January 14, 2005
Mail Stop 0409
Terry G. Roussel
President
Cornerstone Realty Fund, Inc.
4590 MacArthur Blvd., Suite 610
Newport Beach, California 92660
Re: Cornerstone Realty Fund, Inc.
Registration Statement on Form S-11 Filed December 14, 2004
Registration No. 333-121238
Dear Mr. Roussel:
We have reviewed your filing and have the following comments.
Where indicated, we think you should revise your document in
response
to these comments. If you disagree, we will consider your
explanation as to why our comment is inapplicable or a revision is
unnecessary. Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
supplemental information so we may better understand your
disclosure.
After reviewing this information, we may or may not raise
additional
comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or any other aspect
of
our review. Feel free to call us at the telephone numbers listed
at
the end of this letter.
General
1. Supplementally, provide copies of market and industry data that
you cite or rely on in your filing. These materials should be
appropriately marked, dated, and refer to the page number on which
they are cited.
2. Please supplementally provide us with copies of any graphics,
maps, photographs, and related captions or other artwork including
logos that you intend to use in the prospectus. Such graphics and
pictorial representations should not be included in any
preliminary
prospectus distributed to prospective investors prior to our
review.
3. Please note that any sales literature that is to be used in
connection with this offering must be submitted to us
supplementally
prior to use, including sales literature intended for broker-
dealer
use only. Please submit all written sales materials proposed to
be
transmitted to prospective investors, orally or in writing, with
your
next filing. In this regard, note that sales materials must set
forth a balanced presentation of the risks and rewards to
investors
and should not contain any information or disclosure that is
inconsistent with or not also provided in the prospectus. For
guidance, refer to Item 19.D of Industry Guide 5.
4. Refer to the disclosure concerning your share repurchase
program
on page 91. Supplementally, please provide a detailed analysis
regarding the applicability of the tender offer rules to the share
repurchase program. Refer to Rule 13e-4 and Regulation 14E of the
Exchange Act.
5. We note you use the term "Fund" as part of the corporation`s
name.
Please include disclosure on the cover page of the prospectus
clarifying that the corporation is not a mutual fund registered
under
the Investment Company Act of 1940. We refer to the instructions
that accompany Item 501(b)(1) of Regulation S-K.
6. Please revise to include the information required by Item
502(b)
of Regulation S-K.
7. Please provide supplemental support for any comparative factual
assertions and for management`s belief in qualitative statements.
Clearly mark the location of the information you believe is
supportive of the statement referenced. We note, for example,
your
statement on page 1 that Non-trade real estate companies have
historically demonstrated greater stability and lower overall
volatility than traded real estate companies.
8. Throughout the prospectus, please refrain from using the term
"dividends" since the payment of dividends implies the existence
of
current and accumulated earnings and profits. Since the company
was
recently formed, there is no assurance it will have current or
accumulated earnings and profits. Instead, please use the term
"distributions."
9. Please revise to include the information in Item 506 of
Regulation
S-K or tell us why you are not required to do so.
10. You indicate that prior to the effective date of this
prospectus,
your advisor and affiliates will have purchased 27,933 shares of
your
common stock for $200,000. Supplementally, tell us which
exemption
you will rely upon for the sale of these unregistered securities
and
provide a brief description of the facts that support your use of
that exemption. Further, supplementally provide us with your
analysis with respect to the potential for the integration of the
offer and sale of common stock to your advisor and affiliates and
the
public offering of common stock, including a discussion of any
relevant staff interpretations. Please refer to Black Box
Incorporated (June 26, 1990) and Squadron, Ellenoff, Plesant &
Lehrer
(February 28, 1992). We may have further comment.
11. Please provide the disclosure regarding promoters required by
Item 11 of Form S-11, including the information called for by Item
11(d) regarding the names of the promoters and indicate all
positions
and offices with the registrant now held or intended to be held by
each such promoter. Alternatively, please tell us where you have
provided the disclosure naming your promoters.
Cover Page
12. The cover page risk factors should concisely highlight the
most
significant adverse effects related to the offering and should be
quantified to the extent possible. Please revise to include the
following additional bullet-point risk factors on the cover page:
* risks associated with distribution payments, such as the risk
that
you may borrow funds, issue new securities or sell assets to make
distributions and the risk that distributions may be a return of
capital;
* limits on ownership, transferability and redemption of shares.
