (146,783
    )Net cash used in operating activities
    
    
    (2,353,933
    )
    
    
    (2,128,179
    )INVESTING ACTIVITIES:Purchases of investments
    
    
    
    
    
    
    (28,455
    )Sale of available for sale securities
    
    
    46,685
    
    
    
    Payment of leasing costs
    
    
    (1,200
    )
    
    
    (10,486
    )Decrease (increase) in restricted cash
    
    
    58,288
    
    
    
    (392,818
    )Decrease in accounts payable, accrued expenses and
other liabilities relating to investing activities
    
    
    (6,303
    )
    
    
    (64,207
    )Development and construction of real estate assets
    
    
    (1,184,706
    )
    
    
    (2,322,976
    )Net cash used in investing activities from continuing operations
    
    
    (1,087,236
    )
    
    
    (2,818,942
    )Net cash used in investing activities from discontinued operations
    
    
    (6,600
    )
    
    
    (97,355
    )Net cash used in investing activities
    
    
    (1,093,836
    )
    
    
    (2,916,297
    )FINANCING ACTIVITIES:Principal repayments on mortgage notes payable
    
    
    (348,159
    )
    
    
    (411,352
    )Payment of loan costs
    
    
    (110,117
    )
    
    
    (113,886
    )Principal repayments of land notes payable
    
    
    (275,000
    )
    
    
    (577,000
    )Purchase of treasury stock
    
    
    
    
    
    
    (55,446
    )Payment of distributions on common shares
    
    
    
    
    
    
    (1,809,307
    )Payment of distributions on noncontrolling interest
    
    
    
    
    
    
    (551,090
    )Decrease in restricted cash relating to financing activities
    
    
    5,000
    
    
    
    (Decrease) increase in accounts payable, accrued expenses and other liabilities relating to
financing activities
    
    
    (13,333
    )
    
    
    13,333Net cash used in financing activities
    
    
    (741,609
    )
    
    
    (3,504,748
    )NET DECREASE IN CASH AND CASH EQUIVALENTS
    
    
    (4,189,378
    )
    
    
    (8,549,224
    )CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
    
    $
    7,905,771
    
    
    $
    16,454,995CASH AND CASH EQUIVALENTS, END OF PERIOD
    
    $
    3,716,393
    
    
    $
    7,905,771
   F-5




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##### Table of Contents



ROBERTS REALTY INVESTORS, INC.
 CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
 Years Ended December 31,2010
    
    
    2009SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:Cash paid for interest, net of capitalized interest of $491,775 and $762,847 for the
twelve months ended December 31, 2010 and December 31, 2009, respectively
    
    $
    1,265,480
    
    
    $
    1.423,621SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING ACTIVITIES AND FINANCING ACTIVITIES:Development and construction of real estate assets due to but not paid to affiliates
    
    $
    5,019
    
    
    $
    33,749Conversion of operating partnership units to common shares
    
    $
    144,753
    
    
    $
    120,768Adjustments to noncontrolling interest in the operating partnership
    
    $
    212,910
    
    
    $
    438,805Unrealized gain on available-for-sale securities
    
    $
    
    
    
    $
    9,722NON-CASH SALE OF LAND HELD FOR INVESTMENT:Sale of land held for investment
    
    $
    9,009,124
    
    
    $
    Decrease in other assets  net
    
    $
    64
    
    
    $
    Extinguishment of land notes payable
    
    $
    (6,019,792
    )
    
    $
    NON-CASH SALE OF REAL ESTATE ASSETS RELATED TO
DISCONTINUED OPERATIONS:Sale of real estate assets related to discontinued operations
    
    $
    5,627,178
    
    
    $
    Decrease in assets related to discontinued operations
    
    $
    122,778
    
    
    $
    Extinguishment of liabilities related to discontinued operations
    
    $
    (6,019,792
    )
    
    $
    
   F-6




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##### Table of Contents



ROBERTS REALTY INVESTORS, INC.
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 1.
    
    BUSINESS AND ORGANIZATION
 Roberts Realty Investors, Inc. (Roberts Realty), a Georgia corporation, was formed on July
22, 1994 to serve as a vehicle for investments in, and ownership of, a professionally
managed real estate portfolio of multifamily residential communities. Roberts Realty owns
and manages its real estate assets as a self-administered, self-managed equity real estate
investment trust (REIT).
 Roberts Realty conducts all of its operations and owns all of its assets in and through
Roberts Properties Residential, L.P., a Georgia limited partnership (the operating
partnership), or the operating partnerships three wholly owned subsidiaries, which are
Georgia limited liability companies. Roberts Realty controls the operating partnership as
its sole general partner and owner of a majority interest. Roberts Realty had an 82.53%
ownership interest in the operating partnership at December 31, 2010 and an 81.72% ownership
interest in the operating partnership at December 31, 2009.
 At December 31, 2010, Roberts Realty owned the following real estate assets, all of which
are located in the north Atlanta metropolitan area:
 
    
    three neighborhood retail centers totaling 112,322 square feet;
 
    
    one commercial office building totaling 37,864 square feet, part of which
serves as Roberts Realtys corporate headquarters; and
 
    
    five tracts of land totaling 106 acres in various phases of development and
construction.
 On June 30, 2010, Roberts Realty sold its 44,293 square foot Addison Place Shops retail
center and its 44-acre Westside land parcel to the lender for the debt. See Note 4,
Discontinued Operations and Note 5, Notes Payable.
 2.
    
    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Basis of Presentation.The accompanying consolidated financial statements include the
consolidated accounts of Roberts Realty and the operating partnership. All significant
inter-company accounts and transactions have been eliminated in consolidation. The
financial statements of Roberts Realty have been adjusted for the noncontrolling interest of
the unitholders in the operating partnership.
 Holders of operating partnership units generally have the right to require the operating
partnership to redeem their units for shares of Roberts Realty common stock. Upon submittal
of units for redemption, the operating partnership has the option either (a) to acquire
those units in exchange for shares, currently on the basis of 1.647 shares for each unit
submitted for redemption (see Note 6, Shareholders Equity  Special Cash and Stock
Distributions Declared in December 2008 and Paid in January 2009), or (b) to pay cash for
those units at their fair market value, based upon the then current trading price of the
shares and using the same exchange ratio. Roberts Realty has adopted a policy of issuing
shares in exchange for all units submitted for redemption.
 The noncontrolling interest of the unitholders in the operating partnership on the
accompanying balance sheets is calculated by multiplying the noncontrolling interest
ownership percentage at the balance sheet date by the operating partnerships net assets
(total assets less total liabilities). The noncontrolling interest ownership percentage is
calculated at any point in time by dividing (x) (the number of units outstanding multiplied
by 1.647) by (y) the total number of shares plus (the number of units outstanding multiplied
by 1.647). The noncontrolling interest ownership
percentage will change as additional shares and/or units are issued or as units are redeemed
for shares of Roberts Realty common stock. The noncontrolling 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 percentage of units outstanding
during the period, which was 17.75% for 2010 and 18.72% for 2009. There were 1,329,738
units outstanding as of December 31, 2010 and 1,386,394 units outstanding as of December 31,
2009. The noncontrolling interest of the unitholders was $6,372,817 at December 31, 2010
and $8,760,795 at December 31, 2009.
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Real Estate Assets and Depreciation.Real estate assets are recorded at depreciated cost
less reductions for impairment, if any. On January 1, 2009, Roberts Realty adopted
Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC)
Topic 820-10, Fair Value Measurements and Disclosures  Overall, to measure its
non-financial asset and liabilities at fair value on a nonrecurring basis. Roberts Realty
reviews its real estate assets for impairment whenever events or changes in circumstances
indicate that the carrying value may not be recoverable. If the real estate asset is
considered to be impaired, the impairment to be recognized is measured at the amount by
which the carrying amount exceeds the fair value as determined from an appraisal, discounted
cash flow analysis, or other valuation technique. The analysis conducted by Roberts Realty
in determining the impairment losses is described in Note 8  Impairment Losses on Real
Estate Assets.
 The purchase price of acquired real estate assets is allocated to land, building, and
intangible assets in accordance with FASB ASC Topic 805, Business Combinations. Roberts
Realty allocates the purchase price of an acquired asset based on the relative fair values
of the land, building, and intangible assets. For tangible assets classified as real estate
assets, the values are determined as though the land was undeveloped and the buildings were
vacant. Intangible assets typically consist of above or below market leases, customer
relationships and the value of in-place leases. The fair value of any above or below market
leases is amortized into operating revenues over the terms of the respective leases. The
combined net value of above and below market leases acquired, net of accumulated
amortization, was ($27,793) and ($39,462), and the unamortized remaining values are included
in other assets on the consolidated balance sheets at December 31, 2010 and 2009,
respectively. The value of in-place leases is amortized over the term of the respective
lease. Intangible assets that are subject to amortization (a) are reviewed for potential
impairment whenever events or circumstances indicate that carrying amounts may not be
recoverable and (b) are tested at least annually. Roberts Realty determined that, based on
estimated future cash flows, the carrying amount of the fair value of the leases relating to
the Retail/Office segment exceeded its fair value by $4,153 in 2010 and $5,254 in 2009.
 Expenditures directly related to the development, acquisition, and improvement of real
estate assets are capitalized at cost as land, buildings, and improvements. During the
construction period, interest expense, real estate taxes, and insurance are capitalized.
Interest expense is capitalized on qualifying assets during construction using a weighted
average interest rate for all indebtedness. Interest capitalized was $491,775 for 2010 and
$762,847 for 2009. Leasing costs, including commissions and legal costs, are capitalized
and amortized over the term of the lease. 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. The amortization of the value of the in-place leases and any
tenant improvement allowance is included in the depreciation and amortization expense on the
operating statement with the operating real estate depreciable assets. Depreciation expense
was $783,997 in 2010 and $718,118 in 2009.
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##### Table of Contents



