EXHIBIT 13

RIDGEWOOD
PROPERTIES, INC.

ANNUAL REPORT
1995

FINANCIAL STATEMENTS

Ridgewood Properties, Inc. (the "Company") is primarily engaged
in the business of acquiring, developing, operating and selling real
estate property in the Southeast and "Sunbelt" areas. Additionally,
the Company, through its investment in a limited partnership, is
engaged in acquiring and managing hotel properties in the Southeast.

Board of Directors Officers
Michael M. Earley N. Russell Walden
President - Triton Group Ltd. President

Luther A. Henderson Byron T. Cooper
President - Pirvest, Inc. Vice President, Construction and
Planning
John C. Stiska
Chairman and Chief Executive Karen S. Hughes
Officer - Triton Group Ltd. Vice President, Chief Financial
Officer and Secretary
N. Russell Walden
President - Ridgewood
Properties, Inc.

Corporate Offices
2859 Paces Ferry Road, Suite 700
Atlanta, Georgia 30339
Telephone: (770) 434-3670

Market For Registrant's Common Equity and Related Stockholder Matters

The common stock, $0.01 par value per share ("the common
stock"), of the Company is listed in the broker-dealer "Pink Sheets"
and trades in the over-the-counter market. Prior to June 12, 1989,
the common stock was quoted in the automated quotation system of the
National Association of Securities Dealers (NASDAQ). Subsequent to
the deletion of the Company's stock from the automated quotation
system of NASDAQ, there has been an absence of an established public
trading market for the common stock.

Shares outstanding and per share amounts for all periods
presented have been retroactively adjusted for the twenty-for-one
stock split effected in the form of a stock dividend on December 31,
1992, two-for-one stock split effected in the form of a stock dividend
on August 31, 1993, and a three-for-one stock split effected in the
form of a stock dividend on October 31, 1994. On October 31, 1995,
there were 963,480 shares of common stock outstanding held by
approximately 300 shareholders of record. The Company paid its first
and only cash dividend on the common stock during fiscal year 1990.
The dividend paid was approximately $0.06 per share of common stock,
which totaled approximately $397,000. The Company may pay future
dividends if and when earnings and cash are available. The
declaration of dividends on the common stock is within the discretion
of the Board of Directors of the Company and is, therefore, subject to
many considerations, including operating results, business and capital
requirements and other factors.

Selected Financial Data

-----------------------------------------------------------------
($000's omitted, except
per share data) 1995 1994 1993 1992 1991
- ---------------------------------------------------------------------------------------------------------

Balance Sheet Data as of August 31
Total Assets $ 9,673 $ 14,351 $ 34,655 $ 38,857 $ 44,619
Term Loan(s) Payable 2,796 5,415 12,316 14,620 15,797
Shareholders' Investment 5,612 7,440 20,564 22,424 29,884
Income Statement Data
Year Ended August 31
Net Revenues 8,675 30,082 18,619 16,667 13,878
Net Loss (1,656) (3,631) (1,860) (4,460) (4,859)
Loss Per Common Share (1) $ (1.77) $ (0.64) $ (0.32) $ (0.76) $ (0.83)

<FN>
(1) Retroactively adjusted for the twenty-for-one stock split effected
in the form of a stock dividend on December 31, 1992, two-for-one
stock split effected in the form of a stock dividend on August 31, 1993,
and a three-for-one stock split effected in the form of a stock dividend
on October 31, 1994.
</FN>

Management's Discussion and Analysis of Financial
Condition and Results of Operations

Liquidity and Capital Resources -

The Company's term loan entered into in November 1989 was
repaid in June 1995 from the proceeds from the sale of the hotel in
Orlando, Florida and a portion of the proceeds from the sale of land in
Ohio and the refinancing of the Ramada Inn discussed below. With the
repayment of this loan, the Company will be relieved of the burden of
servicing this debt and further deteriorating its cash position.

In April 1995, the Company sold its weekly rental hotel in
Orlando, Florida. The net proceeds were approximately $2,700,000. The
proceeds were used to reduce the outstanding balance of the Company's term
loan discussed above. Additionally, the Company received net proceeds of
approximately $1,920,000 from the sale of residential lots in Atlanta,
Georgia, undeveloped land in Ohio and all but one of the Company's
condominium loans in Florida. The proceeds were used to reduce the term
loan discussed above and to provide additional working capital to the
Company.

In June 1995, the Company received a loan from a commercial
lender to refinance the Ramada Inn in Longwood, Florida. The loan
proceeds are $2,800,000. The loan is for a term of 20 years with an
amortization period of 25 years, at the rate of 10.35%. Principal and
interest payments will be approximately $26,000 per month beginning August
1, 1995. A portion of the proceeds from the loan was used to repay the
term loan discussed above. The remaining proceeds of approximately
$1,500,000 will be used for working capital. In addition, the Company is
required to make a repair escrow payment comprised of 4% of estimated
revenues, as well as real estate tax and insurance escrow payments. The
total amount for these items will be a payment of approximately $20,000
per month and can be adjusted annually. The escrow funds will be used as
tax, insurance and repair needs arise. As of August 31, 1995, there was
approximately $140,000 of escrowed funds related to this loan agreement.

In March 1995, the Company borrowed approximately $381,000
against the cash value on key-person life insurance contracts which the
Company purchased concurrently with the implementation of the Supplemental
Retirement and Death Benefit Plan. The net proceeds to the Company were
approximately $358,000 due to the prepayment of interest on the loan. The
proceeds were used to provide additional working capital to the Company.

On August 16, 1995, RW Hotel Partners, L.P. was organized as a
limited partnership (the "Partnership") under the laws of the State of
Delaware. Concurrently, the Company formed Ridgewood Hotels, Inc., a
Georgia corporation ("Ridgewood Hotels") which became the sole general
partner in the Partnership with RW Hotel Investments, L.L.C. ("Investor")
as the limited partner. Ridgewood Hotels has a 1% base distribution
percentage versus 99% for the Investor. However, distribution percentages
do vary depending on certain defined preferences and priorities pursuant
to the Partnership Agreement ("Agreement") which are discussed below. The
partnership was formed to acquire a hotel property in Louisville,
Kentucky. The terms of this partnership will serve as a guideline for
other potential acquisitions with the Investor or its affiliates.

The Partnership Agreement was amended and restated on September
8, 1995. Distributable Cash is defined as the net income from the
property before depreciation plus any net sale proceeds and net financing
proceeds less capital costs. Distributions of Distributable Cash shall be
made as follows:

- First, to the Investor until there has been distributed to
the Investor an amount equal to a 15% cumulative internal rate of return
on the Investor's investment.

