UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a)
of the Securities
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Roberts
Realty Investors, Inc.
(Name of Registrant as Specified In Its Charter)
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other than the Registrant)
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ROBERTS REALTY INVESTORS, INC.
375 Northridge Road, Suite 330
Atlanta, Georgia 30350
November 18, 2014
Dear Shareholders:
I cordially invite you to attend our annual
meeting of shareholders of Roberts Realty Investors, Inc. at 9:00 a.m. EST, on Friday, December 12, 2014 at Villa Christina at
Perimeter Summit located at 4000 Summit Boulevard, Atlanta, Georgia 30319. Enclosed are the Notice of Annual Meeting of Shareholders
and Proxy Statement, which contain information regarding the proposals on which our shareholders will vote at our annual meeting.
A copy of our 2013 Annual Report to Shareholders with our Form 10-K for 2013 is also enclosed for your convenience.
Regardless of whether or not you plan to attend
our annual meeting, I would appreciate your taking the time to complete, sign, and promptly return the enclosed proxy card. A postage-paid
envelope is enclosed for your convenience. If you hold your shares in “street name,” please note that banks, brokers,
and other nominees do not have the authority to vote your shares for the election of the director without instructions from you.
Accordingly, please provide voting instructions to your bank, broker, and other nominee, so that your shares may be voted.
Your vote is important, and I appreciate the
time and consideration that I am sure you will give it.
Sincerely,
/s/ Charles S. Roberts
Charles S. Roberts
Chief Executive Officer
ROBERTS REALTY INVESTORS, INC.
375 Northridge Road, Suite 330
Atlanta, Georgia 30350
November 18, 2014
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON DECEMBER 12, 2014
The annual meeting of shareholders of
Roberts Realty Investors, Inc. will be held at 9:00 a.m. EST, on Friday, December 12, 2014 at Villa Christina at Perimeter Summit
located at 4000 Summit Boulevard, Atlanta, Georgia 30319, for the following purposes:
| (1) | to elect one director to serve a three-year term; |
| (2) | to conduct an advisory vote on the compensation of our named executive
officers; |
| (3) | to ratify the appointment of Cherry Bekaert LLP as our independent
registered public accounting firm for 2014; and |
| (4) | to transact any other business that properly comes before the meeting
or any adjournment of it. |
The directors set the close of business on
November 5, 2014 as the record date to determine the shareholders who are entitled to vote at the annual meeting.
Under the applicable rules of the SEC, we are
providing access to our proxy materials both by sending you this full set of proxy materials, including a proxy card, and by notifying
you of the availability of our proxy materials on the Internet.
If you do not expect to attend the meeting
in person, please mark, sign, and date the enclosed proxy card and return it in the accompanying postage-paid envelope.
/s/ Anthony W. Shurtz
Anthony W. Shurtz
Secretary
Important Notice Regarding the Availability
of Proxy Materials
for the Shareholder Meeting to Be Held on
December 12, 2014.
This Notice of Annual Meeting and Proxy
Statement and our 2013 Annual Report to Shareholders are also available online at http://robertsrealtyinvestors.investorroom.com.
Table of Contents
Page
| VOTING PROCEDURES |
1 |
| PROPOSAL 1 – ELECTION OF DIRECTOR |
5 |
| SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT |
11 |
| CORPORATE GOVERNANCE |
13 |
| DIRECTOR AND EXECUTIVE OFFICER COMPENSATION |
18 |
| CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS |
21 |
| PROPOSAL 2 – ADVISORY VOTE ON EXECUTIVE COMPENSATION |
27 |
| PROPOSAL 3 – Ratification
of Appointment of Independent Registered Public Accounting Firm |
28 |
| EXHIBITS TO OUR 2013 ANNUAL REPORT ON FORM 10-K |
33 |
PROXY STATEMENT
FOR
THE ANNUAL MEETING OF SHAREHOLDERS
OF ROBERTS REALTY INVESTORS, INC.
TO BE HELD ON DECEMBER 12, 2014
VOTING PROCEDURES
Who is asking for your vote?
The board of directors
of Roberts Realty is soliciting the proxy for use at the annual meeting on December 12, 2014. If the meeting is adjourned, we may
also use the proxy at any later meetings for the purposes stated in the notice of the annual meeting.
What items will be voted on at the annual
meeting?
Three matters are scheduled
for a vote:
| · | the election of one director to serve a
three-year term; |
| · | an advisory vote on the compensation of
our named executive officers; and |
| · | the ratification of the appointment of Cherry
Bekaert LLP (“Cherry Bekaert”) as our independent registered public accounting firm for 2014. |
As of the date of this proxy statement, we
are not aware of any other matters that will be presented for consideration at the annual meeting.
How do your directors recommend that you
vote?
The directors recommend
that you vote:
| · | FOR the election of the nominee for
director; |
| · | FOR the approval of the compensation
of our named executive officers as disclosed in this proxy statement; and |
| · | FOR the ratification of the appointment
of Cherry Bekaert as our independent registered public accounting firm for 2014. |
Who is eligible to vote?
Shareholders of record
at the close of business on November 5, 2014 are entitled to be present and to vote at the annual meeting or any adjourned meeting.
We are mailing these proxy materials to shareholders on or about November 18, 2014.
What are the rules for voting?
As of the record date,
we had 10,066,907 shares of common stock outstanding and entitled to vote at the annual meeting. Each share of our common stock
entitles the holder to one vote on all matters voted on at the meeting. All of the shares of common stock vote as a single class.
You may vote:
| · | By mail – by signing your proxy
card and mailing it in the enclosed preaddressed, postage-paid envelope. If you receive more than one proxy card, it means that
you have multiple accounts at our transfer agent or with your stockbrokers. Please sign and return all proxy cards to be sure that
all your shares are voted. |
| · | In person at the meeting. We will
pass out written ballots to any shareholder of record who wants to vote at the meeting. If you hold your shares through a brokerage
account, however, you may not vote at the meeting by ballot. Instead, you must request a legal proxy from your stockbroker to vote
at the meeting. |
Shares represented by signed
proxies will be voted as instructed. If you sign the proxy but do not mark your vote, your shares will be voted as the directors
have recommended. Voting results will be tabulated and certified by our transfer agent, American Stock Transfer & Trust Company.
As of the date of this
proxy statement, we are not aware of any other matters to be presented or considered at the meeting, but your shares will be voted
at the directors’ discretion on any of the following matters:
| · | Any matter about which we did not receive
written notice a reasonable time before we mailed these proxy materials to our shareholders. |
| · | The election of any person as a director
in lieu of the nominee if he is unable to serve or for good cause will not serve. We do not contemplate that our nominee will be
unable to serve. |
| · | Matters incident to the conduct of the meeting. |
A majority of our outstanding
shares of common stock as of the record date must be present at the meeting, either in person or by proxy, to hold the meeting
and conduct business. This is called a quorum. In determining whether we have a quorum at the annual meeting for purposes of all
matters to be voted on, all votes “for” or “against” and all votes to “withhold authority”
will be counted. Shares will be counted for quorum purposes if they are represented at the meeting for any purpose other than solely
to object to holding the meeting or transacting business at the meeting. If a quorum is present, abstentions will have no effect
on the voting for directors.
If your shares are held
in a stock brokerage account or by a bank or other nominee, you are considered the beneficial owner of shares held in “street
name,” and these proxy materials are being forwarded to you by your broker or nominee, which is considered, with respect
to those shares, to be the shareholder of record. As the beneficial owner, you have the right to direct your broker or nominee
how to vote, and you are also invited to attend the annual meeting. Your broker or nominee has enclosed a voting instruction card
for you to use to direct the broker or nominee how to vote your shares. The voting instruction card may provide various alternative
voting methods, such as via the Internet, by telephone, or by mail.
If you hold your shares
in street name, your brokerage firm may vote your shares under certain circumstances. Brokerage firms have authority under stock
exchange rules to vote their customers’ unvoted shares on certain “routine” matters. We expect that brokers will
be allowed to exercise discretionary authority for beneficial owners who have not provided voting instructions ONLY with respect
to Proposal 3 – the ratification of the appointment of Cherry Bekaert as our independent registered public accounting firm
for 2014, but not with respect to any of the other proposals to be voted on at the annual meeting. If you hold your shares in
street name, please provide voting instructions to your bank, broker or other nominee, so that your shares may be voted on all
other proposals.
When a brokerage firm votes
its customers’ unvoted shares on routine matters, these shares are counted for purposes of establishing a quorum to conduct
business at the meeting. If a brokerage firm indicates on a proxy that it does not have discretionary authority to vote certain
shares on a particular matter, then those shares will be treated as “broker non-votes.” Shares represented by broker
non-votes will be counted in determining whether there is a quorum.
Our directors are elected
by plurality, provided a quorum is present. The proxies given for the annual meeting may not be voted for more than one director.
Shareholders do not have cumulative voting rights or dissenters’ rights. For any other matter coming before the meeting,
the matter will be deemed to be approved if the votes cast in favor of the action exceed the votes cast opposing the action.
If you are a shareholder
of record (i.e., you hold your shares directly instead of through a brokerage account) and you change your mind after you return
your proxy card, you may revoke your proxy and change your vote at any time before the polls close at the meeting. You may do this
by:
| · | signing, dating, and returning another proxy
card with a later date; |
| · | voting in person at the meeting; or |
| · | giving written notice to our corporate Secretary,
Mr. Anthony W. Shurtz. |
If you hold your shares through a brokerage
account, you must contact your brokerage firm to revoke your proxy.