Roberts Realty recognizes gains on sales of assets in accordance with FASB ASC Topic 360-20,
Property, Plant, and Equipment  Real Estate Sales. If any significant continuing
obligation exists at the date of the sale, Roberts Realty defers a portion of the gain
attributable to the continuing obligation until the continuing obligation has expired or is
removed. There were no such continuing obligations on the sales of Roberts Realtys assets
as of December 31, 2010 and 2009.
 Cash and Cash Equivalents.Roberts Realty considers all highly liquid investments with a
maturity of three months or less at the time of purchase to be cash equivalents. Roberts
Realty maintains cash and cash equivalent balances with financial institutions that may at
times exceed the limits for insurance provided by the Federal Depository Insurance
Corporation. Roberts Realty has not experienced any losses related to these balances, and
management believes its credit risk is minimal.
 Restricted Cash.Restricted cash consists of retail and office security deposits, lender
escrows held by third parties, and an interest reserve held by the lender.
 Investments.Roberts Realty classifies its marketable equity securities as
available-for-sale, and marketable equity securities are reported at fair value in
Investments on the consolidated balance sheets. Unrealized gains and losses on
available-for-sale securities are excluded from income and are reported as other
comprehensive income in shareholders equity. During 2010, Roberts Realty sold its
available-for-sale securities and recognized an $18,230 gain from the sale. Roberts Realty
measures the fair value of its marketable equity securities at quoted market prices in
accordance with FASB ASC Topic 820-10, Fair Value Measurements.
 Proceeds
    
    
    Realized
    
    
    Costfrom Sale
    
    
    Gains
    
    
    BasisMarketable equity securities
    
    $
    46,685
    
    
    $
    18,230
    
    
    $
    28,455
 As of December 31, 2009, available-for-sale securities consisted of the following:
 Gross
    
    
    GrossCost
    
    
    Unrealized
    
    
    Unrealized
    
    
    MarketBasis
    
    
    Gains
    
    
    Losses
    
    
    ValueMarketable equity securities
    
    $
    28,455
    
    
    $
    9,858
    
    
    $
    (136
    )
    
    $
    38,177
 Deferred Financing Costs.Deferred financing costs include fees and costs incurred to
obtain financing and are amortized on the straight-line method over the terms of the related
debt. Although accounting principles generally accepted in the U.S. (GAAP) require that
the effective-yield method be used to amortize financing costs, the effect of using the
straight-line method is not materially different from the results that would have been
obtained using the effective-yield method. Amortization of deferred financing costs was
$132,084 for 2010 and $153,989 for 2009.
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##### Table of Contents



Revenue Recognition.Roberts Realty leases its multifamily properties under operating
leases with terms generally one year or less. (Roberts Realty currently owns no multifamily
communities and did not own any multifamily communities in 2009 or 2010.) Commercial leases
for Roberts Realtys retail and office properties generally have terms of three to five
years, with options to renew for an additional three to five years. Roberts Realty
recognizes revenue for reimbursements from retail tenants of operating expenses consisting
primarily of real estate taxes, property insurance, and various common area expenses such as
electricity, water, sewer, and trash removal. Rental income from multifamily properties is
recognized when collected, and rental
income from retail and office properties is recognized when earned, which materially
approximates revenue recognition on a straight-line basis. At December 31, 2010, future
minimum rentals to be received by Roberts Realty under its retail and office leases,
excluding reimbursements for operating expenses, are as follows:
 Year
    
    Amount2011
    
    $
    1,274,2142012
    
    
    977,0612013
    
    
    445,8102014
    
    
    243,1502015
    
    
    23,400Thereafter
    
    
    Total
    
    $
    2,963,635
 Income Taxes.Roberts Realty has elected to be taxed as a REIT under the Internal Revenue
Code of 1986, as amended (the Code), since 1994. As a result, Roberts Realty generally
will not be subject to federal and state income taxation at the corporate level to the
extent it distributes each year at least 90% of its taxable income, as defined in the Code,
to its shareholders and satisfies certain other requirements. As long as Roberts Realty
continues to maintain its qualification as a REIT, it 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. A reconciliation of Roberts Realtys net loss to its taxable loss for the years
ending December 31, 2010 and 2009 is shown below.
 2010
    
    
    2009Net loss
    
    $
    (9,408,079
    )
    
    $
    (14,175,580
    )Adjustments to net loss:Loss from sale of real estate assets
    
    
    1,940,814
    
    
    
    Political campaign contributions
    
    
    
    
    
    
    1,016Gain from disposal of assets
    
    
    (7,590
    )
    
    
    (16,396
    )Depreciation
    
    
    174,470
    
    
    
    170,579Prepaid rents
    
    
    17,163
    
    
    
    32,310Unearned compensation
    
    
    966
    
    
    
    Interest expense
    
    
    (404,475
    )
    
    
    (620,182
    )Bad debt
    
    
    (166,783
    )
    
    
    336,317Meals and entertainment
    
    
    725
    
    
    
    763Impairment loss
    
    
    4,383,505
    
    
    
    11,469,079Fair market value of leases
    
    
    
    
    
    
    4,271Charitable contribution carryover
    
    
    2,056
    
    
    
    4,268Other
    
    
    219
    
    
    
    Taxable (loss) income before
net operating losses and
dividends paid deduction
    
    $
    (3,467,009
    )
    
    $
    (2,793,555
    )Dividends paid deduction
    
    
    
    
    
    
    Net operating loss deduction
    
    
    
    
    
    
    Taxable loss
    
    $
    (3,467,009
    )
    
    $
    (2,793,555
    )
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##### Table of Contents



Tax Status of Distributions.Roberts Realty did not declare a dividend or special
distribution during 2010 or 2009. The special cash and stock distributions declared in
December 2008 and paid in January 2009 were deemed to have been paid in 2008 for tax
purposes.
 Earnings Per Share.Basic earnings per share is calculated using the weighted average
number of common shares outstanding during the periods presented. Diluted earnings per
share is calculated to reflect the potential dilution of all instruments or securities that
are convertible into shares of common stock. For Roberts Realty, this includes the shares
that are issuable in exchange for units that are outstanding during the periods presented.
 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, the 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.
 Recent Accounting Pronouncements.Under FASB ASC Topic 810, Consolidation, Roberts Realty
records noncontrolling interest in the operating partnership on its condensed consolidated
balance sheets at the greater of its carrying amount or redemption value at the end of each
reporting period. Any changes in the value from period to period are charged to additional
paid-in-capital in Roberts Realtys consolidated statements of shareholders equity. The
following table details the components of noncontrolling interest related to unitholders in
the operating partnership for the twelve months ended December 31, 2010 and 2009:
 Year Ended December 31,2010
    
    
    2009Beginning balance
    
    $
    8,760,795
    
    
    $
    12,585,216Net loss attributable to noncontrolling interest
    
    
    (2,030,315
    )
    
    
    (3,264,848
    )Redemptions of noncontrolling partnership units
    
    
    (144,753
    )
    
    
    (120,768
    )Adjustments to noncontrolling interest in
operating partnership
    
    
    (212,910
    )
    
    
    (438,805
    )Ending balance
    
    $
    6,372,817
    
    
    $
    8,760,795
 Net income attributable to noncontrolling interests in the operating partnership is no
longer deducted when determining net income. The adoption of this standard had no effect on
Roberts Realtys net income available for common shareholders or its earnings per share.
 On February 24, 2010, the FASB issued ASU 2010-09, Subsequent Events: Amendments to Certain
Recognition and Disclosure Requirements. This guidance amends FASB ASC Topic 855,
Subsequent Events, so that SEC filers no longer are required to disclose the date through
which subsequent events have been evaluated in originally issued and revised financial
statements. SEC filers must evaluate subsequent events through the date the financial
statements are issued. The adoption of this guidance did not have a material effect on
Roberts Realtys financial statements.
 Certain reclassifications of prior years balances have been made to conform to the current
format.
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##### Table of Contents



3.
    
    ACQUISITIONS AND DISPOSITIONS
 On December 17, 2009, Roberts Realty entered into two sales contracts with Peachtree Corners
Circle, LLC and purchased a 1.004-acre parcel of land on Peachtree Corners Circle and an
adjacent 0.154-acre strip along Peachtree Corners Circle for a total cash purchase price of
$267,000. Mr. Roberts owned a controlling interest in Peachtree Corners Circle, LLC. The
transaction is described in Note 10  Related Party Transactions.
 On June 30, 2010, Roberts Realty sold its 44,293 square foot Addison Place Shops retail
center and its 44-acre Westside land parcel to the lender for the debt. See Note 4,
Discontinued Operations and Note 5, Notes Payable.
 4.
    
    DISCONTINUED OPERATIONS
 Roberts Realty reports the results of operations and the gains or losses from sold
properties in accordance with FASB ASC Topic 360-10, Property, Plant, and Equipment 
Overall(SFAS No. 144). Gains and losses and results of operations from sold properties are
listed separately on the consolidated statements of operations. Interest expense on any
sold property, along with all expenses related to the retirement of debt, are included in
discontinued operations in the year incurred on the consolidated statements of operations.
 On June 30, 2010, Roberts Realty sold its 44,293 square foot Addison Place Shops retail
center to the lender for the $6,000,000 of debt secured by the property. As a result of
this sale, Roberts Realty has no further obligations to the lender for the Addison Place
retail center loan. Accordingly, the operations of the Addison Place retail center have
been accounted for as discontinued operations.
 During 2010, the Addison Place retail center was adjusted to its fair value, and a non-cash
impairment loss of $504,020 was recorded. See Note 8, Impairment Loss on Real Estate
Assets. The property was sold for its debt, which exceeded the carrying value of the
property. Therefore, Roberts Realty recorded a $269,836 gain on the extinguishment of debt.
  F-12




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##### Table of Contents



The following table summarizes the discontinued operations for the twelve months ended
December 31, 2010 and 2009:
 Discontinued Operations
 Twelve Months Ended December 31,2010
    
    
    2009OPERATING REVENUES:Rental operations
    
    $
    141,849
    
    
    $
    300,431Other operating income
    
    
    30,073
    
    
    
    53,788Total operating revenues
    
    
    171,922
    
    
    
    354,219OPERATING EXPENSES:Personnel
    
    
    3,330
    
    
    
    7,261Utilities
    
    
    26,059
    
    
    
    41,154Repairs and maintenance
    
    
    10,934
    
    
    
    11,903Real estate taxes
    
    
    17,483
    
    
    
    91,412Marketing, insurance and other
    
    
    12,836
    
    
    
    21,955General and administrative expenses
    
    
    96,951
    
    
    
    93,998Loss on leasehold improvements and leasing costs
    
    
    83,557
    
    
    
    10,678Impairment loss on real estate assets
    
    
    504,020
    
    
    
    1,884,922Depreciation and amortization
    
    
    83,847
    
    
    
    271,746Total operating expenses
    
    
    839,017
    
    
    
    2,435,029LOSS FROM OPERATIONS
    
    
    (667,095
    )
    
    
    (2,080,810
    )OTHER INCOME (EXPENSE):Gain on extinguishment of debt
    
    
    269,836
    
    
    
    Interest expense
    
    
    (117,708
    )
    
    
    (212,917
    )Amortization of deferred financing & leasing costs
    
    
    (4,343
    )
    
    
    (11,020
    )Total other income (expense)
    
    
    147,785
    
    
    
    (223,937
    )LOSS FROM DISCONTINUED OPERATIONS
    
    $
    (519,310
    )
    
    $
    (2,304,747
    )
 5.
    
