UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the period ended June 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 0-23954
CORNERSTONE REALTY INCOME TRUST, INC.
(Exact name of registrant as specified in its charter)
VIRGINIA 54-1589139
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
306 EAST MAIN STREET
RICHMOND, VIRGINIA 23219
(Address of principal executive offices) (Zip Code)
(804) 643-1761
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address, and former fiscal
year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No At August 1, 1996, there were
outstanding 22,301,298 shares of common stock of the registrant.
<PAGE>
CORNERSTONE REALTY INCOME TRUST, INC.
FORM 10-Q
INDEX
Page Number
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Balance Sheets - June 30, 1996 3
and December 31, 1995
Statements of Operations - 4
Three months ended June 30, 1996
and June 30, 1995
Six months ended June 30, 1996
and June 30, 1995
Statements of Shareholders' Equity- 5
Six months ended June 30, 1996
and Year ended December 31, 1995
Statements of Cash Flows - 6
Six months ended June 30, 1996
and June 30, 1995
Notes to Financial Statements 7
Item 2. Management's Discussion and Analysis 10
of Financial Condition and Results of
Operations
PART II. OTHER INFORMATION:
Item 1. Legal Proceedings (not applicable).
Item 2. Changes in Securities (not applicable).
Item 3. Defaults Upon Senior Securities
(not applicable).
Item 4. Submission of matters to a Vote of 13
Security Holders.
Item 5. Other Information (not applicable)
Item 6. Exhibits and Reports on Form 8-K 14
2
<PAGE>
CORNERSTONE REALTY INCOME TRUST, INC.
BALANCE SHEET (UNAUDITED)
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
------------------ -------------------
<S> <C>
ASSETS
Investment in Rental Property
Land $26,444,788 $19,852,544
Building 173,319,995 96,862,036
Property improvements 15,450,899 10,627,687
Furniture and fixtures 2,839,132 2,354,180
------------------ -------------------
218,054,814 129,696,447
Less accumulated depreciation (6,959,046) (4,254,974)
------------------ -------------------
211,095,768 125,441,473
------------------ -------------------
Cash and cash equivalents 7,961,752 7,073,147
Prepaid expenses 561,066 167,152
Other assets 877,668 499,260
------------------ -------------------
9,400,486 7,739,559
------------------ -------------------
$220,496,254 $133,181,032
================== ===================
LIABILITIES and SHAREHOLDERS' EQUITY
Liabilities
Short-term notes payable $19,205,000 $8,300,000
Accounts payable 504,506 555,691
Commissions payable to underwriters 2,401,546 6,787
Accrued expenses 1,709,007 1,250,444
Rents received in advance 77,513 129,648
Tenant security deposits 1,105,511 784,042
------------------ -------------------
25,003,083 11,026,612
Shareholders' equity
Common stock, no par value, authorized 50,000,000
shares; issued and outstanding 20,301,526 shares
and 12,754,331 shares, respectively 198,300,145 123,771,504
Deferred compensation (66,000) (77,000)
Distributions greater than net income (2,740,974) (1,540,084)
------------------ -------------------
195,493,171 122,154,420
------------------ -------------------
$220,496,254 $133,181,032
================== ===================
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
CORNERSTONE REALTY INCOME TRUST, INC.
STATEMENT OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
1996 1995 1996 1995
----------------------------------- --------------------------------
<S> <C>
REVENUE:
Rental income $8,666,887 $3,410,692 $15,219,575 $6,155,704
EXPENSES:
Utility expenses 761,041 338,212 1,371,187 615,892
Repairs and maintenance 976,477 412,496 1,697,353 724,705
Taxes and insurance 810,823 302,109 1,391,073 540,654
Property management 451,571 191,079 801,236 350,585
Advertising 244,766 73,630 389,585 138,622
General and administrative 258,445 140,546 476,357 254,468
Amortization expense 7,641 7,641 15,282 15,282
Depreciation of rental property 1,465,583 680,907 2,704,072 1,140,082
Other 759,530 236,444 1,300,231 432,034
----------------------------------- --------------------------------
Total expenses 5,735,877 2,383,064 10,146,376 4,212,324
----------------------------------- --------------------------------
Income before interest income (expense) 2,931,010 1,027,628 5,073,199 1,943,380
Interest income 114,875 44,352 191,213 73,514
Interest expense (296,209) (37,797.00) (343,089) (79,879)
----------------------------------- --------------------------------
Net income $2,749,676 $1,034,183 $4,921,323 $1,937,015
=================================== ================================
Net income per share $0.16 $0.15 $0.32 $0.31
=================================== ================================
Weighted average number of shares outstanding 16,926,758 6,959,171 15,435,615 6,323,938
=================================== ================================
</TABLE>
See accompanying notes to financial statements.
