CORNERSTONE CORE PROPERTIES REIT, INC.

NOTICE OF 20072008 ANNUAL MEETING OF STOCKHOLDERS

To be held May 30, 20077, 2008

Revocation of Proxies

You can revoke your proxy at any time before it is voted by:

·                  providing written notice of such revocation to the Secretary of Cornerstone Core Properties REIT, Inc.;

·                  signing and submitting a new proxy card with a later date;

·                  authorizing a new proxy by telephone or Internet (your latest telephone or Internet proxy is counted); or

·                  attending and voting your shares in person at the Annual Meeting.  Attending the Annual Meeting will not revoke your proxy unless you specifically request it.

Proxy Solicitation

The solicitation of proxies for the Annual Meeting will be made primarily by mail. However, if necessary to ensure satisfactory representation at the Annual Meeting, additional solicitation may take place in writing or by telephone or in person.  As the date of the meeting approaches, if we have not received sufficient proxies, stockholders may receive a telephone call from our proxy solicitor, Computershare Fund Services, Inc.  For these services, we will pay fees that are anticipated to be between $3,000$9,000 and $6,000.$12,000. However, the exact cost will depend on the amount and types of services rendered.  We will reimburse brokerage firms and other custodians, nominees and fiduciaries for their reasonable out-of-pocket expenses for forwarding proxy and solicitation materials to the owners of our common stock.  Our officers and regular employees of our advisor or its affiliates may also solicit proxies, but they will not be specifically compensated for these services.  The costs of proxy solicitation will be borne by us.

PROPOSAL 1

ELECTION OF DIRECTORS

The Board of Directors currently consists of five members, three of whom (Paul Danchik, Dan L. Johnson and Lee Powell Stedman) have been determined by the Board of Directors to be “independent” as that term is defined under our Charter, the NASDAQ rules and the rules of the SEC.  The Board of Directors has proposed the following nominees for election as directors, each to serve for a term ending at the 20082009 Annual Meeting of Stockholders: Terry Roussel, Paul Danchik, Joseph H. Holland, Daniel L. Johnson and Lee Powell Stedman.  Each nominee currently serves as a director and, if reelected as a director, will continue in office until his successor has been elected and qualified, or until his earlier death, resignation or retirement.  The persons named in the enclosed proxy card intend to vote the proxy for the election of each of the fivefour nominees, unless you indicate on the proxy card that your vote should be withheld from any or all of the nominees.  On March 18, 2008, Joseph Holland, one of our current directors, notified us that he does not intend to stand for reelection to the Board.  Mr. Holland’s resignation is not the result of any disagreement with us, and he has indicated that he intends to remain on the Board until the remaining directors are able to identify and nominate a suitable successor.  We do not expect to name a nominee to fill the vacancy created by Mr. Holland’s resignation prior to this year’s annual meeting of stockholders.

We expect each nominee for election as a director to be able to serve if elected.  If any nominee is not able to serve, proxies will be voted in favor of the remainder of those nominated and may be voted for substitute nominees, unless the Board chooses to reduce the number of directors serving on the Board.

The principal occupation and certain other information about the nominees are set forth below.

THE BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR ALL” NOMINEES TO BE ELECTED AS DIRECTORS

The principal occupation and certain other information about the nominees are set forth below.

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Terry G. Roussel is one of the founding stockholders of the Cornerstone-related entities that commenced operations in 1989. Mr. Roussel has been our President and Chief Executive Officer and a director since 2004 and is the promoter of us by initiating the founding and organizing of our business.  Mr. Roussel is the Chief Executive Officer and a Director of Cornerstone Realty Advisors, LLC, our Advisor.  Mr. Roussel is also the President, Chief Executive Officer, a Director and the majority shareholder of Cornerstone Ventures, Inc., an affiliate of our advisor. Mr. Roussel is the President, Chief Executive Officer and a director of Cornerstone Growth & Income REIT, Inc. and President and Chief Executive Officer of Cornerstone Leveraged Realty Advisors, LLC.  Mr. Roussel is also a principal and the majority shareholder of Pacific Cornerstone Capital, Inc., the dealer-manager for our offering of securities.  Under Mr. Roussel’s direction, Cornerstone and its affiliates formed nineten separate real estate investment funds and joint ventures.  In 1993, Cornerstone and its affiliates became managing joint venture partner with Koll Capital Markets Group, Inc., a wholly owned subsidiary of Koll Management Services, Inc. (now owned by CB Richard Ellis).

As managing partner of the above-described funds and joint ventures, Cornerstone and its affiliates were responsible for the acquisition, operation, leasing, and disposition of all jointly owned properties between Cornerstone and Koll.  In connection with acquiring properties for the account of these joint ventures, Mr. Roussel personally supervised the acquisition of each property, initiated and directed the business plan for each property, and arranged debt and equity financing for the acquisition of each property.