    NOTES PAYABLE
 Roberts Realty has two types of debt:
 1.
    
    Mortgage notes secured by its operating properties; and
 2.
    
    Land loans used to purchase undeveloped land.
 The details of each of the two types of debt are summarized below. For each loan excluding
the permanent mortgage notes, the operating partnership or its wholly owned subsidiary is
the borrower, and Roberts Realty is the guarantor.
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##### Table of Contents



Mortgage Notes.The permanent mortgage notes payable secured by Roberts Realtys operating
properties at December 31, 2010 and 2009 were as follows (in order of maturity date):
 InterestRate as of
    
    
    Principal OutstandingProperty Securing Mortgage
    
    Maturity
    
    
    12/31/10
    
    
    12/31/10
    
    
    12/31/09Grand Pavilion Retail Center
    
    
    7/11/13
    
    
    
    5.43
    %
    
    
    6,433,286
    
    
    
    6,499,986Northridge Office Building
    
    
    8/10/13
    
    
    
    4.50
    %
    
    
    2,858,333
    
    
    
    3,005,000Spectrum at the Mall of Georgia
    
    
    5/01/14
    
    
    
    5.68
    %
    
    
    4,881,585
    
    
    
    4,972,913Bassett Retail Center
    
    
    10/01/19
    
    
    
    8.47
    %
    
    
    2,524,305
    
    
    
    2,567,769Total
    
    
    
    
    
    
    
    
    
    $
    16,697,509
    
    
    $
    17,045,668
 On September 29, 2005, Roberts Realty purchased Grand Pavilion, a 62,323 square foot retail
center, and assumed the existing mortgage with a balance of $6,995,000, a fixed interest
rate of 5.43%, and a maturity date of July 11, 2013. The loan is secured by the property
and is being amortized over 30 years.
 As Roberts Realty has previously stated in its annual and quarterly reports, its objective
is to exit the retail business to focus exclusively on developing, constructing, and
managing multifamily apartment communities. Given that objective and Grand Pavilions
approximately $625,000 in annual negative cash flow, Roberts Realty has elected not to make
debt service payments since July 2010 on that retail center and has allowed the loan to go
into default. In August 2010, Roberts Realty asked the lender to place the Grand Pavilion
loan with the special servicer. On December 16, 2010, Roberts Realty received a formal
notice of default from counsel for the special servicer of the loan. Roberts Realty is
seeking to transfer the Grand Pavilion retail center to the lender as soon as possible in
satisfaction of the approximately $6,433,286 principal amount of debt (plus associated fees
and costs) secured by the property. Because the loan is nonrecourse, Roberts Realty would
have no further obligations to the lender for this loan.
 On October 27, 2005, Roberts Realty purchased Spectrum at the Mall of Georgia, a 30,050
square foot retail center, and assumed the existing mortgage with a balance of $5,306,000, a
fixed interest rate of 5.68%, and a maturity date of May 1, 2014. The nonrecourse loan is
secured by the property and is being amortized over 30 years.
 On September 30, 2005, Roberts Realty purchased Bassett Retail Center, a 19,949 square foot
retail center, and assumed the existing mortgage with a balance of $2,715,000, a fixed
interest rate of 8.47%, and a maturity date of October 1, 2019. The nonrecourse loan is
secured by the property and is being amortized over 30 years.
 Roberts Realtys Northridge office building secures a loan with a principal balance of
$2,858,333 as of December 31, 2010 and $3,005,000 as of December 31, 2009. On September 30,
2010, Roberts Realty renewed its $2,898,333 Northridge office building loan and extended the
maturity date of the loan to August 10, 2013. Under the terms of the renewal, Roberts
Realty will make monthly payments consisting of a fixed principal amount of $13,333 and
interest at the 30-day LIBOR rate plus 300 basis points, with an interest rate floor of
4.50% per annum.
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##### Table of Contents



Land Loans.The loans secured by Roberts Realtys land parcels at December 31,
2010 and 2009 were as follows (in order of maturity date):
 InterestLand Parcel
    
    
    
    Rate as of
    
    
    Principal OutstandingSecuring Mortgage
    
    Maturity
    
    12/31/10
    
    
    12/31/10
    
    
    12/31/09Westside (sold 06/30/10)
    
    N/A
    
    
    
    
    
    
    
    
    
    $
    6,000,000Peachtree Parkway
    
    07/31/11
    
    
    5.00
    %
    
    $
    8,175,000
    
    
    
    8,175,000Highway 20
    
    04/08/12
    
    
    5.50
    %
    
    
    3,225,000
    
    
    
    3,500,000Bradley Park
    
    04/30/12
    
    
    4.50
    %
    
    
    3,000,000
    
    
    
    3,000,000Total
    
    
    
    
    
    
    
    $
    14,400,000
    
    
    $
    20,675,000
 Roberts Realtys Peachtree Parkway land secures a loan with a principal balance of
$8,175,000 as of December 31, 2010. On June 21, 2010, Roberts Realty renewed this loan and
extended its maturity date to July 31, 2011. At the closing, Roberts Realty established a
$396,690 interest reserve with the lender to fund the interest payments for the next 12
months. Under the terms of the renewed loan, Roberts Realty will make monthly payments of
interest only at the 30-day LIBOR rate plus 300 basis points, with an interest rate floor of
5.00% per annum. The loan is secured by Roberts Realtys Peachtree Parkway property and its
North Springs property.
 Roberts Realtys Highway 20 land secures a loan with a principal balance of $3,225,000 as of
December 31, 2010. On October 29, 2010, Roberts Realty renewed this loan and paid down its
principal amount by $185,000. The renewed loan has a maturity date of April 8, 2012. Under
the terms of the renewal, Roberts Realty will make monthly payments consisting of a fixed
principal amount of $30,000 for the first 12 months along with interest at the prime rate,
with an interest rate floor of 5.50% per annum. The last six monthly payments will be
interest only at the above-described rates.
 Roberts Realtys Bradley Park land secures a loan with a principal balance of $3,000,000 as
of December 31, 2010. On February 9, 2010, Roberts Realty renewed this loan and extended
its maturity date to April 28, 2011. On December 29, 2010, Roberts Realty again renewed and
extended this loan to April 30, 2012. The loan requires monthly payments of interest only
at the 30-day LIBOR index rate plus 300 basis points, with an interest rate floor of 4.50%.
 The scheduled principal payments of all debt outstanding at December 31, 2010 are as
follows:
 2011
    
    $
    8,931,4512012
    
    
    6,412,7382013
    
    
    8,795,313
    (1)2014
    
    
    4,644,2992015
    
    
    66,124Thereafter
    
    
    2,247,584Total
    
    $
    31,097,509
 
 (1)
    
    As discussed above under Mortgage Notes, the Grand Pavilion loan is in default, and
Roberts Realty is seeking to transfer the property securing the loan to the lender in
satisfaction of the loan. The loan is nonrecourse, and Roberts Realty does not intend
to make any further payments on this loan. The table above reflects the original July
11, 2013 maturity date of the Grand Pavilion loan. If this loan were shown as payable
as of January 1, 2011, the principal payments in 2011 would increase by $6,239,318,
while principal payments would decrease by $145,992 in 2012 and $6,093,326 in 2013.  F-15




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##### Table of Contents



At December 31, 2010, the weighted average interest rate on Roberts Realtys short-term
debt was 5.0%. The amount of interest expense that was capitalized was $491,775 for 2010
and $762,847 for 2009. Fixed rate mortgage debt with an aggregate carrying value of
$13,839,176 at December 31, 2010 has an estimated approximate fair value of $13,779,346
based on interest rates available to Roberts Realty for debt with similar terms and
maturities, excluding any adjustment for nonperformance risk. Real estate assets having a
combined depreciated cost of $14,476,134 served as collateral for the outstanding mortgage
debt at December 31, 2010.
 Sale of Addison Place Shops and Westside Land to Lender, and Resulting Release from
Liability for Loans.On June 30, 2010, Roberts Realty sold its 44,293 square
foot Addison Place Shops retail center to the lender for the $6,000,000 of debt secured by
the property. As a result of this sale:
 
    
    Roberts Realty has no further obligations to the lender for this loan; and
 
    
    Roberts Realty recorded a $269,836 gain on extinguishment of debt, which was
included in discontinued operations.
 On June 30, 2010, Roberts Realty sold its 44-acre Westside land, which was held for
investment, to the lender for the $6,000,000 of debt secured by the property. As a result
of this sale:
 
    
    Roberts Realty has no further obligation to the lender for this loan; and
 
    
    Roberts Realty recorded a $2,989,396 loss on extinguishment of debt.
 6.
    
