Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995. The statements in this report that are not historical facts are forward-looking statements that involve a number of known and unknown risks, uncertainties, and other factors, all of which are difficult or impossible to predict and many of which are beyond our control, that may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by those forward-looking statements. These risks are detailed in (a) Part I, Item 1A, Risk Factors, in our Annual Report on Form 10-K for the year ended December 31, 2011; (b) Part II, Item 1A, Risk Factors, in this report; and
(c) our other SEC filings. Please also see the cautionary statements included in the Note Regarding Forward-Looking Statements at the beginning of this report.

Overview

We are a self-administered, self-managed equity real estate investment trust, or REIT. Our primary business is to develop, construct, own, and manage multifamily apartment communities. The operating partnership, either directly or through one of its wholly owned subsidiaries, owns all of our properties. At March 31, 2012, we were its sole general partner and owned an 82.74% interest in the operating partnership. We expect to continue to conduct our business in this organizational structure. As of the filing date of this report, we own the following properties, all of which are located in metropolitan Atlanta, Georgia:

† five tracts of land totaling 106 acres that are zoned for 1,232 multifamily units, including an 11-acre tract of land that is under contract to be sold;

† two retail shopping centers; and

† one office building, part of which serves as our corporate headquarters.

We plan to continue exiting the retail business and focus on our core business of developing, constructing, and managing high quality multifamily apartment communities for cash flow and long-term appreciation. We have significantly reduced our debt and our negative cash flow in the past year, and we intend to continue these efforts.

Recent Developments

Renewal of Highway 20 Loan

On April 19, 2012, we renewed and extended our $2,955,000 Highway 20 land loan to April 8, 2013. The loan is secured by the Highway 20 property, which is located in Cumming, Georgia and is zoned for 210 multifamily units. We established a $165,000 interest reserve to pay the monthly interest payments at the prime rate with a floor of 5.5% per annum. We will also make fixed principal payments of $5,000 per month, with a one-time principal reduction of $240,000 prior to October 15, 2012.

Extension of Closing Date for the Sale of the Northridge Land to Roberts Properties, Inc.

As part of our strategy to address our needs for liquidity and capital resources, on June 30, 2011, we entered into a contract to sell the 11-acre Northridge property to Roberts Properties. On March 26, 2012, we amended the sales contract to extend the closing date to June 29, 2012. Under the terms of the

sales contract as amended, the sales price is $4,070,000, plus the reimbursement of $303,789 for development and construction expenses incurred before June 30, 2011. Roberts Properties is obligated to reimburse us for any development and construction expenses incurred from June 30, 2011 until the closing.

Renewal of Bradley Park Loan

On February 28, 2012, we renewed and extended our $3,000,000 Bradley Park land loan to October 31, 2013. The loan is secured by our Bradley Park property, which is located in Cumming, Georgia and is zoned for 154 multifamily units. The renewed loan requires monthly interest only payments and removes the interest rate floor of 4.50%. The new interest rate is 350 basis points over the 30-day LIBOR and under that formula, the effective interest rate would be 3.74% per annum.

Northridge Property Loan

On February 21, 2012, Northridge Parkway, LLC, a wholly owned subsidiary of the operating partnership, closed a $2,000,000 loan from Paul J. A. van Hessen, the lender. The loan is secured by our Northridge property, which is located in Sandy Springs; is zoned for 220 multifamily apartment units; and is under contract to be sold for $4,070,000 plus the reimbursement of certain development and construction expenses. The loan has a maturity date of February 21, 2013, and at closing, we paid a 2.0% origination fee to the lender and a 1.0% underwriting and management fee to Dutch American Finance, LLC. We established a $240,000 interest reserve to pay the monthly interest only payments at an interest rate of 12% per annum.

Continuing Negative Operating Cash Flow and Maturing Short-Term Debt

Our primary liquidity requirements relate to (a) our continuing negative operating cash flow and (b) our maturing short-term debt. The primary reason for our negative operating cash flow is that we have five tracts of land totaling 106 acres that do not produce revenue but incur carrying costs of interest expense and real estate taxes. These five tracts of land have a combined carrying value of $34,002,384, and are encumbered with land loans totaling $16,130,000. We have substantial equity in these tracts of land, which are an integral part of our multifamily community development and construction program. Because the performance of our retail centers and office building is insufficient to cover our operating expenses, including the carrying costs of our land, we expect to continue to generate negative operating cash flow and to operate at a loss until we raise the equity and obtain the construction loan we need to make substantial progress in constructing and leasing up our planned Bradley Park multifamily community as described in Liquidity and Capital Resources - Business Plan below.

To address these issues, we made substantial progress during the past year in improving our liquidity and balance sheet, and we intend to continue to do so. Further, if we close the sale of our Northridge property as we expect, the proceeds of that sale would be approximately $4,648,207, which we would use to retire our $2,000,000 loan secured by the property and use the remaining proceeds of $2,648,207 to address our liquidity and capital resources needs.

We had total debt of $26,012,290 as of March 31, 2012. As of the date of this report, we have three loans with a total principal balance of $13,130,000 that mature within the next 12 months: (a) the $8,175,000 Peachtree Parkway loan that matures on July 31, 2012; (b) the $2,000,000 Northridge loan that matures on February 21, 2013; and (c) the $2,955,000 Highway 20 loan that matures on April 8, 2013. If we are unable to renew these loans, we may repay all or part of them from the funds we expect to receive from the sale of the Northridge property or are seeking to raise as described in Liquidity and Capital Resources
- Business Plan below.

Results of Operations

Comparison of Three Months Ended March 31, 2012 to Three Months Ended March 31, 2011

The following table highlights our operating results for the periods presented and should be read along with the condensed consolidated financial statements and the accompanying notes included in this report.

                                           Three Months Ended
                                                March 31,
                                          2012            2011         $(Decrease)
                                       (Unaudited)     (Unaudited)      Increase

TOTAL OPERATING REVENUES              $     312,953   $     346,017   $     (33,064 )

OPERATING EXPENSES:
Property operating expenses                 149,079         148,601             478
General and administrative expenses         374,639         330,478          44,161
Gain on disposal of assets                        -          (3,350 )         3,350
Depreciation and amortization               122,809         130,410          (7,601 )

Total operating expenses                    646,527         606,139          40,388

LOSS FROM OPERATIONS                       (333,574 )      (260,122 )        73,452

OTHER EXPENSE                              (386,643 )      (272,437 )       114,206

LOSS FROM CONTINUING OPERATIONS            (720,217 )      (532,559 )       187,658

LOSS FROM DISCONTINUED OPERATIONS            (4,699 )      (158,163 )      (153,464 )

NET LOSS                              $    (724,916 ) $    (690,722 ) $      34,194

Net loss increased $34,194 when compared to the 2011 period. This increase was primarily due to a $33,064 decrease in operating revenues, a $40,388 increase in operating expenses, and a $114,206 increase in other expense, offset by a $153,464 decrease in loss from discontinued operations. We explain below the major variances between the 2012 and 2011 periods.

Total operating revenues decreased by $33,064 from $346,017 in the 2011 period to $312,953 in the current period primarily as a result of a slightly lower occupancy level at our retail centers and overall lower rental rates on new leases and renewals.

Property operating expenses - consisting of utilities, repairs and maintenance, real estate taxes, and marketing and insurance expense - increased by $478 from $148,601 in the 2011 period to $149,079 in the current period.

General and administrative expenses increased by $44,161 from $330,478 in the 2011 period to $374,639 in the current period, primarily due to higher professional service fees partially offset by lower salaries.

Other expense increased $114,206 from $272,437 in the 2011 period to $386,643 in the current period. This increase was primarily due to a $104,725 increase in interest expense because (a) $81,940 of interest was capitalized in the 2011 period and all interest was expensed in the 2012 period and (b) starting in February 2012, the interest on the Northridge land loan began.

Liquidity and Capital Resources

Overview

At March 31, 2012, we had $51,336,535 in total assets, of which $1,709,791 was cash and cash equivalents. In addition, we held $1,103,542 in restricted cash. Of our restricted cash at March 31, 2012, $542,649 was reserved for the payment of interest and certain other costs on specific outstanding loans, and $501,176 was a certificate of deposit pledged to secure a letter of credit for tenant improvements at the Spectrum retail center. As of April 19, 2012, we held $1,523,739 in cash and cash equivalents and $1,213,344 in restricted cash. Of our restricted cash balance, $652,451 was reserved for the payment of interest and certain other costs on specific outstanding loans, and $501,176 is the Spectrum certificate of deposit.