<PAGE>
CORNERSTONE REALTY INCOME TRUST, INC.
STATEMENT OF SHAREHOLDERS' EQUITY (UNAUDITED)
<TABLE>
<CAPTION>
Distributions
(Greater) Total
Number Deferred Less than Shareholders'
of Shares Amount Compensation Net Income Equity
----------------------------------------------------------------------
<S> <C>
Balance at December 31, 1994 5,458,648 $51,890,477 - ($453,614) $51,436,863
Net proceeds from the sale of shares 6,930,567 68,255,383 - - 68,255,383
Net income - - - 5,229,715 5,229,715
Cash distributions paid to shareholders ($.9575 per share) - - - (6,316,185) (6,316,185)
Restricted stock grant 10,000 110,000 ($110,000) - -
Amortization of deferred compensation - - 33,000 - 33,000
Shares issued through Additional Share Option 355,116 3,515,644 - - 3,515,644
----------------------------------------------------------------------
Balance at December 31, 1995 12,754,331 $123,771,504 ($77,000) ($1,540,084) $122,154,420
Net proceeds from the sale of shares 7,215,771 71,247,543 - - 71,247,543
Net income - - - 4,921,323 4,921,323
Cash distributions paid to shareholders ($.4955 per share) - - - (6,122,213) (6,122,213)
Amortization of deferred compensation - - 11,000 - 11,000
Shares issued through Additional Share Option 331,424 3,281,098 - - 3,281,098
----------------------------------------------------------------------
Balance at June 30, 1996 20,301,526 $198,300,145 ($66,000) ($2,740,974) $195,493,171
======================================================================
</TABLE>
See accompanying notes to financial statements.
<PAGE>
CORNERSTONE REALTY INCOME TRUST, INC.
STATEMENT OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended
June 30
1996 1995
---------------------------------------
<S> <C>
Cash flow from operating activities:
Net income $4,921,323 $1,937,015
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation and amortization 2,719,354 1,155,364
Amortization of deferred compensation 11,000 -
Changes in operating assets and liabilities:
Prepaid expenses (393,914) (70,456)
Other assets (393,690) (415,812)
Accounts payable (51,185) 17,780
Accrued expenses 458,563 397,412
Rent received in advance (52,135) (29,436)
Tenant security deposits 321,469 162,338
------------------ ---------------
Net cash provided by operating activities 7,540,785 3,154,205
Cash flow from investing activities:
Acquisitions of rental property (80,652,200) (19,860,000)
Capital improvements (7,706,167) (2,482,590)
------------------ ---------------
Net cash used in investing activities (88,358,367) (22,342,590)
Cash flow from financing activities:
Proceeds from short-term borrowings 49,005,000 4,500,000
Repayments of short-term borrowings (38,100,000) (9,500,000)
Net proceeds from issuance of shares 74,528,641 26,615,981
Increase in commissions payable to underwriters 2,394,759 693,070
Cash distributions paid to shareholders (6,122,213) (2,450,688)
------------------ ---------------
Net cash provided by financing activities 81,706,187 19,858,363
Increase in cash and cash equivalents 888,605 669,978
Cash and cash equivalents, beginning of year 7,073,147 4,288,438
------------------ ---------------
Cash and cash equivalents,
end of period $7,961,752 $4,958,416
================== ===============
</TABLE>
See accompanying notes to financial statements
<PAGE>
CORNERSTONE REALTY INCOME TRUST, INC
Notes to Financial Statements (Unaudited)
June 30, 1996
(1) Basis of Presentation
The accompanying unaudited financial statements have been prepared in
accordance with the instructions for Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information
required by generally accepted accounting principles. In the opinion of
management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included.