    SHAREHOLDERS EQUITY
 Special Cash and Stock Distributions Declared in December 2008 and Paid in January 2009.On
December 18, 2008, Roberts Realtys board of directors declared a special distribution of
$9,058,000, or $1.56 per share, to shareholders of record at the close of business on
December 29, 2008. The distribution was paid in a combination of 20% in cash, or $0.31 per
share, and 80% in common stock, equal to $1.25 per share. On January 29, 2009, Roberts
Realty issued 3,754,732 shares to shareholders in the stock portion of the distribution and
paid a total of $1,809,307 in cash to shareholders in the cash portion of the distribution.
Unitholders received the same cash distribution as shareholders of $0.31 per unit, which
totaled $551,090. As a result of this special stock distribution to shareholders, the
conversion ratio for the exchange of units for shares was adjusted from (a) one share for
each unit exchanged to (b) 1.647 shares for each unit exchanged. This change was effective
as of January 29, 2009, but applied retroactively to the December 29, 2008 record date.
 Exchanges of Units for Shares.In accordance with the revised conversion ratio explained in
the previous paragraph, a total of 319,080 units were exchanged for 525,527 shares on
December 30 and 31, 2008. (These exchanges occurred after the December 29, 2008 record date
for the special distribution.) Of those 525,527 shares, 319,080 shares were issued on the
exchange date, and the remainder were issued on January 29, 2009 concurrently with the
special distribution.
 During 2009, a total of 72,236 units were exchanged for 118,980 shares. During 2010, a
total of 56,656 units were exchanged for 93,316 shares. Each redemption was reflected in
the accompanying consolidated financial statements at the closing price of Roberts Realtys
stock price on the date of conversion.
 Restricted Stock.Shareholders of Roberts Realty approved and adopted the 2006 Roberts
Realty Investors, Inc. Restricted Stock Plan (the Plan) in August 2006. The Plan provides
for the grant of stock awards to employees, directors, consultants, and advisors, including
employees
of Roberts Properties, Inc. (Roberts Properties) and Roberts Properties Construction, Inc.
(Roberts Construction, and together with Roberts Properties, the Roberts Companies).
Mr. Charles S. Roberts, the President, Chief Executive Officer, and Chairman of the Board of
Roberts Realty, owns all of the outstanding stock of the Roberts Companies. Under the Plan
as amended, Roberts Realty may grant up to 654,000 shares of restricted common stock,
subject to the anti-dilution provisions of the Plan. The maximum number of shares of
restricted stock that may be granted to any one individual during the term of the Plan may
not exceed 20% of the aggregate number of shares of restricted stock that may be issued.
The Plan is administered by the compensation committee of Roberts Realtys board of
directors.
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FASB ASC Topic 718, Compensation  Stock Compensation, requires share-based compensation
cost to be measured at the date of grant based on the fair value of the award and to be
recognized in the statements of operations as an expense on a straight line basis over the
requisite service period, which is the vesting period.
 There were 50,000 unvested shares of restricted stock outstanding at December 31, 2010.
During 2010, Roberts Realty granted 50,000 shares under the Plan to an employee of Roberts
Properties. The grant includes a service based vesting period of two years. Compensation
expense related to the restricted stock grant was $1,174 in 2010. There was no compensation
expense or restricted stock activity for 2009, and there were no unvested shares of
restricted stock outstanding at December 31, 2009
 The following table shows the restricted stock activity for 2010:
 Number of
    
    
    Weighted GrantUnvested Shares of
    
    
    Date Fair ValueRestricted Stock
    
    
    Per ShareBalance at December 31, 2009
    
    
    N/AGranted
    
    
    50,000
    
    
    $
    1.43Forfeited
    
    
    
    
    
    
    Vested
    
    
    
    
    
    
    Balance at December 31, 2010
    
    
    50,000
 Quarterly Dividends.Roberts Realty has not paid regular quarterly dividends since the
third quarter of 2001.
 Treasury Stock.In September 1998, Roberts Realtys board of directors authorized a stock
repurchase plan of up to 400,000 shares of our outstanding common stock. Roberts Realty
repurchased 362,588 shares for $2,764,000 prior to 2002. On December 2, 2008, Roberts
Realtys board of directors amended the stock repurchase program to authorize the company to
repurchase up to 300,000 shares of its outstanding common stock (including the remaining
37,412 shares under the plan before that amendment). Roberts Realty subsequently announced
on January 13, 2009 that its board of directors amended its stock repurchase plan to
authorize Roberts Realty to repurchase up to 600,000 shares of its outstanding common stock.
Under the plan, as of December 31, 2010, Roberts Realty had authority to repurchase an
additional 540,362 shares under the plan. The plan does not have an expiration date.
 Roberts Realty repurchased 59,638 shares of its common stock for $55,446 during 2009. In
addition, Roberts Realty received 4,680 shares on January 29, 2009 in the stock distribution
of $1.25 per share based on the treasury stock Roberts Realty held on the record date of
December 29, 2008. Roberts Realty did not repurchase any shares during 2010.
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Earnings Per Share.The following table shows the reconciliations of loss available for
common shareholders and the weighted average number of shares and units used in Roberts
Realtys basic and diluted earnings per share computations.
 Twelve Months EndedDecember 31,2010
    
    
    2009Loss from continuing operations available for
common shareholders  basic
    
    $
    (8,980,947
    )
    
    $
    (12,302,282
    )Loss from continuing operations attributable to
noncontrolling interest
    
    
    (1,938,137
    )
    
    
    (2,833,399
    )Loss from continuing operations  diluted
    
    $
    (10,919,084
    )
    
    $
    (15,135,681
    )Loss from discontinued operations for common
shareholders  basic
    
    
    (427,132
    )
    
    
    (1,873,298
    )Loss from discontinued operations attributable to
noncontrolling interest
    
    
    (92,178
    )
    
    
    (431,449
    )Loss from discontinued operations  diluted
    
    $
    (519,310
    )
    
    $
    (2,304,747
    )Net loss  diluted
    
    $
    (11,438,394
    )
    
    $
    (17,440,428
    )Weighted average number of shares  basic
    
    
    10,273,383
    
    
    
    10,151,536Dilutive securities  weighted average number of
units
    
    
    2,217,448
    
    
    
    2,337,651Weighted average number of shares  diluted
    
    
    12,490,831
    
    
    
    12,489,187
 7.
    
    SEGMENT REPORTING
 FASB ASC Topic 280-10, Segment Reporting  Overall, 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.
Roberts Realtys chief operating decision maker is Mr. Roberts, its Chief Executive
Officer.
 Roberts Realty develops, constructs, owns, and manages multifamily apartment communities;
owns land; and owns and manages retail centers and one office building. (Roberts Realty
does not currently own any operating multifamily communities and did not own any operating
multifamily communities in 2009 or 2010.) All of Roberts Realtys properties are located in
Atlanta, Georgia. Roberts Realty has three reportable operating segments: the retail/office
segment; the land segment; and the corporate segment.
 1.
    
    the retail/office segment, which consists of operating retail centers
and an office building;
 2.
    
    the land segment, which consists of various tracts of land; and
 3.
    
    the corporate segment, which consists primarily of operating cash, cash
equivalents, and miscellaneous other assets.
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The following tables summarize the operating results of Roberts Realtys reportable segments
for 2010 and 2009. The retail/office segment is composed of the Grand Pavilion, Bassett,
and Spectrum at the Mall of Georgia retail centers, along with the Northridge office
building. Roberts
Realtys Addison Place Shops retail center, which it sold on June 30, 2010, is reflected as
discontinued operations within the retail/office segment. The land segment is composed of
five tracts of land totaling 106 acres that are in various phases of development and
construction. Roberts Realty sold its 44-acre Westside property on June 30, 2010, and the
loss associated with that sale is reflected in other expense within the land segment. The
corporate segment consists primarily of cash and cash equivalents, miscellaneous other
assets, and general and administrative expenses.
 Twelve Months Ended December 31, 2010
 Retail/Office
    
    
    Land
    
    
    Corporate
    
    
    TotalOperating revenues  continuing
    
    $
    1,532,036
    
    
    $
    12,675
    
    
    $
    
    
    
    $
    1,544,711Other operating income
    
    
    244,050
    
    
    
    
    
    
    
    10,003
    
    
    
    254,053Total operating revenues from consolidated entities
    
    
    1,776,086
    
    
    
    12,675
    
    
    
    10,003
    
    
    
    1,798,764Operating expenses  continuing
    
    
    3,012,037
    
    
    
    2,903,087
    
    
    
    1,574,641
    
    
    
    7,489,765Depreciation and amortization expense
    
    
    782,314
    
    
    
    
    
    
    
    1,683
    
    
    
    783,997Total operating expenses from consolidated entities
    
    
    3,794,351
    
    
    
    2,903,087
    
    
    
    1,576,324
    
    
    
    8,273,762Other (expense) income
    
    
    (1,026,166
    )
    
    
    (3,477,932
    )
    
    
    60,012
    
    
    
    (4,444,086
    )Consolidated loss from continuing operations
    
    
    (3,044,431
    )
    
    
    (6,368,344
    )
    
    
    (1,506,309
    )
    
    
    (10,919,084
    )Consolidated loss from discontinued operations (Note 4)
    
    
    (519,310
    )
    
    
    
    
    
    
    
    
    
    
    (519,310
    )Consolidated net loss
    
    
    (3,563,741
    )
    
    
    (6,368,344
    )
    
    
    (1,506,309
    )
    
    
    (11,438,394
    )Consolidated loss attributable to noncontrolling interest
    
    
    (632,564
    )
    
    
    (1,130,381
    )
    
    
    (267,370
    )
    
    
    (2,030,315
    )Consolidated net loss available for common shareholders
    
    $
    (2,931,177
    )
    
    $
    (5,237,963
    )
    
    $
    (1,238,939
    )
    
    $
    (9,408,079
    )Total assets at December 31, 2010
    
    $
    20,545,950
    
    
    $
    42,997,659
    
    
    $
    4,635,724
    
    
    $
    68,179,333
 Twelve Months Ended December 31, 2009
 Retail/Office
    
    
    Land
    
    
    Corporate
    
    
    TotalOperating revenues  continuing
    
    $
    1,669,828
    
    
    $
    12,675
    
    
    $
    
    
    