In 1985, Mr. Roussel started the Special Investments Group, a new division within Bank of America’s Capital Markets Group which provided real estate investment opportunities to the bank’s wealthiest private banking clients.  Between 1980 and 1985, Mr. Roussel was employed by Bateman Eichler, Hill Richards, Inc., a regional securities firm headquartered in Los Angeles, California.  In this capacity, Mr. Roussel was promoted to First Vice President and Manager of the partnership finance department where he was responsible for the due diligence and marketing of all publicly registered real estate funds offered by the firm.

Mr. Roussel graduated with honors from California State University at Fullerton in 1976 with a B.A. in Business Administration with a concentration in Accounting.  Subsequent to graduation, Mr. Roussel joined the accounting firm of Arthur Andersen & Co. as an auditor and later transferred to the tax department of Arthur Young & Co., the predecessor firm to Ernst & Young. Mr. Roussel became a Certified Public Accountant in 1979.

Paul Danchik retired in 2003 as Senior Vice President of Warner Media Services, a division of Time Warner Inc.  Mr. Danchik was a member of the Executive Management Team of Warner Media Services and was responsible for their Consumer Products Business unit. Mr. Danchik began his career with Ivy Hill Packaging in 1973 which was acquired by Time Warner, Inc. in 1989.  Mr. Danchik also serves as a consultant to Acres of Love, a non-profit organization currently operating thirteen homes licensed in the Republic of South Africa for care of abandoned children living with or affected by HIV/AIDS.  Mr. Danchik also serves as interim Executive Administrator of the Life Church in Mission Viejo, California.  Mr. Danchik earned a Bachelor of Science Degree in Business Administration from the University of LaVerne.

Joseph H. Hollandis currently the managing member of Uptown Partners, LLC, a real estate group developing market-rate, multi-family housing in New York City.  He is also Director, Municipal Assistance Corporation of the City of New York, as a gubernatorial appointee since 1998 and a Member, Board of Trustees, Cornell University since 1998.

Mr. Holland is the former Commissioner of the New York State Division of Housing and Community Renewal.  In this capacity, Mr. Holland headed the New York State Agency with more than two thousand employees.  Mr. Holland was responsible for administering programs in the areas of community development, supervision of State-assisted housing developments and rent regulation in New York City and other municipalities.  Mr. Holland held this position between 1995 and 1996.  Between 1985 and 1987, Mr. Holland was Chief Counsel for the New York Standing Committee on Housing and Community Development.  Mr. Holland is the 1991 recipient of the Volunteer Action Award, presented by President George Bush and the 1991 Entrepreneur of the Year Award, presented by New York Mayor David Dinkins.

Mr. Holland is a 1982 Graduate of Harvard Law School.  Mr. Holland received his Bachelor of Arts Degree from Cornell University in 1978 and his Master of Arts Degree from Cornell University in 1979 where his fields of concentration were U.S. Diplomatic History and African-American History.

Daniel L. Johnson is a founder and since 2003 has been the Senior Vice President of Sales for InfoSpan, Inc., a developer and operator of customer interaction centers for United States based corporations with operations in Latin America.  From 2000 to 2003, Mr. Johnson was the President of Rutilus Software, Inc. a developer of disk-based storage software.  Prior to 2000, Mr. Johnson spent fourteen years with Toshiba America where he was Vice President of OEM Sales. In this capacity he was responsible for worldwide sales for products within his Division of Toshiba America.  Mr. Johnson holds a Bachelor’s degree from Southern Illinois University.

Lee Powell Stedman is the founder and Chief Executive Officer of Realty Development Advisors, LLC (“RDA”) which he formed in 1996.  RDA is a full service commercial real estate company specializing in development, leasing and real estate consulting.  Since 1995, Mr. Stedman has been involved in the development, financing and leasing of twenty-two commercial properties in five states.  Prior thereto, Mr. Stedman was employed in the real estate acquisition department of a real estate firm and was Manager, REO/ Commercial Sales Specialist for the Resolution Trust Corporation.  Mr. Stedman received his Bachelor of Science Degree from the University of Minnesota.

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Independence

As required by our charter, a majority of the members of our Board of Directors must qualify as “independent” as defined by our charter affirmatively determined by the Board.  The Board consults with our legal counsel to ensure that the Board’s determinations are consistent with applicable securities and other laws and regulations and our charter regarding the definition of “independent.”

Consistent with these considerations, after review of all relevant transactions or relationships between each director, or any of his family members, and Cornerstone Core Properties REIT, our senior management and our independent registered public accounting firm, the Board has determined that the majority of our Board is comprised of independent directors.

Meetings of the Board of Directors and Committees

During the fiscal year ended December 31, 2006,2007, the Board met fivesix times and took action by unanimous written consent sevensix times.  Each of our directors attended at least 75% of the total number of meetings of the Board during 2006.2007.  In addition, each director attended allat least 75% of meetings of the committees on which he served during 2006.2007.  We encourage our directors to attend our annual meetings of stockholders and all of our directors were present telephonically or in person at our 2007 annual meeting of stockholders.  Our entire Board considers all major decisions concerning our business, including any property acquisitions.  However, our Board has established committees so that certain functions can be addressed in more depth than may be possible at a full Board meeting.  The Board of Directors has established four permanent committees: the Audit Committee, the Independent Directors Committee, the Compensation Committee and the Investment Committee.