Operating results for the six months ended June 30, 1996 are not
necessarily indicative of the results that may be expected for the year
ended December 31, 1996. These financial statements should be read in
conjunction with the Company's December 31, 1995 Form 10-K.
(2) Short-Term Note Payable
In April 1996, the Company renewed its unsecured line of credit with an
increased credit limit of $50 million. The terms of the renewed line
are unchanged except that the expiration is March 31, 1997. As of June
30, 1996 the interest rate on the unsecured line of credit was 7.0375%.
The Company borrowed $43,505,000 in conjunction with property
acquisitions and improvements against the line of credit and repaid
$35,800,000 during the quarter ended June 30, 1996.
On June 25, 1996, the Company acquired Trolley Square (formerly
Lexington Towers) for $6,000,000. In conjunction with this purchase, an
unsecured note was executed by the Company in the amount of $5,500,000.
The Company views the unsecured note as a supplement to the line of
credit. The Company entered into the agreement because the payment
terms were more favorable than the line of credit. The note bears an
effective interest rate of 6.65% per annum. Annual interest payments
are due on January 1, 1997, 1998, and 1999 and the principal balance is
due on January 1, 1999 if not prepaid. The note is prepayable at
anytime.
(3) Common Stock
The Company received gross proceeds of $83,019,732, ($74,528,641 net
of selling commissions and other offering expenses) from the sale of
7,547,195 shares for the quarter ended June 30, 1996. During 1996,
David Lerner Associates, Inc. has earned a total of $8,301,973 in
connection with the offering of the Company's shares. The Company
provides an Additional Share Option to the shareholders to reinvest
distributions in the purchase of additional shares of the Company.
During
7
<PAGE>
1996, approximately $3,645,490 ($3,280,941 net of underwriter fees) has
been invested in additional shares of the Company through the
Additional Share Option.
During 1996, the Company has paid distributions of $6,122,213 (49.55
cents per share) to shareholders.
(4) Related Parties
As properties are acquired, the Company enters into agreements to
manage the properties with Cornerstone Management Group, Inc. (The
"Management Company"). The Management Company earns a management fee
equal to 5% of rental income and is entitled to be reimbursed for
certain expenses. Effective January 1, 1996, the staffs of the
individual properties owned by the Company were directly employed by
the Company, and not the Management Company, and there will no longer
be reimbursements for those costs. The Management Company was paid
$865,880 and $398,144 for the six months ended June 30, 1996 and 1995
respectively, for its management fee and certain reimbursable items.
For 1995, the amount paid to the Company was exclusive of salary
reimbursement for the staffs of the Company's properties.
The Company has contracted with Cornerstone Realty Group, Inc. to
acquire the real estate assets held by the Company for a fee of 2% of
the purchase price of the property. The Company was paid $1,595,513 and
$397,200 for the six months ended June 30, 1996 and 1995, respectively.
Cornerstone Advisors, Inc. (the "Advisor") is the advisor to the
Company and provides its day-to-day management. The Advisor is paid a
quarterly fee not to exceed .25% of the Company's assets as defined in
the agreement with the Advisor. The Company's agreement with the
Advisor which was to expire in June 1996 has been extended by approval
of the Board of Directors until June 1997 under terms consistent with
the expiring agreement. As of June 30, 1996 and 1995, the Advisor had
earned a fee of approximately $208,922 and $84,822, respectively.
(5) Subsequent Events
In July, 1996, the Company distributed to its shareholders
approximately $4,192,026 (24.85 cents per share) of which approximately
$2,524,236 was reinvested in the purchase of additional shares through
the Additional Share Option. In July, 1996, the Company closed the sale
to investors of 1,999,771 shares at $11 per share representing net
proceeds to the Company of $19,797,742.
On July 8, 1996, the Company acquired Savannah West (formerly Oak Park
Apartments), a 456-unit apartment community located in Augusta,
Georgia, for $9,804,000. On July 19, 1996, the Company acquired Paces
Glen Apartments, a 172-unit apartment community located in Charlotte,
North Carolina, for $7,425,000. During July, 1996, the Company borrowed
an additional $22,141,000 in conjunction with property acquisitions and
improvements and repaid $25,997,000.