How will we solicit proxies, and who will
pay for the cost of the solicitation?
We will solicit proxies
principally by mailing these proxy materials to our shareholders, but our directors, officers, and employees may also solicit proxies
by telephone or in person. We will pay all of the costs of soliciting proxies, which primarily include the costs of preparing,
printing, and mailing these proxy materials.
How can a shareholder propose business to
be brought before next year’s annual meeting?
We must receive any shareholder
proposals intended to be presented at our 2015 annual meeting of shareholders on or before July 21, 2015 for a proposal to be eligible
to be included in the proxy statement and form of proxy to be distributed by the board of directors for that meeting. We must receive
any shareholder proposals intended to be presented from the floor at our 2015 annual meeting of shareholders not less than 60 days
before the meeting, except that if we give less than 40 days notice or prior public disclosure of the date of the meeting, we must
receive the proposal not later than the close of business on the 10th day following the day on which we mail notice of the date
of the meeting or publicly disclose the date.
Directions to the Annual Meeting of Shareholders
The annual meeting of
shareholders will be held at 9:00 a.m. EST, on Friday, December 12, 2014 at Villa Christina at Perimeter Summit located at 4000
Summit Boulevard, Atlanta, Georgia 30319. The meeting facility is located south of the intersection of Ashford Dunwoody Road and
I-285. From that intersection, proceed south on Ashford Dunwoody Road to Lake Hearn Drive NE, the first road on the right. Turn
right on Lake Hearn Drive NE, then turn left on Parkside Place. Take the first right on Summit Drive, and Villa Christina will
be on your left.
PROPOSAL 1 – ELECTION OF DIRECTOR
Directors and Executive Officers
The following table provides information about
our directors and executive officers as of the date of this proxy statement.
| Name |
Age |
Term as
Director
Expires |
Position |
| |
|
|
|
| Charles S. Roberts |
68 |
2015 |
Chairman of the Board, Chief Executive Officer, and President |
| |
|
|
|
| John L. Davis |
49 |
2016 |
Director, Chairman of the Compensation Committee and Member of Audit Committee and Nominating and Governance Committee |
| |
|
|
|
| Charles R. Elliott |
61 |
2015 |
Director |
| |
|
|
|
| Weldon R. Humphries |
77 |
2016 |
Director, Member of Audit Committee and Compensation Committee |
| |
|
|
|
| Wm. Jarell Jones |
66 |
2014 |
Director, Chairman of Audit Committee and Chairman of Nominating and Governance Committee, and Member of Compensation Committee |
| |
|
|
|
| Anthony W. Shurtz |
48 |
N/A |
Chief Financial Officer, Secretary, and Treasurer |
Nominee for Election as Director
This section gives information
about the nominee for election as a director of Roberts Realty: Mr. Wm. Jarell Jones, who is currently a director of Roberts Realty.
Our Nominating and Governance Committee has recommended that Mr. Jones be reelected to the board for a term expiring at the 2017
annual meeting of shareholders at which a successor shall be elected and shall qualify.
The board of directors recommends a vote
FOR the nominee.
Our articles of incorporation
require the board of directors to be divided into three classes as nearly equal in number as possible, and we have four other directors.
The terms of office of Mr. Charles S. Roberts and Mr. Charles R. Elliott expire at the annual meeting in 2015, and
the terms of office of Mr. John L. Davis and Mr. Weldon R. Humphries expire at the annual meeting in 2016.
Biographical Information for Nominee for
Director
If elected, Mr. Jones will
serve for his three-year term and until his successor is elected and qualified. Mr. Jones has agreed to serve as a director
if elected.
Wm. Jarell Jones,
a director since October 1994, is an attorney and has practiced law with the firm of Wm. Jarell Jones, P.C., since November
1993, except that he practiced with Jones + Turner Law Offices LLP from August 2011 to July 2012. Mr. Jones is a former Certified
Public Accountant, and in 1976, he formed the public accounting firm of Jones & Kolb in Atlanta, Georgia and served as Senior
Tax Partner and Co-Managing Partner until December 1988. In 1990, Mr. Jones moved to Statesboro and practiced law with the firm
of Edenfield, Stone & Cox until November 1992 and then with the firm of Jones & Rutledge from November 1992 until November
1993. Mr. Jones was formerly a director for six years and the Chairman for two years of the Downtown Statesboro Development Authority.
Mr. Jones is the
acting chief financial officer and a director of Efficien Technology LLC, which uses a patented process that converts waste tire
rubber into a solvent that is useful to the oil and gas industry. He is also the chief executive officer of Amiare LLC, which has
an agreement with Efficien to purchase its technology.
In addition, Mr.
Jones is also the President and the sole shareholder of Palmetto Realty Company, a real estate development and brokerage company
that was primarily involved in the development of single-family residential lots in coastal South Carolina and Georgia. Mr. Jones
was also a partner and investor in several other real estate developments primarily involved in residential lot and home sales
in coastal Georgia and South Carolina. Mr. Jones personally guaranteed the loans for these developments along with his other partners
who were the real estate developers of these developments. With the collapse of the residential real estate market beginning in
2008, particularly in those coastal areas, the developments were unable to generate sufficient cash flow to maintain the properties
and keep the development/construction loans current. Additionally, the market value of all of these properties plummeted far below
the amount of the debt and the real estate developers were unable to secure refinancing of any of these properties or work out
any suitable modifications with the lenders. As a result of these difficulties and his personal guaranties of the loans, Mr. Jones
personally filed a bankruptcy petition under Chapter 11 of the United States Bankruptcy Code on September 2, 2010 in the United
States Bankruptcy Court for the Southern District of Georgia. This proceeding was converted to Chapter 7 on January 17, 2012 and
was discharged on December 18, 2012.
The nominating and
governance committee of our board of directors has concluded that Mr. Jones should serve as a director because of his legal
and accounting expertise and his service as chairman of several committees of the board of directors, including the audit committee.
The committee also took into account that Mr. Jones is “independent” under SEC Rule 10A-3 and under Section 803A of
the NYSE MKT exchange listing standards and is an “audit committee financial expert.”
Biographical Information for Continuing
Directors
Charles S. Roberts
has served as our Chairman of the Board, Chief Executive Officer, and President since he founded the company in 1994. Mr. Roberts
owns, directly or indirectly, all of the outstanding stock of, and is the president and sole director of, each of the Roberts Companies.
In 1970, Mr. Roberts
established Roberts Properties, Inc. (“Roberts Properties”) to develop, construct, and manage multifamily apartment
communities. Mr. Roberts and Roberts Properties have won numerous local, regional, and national awards for the development of these
communities. Mr. Roberts has been a national speaker on the topic of developing upscale multifamily housing and has been recognized
as a leader in this industry. On a regional level, Roberts Properties has been awarded 21 prestigious Aurora Awards by the Southeast
Builders Conference; including eight times for the best rental apartment community. Roberts Properties has also been awarded the
coveted Golden Aurora Award for best overall development in the Southeast. On a national level, Roberts Properties Management was
recognized as the Property Management Company of the Year by the National Association of Home Builders, and Roberts Properties
has twice been awarded the prestigious Pillars of the Industry Award from the National Association of Home Builders for the best
upscale apartment community.
Mr. Roberts served
as chairman of the board of directors of Big Trees Forest Preserve, a 30-acre urban forest in Sandy Springs, Georgia dedicated
to conservation, preservation, and education, from 2006 to 2009. During this period, he personally donated over $100,000 to the
Preserve in support of its mission. Additionally, in January 2012, Mr. Roberts was appointed to the City of Sandy Springs Economic
Development Council, and in October 2012, he was appointed to the City of Sandy Springs Design Review Board.
As a result of his
experience in design, development, and construction, coupled with his knowledge of architectural history, Mr. Roberts was appointed
as a commissioner to the Landmarks Preservation Commission of the historic Town of Palm Beach, Florida. He served as a Landmarks
Preservation Commissioner from 2007 through 2010.
Mr. Roberts supports
numerous charitable organizations and has participated in a wide variety of philanthropic endeavors. He has been actively involved
with the Cystic Fibrosis Foundation for more than 20 years and served as Auction Chairman of the 2008 Sixty-Five Roses Ball, which
raised more than $500,000. Mr. Roberts was a founding sponsor of the Fulton County “Beat the Odds” program, which provided
college scholarships and other assistance to Fulton County high school students who triumphed over life’s hardships to excel
both academically and personally. As a lifelong supporter of the YMCA, Mr. Roberts donated $75,000 for the construction of an Aerobics
Center at the Ed Isakson/Alpharetta Family YMCA in Alpharetta, Georgia.
The nominating and
governance committee of our board of directors has concluded that Mr. Roberts should serve as a director because he is our
founder and largest shareholder, he has served as our Chief Executive Officer since 1994, and he has more than 40 years of experience
in real estate development, construction, and management, particularly with respect to multifamily apartment communities.
