UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Form 10-Q

[ü] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

OR

[   ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Commission File No. 001-13183

Roberts Realty Investors, Inc.

     Registrant’s telephone number, Including Area Code:  (770) 394-6000

     Indicate by check whether the registrant: (1) has filed all reports to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes [ü]   No [  ]

     Indicate by check whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

Yes [  ]   No [ü]

The number of outstanding shares of the registrant’s common stock on November 9, 2004 was 5,307,566 (net of shares held in treasury).

TABLE OF CONTENTS

PART I

ITEM 1. FINANCIAL STATEMENTS.

ROBERTS REALTY INVESTORS, INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)

See notes to the consolidated financial statements.

ROBERTS REALTY INVESTORS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in Thousands, Except Per Share Amounts)

See notes to the consolidated financial statements.

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ROBERTS REALTY INVESTORS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)

See notes to the consolidated financial statements.

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ROBERTS REALTY INVESTORS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.		BUSINESS AND ORGANIZATION
		Roberts Realty Investors, Inc., a Georgia corporation, was formed July 22, 1994 to serve as a vehicle for investments in, and ownership of, a professionally managed real estate portfolio consisting primarily of multifamily apartment communities. Roberts Realty owns and operates multifamily residential properties as a self-administered, self-managed equity real estate investment trust (a “REIT”).
		Roberts Realty conducts all of its operations and owns all of its assets in and through Roberts Properties Residential, L.P., a Georgia limited partnership (the “operating partnership”), of which Roberts Realty is the sole general partner and had a 73.4% and 72.3% ownership interest at September 30, 2004 and December 31, 2003, respectively. As the sole general partner and owner of a majority interest of the operating partnership, Roberts Realty controls the operating partnership.
		At September 30, 2004, Roberts Realty owned one completed multifamily apartment community totaling 403 apartment homes in the Atlanta metropolitan area; a 319-unit apartment community in Charlotte, North Carolina was in its lease-up phase; and a 220-unit apartment community in Atlanta was in the planning and design phase. In addition, Roberts Realty owns a 39,907 square foot commercial office building which is in its lease-up phase, a 42,090 square foot retail center under construction, and two undeveloped commercial sites adjacent to the retail center.
		Roberts Realty elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended, beginning with the taxable year ended December 31, 1994. As a result, Roberts Realty generally will not be subject to federal and state income taxation at the corporate level to the extent it distributes annually to its shareholders at least 90% of its taxable income, as defined in the Internal Revenue Code, and satisfies certain other requirements. Accordingly, the accompanying consolidated financial statements include no provision for federal and state income taxes.
		Roberts Realty enters into contractual commitments in the normal course of business with Roberts Properties, Inc. (“Roberts Properties”) and Roberts Properties Construction, Inc. (“Roberts Construction”), which are affiliates of Roberts Realty that are wholly owned by Mr. Charles S. Roberts, the President, Chief Executive Officer, and Chairman of the Board of Roberts Realty. These contracts relate to the development and construction of real estate assets. See Note 7 – Related Party Transactions.
2.		BASIS OF PRESENTATION
		The accompanying consolidated financial statements include the consolidated accounts of Roberts Realty and the operating partnership. All significant inter-company accounts and transactions have been eliminated in consolidation. The financial statements of Roberts Realty have been adjusted for the minority interest of the unitholders in the operating partnership.
		The minority interest of the unitholders in the operating partnership on the accompanying balance sheets is calculated based on the minority interest ownership percentage multiplied by the operating partnership’s net assets (total assets less total liabilities). The minority interest percentage reflects the number of shares and units outstanding and will change as additional shares and units are issued and redeemed. The minority interest of the unitholders in the earnings or loss of the operating partnership on the accompanying statements of operations is calculated based on the weighted average number of units outstanding during the period, which was 26.6% and 28.1% for the three months ended September 30, 2004 and 2003, respectively, and 27.0% and 28.6% for the nine months ended September 30, 2004