- Second, to Ridgewood Hotels until the aggregate amount
received by Ridgewood Hotels equals the aggregate cash contributions made
by Ridgewood Hotels to the Partnership (as of 8/31/95, Ridgewood Hotels
had contributed approximately $232,000).

- Third, 12% to Ridgewood Hotels and 88% to the Investor until
there has been distributed to the Investor an amount equal to a 25%
cumulative internal rate of return on Investor's investment.

- Fourth, 75% of the residual to the Investor and 25% to
Ridgewood Hotels.

A Management Agreement exists between the Partnership and the
Company as Manager ("Manager") for the purpose of managing a hotel in
Louisville, Kentucky. The Manager shall be entitled to the following
property management fees:

(1) 2.5% of the gross revenues from the hotel property.

(2) 1% of the gross revenues from the hotel property as an
incentive fee if distributable cash equals or exceeds 13.5% of certain
aggregate acquisition costs. Currently, no management fees are payable
with respect to the first 12-month period of management of the hotel.

A Construction Management Agreement exists between the
Partnership and the Manager for the purpose of managing certain
improvements to the property. No construction management fees are payable
with respect to the hotel purchased in Louisville, Kentucky.

The Company currently has approximately $232,000 invested in
the Partnership for the purchase of a hotel in Louisville, Kentucky. Five
other hotels are under contract to be purchased and would require
approximately $500,000 in additional capital contribution to the
Partnership by the Company. The Company also has approximately $113,000
of due diligence costs incurred for the hotels under contract that will be
reimbursed to the Company upon the closing of the hotels. The Company may
make future capital contributions to the Partnership. Management expects
to fund such capital contributions through available cash or from loans
from the Partnership. Additionally, the Company may invest in other
partnerships to acquire hotels in the future.

The Company formed a hotel management subsidiary in December
1994. The loss from the subsidiary for the fiscal year ended August 31,
1995 was $75,000. The loss was generated by expenses attributable to the
hotel management operations exceeding management fee revenue. This loss
is attributable to the assets of another company which the Company has an
option to purchase. The option agreement requires Cornerstone Management
and Development, Inc. (Maryland) to repay the Company if losses occur, but
because of the uncertainty of collecting this amount, the Company has
included this loss in its results of operations.

Since the Company is not currently generating sufficient
operating cash to cover overhead and debt service, the Company must
continue to sell real estate, seek alternative financing or otherwise
recapitalize the Company. Due to the sale of the hotel in Orlando,
Florida and the refinancing of the Ramada Inn, there is available cash of
approximately $1.8 million. This available cash will be used to fund
operating losses until new sources of income can be generated. The
Company also intends to aggressively pursue the acquisition of hotels and
hotel management contracts through similar partnerships as described above
which would provide additional cash flow.

The Company owns and operates one hotel and owns a number of
land parcels which are held for sale or development. The success of the
Company's operations continues to be dependent upon such unpredictable
factors as the general and local economic conditions to which the real
estate industry is particularly sensitive: labor, environmental issues,
weather conditions, consumer spending or general business conditions and
the availability of satisfactory financing.

Results of Operations -

Sales of real estate properties for the fiscal year ended
August 31, 1995 decreased 75% compared to 1994 due to the sale of the
Company's five mobile home parks and apartment complexes in 1994. Sales
of real estate properties for the fiscal year ended August 31, 1994,
increased 229% compared to 1993 due to the sale of the Company's five
mobile home parks. The Company had gains from real estate sales of
approximately $291,000, $1,789,000 and $1,407,000 during fiscal years
1995, 1994 and 1993, respectively. Gains or losses on real estate sales
are dependent upon the timing, sales price and the Company's basis in
specific assets sold and will vary considerably from period to period.

Revenues from real estate properties for fiscal year 1995
decreased $2,158,000, or 40%, compared to 1994. The decrease was
primarily due to the sale of the mobile home parks and apartments in 1994.
Revenues from real estate properties for fiscal year 1994 decreased
$1,273,000, or 19%, compared to 1993. This decrease also was primarily
due to the sale of the mobile home parks and apartments in 1994.

There were no mobile home sales during fiscal year ended August
31, 1995 due to the sale of the mobile home parks in prior years. Mobile
home sales decreased $1,103,000, or 19%, for the fiscal year ended August
31, 1994, compared to 1993. This decrease was due to the sale of certain
mobile home parks. Related costs and expenses decreased $662,000, or 10%,
for the same period due to the sale of the mobile home parks.

Expenses of real estate properties decreased $1,987,000, or
41%, for the fiscal year ended August 31, 1995 compared to 1994 due to the
sale of the mobile home parks, apartments and hotel. Expenses of real
estate properties decreased $374,000, or 7%, for the fiscal year ended
August 31, 1994, compared to 1993 due to the sale of the mobile home parks
and apartments.

Income from loans and temporary investments decreased $68,000
for the fiscal year ended August 31, 1995 compared to 1994. The decrease
is due to less cash available for investment. Income from loans and
temporary investments increased $37,000 for the fiscal year ended August
31, 1994, compared to 1993. The increase is due to more cash available
for investment.

Other income remained relatively insignificant for all three
fiscal years ending August 31, 1995, 1994 and 1993. The provision of
$50,000 for possible losses in fiscal year 1995 pertains to a land parcel
in Atlanta, Georgia which has been sold. The provision of $1,638,000 for
possible losses in fiscal year 1994 pertains to land parcels in Dallas,
Texas; Phoenix, Arizona and Atlanta, Georgia. It was management's belief
that an additional provision in 1995 and 1994 was necessary to properly
reflect the current net realizable value of the property.

Interest expense decreased by $328,000 during the fiscal year
ended August 31, 1995, compared to 1994 and $224,000 during the fiscal
year ended August 31, 1994, compared to 1993. The decreases are primarily
due to reductions in the principal amount outstanding under the Company's
term loans.

General, administrative and other expenses decreased by
$245,000 and $166,000 for the fiscal year ended August 31, 1995, compared
to 1994 and fiscal year ended August 31, 1994, compared to 1993,
respectively. Both of these decreases were due to management's continuing
effort to reduce and control overhead.

During fiscal year ended August 31, 1995, the Company formed a
hotel management subsidiary. The loss from the subsidiary was $75,000.
The loss was generated by expenses attributable to the hotel management
operations exceeding management fee revenue.

Due to the Company's aggressive movement into the business of
acquiring, developing, operating and selling hotel properties throughout
the country, the Company incurred business development costs of $165,000
in fiscal year 1995.