John L. Davis,
a director since November 2008, has more than 20 years of experience in the commercial banking industry. Mr. Davis has been an
Executive Vice President, Capital Markets – Real Estate Investment Banking, with Jones Lang LaSalle in Atlanta since June
2013. In that role at Jones Lang LaSalle, he focuses on loan originations for the office and retail property sectors. Mr. Davis
is also President of Bravo Realty Consulting, Inc., a company that he formed in 2007 to provide consulting services for small and
middle market real estate companies seeking debt and equity. In 2011, he co-founded Spring Street Capital, LLC, a commercial real
estate mortgage banking company. From May 2005 to November 2007, he served as a Senior Director of Wrightwood Capital, a structured
debt and equity provider. Prior to 2005, he was a Senior Vice President with Compass Bank for 10 years. During his tenure with
Compass Bank, Mr. Davis was our relationship manager and was involved in all facets of our business relationship with Compass Bank.
Prior to joining Compass Bank, he was a banker for seven years with Hibernia Bank in New Orleans. Mr. Davis has also been a principal
in Sacred Heart Management, LLC, a healthcare management and investment company, since 1999.
The nominating and
governance committee of our board of directors has concluded that Mr. Davis should serve as a director because he has extensive
banking experience, particularly as a real estate lender. This experience is particularly valuable to us as we extend our current
financing and seek to obtain financing for the construction of new multifamily apartment communities. The committee also values
his extensive business experience and his substantial knowledge about our business and properties. The committee also took into
account that he is “independent” under SEC Rule 10A-3 and under Section 803A of the NYSE MKT exchange listing
standards and that his financial expertise qualifies him to serve on our audit committee.
Charles R. Elliott
served as a director from October 1994 to February 1995 and became a director again in 2000. From May 31, 2006 until his retirement
on November 10, 2014, Mr. Elliott was our Chief Financial Officer, Secretary, and Treasurer. Previously, he was our Secretary and
Treasurer from our inception until July 15, 2002, and our Chief Financial Officer from April 1995 until July 15, 2002, when he
became our Senior Vice President – Real Estate. He left Roberts Realty as a full-time employee on August 30, 2002 and returned
on a full-time basis from February 17, 2003 to September 30, 2003 as our Chief Operating Officer. Mr. Elliott first joined
Roberts Properties in August 1993 as Chief Financial Officer and served in that role until April 1995, when he was appointed Chief
Financial Officer of Roberts Realty. He worked for Hunneman Real Estate Corporation in Boston, Massachusetts from 1979 to 1993.
He holds an undergraduate degree in Accounting and a master’s degree in Finance.
The nominating and
governance committee of our board of directors has concluded that Mr. Elliott should serve as a director because of his experience
from serving as our Chief Financial Officer for much of our existence and his expertise in real estate finance, acquisitions, and
dispositions, which we believe will continue to be particularly valuable to us.
Weldon R. Humphries,
a director since December 2011, had a distinguished twenty-year career with Manor Care, Inc. and subsidiary companies (Choice
Hotels International and SunBurst Hospitality Corp.) where he served as Senior Vice President of Real Estate and Development from
1978 – 1998. He was responsible for asset management, acquisitions, and development for all three companies.
During his tenure, each company was listed on the New York Stock Exchange.
Mr. Humphries
earned a BBA from the University of Houston, an MBA from the University of Hartford, and served as an officer in the United States
Marine Corps before starting his career in the field of real estate and finance. He began his career in commercial mortgage
lending at Connecticut General Life Insurance Company and later became Vice President and head of real estate for Arvida Corporation,
one of Florida’s largest land owners and developers. He was subsequently selected by Republic Mortgage Investors, a
REIT, to oversee its real estate portfolio as Vice President of Investments before joining Manor Care. Mr. Humphries
is also a licensed real estate broker, has taught real estate appraisal and mortgage banking courses, and has been a guest speaker
at numerous real estate and investment seminars and at the National Association of Home Builders.
The nominating and
governance committee of our board of directors has concluded that Mr. Humphries should serve as a director because of his
extensive experience as a real estate executive, commercial mortgage banker, and real estate investor. His commercial mortgage
banking background is of particular value as we extend our current financing and seek to obtain financing for the construction
of new multifamily apartment communities. The committee also took into account that Mr. Humphries is “independent”
under SEC Rule 10A-3 and under Section 803A of the NYSE MKT exchange listing standards and that his financial expertise qualifies
him to serve on our audit committee.
Biographical Information for Executive Officers
Our executive officers
are Charles S. Roberts, our Chairman of the Board, Chief Executive Officer, and President; and Anthony W. Shurtz, our Chief Financial
Officer, Secretary, and Treasurer. Because Mr. Roberts is a director, we have provided his biographical information above.
Anthony W. Shurtz,
age 48, became our Chief Financial Officer, Secretary, and Treasurer on November 10, 2014. For the past 17 years, Mr. Shurtz has
served as the Chief Financial Officer of Roberts Properties and its subsidiaries and certain affiliates (collectively, the “Roberts
Companies”), which develop, construct and own multifamily and other commercial real estate properties. The Roberts Companies
are wholly owned by Mr. Roberts, our President and Chief Executive Officer. As CFO, Mr. Shurtz directed the financial
operations of Roberts Properties and its affiliated investment vehicles. Mr. Shurtz has extensive experience in completing
private securities offerings and with the preparation and filing of current and periodic reports and proxy statements for SEC-reporting
companies. Mr. Shurtz has expertise in structuring, financing, and closing real estate transactions, real estate partnerships,
and other real estate joint ventures. Mr. Shurtz was also directly involved in the acquisition, financing, development, management,
and sale of 20 different apartment communities sponsored by Roberts Properties and its affiliated entities. Before joining Roberts
Properties in July 1993, Mr. Shurtz began his career with the public accounting firm of Jones and Kolb, CPAs in 1991. Mr. Shurtz
received his BBA degree in Accounting from Georgia State University.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The table on the
following page describes the beneficial ownership of shares of our common stock as of November 5, 2014 for:
| · | each person or entity known by us to be
the beneficial owner of more than 5% of the outstanding shares of our common stock; |
| · | each director and each named executive officer;
and |
| · | our directors and executive officers as
a group. |
Except as noted
in the footnotes, each person named in the following table directly owns and has sole voting and investment power over all such
person’s shares of common stock and units of partnership interest in Roberts Properties Residential, L.P., our operating
partnership. Mr. Roberts, the only person known by us to beneficially own more than 5% of our common stock, has an address in care
of our principal office. The Number of Shares Beneficially Owned column in the table includes the shares owned by the persons named
but does not include shares they may acquire by exchanging units for shares of common stock as explained in the following paragraphs.
The Number of Shares Underlying Units Beneficially Owned column in the table reflects all shares that each person has the right
to acquire by exchanging units for shares, subject to the limitations described in the following paragraphs. In the case of persons
who own shares and units (and all directors and executive officers as a group), the percentages in the Percent of Class column
are not equal to the number of shares then owned by the person divided by the number of outstanding shares. Instead, under SEC
rules, the shares that the person or group can acquire in exchange for units are deemed to be outstanding and to be beneficially
owned by the person or group holding those units when calculating the percentage ownership of that person or group, although shares
that other persons can acquire in exchange for units are not treated as outstanding for purposes of that calculation.
Unitholders generally
have the right to require the operating partnership to redeem their units. To preserve our qualification as a real estate investment
trust, our articles of incorporation limit beneficial ownership by Mr. Roberts to 35% of the outstanding shares. Accordingly, Mr. Roberts
cannot redeem units for shares if upon their redemption he would hold more than 35% of our outstanding shares.
Any unitholder who
submits units for redemption will receive, at our election, either: (a) a number of shares equal to the number of units submitted
for redemption multiplied by the applicable conversion factor, which is currently 1.647 shares for each unit submitted for redemption,
or (b) cash equal to the average of the daily market prices of the common stock for the 10 consecutive trading days before the
date of submission multiplied by the product of the number of units submitted times the applicable conversion factor. Our policy
is to issue shares in exchange for units submitted for redemption.
Name of
Beneficial Owner | |
Number of
Shares
Beneficially
Owned | |
Number of Shares Underlying
Units
Beneficially
Owned | |
Total | |
Percent of Class(1) |
| | |
| |
| |
| |
|
| Charles S. Roberts | |
| 2,752,824 | (2) | |
| 1,533,895 | (3) | |
| 4,286,719 | | |
| 37.0 | % |
| | |
| | | |
| | | |
| | | |
| | |
| John L. Davis | |
| 27,852 | (4) | |
| — | | |
| 27,852 | | |
| * | |
| | |
| | | |
| | | |
| | | |
| | |
| Charles R. Elliott | |
| 46,200 | (5) | |
| — | | |
| 46,200 | | |
| * | |
| | |
| | | |
| | | |
| | | |
| | |
| Weldon R. Humphries | |
| 62,029 | (6) | |
| — | | |
| 62,029 | | |
| * | |
| | |
| | | |
| | | |
| | | |
| | |
| Wm. Jarell Jones | |
| 48,968 | | |
| — | | |
| 48,968 | | |
| * | |
| | |
| | | |
| | | |
| | | |
| | |
| All directors and executive officers as a group: (6 persons) (3) | |
| 3,067,681 | | |
| 1,533,895 | | |
| 4,601,576 | | |
| 39.7 | % |
* Less than 1%.
| (1) | The total number of shares outstanding used in calculating this percentage is 11,600,802, which
is the sum of (a) 10,066,907, the number of shares deemed outstanding for the purposes of this calculation as of November 5, 2014,
plus (b) 1,533,895, the number of shares underlying units beneficially owned as of November 5, 2014. |
| (2) | Includes 258,705 shares owned by Mr. Roberts’ spouse; Mr. Roberts disclaims beneficial
ownership of those shares. |
| (3) | Reflects Mr. Roberts’ beneficial ownership of 931,329 units, each of which is exchangeable
for 1.647 shares of our common stock. |
| (4) | Includes 24,588 shares owned indirectly through the 401(k) plan of Bravo Realty Consulting, Inc.
|
| (5) | Owned jointly with Mr. Elliott’s spouse. |
| (6) | Owned indirectly through The Humphries Living Trust. |
CORPORATE GOVERNANCE
Introduction
The directors meet to review
our operations and discuss our business plans and strategies for the future. The board of directors met 17 times in 2013. During
2013, each director attended at least 75% of the aggregate of the number of board meetings and the number of meetings held by the
committees of the board on which he served. Our policy is that all directors attend the annual meeting of shareholders. All of
our directors attended the 2013 annual meeting.