    $
    1,682,503Other operating income
    
    
    266,066
    
    
    
    
    
    
    
    15,252
    
    
    
    281,318Total operating revenues from consolidated entities
    
    
    1,935,894
    
    
    
    12,675
    
    
    
    15,252
    
    
    
    1,963,821Operating expenses  continuing
    
    
    3,115,533
    
    
    
    10,392,145
    
    
    
    1,574,251
    
    
    
    15,081,929Depreciation and amortization expense
    
    
    704,565
    
    
    
    
    
    
    
    13,553
    
    
    
    718,118Total operating expenses from consolidated entities
    
    
    3,820,098
    
    
    
    10,392,145
    
    
    
    1,587,804
    
    
    
    15,800,047Other (expense) income
    
    
    (1,028,736
    )
    
    
    (387,770
    )
    
    
    117,051
    
    
    
    (1,299,455
    )Consolidated loss from continuing operations
    
    
    (2,912,940
    )
    
    
    (10,767,240
    )
    
    
    (1,455,501
    )
    
    
    (15,135,681
    )Consolidated loss from discontinued operations (Note 4)
    
    
    (2,304,747
    )
    
    
    
    
    
    
    
    
    
    
    (2,304,747
    )Consolidated net loss
    
    
    (5,217,687
    )
    
    
    (10,767,240
    )
    
    
    (1,455,501
    )
    
    
    (17,440,428
    )Consolidated loss attributable to noncontrolling interest
    
    
    (976,751
    )
    
    
    (2,015,627
    )
    
    
    (272,470
    )
    
    
    (3,264,848
    )Consolidated net loss available for common shareholders
    
    $
    (4,240,936
    )
    
    $
    (8,751,613
    )
    
    $
    (1,183,031
    )
    
    $
    (14,175,580
    )Total assets at December 31, 2009
    
    $
    30,096,403
    
    
    $
    53,512,273
    
    
    $
    8,772,687
    
    
    $
    92,381,363
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8.
    
    IMPAIRMENT LOSS ON REAL ESTATE ASSETS
 Impairment Loss on Real Estate Assets
 Roberts Realty periodically evaluates its real estate assets, on a property-by-property
basis, for impairment when events or changes in circumstances indicate the carrying amount
of an asset may not be recoverable in accordance with FASB ASC Topic 360-10, Property,
Plant, and Equipment Overall.
 FASB ASC Topic 360-10 requires impairment losses to be recorded on long-lived assets used in
operations and land parcels when indicators of impairment are present and the undiscounted
cash flows estimated to be generated by those assets are less than the assets carrying
amounts. The expected future cash flows depend on estimates made by management, including
(1) changes in the national, regional, and/or local economic climates, (2) rental rates, (3)
competition, (4) operating costs, (5) tenant occupancy, (6) holding period, and (7) an
estimated construction budget. A change in the assumptions used to determine future
economic events could result in an adverse change in the value of a property and cause an
impairment to be recorded. Due to uncertainties in the estimation process, actual results
could differ materially from those estimates. Roberts Realtys determination of fair value
is based on a discounted future cash flow analysis, which incorporates available market
information as well as other assumptions made by Roberts Realtys management. Because the
factors Roberts Realtys management uses in generating these cash flows are difficult to
predict and are subject to future events that may alter its assumptions, Roberts Realty may
not achieve the discounted or undiscounted future operating and residual cash flows it
estimates in its impairment analyses or those established by appraisals, and Roberts Realty
may be required to recognize future impairment losses on its properties held for use.
 Non-Cash Impairments on Operating Real Estate Assets. During 2010, Roberts Realty
determined that the carrying amount of the Grand Pavilion retail center was not recoverable
as a result of a change in the estimated holding period due to the economic and real estate
market conditions at that time. Accordingly, Roberts Realty recorded a non-cash impairment
loss of $2,180,632 on the Grand Pavilion retail center during 2010. In addition, Roberts
Realty recorded a non-cash impairment loss of $504,020 on the Addison Place Shops retail
center. During 2009, Roberts Realty recorded non-cash impairment losses of $1,411,000 on
the Grand Pavilion retail center, $1,884,922 on the Addison Place retail center, and
$699,948 on the Bassett retail center. As a result of the sale of the Addison Place retail
center on June 30, 2010, the non-cash impairment losses on the Addison Place retail center
during 2010 and 2009, respectively, are reflected in loss from discontinued operations. See
Note 4  Discontinued Operations.
 Non-Cash Impairments on Land Parcels. During 2010, Roberts Realty determined that the
carrying amount of the North Springs property was not recoverable due to the current
economic and market conditions. The determination of the fair value of the North Springs
property was based on a discounted cash flow analysis assuming a future sale of the property
at the estimated value of the propertys office, retail, condominium, and multifamily unit
density, as well as the value of the entitlements, development work, and other improvements
that have been made to the property. As a result of this analysis, during 2010, Roberts
Realty recorded a fair value adjustment of $2,644,963 on the North Springs property. For
2009, Roberts Realty recognized non-cash fair value adjustments related to its land parcels
of $2,385,284 on the Northridge property, $3,975,273 on the North Springs property, and
$3,754,907 on the Peachtree Parkway property.
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9.
    
    FAIR VALUE MEASUREMENTS
 FASB ASC Topic 820, Fair Value Measurement and Disclosures, defines fair value and
establishes a framework for measuring fair value. The objective of fair value is to
determine the price that would be received upon the sale of an asset. FASB ASC Topic 820
establishes a fair value hierarchy that prioritizes observable and unobservable inputs used
to measure fair value into three levels:
 
    
    Level 1  quoted prices (unadjusted) in active markets that are accessible at
the measurement date for assets or liabilities;
 
    
    Level 2  observable prices that are based on inputs not quoted in active
markets, but corroborated by market data; and
 
    
    Level 3  unobservable inputs that are used when little or no market data is
available.
 The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest
priority to Level 3 inputs. In determining fair value, Roberts Realty uses valuation
techniques that maximize the use of observable inputs and minimize the use of unobservable
inputs to the extent possible. Considerable judgment is necessary to interpret Level 2 and
3 inputs in determining fair value of financial and non-financial assets and liabilities.
Accordingly, the fair values presented in the financial statements may not reflect the
amounts ultimately realized on a sale or other disposition of these assets.
 The following table provides the balances for those assets required to be measured at fair
value on a recurring basis, which consisted of marketable securities, as of December 31,
2009. Roberts Realty held no assets required to be measured at fair value on a recurring
basis as of December 31, 2010.
 Year EndedDecember 31, 2009Description
    
    Total
    
    
    Level 1
    
    
    Level 2
    
    
    Level 3Marketable equity
securities
    
    $
    38,177
    
    
    $
    38,177
    
    
    
    
    
    
    
    
 Assets measured at fair value on a nonrecurring basis consist of real estate assets that
have incurred non-cash impairment losses so that their carrying value is equal to or less
than their estimated fair value. The following tables provide the balances for those assets
required to be measured at fair value on a nonrecurring basis as of December 31, 2010 and
December 31, 2009.
 Year EndedDecember 31, 2010Description
    
    Total
    
    
    Level 1
    
    
    Level 2
    
    
    Level 3Operating real estate assets
    
    $
    5,373,582
    
    
    
    
    
    
    
    
    
    
    $
    5,373,582Real estate under development
    
    
    13,100,000
    
    
    
    
    
    
    
    
    
    
    
    13,100,000Assets related to
discontinued operations
    
    
    5,627,178
    
    
    
    
    
    
    
    
    
    
    
    5,627,178Total assets
    
    $
    24,100,760
    
    
    
    
    
    
    
    
    
    
    $
    24,100,760
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Year EndedDecember 31, 2009Description
    
    Total
    
    
    Level 1
    
    
    Level 2
    
    
    Level 3Operating real estate assets
    
    $
    11,989,644
    
    
    
    
    
    
    
    
    
    
    $
    11,989,644Real estate under development
    
    
    31,991,110
    
    
    
    
    
    
    
    
    
    
    
    31,991,110Assets related to
discontinued operations
    
    
    6,288,508
    
    
    
    
    
    
    
    
    
    
    
    6,288,508Total assets
    
    $
    50,269,262
    
    
    
    
    
    
    
    
    
    
    $
    50,269,262
 10.
    
    RELATED PARTY TRANSACTIONS
 Transactions with Mr. Charles S. Roberts and His Affiliates
 Roberts Realty enters into contractual commitments in the normal course of business with the
Roberts Companies. The contracts between Roberts Realty and the Roberts Companies relate to
the development and construction of real estate assets, and from time to time, the
acquisition of real estate. 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. Under the charter for the audit committee of Roberts Realtys board
of directors, related party transactions are also subject to review and oversight by the
audit committee.
 Roberts Realty and its predecessor limited partnerships have previously entered into
agreements with Roberts Properties and Roberts Construction to provide design, development,
and construction services for 16 apartment communities with a total of 2,750 units that were
sold for a total sales price of $287,461,143 from 1999 to 2008. All of these communities
were sold for a substantial profit. In entering into transactions with the Roberts
Companies, Roberts Realty complied with the policies described in the preceding paragraph.
 Design and Development Agreements with Roberts Properties. Roberts Properties provides
various development services that include market studies; business plans; assistance with
permitting, land use and zoning issues, easements, and utility issues; as well as exterior
design, finish selection, interior design, and construction administration. Roberts Realty
has entered into design and development agreements with Roberts Properties for the two
projects listed in the following table for which we made payments to Roberts Properties in
2009 and 2010:
 Total
    
    
    Amounts
    
    
    Amounts
    
    
    RemainingContract
    
    
    Incurred in
    
    
    Incurred in
    
    
    ContractualAmount
    
    
    2009
    
    
    2010
    
    
    CommitmentBradley Park
    
    $
    770,000
    
    
    $
    308,000
    
    
    $
    
    
    
    $
    Highway 20
    
    
    1,050,000
    
    
    
    
    
    
    
    225,000
    
    
    
