ATLANTA, Nov. 28, 2005 (PRIMEZONE) -- Roberts Realty Investors, Inc. (AMEX:RPI) announces that on November 23, 2005, it purchased 36 acres of undeveloped land for a new 210-unit community in the north Atlanta submarket of Cumming, Georgia. The land is located on Georgia Highway 20 at the intersection of Elm Street, just north of the City of Cumming's town square. The purchase price was $5.1 million, including closing costs and sewer tap fees. The acquisition completes Roberts Realty's Section 1031 tax-deferred exchange using proceeds from the May 2005 sale of the company's Ballantyne Place community, located in Charlotte, North Carolina.
Since May 2005, Roberts Realty has acquired over $37 million of real estate assets consisting of three tracts of land totaling 72.5 acres zoned for 581 residential units and three retail centers totaling 112,322 square feet. All of these acquisitions are in the high-growth, north Atlanta suburbs.
Mr. Charles S. Roberts, the company's founder and CEO, stated: "Our objective in selling Ballantyne Place was to exit the Charlotte market, redeploy our capital into new properties in Atlanta and continue our development and construction program. I'm proud to say that we have accomplished all of this and more. We've added 581 residential units to our development pipeline, expanded our retail presence in the high-growth, north Atlanta suburbs, improved our operating cash flow and deferred over $10 million of taxable gain from the Ballantyne Place sale. Combined with the properties we already have under development, these recent acquisitions position us to create shareholder value for many years to come."
Roberts Realty currently has 1,022 residential units in various phases of development, consisting of 236 units and 120 units on Peachtree Dunwoody Road, 292 units on Peachtree Parkway and 220 units on Northridge Parkway, all in metropolitan Atlanta. Roberts Realty also owns 80 acres of investment property zoned for 536 residential units, also in metropolitan Atlanta.
The company is currently experiencing negative operating cash flow as a result of the sales of its older, appreciated residential communities in 2004 and the sale of its Charlotte residential community in May 2005. As previously reflected in Roberts Realty's consolidated statements of cash flows in its Quarterly Report on Form 10-Q for the quarter ended September 30, 2005 filed with the SEC, net cash used in operating activities from continuing operations was $(1,144,000) for the nine months ended September 30, 2005, compared to net cash provided by operating activities from continuing operations of $365,000 for the same period in 2004. Net income for the nine months ended September 30, 2005, was $1,831,000 compared to $37,776,000 for the same period in 2004. Roberts Realty expects the negative cash flow to continue until its development properties 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.
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: the company may not be able to develop, construct, and lease its residential communities and other properties as soon as it expects; construction and permanent debt financing for the projects may not be available as expected, or such financing may be available only on unfavorable terms; the company may encounter unexpected construction problems or delays; market and economic conditions may be unfavorable for the development of the company's residential communities and other properties; and increased competition may limit the rents the company can charge and collect. 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.