The board has determined
that each of Mr. Davis, Mr. Humphries, and Mr. Jones is “independent” for purposes of Section 803A of the NYSE MKT
exchange listing standards.
Committees of the Board of Directors
The board of directors has established an Audit
Committee, a Nominating and Governance Committee, and a Compensation Committee.
Audit Committee.
Our Audit Committee is composed of Mr. Jones, its Chairman, Mr. Davis, and Mr. Humphries. The Audit Committee was established for
the purpose of overseeing our accounting and financial reporting processes and the audits of our financial statements, and its
functions are described in the Report of the Audit Committee below. The board has determined that Mr. Jones is an “audit
committee financial expert” and that each member of the Audit Committee is “independent” under the SEC’s
Rule 10A-3 and under Section 803A of the NYSE MKT exchange listing standards. The Audit Committee met seven times in 2013, and
the members of the committee reviewed our quarterly reports on Form 10-Q and our Annual Report on Form 10-K with management and
our independent auditors.
Nominating and Governance
Committee. This committee is responsible for the oversight of the composition of the board and its committees, and identification
and recommendation of individuals to become board members. Our Nominating and Governance Committee is composed of Mr. Jones, its
Chairman, and Mr. Davis. The board has determined that each member of the Nominating and Governance Committee is “independent”
under Section 803A of the NYSE MKT exchange listing standards. The Nominating and Governance Committee met once in 2013. Any shareholder
interested in nominating a director should review the material described under “Nominations of Directors” below.
Compensation Committee.
This committee oversees management of some of our human resources activities, including determining compensation for executive
officers and administering our employee benefit plans. Our Compensation Committee is composed of Mr. Davis, its Chairman, Mr. Humphries,
and Mr. Jones. The board has determined that each member of the Compensation Committee is “independent” under Section
803A of the NYSE MKT exchange listing standards. The Compensation Committee met two times in 2013.
Before the Compensation
Committee determines the compensation of the executive officers each year, Mr. Roberts meets with the members of the committee
to express his opinion regarding his own compensation and that of our other executive officers. The Compensation Committee then
determines the compensation of our executive officers in a private meeting in which no executive officer participates.
We did not retain a compensation
consultant in 2013, although the Compensation Committee has the authority to retain legal, accounting and other advisors as it
determines necessary to carry out its functions, without deliberation or approval by the board or management.
Board Leadership Structure
The board does not have
a policy regarding the separation of the roles of Chief Executive Officer and Chairman of the Board because the board believes
it is in the best interests of the company to make that determination based on the position and direction of the company and the
membership of the board. The board has determined that having Mr. Roberts, our Chief Executive Officer, serve as Chairman of the
board is in the best interest of our shareholders at this time because this structure makes the best use of Mr. Roberts’
extensive knowledge of the company and his more than 40 years of experience in real estate development, construction, and management,
particularly with respect to multifamily communities.
Board’s Role in Risk Oversight
The board provides oversight
of our risk management processes. Management identifies and prioritizes material risks, and each prioritized risk is referred to
a board committee or the full board for oversight. For example, financial risks are referred to the Audit Committee. The board
regularly reviews information regarding our properties, loans, operations, liquidity and capital resources. The board informally
reviews the risks associated with these items at each board meeting.
Our compensation program
for our executive officers is composed of (a) a cash salary; and (b) bonuses that may be paid from time to time in the sole discretion
of the Compensation Committee for current or long-term performance. Taking the foregoing into account, the Compensation Committee
and the full board have reviewed our compensation program and have concluded that it does not encourage excessive risk-taking.
Report of the Audit Committee
Our Audit Committee operates
under a written charter adopted by the board. Our Audit Committee is responsible for providing oversight of the independent audit
process and the independent auditors, reviewing our financial statements and the financial statements of our subsidiaries and discussing
them with management and the independent auditors, reviewing and discussing with management and the independent auditors the adequacy
and effectiveness of our internal accounting and disclosure controls and procedures, and providing oversight of legal and regulatory
compliance and ethics programs. The Audit Committee communicates regularly with our management, including our Chief Financial Officer,
and with our auditors. The Audit Committee is also responsible for conducting an appropriate review of and pre-approving all related
person transactions in accordance with the NYSE MKT exchange listing standards, and evaluating the effectiveness of the Audit Committee
charter at least annually.
To comply with the Sarbanes-Oxley
Act of 2002, the Audit Committee adopted a policy that pre-approves specified audit and tax-related services to be provided by
our independent auditors. The policy forbids our independent auditors from providing the services enumerated in Section 201(a)
of the Sarbanes-Oxley Act.
In performing all of these
functions, the Audit Committee acts only in an oversight capacity. The Audit Committee reviews our quarterly and annual reporting
on Form 10-Q and Form 10-K prior to filing with the SEC. In its oversight role, the Audit Committee relies on the work and assurances
of our management, which has the primary responsibility for our financial statements and reports, and of the independent auditors,
who, in their report, express an opinion on the conformity of our annual financial statements with generally accepted accounting
principles.
When our audited consolidated
balance sheets as of December 31, 2013 and 2012, and the related consolidated statements of operations, shareholders’ equity,
and cash flows for the years then ended, were prepared and included in our Annual Report on Form 10-K for the fiscal year ended
December 31, 2013, our independent registered public accounting firm was CohnReznick LLP (“CohnReznick”). The Audit
Committee reviewed and discussed the audited financial statements with management and discussed with CohnReznick those matters
required to be discussed by CohnReznick with the Audit Committee under the rules adopted by the Public Company Accounting Oversight
Board (the “PCAOB”). The Audit Committee received the written disclosures and the letter from CohnReznick required
by the applicable requirements of the PCAOB regarding CohnReznick’s communications with the Audit Committee concerning independence,
and discussed with representatives of CohnReznick their independence from the company and our management. The Audit Committee reported
its findings to our board of directors.
Based on the reviews and
discussions described above, the Audit Committee recommended to our board of directors that the audited financial statements be
included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2013 for filing with the SEC. A copy of our Annual
Report on Form 10-K is part of the Annual Report to Shareholders enclosed with these proxy materials.
The Audit Committee’s
report shall not be deemed incorporated by reference by any general statement incorporating by reference this proxy statement into
any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that we specifically incorporate
the information contained in the report by reference, and it shall not be deemed filed under such acts.
Wm. Jarell Jones, Chairman
John L. Davis
Weldon R. Humphries
Nominations of Directors
The responsibilities of
the Nominating and Governance Committee include evaluating and recommending to the full board of directors the director nominee
or nominees to stand for election at our annual meetings of shareholders. Although the committee is authorized to retain search
firms and to compensate them for their services, it has not elected to do so to date.
The Nominating and Governance
Committee examines each director nominee on a case-by-case basis regardless of who recommends the nominee. In considering whether
to recommend any particular candidate for inclusion in the board’s slate of recommended director nominees, the committee
considers the following criteria, among others: the candidate’s availability, insight, practical wisdom, professional and
personal ethics and values to ensure they are consistent with the company’s longstanding values and standards; experience
at the policy-making level in business, real estate or other areas of endeavor specified by the board; commitment to enhancing
shareholder value; and ability and desire to represent the interests of all shareholders. The committee does not assign specific
weights to particular criteria, and no particular criterion is a prerequisite for any prospective nominee. Although we have no
policy regarding diversity, we believe that the backgrounds and qualifications of our directors, considered as a group, should
provide a composite mix of experience, knowledge, and abilities that will allow the board of directors to fulfill its responsibilities.
In addition to the qualification
criteria above, the Nominating and Governance Committee also takes into account whether a potential director nominee qualifies
as an “audit committee financial expert” as the SEC defines that term, and whether the potential director nominee would
qualify as an “independent” director under the listing standards of the NYSE MKT exchange.
The Nominating and Governance
Committee evaluated our board’s nominee, Mr. Jones, in light of the above criteria and recommended to the board that he be
nominated for reelection as a director at the 2014 annual meeting. Our board approved that recommendation.
The Nominating and Governance
Committee will consider persons recommended by shareholders to become nominees for election as directors, provided that those recommendations
are submitted in writing to our Corporate Secretary specifying the nominee’s name and qualifications for board membership.
For a shareholder to nominate a director candidate, the shareholder must comply with the advance notice provisions and other requirements
of Section 8 of Article I of our bylaws.