    725,000$
    1,820,000
    
    
    $
    308,000
    
    
    $
    225,000
    
    
    $
    725,000
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Construction Contracts with Roberts Construction.Roberts Realty has entered into cost plus
10% (5% for overhead and 5% for profit) contracts with Roberts Construction for the Bradley
Park, Northridge, Peachtree Parkway, North Springs, and Highway 20 properties. Progress
payments are paid monthly to Roberts Construction based on the work that has been completed. The following table lists the amounts incurred on these contracts in 2010 and 2009.
 AmountsAmounts
    
    
    Incurred forIncurred for
    
    
    5% Profit andLabor and Materials Costs from
    
    
    5% Overhead fromTwelve Months Ended
    
    
    Twelve Months EndedDecember 31,
    
    
    December 31,2010
    
    
    2009
    
    
    2010
    
    
    2009Bradley Park
    
    $
    39,039
    
    
    $
    298,840
    
    
    $
    3,904
    
    
    $
    29,884Northridge
    
    
    160,148
    
    
    
    205,541
    
    
    
    16,015
    
    
    
    20,554Peachtree Parkway
    
    
    2,981
    
    
    
    4,993
    
    
    
    298
    
    
    
    499North Springs
    
    
    8,039
    
    
    
    73,691
    
    
    
    804
    
    
    
    7,369Highway 20
    
    
    
    
    
    
    288
    
    
    
    
    
    
    
    29Totals
    
    $
    210,207
    
    
    $
    583,353
    
    
    $
    21,021
    
    
    $
    58,335
 Land Acquisitions.On December 17, 2009, Roberts Realty entered into two sales contracts
with Peachtree Corners Circle, LLC, and purchased a 1.004-acre parcel of land on Peachtree
Corners Circle and an adjacent 0.154-acre strip along Peachtree Corners Circle
(collectively, the purchased property) for a total cash purchase price of $267,000. Mr.
Roberts owned a controlling interest in Peachtree Corners Circle, LLC. Mr. Roberts agreed
to sell the property to Roberts Realty for 60% of the average of the two appraised values to
allow Roberts Realty to improve its property. Two independent appraisals were performed on
the purchased property for Roberts Realtys board of directors, and the average of the two
appraised values was $445,000. The purchase price of each parcel was equal to 60% of the
average appraised value. The purchased property is located adjacent to Roberts Realtys
Peachtree Parkway land parcel.
 Other Payments.At the request of Roberts Realty, Roberts Construction performed repairs
and tenant improvements for new leases at the retail centers and office building. For the
twelve months ended December 31, 2010, Roberts Realty paid Roberts Construction $161,939 for
labor and materials costs plus $16,194 (5% for profit and 5% for overhead). Other
affiliates of Mr. Roberts received cost reimbursements of $211,588 for the twelve months
ended December 31, 2010.
 Office Leases.Roberts Realty leases office space in the Northridge office building to the
Roberts Companies. Effective as of January 1, 2011, Roberts Realty renewed its leases with
the Roberts Companies. Under the renewed leases, Roberts Properties leases 4,431 rentable
square feet, and Roberts Construction leases 1,920 rentable square feet. Both leases are
for a one-year term with a new rental rate of $17.50 per rentable square foot. Roberts
Realty recognized total rental income from Roberts Properties and Roberts Construction of
$96,342 for the twelve months ended December 31, 2010 and $143,800 for the twelve months
ended December 31, 2009.
 11.
    
    COMMITMENTS AND CONTINGENCIES
 Roberts Realty has entered into various contracts for the development and construction of
its projects. The contracts with Roberts Properties and Roberts Construction are described
in Note 10  Related Party Transactions. The construction contracts require Roberts Realty
to pay Roberts Construction the labor and materials costs plus 10% (5% overhead and 5%
profit).
 In addition to the construction contracts with Roberts Construction, Roberts Realty has
entered into architectural and engineering contracts with third parties for the Northridge,
Bradley Park,
and Peachtree Parkway projects. At December 31, 2010, outstanding commitments on these
contracts totaled $237,964.
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At December 31, 2010, Roberts Realty had a $500,000 letter of credit outstanding. The
letter of credit is required by the lender for Roberts Realtys Spectrum retail center and
is held as a reserve for the payment of leasing costs. Roberts Realty assumed this
obligation when it acquired the Spectrum retail center in October 2005. The letter of
credit expires on September 26, 2011.
 Roberts Realty 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, management believes that the final outcome of these
matters will not have a material adverse effect on Roberts Realtys financial position or
results of operations. Roberts Realty has a disputed claim related to its Bradley Park
property in the amount of $127,124 by an architect that has gone out of business. Roberts
Realty disputes the amount and quality of the work performed and believes this dispute will
more than likely lead to litigation.
 As a result of the mergers of various predecessor limited partnerships into the operating
partnership, the former partners of those predecessor limited partnerships received
operating partnership 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
1.647-for-one basis). Roberts Realty has adopted a policy that it will issue shares in
exchange for all future units submitted. At December 31, 2010, there were 1,329,738 units
outstanding that could be exchanged for shares, subject to the conditions described above.
 Under Roberts Realtys bylaws, it is obligated to indemnify its officers and directors for
certain events or occurrences arising as a result of its officers and directors serving in
these capacities. The maximum potential amount of future payments Roberts Realty could be
required to make under this indemnification arrangement is unlimited. Roberts Realty
currently has a directors and officers liability insurance policy that may limit its
exposure and enable it to recover a portion of any future amounts paid. Because of the
insurance policy coverage, Roberts Realty believes the estimated fair value of this
indemnification arrangement is minimal, and Roberts Realty has recorded no liabilities for
this indemnification arrangement as of December 31, 2010.
 Under various federal, state, and local environmental laws and regulations, Roberts Realty
may be required to investigate and clean up the effects of hazardous or toxic substances at
its properties, including properties that have previously been sold. The preliminary
environmental assessments of Roberts Realtys operating properties, development projects,
and land held for investment have not revealed any environmental liability that Roberts
Realty believes would have a material adverse effect on its business, assets, or results of
operations, nor is Roberts Realty aware of any such environmental liability.
 Managements Business Plan.Management continues to focus on improving Roberts Realtys
liquidity and balance sheet. Roberts Realtys primary liquidity requirements are related to
its continuing negative operating cash flow and maturing short-term debt. Roberts Realtys
negative cash flow is primarily due to its five tracts of land and low occupancy rates at
two of its retail centers and its office building. Roberts Realty has one loan with a
principal balance of $8,175,000 that matures within the next 12 months. Managements plan
is to renew this loan before its July 31, 2011 due date and extend its maturity date at
least 12 months. Management believes that its long history of operating and developing real
estate and its current plans for developing its existing land holdings will allow it to
successfully extend this loan or find
alternative funding and raise additional capital for development. However, current economic
conditions and the tight lending environment create uncertainty regarding whether the
maturing loan will be extended or refinanced as planned. If Roberts Realty were required to
use its current cash balances to pay down this loan, those repayments and the corresponding
reductions in Roberts Realtys cash could adversely affect Roberts Realtys ability to
execute its plans as described further below.
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##### Table of Contents



Management believes that the most important uses of Roberts Realtys capital resources will
be:
 (a)
    
    to provide working capital to cover its negative operating cash
flow; and
 (b)
    
    to invest in the development of its land parcels to enable it
to raise the required equity to construct these new multifamily communities.
 Management is focusing on its core business of developing, constructing, managing, and
selling high quality multifamily communities for cash flow and long-term appreciation.
Management has significantly reduced Roberts Realtys debt and decreased its negative cash
flow and intends to continue these efforts.
 Retail Centers and Office Building.Because the retail sector took the brunt of the severe
recession, Roberts Realtys retail centers have struggled with occupancy as tenants have
failed. Management anticipates that the performance of the retail centers will continue to
be weak for the foreseeable future. Similarly, the market for office space in Atlanta is
overbuilt and continues to be very challenging. In spite of this difficult environment,
however, management is committed to increasing the occupancy of both the retail centers and
office building so they can be positioned for sale. In addition to considering the sale of
the Bassett and Spectrum retail centers and the office building, Roberts Realty may form a
joint venture with a company that specializes in retail or office properties to use their
expertise in leasing these property types. Roberts Realty also intends to pursue joint
ventures with potential partners that include local investors, pension funds, life insurance
companies, hedge funds, and foreign investors.
 As Roberts Realty has previously stated in its annual and quarterly reports, its objective
is to exit the retail business to focus exclusively on developing, constructing and managing
multifamily apartment communities. Given that objective and the approximately $625,000 in
annual negative cash flow from its Grand Pavilion retail center, Roberts Realty has elected
not to make debt service payments since July 2010 on that retail center and has allowed the
loan to go into default. In August 2010, Roberts Realty asked the lender to place the Grand
Pavilion loan with the special servicer. On December 16, 2010, Roberts Realty received a
formal notice of default from the special servicer of the loan. Roberts Realty is seeking
to transfer the Grand Pavilion retail center to the lender as soon as possible in
satisfaction of the approximately $6,433,286 principal amount of debt secured by the
property. Because the loan is nonrecourse, Roberts Realty would have no further obligations
to the lender for this loan. This transaction would move Roberts Realty closer to exiting
the retail business, reduce the principal amount of its debt by $6,433,286, and reduce its
annual negative operating cash flow by approximately $625,000.
 Land Parcels Held for Development and Construction. Roberts Realty intends to move forward
with the development and construction of its next two multifamily communities: Bradley Park
and Northridge. Despite the very challenging economic conditions, management believes this
is an opportune time to create new multifamily assets. Management believes that in this
difficult economic climate, Roberts Realty can build at lower construction costs and create
value for shareholders as Roberts Realty has historically done during economic downturns and
recessions. Roberts Realty is currently seeking to raise the equity and obtain the
construction loans for the Bradley Park and Northridge communities. Roberts Realty
currently estimates that it will need
approximately $35,718,000 in debt and equity to complete the construction of its Northridge
and Bradley Park multifamily communities.
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##### Table of Contents



To provide the equity for construction, Roberts Realty may sell one or more of its land
parcels to independent purchasers. Roberts Realty is also considering forming joint
ventures and partnerships, and raising private equity. Roberts Realty is also in
discussions with possible joint venture participants such as pension funds, life insurance
companies, hedge funds, foreign investors, and local investors. Roberts Realty may also
sell one or more land parcels to Roberts Properties or to a newly formed affiliate of
Roberts Properties or of Roberts Realty that would raise private equity for the specific
purpose of funding the purchase of the land parcel and constructing a multifamily community.
 Possible Sale, Merger, or Business Combination. In an effort to maximize shareholder value,
Roberts Realty is open to any transaction that would be in the best interests of its
shareholders. In 2009 and 2010, Roberts Realty has engaged in discussions with both private
companies and individuals regarding a possible sale, merger, or other business combination.
Roberts Realty has entered into mutual confidentiality agreements with six different
entities and discussions are ongoing with several of them. To date, Roberts Realty has not
entered into any letter of intent or definitive agreement for such a transaction.
Management remains open to any reasonable proposal for a sale, merger, or other business
combination that would reward shareholders and maximize their value.
 12.
    