13. Please revise the seventh bullet point to include the
percentage
and associated dollar value that will be given to affiliates.
14. Please revise the cover page to state the percentage of
offering
proceeds that will be available for investments after payment of
fees
and expenses associated with the offering.
15. Please revise to delete the term "Pacific Cornerstone Capital,
Inc." at the bottom of this page. Please note that the current
placement of "Pacific Cornerstone Capital Inc." implies that this
is
a firm commitment underwritten offering. In this regard, we note
your statement in the last paragraph. See Item 501(b)(8) of
Regulation S-K.
16. Please revise to indicate the maximum percentage of gross
offering proceeds that you will pay for dealer manager fees and
commissions.
Questions and Answers About this Offering
17. Please be aware that we view the Question and Answer section
and
the summary section of the prospectus to be one section. Your Q&A
section should not repeat any information that appears in the
summary, and vice versa. To the extent there is repetitive text
in
these sections, please revise to eliminate the repetition. We
note,
for example, that both sections contain information regarding
material terms of the offering, investment objectives, and your
special dividend. Further, as written together, the Q&A and the
summary sections are lengthy and do not provide investors with a
clear, concise and coherent "snapshot" description of the most
significant aspects of the offering. We note that much of the
summary is repeated in the body of the prospectus. Please revise
to
provide a brief overview of the salient aspects of the
transaction.
See Securities Act Release 33-6900 and Section 3 of Industry Guide
5.
18. We note that your Q&A includes a discussion of the advantages
of
investing in your company. Please balance this disclosure with a
summary of the most significant risks associated with your company
and this offering.
19. What is a REIT? Please remove the second bullet point, since
not
all REITs hold a large, diversified real estate portfolio.
20. Do you currently own any properties? Please revise your
answer
or revised summary section to include a reference to the term
"blind
pool" offering.
21. Where will the properties you acquire be located? We note
that
you generally seek to acquire properties in locations with
historically high levels of tenant demand. Please expand your
disclosure to identify those geographic areas.
22. Will you use temporary acquisition debt financing to purchase
properties? We note that during the offering period you may use
temporary debt financing to facilitate your acquisitions. Please
revise to indicate whether you have any firm commitments for
financing from any financial institutions or other lenders.
23. Will you acquire properties in joint ventures?
Supplementally,
please tell us whether you may also hold properties through
tenant-
in-common interests. If so, please expand your Q&A to briefly
describe the nature of such holdings. Provide additional
disclosure
in the description of your investment objectives, beginning on
page
60.
24. How will you determine the amount of dividends to be paid?
Please revise the disclosure to clarify that 90% of your taxable
income may exceed your cash available for distribution. Describe
how
you will fund those distributions in order to maintain your status
as
a REIT. Clearly state that distributions paid in excess of
available
cash will constitute a return of capital.
25. Will you have a stock repurchase program? Please revise to
indicate whether the investors will be subject to any fees in
connection with the stock repurchase program.
Prospectus Summary, page 12
The Offering, page 12
26. You indicate that if you do not sell $1,000,000 of stock by a
certain date, you will terminate the offering and return all
subscribers` funds, plus interest. Please clarify the time frame
within which you will return payment to investors. Refer to the
requirements for transmitting payments under Rule 15c2-4.
27. Please revise to provide a comparison in percentages of the
securities being offered to the public and those issued or to be
issued to affiliated persons.
Our Advisor, page 13
28. Please revise to disclose that your officers and directors are
also officers and directors of the advisor.
Investment Objectives, page 13
29. Clarify whether you will purchase vacant properties or only
properties with tenants already under contract.
Conflict of Interests, page 14
30. Please revise to quantify all fees and compensation.
Risk Factors, page 17
31. Many of your risk factor subheadings state a fact, or describe
some aspect of your business, rather than state a risk. These
risk
factors convey the cause of concern, but not the effect. This
requires the reader to infer the risk. Please revise your
captions
to accurately convey the risks that relate to the facts you
present.
