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 June 30, 2012, we were its sole general partner and owned an 82.81% 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:

† three tracts of land totaling 70 acres that are zoned for 720 multifamily units and are in various phases of development and construction;

† three tracts of land totaling 37 acres that are zoned for 512 multifamily units and are classified as real estate assets held for sale, including an 11-acre tract zoned for 220 multifamily units 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 capital appreciation. We have significantly reduced our debt and our negative cash flow during the past year, and we intend to continue these efforts.

Recent Developments

Extension of Peachtree Parkway Land Loan

On July 16, 2012, we extended the maturity date of our $8,175,000 land loan to October 31, 2012 on substantially the same terms and conditions. At the closing, we deposited $153,000 as an interest and real estate tax reserve to fund these payments through the maturity date. Under the terms of the loan, we will make monthly payments of interest only at the 1-month LIBOR index rate plus 300 basis points, with an interest rate floor of 5.00% per annum.

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 June 25, 2012, we amended the sales contract to extend the closing date to October 30, 2012, provided that Roberts Properties received the land disturbance permit for the Northridge land on or before August 1, 2012. The City of Sandy Springs issued the land disturbance permit on July 23, 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 Highway 20 Land Loan

On April 19, 2012, we renewed and extended our Highway 20 land loan to April 8, 2013. 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 also agreed to make fixed principal payments of $5,000 per month, with a one-time principal reduction of $240,000 prior to October 15, 2012.

Peachtree Parkway and Other Real Estate Asset Held for Sale

To further our efforts to improve liquidity and provide capital resources, we have begun to actively market for sale our 25-acre Peachtree Parkway land and our approximately one-acre commercial site in Johns Creek and have classified those assets in the condensed consolidated balance sheets as real estate assets held for sale.

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 six tracts of land totaling 107 acres that do not produce revenue but incur carrying costs of interest expense and real estate taxes. These six tracts of land have a combined carrying value of $34,602,953, and are encumbered with land loans totaling $16,110,000. 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 capital resources, 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 $4,673,895, which we would use to retire our $2,000,000 loan secured by the property and use the remaining proceeds of $2,673,895 to address our liquidity and capital resources needs. We are also actively marketing our Peachtree Parkway property and our Johns Creek commercial site for sale and would use the net proceeds of the sale of one or both of those properties to address our liquidity and capital resources needs.

We had total debt of $25,913,796 as of June 30, 2012. As of the date of this report, we have three loans with a total principal balance of $13,110,000 that mature within the next 12 months: (a) the $8,175,000 Peachtree Parkway loan that matures on October 31, 2012; (b) the $2,000,000 Northridge loan

that matures on February 21, 2013; and (c) the $2,935,000 Highway 20 loan that matures on April 8, 2013. If we are unable to renew these loans, we may repay all or part of these loans from the funds we expect to receive from the sale of the Northridge property or the funds we are seeking to raise as described in Liquidity and Capital Resources - Business Plan below.

Results of Operations

Comparison of Three Months Ended June 30, 2012 to Three Months Ended June 30, 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
                                                        June 30,
                                                  2012             2011         $Increase
                                               (Unaudited)     (Unaudited)      (Decrease)

TOTAL OPERATING REVENUES                      $     319,592    $    314,900    $      4,692

OPERATING EXPENSES:
Property operating expenses                         159,473         161,616          (2,143 )
General and administrative expenses                 382,486         370,197          12,289
Gain on disposal of assets                                -          (1,200 )         1,200
Impairment loss on real estate assets               275,949       1,386,480      (1,110,531 )
Depreciation and amortization                       128,124         130,410          (2,286 )

Total operating expenses                            946,032       2,047,503      (1,101,471 )

LOSS FROM OPERATIONS                               (626,440 )    (1,732,603 )    (1,106,163 )

OTHER EXPENSE                                      (430,235 )      (333,332 )        96,903

LOSS FROM CONTINUING OPERATIONS                  (1,056,675 )    (2,065,935 )    (1,009,260 )

INCOME (LOSS) FROM DISCONTINUED OPERATIONS          133,351        (157,044 )      (290,395 )

NET LOSS                                      $    (923,324 )  $ (2,222,979 )  $ (1,299,655 )

Net loss decreased $1,299,655 when compared to the 2011 period. This decrease was the result of a $4,692 increase in operating revenues, a $1,101,471 decrease in operating expenses (primarily due to a substantially lower non-cash impairment loss on real estate assets in the 2012 period when compared to the 2011 period), and a $290,395 decrease in loss from discontinued operations, offset by a $96,903 increase in other expense. We explain below the major variances between the 2012 and 2011 periods.

Total operating revenues increased by $4,692 from $314,900 in the 2011 period to $319,592 in the current period, primarily as a result of an increase in rental revenue.

Property operating expenses - consisting of utilities, repairs and maintenance, real estate taxes, and marketing and insurance expense - decreased by $2,143 from $161,616 in the 2011 period to $159,473 in the current period.

General and administrative expenses increased by $12,289 from $370,197 in the 2011 period to $382,486 in the current period, primarily due to higher salaries expense.

The 2011 period included a $1,386,480 non-cash impairment loss on the Northridge land parcel, while the 2012 period included a $275,949 non-cash impairment loss on our Johns Creek commercial site.

Other expense increased $96,903 from $333,332 in the 2011 period to $430,235 in the current period. This increase was primarily due to a $16,936 increase in the amortization of deferred financing and leasing costs and a $77,147 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) the interest on the Northridge land loan, which began in February 2012.

Comparison of Six Months Ended June 30, 2012 to Six Months Ended June 30, 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.