We have determined that we would beare better served by generally having the full Board review nominating matters.  Therefore, there iswe have no nominating committee; however, each director onpursuant to our charter, our independent directors are responsible for nominating all replacements for vacancies resulting from the Boarddeparture of Directorsindependent directors.  The full Board participates in the consideration of all other director nominees.  Specifically, the Board identifies nominees by first evaluating the current members of the Board willing to continue in service.  Current members of the Board with skills and experience that are relevant to our business and who are willing to continue in service are considered for re-nomination.  If any member of the Board up for re-election at an upcoming annual meeting of stockholders does not wish to continue in service, the Board identifies the desired skills and experience of a new nominee, if the Board determines that it is appropriate to replace the retiring member.  The Board believes that potential directors should possess sound judgment, understanding of the business issues affecting us, integrity and the highest personal and professional ethics.  In searching for potential Board nominees, the Board (or the independent directors, if the nomination is for a vacant independent director position) seeks directors who have a range of business, management and civic experience appropriate for the Board to discharge its responsibilities.  In the case of both incumbent and new directors, the Board seeks persons who are able to devote significant time and effort to Board and Board committee responsibilities.  The Board will consider recommendation made by stockholders for director nominees who meet the criteria set forth above.  In order to be considered for nomination, recommendations made by stockholders must be submitted within the timeframe required to request a proposal to be included in the proxy materials.  See “Stockholder Proposals” below.

Audit Committee

The audit committee has a charter and selects the independent public accountants to audit our annual financial statements, reviews the plans and results of the audit engagement with the independent public accountants, approves the audit and non-audit services provided by the independent public accountants, reviews the independence of the independent public accountants, considers the range of audit and non-audit fees and reviews the adequacy of our internal accounting controls.  Joseph Holland, Paul Danchik, Dan Johnson and Lee Stedman are all members of the audit committee. We do not have an audit committee financial expert. Because we are not exchange listed, we are not required to have one.  The Audit Committee charter is attached hereto as Appendix A.

Independent Directors Committee

In order to reduce or eliminate certain potential conflicts of interest, a majority of our independent directors, that is, the directors who are not affiliated with our advisor, approves all transactions between us and our advisor or its affiliates.  Our independent directors are authorized to retain their own legal and financial advisors at our expense and are empowered to act on any matter permitted under Maryland law provided that a majority of our independent

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We have provided below certain information regarding compensation paid to our directors during fiscal year 2007.

(1)     Directors who are also our executive officers do not receive compensation for services rendered as a director.

We pay each of our directors who are not employees of our advisor or its affiliates for attending board and committee meetings as follows:

·                  $3,000 per regularly scheduled board meeting attended in person or by teleconference;

·                  $1,000 per regularly scheduled committee meeting attended in person or by teleconference ($1,500 for the audit committee chairperson and $1,250 for other committee chairpersons); and

·                  $750 per special board meeting attended, whether held in person or by teleconference.

All directors receive reimbursement of reasonable out-of-pocket expenses incurred in connection with attendance at meetings of the board of directors and committees.

In addition, we issue stock options to the directors pursuant to our Employee and Director Incentive Stock Plan.  On an annual basis, weWe expect to issue options to purchase 5,000 shares of common stock to each director who is not an employee of our advisor or its affiliates.affiliates and who is then in office on the date of each annual stockholders’ meeting.  We may not grant options at any time when the issuance of the stock underlying the grant, when combined with those issuable upon exercise of outstanding options granted to our advisor, directors, officers or any of their affiliates, would exceed 10% of our outstanding shares.

Executive Officers

In addition to Terry Roussel, as of March 31, 2007,7, 2008, the following individuals currently serve as our executive officers:

Sharon C. Kaiser joined Cornerstone in July 2005 as our Chief Financial Officer and in August 2005, she became the Chief Financial Officer of our advisor. Ms. Kaiser is responsible for our finance and accounting, MIS, human resources and administrative functions.  Ms. Kaiser is also Chief Financial Officer of Cornerstone Growth & Income REIT, inc. and Cornerstone Leverages Realty Advisors, LLC, positions she has held since October 2006 and December 2006, respectively.

Prior to joining Cornerstone, Ms. Kaiser was Director of Financial Operations for Westfield America, Inc., an owner, manager and developer of regional shopping centers and the American subsidiary of one of the largest listed retail REITs in the world. From 1999 to 2002, Ms. Kaiser served as Chief Financial Officer of The StayWell Company, a subsidiary of Vivendi Universal, and from 1995 to 1999, she served as Chief Financial Officer and Senior Vice President of HemaCare Corporation, a publicly-traded biomedical company.  Her responsibilities included financial accounting and reporting, information technology, investor relations and human resources, as well as strategic planning and acquisition due diligence and integration.

Before joining HemaCare Corporation, Ms. Kaiser served as the Chief Financial Officer of a publicly-traded (AMEX) REIT sponsored by The Koll Company.  She started her career with Arthur Andersen and Co., leaving as a senior manager.