In September 1993, the Company adopted Statement of Financial
Accounting Standards No. 109 (FAS 109), "Accounting for Income Taxes".
Upon adoption of FAS 109 the Company changed its method of accounting for
income taxes from the deferred method (APB 11) to an asset and liability
approach. This approach requires the recognition of deferred tax
liabilities and assets for the expected future tax consequences of
temporary differences between the carrying amounts and the tax bases of
other assets and liabilities. The adoption of FAS 109 had no effect on
the Company's financial condition or results of operations for the year
ended August 31, 1994.

In March 1995, the Financial Accounting Standards Board issued
Statement of Accounting Standards No. 121 (FAS 121), "Accounting for the
Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed of."
FAS 121 establishes new standards for determining and measuring impairment
of long-lived assets held by an entity for investment purposes or for
disposal. According to the provisions of FAS 121, an entity should assess
impairment on assets held for investment or disposal whenever events or
changes in circumstances, whether economical or otherwise, indicate the
recorded amount of the asset may not be recoverable. FAS 121 is effective
for fiscal years beginning after December 15, 1995, although early
adoption is encouraged. The Company's management has elected to defer
early adoption of the effects of FAS 121; however, upon adoption,
management does not expect the effects of FAS 121 to have a material
adverse impact on the Company's financial statements.

Effect of Inflation -

Inflation tends to increase the Company's cash flow from income
producing properties since rental rates generally increase by a greater
amount than associated expenses. Inflation also generally tends to
increase the value of the Company's land portfolio.

Offsetting these beneficial effects of inflation are the
increased cost and decreased supply of investment capital for real estate
that generally accompany inflation.

RIDGEWOOD PROPERTIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

AUGUST 31, 1995 AND 1994

($000'S omitted, except per share data)

August 31, August 31,
ASSETS 1995 1994
------ --------- ---------

REAL ESTATE INVESTMENTS:
Real Estate Properties
Operating Properties $ 1,461 $ 4,196
Land Held for Sale 10,104 10,903
---------- ----------
11,565 15,099

Mortgage Loans 44 503
---------- ----------
Total real estate investments 11,609 15,602

Allowance for Possible Losses (4,700) (4,873)
---------- ----------
Net real estate investments 6,909 10,729

INVESTMENT IN LIMITED PARTNERSHIP 232 --

CASH AND CASH EQUIVALENTS 1,880 2,804

OTHER ASSETS 652 818
---------- ----------

$ 9,673 $ 14,351
========== ==========

<FN>

The accompanying notes are an integral part of these consolidated
financial statements.

</FN>

August 31, August 31,
LIABILITIES AND SHAREHOLDERS' INVESTMENT 1995 1994
---------------------------------------- ---------- ----------

ACCOUNTS PAYABLE $ 102 $ 253

ACCRUED SALARIES, BONUSES AND
OTHER COMPENSATION 737 673

ACCRUED PROPERTY TAX EXPENSE 146 187

ACCRUED INTEREST AND OTHER LIABILITIES 280 383

TERM LOAN 2,796 5,415
---------- ----------
Total Liabilities 4,061 6,911
---------- ----------

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' INVESTMENT
Series A Convertible Preferred Stock,
$1 par value, 1,000,000 shares
authorized, 450,000 shares
issued and outstanding in 1994 and 1995
liquidation preference
and callable at $3,600,000. 450 450
Common stock, $0.01 par value, 5,000,000
shares authorized, 963,480
shares issued and outstanding in 1994 and 10 10
1995.
Paid-in Surplus 16,196 16,368
Accumulated deficit since
December 30, 1985 (11,044) (9,388)
---------- ----------
Total Shareholders' Investment 5,612 7,440
---------- ----------
$ 9,673 $ 14,351
========== ==========
<FN>
The accompanying notes are an integral part of these consolidated
financial statements.
</FN>

RIDGEWOOD PROPERTIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF LOSS

FOR THE YEARS ENDED AUGUST 31, 1995, 1994 AND 1993

($000's Omitted, except per share data)

1995 1994 1993
--------- ------- --------

REVENUES:
Revenues from real estate properties............... $ 3,252 $ 5,410 $ 6,683
Revenues from hotel management .................... 287 -- --
Sales of real estate properties ................... 5,018 19,848 6,032
Sales of mobile homes.............................. -- 4,594 5,697
Income from loans and temporary investments........ 113 181 144
Other.............................................. 5 49 63
---------- --------- ---------
8,675 30,082 18,619
---------- --------- ---------
COSTS AND EXPENSES:
Expenses of real estate properties................. 2,868 4,855 5,229
Expenses of hotel management ...................... 362 -- --
Costs of real estate sold ......................... 4,727 18,059 4,625
Costs of mobile homes sold......................... -- 5,757 6,419
Depreciation ...................................... 364 1,074 1,486
Provision for possible losses ..................... 50 1,638 --
Interest expense, net of interest capitalized...... 410 738 962
General, administration and other.................. 1,347 1,592 1,758
Business development .............................. 165 -- --
---------- --------- ---------
10,293 33,713 20,479
---------- --------- ---------
LOSS BEFORE INCOME TAXES (1,618) (3,631) (1,860)

INCOME TAXES (38) -- --
---------- --------- ---------
NET LOSS $ (1,656) $ (3,631) $ (1,860)
---------- --------- ---------
LOSS PER COMMON SHARE $ (1.72) (0.64) (0.32)
========== ========= =========
<FN>
The accompanying notes are an integral part of these consolidated financial statements.
</FN>

Ridgewood Properties, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

For the Years Ended August 31, 1995, 1994 and 1993

($000's Omitted)

1995 1994 1993
Cash flows from operating activities: --------- ----------- -----------

Net loss ................................................... $ (1,656) $ (3,631) $ (1,860)
Adjustments to reconcile net loss to
net cash used by operating activities:
Depreciation and amortization .......................... 437 1,078 1,617
(Decrease) Increase in allowance for possible losses.... (173) 1,638 (49)
Gain from sale of real estate properties ............... (68) (1,788) (1,348)
Decrease in mobile home inventory ...................... -- 1,355 223
Decrease (increase) in other assets .................... 209 411 (427)
Decrease in accounts payable and accrued liabilities.... (232) (370) (39)
---------- ------------ ------------
Total adjustments ...................................... 173 2,324 (23)
---------- ------------ ------------
Net cash used by operating activities .................. (1,483) (1,307) (1,883)
---------- ------------ ------------
Cash flows from investing activities:
Principal payments received on mortgage loans ............ 36 60 10
Foreclosures on mortgage loans ........................... -- -- (10)
Investment in limited partnership ........................ (232) -- --
Proceeds from sale of real estate ........................ 4,620 17,867 5,870
Additions to real estate properties ...................... (915) (1,015) (1,290)
---------- ------------ ------------
Net cash provided by investing activities .............. 3,509 16,912 4,580
---------- ------------ ------------
Cash flows from financing activities:
Dividends on preferred stock ............................. (172) -- --
Purchase and retirement of common stock .................. -- (8,042) --
Proceeds from issuance of debt ........................... 2,800 2,433 3,831
Debt financing costs ..................................... (159) -- --
Repayments of debt ....................................... (5,419) (9,334) (6,135)
---------- ------------ ------------
Net cash used by financing activities .................. (2,950) (14,943) (2,304)
---------- ------------ ------------
Net (decrease) increase in cash and cash equivalents ......... (924) 662 393
Cash and cash equivalents at beginning of year ............... 2,804 2,142 1,749
---------- ------------ ------------
Cash and cash equivalents at end of year ..................... $ 1,880 $ 2,804 $ 2,142
========== ============ ============

<FN>
The accompanying notes are an integral part of these consolidated financial statements.
</FN>

Ridgewood Properties, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

For the Years Ended August 31, 1995, 1994 and 1993

- -------------------------------------------------------------------------------------------------

Supplemental disclosures of
cash flow information:
1995 1994 1993
------------ ------------ ------------

Interest paid ...................................... $ 450,000 $ 698,000 $ 996,000
Income taxes paid .................................. $ 38,000 $ -- $ --

- ------------------------------------------------------------------------------------------------

Supplemental disclosure of non-cash activity in fiscal year 1994:

Charge-off of fully-reserved loan ................... $ 227,000

Issuance of preferred stock in exchange for shares of
common stock ........................................ $ 450,000

Purchase of common stock in exchange for note........ $ 1,450,000

- ------------------------------------------------------------------------------------------------

<FN>
The accompanying notes are an integral part of these consolidated financial statements.
</FN>

RIDGEWOOD PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' INVESTMENT
FOR THE YEARS ENDED AUGUST 31, 1995, 1994 AND 1993
($000's Omitted, except per share data)

(NOTES 1, 6 & 10)

Preferred Common
Stock Stock Accumulated Total
----------------------- ------------------------- Paid-in Earnings Shareholders'
Shares Amount Shares Amount Surplus (Deficit) Investment
---------- ---------- ------------ ---------- ---------- ---------- ----------

Balance, August 31, 1992 -- $ -- 5,868,960 $ 59 $ 26,262 $ (3,897) $ 22,424

Net loss -- -- -- -- -- (1,860) (1,860)
---------- ---------- ------------ ----------- ----------- ----------- -----------
Balance, August 31, 1993 -- $ -- 5,868,960 $ 59 $ 26,262 $ (5,757) $ 20,564

Purchase of common stock
for cash and issuance
of preferred stock 450,000 450 (4,365,840) (44) (8,449) -- (8,043)

Purchase of common
stock in exchange
for note -- -- (539,640) (5) (1,445) -- (1,450)

Net Loss -- -- -- -- -- (3,631) (3,631)
----------- ----------- ------------- ----------- ----------- ----------- -----------
Balance, August 31, 1994 450,000 $ 450 963,480 $ 10 $ 16,368 $ (9,388) $ 7,440

Net Loss -- -- -- -- -- (1,656) (1,656)
Dividends on
Preferred Stock -- -- -- -- (172) -- (172)
----------- ----------- ------------- ----------- ----------- ----------- -----------

Balance, August 31, 1995 450,000 $ 450 963,480 $ 10 $ 16,196 $ (11,044) $ 5,612
=========== =========== ============= =========== =========== =========== ===========

<FN>
The accompanying notes are an integral part of these consolidated financial statements.
</FN>

Ridgewood Properties, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
August 31, 1995, 1994 and 1993

1. Significant Accounting Policies

General -

The Company's common stock is listed in the broker-dealer "Pink
Sheets" and traded in the over-the-counter market (see Note 6). During
the fourth quarter of fiscal year 1994, the Company purchased and retired
all of the shares of common stock ("Triton Shares") owned by the Company's
then-majority stockholder, Triton Group, Ltd. ("Triton"). The cash used
to purchase the common stock was from the proceeds received by the Company
from the sale of its mobile home parks in June 1994. In conjunction with
this purchase, the Company issued 450,000 shares of Series A Convertible
Preferred Stock (the "preferred stock") to Triton. The preferred stock is
redeemable by the Company at $8.00 per share and accrues dividends at a
rate of $0.40 per share annually for the first two years and at a rate of
$0.80 per share annually thereafter. Dividends are payable quarterly
commencing on November 1, 1994. Each share of the preferred stock is
convertible into three shares of the Company's common stock either upon
default of the dividend payments or at the end of two years and is subject
to certain anti-dilution adjustments. In the event of any liquidation,
dissolution or winding up of the Company, whether voluntary or
involuntary, the holders of the shares of preferred stock shall be
entitled to receive $8.00 per share of preferred stock plus all dividends
accrued and unpaid thereon. So long as a minimum of 50,000 shares of
preferred stock is outstanding, Triton shall be entitled to elect one
additional director to serve on the Board of Directors of the Company.
Additionally, as long as Triton is the holder of the minimum 50,000 shares
of preferred stock and both John C. Stiska and Michael M. Earley are
officers of Triton, then the Company's Board of Directors shall consist of
four members, two of which would be Mr. Stiska and Mr. Earley (and wherein
either Mr. Stiska or Mr. Earley is considered to be the additional
director to which Triton is entitled to elect.) No change of control for
financial reporting purposes of the Company is deemed to have occurred
because of Triton's retaining control of 50% of the Board of Directors and
holding preferred shares convertible into 1,350,000 of the Company's
common stock representing 58% of the total shares outstanding (after
giving effect to the issuance thereof).

The Company also purchased and retired all the shares of common
stock owned by Hesperus Partners, Ltd. ("Hesperus") (the "Hesperus
Shares), formerly known as Harris Associates, L.P. The stock was
exchanged for a note the Company received from Sun Communities Operating
Limited Partnership in conjunction with the sale of the mobile home parks
(the "Note"). In addition to assigning the Note and the mortgage securing
the Note, the Company had agreed and did pay Hesperus interest on the
outstanding principal balance of the Note from the closing date through
June 15, 1995, and has agreed to grant Hesperus the right to require the
Company to repurchase the Note and the mortgage following an uncured
principal payment default by the obligor under the Note or by certain
uncured payment defaults by the Company. The Company's President, N.
Russell Walden, is the owner of approximately 42% of the Company's
outstanding shares of common stock.

