Exhibit 8
MCGUIREWOODS
BATTLE&BOOTHE LLP
One James Center
901 East Cary Street
Richmond, Virginia 23219-4030
May 29, 1998
Board of Directors
Cornerstone Realty Income Trust, Inc.
306 East Main Street
Richmond, VA 23219
PaineWebber Incorporated
1285 Avenue of the Americas
New York, NY 10019
Ladies and Gentlemen:
We have acted as counsel to Cornerstone Realty Income Trust, Inc. (the
"Company"), a Virginia corporation, in connection with the issuance of 2,608,696
Common Shares pursuant to a prospectus supplement (the Prospectus Supplement")
filed pursuant to Rule 424(b) under the Securities Act of 1933, as amended (the
"Act") in connection with the Company's registration statement on Form S-3, File
No. 333-34441 (the "Registration Statement") including the prospectus, dated
January 27, 1998, contained therein (the "Prospectus"). The Company filed the
Registration Statement with the Securities and Exchange Commission under the
Act, to register under the Act $200,000,000 of Common Shares, Preferred Shares
and Debt Securities of the Company, and the Registration Statement was declared
effective on January 27, 1998. Terms not otherwise defined herein shall have the
meanings assigned to them in the Registration Statement.
The Company has elected to be treated as a real estate investment trust
("REIT") for federal income tax purposes commencing with its taxable year ended
December 31, 1993. The Company's initial and continuing qualification as a REIT
depends upon the satisfaction of various requirements under the Internal Revenue
Code of 1986, as amended (the "Code"). The satisfaction of those requirements
generally is within the control of the Company's Board of Directors and
officers, who have been engaged to conduct the affairs of the Company under the
supervision of the Board of Directors. This opinion is based upon various
assumptions and is conditioned upon certain representations as to factual
matters made by the Company through a certificate of an officer of the Company
(the "Officer's Certificate"), a copy of which is attached hereto.
May 29, 1998
Page 2
After reasonable inquiry of the officers of the Company, we are not aware
of any facts or circumstances contrary to or inconsistent with the foregoing
representations and assumptions. To the extent the representations set forth in
the Officer's Certificate are with respect to matters set forth in the Code or
Treasury Regulations, we have reviewed with the individual making such
representations the relevant provisions of the Code, the applicable Treasury
Regulations and published administrative interpretations thereof.
We have reviewed originals or copies of (i) the Amended and Restated
Articles of Incorporation (as amended), Bylaws and other corporate documents of
the Company, (ii) certain resolutions of the Board of Directors of the Company,
and (iii) the Registration Statement, the Prospectus and the Prospectus
Supplement. In addition, we have reviewed such other documents and have made
such legal and factual inquiries as we have deemed necessary or advisable for
purposes of rendering the opinions set forth below. We have assumed the
genuineness of all signatures, the authenticity of all documents submitted to us
as originals, the conformity to authentic original documents of all documents
submitted to us as copies, and the accuracy and completeness of all records made
available to us.
We are opining herein only as to the federal income tax laws of the United
States and we express no opinion with respect to the applicability thereto, or
the effect thereon, of other federal laws, the laws of any other jurisdiction or
as to any matters of municipal law or the laws of any other local agencies
within any state.
Based on the foregoing documents, representations, and assumptions being,
and continuing to be, accurate, and subject to the qualifications hereinafter
set forth, we are of the opinion that:
1. The Company qualified as a REIT for its taxable years ended December 31,
1993 through December 31, 1997, and, as of the date hereof, its proposed method
of operation should enable it to continue to meet the requirements for
qualification as a REIT under the Code; and
2. The statements and legal conclusions contained in the Prospectus and
Prospectus Supplement under the captions "Certain Federal Income Tax
Considerations" are accurate.
No opinion is expressed as to any matter not discussed herein.
Any variation or difference in the facts from those set forth in the
Officer's Certificate or the other representations and assumptions described
above may affect the conclusions stated herein. With respect to our opinion
contained in paragraph 1 above, you should note that the continued qualification
and taxation of the Company as a REIT under the Code will depend upon the
Company's ability, through its actual operations, to meet the qualification
tests imposed by section 856(c)(2), (3) and (4) of the Code. The Company's
ability to satisfy such tests may be affected by, inter alia, the Company's
actual annual operating results, distribution levels,
May 29, 1998
Page 3
diversity of stock ownership, and changes in the Company's current method of
operation. No prediction as to those actual operating results is implied by our
opinion.
The foregoing opinions are based solely on the provisions of the Code, the
Treasury Regulations promulgated thereunder and the judicial and administrative
rulings, pronouncements and decisions all as they exist as of this date and all
of which are subject to change, which change may be retroactively applied, or
possible differing interpretations that may affect the conclusions stated
herein. To the extent this opinion relies upon recent tax legislation, and
recently promulgated Treasury Regulations, no assurance can be given as to the
interpretations of such recent legislation that will be reflected in applicable
Internal Revenue Service rulings and future Treasury Regulations, which could be
applied retroactively. Any changes to the foregoing authorities might result in
modifications to our opinions contained herein. Further, this opinion does not
purport to deal with certain types of investors subject to special treatment
under the federal income tax laws.
We consent to the filing of this opinion with the Securities and Exchange
Commission as an exhibit to a Report on Form 8-K of the Company and to the
incorporation of this opinion by reference into the Registration Statement.
Very truly yours,
/s/ McGuire, Woods, Battle & Boothe LLP