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Ms. Kaiser holds a Bachelor of Science degree in Business Administration from the University of Southern California and has been a Certified Public Accountant since 1981.

Dominic J. Petrucci has been our Chief Operating Officer since 2004 and is also the Chief Operating Officer of our advisor and Cornerstone Ventures, Inc.  Mr. Petrucci is responsible for overseeing all our operations.  Mrs. Petrucci has also been the Chief Operating Officer of Cornerstone Growth & Income REIT, Inc. since October 2006.

Prior to joining Cornerstone Ventures in 2002, Mr. Petrucci served since 1998 as Division President of Koll Development Company.  In this capacity he managed the commercial real estate development activities for a 2.8 million square foot portfolio. Mr. Petrucci’s responsibilities included business development, divisional oversight of operations and administration, and participation on Koll Development Company’s Executive Committee and Investment Committee.

Mr. Petrucci was a Vice President for Kitchell Development Company and Kitchell Corporation from 1996 to 1998. As Vice President for Kitchell Development Company, he oversaw Kitchell’s real estate development operations throughout the western United States. As Vice President — Finance for Kitchell Corporation, Mr. Petrucci provided total financial oversight of their domestic and international construction activities and managed the property management, financial services, human resources, and risk management departments for Kitchell ($300 million annual revenues).

From 1990 until early 1996, Mr. Petrucci worked with the Koll organization in various capacities. He was Chief Financial Officer and Corporate Secretary for Koll Construction, Vice President — Finance for Koll International, and Group Controller for Koll Development. In his capacities with Kitchell and Koll, Mr. Petrucci was involved in the origination and restructuring of nearly $1 billion in debt and equity investments in addition to participation in the marketing and selling of nearly $300 million of property.

Mr. Petrucci began his career in the real estate group at KPMG Peat Marwick in Los Angeles where he earned a Certified Public Accountant designation.  Mr. Petrucci earned his Bachelor of Science degree in Commerce, with an accounting major from Rider University in Lawrenceville, New Jersey.

Robert C. Peterson has been our Chief Investment Officer since 2004 and is also the Chief Investment Officer and a Director of our advisor. Mrs. Peterson has also been the Chief Investment Officer of Cornerstone Growth & Income REIT, Inc. and Cornerstone Leveraged Property Advisors, LLC since December 2006. Mr. Peterson was previously Executive Vice President of Acquisitions and Dispositions for Koll Bren Schreiber Realty Advisors (“KBS”).  KBS is one of the largest institutional real estate fund managers in the United States. KBS has acquired over $5 billion of commercial real estate on behalf of many of the largest private and public institutional investors in the United States.  In his capacity, Mr. Peterson was the individual responsible for identifying, underwriting, acquiring and disposing of real estate opportunities in the western half of the United States for KBS.  Mr. Peterson was with KBS since its inception in 1992 until 2003.

From 1990 to 1992, he was an officer of Koll Management Services, Inc. (“Koll”), one of the largest managers and operators of commercial real estate in the United States.  Mr. Peterson was instrumental in the formation of both the first joint venture between Koll and Cornerstone in 1993 and the second joint venture between Koll and Cornerstone in 1995.

Mr. Peterson has 24 years of real estate investment experience, including a diverse background in acquisitions, financing, and leasing through previous affiliations with Koll Management Services, Meyer Real Estate Advisors, VMS Realty, Inc. and Peat Marwick in Chicago.

Mr. Peterson earned a Certified Public Accountant (CPA) designation and is a Certified Commercial Investment Member (CCIM), Certified Property Manager (CPM) and a licensed Real Estate Broker in the state of California.  Mr. Peterson also holds a Bachelor’s Degree in Accounting from the University of Illinois.

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Alfred J. Pizzurro has been our Senior Vice President and Secretary since 2004. Mr. Pizzurro is also a Senior Vice President and Director of our advisor and a Senior Vice President, a Director and a principal of Cornerstone Ventures, Inc. and Pacific Cornerstone Capital, Inc., the dealer manager for this offering.  Mr. Pizzurro has been Senior Vice President and Secretary of Cornerstone Growth & Income REIT, Inc. since December 2006.  Mr. Pizzurro joined Cornerstone Ventures, Inc. in April 1998 and has been the individual primarily responsible for Cornerstone Venture’s marketing and new business development activities since that time.

Between 1993 and 1998, Mr. Pizzurro was responsible for business development both domestically and internationally for The Joseph Company, a research and development company.  From 1986 to 1992, he was the Director of Marketing for a regional real estate company. Mr. Pizzurro served as a helicopter pilot in the United States Marine Corps between 1979 and 1986 where he attained the rank of Captain.

Mr. Pizzurro received his Bachelor of Science Degree in Communications from Clarion University in 1978.

Executive Compensation

Our named executive officers, including Mr. Roussel, our Chief Executive Officer, do not receive compensation directly from us for services rendered to us.  Our executive officers are also officersemployees of Cornerstone Realty Advisors LLC, our advisor, and its affiliates.   These executive officers are compensated by our advisor and/or its affiliates and will not receive any compensation from us for their services.affiliates.  A description of the fees that we pay to our advisor and other affiliates is found in the “Certain Transactions” section below.