We urge any shareholder
who intends to recommend a director candidate to the Nominating and Governance Committee for consideration to review thoroughly
our Nominating and Governance Committee Charter and Section 8 of Article I of our bylaws. Copies of our Nominating and Governance
Committee Charter and our bylaws are available upon written request to Chief Financial Officer, Roberts Realty Investors, Inc.,
375 Northridge Road, Suite 330, Atlanta, Georgia 30350.
Communications with the Board of Directors
The board of directors
has established a process for shareholders to send communications to the board of directors. Shareholders may communicate with
the board as a group or individually by writing to: The Board of Directors of Roberts Realty Investors, Inc. c/o Chief Financial
Officer, Roberts Realty Investors, Inc., 375 Northridge Road, Suite 330, Atlanta, Georgia 30350. The Chief Financial Officer may
require reasonable evidence that a communication or other submission is made by a Roberts Realty shareholder before transmitting
the communication to the board or a board member. On a periodic basis, the Chief Financial Officer will compile and forward all
shareholder communications submitted to the board or the individual directors.
DIRECTOR AND EXECUTIVE OFFICER COMPENSATION
Compensation of Named Executive Officers
Our
executive officers are currently Charles S. Roberts, our Chairman of the Board, Chief Executive Officer, and President, and Anthony
W. Shurtz, our Chief Financial Officer, Secretary, and Treasurer. Charles R. Elliott served as Chief Financial Officer, Secretary,
and Treasurer until his retirement on November 10, 2014. Biographical information for Mr. Roberts, Mr. Shurtz, and Mr. Elliott
is included in Proposal 1 – Election of Director – Biographical Information for Continuing Directors and – Biographical
Information for Executive Officers above. Under applicable SEC rules, Mr. Roberts and Mr. Elliott are our “named executive
officers.” Our executive officers hold no stock options or unvested shares of restricted stock and do not have employment
agreements.
Summary Compensation Table for 2013
and 2012
Name and Principal Position | |
Year | |
Salary ($) | |
Bonus ($) | |
Total ($) |
| | |
| |
| |
| |
|
Charles S. Roberts,
| |
| 2013 | | |
| 225,000 | | |
| 150,000 | | |
| 375,000 | |
Chief Executive Officer, President,
and Chairman of the Board | |
| 2012 | | |
| 225,000 | | |
| 125,000 | | |
| 350,000 | |
| |
| | | |
| | | |
| | |
Charles R. Elliott,
| |
| 2013 | | |
| 18,000 | | |
| — | | |
| 18,000 | |
Chief Financial Officer, Secretary,
and Treasurer | |
| 2012 | | |
| 18,000 | | |
| — | | |
| 18,000 | |
Compensation of Mr. Roberts
The Compensation Committee
has followed a performance-based compensation philosophy related to Mr. Roberts’ compensation. Accordingly, Mr. Roberts has
agreed (a) to accept a relatively low base salary, given his more than 40 years of experience in real estate development, construction,
and management, particularly with respect to multifamily communities; and (b) to rely on the awarding of discretionary bonuses
based on specific achievements or for long-term performance. Mr. Roberts has not received an increase in his annual salary since
January 2007, and we have never provided him with any employee benefits such as medical and life insurance, retirement or pension
plan contributions or deferred compensation. Mr. Roberts also does not receive any auto allowance or reimbursement for mileage.
In approving Mr. Roberts’
bonus for 2013, the compensation committee took into account Mr. Roberts’ efforts in leading: (a) the sale of 20.6 acres
of the Peachtree Parkway property to Lennar Multifamily Investors, LLC, resulting in $7,090,000 of sales proceeds (without the
involvement of a broker and thus without the payment of a brokerage commission), the repayment of $7,000,200 in debt and the decrease
in our annual operating expenses of $475,000; (b) the sale of an additional 1.5 acres of the Peachtree Parkway property to another
unrelated purchaser, resulting in $450,000 of sales proceeds (without the payment of a brokerage commission); (c) the sale
of the Northridge Office Building, resulting in $5,280,000 of sales proceeds, the repayment of $2,422,533 in debt and the decrease
in our annual operating expenses of $210,000; (d) the acquisition and closing of a new $5,500,000 loan secured by the North Springs
property, resulting in $2,553,660 of net proceeds for working capital purposes and the repayment of the $2,000,000 Northridge land
loan, leaving the Northridge land, which had a book value of $4,373,789, unencumbered; (e) the renewal and extension of $13.0 million
of maturing debt; and (f) the completion of the Company’s exit from the retail and office business through the disposition
of the Bassett and Spectrum retail centers in satisfaction of $7,098,411 of debt and the decrease in our annual operating expenses
of $165,000. We paid this bonus in 2014 for 2013.
In approving Mr. Roberts’
bonus for 2012, the compensation committee took into account Mr. Roberts’ efforts in leading (a) the sale of 2.937 acres
of the Peachtree Parkway property resulting in $1,200,000 of sales proceeds (without the involvement of a broker and thus without
the payment of a brokerage commission), the reimbursement of $515,530 in costs previously incurred to allow the Peachtree Parkway
property to be rezoned for a commercial use and the repayment of $1,174,800 in debt; (b) the acquisition and closing of a new $2,000,000
loan secured by the Northridge property; (c) the renewal and extension of $12.9 million of maturing debt; (d) the pursuit of and
litigation with a tenant on a defaulted lease obligation resulting in a $135,000 settlement being paid by the defaulting tenant;
and (e) the closing of four new leases and the renewal and extension of five leases representing 27,684 square feet at our
Bassett and Spectrum retail centers, all but one of which was accomplished without the payment of a brokerage commission. We paid
this bonus in 2013 for 2012.
Given these compensation
arrangements and his status as our largest shareholder, the Compensation Committee believes that his interests are strongly aligned
with the interests of our shareholders.
Compensation of Mr.
Elliott
Until September 22, 2014,
when the Compensation Committee revised Mr. Elliott’s compensation arrangement as described below, the Compensation Committee
believed it was appropriate to compensate Mr. Elliott on an hourly basis at $70 per hour, for the actual number of hours he worked
and for which he elected to bill us for his service as our Chief Financial Officer, Secretary, and Treasurer. On September 22,
2014, the Compensation Committee revised Mr. Elliott’s compensation arrangement, effective January 1, 2014, to pay him $3,000
per month in lieu of the hourly rate at which he was previously compensated. In the past, the Compensation Committee has awarded
bonuses to Mr. Elliott from time to time based on specific achievements or for long-term performance. Mr. Elliott receives no employee
benefits, such as medical and life insurance, retirement plan contributions or deferred compensation. Mr. Elliott did receive our
standard director fees of $18,000 during each of 2013 and 2012, which amounts are included in the salary amounts shown in the table.
Compensation of Mr.
Shurtz
The Compensation Committee
has determined that Mr. Shurtz will be paid an annual salary of $140,000. In addition, Mr. Shurtz will be entitled to a lump sum
severance payment equal to six months’ salary upon the occurrence of a “change in control” of the Company as
defined in the form of Directors and Officers Indemnification Agreement adopted by the Company.
In light of the foregoing, the Compensation
Committee believes that the compensation program for our executive officers is appropriate.
Compensation of Directors
The following table summarizes
the compensation we paid to our non-employee directors in 2013. The table includes any person who served as a director during 2013
who was not a named executive officer.
Director Compensation for 2013
| Name | |
Fees Earned
or Paid in Cash
($) | |
Total
($) |
| | |
| | | |
| | |
| John L. Davis | |
| 18,000 | | |
| 18,000 | |
| Wm. Jarell Jones | |
| 30,000 | | |
| 30,000 | |
| Weldon R. Humphries | |
| 18,000 | | |
| 18,000 | |
During 2013, we paid our
directors other than Mr. Roberts an annual fee of $18,000 for attendance, in person or by telephone, at meetings of the board of
directors and its committees. We paid additional compensation of $1,000 per month to Mr. Jones for serving as the chairman of the
audit committee and the nominating and governance committee. In addition, we reimburse our directors for reasonable travel expenses
and out-of-pocket expenses incurred in connection with their activities on our behalf. These reimbursements are not reflected in
the table above. Our directors hold no stock options or unvested shares of restricted stock.
Section 16(a) Beneficial Ownership Reporting
Compliance
Section 16(a) of the
Securities Exchange Act of 1934 requires our directors, executive officers, and persons who beneficially own more than 10% of our
outstanding common stock to file with the SEC initial reports of ownership and reports of changes in their ownership of our common
stock. Directors, executive officers and greater than 10% shareholders are required by SEC regulations to furnish us with copies
of the forms they file. To our knowledge, based solely on a review of the copies of such reports furnished to us, during the fiscal
year ended December 31, 2013, our directors, executive officers and greater than 10% shareholders complied with all applicable
Section 16(a) filing requirements.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
General
Roberts Realty conducts
its business through Roberts Properties Residential, L.P., which we refer to as the operating partnership. Roberts Realty owns
an 80.23% interest in the operating partnership as of November 5, 2014 and is its sole general partner. Mr. Charles S. Roberts,
our Chief Executive Officer, owns all of the outstanding shares of each of Roberts Properties, Inc. (“Roberts Properties”)
and Roberts Properties Construction, Inc. (“Roberts Construction,” together with Roberts Properties, the “Roberts
Companies”). As explained below, we have entered into transactions with the Roberts Companies and paid them to perform services
for us.