We believe that the most important uses of our capital resources will be to provide working capital to enable us to cover our negative operating cash flow as we pursue our business plan and to invest in the development of the Bradley Park multifamily community to enable us to raise the required debt and equity to construct that community. We currently estimate that we will need approximately $14,695,000 in debt and equity to complete the construction of Bradley Park. Our current cash resources are inadequate to meet these needs. To address these needs, we are considering the alternatives described in Business Plan below.

We continue to focus on improving our liquidity and balance sheet. Further, if we close the sale of our Northridge property as we expect, the net proceeds of that sale would be approximately $2,648,207, which we would use to address our liquidity and capital resources needs.

Our primary liquidity requirements are related to our continuing negative operating cash flow and our maturing short-term debt. We have three loans with a current aggregate principal balance of $13,130,000 that mature within the next 12 months, as listed in the following table in their order of maturity:

                                         Principal Payments Due
Property Securing Loan   Maturity Date      Within 12 Months

Peachtree Parkway           7/31/12      $             8,175,000
Northridge                  2/21/13                    2,000,000
Highway 20                  4/08/13                    2,955,000

Total                                    $            13,130,000

We are currently generating negative operating cash flow, and we expect to continue to generate negative operating cash flow and to operate at a loss for the foreseeable future. The three primary reasons for our negative operating cash flow are as follows:

† We own five tracts of land totaling 106 acres with an aggregate carrying value of $34,002,384 that secure land loans totaling $16,130,000. Because land does not generate revenue, a substantial portion of our negative cash flow is a result of the carrying costs (interest expense and real estate taxes) on our land.

† Due to the continued weakness in the retail and office sectors, one of our retail centers and our office building are producing negative cash flow, and the other retail center is positively cash flowing.

† Our general and administrative expenses were $1,357,252 for the calendar year 2011 and $374,639 for the three months ended March 31, 2012; these expenses included the costs of being an SEC reporting company and having our shares listed on the NYSE Amex Equities exchange. These costs include accounting and related fees to our independent auditors as well as to another accounting firm required for our compliance with Section 404(a) of the Sarbanes-Oxley Act, legal fees, listing fees, director compensation, and directors and officers insurance premiums. We estimate that these additional costs related to being a public reporting company are approximately $665,000 per year.

Short- and Long-Term Liquidity Outlook

Our operating revenues are not adequate to provide short-term (12 months) liquidity for the payment of all direct rental operating expenses, interest, and scheduled amortization of principal on our mortgage debt. We are currently using our unrestricted cash balance of $1,709,791 to meet our short-term liquidity requirements, including general and administrative expenses, principal reductions on our debt, and improvements at our existing properties.

As noted above, we have three loans with a total principal balance of $13,130,000 that mature within the next 12 months. We plan to renew these loans as they come due and extend their maturity dates at least 12 months or find alternative funding and raise additional capital for the development of the properties securing the loans. We may be required to repay part of the outstanding principal of one or more of these loans in connection with that refinancing. To fund these repayments, we may use cash from one or more of the following sources: our existing cash, the proceeds from the sale of the Northridge property, contributions from a joint venture partner, the net proceeds from the sale of one or more of our remaining properties, or equity we raise in a private offering.

Current economic conditions and the tight lending environment create uncertainty regarding whether we can extend or refinance the maturing loans as planned or find alternative funding and raise additional capital for the development of the properties securing the loans. If we were required to use our current cash balances to pay down existing loans, those repayments and the corresponding reductions in our cash could adversely affect our ability to execute our plans as described further below.

We expect to meet our long-term liquidity requirements, including future developments and debt maturities, from the proceeds of construction and permanent loans, the sale of properties, or the equity we raise in a private offering.