                                                  Six Months Ended
                                                      June 30,
                                                 2012           2011       $(Decrease)
                                             (Unaudited)    (Unaudited)      Increase

TOTAL OPERATING REVENUES                     $    632,545   $    660,917   $    (28,372 )

OPERATING EXPENSES:
Property operating expenses                       308,552        310,217         (1,665 )
General and administrative expenses               757,125        700,675         56,450
Gain on disposal of assets                              -         (4,550 )        4,550
Impairment loss on real estate assets             275,949      1,386,480     (1,110,531 )
Depreciation and amortization                     250,933        260,820         (9,887 )

Total operating expenses                        1,592,559      2,653,642     (1,061,083 )

LOSS FROM OPERATIONS                             (960,014 )   (1,992,725 )   (1,032,711 )

OTHER EXPENSE                                    (816,878 )     (605,769 )      211,109

LOSS FROM CONTINUING OPERATIONS                (1,776,892 )   (2,598,494 )     (821,602 )

INCOME (LOSS) FROM DISCONTINUED OPERATIONS        128,652       (315,207 )     (443,859 )

NET LOSS                                     $ (1,648,240 ) $ (2,913,701 ) $ (1,265,461 )

Net loss decreased $1,265,461 when compared to the 2011 period. This decrease was primarily due to a $1,061,083 decrease in operating expenses (primarily due to a substantially lower non-cash impairment loss on real estate assets in the 2012 period when compared to the 2011 period) and a $443,859 decrease in loss from discontinued operations, offset by a $28,372 decrease in operating revenues and a $211,109 increase in other expense. We explain below the major variances between the 2012 and 2011 periods.

Total operating revenues decreased by $28,372 from $660,917 in the 2011 period to $632,545 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 - decreased by $1,665 from $310,217 in the 2011 period to $308,552 in the current period.

General and administrative expenses increased by $56,450 from $700,675 in the 2011 period to $757,125 in the current period, primarily due to higher professional service fees.

The 2011 period included a $1,386,480 non-cash impairment loss on the Northridge land parcel, while the 2012 period included a $275,949 non-cash impairment loss on our Johns Creek commercial site.

Other expense increased $211,109 from $605,769 in the 2011 period to $816,878 in the current period. This increase was primarily due to a $22,308 increase in amortization of deferred financing and leasing costs and a $181,872 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) the interest on the Northridge land loan, which began in February 2012.

Liquidity and Capital Resources

Overview

At June 30, 2012, we had $50,383,572 in total assets, of which $1,091,486 was cash and cash equivalents. In addition, we held $1,044,574 in restricted cash. Of our restricted cash at June 30, 2012, $494,564 was reserved for the payment of interest and certain other costs on specific outstanding loans, and $501,673 was a certificate of deposit pledged to secure a letter of credit for tenant improvements and leasing costs at the Spectrum retail center. As of July 23, 2012, we held $955,357 in cash and cash equivalents and $1,140,190 in restricted cash. Of our restricted cash balance, $593,245 was reserved for the payment of interest and certain other costs on specific outstanding loans, and $501,673 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 apartment 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 capital resources. Further, if we close the sale of our Northridge property as we expect, the net proceeds of that sale would be approximately $2,673,895, which we would use to address our liquidity and capital resources needs. We are also actively marketing our Peachtree Parkway property and our Johns Creek commercial site for sale and would use the net proceeds of the sale of one or both of those properties 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 $13,110,000 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          10/31/12      $             8,175,000
Northridge                  2/21/13                    2,000,000
Highway 20                  4/08/13                    2,935,000

Total                                    $            13,110,000

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 six tracts of land totaling 107 acres with an aggregate carrying value of $34,602,953 that secure land loans totaling $16,110,000. 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, although the other retail center is positively cash flowing.

† Our general and administrative expenses were $1,357,252 for the calendar year 2011 and $757,125 for the six months ended June 30, 2012; these expenses include the costs of being an SEC reporting company and having our shares listed on the NYSE MKT stock exchange (formerly NYSE Amex Equities). These costs also 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 $625,000 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 $1,091,486 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 $13,110,000 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: (a) our existing cash; (b) the net proceeds from the sale of one or more of our Northridge property, our Peachtree Parkway property, or our Johns Creek commercial site; (c) contributions from a joint venture partner; or
(d) 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 balances 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 capital 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 extended our $8,175,000 Peachtree Parkway land loan to October 31, 2012 and our $2,935,000 Highway 20 land loan to April 8, 2013, and we have begun to actively market for sale our Peachtree Parkway land and our Johns Creek commercial site.

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 apartment 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 three 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. 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.

3. 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 are currently holding three land parcels for sale:

1. 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 to sell Northridge to Roberts Properties for a total cash sales price of $4,070,000 plus certain cost reimbursements. The closing is scheduled to occur on or before October 30, 2012.

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. Johns Creek, an approximately one-acre commercial site located in Johns Creek, Georgia.

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. Whether or not the sale of the Northridge property closes as expected, we will continue to market for sale the Peachtree Parkway property and the Johns Creek commercial site, and we may also 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 apartment community.

Now that the Atlanta apartment market is recovering from the recession, we believe this is an opportune time to create new multifamily assets. We believe that we can create value for our shareholders as we have historically done following economic downturns and recessions. We intend to move forward with the development and construction of our next multifamily apartment community at Bradley Park. Although we cannot make substantial progress on constructing this apartment community 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 are seeking to sell one or more of our land parcels, including the Peachtree Parkway property and the Johns Creek commercial site, to independent purchasers or to raise the required 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 . . .