For example, but not limited to:
* Because this is an unspecified property offering...;
* The availability and timing of cash dividends is uncertain;
* We may borrow money for dividends to meet the REIT...;
* We may acquire properties from affiliates of our advisor in
transactions in which the price will not be the result of arm`s-
length negotiations; and
* You have limited control over changes in our policies and
operations.
32. Please avoid using generic conclusions such as "adversely
affected" and "negatively affected" when describing the risks`
effects. Replace this, and similar language, with specific
disclosure of how you, your business, financial condition and
results
of operations would be affected by the facts you describe.
33. Some of your risk factors fail to specifically state the risks
that may flow from the facts and circumstances you describe. For
example, under We may purchase properties from persons with whom
our
advisor or its affiliates have prior business relationships..., on
page 20 you fail to state the risks that will result from facts
you
describe. Please review and revise each of your risk factors to
state the specific risk that will result from the facts you
describe.
Explain how the risk affects Cornerstone Realty or the securities
being offered.
34. To the extent possible, avoid generic risk factors. For
example,
the risk described on page 28 that states "Real estate taxes may
increase resulting in our income being reduced" could apply to any
company because any company with real estate could be affected by
an
increase in property taxes. If you wish to retain this risk
factor,
you must clearly explain how the specific risks apply to your
company. Alternatively, delete these risks.
Investment Risks, page 17
There is no public trading market for our stock, page 17
35. Please delete all mitigating language from risk factors such
as
"Although in the future, we may consider opportunities to
establish a
public securities market for our stock..."
36. Please revise to quantify the ownership restrictions imposed
by
your charter.
We may also borrow money for dividends to meet the REIT minimum
distribution requirement, page 19
37. Please revise to disclose that distributions in excess of
available cash will constitute a return of capital to
stockholders.
Provide similar disclosure in the summary.
Our ability to retain key personnel..., page 19
38. We note that you depend to a significant degree upon
contributions of key personnel of your advisor. Please revise
your
disclosure to identify the key personnel.
Risk Related to Conflict of Interest, page 19
Our advisor will face conflicts of interest relating to the
purchase
and leasing of properties, page 19
39. Please revise to quantify and briefly describe the "other
programs" sponsored by your advisor or its affiliates that are
currently raising offering proceeds. Provide a more detailed
discussion in the conflict of interest section of your prospectus.
We may acquire properties from affiliates of our
advisor...page
19
40. We note your statement that if the price of your properties
costs
you in excess of the cost and expenses to affiliates, then
substantial justification for such excess will exist. To provide
depth to your risk factor, please revise to include an example of
such substantial justification.
41. Please revise to disclose whether you will use an independent
third party appraiser when acquiring property.
Our adviser, its affiliates and our officers will face
competing demands..., page 20
42. Please revise to quantify the amount of time that your adviser
and its affiliates will dedicate to Cornerstone Realty.
Our adviser and its affiliates, including our officers and some of
our directors, will face conflicts of interest caused by
compensation
arrangements..., page 21
43. Some of the factors you have listed in the bullet points under
this risk factor appear to be risks that you have already
addressed
elsewhere in the risk factors section. Please revise to delete
all
redundancies. Also, consider combining this risk factor with the
similar risk factor on page 20.
Risks Related to This Offering and Our Corporate Structure,
page 22
The payment of the subordinated performance fee due upon
termination..., page 23
44. In order to give depth to your disclosure, revise to quantify
the
subordinated performance fee.
Your investment return may be reduced if we are required to
register
as an investment company..., page 24
45. Please revise your disclosure to explain why you believe you
may
be required to register as an investment company under the
Investment
Company Act of 1940. Alternatively, delete this risk factor.
You may not be able to sell your stock under the proposed stock
repurchase program, page 25
46. You indicate that you will not adopt the proposed stock
repurchase program until completion of this offering unless you
receive an exemption from the SEC. Please revise to provide a
description of the relief sought from the SEC. Also, indicate
whether you have applied to the SEC for such relief. If not, tell
us
why you believe this language is appropriate. Alternatively,
delete
this and similar language throughout your prospectus.
General Risks related to Investments in Real Estate, page 27
Economic and regulatory changes that impact the real estate market
may adversely affect our operating results..., page 27
47. The factors you have listed in the bullet points under this
risk
factor appear to be risks that you have already addressed
elsewhere
in the risk factors section. Please delete all redundancies.