Employee and Director Incentive Award Plan

We adopted our Employee and Director Incentive Stock Plan to:

·                  provide incentives to individuals who are granted stock awards because of their ability to improve our operations and increase profits;

·                  encourage selected persons to accept or continue employment with us or with our advisor or its affiliates; and

·                  increase the interest of directors in our success through their participation in the growth in value of our stock.

Equity Compensation Plan Information

The following table gives information about our common stock that may be issued upon the exercise of the options under all of our existing equity compensation plans as of December 31, 2006:2007:

(1)          Our Employee and Director Incentive Stock Plan was approved by our security holders and provides that the total number of shares issuable under the plan is a number of shares equal to ten percent (10%) of our outstanding common stock.  The maximum number of shares that may be granted under the plan with respect to “incentive stock options” within the meaning of Section 422 of the Internal Revenue Code is 5,000,000.  As of March 31, 2007,7, 2008, there were 5,773,66511,039,484 shares of our common stock issued and outstanding.

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Compensation Committee Interlocks and Insider Participation

No member of our Compensation Committee served as an officer or employee of us or any of our subsidiaries during the fiscal year ended December 31, 20062007 or formerly served as an officer of us or any of our subsidiaries.  In addition, during the fiscal year ended December 31, 2006,2007, none of our executive officers served as a member of a Board of Directors or compensation committee of any entity that has one or more executive officers serving as a member of our Board of Directors or Compensation Committee.

 Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires each director, officer and individual beneficially owning more than 10% of a registered security of us to file initial statements of beneficial ownership (Form 3) and statements of changes in beneficial ownership (Forms 4 and 5) of common stock of us with the SEC.   We were notBased solely upon our review of copies of these reports filed with the SEC and written representations furnished to us by our officers and directors, we believe that all of the persons subject to thesethe Section 16(a) reporting requirements in 2006.filed the required reports on a timely basis with respect to fiscal year 2007, except for Messrs. Danchik, Holland, Johnson and Stedman each of whom were issued options to purchase 5,000 shares of our common stock pursuant to our Employee and Director Incentive Stock Plan on August 8, 2007. The directors were unaware at the time of their obligation to report, and did not report, the issuances of such options on Forms 4 and 5 for fiscal year 2007. Upon becoming aware of the obligation to report the option issuances, we believe that all of the issuances of options have now been reported on Form 4 reports filed on March 18, 2008.

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OWNERSHIP OF EQUITY SECURITIES

The following table sets forth information as of March 31, 2007,7, 2008, regarding the beneficial ownership of our common stock by each person known by us to own 5% or more of the outstanding shares of common stock, each of our directors, each of our named executive officers, and our directors and executive officers as a group. The percentage of beneficial ownership is calculated based on 5,773,66511,039,484 shares of common stock outstanding as of March 31, 2007.7, 2008.

*      Less than 1%.

(1)   Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities and shares issuable pursuant to options, warrants and similar rights held by the respective person or group that may be exercised within 60 days following March 31, 2007.7, 2008.  Except as otherwise indicated by footnote, and subject to community property laws where applicable, the persons named in the table above have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them.  None of the securities listed are pledged as security.

(2)   Consists of shares of common stock underlying options that are immediately exercisable.

AUDIT COMMITTEE REPORT

The Audit Committee reviews our financial reporting process on behalf of the Board of Directors.  Management has the primary responsibility for the financial statements and the reporting process, including the system of internal controls.

In this context, the Audit Committee has met and held discussions with management and the independent registered public accounting firm regarding the fair and complete presentation of our results.  The Audit Committee has discussed significant accounting policies applied by us in our financial statements, as well as alternative treatments.  Management represented to the Audit Committee that our consolidated financial statements were prepared in accordance with generally accepted accounting principles, and the Audit Committee has reviewed and discussed the consolidated financial statements with management and the independent registered public accounting firm.  The Audit Committee discussed with the independent registered public accounting firm matters required to be discussed by Statement on Auditing Standards No. 61 (Communication With Audit Committees).

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Audit and Non-Audit Fees

BDO Seidman, LLP served as our independent registered public accounting firm from inception until they were dismissed by us on January 16, 2006.

Deloitte and Touche LLP, the member firms of Deloitte Touche Tohmatsu, and their respective affiliates (collectively, “Deloitte & Touche”),  has served as our independent registered public accounting firm from January 16, 2006 and has audited our financial statements for the years ended December 31, 2006, 2005 and 2004.

The following table lists the fees for services rendered by the independent registered public accounting firms for 20062007 and 2005:2006:

(1)          Audit fees billed in 20062007 and 20052006 consisted of the audit of our annual financial statements, reviews of our quarterly financial statements, consents and other services related to filings with the SEC.  These amounts include fees paid by our advisor and its affiliates for costs in connections with our initial public offering that are not included within our consolidated financial statements, as they are subject to the accounting policy described under Organizational and Offering Costs in the notes to the consolidated financial statements included in our annual report.