Under applicable
SEC rules, this section describes any transaction that has occurred since January 1, 2012, or any currently proposed transaction,
in which we were or are to be a participant and the amount involved exceeds the lesser of $120,000 or one percent of our total
assets at year end for the last two completed fiscal years, and in which our officers, directors, and certain other “related
persons” as defined in the SEC rules had or will have a direct or indirect material interest. Our Audit Committee, which
is composed of three independent directors, approved these transactions in accordance with the committee’s charter and in
compliance with the applicable listing rules of the NYSE MKT stock exchange. Our board of directors also approved the transactions
in accordance with our Code of Business Conduct and Ethics. Notes 3 and 9 to our audited consolidated financial statements included
in our 2013 Annual Report to Shareholders provide further detail regarding some of the transactions described in this section.
Transactions with the Roberts Companies
Overview.
We have paid fees to the Roberts Companies for various services and will continue to do so in the future. We reimburse the Roberts
Companies for the costs of certain services and personnel the Roberts Companies provide to us, and we have retained the Roberts
Companies for development services and construction services for some of our land parcels. Roberts Realty, its predecessor limited
partnerships, and other limited partnerships sponsored by Mr. Roberts have previously entered into agreements with Roberts
Properties and Roberts Construction to provide some of these services for 20 apartment communities with a total of 4,648 units
that were sold for a total sales price of $431,701,143. All of these communities were sold for a substantial profit.
Lease of Office
Space in Northridge Office Building. On October 30, 2013, we sold our 37,864 square foot Northridge Office Building to the
Fulton County Board of Education, an unrelated third party, for $5,280,000. Prior to the sale, we leased 4,431 rentable square
feet in the Northridge Office Building to Roberts Properties and 1,920 rentable square feet to Roberts Construction. Effective
as of January 1, 2012, we renewed our leases with the Roberts Companies for a one-year term with a rental rate of $17.50 per rentable
square foot. Effective as of January 1, 2013, Roberts Realty again renewed its leases with the Roberts Companies for a one-year
term with a new rental rate of $17.00 per rentable square foot. The renewal rental rate was higher than a December 2012 lease renewal
with an unrelated third party at the Northridge Office Building. We recognized total rental income from Roberts Properties and
Roberts Construction of $90,342 for the year ended December 31, 2012 and $80,975 for the year ended December 31, 2013.
Sublease of Office
Space. On October 30, 2013, we sold our Northridge Office Building to the Fulton County Board of Education for $5,280,000 and
paid off our $2,422,533 Northridge Office Building loan. This sale also reduced our operating expenses by approximately $210,000
per year. The Fulton County Board of Education will occupy 100% of the building and as a condition of closing, required that we
vacate the building by February 28, 2014, which was later extended to April 5, 2014. Consequently, we were required to seek new
office space in another building. On February 19, 2014, we entered into a sublease for 1,817 square feet of office space with Roberts
Capital Partners, LLC. The sublease has a commencement date of April 7, 2014. Roberts Capital Partners, LLC is owned by Mr. Charles
S. Roberts, our Chairman of the Board, Chief Executive Officer, and President. The rental rates and lease term are the same rental
rates and lease term that Roberts Capital Partners, LLC has with KBS SOR Northridge LLC, the unrelated third party owner of the
building. Roberts Capital Partners, LLC is liable to the building owner for the full three-year term of its lease; however, we
negotiated a 90-day right to terminate our sublease as described below. The sublease has a three-year term, with a one-year option,
which provides for rental rates of $16.50 per square foot in Year 1, $17.25 per square foot in Year 2, $18.00 per square foot in
Year 3, and $18.75 per square foot for the Year 4 option. We have the right to terminate the sublease upon 90 days notice by paying
(a) a minimum of 12 months of rent under the sublease, plus (b) an early termination amount, which will be the lesser of (x) the
next 12 months of rent due under the sublease or (y) the remaining amounts due under the term of the sublease, as calculated on
the early termination date. The minimum total lease payments to Roberts Capital Partners, LLC will be $61,324 and the maximum total
lease payments, assuming the full three-year term and the exercise of the Year 4 option, would be $128,099. We believe the favorable
terms of our sublease provide us with significant flexibility in successfully implementing our business plan. Upon execution of
the sublease, we paid a security deposit of $20,577, and we have paid $16,989 in rent during the nine months ended September 30,
2014.
Release of Restrictive
Covenant on Peachtree Parkway Property. In acquiring the Peachtree Parkway land parcel in December 2004, we assumed and became
bound by a restrictive covenant on the property that was already recorded in the Gwinnett County records in favor of Roberts Properties
and Roberts Construction. The restrictive covenant provided that if the then-owner of the
property developed it for residential use, Roberts Construction, or any other entity designated by Mr. Roberts, would be engaged
as the general contractor for the project on a cost plus basis and would be paid the cost of constructing the project plus 5% profit
and 5% overhead. (The restrictive covenant also provided that Roberts Properties, or any entity designated by Mr. Roberts,
would be engaged as the development company for the project, but we previously paid the development fees to Roberts Properties
for the services they provided in full satisfaction of that part of the covenant.) These terms and conditions were consistent with
our previous agreements with Roberts Properties and Roberts Construction for development and construction services for multifamily
apartment communities. The restrictive covenant was scheduled to expire on October 29, 2014.
On February 7, 2013, we
sold the 20.6-acre Peachtree Parkway land parcel to Lennar Multifamily Investors, LLC (“Lennar”), an unrelated third
party, for $7,590,000, in accordance with the terms of sale previously reported in our Current Reports on Form 8-K. Lennar had
previously informed us and stated in its offer and in the sales contract that it would not use Roberts Construction as the general
contractor. The sales contract provided that Lennar would not enter into the sales contract unless the restrictive covenant was
terminated no later than the closing date at no cost to Lennar. After being advised by Lennar of this requirement, the Audit Committee
negotiated with Roberts Construction for the release of the restrictive covenant. Roberts Construction agreed in the sales contract
to give up its contractual rights to be the general contractor for the project and to release the restrictive covenant on the closing
date for a payment of $500,000 from the purchase price to be paid by Lennar. On February 7, 2013, the closing occurred
and Roberts Construction received the payment for releasing the restrictive covenant. We used the remaining sales proceeds to repay
the Peachtree Parkway loan and recorded a $1,214,192 gain on the sale.
Restrictive Covenant
on North Springs Property. Our 10-acre North Springs property in Fulton County is zoned for 236 multifamily units, 120 condominiums,
210,000 square feet of office space, and 56,000 square feet of retail space. In acquiring the North Springs property in January
2005, we assumed and became bound by a pre-existing restrictive covenant on the property that was already recorded in the Fulton
County, Georgia real estate records in favor of Roberts Properties and Roberts Construction. The covenant has the same terms and
conditions as the restrictive covenant related to the Peachtree Parkway land described above. The restrictive covenant expires
on January 3, 2015. We have paid the development fees to Roberts
Properties for the services they provided in full satisfaction of that part of the covenant.
Development Fees.
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, and interior design. We
have entered into a design and development agreement with Roberts Properties for the Highway 20 project and made payments to Roberts
Properties as outlined in the following table:
| | |
Total
Contract
Amount | |
Amounts
Incurred in 2012 | |
Amounts
Incurred in
2013 | |
Amounts
Incurred From 1/1/2014 to 9/30/2014 | |
Remaining
Contractual
Commitment |
| | | | |
| | | |
| | | |
| | | |
| | | |
| | |
| | Highway 20 | | |
$ | 1,050,000 | | |
$ | 0 | | |
$ | 35,000 | | |
$ | 105,000 | | |
$ | 285,000 | |
Construction Contracts.
We have entered into cost plus contracts with Roberts Construction for the Bradley Park, Northridge, Peachtree Parkway, North Springs,
and Highway 20 properties. Under these contracts, we will pay Roberts Construction the cost of constructing the project plus 5%
for overhead and 5% for profit. We pay progress payments monthly to Roberts Construction based on the work that has been completed.
(We will not make any further payments with respect to the Peachtree Parkway property, which we have sold.) The following table
lists the amounts incurred on these contracts during 2012, 2013, and the nine months ended September 30, 2014.
| | |
Amounts
Incurred for
Labor and
Materials Costs | |
Amounts
Incurred for
5% Overhead and
5%
Profit |
| | |
For Twelve Months Ended December 31, | |
From 1/1/2014 to | |
For Twelve Months Ended December 31, | |
From 1/1/2014 to |
| | |
| 2013 | | |
| 2012 | | |
| 9/30/2014 | | |
| 2013 | | |
| 2012 | | |
| 9/30/2014 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Bradley Park | |
$ | 0 | | |
$ | 922 | | |
$ | 0 | | |
$ | 0 | | |
$ | 92 | | |
$ | 0 | |
| Northridge | |
| 999 | | |
| 145,085 | | |
| 0 | | |
| 100 | | |
| 14,508 | | |
| 0 | |
| Peachtree Pkwy | |
| 0 | | |
| 1,126 | | |
| 0 | | |
| 0 | | |
| 113 | | |
| 0 | |
| North Springs | |
| 0 | | |
| 286 | | |
| 0 | | |
| 0 | | |
| 29 | | |
| 0 | |
| Highway 20 | |
| 0 | | |
| 622 | | |
| 0 | | |
| 0 | | |
| 62 | | |
| 0 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Totals | |
$ | 999 | | |
$ | 148,041 | | |
$ | 0 | | |
$ | 100 | | |
$ | 14,804 | | |
$ | 0 | |
Other Payments to Roberts
Construction. At our request, Roberts Construction performed repairs and maintenance and made tenant improvements for new leases
at our retail centers and office building. Roberts Construction also performed maintenance on the land parcels. In 2012, we paid
Roberts Construction $149,806 for labor and materials costs plus $14,981 (5% for profit and 5% for overhead). Additionally, Roberts
Construction received cost reimbursements of $42,914 in 2012; $279,326 in 2013; and $225,731 during the nine months ended September
30, 2014.