Adverse economic and worldwide political conditions could
negatively
affect our returns and profitability, page 27
48. We note you have presented four risks that are market and
economic challenges, many of which could apply to any company.
Please consider discussing each of these risk factors under a
separate caption that adequately describes the risk being
presented.
Focus on how these risks may affect your business in a degree or
manner that is different or more significant than other companies.
We expect to acquire many properties in the future..., page
28
49. Please revise this risk factor and explain how the risk
described
in each bullet point affects Cornerstone Realty or the securities
being offered.
Real estate related taxes may increase resulting in our
income
being reduced, page 28
50. Please revise to discuss any proposed changes that would have
the
affect of increasing your real estate taxes. Alternatively,
delete
this risk factor.
Costs incurred in complying with governmental laws and regulations
may adversely affect our income, page 28
51. Please revise to identify and briefly discuss the material
laws
and regulations that may adversely affect your income and cash
available for dividends.
We may acquire and finance portfolios of properties that....may
require us to maintain specified debt levels for a period of years
on
some properties, page 30
52. You indicate that loan provisions could materially restrict
you
from selling or otherwise disposing of or refinancing properties.
Please revise to reconcile this with your investment objective to
preserve stockholder capital by owning and operating real estate
on
an all cash basis with no permanent debt financing. Also,
consider
defining "permanent financing" in the beginning of your
prospectus.
Federal Income Tax Risks, page 32
If you elect to reinvest your dividends in our common stock, you
will
have current tax liability on the amount you invest, page 33
53. The disclosure in this risk factor appears more appropriate
for
the body of your prospectus. Please revise to explain why this
risk
factor makes this offering speculative or risky. Alternatively,
delete this risk factor.
Future tax changes could adversely affect you, page 34
54. Please revise to discuss any proposed changes to the federal
income tax laws governing REITs or the administrative
interpretations
of those laws. If there are no proposed changes, please revise to
explain how this risk factor makes this offering speculative or
risky. Alternatively, delete this risk factor.
Cautionary Note Regarding Forward-Looking Statements, page 36
55. Section 27A(b)(2)(D) of the Securities Act of 1933 and Section
21E(b)(2)(D) of the Securities Exchange Act of 1934 expressly
state
that the safe harbor for forward looking statements does not apply
to
statements made in connection with an initial public offering.
Please either:
* delete any references to Section 27A or Section 21E; or
* make clear each time you refer to those sections that the safe
harbor does not apply to initial public offerings.
Estimated Use of Proceeds, page 36
56. We note that you plan to pay your advisor an acquisition fee
upon
the receipt of offering proceeds rather than at the time a
property
is acquired. Do you intend to adjust the amount of previously
paid
acquisition fees as properties are acquired? Please revise your
disclosure as necessary in the Estimated Use of Proceeds on page
37
and the Management Compensation table on pages 49 and 52.
57. Please revise the table to include separate line items for
reserves for operations, capitalized tenant improvements, leasing
expenses, and acquisition expenses. Refer to Appendix I of
Industry
Guide 5.
Management, page 38
58. Please revise to include the disclosure required by Item 404
of
Regulation S-K, regarding certain relationships and related party
transactions. Refer to Item 23 of Form S-11.
Executive Officers and Directors, page 39
59. Please revise to state the term of office for each named
executive officer. See Item 401(b) of Regulation S-K.
Initial Investment by Our Advisor, page 47
60. We note that your advisor will purchase 27,933 shares of stock
prior to the effective date of this prospectus. Please revise to
disclose whether this purchase will count toward meeting the
minimum
offering amount threshold.
Management Compensation, page 48
61. Please expand your description of the acquisition fees to
explain
how the actual amounts will be determined.
62. Refer to the last sentence in footnote (5), where you compare
your asset management fee to the asset management fees of
companies
that use 50% leverage. Please revise to discuss the effect if you
leverage your properties. We note that you intend to be an all-
cash
REIT, but that your charter permits borrowings up to 75% of the
cost
of your assets and that your independent directors can approve
excess
borrowing.
Conflicts of Interests, page 54
Our Advisor`s Interests in Other Real Estate Programs, page 54
63. Please identify the affiliates of your advisor that are
general
partners and managing members of other real estate programs and
describe the nature of the affiliate relationship to your advisor.