Since the Company is not currently generating sufficient
operating cash to cover overhead and debt service cost, the Company must
continue to sell real estate, seek alternative financing, or otherwise,
recapitalize the Company. It is currently reviewing the viability of all
of these alternatives.

Basis of Presentation and Consolidation -

The accompanying financial statements of the Company present the
historical cost basis amount of assets, liabilities, revenues, costs and
expenses and shareholders' investment of the real estate business,
formerly known as CMEI, for the periods presented.

In 1995, the Company formed two wholly-owned subsidiaries for
the purpose of managing hotels and another for the sole purpose of owning
the hotel in Longwood, Florida, which serves as collateral for the
Company's term loan. The lender required that a separate subsidiary own
the hotel. One other subsidiary remains, but is not operational.

All significant intercompany balances and transactions have
been eliminated.

Valuation of Real Estate Properties -

The Company carries its real estate properties at the lower of cost
or net realizable value. Where estimated net realizable value is lower
than cost, an allowance for possible losses is provided (see Note 2).

The allowance for possible losses relates to all real estate
investments, including mortgage loans and real estate properties. The
adequacy of the allowance for possible losses is evaluated by means of
periodic reviews of the investment portfolio on an individual asset basis.

Depreciation Policies -

The Company depreciates operating properties and any related
improvements by using the straight-line method over the estimated useful
lives of such assets, which are generally 30 years for building and land
improvements and 5 years for furniture, fixtures and equipment.

Capitalization Policies -

The Company capitalizes interest as a cost of properties while they
are under construction or development. Costs of planning and development
performed by outside contractors and all other direct costs related to
properties under construction or development are also capitalized.
Capitalization of interest and other costs is discontinued when a project
is substantially completed, or if active development ceases.

Total interest incurred and paid amounted to approximately $450,000,
$698,000, and $996,000 in 1995, 1994 and 1993, respectively. No interest
was capitalized; however, the effect on the financial statements from
capitalizing amounts permitted would not have been material.

Repairs and maintenance costs are expensed in the period
incurred. Major improvements to existing properties which increase the
usefulness or useful life of the property are capitalized.

Sale of Real Estate -

All revenue related to the sale of real estate is recognized at the
time of closing. The Company allocates costs of real estate sold using
the specific identification or relative sales value methods based on the
nature of the development. Profit recognition is based upon the Company
receiving adequate cash down payments and other criteria specified by
existing accounting literature.

Cash and Cash Equivalents -

For the purpose of the Statement of Cash Flows, cash includes cash
equivalents. Cash equivalents include all highly liquid investments with
maturities of three months or less.

2. Real Estate Investments

The Company's real estate properties by type at August 31, 1995, and
1994 were as follows ($000's omitted):

Furniture
August 31, 1995 Land & Fixtures &
Type of Project Buildings Equipment Total

Hotel 2,535 295 2,830

Less -- accumulated
depreciation (1,369)

Net operating properties 1,461
Land 10,104 - 10,104

Total $11,565
=======

Furniture,
August 31, 1994 Land & Fixtures &
Type of Project Buildings Equipment Total

Hotels $ 5,328 $ 1,537 $ 6,865
Less -- accumulated
depreciation (2,669)
-------
Net operating properties 4,196
Land 10,903
-------
Total $15,099
=======

Changes in the allowance for possible losses for the
years ended August 31, 1995, 1994 and 1993 were as follows
($000's omitted):

1995 1994 1993

Allowance, beginning of year $4,873 $3,625 $3,674
Provision for possible losses 50 1,638 --
Chargeoff and reversal of
reserves from the sales of
real estate assets (223) (163) (49)
Chargeoff of fully reserved
loan -- (227) --

Allowance, end of year $4,700 $4,873 $3,625
====== ======= ======

3. Commitments and Contingencies

In August 1991, each executive officer was offered a Post-
Employment Consulting Agreement (the "Consulting Agreement(s)") whereby
the officer agrees that if he or she is terminated by the Company for
other than good cause, the officer will be available for consulting at a
rate equal to their annual compensation immediately prior to termination.
All officers have chosen to enter into Consulting Agreements. In
addition, one other employee was offered and has chosen to enter into a
one year Consulting Agreement. The executive, upon termination, agrees to
sign an unconditional release of all claims and liability in exchange for
a one (one employee) or two (three executives) year consulting fee
arrangement, depending upon the years of service as an officer or the
designation as a senior executive officer.

On May 2, 1995 a complaint was filed in the Court of Chancery of the
State of Delaware (New Castle County) entitled William N. Strassburger v.
Michael M. Early, Luther A. Henderson, John C. Stiska, N. Russell Walden,
and Triton Group, Ltd., defendants, and Ridgewood Properties, Inc.,
nominal defendant, C.A. No. 14267 (the "Complaint"). The plaintiff is an
individual shareholder of the Company who purports to file the Complaint
individually, representatively on behalf of all similarly situated
shareholders, and derivatively on behalf of the Company. The Complaint
challenges the actions of the Company and its directors in consummating
the Company's August 1994 repurchase of its common stock held by Triton
Group, Ltd. and Hesperus Partners Ltd. in five counts, denominated Waste
of Corporate Assets, Breach of Duty of Loyalty to Ridgewood, Breach of
Duty of Good Faith, Intentional Misconduct, and Breach of Duty of Loyalty
and Good Faith to Class.

The Complaint seeks (a) permission of the court to proceed as a
class action with respect to one count; (b) rescission of the repurchase
of Triton's Ridgewood common stock, together with recovery (to Ridgewood)
of the approximately $8 million in cash and the shares of the preferred
stock received by Triton in the repurchase, or in the alternative,
unspecified restitution or damages to Ridgewood resulting from the Triton
repurchase; (c) unspecified restitution or damages to Ridgewood resulting
from the Hesperus repurchase; (d) unspecified damages to Ridgewood
resulting from the alleged breaches of the defendants' duties of loyalty
and good faith and their alleged intentional misconduct; (e) unspecified
damages for any separate injury allegedly suffered by members of the
purported class; and (f) the plaintiff's costs and expenses of this
litigation, including attorneys' fees.

The Company has answered the Complaint, denying all allegations
of wrongdoing either on its part or that of its directors. The Company's
management believes the claims made in the Complaint are without merit,
and that the shareholders of Ridgewood benefited from the challenged
transactions. Management intends to vigorously contest this matter.