Reimbursements
to Roberts Properties for Consulting Services. We entered into a reimbursement arrangement for services provided by Roberts
Properties, effective February 4, 2008, as amended January 1, 2014. Under the terms of the arrangement, we reimburse Roberts
Properties the cost of providing consulting services in an amount equal to an agreed-upon hourly billing rate for each employee
multiplied by the number of hours that the employee provided services to us. As amended, the arrangement provides that the appropriate
billing rate shall be calculated by multiplying an hourly cost for an employee (which is defined as the employee’s salary,
plus benefits paid by the Roberts Companies, divided by 2,080 annual hours) by a factor of 2.25 for all employees (increased from
a factor of 1.7), including Roberts Properties’ Chief Financial Officer (increased from a factor of 1.8). The reimbursement
arrangement allows us to obtain services from experienced and knowledgeable personnel without having to bear the cost of employing
them on a full-time basis. Under this arrangement, we incurred $136,297 in 2012; $261,014 in 2013; and $389,453 during the nine
months ended September 30, 2014. The increases in 2013 and 2014 were because Roberts
Properties provided additional services in 2013 and 2014 that replaced the services of a full-time temporary contractor we had
retained, which resulted in a net savings to us.
Other Reimbursements
to Roberts Properties. For our operating costs and other expenses, we reimbursed Roberts Properties $7,221 in 2012; $10,331
in 2013; and $35,845 during the nine months ended September 30, 2014.
Expiration
of Sales Contract for Northridge Land. As disclosed in our previous SEC filings, on June 30, 2011, we entered into
a contract to sell our 11-acre Northridge property to Roberts Properties for $5,060,000, plus the reimbursement of $303,789 of
certain development and construction expenses. The sales contract was amended on December 19, 2011 to provide for a sales
price of $4,070,000 and was subsequently amended several times to extend the closing date, most recently to June 30, 2013.
On July 1, 2013, the sales contract expired according to its terms, which resulted in our receipt of the $25,000 earnest money
deposit, which Roberts Properties forfeited. Additionally, during the term of the sales contract Roberts Properties reimbursed
us $383,373 for certain development and construction expenses that we had incurred.
Reciprocal
Easememts Agreement. On November 3, 2014, the operating partnership entered into a Reciprocal Easements Agreement with Highway
Nine Investors, LLC (“Highway Nine”), which is wholly owned by Mr. Roberts. The Reciprocal Easements Agreement relates
to the development of our 22-acre Bradley Park apartment property. Highway Nine owns a 5.8-acre undeveloped land parcel that is
zoned for commercial development and is adjacent to our Bradley Park apartment property. Under the agreement, the operating partnership
obtained temporary, non-exclusive easements: (a) to allow the operating partnership to deposit Bradley Park’s excess dirt
on the Highway Nine parcel instead of having to haul the excess dirt to a much farther away location, which results in a construction
cost savings for the Bradley Park apartment community; (b) to allow the operating partnership to perform grading work related to
moving the excess dirt; and (c) to allow the operating partnership to extend a sanitary sewer line at Highway’s Nine’s
expense. Highway Nine also granted the operating partnership a perpetual, exclusive and irrevocable easement to construct, maintain
and use approximately 13 surface level parking spaces on a portion of the 5.8-acre Highway Nine commercial parcel. The operating
partnership agreed to allow part of the entry drive for the Highway Nine commercial parcel to be located on a part of the Bradley
Park property that was not being used for the Bradley Park apartment community. These reciprocal easements will benefit both parties,
and no additional consideration was paid by either party.
Transactions with
Anthony W. Shurtz
Effective November 10,
2014, our board of directors appointed Anthony W. Shurtz as our Chief Financial Officer, Secretary, and Treasurer. As Chief Financial
Officer of the Roberts Companies, Mr. Shurtz has provided real estate, securities, financial and other consulting services to us
since 2010. Under the terms of our reimbursement arrangement with Roberts Properties as described above, we reimburse Roberts Properties
the cost of providing consulting services in an amount equal to an agreed-upon hourly billing rate for each employee multiplied
by the number of hours that the employee provided services to us. Under this consulting arrangement, we incurred the following
amounts for the services performed by Mr. Shurtz: $131,637 in 2012, $193,944 in 2013, and $209,136 during the nine months ended
September 30, 2014. (These amounts are also included within the reimbursements to Roberts Properties described above.)
Under the 2006 Roberts
Realty Investors, Inc. Restricted Stock Plan approved by the Company’s shareholders in August 2006, Mr. Shurtz received a
grant of 50,000 shares of restricted stock at a grant price of $1.36 per share in 2012 and a grant of 15,625 shares of restricted
stock at a grant price of $.96 per share in 2013, all of which shares vested in 2013.
PROPOSAL 2 – ADVISORY VOTE ON EXECUTIVE
COMPENSATION
Section 14A of the Securities
Exchange Act of 1934 requires us to give shareholders the opportunity to vote to approve, on a non-binding, advisory basis, the
compensation of our named executive officers as disclosed in this proxy statement in accordance with the compensation disclosure
rules of the SEC. We seek to align the interests of our named executive officers with the interests of our shareholders. Our compensation
programs are designed to reward our named executive officers appropriately, while avoiding the encouragement of unnecessary or
excessive risk-taking. The proposal described below, commonly known as a “say-on-pay” proposal, gives you as a shareholder
the opportunity to express your views regarding the compensation for our named executive officers by voting to approve or not to
approve that compensation as described in this proxy statement.
This vote is advisory,
which means that it is not binding on us, the board of directors, or the Compensation Committee. The vote on this resolution is
not intended to address any specific element of compensation, but rather relates to the overall compensation of our named executive
officers, as described in this proxy statement in accordance with the compensation disclosure rules of the SEC.
The board asks our shareholders
to vote in favor of the following resolution at the annual meeting:
“RESOLVED,
that the compensation paid to the company’s named executive officers, as disclosed in the company’s proxy statement
for the 2014 annual meeting of shareholders under the compensation disclosure rules of the SEC, is hereby APPROVED.”
The board of directors recommends that you
vote FOR the approval of the resolution related to the compensation of our named executive officers.
PROPOSAL
3 – Ratification of Appointment of
Independent
Registered Public Accounting Firm
Changes in Our Independent Registered
Public Accounting Firm
Business Combination of Reznick
Group, P.C. with J.H. Cohn, LLP to form CohnReznick LLP in 2012
In October 2012,
we were informed by Reznick Group, P.C. (“Reznick Group”), our independent registered public accounting firm at that
time, that Reznick Group had entered into a business combination with J.H. Cohn, LLP (“J.H. Cohn”), another independent
registered public accounting firm. In connection with the business combination, J.H. Cohn legally changed its name to CohnReznick
LLP (“CohnReznick”) and continues to be registered with the PCAOB. As a result of the business combination and in accordance
with applicable SEC rules related to business combinations of independent registered public accounting firms, on November 5, 2012,
Reznick Group resigned as our independent registered public accounting firm. The audit committee of our board of directors then
appointed CohnReznick, the combined firm, as our independent registered public accounting firm to audit our consolidated financial
statements for the year ended December 31, 2012, effective November 5, 2012. Our audit engagement team did not change as a result
of the business combination.
Reznick Group’s
reports on our financial statements for the fiscal years ended December 31, 2010 and December 31, 2011 did not contain
any adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope or accounting
principles.
During the two fiscal
years ended December 31, 2010 and December 31, 2011, and the subsequent interim period through November 5, 2012, there were:
| (a) | no “disagreements” (as that term is defined in Item 304(a)(1)(iv) of Regulation S-K
promulgated by the SEC and the related instructions) between Reznick Group and us on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure, which, if not resolved to the satisfaction of Reznick Group, would
have caused Reznick Group to make reference to the subject matter of the disagreements in its reports on our financial statements
for those years; and |
| | | |
| | (b) | no “reportable
events” (as that term is defined in Item 304(a)(1)(v) of Regulation S-K). |
During the two fiscal
years ended December 31, 2010 and December 31, 2011 and the subsequent interim period through November 5, 2012:
| (a) | neither we nor anyone on our behalf consulted J.H. Cohn regarding the application of accounting
principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered with respect
to our financial statements, |
| (b) | J.H. Cohn provided no written report or oral advice to us that was an important factor we considered
in reaching a decision as to any accounting, auditing, or financial reporting issue; and |
| (c) | neither we nor anyone on our behalf consulted J.H. Cohn regarding any matter that was the
subject of a disagreement or a reportable event. |
Our Audit Committee appointed
CohnReznick to audit our consolidated financial statements for the year ending December 31, 2013. Because no representative of
CohnReznick is expected to be present at the 2014 annual meeting, CohnReznick will not be available to make a statement or to respond
to appropriate questions.