(2)          Audit-related fees billed in 20062007 and 20052006 consisted of statutory and regulatory audits and financial accounting and reporting consultations.

(3)          Tax services billed in 20062007 and 20052006 consisted of tax compliance and tax planning and advice.

The Audit Committee pre-approves all auditing services and permitted non-audit services (including the fees and terms thereof) to be performed for us by our independent auditor, subject to the de minimis exceptions for non-audit services described in Section 10A(i)(1)(B) of the Exchange Act and the rules and regulations of the SEC which are approved by the Audit Committee prior to the completion of the audit.

CERTAIN TRANSACTIONS

We will incur substantial fees and expenses in our organization and offering stage, our acquisition and operating stage and our property disposition stage.  In most cases, these fees and expenses will be paid to our advisor or its affiliates, including our dealer manager for our initial public offering.

All of the membership interests in our advisor, Cornerstone Realty Advisors, LLC, are owned by Cornerstone Industrial Properties, LLC, which also serves as the managing member of our advisor.  Cornerstone Ventures, Inc. is the managing member of Cornerstone Industrial Properties, LLC. Terry G. Roussel, our Chairman, Chief Executive Officer and President, is the Chief Executive Officer and a Director of our advisor, as well as the President, Chief Executive Officer, a Director and the majority shareholder of Cornerstone Ventures, Inc.  Mr. Roussel is also a principal and the majority shareholder of Pacific Cornerstone Capital, Inc., the dealer-manager for our initial public offering.  Alfred J. Pizzurro, our Senior Vice President and Secretary is also a shareholder of Pacific Cornerstone Capital, Inc. and Cornerstone Ventures, Inc.  We will pay fees to our advisor for services provided to us pursuant to an advisory agreement and will pay fees and commissions to Pacific Cornerstone Capital, Inc. the dealer-manager for our initial public offering pursuant to a Dealer Manager Agreement.  The advisory agreement and dealer manager agreement are included as exhibits to this report.  The fees that we will pay to our advisory and dealer manager are summarized below.

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Offering Stage

·                  Sales commissions (payable to our dealer manager) up to 7% of gross offering proceeds from our primary offering, some or all of which may be re-allowed to participating brokers.

·                  Dealer manager fees (payable to our dealer manager) up to 3% of gross offering proceeds from our primary offering, some or all of which may be re-allowed to participating brokers.

·                  Reimbursements to our advisor or its affiliates for organization and offering expenses (including bona fide due diligence expenses) expected to average between 2% and 3% of gross offering proceeds from our initial public offering, but which could be as much as 3.5%.

·During the fiscal year ended December 31, 2007, we incurred approximately $4.3 million in sales commissions and dealer manager fees, a substantial portion of which was reallowed by our dealer manager to third party broker-dealers.

·During the year ended December 31, 2007, the advisor and its affiliates incurred on our behalf organizational and offering costs totaling approximately $0.9 million.

Acquisition and Operating Stage

·                  Property acquisition fees (payable to our advisor or its affiliates) equal to 2% of gross offering proceeds from our primary offering.

·                  Reimbursement of acquisition expenses to our advisor and its affiliates.

·                  Monthly asset management fees (payable to our advisor) equal to one-twelfth of 1% of the book values of our assets invested, directly or indirectly, in real estate before non-cash reserves, plus direct and indirect costs and expenses incurred by our advisor in providing asset management services.

·                  Reimbursement of operating expenses including our advisor’s direct and indirect cost of providing administrative services.

·During the fiscal year ended December 31, 2007, our advisor earned approximately $0.9 million of acquisition fees from us and did not incur any acquisition expenses on our behalf.

·During the year ended December 31, 2007, our advisor earned approximately $707,000 in asset management fees.

·For the year ended December 31, 2007 we reimbursed our advisor for approximately $517,000 of operating expenses.

Listing/ Liquidation Stage

·                  Property disposition fees (payable to our advisor or its affiliates), if our advisor or its affiliates perform substantial services in connection with property sales, up to 3% of the price of the properties sold.

·                  After stockholders have received cumulative distributions equal to $8 per share (less any returns of capital) plus cumulative, non-compounded annual returns on net invested capital, our advisor will be paid a subordinated participation in net sale proceeds ranging from a low of 5% of net sales proceeds, provided investors have earned annualized returns of 6%, to a high of 15% of net sales proceeds, if investors have earned annualized returns of 10% or more.

·                  Upon termination of the advisory agreement, our advisor will receive the subordinated performance fee due upon termination. This fee ranges from a low of 5% of the amount by which the sum of the appraised value of our assets minus our liabilities on the date the advisory agreement is terminated plus total dividends (other than stock dividends) paid prior to termination of the advisory agreement exceeds the amount of invested capital plus annualized returns of 6%, to a high of 15% of the amount by which the sum of the appraised value of our assets minus our liabilities plus all prior dividends (other than stock dividends) exceeds the amount of invested capital plus annualized returns of 10% or more.

