ATLANTA, Oct. 31, 2005 (PRIMEZONE) -- Roberts Realty Investors, Inc. (AMEX:RPI) announces that on October 27, 2005 it purchased Spectrum, a 30,050 square foot retail center located in Gwinnett County, Georgia for $8.4 million. The center is located directly across from the Mall of Georgia and is 83% leased. Roberts Realty assumed $5.3 million in debt bearing a fixed interest rate of 5.68%, and financed the balance with proceeds from the May 2005 sale of the company's Ballantyne Place residential community located in Charlotte, North Carolina.
This is the company's third retail center acquisition and fifth overall acquisition as part of a Section 1031 tax-deferred exchange from the sale of Ballantyne Place for $37.9 million. In September 2005, the company purchased Grand Pavilion, a 62,323 square foot retail center located in Alpharetta, Georgia, and Bassett Shopping Center, a 19,949 square foot retail center also located in Gwinnett County, Georgia. 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 2005, the company purchased 22 acres of undeveloped land zoned for 154 residential units in Cumming, Georgia. The total purchase price of these five properties was $32 million and the company incurred $20.7 million in debt.
Mr. Charles S. Roberts, the company's founder and CEO, stated: "With the addition of Spectrum, we have more than doubled the amount of retail space we own in the Mall of Georgia sub-market and will use this to our advantage. It is an excellent asset located on a heavily traveled road in a high-growth, high-profile market. The acquisition of Spectrum will improve our operating cash flow and nearly complete our Section 1031 exchange."
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 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.
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 complete the 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.