Engagement of Cherry
Bekaert LLP and Dismissal of CohnReznick LLP
On March 28, 2014,
our Audit Committee approved the engagement of Cherry Bekaert LLP (“Cherry Bekaert”) as the Company’s independent
registered public accounting firm for the purposes of auditing the Company’s financial statements, effective as of April
3, 2014. This selection resulted in the dismissal by the Audit Committee of CohnReznick, which had served in that role until March
28, 2014. The change in accountants did not result from any dissatisfaction with the quality of professional services rendered
by CohnReznick.
The audit reports
of CohnReznick on the consolidated financial statements of the Company as of and for the years ended December 31, 2013 and 2012
did not contain any adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope,
or accounting principles.
During the two fiscal
years ended December 31, 2013 and 2012 and from January 1, 2014 through March 28, 2014, (i) there were no disagreements with CohnReznick
on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedures that, if not
resolved to CohnReznick’s satisfaction, would have caused CohnReznick to make reference in connection to their opinion to
the subject matter of the disagreement and (ii) there were no “reportable events” as defined in Item 304(a)(1)(v) of
Regulation S-K.
As noted above,
on March 28, 2014, our Audit Committee approved the engagement of Cherry Bekaert as our independent registered public accounting
firm for the purposes of auditing our financial statements, effective as of April 3, 2014. During the two fiscal years ended December
31, 2013 and 2012 and from January 1, 2014 through March 28, 2014, neither we nor (to our knowledge) anyone acting on behalf of
us consulted with Cherry Bekaert regarding either (i) the application of accounting principles to a specified transaction (either
completed or proposed), (ii) the type of audit opinion that might be rendered on our financial statements, or (iii) any matter
that was either the subject matter of a “disagreement,” as described in Item 304(a)(1) of Regulation S-K, or a “reportable
event.”
We are asking our shareholders
to ratify the appointment of Cherry Bekaert as our independent registered public accounting firm for 2014. Although the ratification
is not required by our bylaws or other governing documents, the board is submitting the selection of Cherry Bekaert to our shareholders
for ratification as a matter of good corporate practice. Even if the shareholders do ratify the appointment, our Audit Committee
in its discretion may direct the appointment of a different independent registered public accounting firm at any time during the
year if it believes that such a change would be in the best interest of us and our shareholders.
The board of directors recommends a vote
FOR the ratification of the appointment of Cherry Bekaert as our independent registered public accounting firm for 2014.
Fees Paid to Our Independent Registered
Public Accounting Firm
Audit Fees
For 2013
The aggregate fees
billed by CohnReznick for professional services rendered for the audit of our annual financial statements for 2013 and for the
review of the financial statements included in our quarterly reports on Form 10-Q during 2013 were $125,000.
For 2012
The aggregate fees
billed by CohnReznick for professional services rendered for the audit of our annual financial statements for 2012 and for the
review of the financial statements included in our quarterly reports on Form 10-Q during 2012 were $135,000.
Audit-Related Fees
For 2013
We did not engage
CohnReznick to provide, and CohnReznick did not bill us for, any professional services that were reasonably related to the performance
of the audit of our 2013 financial statements, but which are not reported under Audit Fees above.
For 2012
CohnReznick provided
professional services in the amount of $22,300 that were reasonably related to the performance of the audit of our 2012 financial
statements, but which are not reported under Audit Fees above.
Reznick Group provided
professional services in the amount of $4,500 that were reasonably related to the performance of the audit of our 2012 financial
statements, but which are not reported under Audit Fees above.
Tax Fees
For 2013
The aggregate fees
billed by CohnReznick for professional services rendered related to tax compliance, tax advice, and tax planning for 2013 were
$18,000.
For 2012
The aggregate fees
billed by CohnReznick for professional services rendered related to tax compliance, tax advice, and tax planning for 2012 were
$18,000.
All Other Fees
For 2013
The aggregate fees
billed by CohnReznick for real estate consulting services in 2013 were $2,000.
For 2012
The aggregate fees
billed by Reznick Group for real estate consulting services in 2012 were $7,500.
Pre-Approval Policy
Our audit committee
pre-approval guidelines with respect to pre-approval of audit and non-audit services are summarized below.
General. The
audit committee is required to pre-approve the audit and non-audit services performed by the independent auditor in order to assure
that the provision of such services does not impair the auditor’s independence. Unless a type of service to be provided by
the independent auditor has received general pre-approval, it will require specific pre-approval by the audit committee. Any proposed
services exceeding pre-approved cost levels require specific pre-approval by the audit committee.
Audit Services.
The annual audit services engagement terms and fees are subject to the specific pre-approval of the audit committee. In addition
to the annual audit services engagement specifically approved by the audit committee, the audit committee has granted general pre-approval
for other audit services, which are those services that only the independent auditor reasonably can provide.
Audit-related
Services. Audit-related services are assurance and related services that are reasonably related to the performance of the audit
or review of our financial statements and that are traditionally performed by the independent auditor. The audit committee believes
that the provision of audit-related services does not impair the independence of the auditor.
Tax Services.
The audit committee believes that the independent auditor can provide tax services to us, such as tax compliance, tax planning
and tax advice, without impairing the auditor’s independence. The audit committee will not permit the retention of the independent
auditor in connection with a transaction initially recommended by the independent auditor, the purpose of which may be tax avoidance
and the tax treatment of which may not be supported in the Internal Revenue Code and related regulations.
All Other Services.
The audit committee has granted pre-approval to those permissible non-audit services classified as “all other services”
that it believes are routine and recurring services, and would not impair the independence of the auditor.
Pre-Approval
Fee Levels. To facilitate management’s day-to-day conduct of our business, the audit committee deemed it advisable and
in our best interests to permit certain routine, non-audit services without the necessity of pre-approval by the audit committee.
Therefore, the audit committee expects to establish a pre-approval fee level per engagement. Any proposal for services exceeding
this level will require specific pre-approval by the audit committee. Although management may engage non-audit services from our
independent auditor within this limit, management cannot enter into any engagement that would violate the SEC’s rules and
regulations related to auditor independence. These non-audit service engagements are to be reported to the audit committee as promptly
as practicable.
EXHIBITS TO OUR 2013 ANNUAL REPORT ON FORM
10-K
Included with these
proxy materials is a copy of our 2013 Annual Report on Form 10-K, without exhibits, as filed with the SEC. We will furnish to each
person whose proxy is solicited, upon our receipt of the written request of that person, a copy of the exhibits to our annual report
for a charge of ten cents per page. Please direct your request to Anthony W. Shurtz, Secretary, 375 Northridge Road, Suite 330,
Atlanta, Georgia 30350.
ROBERTS REALTY INVESTORS, INC.
375 Northridge Road
Suite 330
Atlanta, Georgia 30350
Telephone: (770) 394-6000
ANNUAL MEETING OF SHAREHOLDERS OF
ROBERTS REALTY INVESTORS, INC.
December 12, 2014
GO GREEN
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NOTICE OF INTERNET AVAILABILITY
OF PROXY MATERIAL:
The Notice of Meeting, Proxy Statement,
Proxy Card, and a copy of the 2013 Annual Report to Shareholders are also available at http://robertsrealtyinvestors.investorroom.com.
Please sign, date and mail
your proxy card in the
envelope provided as soon
as possible.
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10030300000000001000 6 |
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PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE  |
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1. To elect Wm. Jarell Jones as director:
NOMINEE:
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FOR THE NOMINEE Wm.
Jarell Jones
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WITHHOLD AUTHORITY
FOR THE NOMINEE
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2. To conduct an advisory vote to approve the compensation of the Company's named executive officers. |
FOR AGAINST ABSTAIN
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| 3. To ratify the appointment of Cherry Bekaert LLP as the Company’s independent registered public accounting firm for 2014. |
FOR AGAINST ABSTAIN
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| THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS INDICATED, WILL BE VOTED "FOR" PROPOSALS 1, 2 AND 3. |
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| Please sign and date this proxy as your name appears below and return immediately in the enclosed envelope, whether or not you plan to attend the annual meeting. |
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Please check box if you intend to attend the meeting in person. o |
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| To change the address on your account, please check the box at right and indicate your new address in the address space above. Please note that changes to the registered name(s) on the account may not be submitted via this method. |
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| Signature of Shareholder |
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Signature of Shareholder |
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Note:
Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each
holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If
the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer
is a partnership, please sign in partnership name by authorized person. |
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ROBERTS REALTY INVESTORS, INC.
375 Northridge Road, Suite 330
Atlanta, Georgia 30350
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR
ANNUAL MEETING OF SHAREHOLDERS, DECEMBER
12, 2014
The shareholder(s) who sign this proxy
card on the reverse side appoint Charles R. Elliott and Charles S. Roberts, and each of them, proxies, with full power of substitution,
for and in their name(s), to vote all shares of common stock of Roberts Realty Investors, Inc. that such person(s) hold of record
at the annual meeting of shareholders to be held on Friday, December 12, 2014 at 9:00 a.m., E.S.T., at Villa Christina at Perimeter
Summit located at 4000 Summit Boulevard, Atlanta, Georgia and at any adjournment of the meeting. The signing shareholder(s) acknowledge
receipt of the Notice of Annual Meeting and Proxy Statement and direct the proxy to vote as follows on the matters described in
the accompanying Notice of Annual Meeting and Proxy Statement and otherwise in their discretion on any other business that may
properly come before, and matters incident to the conduct of, the meeting or any adjournment of it, as provided in the Proxy Statement.
(Continued and to be signed on
the reverse side.)
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