    SUMMARIZED QUARTERLY FINANCIAL INFORMATION

(UNAUDITED)
 Quarter EndedMarch 31
    
    
    June 30
    
    
    Sept 30
    
    
    Dec 31Year Ended December 31, 2010Total operating revenues
    
    $
    494,935
    
    
    $
    487,318
    
    
    $
    409,834
    
    
    $
    406,677Loss from operations
    
    
    (325,612
    )
    
    
    (247,196
    )
    
    
    (5,306,856
    )
    
    
    (595,334
    )Loss from continuing operations
    
    
    (675,661
    )
    
    
    (3,580,649
    )
    
    
    (5,682,952
    )
    
    
    (979,822
    )(Loss) income from discontinued operations
    
    
    (204,091
    )
    
    
    (318,423
    )
    
    
    3,204
    
    
    
    Net loss
    
    
    (879,752
    )
    
    
    (3,899,072
    )
    
    
    (5,679,748
    )
    
    
    (979,822
    )Per share (diluted):Loss from continuing operations
    
    $
    (0.05
    )
    
    $
    (0.29
    )
    
    $
    (0.46
    )
    
    $
    (0.08
    )Loss from discontinued operations
    
    
    (0.02
    )
    
    
    (0.02
    )
    
    
    
    
    
    
    Net loss
    
    $
    (0.07
    )
    
    $
    (0.31
    )
    
    $
    (0.46
    )
    
    $
    (0.08
    )Year Ended December 31, 2009Total operating revenues
    
    $
    489,762
    
    
    $
    504,323
    
    
    $
    479,939
    
    
    $
    489,797Loss from operations
    
    
    (1,883,484
    )
    
    
    (3,770,082
    )
    
    
    (470,362
    )
    
    
    (7,712,298
    )Loss from continuing operations
    
    
    (2,145,161
    )
    
    
    (4,125,887
    )
    
    
    (813,866
    )
    
    
    (8,050,767
    )Loss from discontinued operations
    
    
    (102,425
    )
    
    
    (2,045,039
    )
    
    
    (46,222
    )
    
    
    (111,061
    )Net loss
    
    
    (2,247,586
    )
    
    
    (6,170,926
    )
    
    
    (860,088
    )
    
    
    (8,161,828
    )Per share (diluted):Loss from continuing operations
    
    
    (0.17
    )
    
    
    (0.33
    )
    
    
    (0.07
    )
    
    
    (0.64
    )Loss from discontinued operations
    
    
    (0.01
    )
    
    
    (0.16
    )
    
    
    
    
    
    
    (0.02
    )Net loss
    
    $
    (0.18
    )
    
    $
    (0.49
    )
    
    $
    (0.07
    )
    
    $
    (0.66
    )
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13.
    
    SUBSEQUENT EVENTS.
 Office Leases.Roberts Realty leases office space in the Northridge office building to the
Roberts Companies. Effective as of January 1, 2011, Roberts Realty renewed its leases with
the Roberts Companies. Under the renewed leases, Roberts Properties leases 4,431 rentable
square feet, and Roberts Construction leases 1,920 rentable square feet. Both leases are
for a one-year term with a new rental rate of $17.50 per rentable square foot.
 
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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.
    
    DescriptionPlan of Disposition:2.1
    
    
    Agreement for Deed In Lieu of Foreclosure by and between Compass Bank, Roberts
Properties Residential, L.P. and Roberts Realty Investors, Inc. dated as of
June 30, 2010 (Addison Place Shops and Westside). [Incorporated by reference
to Item 2.1 in our current report on Form 8-K dated June 30, 2010.]Articles of Incorporation, Bylaws and Certificates and Articles of Merger:3.1
    
    
    Amended and Restated Articles of Incorporation of Roberts Realty Investors,
Inc. filed with the Georgia Secretary of State on July 22, 2004.
[Incorporated by reference to Exhibit 3.1 in our quarterly report on Form 10-Q
for the quarter ended September 30, 2004.]3.2
    
    
    Bylaws of Roberts Realty Investors, Inc. [* 2.2]3.3
    
    
    Amended and Restated Bylaws of Roberts Realty Investors, Inc. [Incorporated
by reference to Exhibit 3.1 in our current report on Form 8-K dated February
4, 2008.]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, as amended. [*
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 in 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]
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Exhibit No.
    
    Description4.2.2
    
    
    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, Ltd. with and into Roberts
Properties Residential, L.P. (Windsong Merger). [* 3.2.4]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 in 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 in 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 in our current report on Form 8-K dated April 1, 1997.]Material Agreements with Affiliates:Corporate Office Building10.1.1
    
    
    Office Lease between Roberts Properties Residential, L.P. and Roberts
Properties, Inc. dated March 27, 2006. [Incorporated by reference to Exhibit
10.4 in our quarterly report on Form 10-Q for the quarter ended March 31,
2006.]10.1.2
    
    
    Office Lease between Roberts Properties Residential, L.P. and Roberts
Properties Construction, Inc. dated March 27, 2006. [Incorporated by
reference to Exhibit 10.3 in our quarterly report on Form 10-Q for the quarter
ended March 31, 2006.]10.1.3
    
    
    Lease renewal agreement by and between Roberts Properties Residential, L.P.
and Roberts Properties Construction, Inc. dated March 21, 2007. [Incorporated
by reference to Exhibit 10.1 in our quarterly report on Form 10-Q for the
quarter ended March 31, 2007.]10.1.4
    
    
    Lease renewal agreement by and between Roberts Properties Residential, L.P.
and Roberts Properties, Inc. dated March 21, 2007. [Incorporated by reference
to Exhibit 10.2 in our quarterly report on Form 10-Q for the quarter ended
March 31, 2007.]10.1.5
    
    
    Lease renewal agreement by and between Roberts Properties Residential, L.P.
and Roberts Properties Construction, Inc. dated January 18, 2008.
[Incorporated by reference to Exhibit 10.1.6 in our annual report on Form 10-K
for the year ended December 31, 2007.]10.1.6
    
    
    Lease renewal agreement by and between Roberts Properties Residential, L.P.
and Roberts Properties, Inc. dated January 18, 2008. [Incorporated by
reference to Exhibit 10.1.7 in our annual report on Form 10-K for the year
ended December 31, 2007.]
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Exhibit No.
    
    Description10.1.7
    
    
    Lease renewal agreement by and between Roberts Properties Residential, L.P.
and Roberts Properties, Inc. dated January 30, 2009. [Incorporated by
reference to Exhibit 10.1.8 in our annual report on Form 10-K for the year
ended December 31, 2008.]10.1.8
    
    
    Lease renewal agreement by and between Roberts Properties Residential, L.P.
and Roberts Properties Construction, Inc. dated January 30, 2009.
[Incorporated by reference to Exhibit 10.1.9 in our annual report on Form 10-K
for the year ended December 31, 2008.]10.1.9
    
    
    First Amendment to Lease dated December 30, 2009 by and between Roberts
Properties, Inc. and Roberts Properties Residential, L.P. [Incorporated by
reference to Exhibit 10.1 in our current report on Form 8-K dated December 30,
2009.]10.1.10
    
    
    First Amendment to Lease dated December 30, 2009 by and between Roberts
Properties Construction, Inc. and Roberts Properties Residential, L.P.
[Incorporated by reference to Exhibit 10.2 in our current report on Form 8-K
dated December 30, 2009.]10.1.11
    
    
    Amendment to Lease dated as of January 1, 2011 by and between Roberts
Properties, Inc. and Roberts Properties Residential, L.P. [Incorporated by
reference to Exhibit 10.1 in our current report on Form 8-K dated January 24,
2011.]10.1.12
    
    
    Amendment to Lease dated as of January 1, 2011 by and between Roberts
Properties Construction, Inc. and Roberts Properties Residential, L.P.
[Incorporated by reference to Exhibit 10.2 in our current report on Form 8-K
dated January 24, 2011.]Northridge10.2.1
    
    
    Construction Agreement between Roberts Properties Residential, L.P. and
Roberts Properties Construction, Inc. (Northridge). [Incorporated by
reference to Exhibit 10.1.18 in our quarterly report on Form 10-Q for the
quarter ended March 31, 2003.]Peachtree Parkway10.3.1
    
    
    Restrictive Covenant by Roberts Properties Peachtree Parkway, L.P., assumed by
Roberts Properties Residential, L.P. on December 29, 2004. [Incorporated by
reference to Exhibit 10.3 in our current report on Form 8-K dated January 5,
2005.]10.3.2
    
    
    Design and Development Agreement among Roberts Properties Residential, L.P.,
Georgianna Jean K. Valentino and Roberts Properties, Inc. for the Peachtree
Parkway land parcel, dated as of April 14, 2005. [Incorporated by reference
to Exhibit 10.1 in our current report on Form 8-K dated April 12, 2005.]10.3.3
    
    
    Amendment Number 1 to Design and Development Agreement between Roberts
Properties Residential, L.P. and Roberts Properties, Inc. dated as of December
6, 2006 (Peachtree Parkway). [Incorporated by reference to Exhibit 10.1 in
our current report on Form 8-K dated December 6, 2006.]10.3.4
    
    
    Construction Contract among Roberts Properties Residential, L.P., Georgianna
Jean K. Valentino and Roberts Properties Construction, Inc. for the Peachtree
Parkway land parcel, dated as of April 14, 2005. [Incorporated by reference
to Exhibit 10.3 in our current report on Form 8-K dated April 12, 2005.]
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Exhibit No.
    