8
<PAGE>
The officers and Directors of the Company have undertaken an evaluation
of whether it would be in the best interest of the Company and the
Shareholders to convert the Company into a "self-administered" or
"self-managed" REIT. This conversion, if undertaken, would involve
transferring some or all of the management and other services now being
provided by other companies to employees of the Company. If such
conversion were implemented, the Company would no longer pay fees (such
as the Asset Management Fees, Real Estate Acquisition Fees and Property
Management Fees) to other companies for services assumed by employees
of the Company, but would itself bear the costs thereof (including
salaries and wages to such employees). Any such conversion would
involve the payment of consideration, either in shares, cash or other
property, from the Company to the entities whose contracts with the
Company were being terminated in connection with such conversion, in
recognition of such companies agreeing to the termination of their
agreements. If this takes place, the effective date would be September
1, 1996.
(6) Acquisitions (unaudited)
The following unaudited pro forma information for the six months ended
June 30, 1996 and 1995 is presented as if (a) the Company had owned the
properties listed below on January 1, 1995, (b) the Company had
qualified as a REIT, distributed all of its taxable income and,
therefore incurred no federal income tax expense during the period, and
(c) the Company had used proceeds from its best efforts offering to
acquire the properties. The pro forma information does not purport to
represent what the Company's results of operations would actually have
been if such transactions, in fact, had occurred on January 1, 1995 nor
does it purport to represent the results of operations for future
periods.
Six Months Six Months
Ended Ended
6/30/96 6/30/95
Rental Income $18,334,405 $17,597,016
Net Income $ 6,192,803 $ 5,615,210
Net Income Per Share $.30 $.28
The pro forma information reflects adjustments for the actual rental
income and rental expenses of Wind Lake, Breckinridge, Magnolia Run,
Bay Watch, Hanover Landing, Mill Creek, Glen Eagles, Sailboat Bay,
Tradewinds, Osprey Landing, The Meadows, West Eagle Green, Ashley Park,
Arbor Trace, Longmeadows, Trophy Chase, Beacon Hill, Summerwalk, Willow
Creek, and Meadow Creek Apartments for the respective periods in 1996
and 1995 prior to acquisition by the Company. Net income has been
adjusted as follows: (1) property management and advisory expenses have
been adjusted based on the Company's contractual arrangements, and (2)
depreciation has been adjusted based on the Company's basis in the
properties. The pro forma weighted average number of shares used to
calculate net income per share includes the number of shares necessary
to provide proceeds adequate to finance the purchase price of the
acquired properties.
9
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
There was a significant change in the Company's liquidity during the
quarter ended June 30, 1996. During the quarter, the Company closed the
sale to investors of 4,732,343 shares at $11 per share representing
gross proceeds to the Company of $52,055,771 and net proceeds after
payment of underwriter fees of $46,850,194. The Company capitalized
$7,706,167 of improvements to its various properties during the
quarter. It is anticipated that some $2,000,000 additional capital
improvements will be completed during the next year on the current
portfolio. The source to fund these improvements is from equity raised
and set aside specifically for the improvements and from the expected
sale of additional shares.
During the quarter ended June 30, 1996, the Company made seven
acquisitions of residential rental properties as follows:
<TABLE>
<CAPTION>
Property Name Date Acquired Units Purchase Price Location
<S> <C>
Bridgetown Bay April 1996 120 $ 5,025,000 Charlotte, NC
(formerly Longmeadows)
Trophy Chase April 1996 185 $ 3,710,000 Charlottesville, VA
(formerly Westfield Club)
Summerwalk May 1996 160 $ 5,660,000 Concord, NC
(formerly Lakewood)
Willow Creek May 1996 200 $ 8,345,000 Durham, NC
Beacon Hill May 1996 349 $13,407,200 Charlotte, NC
Meadow Creek May 1996 250 $11,100,000 Charlotte, NC
Trolley Square June 1996 197 $ 6,000,000 Richmond, VA
(formerly Lexington Towers)
</TABLE>
In July 1996, the Company made two acquisitions as discussed in the
Note 5. These acquisitions brought the total number of apartment units
owned by the Company to 7,238.