Business Plan

Overview and Outlook

We intend to maximize shareholder value and to address our needs for liquidity and capital resources by executing our business plan. We plan to continue exiting the retail business and focusing on our core business of developing, constructing, and managing high quality multifamily apartment communities for cash flow and long-term appreciation. During the past year, we have significantly reduced our debt and decreased our negative cash flow and we intend to continue these efforts. As explained above in Recent Developments, we have recently closed a $2,000,000 loan secured by our Northridge property, renewed and extended our $3,000,000 Bradley Park land loan to October 30, 2013, and renewed and extended our $2,955,000 Highway 20 land loan to April 8, 2013.

We explain below our strategies and plans for each type of property we own.

Development and Construction of Multifamily Communities

We are optimistic about the market for new apartments in the metro Atlanta submarkets where our land is located. We believe the economic climate for our business in these markets is improving for the following reasons:

† Rents for the "Class A" or upscale apartments communities of the type that we build should increase appreciably during 2012, and the level of rental concessions should continue to decrease as the market continues to improve.

† Occupancy rates for Class A apartments in Atlanta should continue to increase in 2012.

† The number of new apartments constructed in Atlanta was substantially lower in 2011 than in recent years and is expected to remain low in 2012.

† Employment in metro Atlanta is expected to grow, although slowly compared to historical levels.

† Nationally, home ownership rates are declining, and we believe that this trend, coupled with larger required down payments for single-family home loans, will lead to higher demand for apartments generally and in our market areas.

We believe that these favorable trends will increase the availability of debt and equity capital for the construction of new apartments in our market areas, particularly for companies like ours that have weathered the recession, own tracts of land in areas we believe are well-suited for upscale apartments, and have a long history of developing, constructing, leasing up, and selling upscale multifamily communities for substantial profits. For the reasons explained in Item 1A, Risk Factors, in our Annual Report on Form 10-K for the year ended December 31, 2011, as well as Part II, Item 1A, Risk Factors, below, however, our beliefs and expectations about these favorable trends may not prove to be accurate.

We are currently holding four land parcels for development and construction:

1. Bradley Park, a 22-acre site located in Forsyth County zoned for 154 multifamily units. We have completed our architectural drawings, purchased our land disturbance permit, and are ready to begin grading the site.

2. Peachtree Parkway, a 25-acre site fronting Peachtree Parkway (Highway 141) in Gwinnett County zoned for 292 multifamily units that is located across the street from The Forum, a 580,000 square foot upscale shopping center.

3. Highway 20, a 38-acre site located in Cumming zoned for 210 multifamily units. We have started the necessary design and development work for this community.

4. North Springs, a 10-acre site located on Peachtree Dunwoody Road in Sandy Springs across from the North Springs commuter rail station; the property is zoned for 356 multifamily units, 210,000 square feet of office space, and 56,000 square feet of retail space.

We also own Northridge, an 11-acre site located close to the GA 400 and Northridge Road interchange in Sandy Springs zoned for 220 multifamily units. We have entered into a contract, as

amended, to sell Northridge to Roberts Properties for a sales price of $4,070,000, plus certain cost reimbursements. Under the amended terms of the contract, the closing is scheduled to occur on or before June 29, 2012.

If the sale of the Northridge property closes as anticipated, we expect to use the proceeds of the sale to address our liquidity and capital resources needs. If the sale of the Northridge property does not close as expected, we may seek to sell one or more of our remaining land parcels to independent purchasers. Potential buyers have recently expressed interest in purchasing some of our properties and we believe they have the financial resources to do so. We may raise private equity and are in discussions with possible joint venture participants such as pension funds, life insurance companies, hedge funds, foreign investors, and local investors. We may also sell one or more of our remaining land parcels to Roberts Properties as we have agreed to do with the Northridge land parcel. We may also form a new affiliate that would raise private equity for the specific purpose of funding the purchase of one of the remaining land parcels and constructing a multifamily community.

Now that the Atlanta apartment market is beginning to recover from the recession, we believe this is an opportune time to create new multifamily assets. We believe that we can build at lower construction costs and create value for our shareholders as we have historically done during economic downturns and recessions, as the economy recovers. We intend to move forward with the development and construction of our next multifamily community at Bradley Park. Although we cannot make substantial progress on constructing this project until we raise the required equity and obtain construction financing, we believe that the market for construction financing is improving in light of the positive factors noted above. We currently estimate that we will need approximately $14,695,000 in debt and equity to complete the construction of our Bradley Park multifamily community.