Also disclose the number of other real estate programs.
Our Board`s Loyalties to Existing and Future Programs Sponsored by
Our Advisor, page 55
Fiduciary Duties Owed by Some of Our Affiliates to Our Advisor and
Our Advisor`s Affiliates, page 56
64. Please revise to identify your directors that will also be
directors of your advisor. Similarly, identify your executive
officers and directors that are also executive officers and
directors
of Cornerstone Ventures, Inc. and Pacific Cornerstone Capital,
Inc.
Lack of Separation Representation, page 56
65. If a conflict arises between Cornerstone and the Advisor or
Cornerstone and an individual officer or director of Cornerstone
and
the Advisor, disclose whether Preston Gates & Ellis, LLP, a
Professional Corporation will represent Cornerstone.
Approval of Our Independent Directors, page 56
66. Please revise to disclose that you currently have no
independent
directors and clarify that a majority vote of independent
directors,
at present, is not possible.
Investment Objectives and Acquisition Policies, page 60
67. Please revise to indicate the geographic area or areas in
which
you propose to acquire real estate or interest in real estate.
Plan of Operation, page 66
General, page 66
68. You indicate that your advisor may establish reserves from the
gross offering proceeds, out of cash flow from operating
properties
or out of net sale proceeds from the sale of your properties.
Please
revise to expand your description of the reserves. For example,
explain the purpose of the reserve account. Also, revise your use
of
proceeds section to the extent that proceeds will be used from
this
offering to fund the reserve account.
Liquidity and Capital Resources, page 66
69. We note that you are dependent on your advisor to fund your
offering and organizational activities. We also note that your
advisor must raise funds to obtain the cash necessary to advance
you
funds. Please revise your disclosure to explain why you will rely
on
your advisor for advances. If your reliance on the advances is to
acquire properties, please explain the purpose of this offering.
Regardless, revise to disclose the terms of the advances.
Prior Performance Summary, page 71
70. Please revise to include the investment objectives of the
public
and prior programs clarifying whether the investment objectives
are
similar to this program.
Public Programs, page 71
71. Please revise to include the total number of investors. Also,
disclose the location of each of the properties by region.
72. Please include a list of all prior public programs by name.
Refer to Item 8.A.3 of Industry Guide 5.
Description of Securities, page 85
Dividends, page 89
73. Please revise to provide a discussion of any restrictions that
limit or prevent you from making a distribution.
74. To the extent that your ability to make distributions to your
stockholders will depend, in part, upon your receipt of
distributions
from your operating partnership, please revise your disclosure to
indicate whether or not there are any restrictions on the ability
of
Cornerstone Operating Partnership, L.P. to transfer funds to
Cornerstone Realty Fund.
Special 10% Stock Dividend for Early Investors, page 89
75. Please revise to discussion the dilutive affect this special
stock dividend will have on stockholders interests in Cornerstone.
Plan of Distribution, page 100
76. Supplementally, please tell us whether you or your dealer-
manager
intends offer securities through the internet. If so, please tell
us
whether the electronic offering procedures have previously been
cleared with the Division`s Office of Chief Counsel and whether
the
procedures have changed since they were cleared. If your
electronic
offering procedures have not been cleared by the Office of Chief
Counsel, please describe your procedures to us in detail and
explain
how they are consistent with Section 5 of the Securities Act. In
this regard, we note that Cornerstone Realty Fund, LLC is
currently
offering securities through its website.
77. Sales to our Affiliates. Please revise to clarify whether
sales
to your affiliates will count toward the minimum offering amount.
78. Sales Pursuant to Our Dividend Reinvestment Plan. Please
revise
to clearly state the anticipated cost to the participants by
transaction or other convenient reference. For example, do the
shares to each participant costs $7.05 per share plus any
commissions
and fees? Consider including an example to illustrate how you
will
determine the stock price.
Notes to Balance Sheet
Note 2. Summary of Significant Accounting Policies
Real Estate Purchase Price Allocation, page F-5
79. When disclosing your real estate purchase price allocation
policy, include a discussion of the method you use to allocate the
purchase price to tangible assets, as well as intangible assets
acquired.
