ATLANTA, Oct. 3, 2005 (PRIMEZONE) -- Roberts Realty Investors, Inc. (AMEX:RPI) announces that it purchased two retail centers in two separate transactions totaling 82,272 square feet for prices totaling $15.7 million. On September 29, 2005, Roberts Realty purchased Grand Pavilion, a 62,323 square foot retail center in Alpharetta, Georgia, for $10.9 million. The center is located at the intersection of State Bridge Road and Kimball Bridge Road, just one mile south of the newly constructed Addison Place Shops, another Roberts Realty retail center. Grand Pavilion was 88% leased at the time of purchase. Roberts Realty assumed $7 million in debt and financed the balance with proceeds from the May 2005 sale of the company's Ballantyne Place residential community, located in Charlotte, North Carolina.
On September 30, 2005, Roberts Realty purchased a 19,949 square foot retail center in Buford, Georgia for $4.8 million. Built in 1999, the center is located directly across from the Mall of Georgia and anchored by Bassett Furniture Direct. It is 100% leased. Roberts Realty assumed $2.7 million in debt and financed the balance with proceeds from the Ballantyne Place sale.
Mr. Charles S. Roberts, the company's founder and CEO, stated, "These two well-located and established properties fit our strategy of investing in excellent assets located in high-growth markets and will immediately improve our operating cash flow. They also move us closer to completing our Section 1031 exchange."
These retail center acquisitions are Roberts Realty's third and fourth acquisitions as part of a Section 1031 tax-deferred exchange using proceeds from the sale of Ballantyne Place for $37.9 million. In June 2005, the company purchased 14.5 acres of investment property zoned for 217 residential units in the Westside mixed-use development in Alpharetta, Georgia, and in August 2004, the company purchased 22 acres of undeveloped land zoned for 154 residential units in Cumming, Georgia. These four properties total $23.8 million in purchases and $15.4 million in debt.
The company is currently experiencing negative operating cash flow as a result of the company's June 2004 sale of its older, appreciated residential communities in Atlanta and its May 2005 sale of its residential community in Charlotte. Roberts Realty expects the negative operating cash flow to continue through the end of 2006 or until its new communities are constructed and leased. As a result, the company does not intend to pay distributions to shareholders in the foreseeable future.
Roberts Realty Investors, Inc. invests in multi-family residential communities and retail centers in Atlanta and South Florida as a self-administered, self-managed equity real estate investment trust.
This press release contains forward-looking statements within the meaning of the securities laws. Although the company believes the expectations reflected in the forward-looking statements are based on reasonable assumptions, the company's actual results could differ materially from those anticipated in the forward-looking statements. Certain factors that might cause such a difference include, but are not limited to the following: competition in the retail market may affect the tenants' ability to generate sufficient sales to sustain their businesses and pay their rents, and may affect the company's ability to lease space at desirable rents. Other factors that might cause a difference include: the company may not be able to redeploy the entire net proceeds from the sale of Ballantyne Place to complete a Section 1031 tax-deferred exchange as it intends; market and economic conditions may change and become unfavorable for the development of residential communities; increased competition; construction risks; the lack of construction and permanent debt financing, or the availability of such financing on unfavorable terms; the master-planned Westside development may not ultimately be developed as planned; and Roberts Realty may be required to make distributions to maintain its status as a REIT for federal income tax purposes. For more information about other risks and uncertainties Roberts Realty faces, please see the section in Roberts Realty's most recent quarterly report on Form 10-Q entitled Management's Discussion and Analysis of Financial Conditions and Results of Operations -- Disclosure Regarding Forward-Looking Statements.