To provide the equity we need for the construction of Bradley Park as well as to repay or partially extend our maturing loans, we may seek to sell one or more of our land parcels to independent purchasers or to raise debt and equity through the other means described above.

Retail Centers and Office Building

We currently own two retail centers and an office building, which have the occupancy percentages provided below:

1. Bassett Shopping Center, a 19,949 square foot retail center located directly across from the Mall of Georgia in Gwinnett County that is 82.9% occupied.

2. Spectrum at the Mall of Georgia, a 30,050 square foot retail center located directly across from the Mall of Georgia in Gwinnett County that is 52.5% occupied.

3. Northridge Office Building, a 37,864 square foot building located in Sandy Springs that is 64.5% occupied. We occupy a portion of the building as our corporate headquarters.

The retail sector took the brunt of the severe recession, and as a result our retail centers have struggled to increase their occupancy. The risks of owning retail centers have dramatically increased since we purchased these retail centers, and we anticipate that the performance of our retail centers will continue to be weak for the foreseeable future. As a result, we intend to exit the retail business and focus on our core business of developing, constructing, and managing high quality multifamily apartment communities. In spite of this difficult environment, however, we are committed to increasing the occupancy of our Spectrum and Bassett retail centers so they can be positioned for sale. In addition to considering the sale of the Bassett and Spectrum retail centers, we may form a joint venture with a

company that specializes in retail properties to use their leasing expertise. We also may pursue joint ventures with potential partners that include local investors, pension funds, life insurance companies, hedge funds, and foreign investors.

The conduit loans secured by the Bassett and Spectrum retail centers are nonrecourse. If we are unable to improve the financial performance of one or both of these centers, particularly if the retail sector fails to improve or worsens, we may seek to modify these loans. As a last resort, we may transfer one or both of these retail centers to the lender in satisfaction of the debt to avoid any further negative operating cash flow from these assets.

Similar to the retail market, the market for office space in suburban Atlanta is overbuilt and continues to be very challenging. We are considering the sale of our Northridge office building and may also pursue joint ventures with potential partners that include local investors, pension funds, life insurance companies, hedge funds, and foreign investors.

Possible Sale, Merger, or Business Combination of the Entire Company

In our efforts to maximize shareholder value, we are open to any transaction that would be in the best interests of our shareholders. During the past two years, we have engaged in discussions with both private companies and individuals regarding a possible sale, merger, or other business combination. In 2011, we retained the services of Sandler O'Neill + Partners, L.P. to explore potential strategic alternatives for us. We have entered into mutual confidentiality agreements with 53 different entities, and discussions are ongoing with several of them. To date, however, we have not entered into a definitive agreement for such a transaction. We currently remain open to any reasonable proposal for a sale, merger, or other business combination that would reward our shareholders and maximize their value.

Comparison of Three Months ended March 31, 2012 to Three Months ended March 31, 2011

Cash and cash equivalents increased $1,141,600 during the first three months of 2012 compared to a decrease of $606,231 during the 2011 period. The respective changes in cash are described below.

Net cash used in operating activities in the 2012 period was $546,466 compared to $227,220 used during the 2011 period. This increase was primarily the result of lower rental revenues, increased general and administrative and interest expense related to operations coupled with a $71,517 decrease in the change of accounts payable, accrued expenses, and other liabilities, and an increase of $32,236 in due to affiliates.

Net cash used in investing activities was $120,278 during the 2012 period compared to $212,199 used during the 2011 period. This decrease was primarily due to a $222,497 decrease in development and construction of real estate assets, and a $42,342 increase in the change of accounts payable, accrued expenses and other liabilities related to investing activities offset by a $178,373 increase in the change in restricted cash.

Net cash provided by financing activities was $1,808,344 for the 2012 period compared to net cash used in financing activities of $166,812 during the 2011 period. The increase in cash provided by financing activities primarily resulted from the $2,000,000 of proceeds from the Northridge land loan offset by the loan costs for the Northridge land loan and renewal of the Bradley Park land loan.

Debt Maturities

Our existing loans will be amortized with scheduled monthly payments, as well as balloon payments at maturity, through 2019 as summarized in the following table:

. . .