As more fully described in Note 8, the Company is required to
fund certain capital contributions to RW Hotel Partners, L.P. as the
partnership acquires hotels.

4. Notes Payable

A. In November 1989, the Company entered into a $15,000,000
Revolving Line of Credit with a commercial bank. Effective December 31,
1991, the Company's Revolving Line of Credit expired and the outstanding
principal balance of $15,000,000 was converted to a term loan. In January
1992, the term loan was amended to postpone principal payments for seven
months. Under the amended agreement, interest accrued at the rate of one
percent (1%) per annum above the prime rate of the lender. Under the term
loan agreement, the Company was required to make interest payments on the
outstanding principal balance of the note, which payments commenced on
February 1, 1992, and monthly thereafter through December 1, 1996.
Commencing on September 1, 1992, and thereafter on the first day of each
month through December 1, 1996, the outstanding principal amount of the
note shall be repaid in equal monthly payments. In June 1994, the loan
agreement was amended whereby proceeds from future sales of property
securing the term loan will serve to reduce the remaining monthly
amortization thereby reducing the monthly payment rather than reducing
the remaining principal due at the end of the term loan. On January 1,
1997, the remaining outstanding principal balance was to be payable in
full. The entire loan was repaid in full in June 1995.

The approximate average amounts of borrowings on the term loan
during fiscal years 1995 and 1994 were $3,996,000 and $7,782,000, at
average interest rates of approximately 9.32% and 7.47%, respectively.
The maximum amounts of borrowings outstanding under this note payable
during fiscal years 1995 and 1994 were $5,415,000 and $10,191,000,
respectively.

B. The Company entered into a $1,750,000 Wholesale Financing
Agreement ("Agreement") with a major commercial lender in February 1993.
This Agreement was repaid in full with the closing of the sale of all of
the mobile home parks in fiscal year 1994.

The approximate average amount of borrowings on the Agreement
during fiscal year 1994 was $976,000, at an average interest rate of
approximately 8.0%. The maximum amount of borrowings outstanding under
this note payable during fiscal year 1994 was approximately $1,318,000.

C. In November 1992, the Company entered into a term loan with
a commercial lender for $1,020,000. The entire loan was assumed by
another entity in March 1994. The approximate average amount of
borrowings on the term loan during fiscal year 1994 was $1,016,000, at an
average interest rate of 8.75%. The maximum amount of borrowings
outstanding under this term note during fiscal year 1994 was approximately
$1,017,000.

D. In June 1995, the Company entered into a loan with a
commercial lender to refinance the Ramada Inn in Longwood, Florida. The
loan proceeds are $2,800,000. The loan is for a term of 20 years with an
amortization period of 25 years, at the rate of 10.35%. Principal and
interest payments are approximately $26,000 per month beginning August 1,
1995. A portion of the proceeds from the loan was used to repay the term
loan discussed in A above. The remaining proceeds of approximately
$1,500,000 will be used for working capital. In addition, the Company is
required to make a repair escrow payment comprised of 4% of estimated
revenues, as well as real estate tax and insurance escrow payments. The
total amount for these items will be a payment of approximately $20,000
per month and can be adjusted annually. The escrow funds will be used as
tax, insurance and repair needs arise. As of August 31, 1995, there was
approximately $140,000 of escrowed funds related to this loan agreement.
Also, commitment fees and loan costs of approximately $159,000 are being
amortized over 20 years.

The approximate average amount of borrowings on the term loan
during fiscal year 1995 was $2,799,000, at an average interest rate of
10.35%. The maximum amount of borrowings outstanding under this loan was
$2,800,000.

Maturities of long-term debt during the Company's next five
fiscal years are as follows: 1996 - $25,000; 1997 - $28,000; 1998 -
$31,000; 1999 - $35,000; 2000 - $38,000.

5. Income Taxes

In September 1993, the Company adopted Statement of Financial
Accounting Standards No. 109 (FAS 109), "Accounting for Income Taxes".
Upon adoption, the Company changed its method of accounting for income
taxes from the deferred method (APB 11) to an asset and liability
approach. This approach requires the recognition of deferred tax
liabilities and assets for the expected future tax consequences of
temporary differences between the carrying amounts and the tax bases of
other assets and liabilities. The adoption of FAS 109 had no effect on
the Company's financial condition or results of operations for the year
ended August 31, 1994.

The Company's 1995 provision for income taxes is comprised of
$38,000 in alternative minimum tax. There was no provision for income
taxes for the years ended August 31, 1994 or 1993.

Deferred tax assets (liabilities) are comprised of the
following at August 31, 1995, and September 1, 1994, respectively:

(000's omitted)

1995 1994

Allowance for possible losses $ 1,598 $ 1,657
Excess of tax over book basis, land held
for sale or future development 14 14
Excess of tax over book basis, operating
properties -- 59
Excess of tax over book basis, other
investments -- 119
Depreciation 105 31
Other 232 54
Tax loss carryforwards 3,759 3,170
----- -----
Gross deferred tax assets 5,708 5,104
----- -----
Excess of book over tax basis, land held
for sale or future development (39) (39)
Excess of book over tax basis, operating
properties
Depreciation
Gross deferred tax liabilities (39) (39)
------ ------
Deferred tax assets valuation allowance (5,669) (5,065)
------ ------
$ 0 $ 0
======== =======

The net change in the valuation allowance for deferred tax
assets was an increase of $604,000. This change resulted primarily from
an increase in the Company's tax loss carryforward and other deferred tax
assets, offset by a decrease in nondeductible allowance for possible
losses relating to certain properties sold during fiscal year 1995.

Approximately $11,055,000 of tax loss carryforwards remain at
August 31, 1995 for income tax purposes. The carryforwards expire
$2,080,000 in 2005, $4,150,000 in 2006, $1,524,000 in 2007, $1,699,000 in
2008 and $1,602,000 in 2010. As a result of a change in control during
fiscal year 1994, the amount of tax loss carryforwards which may be
utilized by the Company in any one year period is limited to
approximately $940,000. The Company has unused net operating loss
carryforwards in certain states in which it operates which are available
to offset future state taxable income in those states. No benefit for the
remaining loss carryforwards has been recognized in the financial
statements.