    Description10.3.6
    
    
    Amendment Number 1 to Construction Contract between Roberts Properties
Residential, L.P. and Roberts Properties Construction, Inc. dated as of
December 6, 2006 (Peachtree Parkway). [Incorporated by reference to Exhibit
10.2 in our current report on Form 8-K dated December 6, 2006.]10.3.6
    
    
    Sales Contract dated December 17, 2009 between Peachtree Corners Circle, LLC
and Roberts Properties Residential, L.P. (1.004-acre parcel on Peachtree
Corners Circle). [Incorporated by reference to Exhibit 10.1 in our current
report on Form 8-K dated December 17, 2009.]10.3.7
    
    
    Sales Contract dated December 17, 2009 between Peachtree Corners Circle, LLC
and Roberts Properties Residential, L.P. (0.154-acre strip along Peachtree
Corners Circle). [Incorporated by reference to Exhibit 10.2 in our current
report on Form 8-K dated December 17, 2009.]North Springs (formerly Peachtree Dunwoody)10.4.1
    
    
    Restrictive Covenant by Roberts Properties Peachtree Dunwoody, LLC, assumed by
Roberts Properties Residential, L.P. on January 20, 2005. [Incorporated by
reference to Exhibit 10.2 in our current report on Form 8-K dated January 21,
2005.]10.4.2
    
    
    Design and Development Agreement between Roberts Properties Residential, L.P.
and Roberts Properties, Inc. for the North Springs (formerly Peachtree
Dunwoody) land parcel, dated as of April 14, 2005. [Incorporated by reference
to Exhibit 10.2 in our current report on Form 8-K dated April 12, 2005.]10.4.3
    
    
    Construction Contract between Roberts Properties Residential, L.P. and Roberts
Properties Construction, Inc. for the North Springs (formerly Peachtree
Dunwoody) land parcel, dated as of April 14, 2005. [Incorporated by reference
to Exhibit 10.4 in our current report on Form 8-K dated April 12, 2005.]Bradley Park10.5.1
    
    
    Design and Development Agreement between Roberts Properties Residential, L.P.
and Roberts Properties, Inc. for the Bradley Park (formerly Sawmill) land
parcel in Cumming, Georgia, dated as of August 4, 2005. [Incorporated by
reference to Exhibit 10.1 in our current report on Form 8-K dated August 9,
2005.]10.5.2
    
    
    Construction Contract between Roberts Properties Residential, L.P. and Roberts
Properties Construction, Inc. for the Bradley Park (formerly Sawmill) land
parcel in Cumming, Georgia, dated as of August 4, 2005. [Incorporated by
reference to Exhibit 10.2 in our current report on Form 8-K dated August 9,
2005.]Highway 2010.6.1
    
    
    Design and Development Agreement between Roberts Properties Residential, L.P.
and Roberts Properties, Inc. for the Highway 20 land parcel in Cumming,
Georgia, dated as of February 21, 2006. [Incorporated by reference to Exhibit
10.1 in our current report on Form 8-K dated February 21, 2006.]10.6.2
    
    
    Construction Contract between Roberts Properties Residential, L.P. and Roberts
Properties Construction, Inc. for the Highway 20 land parcel in Cumming,
Georgia, dated as of February 21, 2006. [Incorporated by reference to Exhibit
10.2 in our current report on Form 8-K dated February 21, 2006.]
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Exhibit No.
    
    DescriptionCompensation Agreements and Arrangements, and Restricted Stock Plan10.7.1
    
    
    Determination of compensation arrangements for the interim Chief Financial
Officer of Roberts Realty Investors, Inc. [Incorporated by reference to Item
5.02 in our current report on Form 8-K dated May 31, 2006.]10.7.2
    
    
    2006 Roberts Realty Investors, Inc. Restricted Stock Plan, as amended
effective January 27, 2009. [Incorporated by reference to Exhibit 4.1 in the
companys post-effective amendment to its Registration Statement on Form S-8
filed with the SEC on January 29, 2009.]10.7.3
    
    
    Revised Form of Restricted Stock Award Agreement (supersedes the form of
restricted stock award agreement attached as Exhibit A to Annex A to our proxy
statement for our 2006 annual meeting filed with the SEC on July 20, 2006).
[Incorporated by reference to Exhibit 10.3 in our quarterly report on Form
10-Q for the quarter ended March 31, 2007.]Other Agreements with Affiliates10.8.1
    
    
    Reimbursement arrangement between Roberts Realty Investors, Inc. and Roberts
Properties, Inc., effective February 8, 2008. [Incorporated by reference to
Exhibit 10.1 in our current report on Form 8-K dated February 4, 2008.]10.8.2
    
    
    Reimbursement arrangement between Roberts Realty Investors, Inc. and Roberts
Properties, Inc., effective January 1, 2011. [Incorporated by reference to
Exhibit 10.3 in our current report on Form 8-K dated January 24, 2011.]Peachtree Parkway / North Springs (formerly Peachtree Dunwoody) / Highway 20 Financing Documents:10.9.1
    
    
    Promissory Note in the principal amount of $8,175,000, dated December 6, 2006,
executed by Roberts Properties Residential, L.P. in favor of Wachovia Bank,
National Association (Peachtree Parkway). [Incorporated by reference to
Exhibit 10.3 in our current report on Form 8-K dated December 6, 2006.]10.9.2
    
    
    Deed to Secure Debt and Assignment of Rents dated December 6, 2006, executed
by Roberts Properties Residential, L.P. in favor of Wachovia Bank, National
Association (Peachtree Parkway). [Incorporated by reference to Exhibit 10.4
in our current report on Form 8-K dated December 6, 2006.]10.9.3
    
    
    Unconditional Guaranty dated December 6, 2006, executed by Roberts Realty
Investors, Inc. in favor of Wachovia Bank, National Association (Peachtree
Parkway). [Incorporated by reference to Exhibit 10.5 in our current report on
Form 8-K dated December 6, 2006.]10.9.4
    
    
    Second Consolidated Amendatory Agreement and Agreement Regarding Cross-Default
and Cross-Collateralization of Loans dated April 28, 2008 by and between
Roberts Properties Residential, L.P. and Wachovia Bank, National Association
(Peachtree Parkway). [Incorporated by reference to Exhibit 10.1 in our
current report on Form 8-K dated April 28, 2008.]10.9.5
    
    
    Deed to Secure Debt and Assignment of Rents dated April 28, 2008, executed by
Roberts Properties Residential, L.P. in favor of Wachovia Bank, National
Association (North Springs). [Incorporated by reference to Exhibit 10.3 in
our current report on Form 8-K dated April 28, 2008.]
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Exhibit No.
    
    Description10.9.6
    
    
    Letter Agreement from Wachovia Bank, N.A. dated April 27, 2009. [Incorporated
by reference to Exhibit 10.1 in our current report on Form 8-K dated April 27,
2009.]10.9.7
    
    
    Third Consolidated Amendatory Agreement dated July 17, 2009 by and among
Roberts Properties Residential, L.P., Roberts Realty Investors, Inc. and
Wachovia Bank, National Association (Peachtree Parkway). [Incorporated by
reference to Exhibit 10.1 in our current report on Form 8-K dated July 17,
2009.]10.9.8
    
    
    Second Amendment to Deed to Secure Debt and Assignment of Rents and Other Loan
Documents dated July 17, 2009 by and between Roberts Properties Residential,
L.P. and Wachovia Bank, National Association (Peachtree Parkway).
[Incorporated by reference to Exhibit 10.2 in our current report on Form 8-K
dated July 17, 2009.]10.9.9
    
    
    Fourth Consolidated Amendatory Agreement dated June 21, 2010 by and among
Roberts Properties Residential, L.P., Roberts Realty Investors, Inc. and Wells
Fargo Bank, National Association (Peachtree Parkway). [Incorporated by
reference to Item 10.1 in our current report on Form 8-K dated June 21, 2010.]10.9.10
    
    
    Third Amendment to Deed to Secure Debt and Assignment of Rents and Other Loan
Documents dated June 21, 2010 by and between Roberts Properties Residential,
L.P. and Wells Fargo Bank, National Association (Peachtree Parkway).
[Incorporated by reference to Item 10.2 in our current report on Form 8-K
dated June 21, 2010.]Other Exhibits:21
    
    
    Subsidiaries of Roberts Realty Investors, Inc.23
    
    
    Consent of Independent Registered Public Accounting Firm  Reznick Group, P.C.24
    
    
    Power of Attorney (contained on the signature page hereof).31
    
    
    Certifications of Charles S. Roberts and Charles R. Elliott pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.32
    
    
    Certifications of Charles S. Roberts and Charles R. Elliott pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002. This exhibit is not filed
for purposes of Section 18 of the Securities Exchange Act of 1934 but is
instead furnished as provided by applicable rules of the Securities and
Exchange Commission.
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##### Table of Contents



SIGNATURES
   ROBERTS REALTY INVESTORS, INC.By:
    
    /s/ Charles S. Roberts

Charles S. Roberts, Chairman of the Board,Chief Executive Officer and President
 POWER OF ATTORNEY
   Signature
    
    Title
    
    Date/s/ Charles S. Roberts

Charles S. Roberts
    
    Chairman of the Board, Chief 
Executive
Officer and President
    
    March 17, 2011/s/ Charles R. Elliott

Charles R. Elliott
    
    Secretary, Treasurer, Chief 
Financial
Officer (Principal Financial

Officer and Principal Accounting 

Officer) and Director
    
    March 17, 2011/s/ John L. Davis

John L. Davis
    
    Director
    
    March 17, 2011/s/ Wm. Jarell Jones

Wm. Jarell Jones
    
    Director
    
    March 17, 2011
  66