The balance on the line of credit as of March 31, 1996 was $12,205,000.
During the quarter ended June 30, 1996 the Company borrowed $26,000,000
against the line of credit in conjunction with property acquisitions
and improvements and repaid $24,500,000 of the balance and expects to
repay the balance within sixty days through the additional sale of
shares. As of June 30, 1996, the outstanding debt balance included
$13,705,000 on the line of credit and the $5,500,000 unsecured note as
discussed in the Note 2. This is consistent with the Company's long
term business objective to hold its properties on an unleveraged basis.
Cash and cash equivalents totaled $7,961,752 at June 30, 1996. During
April 1996, the Company distributed $3,393,770 (24.8 cents per share)
to its shareholders of which $2,023,408 was reinvested in additional
shares per the terms of the Company's Additional Share Option. The
reinvested funds netted the Company $1,821,067 after payment of
underwriter fees.
10
<PAGE>
While the Company is always assessing potential acquisitions, no
material commitments existed on August 1, 1996 for the purchase of
additional properties. The Company's only on-going commitment for
capital expenditures is to the renovation of its existing portfolio.
Equity funds are raised in conjunction with the acquisition of
properties to fund these capital expenditures. In addition, the Company
will acquire new properties as funds are available.
The Company has short-term cash flow needs to conduct the operation of
its properties. The rental income generated from the properties
supplies sufficient cash to provide for the payment of these operating
expenses.
The Company's capital resources are expected to grow with the continued
sale of its shares and through operations.
Results of Operations
The Company's property operations for the six months ended June 30,
1996 reflect the operations of the Company's pre-1996 acquisitions, The
Meadows since February 1996, West Eagle Green, Ashley Park and Arbor
Trace since March 1996, Bridgetown Bay (formerly Longmeadows
Apartments) and Trophy Chase (formerly Westfield Apartments) since
April 1996, Beacon Hill, Summerwalk, (formerly Lakewood Apartments) and
Willow Creek since May 1996. The results of operations for the six
months ended June 30, 1995 reflect the operations of the 1993 and 1994
acquisitions and Windlake Apartments since April 1995. The increase in
income and expenses for the six months ended June 30, 1996 over 1995 is
mainly due to a full six months of operation in 1996 of all of the 1995
acquisitions. As of June 30, 1996, and June 30, 1995 rental income for
the 1993 and 1994 acquisitions was $6,050,493 and $5,624,147,
respectively which represents a 7% increase.
The occupancy levels for the Company's properties averaged 91% and 95%
at the end of the six months ended June 30, 1996 and 1995,
respectively. The decrease in occupancy is primarily due to the vacancy
at three of the 1995 acquisitions which are currently under renovation.
Overall, average rental rates for the portfolio increased from $471 to
$511 per month.
The Company's revenue is primarily from rental operation of its
apartment communities. Rental income for the first six months increased
to $15,219,575 in 1996 from $6,155,704 in 1995. The increase is due to
a combination of rental increases and property acquisitions. Rental
income is expected to increase further as a result of planned
improvements, higher occupancies and increased rental rates. The
Company's other source of income is the investment of its cash and cash
reserves. Interest income for the six months ended June 30, 1996 and
1995 was $114,875 and $73,514, respectively.
Total expenses for the first six months increased to $10,146,376 in
1996 from $4,212,324 in 1995. The operating expense ratio (the ratio of
rental expenses, excluding general and administrative, amortization and
depreciation expense, to rental income) was 45% for the six months
ended June 30, 1996 and 1995. In addition, the Company incurred
interest
11
<PAGE>
expense of $343,089 and $79,879 during the first six months of 1996 and
1995, respectively, which related to the short-term borrowings on
property acquisitions and improvements.
Depreciation expense for the first six months has increased to
$2,704,072 in 1996 from $1,140,082 in 1995. The increase is due to the
1996 acquisitions and a full six months of depreciation for 1995
acquisitions.