6. Shareholders' Investment

Authorized Shares of Common and Preferred Stock -

On March 30, 1993, the shareholders of the Company approved an
amendment to the Company's Certificate of Incorporation increasing the
authorized number of shares of the Company's common stock, par value $0.01
per share, from 1,000,000 shares to 2,000,000 shares. On January 12,
1994, the shareholders of the Company approved an amendment to the
Company's Certificate of Incorporation increasing the authorized number of
shares of the Company's common stock from 2,000,000 shares to 3,000,000
shares. On January 4, 1995, the shareholders of the Company approved an
amendment to the Company's Certificate of Incorporation increasing the
authorized number of shares of the Company's common stock from 3,000,000
shares to 5,000,000 shares and to increase the number of authorized shares
of the Company's preferred stock, par value $1.00 per share, from 500,000
shares to 1,000,000 shares. In addition, the shareholders approved and
adopted a proposal to amend the Ridgewood Properties, Inc. 1993 Stock
Option Plan, increasing the number of shares of common stock reserved for
issuance or transfer upon the exercise of options to be granted from time
to time thereunder, from an aggregate of 900,000 to 1,200,000 shares of
common stock. Accordingly, 4,036,520 shares of common stock are available
for future issuance, of which 1,200,000 are reserved for the Company's
stock option plan. There are currently 963,480 shares of common stock
outstanding.

There are currently 1,000,000 authorized shares of the
Company's Series A Convertible Preferred Stock. On August 15, 1994, the
Company issued 450,000 shares of the Company's preferred stock (see
"Purchase of Common Shares" below), which represent the only outstanding
preferred shares. Accordingly, 550,000 shares of preferred stock are
available for future issuance.

Stock Splits -

On December 31, 1992, the Board of Directors declared a stock
split effected in the form of a stock dividend on the Company's
outstanding common stock. All shareholders of record as of December 31,
1992 received a dividend of 19 shares of common stock for each one share
of common stock held. The stock dividend was distributed on January 15,
1993.

On August 31, 1993, the Board of Directors declared a stock
split effected in the form of a stock dividend on the Company's
outstanding common stock. All shareholders of record as of August 31,
1993 received one share of common stock for each share of common stock
held. The stock was distributed on September 20, 1993.

On October 26, 1994, the Board of Directors declared a stock
split effected in the form of a stock dividend on the Company's
outstanding common stock. All shareholders of record as of October 31,
1994 received two shares of common stock for each share of common stock
held.

The number of shares presented in the accompanying financial
statements has been changed to reflect the stock splits. Because of the
retroactive treatment, some share numbers presented in the financial
statements give the appearance that there were, in some instances, more
shares of common stock outstanding than authorized when, in fact, there
was not.

Loss Per Common Share -

Loss per common share is calculated based upon the weighted
average number of shares outstanding during the period of approximately
963,000, 5,676,000 and 5,868,000 in 1995, 1994 and 1993, respectively.

Purchases of Common Stock by the Company -

As described in Note 1, on August 15, 1994, the Company
purchased all (4.38 million) of the shares of the Company's common stock,
$0.01 par value, held by the Company's then-majority stockholder, Triton
Group Ltd. The Triton Shares represented 74.4% of the 5.88 million shares
of common stock outstanding prior to the consummation of the transaction.
In consideration for the Triton Shares, the Company paid $8.0 million in
cash and authorized and issued 450,000 shares of the Company's preferred
stock.

In addition, on August 29, 1994, the Company acquired all
(539,640) of the shares of common stock owned by Hesperus Partners Ltd.,
formerly known as Harris Associates, L.P., in exchange for a note
receivable in the principal amount of $1.45 million executed by Sun
Communities Operating Limited Partnership and held by the Company (see
Note 1). In addition to assigning the Note and the mortgage securing the
Note, the Company had agreed and did pay to Hesperus interest on the
outstanding principal balance of the Note from the closing date through
June 15, 1995, and has agreed to grant Hesperus the right to require the
Company to repurchase the Note and the mortgage following an uncured
principal payment default by the obligor under the Note or by certain
uncured payment defaults by the Company.

Following the purchase of the Triton and Hesperus Shares by the
Company, there are 963,480 shares of common stock outstanding. Of the
Company's issued and outstanding shares of common stock, approximately 42%
are owned by the Company's President, N. Russell Walden.

1993 Stock Option Plan -

On March 30, 1993, the Company granted options to purchase
378,000 shares of common stock at a price of approximately $1.83 per share
to its key employees and one director under the Ridgewood Properties, Inc.
1993 Stock Option Plan (the "Plan"). The options will vest over a four
year period in 25% increments. All options expire ten years from the date
of grant, unless earlier by reason of death, disability, termination of
employment, or for other reasons outlined in the Plan. As of August 31,
1994, approximately 284,000 options are currently exercisable.

On January 28, 1994, the Company granted options to purchase
375,000 and 75,000 shares of common stock at a price of $1.00 per share to
its President and Chief Financial Officer, respectively, under the Plan.
The options are exercisable immediately and expire on January 31, 1997.
If all vested options are exercised, the President and Chief Financial
Officer would hold 53% and 8%, respectively, of the total outstanding
shares of common stock.

On January 4, 1995, the shareholders approved an increase in
the number of authorized shares reserved for the Company's stock option
plan from 900,000 to 1,200,000.

7. Supplemental Retirement and Death Benefit Plan

The Company implemented a non-qualified Supplemental Retirement
and Death Benefit Plan with an effective date of January 1, 1987. The
Plan supplements other retirement plans and also provides pre-retirement
death benefits to participants' beneficiaries.

Concurrent with the implementation of the Supplemental
Retirement and Death Benefit Plan, the Company purchased key-person life
insurance contracts on the lives of the Plan participants. The policies
are owned by and payable to the Company and are "increasing whole life"
insurance. The Company pays level annual premiums, may borrow against
cash values earned, and pays interest annually on any loans which may be
cumulatively outstanding. In March 1995, the Company borrowed
approximately $381,000 against the cash values. The net proceeds to the
Company were approximately $358,000 due to the prepayment of interest on
the loan.

For the fiscal years ending August 31, 1995, 1994 and 1993, the
pension expense was approximately $60,000, $63,000, and $66,000,
respectively.

8. Investment in Limited Partnership

- First, to the Investor until there has been distributed to
the Investor an amount equal to a 15% cumulative internal rate of return
on the Investor's investment.

- Third, 12% to Ridgewood Hotels and 88% to the Investor until
there has been distributed to the Investor an amount equal to a 25%
cumulative internal rate of return on Investor's investment.

- Fourth, 75% of the residual to the Investor and 25% to
Ridgewood Hotels.

(1) 2.5% of the gross revenues from the hotel property.