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·                  In the event we list our stock for trading, our advisor will receive a subordinated incentive listing fee instead of a subordinated participation in net sales proceeds. This fee ranges from a low of 5% of the amount by which the market value of our common stock plus all prior dividends (other than stock dividends) exceeds the amount of invested capital plus annualized returns of 6%, to a high of 15% of the amount by which the sum of the market value of our stock plus all prior dividends (other than stock dividends) exceeds the amount of invested capital plus annualized returns of 10% or more.

·During the year ended December 31, 2007 we did not pay any property disposition fees, subordinated participation in net sales proceeds, subordinated termination fees due upon termination, or subordinated incentive listing fees to our advisor or its affiliates.

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APPENDIX A

CORNERSTONE CORE PROPERTIES REIT, INC.

CHARTER FOR THE

AUDIT COMMITTEE

OF THE BOARD OF DIRECTORS

Organization

This Charter governs the operations of the Audit Committee of Cornerstone Core Properties REIT, Inc., a Maryland corporation (the “Company”).  The Audit Committee shall review and reassess the Charter at least annually.  The Audit Committee shall consist of at least three Directors, a majority of whom are Independent Directors, and are appointed by the Board of Directors.  Independent Director means a Director who is not, and within the last two (2) years has not been, directly or indirectly associated with the Cornerstone Realty Advisors, LLC (the “Advisor”) by virtue of (i) ownership of an interest in the Advisor or its affiliates, (ii) employment by the Advisor or its affiliates, (iii) service as an officer or director of the Advisor or its affiliates, (iv) performance of services, other than as a Director, for the Company, (v) service as a director or trustee of more than three (3) real estate investment trusts advised by the Advisor, or (vi) maintenance of a material business or professional relationship with the Advisor or any of its affiliates.  An indirect relationship shall include circumstances in which a Director’s spouse, parents, children, siblings, mothers- or fathers-in-law, sons- or daughters-in-law or brothers- or sisters-in-law are or have been associated with the Advisor, any of its affiliates or the Company.  A business or professional relationship is considered material if the gross revenue derived by the Director from the Advisor and affiliates exceeds five percent (5%) of either the Director’s annual gross revenue during either of the last two (2) years or the Director’s net worth on a fair market value basis.  Such independence policy does not preclude a Director’s role as an investor in any private or public fund sponsored by or affiliated with Cornerstone Ventures, Inc. At any meeting of the Audit Committee, a majority of the total number of members of the Audit Committee shall constitute a quorum.  All Audit Committee members shall be financially literate, or shall become financially literate within a reasonable period of time after appointment to the Audit Committee, and at least one member of the Audit Committee shall have accounting or related financial management expertise.

Statement of Policy

The Audit Committee shall provide assistance to the Board of Directors in fulfilling its oversight responsibility to the stockholder and investment community, oversee the financial reporting process, the systems of internal accounting and financial controls, the performance and independence of the independent auditors, the annual independent audit of the Company’s financial statements, the performance and legal compliance of escrow holders selected by management and the Board of Directors, and the legal compliance and ethics programs established by management and the Board of Directors.  In so doing, it is the responsibility of the Audit Committee to maintain free and open communication between the committee, independent auditors, and management of the Company.  In discharging its oversight role, the Audit Committee is empowered to investigate any matter brought to its attention with full access to all books, records, facilities, and personnel of the Company and the authority to retain outside counsel, or other experts for this purpose at the expense of the Company.

Responsibilities and Processes

The primary responsibility of the Audit Committee is to oversee the Company’s financial reporting process on behalf of the Board of Directors and report results of their activities to the Board of Directors.  Management is responsible for preparing the Company’s financial statements, and the independent auditors are responsible for auditing those financial statements.  The Audit Committee should take the appropriate actions to set the overall corporate “tone” for quality financial reporting and sound business risk practices and ethical behavior.  It is not the duty of the Audit Committee to plan or conduct the audits or to determine that the Company’s financial statements are complete and accurate and prepared in accordance with generally accepted accounting principles.

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The following shall be the principal recurring processes of the Audit Committee in carrying out its oversight responsibilities.  The processes are set forth as a guide with the understanding that the Audit Committee may supplement them as appropriate and they should remain flexible in order to best react to growth, changing conditions and circumstances.

(1)                        The Audit Committee shall have a clear understanding with management and the independent auditors that the independent auditors are ultimately accountable to the Audit Committee and the Board of Directors, as representatives of the Company’s stockholders.  The Audit Committee and the Board of Directors shall have the ultimate authority and responsibility to select, evaluate and, where appropriate, replace the independent auditors.  Annually, the Audit Committee shall review and recommend to the Board of Directors the selection of the Company’s independent auditors, subject to stockholder approval.  Also, the Audit Committee shall discuss with management and the independent auditors the adequacy and effectiveness of the accounting and financial controls, including the Company’s system to monitor and manage business risk, and legal and ethical compliance programs, including the Company’s Code of Conduct.  Further, the Audit Committee shall meet separately with the independent auditors, with and without management present, to discuss the results of their examinations and will provide sufficient opportunity for the independent auditors to meet privately with the members of the Audit Committee.