General and administrative expenses totaled 3% of total rental income
for the six months ended June 30, 1996 and 4% for the same period in
1995. This percentage is expected to further decrease as the Company's
asset base and rental income grow. These expenses represent the
administrative expenses of the Company as distinguished from the
operations of the Company's properties.
The Company does not believe that inflation had any significant impact
on the operation of the Company during the six months ended June 30,
1996. Future inflation, if any, would likely cause increased operating
expenses, but the Company believes that increases in expenses would be
offset by increases in rental income. Continued inflation may also
cause capital appreciation of the Company's properties over time, as
rental rates and replacement costs increase.
12
<PAGE>
Part II. Item 4
Submission of Matters to a Vote of Security Holders
The 1996 Annual Meeting of Shareholders of the Company was held at
Terrace on the Park, 52-11 111th Street, Queens, New York, on Tuesday, April 23,
1996.
Details of Voting. A total of 14,573,279 Shares were entitled to vote.
A total of 54.6% of the Shares were present in person or by proxy, constituting
a quorum.
The only issue on which the Shareholders voted was the election of
seven directors for various terms. All nominees were elected as Directors, in
accordance with the following votes:
<TABLE>
<CAPTION>
Number of Number of
Name of Director Votes Received Votes Withheld
<S> <C>
Glenn W. Bunting, Jr. (three-year term) 7,924,777.37 37,926.47
Leslie A. Grandis (three-year term) 7,924,777.37 37,926.47
Glade M. Knight (three-year term) 7,924,777.37 37,926.47
Penelope W. Kyle (two-year term) 7,924,777.37 37,926.47
Stanley J. Olander, Jr. (one-year term) 7,924,777.37 37,926.47
Harry S. Taubenfeld (two-year term) 7,924,777.37 37,926.47
Martin Zuckerbrod (one-year term) 7,924,777.37 38,184.47
</TABLE>
Messrs. Olander and Zuckerbrod will serve until the 1997 Annual Meeting of
Shareholders, Mr. Taubenfeld and Ms. Kyle will serve until the 1998 Annual
Meeting of Shareholders, and Messrs. Bunting, Grandis and Knight will serve
until the 1999 Annual Meeting of Shareholder.
13
<PAGE>
Part II, Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits - None
(b) Reports on Form 8-K
The following table lists the reports on Form 8-K filed by the Company
during the quarter ended June 30, 1996, the items reported and the financial
statements included in such filings.
Type and Date
of Reports Items Reported Financial Statements Filed
Form 8-K/A (date of 7(b), (c), (d) Statement of Income and
Original Report: Direct Operating Expenses of
January 31, 1996) Scarlett Oaks Apartments for
twelve months ended January
31, 1996. Historical Summary
of Operating Revenue and
Expenses of Ashley Park
Apartments for year ended
December 31, 1995. Statement
of Income and Direct
Operating Expenses of
Colonial Ridge Apartments for
twelve months ended December
31, 1995.
Form 8-K dated 2, 7(h) None
April 30, 1996
14
<PAGE>
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 thereunto duly authorized.
Cornerstone Realty Income Trust, Inc.
(Registrant)
DATE: 8/13/96 BY: /s/ Stanley J. Olander
Stanley J. Olander
Vice President and Treasurer
15
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> APR-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 7,961,752
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 218,054,814
<DEPRECIATION> 6,959,046
<TOTAL-ASSETS> 220,496,254
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 0
0
0
<COMMON> 198,300,145
<OTHER-SE> (2,806,974)
<TOTAL-LIABILITY-AND-EQUITY> 220,496,254
<SALES> 0<F2>
<TOTAL-REVENUES> 15,219,575
<CGS> 0<F2>
<TOTAL-COSTS> 10,146,376
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 343,089
<INCOME-PRETAX> 4,921,323
<INCOME-TAX> 0
<INCOME-CONTINUING> 4,921,323
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,921,323
<EPS-PRIMARY> 0.50
<EPS-DILUTED> 0
<FN>
<F1>Current Assets and Current Liabilities are not separated to conform with
industry standards.
<F2>Income is from rental income. There are no Sales or Cost of Goods Sold.
</FN>
</TABLE>