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		and 2003, respectively. The minority interest of the unitholders was $14,640,000 at September 30, 2004 and $9,214,000 at December 31, 2003.
		Holders of partnership units generally have the right to require the operating partnership to redeem their units for shares. Upon submittal of units for redemption, the operating partnership has the option either (a) to acquire those units in exchange for shares, on a one-for-one basis, or (b) to pay cash for those units at their fair market value, based upon the then current trading price of the shares. Roberts Realty has adopted a policy that it will issue shares in exchange for all units submitted in the future.
		Restricted Cash on the accompanying consolidated balance sheets at September 30, 2004 consists of tenant deposits and proceeds from the sale of St. Andrews at the Polo Club community set aside to reinvest in other properties through a Section 1031 tax-deferred exchange. At December 31, 2003, Restricted Cash consists of tenant deposits.
		Roberts Realty’s management has prepared the accompanying interim unaudited financial statements in accordance with generally accepted accounting principles for interim financial information and in conformity with the rules and regulations of the Securities and Exchange Commission. In the opinion of management, the interim financial statements reflect all adjustments of a normal and recurring nature that are necessary to fairly state the interim financial statements. The results of operations for the interim periods do not necessarily indicate the results that may be expected for the year ending December 31, 2004. These financial statements should be read in conjunction with Roberts Realty’s audited financial statements and the notes to them included in Roberts Realty’s Annual Report on Form 10-K for the year ended December 31, 2003.
3.		ACQUISITIONS AND DISPOSITIONS
		On February 27, 2001, Roberts Realty signed an exchange agreement with an intermediary to acquire land previously owned by Roberts Properties Jones Bridge, LLC, of which Mr. Roberts owned a 90% interest. Roberts Realty is constructing a 42,090 square foot retail center on the 6.84-acre property, which is located in Alpharetta, Georgia. Roberts Realty acquired the property on June 20, 2001 for approximately $4,470,000. In connection with these transactions, Roberts Properties Jones Bridge, LLC received $3,498,000 for the property. Through September 30, 2004, Roberts Realty paid Roberts Construction approximately $3,242,000 for construction-related work on the property. Roberts Realty entered into a cost-plus 5% contract with Roberts Construction to complete the retail center. See Note 7 – Related Party Transactions.
		On June 28, 2001, Roberts Realty purchased approximately 10.9 acres from Roberts Properties to construct a 220-unit upscale apartment community located adjacent to its office building. The purchase price was $5,376,000 including closing costs, and the transaction was part of a Section 1031 tax-deferred exchange partially funded by sales proceeds from the sale of Rosewood Plantation. The total cost of the project is estimated to be $24,000,000. Roberts Realty paid Roberts Properties to complete the design and development work for a fee of $2,500 per unit, or $550,000. Roberts Realty entered into a cost-plus 10% contract with Roberts Construction to build the 220 apartment units. See Note 7 – Related Party Transactions.
		On June 28, 2001, Roberts Realty purchased a partially constructed office building and approximately 3.9 acres of land from Roberts Properties for $2,147,000, including closing costs. Roberts Realty did not pay Roberts Properties a development fee for this project. Roberts Realty entered into a fixed cost contract with Roberts Construction to construct the building shell and parking deck for $4,670,000, of which $1,616,000 was incurred at closing. Roberts Construction will perform tenant finish work at cost and will not earn a profit on the construction of the building or the parking deck. Construction is substantially complete on the building shell, parking deck and tenant finish on one floor. Roberts Realty

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		occupies a portion of one floor of the building as its corporate headquarters. Roberts Realty entered into leases for the remaining space on that floor with Roberts Properties and Roberts Construction and plans to lease the other two floors to unaffiliated tenants.
		On February 28, 2003, Roberts Realty received an aggregate of $381,000 in connection with the sale of land, reimbursement for land improvements and conveyances of temporary construction easements to Fulton County, Georgia for road right-of-way projects at the Addison Place community, which resulted in a gain of $77,000, net of minority interest of unitholders in the operating partnership.
		On August 6, 2003, Roberts Realty sold its Highland Park community for $17,988,000, resulting in a gain of approximately $6,070,000, net of minority interest of $2,432,000. Net sales proceeds were approximately $6,932,000 after deduction of $9,930,000 for the mortgage note payable, which was assumed by the buyer, closing costs and prorations totaling $227,000, and a partnership profits interest of $899,000 paid to Roberts Properties under the amended partnership agreement of the operating partnership.
		On June 2, 2004, Roberts Realty sold five of its Atlanta apartment communities – Bradford Creek, Plantation Trace, Preston Oaks, River Oaks, and Veranda Chase, totaling 1,091 units – to Colonial Properties Trust. The sales price was $109,150,000 or an average of $100,045 per apartment unit, resulting in a gain of $32,404,000, net of minority interest of $11,985,000. Net sales proceeds were approximately $46,906,000, or $6.49 per share/unit, after deduction of:

	(a)		$58,802,000 for the mortgage note payable assumed by the buyer,
	(b)		closing costs and prorations totaling $260,000, and
	(c)		a partnership profits interest distribution of $3,182,000 paid to Roberts Properties under the amended partnership agreement of the operating partnership.

		On June 18, 2004, Roberts Realty paid a distribution of $4.50 per share to shareholders and unitholders of record on June 14, 2004. Roberts Realty has retained $14,407,000 of the net proceeds, or $1.99 per share/unit, for the purchase and development of other communities and for working capital.
		On July 29, 2004, Roberts Realty sold its St. Andrews at the Polo Club community in Palm Beach County, Florida for $36,000,000 or an average of $180,000 per apartment unit, resulting in a gain of $8,254,000, net of minority interest of $3,053,000. Net sales proceeds were approximately $15,115,000 after deduction of $20,412,000 for the mortgage note payable assumed by the buyer, and closing costs and pro-rations totaling $473,000. Roberts Realty intends to reinvest the proceeds in other properties through a Section 1031 tax-deferred exchange, which will permit its shareholders to defer paying the tax they would otherwise incur on the gain.
4.		DISCONTINUED OPERATIONS
		For the three and nine months ended September 30, 2004 and 2003, income from discontinued operations relates to (a) the 188-unit Highland Park community that Roberts Realty sold on August 6, 2003; (b) the five apartment communities totaling 1,091 units that Roberts Realty sold on June 2, 2004; and (c) the 200-unit St. Andrews at the Polo Club community that Roberts Realty sold on July 29, 2004. The tables on the following pages provide information regarding these discontinued operations.

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The following table summarizes information for the seven apartment communities as of September 30, 2004 and December 31, 2003 (dollars in thousands, unaudited):

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The following table summarizes revenue and expense information for the seven communities for the three and nine month periods ended September 30, 2004 and 2003 (dollars in thousands, unaudited):

5.		NOTES PAYABLE
		Roberts Realty has three types of debt: an unsecured line of credit; mortgage notes secured by an apartment community; and construction/permanent loans secured by an apartment community and other properties. These loans are summarized below.
		Line of Credit. Roberts Realty has a $2,000,000 unsecured line of credit, which expires August 1, 2005. At September 30, 2004, there were no borrowings under this line of credit.

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Mortgage Notes. The permanent mortgage notes payable secured by Roberts Realty’s completed apartment community at September 30, 2004 and December 31, 2003 were as follows: