SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Current Report
Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Date of Report: June 26, 1996
CORNERSTONE REALTY INCOME TRUST, INC.
(Exact name of registrant as specified in its charter)
VIRGINIA 0-23954 54-1589139
(State of (Commission (IRS Employer
incorporation) File Number) Identification No.)
306 East Main Street
Richmond, Virginia 23219
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including area code:
(804) 643-1761
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CORNERSTONE REALTY INCOME TRUST, INC.
FORM 8-K
Index
Page No.
Item 2. Acquisition or Disposition of Assets 5
Item 7. Financial Statements, Pro Forma Financial
Information and Exhibits
a. Independent Auditors' Report
(Lexington Towers Apartments) 27
Historical Statement of Income and
Direct Operating Expenses
(Lexington Towers Apartments) 28
Note to Historical Statement of
Income and Direct Operating
Expenses (Lexington Towers Apartments) 29
b. Independent Auditors' Report
(Oak Park Apartments)*
Historical Statement of Income and
Direct Operating Expenses
(Oak Park Apartments)*
Note to Historical Statement of
Income and Direct Operating
Expenses (Oak Park Apartments)*
c. Independent Auditors' Report
(Paces Glen Apartments) 32
Historical Statement of Income and
Direct Operating Expenses
(Paces Glen Apartments) 33
Note to Historical Statement of
Income and Direct Operating
Expenses (Paces Glen Apartments) 34
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* To be filed by amendment.
d. Independent Auditors' Report
(Doctors Park Apartments) 36
Historical Statement of Income and
Direct Operating Expenses
(Doctors Park Apartments) 37
Note to Historical Statement of
Income and Direct Operating
Expenses (Doctors Park Apartments) 38
e. Independent Auditors' Report
(Hampton Glen Apartments)*
Historical Statement of Income and
Direct Operating Expenses
(Hampton Glen Apartments)*
Note to Historical Statement of
Income and Direct Operating
Expenses (Hampton Glen Apartments)*
f. Pro Forma Statement of Operations for
the Six Months ended June 30, 1996
(unaudited)*
Pro Forma Balance Sheet as of
June 30, 1996 (unaudited)*
Pro Forma Statement of Operations
for the Year ended December 31, 1995
(unaudited)*
g. Exhibits
10.1 Purchase Contract for Lexington Towers
Apartments
10.2 Purchase Contract for Oak Park Apartments
10.3 Purchase Contract for Paces Glen
Apartments
10.4 Purchase Contract for Doctors Park
Apartments
10.5 Purchase Contract for Hampton Glen
Apartments
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* To be filed by amendment.
23.1 Consent of Independent Auditors
23.2 Consent of Independent Auditors*
23.3 Consent of Independent Auditors
23.4 Consent of Independent Auditors
23.5 Consent of Independent Auditors*
23.6 Consent of Independent Auditors*
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* To be filed by amendment.
Item 2. Acquisition or Disposition of Assets
LEXINGTON TOWERS APARTMENTS
RICHMOND, VIRGINIA
On June 26, 1996, effective the same date, the Company purchased the
Lexington Towers Apartments, a 197-unit high-rise apartment building having an
address of 102 North Fifth Street, Richmond, Virginia (the "Property"). The
Company has renamed the Property the "Trolley Square Apartments."
The seller was unaffiliated with the Company, the Advisor and their
Affiliates. The purchase price was $6,000,000. At closing, the Company paid
$500,000 in cash from a borrowing under the Unsecured Line of Credit. The
balance of $5.5 million is evidenced by a promissory note bearing interest at
5.65%. The principal amount of the promissory note and all accrued interest is
due three years after closing. The note is secured with a letter of credit which
will cost the Company approximately 1% per year. The note is not secured by the
Property. The Company expects to pay the note with proceeds from the sale of
Shares. Title to the Property was conveyed to the Company by limited warranty
deed.
Location. The following information is based in part upon
information provided by the Richmond Chamber of Commerce.
The current population of Richmond is approximately 202,000 and the
current population of the Metropolitan Statistical Area including the City of
Richmond is approximately 930,000. Richmond is located centrally within the
Commonwealth of Virginia, approximately midway between Washington, D.C. and
Raleigh, North Carolina.
The greater Richmond area is served by the Richmond International
Airport, and is situated at the intersection of Interstates 95 and 64. In
addition to being the capital of Virginia, Richmond is also home to numerous
Fortune 500 companies. Some of the larger employers in the area are Philip
Morris, state government, AT&T, Dupont, and NationsBank. In addition, the area
is the site of a number of institutions of higher education, including Virginia
Commonwealth University, the Medical College of Virginia, the University of
Richmond, and Virginia State University.
The Property is located in downtown Richmond, Virginia. The immediate
area consists of other multi-family housing, commercial development and retail
development. The Property is in close proximity to Virginia Commonwealth
University, and is near to the
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two established commercial areas known as Carytown and Shockoe Slip.
The Property is close to Virginia's 23-acre Biotechnology Research Park,
which is under development. The Park is being sponsored and master-leased by
Virginia Commonwealth University to provide a common site for public and private
medical-oriented biotechnology research and development facilities. Phase I,
consisting of approximately 100,000 square feet, was recently completed and is
fully leased. The second and third phases are under construction and are
expected to be completed in late 1996. The facility, which is adjacent to the
Medical College of Virginia campus of Virginia Commonwealth University, is
expected to impact the demand for rental housing in the area.
The Property is only a few blocks from the Richmond Downtown Expressway,
which provides ready access to Interstates 95 and 64. The Richmond International
Airport is approximately 15 minutes from the Property.
Description of the Property. The Property consists of 197 apartment
units in a single 17-story apartment building in the central business district.
The Property was built in 1965.
The Company believes that the Property is generally in good condition.
However, the Company has budgeted approximately $517,500 for various repairs and
improvements, including interior renovations of apartment units, carpet and
appliance replacement, pool renovation, and renovation of the fitness facility
and common areas.
The Property offers five unit types. The unit mix and rents currently
being charged new tenants are as follows:
Approximate
Interior
Quantity Type Square Footage Monthly Rental
- -------- ---- -------------- --------------
42 efficiency 365 $375-450
94 junior executive 480 395-500
1 executive suite 690 550
54 1 bedroom, 1 bath 678-937 525-700
6 2 bedrooms, 2 baths 912-1,035 775-875
The apartments provide a combined total of approximately 107,000 square
feet of net rentable area.
Leases at the Property are generally for terms of one year
or less. Average rental rates for the past five years have
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gradually increased. As an example, a junior executive apartment rented for $370
in 1991, $380 in 1992, $380 in 1993, $390 in 1994, and $390 in 1995. The average
effective annual rental per square foot at the Property for 1991, 1992, 1993,
1994, and 1995 was $10.21, $10.49, $10.49, $10.78, and $10.78, respectively.
The Property has an outdoor swimming pool, a clubhouse and exercise room
(located on the 16th floor), a meeting/game room, laundry facilities on each
floor, and an attached parking garage, with approximately 111 parking spaces
which can be reconfigured to accommodate approximately 138 vehicles. There is
also 24-hour security at the Property.
The Company is planning to convert approximately 7,500 square feet of
unoccupied office space on the first floor and approximately 17,500 square feet
on the 16th floor that is now being used as a clubhouse and exercise facility
into new apartments. The Company believes than an additional 10 apartment units
can be added using these spaces.
The building is brick veneer over steel frame. There are concrete floor
decks. The roof is flat with modified bitumen rubber sheathing, and was replaced
within the last 12 months. Windows are single stainless steel frames.
All apartment units have wall-to-wall carpeting or parquet flooring in
the living area, and vinyl flooring in the kitchen. Each apartment unit has a
cable television hook-up and an individually controlled heating and
air-conditioning unit. Each kitchen is equipped with a refrigerator/freezer,
electric range and oven, dishwasher and garbage disposal. The owner of the
Property provides all utilities. The tenants pay for their phone and cable
services.
There are at least four apartment properties in the area which compete
with the Property. All offer similar amenities and have rents that are generally
slightly higher when compared with those of the Property. Based on a recent
telephone survey, Cornerstone Management Group, Inc. estimates that occupancy in
nearby competing projects now averages approximately 97%.
According to information provided by the seller, physical occupancy at
the Property averaged approximately 43% in 1991, 41% in 1992, 41% in 1993, 42%
in 1994, and 63% in 1995. On June 1, 1996, the Property was 95% occupied. The
tenants are a mix of white-collar and blue-collar workers and students. Many of
the current tenants have resided at the Property for many years, and detailed
information on them and their status is not available. A large number of the
residents are foreign intern students at
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the Medical College of Virginia. Many of the tenants on which
current information is available are employed in professional
positions in engineering, medicine and education.
The Property had been managed by its original owner since construction.
According to the prior owner, the Property historically enjoyed an excellent
occupancy rate until the prior owner decided to convert it to condominiums
approximately four years ago. Following such decision, the occupancy at the
Property decreased to below 50%. The prior owner subsequently reversed its
decision to convert to condominiums and thereafter continued to run the building
as an apartment complex. However, the occupancy at the Property remained at
approximately 50% until the fall of 1995. Cornerstone Management Company, Inc.
believes that the failure to increase occupancy was attributable to a passive
management style and insufficient on-site staff. In the fall of 1995, the owner
restaffed the Property and occupancy began to improve.
The 1995 real estate tax rate applicable to the Property was
approximately $1.445 per $100 of assessed value, and the real estate taxes for
1995 were calculated to be $53,393. The assessed value was $3,695,000. The basis
of the depreciable residential real property portion of the Property (currently
estimated at about $2,710,000) will be depreciated over 27.5 years on a straight
line basis. The basis of the personal property portion will be depreciated in
accordance with the modified accelerated cost recovery system of the Code.
Amounts to be spent by the Company on repairs and improvements will be treated
for tax purposes as permitted by the Code based on the nature of the
expenditures.
The Company believes that the Property is and will continue to be
adequately covered by property and liability insurance.
Material Factors Considered in Assessing the Property. The factors
considered by the Advisor and the Company to be relevant in evaluating the
Property for acquisition by the Company included the following:
1. The Company believes that the Richmond, Virginia area will enjoy
continued steady economic development and steady population increase, due to a
diversified economy, and that such development and increase will support stable
occupancy rates and reasonable increases in rents at the Property.
2. Based upon an engineering report and its own
inspections, the Company believes that the Property is in sound condition.
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3. The Property is conveniently located and proximate to
major employers and shopping, as well as the downtown Richmond area.
4. The Company is particularly familiar with the Richmond
market since the Company's principal offices are in Richmond.
The Company is not aware of any material adverse factors relating to the
Property not set forth in this report that would cause the financial information
contained in this report not to be necessarily indicative of future operating
results.
Acquisition Services and Fees. In consideration of services rendered to
the Company in connection with the selection and acquisition of the Property,
the Company will pay Cornerstone Realty Group, Inc. a property acquisition fee
of 2% of the purchase price of the Property, or $120,000. As of September 15,
1996, $10,000 of such fee has been paid, and the balance will be paid as and
when the note issued to the Property's seller is repaid with proceeds from the
sale of Shares.
OAK PARK APARTMENTS
AUGUSTA, GEORGIA
On July 15, 1996, effective July 1, 1996, the Company purchased the Oak
Park Apartments, a 456-unit apartment complex, having an address of 1016
WoodsEdge Drive in Richmond County, near Augusta, Georgia (the "Property").
The Company purchased the Property from a seller which is unaffiliated
with the Company, the Advisor, and their Affiliates. The purchase price was
$9,804,000. At closing, $9,675,000 of the purchase price was borrowed on an
interim basis under the Company's unsecured line of credit. The balance of the
purchase price ($129,000) was paid in cash from the proceeds of the Offering.
Title to the Property was conveyed to the Company by limited warranty deed.
Location. The following information is based in part upon
information provided by the Augusta Chamber of Commerce.
The Property is located in Richmond County in Augusta, Georgia. As of
1990, Richmond County had a population of approximately 190,000, with
approximately 45,000 of such total residing within the city limits. Augusta is
an approximately 2
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hour drive from Atlanta and an approximately 2-1/2 hour drive from Charlotte,
North Carolina.
There are two major employers within the greater metropolitan area: Fort
Gordon, a military installation, and the medical community, which centers around
the Medical College of Georgia and University Hospital. The Medical College of
Georgia employs approximately 7,000 persons and University Hospital employs
approximately 3,500 persons. There are also a number of Fortune 500 companies
with a significant presence in the metropolitan Augusta area. These include
Allied Signal, Archer Daniels Midland, Borden, Proctor & Gamble, Sunbeam and
Philip Morris. There are two major colleges in the area: Augusta College with an
enrollment of approximately 5,700 and the Medical College of Georgia, with
approximately 5,300 students.
The major highways serving the area are Interstate 20 and Interstate
520. There is a municipal airport approximately 14 miles from the Property.
The immediate neighborhood surrounding the Property is characterized by
the intersection of Washington Road and Interstate 20. This area is the site of
numerous retail stores, restaurants, and businesses. The Property is located
within five miles of the Augusta central business district via Washington Road.
The central business district of Augusta is similar to that of other older
Southern towns, being characterized by governmental offices and banks, with a
few newer businesses.
Description of the Property. The Property consists of 456 garden-style
apartments in 57 two-story buildings located on approximately 9.5 acres of land.
The Property was constructed in 1968.
The Company believes that the Property has been wellmaintained and is
generally in good condition. However, the Company has budgeted approximately
$456,000 for repairs and improvements, including new siding, repainting,
clubhouse renovation, landscaping, model renovations and pavement repairs.
The Property offers a wide variety of unit types. The unit mix and rents
currently being charged new tenants are as follows:
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Approximate
Interior
Square Monthly
Quantity Type Footage Rental
-------- ---- ------- ------
72 one bedroom, one bath 585 $405
117 two bedrooms, one bath 858 430
106 two bedrooms, one bath 858 430
11 two bedrooms, one bath 908 485
w/utility room
14 two bedrooms, one bath w/den 933 465
76 two bedrooms, one bath 1,010 475
16 two bedrooms, one bath 1,010 525
2 two bedrooms, one bath w/den 1,060 510
26 two bedrooms, two baths 1,010 510
4 two bedrooms, two baths w/den 1,085 530
7 three bedrooms, two baths 1,200 595
2 three bedrooms, two baths 1,200 645
w/utility
2 three bedrooms, two baths 1,275 645
w/utility
1 three bedrooms, two baths 1,275 630
w/den
The apartments provide a combined total of approximately 398,000 square
feet of net rentable area.
Lease at the Property are for terms of one year or less. Rental rates
for the past five years have generally increased steadily. As an example, a two
bedroom, one bath apartment rented for $325 in 1991, $335 in 1992, $365 in 1993,
$395 in 1994, and $407 in 1995. The average effective annual rental per square
foot at the Property for 1991, 1992, 1993, 1994, and 1995 was $5.02, $5.02,
$5.47, $5.92, and $6.10, respectively.
The buildings are a combination of stucco, wood siding, and brick veneer
on concrete slab foundations. The roofs are flat with mansard coverings. Over
the last three years, the prior
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owner replaced all of the roof structures, including the mansard overhangs, and
replaced all of the appliances, countertops, kitchen sinks, vinyl floor
coverings, and carpeting. In addition, the pavement at the Property received new
asphalt approximately three years ago.
The Property has an outdoor swimming pool, a playground, a laundry room
in each building, a clubhouse, and rental office. There is ample paved parking
for tenants.
All apartments have wall-to-wall carpeting in the living room areas and
vinyl floors in the kitchen and bath. Each apartment unit has an
individually-controlled heating and air-conditioning unit, and each kitchen is
equipped with a refrigerator/freezer, electric range and oven, pantry, and
garbage disposal. As of the date of acquisition of the Property by the Company,
approximately 276 units had dishwashers, and the Company expects to install
dishwashers in all of the remaining apartment units in 1996. The owner of the
Property supplies cold water, natural gas (for heating, cooking and hot water),
sewer service, trash removal, monthly pest control, and cable television
service. The tenants pay for their own electricity usage, which includes air
conditioning and lights.
There are at least five apartment properties in the area which compete
with the Property. All offer similar amenities and have rents that are generally
higher when compared with those of the Property. Based on a recent telephone
survey, Cornerstone Management Group, Inc. estimates that occupancy in nearby
competing projects now averages approximately 87%. The Company also owns the
West Eagle Greens Apartments, which are located approximately one mile from the
Property. The occupancy at the West Eagle Greens Apartments is now approximately
85%.
According to information provided by the seller, physical occupancy at
the Property averaged approximately 71% in 1991, 72% in 1992, 74% in 1993, 83%
in 1994, and 85% in 1995. On August 1, 1996, the Property was 81% occupied. The
residents are a mix of white-collar, blue-collar, and military workers, with
some students. There is no predominant employer.
The 1995 real estate tax rate applicable to the Property was $0.02722
times 40% of assessed value, and the real estate taxes for 1995 were calculated
to be $63,268. The assessed value was $5,810,840. The basis of the depreciable
residential real property portion of the Property (currently estimated at about
$5,471,540) will be depreciated over 27.5 years on a straight-line basis. The
basis of the personal property portion will be depreciated in accordance with
the modified accelerated cost
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recovery system of the Code. Amounts to be spent by the Company on repairs and
improvements will be treated for tax purposes as permitted by the Code based on
the nature of the expenditures.
The Company believes that the Property is and will continue to be
adequately covered by property and liability insurance.
Material Factors Considered in Assessing the Property. The factors
considered by the Advisor and the Company to be relevant in evaluating the
Property for acquisition by the Company included the following:
1. The Company believes that the Augusta, Georgia area will experience
continued economic development and steady population increase, and that such
development and increase will support stable occupancy rates and reasonable
increases in rents at the Property.
2. Based upon an engineering report and its own
inspections, the Company believes that the Property is in sound condition.
3. The Property is conveniently located and proximate to
major employers and shopping.
4. The Property offers a very wide variety of unit types and sizes to
accommodate a variety of tenants, which may offer competitive advantages for the
Property.
The Company is not aware of any material adverse factors relating to the
Property not set forth in this report that would cause the financial information
contained in this report not to be necessarily indicative of future operating
results.
Acquisition Services and Fees. In consideration of
services rendered to the Company in connection with the selection and
acquisition of the Property, the Company paid Cornerstone Realty Group, Inc.
a property acquisition fee of 2% of the purchase price of the Property, or
$196,080.
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PACES GLEN APARTMENTS
CHARLOTTE, NORTH CAROLINA
On July 19, 1996, effective July 19, 1996, the Company purchased the
Paces Glen Apartments, a 172-unit apartment complex having an address of 5600
Paces Glen Avenue in Charlotte, North Carolina (the "Property"). The Company
purchased the Property from a seller which is unaffiliated with the Company, the
Advisor, and their Affiliates. The purchase price was $7,425,000. At closing,
$7,387,335 of the purchase price was borrowed on an interim basis under the
Company's unsecured line of credit and the balance of $37,665 was paid in cash
from the proceeds of the Offering. Title to the Property was conveyed to the
Company by limited warranty deed.
Location. The following information is based in part upon
information provided by the Charlotte Chamber of Commerce.
Based in part upon its fast rate of growth and a diversified economy,
Charlotte has in recent years come to national attention as an attractive
location for business and residential growth. According to the August, 1995,
Site Selection magazine, Charlotte's corporate popularity ranked second
nationally only to Dallas during the period between 1990 and 1994, being the
site of 474 significant new and expanded facilities.
Charlotte has developed into a major financial, distribution and
transportation center, with a metropolitan population of approximately 1.3
million and a population of approximately 5.6 million within a 100-mile radius.
Charlotte's growth is also attributable to its favorable year-round climate, a
moderate cost of living, excellent quality of life, educated work force,
probusiness political climate, extensive transportation network, and strategic
geographic location.
According to the Charlotte Chamber of Commerce, during the first six
months of 1995, approximately 530 firms announced new or expanded businesses
which will provide approximately 6,200 new jobs in the area. Charlotte is home
to major offices of more than 225 of the Fortune 500 industrial firms and
approximately 300 of the Fortune 500 service firms.
Charlotte is the leading financial center of the Southeast, serving as
corporate headquarters to NationsBank and First Union, with assets of
approximately $170 billion and $124 billion, respectively. The growth of
Charlotte's banking and financial communities has had a positive effect on the
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growth of its supporting industries, such as insurance, accounting, legal
services, and real estate.
The city of Charlotte is located near the border of North Carolina and
South Carolina within Mecklenburg County. It is located at the intersection of
Interstates 77 and 85, the major north/south and east/west thoroughfares in the
region, which provide convenient access to all other regional areas.
The Property is located in what is known as East Charlotte. According to
the 1996 Charlotte Apartment Report, East Charlotte's rental submarket is
Charlotte's largest, with approximately 19,000 units. The predominant land use
in the area is residential. Since the beginning of 1994, the overall submarket
vacancy has ranged from 3.1% to 5.1%, and in the same period, average rents have
increased from $478 to $552.
The Property is located on a quiet road, approximately one mile from
Albemarle Road, a major collector road. Nearby shopping includes the Eastland
Mall, which includes Belk's, Dillard's, Sears', and J. C. Penney, and the
Reddman Shopping Center. There are also supermarkets, restaurants, bank
branches, and other retail and commercial establishments nearby.
Description of the Property. The Property consists of 172 garden-style
apartments located in 12 one and two-story buildings on approximately 28.7 acres
of land. The Property was constructed in 1986.
The Company believes that the Property has been wellmaintained and is
generally in good condition. However, the Company has budgeted approximately
$75,000 for repairs and improvements, including repainting, asphalt patching and
minor roof repair.
The Property offers five unit types. The unit mix and rents currently
being charged new tenants are as follows:
Approximate
Interior
Square Monthly
Quantity Type Footage Rental
- -------- ---- ------- ------
40 one bedroom, one bath 625 $490-515
52 one bedroom, one bath 788 535-575
16 two bedrooms, one bath 938 620-670
48 two bedrooms, two baths 1,136 680-730
16 two bedrooms, two baths 1,260 810-835
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The apartments provide a combined total of approximately 155,000 square
feet of net rentable area.
Leases at the Property are for terms of one year or less. Average rental
rents for the past five years have generally increased gradually. As an example,
a two bedroom apartment located on the first floor rented for $630 in 1991, $630
in 1992, $645 in 1993, $660 in 1994, and $680 in 1995. The average effective
annual rental per square foot at the Property for 1991, 1992, 1993, 1994, and
1995, was $6.16, $6.96, $7.13, $7.29, and $7.52, respectively.
The buildings are wood frame construction on concrete slabs
with pitched roofs covered with composition shingles. The exteriors are
masonite hardboard.
The Property features an outdoor swimming pool and hot tub, a lighted
tennis court, a laundry facility, a fitness center, a picnic area with gazebo
and gas grills, twenty-four carports and a car wash area. There is also a 1,350
square-foot clubhouse with a leasing office. There is paved parking for
approximately 290 cars. The site includes additional land which is zoned and
suitable for the construction of 18 additional apartment units.
All apartment units have wall-to-wall carpeting in the living areas and
vinyl floors in the kitchen and bath. Each apartment unit has a cable television
hook-up, washer/dryer hookups and an individually-controlled heating and air
conditioning unit. Each kitchen is equipped with a refrigerator/freezer,
electric range and oven, dishwasher and garbage disposal. The owner of the
Property supplies cold water and sewer service. The tenants pay for their gas
usage, electric service, and cable television. The tenant utilities include air
conditioning, cooking, lights, and hot water.
There are at least three apartment properties in the area which compete
with the Property. All offer similar amenities and have rents that are generally
the same as those of the Property. Based on a recent telephone survey,
Cornerstone Management Group, Inc. estimates that occupancy in nearby competing
projects now averages 94%. Two properties owned by the Company (known as
Sailboat Bay and Bridgetown Bay (formerly Longmeadow), are located near the
Property and will compete with the Property for tenants. The occupancies of
these properties as of August 14, 1996, were 76% and 98%, respectively.
According to information provided by the seller, physical occupancy at
the Property averaged approximately 96% in 1991, 96% in 1992, 98% in 1993, 98%
in 1994, and 97% in 1995. On August 1,
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1996, the Property was 98% occupied. A majority of the current
residents at the Property are employed in white-collar positions.
The 1995 real estate tax rate applicable to the Property was
approximately $1.233 per $100 of assessed value, and the real estate taxes for
1995 were calculated to be $77,963. The assessed value was $6,000,360. The basis
of the depreciable residential real Property portion of the Property (currently
estimated at about $4,259,700) will be depreciated over 27.5 years on a straight
line basis. The basis of the personal Property portion will be depreciated in
accordance with the modified accelerated cost recovery system of the Code.
Amounts to be spent by the Company on repairs and improvements will be treated
for tax purposes as permitted by the Code based on the nature of the
expenditures.
The Company believes that the Property is and will continue to be
adequately covered by property and liability insurance.
Material Factors Considered in Assessing the Property. The factors
considered by the Advisor and the Company to be relevant in evaluating the
Property for acquisition by the Company included the following:
1. The Company believes that the Charlotte, North Carolina area will
experience continued strong economic development and steady population increase,
and that such development and increase will support stable occupancy rates and
reasonable increases in rents at the Property.
2. Based upon an engineering report and its own
inspections, the Company believes that the Property is in sound condition.
3. The Property is conveniently located and proximate to
major employers and shopping.
4. The Company is very familiar with the Charlotte rental market. The
Company already owns other apartment complexes in the Charlotte area, which may
provide certain economies and efficiency in operation.
The Company is not aware of any material adverse factors relating to the
Property not set forth in this report that would cause the financial information
contained in this report not to be necessarily indicative of future operating
results.
Acquisition Services and Fees. In consideration of services rendered to
the Company in connection
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with the selection and acquisition of the Property, the Company paid Cornerstone
Realty Group, Inc. a property acquisition fee of 2% of the purchase price of the
Property, or $148,500.
DOCTORS PARK APARTMENTS
GREENVILLE, NORTH CAROLINA
On August 30, 1996, effective August 1, 1996, the Company purchased the
Doctors Park Apartments, a 171-unit apartment complex located on Beasley Drive
in Greenville, North Carolina (the "Property").
The seller was unaffiliated with the Company, the Advisor and their
Affiliates. The purchase price was $5,462,948. At closing, the Company paid the
entire purchase price in cash from the proceeds of the Offering. Title to the
Property was conveyed to the Company by limited warranty deed.
Location. The following information is based in part upon
information provided by the Greenville, North Carolina Chamber of Commerce.
Greenville, North Carolina is located in Pitt County in eastern North
Carolina. The Greenville MSA has a population of approximately 118,000, which
reflects a population increase of approximately 23% since 1980.
The major economic influences in the area are Pitt County Memorial
Hospital and East Carolina University. The Hospital is the major medical and
research facility for eastern North Carolina and attracts a wide range of
professional, medical and support employees. East Carolina University has a
total enrollment of approximately 17,500 and employs approximately 3,700 as
faculty and staff.
The City of Greenville lies approximately 45 minutes to the east of
Interstate 95. It is in relatively close proximity to Raleigh and Wilmington,
North Carolina and to the Atlantic Ocean.
The Property is located one block from Pitt County Memorial Hospital and
therefore occupies a desirable location for residence of professionals and other
employees working at the
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Hospital. Apart from the Hospital, the immediate area consists
principally of commercial and retail development and single-
family housing. The Property is convenient to shopping areas and
restaurants.
Description of the Property. The Property consists of 171 garden and
townhouse style apartments located in 21 two-story buildings located on
approximately 15 acres. The Property was built in 1981.
The Company believes that the Property is generally in good condition.
However, the Company believes that there exists a certain amount of deferred
maintenance at the Property. The Company has budgeted approximately $500,000 for
various repairs and improvements, including siding replacement, painting, roof
replacement, clubhouse renovations, landscaping and pavement repairs.
The Property offers five unit types. The unit mix and rents currently
being charged new tenants are as follows:
Approximate
Interior
Square Monthly
Quantity Type Footage Rental
- -------- ---- ------- ------
49 one bedroom, one bath 706 $385
74 two bedrooms, one bath 860 475
8 two bedrooms, 1.5 baths 1,100 495
(townhouse)
24 three bedrooms, 1.5 baths 1,300 580
16 three bedrooms, 1.5 baths 1,400 600
(townhouse)
The apartments provide a combined total of approximately 177,000 square
feet of net rentable area.
Leases at the property are generally for terms of one year or less.
Average rental rates for the past five years have increased slightly. As an
example, a two bedroom apartment rented for $390 in 1991, $400 in 1992, $410 in
1993, $420 in 1994, and $420 in 1995. The average effective annual rental per
square foot at the Property for 1991, 1992, 1993, 1994 and 1995 was $4.34,
$4.45, $4.56, $4.67, and $4.67, respectively. The
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Property has an outdoor swimming pool, a playground and a clubhouse. There is
ample paved parking for residents.
The buildings are wood frame construction with brick veneer on concrete
slab foundations. Roofs are pitched and covered with asphalt shingles. The
exteriors also have cyprus siding and the windows are single-pane casements.
All apartment units have wall-to-wall carpeting in the living areas and
vinyl floors in the kitchen and baths. Each apartment unit has a cable
television hook-up, washer/dryer connections and an individually controlled
heating and air-conditioning unit. Each kitchen is equipped with a
refrigerator/freezer, electric range and oven, dishwasher and garbage disposal.
The owner of the Property provides cold water, sewer service and trash removal.
The tenants pay for their electric usage, which includes heating,
air-conditioning, hot water, cooking and lights.
There are at least three apartment properties in the area which compete
with the Property. All offer similar amenities and have rents that are generally
comparable to those of the Property. Based on a recent telephone survey, the
Company estimates that occupancy in nearby competing projects now averages
approximately 88%.
According to information provided by the seller, physical occupancy at
the Property averaged approximately 98% in 1991, 90% in 1992, 96% in 1993, 91%
in 1994, and 94% in 1995. On August 30, 1996, the Property was 94% occupied.
Approximately 45% of the apartment units are occupied by employees of Pitt
County Memorial Hospital. The remainder of the tenants are employed in a
mix of white-collar and blue-collar jobs. Currently, approximately 1/3 of the
tenants have household incomes between $30,000 and $40,000, and approximately
1/4 of the tenants have household incomes in excess of $40,000.
The 1995 real estate tax rate applicable to the Property was
approximately $1.18 per $100 of assessed value, and the real estate taxes for
1995 were calculated to be $68,599. The assessed value was $5,101,640. The basis
of the depreciable residential real property portion of the Property (currently
estimated at about $4,643,540) will be depreciated over 27.5 years on a straight
line basis. The basis of the personal property portion will be depreciated in
accordance with the modified accelerated cost recovery system of the Code.
Amounts to be spent by the Company on repairs and improvements will be
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treated for tax purposes as permitted by the Code based on the
nature of the expenditures.
The Company believes that the Property is and will continue to be
adequately covered by property and liability insurance.
Material Factors Considered in Assessing the Property. The factors
considered by the Company to be relevant in evaluating the Property for
acquisition by the Company included the following:
1. The Company believes that the Greenville, North Carolina area will
enjoy steady economic development and population increase, and that such
development and increase will support stable occupancy rates and reasonable
increases in rents at the Property.
2. Based upon an engineering report and its own
inspections, the Company believes that the Property is in sound condition.
3. The Property is strategically located just one block
from Pitt County Memorial Hospital, one of the area's major
employers.
The Company is not aware of any material adverse factors relating to the
Property not set forth in this report that would cause the financial information
contained in this report not to be necessarily indicative of future operating
results.
HAMPTON GLEN APARTMENTS
RICHMOND, VIRGINIA
On September 4, 1996, effective August 1, 1996, the Company purchased
the Hampton Glen Apartments, a 232-unit apartment complex having an address of
4118 Whitford Circle, in Glen Allen, outside of Richmond, Virginia (the
"Property").
The seller was unaffiliated with the Company, the Advisor and their
Affiliates. The purchase price was $11,599,931. At closing, the Company borrowed
the entire purchase price under the Company's Unsecured Line of Credit. Title to
the Property was conveyed to the Company by limited warranty deed.
Location. The following information is based in part upon
information provided by the Richmond Chamber of Commerce.
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The current population of Richmond is approximately 202,000 and the
current population of the Metropolitan Statistical Area including the City of
Richmond is approximately 930,000. Richmond is located centrally within the
Commonwealth of Virginia, approximately midway between Washington, D.C. and
Raleigh, North Carolina.
The greater Richmond area is served by the Richmond International
Airport, and is situated at the intersection of Interstates 95 and 64. In
addition to being the capital of Virginia, Richmond is also home to numerous
Fortune 500 companies. Some of the larger employers in the area are Philip
Morris, state government, AT&T, Dupont, and NationsBank. In addition, the area
is the site of a number of institutions of higher education, including Virginia
Commonwealth University, the Medical College of Virginia, the University of
Richmond, and Virginia State University.
The Property is located west of the City of Richmond in Henrico County.
The Property is conveniently close to many retail, dining and recreation areas.
The Property is near the Innsbrook Corporate Center, a large and expanding
corporate office park.
The Property is approximately a 15-minute drive from downtown Richmond
and an approximately 30-minute drive from Richmond International Airport.
Description of the Property. The Property consists of 232 garden-style
apartments located in 19 two-story buildings on approximately 16 acres. The
Property was built in 1985 and 1986.
The Company believes that the Property is generally in good condition.
However the Company has budgeted approximately $348,000 for certain repairs and
improvements, including siding replacement, painting, roof repairs, landscaping
and clubhouse renovation.
The Property offers four unit types. The unit mix and rents currently
being charged new tenants are as follows:
Approximate
Interior
Square Monthly
Quantity Type Footage Rental
- -------- ---- ------- ------
48 one bedroom, one bath 562 $545-585
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Approximate
Interior
Square Monthly
Quantity Type Footage Rental
- -------- ---- ------- ------
64 one bedroom, one bath 672 595-635
40 two bedrooms, 1 bath 827 665-710
80 two bedrooms, 2 baths 997 740-770
The apartments provide a combined total of approximately 183,000 square
feet of net rentable area.
Leases at the Property are generally for terms of one year or less.
Average rental rates for the past five years have gradually increased. As an
example, a one bedroom apartment rented for $445 in 1991, $450 in 1992, $460 in
1993, $480 in 1994, and $520 in 1995. The average effective annual rental per
square foot at the Property for 1991, 1992, 1993, 1994, and 1995 was $7.99,
$8.08, $8.26, $8.62, and $9.33, respectively.
The Property includes an athletic club which offers fitness amenities
including weight machines, exercycles and a racquetball court. The Property has
two outdoor swimming pools with a waterfall and an expansive sundeck, a lighted
tennis court, a basketball court, a sand volleyball court, a car wash area, and
a tree-lined walking trail surrounding the Property. The Property also has a
clubhouse and a rental office, and there is ample paved parking for residents.
The buildings are wood frame structures on concrete slab with pitched
roofs covered with three tab shingles over wood sheathing. Exteriors are brick
veneer and painted horizontal siding. Windows are aluminum frame with dual
panes. According to the seller, over the past three years, the seller expended
approximately $600,000 in improvements, including a roof replacement,
repainting, window replacement and carpet replacement.
All apartments units have wall-to-wall carpeting in the living areas and
vinyl floors in the kitchen and baths. Each apartment unit has a cable
television hook-up, a patio or deck with outside storage locker, large walk-in
closets and an individually controlled heating and air-conditioning unit. Each
unit also includes a washer and dryer. Each kitchen is equipped with a
refrigerator/freezer with icemaker, an electric range and self-cleaning oven, a
dishwasher, a microwave and a garbage
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disposal. The owner of the Property supplies cold water, sewer service and trash
removal. The tenants pay for their electricity usage, which includes heat, hot
water, air-conditioning, cooking and lights.
There are at least three apartment properties in the area which compete
with the Property. All offer similar amenities and have rents that are generally
higher when compared with those of the Property. Based on a recent telephone
survey, the Company estimates that occupancy in nearby competing projects now
averages approximately 96%.
According to information provided by the seller, physical occupancy at
the Property averaged approximately 90% in 1991, 88% in 1992, 90% in 1993, 95%
in 1994, and 97% in 1995. On August 30, 1996, the Property was 96% occupied.
Most of the tenants are employed in professional, administrative or technical
occupations. Major employers of tenants include Capital One, Circuit City,
Signet Bank, Crestar Bank and Virginia Commonwealth University. Most of the
current tenants are single. It is believed that currently approximately 30% of
the tenants have household incomes in the range of $30,000 to $40,000 and nearly
one half of the residents have household incomes in excess of $40,000.
The 1995 real estate tax rate applicable to the Property was
approximately $0.96 per $100 of assessed value, and the real estate taxes for
1995 were calculated to be $87,682. The assessed value was $9,133,500. The basis
of the depreciable residential real property portion of the Property (currently
estimated at about $8,043,100) will be depreciated over 27.5 years on a straight
line basis. The basis of the personal property portion will be depreciated in
accordance with the modified accelerated cost recovery system of the Code.
Amounts to be spent by the Company on repairs and improvements will be treated
for tax purposes as permitted by the Code based on the nature of the
expenditures.
The Company believes that the Property is and will continue to be
adequately covered by property and liability insurance.
Material Factors Considered in Assessing the Property. The factors
considered by the Company to be relevant in evaluating the Property for
acquisition by the Company included the following:
1. The Company believes that the Richmond, Virginia area
will enjoy continued steady economic development and steady
population increase, due to a diversified economy, and that such
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development and increase will support stable occupancy rates and reasonable
increases in rents at the Property.
2. Based upon an engineering report and its own
inspections, the Company believes that the Property is in sound
condition.
3. The Property is conveniently located and proximate to
major employers and shopping, as well as the downtown Richmond
area.
4. The Company is particularly familiar with the Richmond
market since the Company's principal offices are in Richmond.
The Company is not aware of any material adverse factors relating to the
Property not set forth in this report that would cause the financial information
contained in this report not to be necessarily indicative of future operating
results.
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ITEM 7.a.
[L.P. MARTIN & COMPANY LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
The Board of Directors
Cornerstone Realty Income Trust, Inc.
Richmond, Virginia
We have audited the accompanying statement of income and direct operating
expenses exclusive of items not comparable to the proposed future operations of
the property Lexington Tower Apartments located in Richmond, Virginia for the
three month period ended March 31, 1996. This statement is the responsibility of
the management of Lexington Tower Apartments. Our responsibility is to express
an opinion on this statement based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the statement. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall presentation of the statement. We believe that
our audit provides a reasonable basis for our opinion.
The accompanying statement was prepared for the purpose of complying with
the rules and regulations of the Securities and Exchange Commission (for
inclusion in a filing by Cornerstone Realty Income Trust, Inc.) and excludes
material expenses, described in Note 1 to the statement, that would not be
comparable to those resulting from the proposed future operations of the
property.
In our opinion, the statement referred to above presents fairly, in all
material respects, the income and direct operating expenses of Lexington Tower
Apartments (as defined above) for the three month period ended March 31, l996,
in conformity with generally accepted accounting principles.
/s/ L.P. MARTIN & CO., P.C.
Richmond, Virginia
June 21, 1996
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LEXINGTON TOWER APARTMENTS
STATEMENT OF INCOME AND DIRECT OPERATING EXPENSES EXCLUSIVE OF
ITEMS NOT COMPARABLE TO THE PROPOSED FUTURE
OPERATIONS OF THE PROPERTY
THREE MONTHS ENDED MARCH 31, 1996
INCOME
Rental and Other Income $ 258,897
DIRECT OPERATING EXPENSES
Administrative and Other 11,522
Insurance 4,122
Repairs and Maintenance 45,039
Taxes, Property 14,949
Utilities 40,700
TOTAL DIRECT OPERATING EXPENSES 116,332
Operating income exclusive of items not
comparable to the proposed future operations
of the property $ 142,565
See accompanying note to the financial statement.
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LEXINGTON TOWER APARTMENTS
NOTE TO THE STATEMENT OF INCOME AND DIRECT OPERATING EXPENSES
EXCLUSIVE OF ITEMS NOT COMPARABLE TO THE PROPOSED FUTURE
OPERATIONS OF THE PROPERTY
THREE MONTHS ENDED MARCH 31, 1996
NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION
Lexington Tower Apartments is a 197 unit high rise apartment complex with
attached parking located in Richmond, Virginia. Living space totals 107,322
square feet.
The assets comprising the property were owned by Lexington Tower Associates
during the financial statement period. Cornerstone Realty Income Trust, Inc. has
a contract to purchase the property and is scheduled to close in June, 1996.
In accordance with Rule 3-14 of Regulation S-X of the Securities and Exchange
Commission, the statement of income and direct operating expenses excludes
interest and non rent related income and expenses not considered comparable to
those resulting from the proposed future operations of the property. Excluded
expenses are mortgage interest, property depreciation, legal fees, management
fees and accounting fees.
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ITEM 7.b.*
- ---------------------
* To be filed by amendment. It is impracticable to include herein the required
financial statements for the Property. The required financial statements will be
filed as an amendment to this report as soon as possible, but in no event more
than 60 days after the date of filing of this report.
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ITEM 7.c.
[L.P. MARTIN & COMPANY LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
The Board of Directors
Cornerstone Realty Income Trust, Inc.
Richmond, Virginia
We have audited the accompanying statement of income and direct operating
expenses exclusive of items not comparable to the proposed future operations of
the property Paces Glen Apartments located in Charlotte, North Carolina for the
twelve month period ended June 30, 1996. This statement is the responsibility of
the management of Paces Glen Apartments. Our responsibility is to express an
opinion on this statement based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the statement. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall presentation of the statement. We believe that
our audit provides a reasonable basis for our opinion.
The accompanying statement was prepared for the purpose of complying with
the rules and regulations of the Securities and Exchange Commission (for
inclusion in a filing by Cornerstone Realty Income Trust, Inc.) and excludes
material expenses, described in Note 1 to the statement, that would not be
comparable to those resulting from the proposed future operations of the
property.
In our opinion, the statement referred to above presents fairly, in all
material respects, the income and direct operating expenses of Paces Glen
Apartments (as defined above) for the twelve month period ended June 30, 1996,
in conformity with generally accepted accounting principles.
/s/ L.P. MARTIN & CO., P.C.
Richmond, Virginia
August 14, 1996
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PACES GLEN APARTMENTS
STATEMENT OF INCOME AND DIRECT OPERATING EXPENSES EXCLUSIVE OF
ITEMS NOT COMPARABLE TO THE PROPOSED FUTURE
OPERATIONS OF THE PROPERTY
TWELVE MONTHS ENDED JUNE 30, 1996
INCOME
Rental and Other Income $1,160,564
DIRECT OPERATING EXPENSES
Administrative and Other 109,492
Insurance 7,749
Repairs and Maintenance 170,012
Taxes, Property 78,714
Utilities 72,111
TOTAL DIRECT OPERATING EXPENSES 438,078
Operating income exclusive of items not
comparable to the proposed future operations
of the property $ 722,486
See accompanying note to the financial statement.
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PACES GLEN APARTMENTS
NOTE TO THE STATEMENT OF INCOME AND DIRECT OPERATING EXPENSES
EXCLUSIVE OF ITEMS NOT COMPARABLE TO THE PROPOSED FUTURE
OPERATIONS OF THE PROPERTY
TWELVE MONTHS ENDED JUNE 30, 1996
NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION
Paces Glen Apartments is a 172 unit residential garden style apartment complex
located on 28.7 acres in Charlotte, North Carolina. Living space totals 155,672
square feet.
The assets comprising the property were owned by High Equity XX Limited
Partnership during the financial statement period. Cornerstone Realty Income
Trust, Inc. purchased the property in July 1996.
In accordance with Rule 3-14 of Regulation S-X of the Securities and Exchange
Commission, the statement of income and direct operating expenses excludes
interest and non rent related income and expenses not considered comparable to
those resulting from the proposed future operations of the property. Excluded
expenses are mortgage interest, loan amortization, property depreciation,
management fees and professional fees.
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ITEM 7.d.
[L.P. MARTIN & COMPANY LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
The Board of Directors
Cornerstone Realty Income Trust, Inc.
Richmond, Virginia
We have audited the accompanying statement of income and direct
operating expenses exclusive of items not comparable to the proposed future
operations of the property Doctors Park Apartments located in Greenville, North
Carolina for the twelve month period ended June 30, 1996. This statement is the
responsibility of the management of Doctors Park Apartments. Our responsibility
is to express an opinion on this statement based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the statement is free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the statement. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the statement.
We believe that our audit provides a reasonable basis for our opinion.
The accompanying statement was prepared for the purpose of complying
with the rules and regulations of the Securities and Exchange Commission (for
inclusion in a filing by Cornerstone Realty Income Trust, Inc.) and excludes
material expenses, described in Note 1 to the statement, that would not be
comparable to those resulting from the proposed future operations of the
property.
In our opinion, the statement referred to above presents fairly, in all
material respects, the income and direct operating expenses of Doctors Park
Apartments (as defined above) for the twelve month period ended June 30, 1996,
in conformity with generally accepted accounting principles.
Richmond, Virginia
August 23, 1996 /s/ L.P. MARTIN & CO., P.C.
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DOCTORS PARK APARTMENTS
STATEMENT OF INCOME AND DIRECT OPERATING EXPENSES EXCLUSIVE OF
ITEMS NOT COMPARABLE TO THE PROPOSED FUTURE
OPERATIONS OF THE PROPERTY
TWELVE MONTHS ENDED JUNE 30, 1996
INCOME
Rental and Other Income $873,794
DIRECT OPERATING EXPENSES
Administrative and Other 65,142
Insurance 11,460
Repairs and Maintenance 210,849
Taxes, Property 69,389
Utilities 44,488
TOTAL DIRECT OPERATING EXPENSES 401,328
Operating income exclusive of items not
comparable to the proposed future operations
of the property $472,466
See accompanying notes to the financial statement.
- 37 -
DOCTORS PARK APARTMENTS
NOTES TO THE STATEMENT OF INCOME AND DIRECT OPERATING EXPENSES
EXCLUSIVE OF ITEMS NOT COMPARABLE TO THE PROPOSED FUTURE
OPERATIONS OF THE PROPERTY
TWELVE MONTHS ENDED JUNE 30, 1996
NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION
Doctors Park Apartments is a 171 unit residential garden and townhouse style
apartment complex located on 15.27 acres in Greenville, North Carolina. Living
space totals 177,254 square feet. A majority of the tenants are employed at
Pitt County Memorial Hospital.
During the financial statement period, the assets comprising the property were
owned by a nonaffiliated North Carolina partnership. The partnership is
donating the property to the Boys and Girls Club Foundation of America.
Cornerstone Realty Income Trust, Inc. has a contract to purchase the property
from the Foundation and is scheduled to close in August 1996.
In accordance with Rule 3-14 of Regulation S-X of the Securities and Exchange
Commission, the statement of income and direct operating expenses excludes
interest and non rent related income and expenses not considered comparable to
those resulting from the proposed future operations of the property. Excluded
expenses are mortgage interest, property depreciation, legal fees, accounting
fees and management fees.
NOTE 2 - RELATED PARTY TRANSACTIONS
During the financial statement period the property was managed by Remco East,
Inc. (Remco). Remco was paid a management fee, for services provided, based
on a percentage of property income. In addition, employees of Remco performed
the majority of repairs and maintenance services. Remco charged a mark up for
materials and supplies purchased and for labor provided. The management fees
are excluded from the statement of income and direct operating expenses.
- 38 -
ITEM 7.e.*
- ---------------------
* To be filed by amendment. It is impracticable to include herein the required
financial statements for the Property. The required financial statements will be
filed as an amendment to this report as soon as possible, but in no event more
than 60 days after the date of filing of this report.
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ITEM 7.f.*
- ---------------------
* To be filed by amendment. It is impracticable to include herein the required
pro forma financial information. The required pro forma financial information
will be filed as an amendment to this report as soon as possible, but in no
event more than 60 days after the date of filing of this report.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Cornerstone Realty Income Trust, Inc.
Date: September 16, 1996 By: /s/ Stanley J. Olander, Jr.
--------------------------------
Stanley J. Olander, Jr.,
Vice President of
Cornerstone Realty
Income Trust, Inc.
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EXHIBIT INDEX
Cornerstone Realty Income Trust
Form 8-K dated June 26, 1996
Exhibit Number Exhibit Page Number
10.1 Purchase Contract for
Lexington Towers Apartments
10.2 Purchase Contract for Oak Park
Apartments
10.3 Purchase Contract for Paces Glen
Apartments
10.4 Purchase Contract for Doctors Park
Apartments
10.5 Purchase Contract for Hampton Glen
Apartments
23.1 Consent of Independent Auditors
23.2 Consent of Independent Auditors*
23.3 Consent of Independent Auditors
23.4 Consent of Independent Auditors
23.5 Consent of Independent Auditors*
23.6 Consent of Independent Auditors*
* To be filed by amendment.
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