(2)                        The Audit Committee shall discuss with the independent auditors the overall scope and plans for their respective audits and approve the fees to be paid for such audits.  Such discussion should include inquiry as to the “peer review” processes of the audit firm and any disciplinary action, litigation or other matters which would affect the auditor’s ability to issue their opinion or affect their independence.

(3)                        The Audit Committee shall review the interim financial statements with management and the independent auditors prior to the filing of the Company’s Quarterly Report on Form 10-Q.  Also, the Audit Committee shall discuss the results of the quarterly review and any other matters required to be communicated to the Audit Committee by the independent auditors under generally accepted auditing standards.  The chairperson of the Audit Committee may represent the entire Audit Committee for the purposes of this review.

(4)                        Also, the Audit Committee shall discuss with management, and the independent auditors the adequacy and effectiveness of the accounting and financial controls, including the Company’s system to monitor and manage business risk, and legal and ethical compliance programs.  The Audit Committee shall discuss with management and the auditors the three, four, or five “critical accounting policies” that have the greatest effect on the Company’s financial posture and review the activity in the Company’s reserves and other areas of the financial statements with management and the auditors.

(5)                        The Audit Committee shall review the impact on the interim financial statements of significant events, transactions, reports or inquiries received from regulators or governmental agencies for their impact on the financial statements.  The Audit Committee shall review with management applicable industry developments and the Company’s competitive position and strategy.

(6)                        The Audit Committee shall review with management and the independent auditors the financial statements to be included in the Company’s Annual Report on Form 10-K (or the annual report to stockholders if distributed prior to the filing of Form 10-K), as well as the auditor’s judgment about the quality, not just acceptability, of the Company’s accounting principles as applied in its financial reporting.  The review shall also include the reasonableness of significant judgments made in the preparation of the financial statements, as well as the clarity of financial statement disclosures.  In addition, the Audit Committee shall discuss the results of the annual audit and any other matters required to be communicated to the Audit Committee by the independent auditors under generally accepted auditing standards.

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(7)                        The Audit Committee shall review with management and the independent auditors the management letter provided by the auditors, especially comments which require recommended changes or

improvements in the Company’s accounting and reporting procedures or internal controls, and the Company’s response to that letter.

(8)                        The Audit Committee may conduct investigations into any matters within its scope of responsibility.

(9)                        The Audit Committee shall develop a meeting planner to make sure that the Audit Committee meets its responsibilities outlined in this Charter.

(10)     The Audit Committee shall annually obtain written representations from management regarding its responsibility for the integrity of the internal control and financial reporting systems and processes, and its beliefs about the quality of controls and financial reports.

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APPENDIX B

CORNERSTONE CORE PROPERTIES REIT, INC.

CHARTER FOR THE

COMPENSATION COMMITTEE

OF THE BOARD OF DIRECTORS

Organization

This Charter governs the operations of the Compensation Committee of Cornerstone Core Properties REIT, Inc., a Maryland corporation (the “Company”).  The Compensation Committee shall review and reassess the Charter at least annually.  The Compensation Committee shall consist of at least two Directors appointed by the Board of Directors, each of whom will be an “independent director” as defined in applicable guidelines or listing requirements, a “non-employee director” within the meaning of Rule 16b-3 issued by the Securities and Exchange Commission (“SEC”), and an “outside director” within the meaning of Section 162(m) of the Internal Revenue Code, as amended. Each appointed Committee member will be subject to annual reconfirmation and may be removed by the Board of Directors (the “Board”) at any time.

Statement of Policy

The Compensation Committee’s basic responsibility is to review the performance and development of Company management in achieving corporate goals and objectives and to assure that senior executives of the Company are compensated effectively in a manner consistent with the strategy of the Company, competitive practice, and the requirements of the appropriate regulatory bodies.  Toward that end, the Committee will oversee, review and administer all compensation, equity and employee benefit plans and programs.

Responsibilities and Processes

In carrying out its purpose, the Compensation Committee will have the following responsibilities and duties:

1.                                     Review annually and approve the Company’s compensation strategy to ensure that employees of the Company are rewarded appropriately for their contributions to company growth and profitability.

2.                                     Review annually and approve corporate goals and objectives relevant to executive compensation and evaluate performance in light of those goals.

3.                                     Approve all special perquisites, special cash payments and other special compensation and benefit arrangements for the Company’s officers.

4.                                     Review and recommend compensation for non-employee members of the Board, including but not limited to the following elements: retainer, meeting fees, committee fees, committee chair fees, equity or stock compensation, benefits and perquisites.

5.                                     With sole and exclusive authority, make and approve stock option grants and other discretionary awards under the Company’s stock option or other equity incentive plans to all persons who are Board members or officers.

6.                                     Grant stock options and other discretionary awards under the Company’s stock option or other equity incentive plans to all other eligible individuals. The Committee may delegate to one or more corporate officers designated by the Committee the authority to make grants to eligible individuals (other than any such corporate officer) who are not officers, provided that the Committee shall have fixed the price (or a formula for determining the price) and the vesting schedule for such grants, approved the form of documentation evidencing such grants, and

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