Prior Performance Tables
Table V: Sales or Disposals of Properties, page P-11
80. In connection with the total selling price, net of closing
costs
and GAAP adjustments, disclose the allocation of the taxable gain
between ordinary and capital and identify those sales, if any,
that
are being reported for tax purposes on the installment basis.
Refer
to Appendix II of Industry Guide 5.
81. Revise your disclosure to indicate that the total acquisition
cost, capital improvements, closing and soft costs do not include
a
pro rata share of original offering costs, as required by Appendix
II
of Industry Guide 5.
82. It does not appear that the programs included in Table V have
investment objectives similar to those of Cornerstone Realty Fund,
Inc. If the investment objectives of the programs presented are
dissimilar, indicate the differences through footnote disclosure.
Table V: Results of Completed Programs for the Period, page P-12
83. Please supplementally advise us of your basis for including
the
table presented on page P-12.
84. Please supplementally advise us and clarify your disclosure to
address what adjustments were made to the properties` sales prices
to
arrive at Net Sales Price as presented in this table. Also advise
us
of the consideration you gave to the carrying value of the
properties
when determining the Profit from Sales.
85. Please clarify in your disclosure how the Sales Profit (%) is
calculated and elaborate upon how this metric varies from the
Annualized Sales Profit (%).
Part II
Item 33. Recent Sales of Unregistered Securities, page II-1
86. Please revise your disclosure to provide all of the disclosure
required under Item 701 of Regulation S-K. Specifically, if the
securities sold to Mr. Roussel were sold for cash, state the
aggregate offering price.
Item 36. Exhibits and Financial Statement Schedules, page II-2
87. Please file your legal and tax opinions with your next
amendment
or provide draft opinions for us to review.
88. Please revise your disclosure to list all financial statements
filed as part of the registration statement, indicating those
included in the prospectus. See Item 36(a) of Form S-11.
* * *
As appropriate, please amend your registration statement in
response to these comments. You may wish to provide us with
marked
copies of the amendment to expedite our review. Please furnish a
cover letter with your amendment that keys your responses to our
comments and provides any requested supplemental information.
Detailed cover letters greatly facilitate our review. Please
understand that we may have additional comments after reviewing
your
amendment and responses to our comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings reviewed by the staff to
be
certain that they have provided all information investors require
for
an informed decision. Since the company and its management are in
possession of all facts relating to a company`s disclosure, they
are
responsible for the accuracy and adequacy of the disclosures they
have made.
Notwithstanding our comments, in the event the company
requests
acceleration of the effective date of the pending registration
statement, it should furnish a letter, at the time of such
request,
acknowledging that:
* should the Commission or the staff, acting pursuant to delegated
authority, declare the filing effective, it does not foreclose the
Commission from taking any action with respect to the filing;
* the action of the Commission or the staff, acting pursuant to
delegated authority, in declaring the filing effective, does not
relieve the company from its full responsibility for the adequacy
and
accuracy of the disclosure in the filing; and
* the company may not assert this action as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in connection with our review of
your
filing or in response to our comments on your filing.
We will consider a written request for acceleration of the
effective date of the registration statement as a confirmation of
the
fact that those requesting acceleration are aware of their
respective
responsibilities under the Securities Act of 1933 and the
Securities
Exchange Act of 1934 as they relate to the proposed public
offering
of the securities specified in the above registration statement.
We
will act on the request and, pursuant to delegated authority,
grant
acceleration of the effective date.
We direct your attention to Rules 460 and 461 regarding
requesting acceleration of a registration statement. Please allow
adequate time after the filing of any amendment for further review
before submitting a request for acceleration. Please provide this
request at least two business days in advance of the requested
effective date.
You may contact Kristi Beshears, Accountant, at (202) 824-
5346
or Linda Van Doorn, Senior Assistant Chief Accountant, at (202)
942-
1964 if you have questions regarding comments on the financial
statements and related matters. Please contact Jeffrey Shady,
Attorney-Advisor, at (202) 942-1901 or me at (202) 942-1960 with
any
other questions.
Sincerely,
Karen J. Garnett
Assistant Director
cc: Karen Winnett, Esq. (via facsimile)
Preston Gates & Ellis LLP
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Cornerstone Realty Fund, Inc.
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