(2) 1% of the gross revenues from the hotel property as an
incentive fee if distributable cash equals or exceeds 13.5% of certain
aggregate acquisition costs. No management fees are payable with respect
to the first 12-month period of management of this hotel.

A Construction Management Agreement exists between the
Partnership and the Manager for the purpose of managing future
improvements to the property.

The Company currently has approximately $232,000 invested in
the Partnership. The Partnership purchased a hotel in Louisville,
Kentucky for approximately $16,000,000. Five other hotels are under
contract to be purchased by the partnership for an aggregate cost of
approximately $18,000,000, and would require approximately $500,000 in
additional capital contribution to the Partnership by the Company. The
Company also has approximately $113,000 of due diligence costs incurred
for the hotels under contract that will be reimbursed to the Company upon
the closing of the hotels. These costs are reflected in Other Assets.
The Company may make future capital contributions to the Partnership.
Management expects to fund such capital contributions through available
cash or from loans from the Partnership. Additionally, the Company may
invest in other partnerships to acquire hotels in the future.

In December 1993, the Company entered into a joint venture
agreement for the purpose of developing approximately a 150 lot
subdivision in Atlanta, Georgia. The Company contributed development
funds, and the other partner provided the land. Both partners are
responsible for any deficits resulting from the project. As of August 31,
1995, the Company has invested approximately $61,000 into the joint
venture, but was refunded its entire investment in September 1995. The
joint venture has been dissolved.

9. Employee Savings Plan

The Ridgewood Properties Employee Savings Plan ("Savings Plan")
is a savings and salary deferral plan which is intended to qualify for
favorable tax treatment under Sections 401(a) and 401(k) of the Internal
Revenue Code of 1986. The Savings Plan includes all employees of the
Company who have completed one year of service and have attained age
twenty-one.

Each participant in the Savings Plan may elect to reduce his or
her compensation by any percentage, not to exceed 15% of compensation when
combined with any Matching Basic or Discretionary Employer Contributions
(below) made on behalf of the participant, and have such amount
contributed to his or her account under the Savings Plan. Elective
employer contributions are made prior to the withholding of income taxes
on such amounts. A participant may also elect to contribute to the Plan
an amount of cash or property equal to or up to 10% of his or her
compensation ("Voluntary Contributions"). Voluntary Contributions are
made on an after-tax basis.

The Savings Plan provides for an employer matching contribution
in an amount equal to 50% of the elective employer contributions, provided
that in no event shall such employer matching contributions exceed 3% of
the participant's compensation. In addition, the Board of Directors of
the Company is authorized to make discretionary contributions to the
Savings Plan out of the Company's current or accumulated profits
("Discretionary Contributions"). Discretionary Contributions are
allocated among those participants who complete at least 1,000 hours of
service during the plan year and are employed by the Company on the last
day of the plan year.

Employees are subject to a seven year graduated vesting
schedule with respect to Basic Employer Contributions, Matching Employer
Contributions and Discretionary Contributions.

Distributions from the Savings Plan will generally be available
upon or shortly following a participant's termination of employment with
the Company, with additional withdrawal rights with respect to Voluntary
Contributions.

For the fiscal years ending August 31, 1995, 1994 and 1993,
expense for the Employee Savings Plan was approximately $15,000, $17,000
and $38,000, respectively.

10. Sale of Operating Properties

In November 1992, the Company sold its warehouse in Tennessee
for $400,000. The Company recognized a gain on the sale of approximately
$135,000. In May 1993, the Company sold one of its mobile home parks for
$3,990,000, resulting in a gain of approximately $1,256,000.

In March 1994, the Company sold its apartments in Dallas,
Texas, for $4,100,000, resulting in a gain of approximately $1,227,000.
The gross purchase price included a $1,015,000 term loan secured by one of
the apartments which is insured by the Department of Housing and Urban
Development and which was assumed by the buyer at the time of purchase.
An additional $1,710,000 of the proceeds were used to reduce the Company's
debt. Net proceeds to the Company were approximately $1,100,000.

In June 1994, the Company sold its five mobile home parks for
$13,900,000, resulting in a gain of approximately $694,000. Net proceeds
to the Company were approximately $12,000,000. Approximately $386,000 was
applied to certain selling and operational costs. In addition, the
Company accepted a $1,450,000 note which is secured by one of the mobile
home parks. The note was subsequently exchanged for common stock of the
Company in August 1994 as discussed in Note 1.

In April 1995, the Company sold the Ridgewood Lodge, its weekly
rental hotel in Orlando, Florida. The net proceeds, after commissions,
were approximately $2,700,000. The gain on the sale was approximately
$250,000. The proceeds were used to reduce the outstanding balance of the
Company's term loan.

Report of Independent Accountants

To the Board of Directors and
Shareholders of Ridgewood Properties, Inc.

In our opinion, the accompanying consolidated balance sheets and the
related consolidated statements of loss, of cash flows and of
shareholders' investment present fairly, in all material respects, the
financial position of Ridgewood Properties, Inc. and its subsidiaries at
August 31, 1995 and 1994, and the results of their operations and their
cash flows for each of the three years in the period ended August 31,
1995, in conformity with generally accepted accounting principles. These
financial statements are the responsibility of the Company's management;
our responsibility is to express an opinion on these financial statements
based on our audits. We conducted our audits of these statements in
accordance with generally accepted auditing standards which require that
we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for the opinion expressed above.

PRICE WATERHOUSE LLP
Atlanta, Georgia
October 25, 1995

Market Information

The Company's common stock is traded in the over-the-counter
market and is listed in the broker-dealer "Pink Sheets."

Transfer Agent and Registrar

Society National Bank, Dallas, Texas is the Company's stock
transfer agent and registrar. Society National Bank maintains the
Company's shareholder records. To change name, address or ownership of
stock, to report lost certificates, or to consolidate accounts, contact:

Society National Bank
Shareholder Services, Inc.
1201 Elm Street, Suite 5050
Dallas, Texas 75270
(214) 658-0200

General Counsel

Rogers & Hardin
2700 Cain Tower
229 Peachtree Street, N.E.
Atlanta, Georgia 30303

Independent Accountants

Price Waterhouse LLP
50 Hurt Plaza
Suite 1700
Atlanta, Georgia 30303

Shareholder and General Inquiries

The Company is required to file an Annual Report on Form 10-K
for its fiscal year ended August 31, 1995 with the Securities and Exchange
Commission. Copies of this annual report may be obtained without charge
upon written request to:

Ridgewood Properties, Inc.
Shareholder Relations
2859 Paces Ferry Road
Suite 700
Atlanta, Georgia 30339
(770) 434-3670