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 September 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 October 20, 1996, there
were outstanding 27,279,721 shares of common stock, no par value, 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 - September 30, 1996 3
and December 31, 1995
Statements of Operations - 4
Three months ended September 30, 1996
and September 30, 1995
Nine months ended September 30, 1996
and September 30, 1995
Statements of Shareholders' Equity- 5
Nine months ended September 30, 1996
and Year ended December 31, 1995
Statements of Cash Flows - 6
Nine months ended September 30, 1996
and September 30, 1995
Notes to Financial Statements 7
Item 2. Management's Discussion and Analysis 11
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
Security Holders (not applicable).
Item 5. Other Information (not applicable).
Item 6. Exhibits and Reports on Form 8-K 14
2
<PAGE>
CORNERSTONE REALTY INCOME TRUST, INC.
BALANCE SHEETS (UNAUDITED)
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
------------- -----------
<S> <C>
ASSETS
Investment in Rental Property:
Land $44,434,871 $19,852,544
Building 227,590,874 96,862,036
Property improvements 19,456,778 10,627,687
Furniture and fixtures 4,133,812 2,354,180
------------- -------------
295,616,335 129,696,447
Less: accumulated depreciation (9,410,082) (4,254,974)
------------- -------------
286,206,253 125,441,473
------------- -------------
Cash and cash equivalents 4,193,771 7,073,147
Prepaid expenses 627,219 167,152
Other assets 1,194,470 499,260
------------- -------------
6,015,460 7,739,559
------------- -------------
$292,221,713 $133,181,032
============= =============
LIABILITIES and SHAREHOLDERS' EQUITY
Liabilities
Short-term notes payable $26,600,000 $8,300,000
Accounts payable 678,345 555,691
Commissions payable to underwriters - 6,787
Accrued expenses 2,554,846 1,250,444
Rents received in advance 231,884 129,648
Tenant security deposits 1,521,933 784,042
------------- -------------
31,587,008 11,026,612
Shareholders' equity
Common stock, no par value, authorized 50,000,000
shares; issued and outstanding 26,970,400
and 12,754,331 shares, respectively 264,321,997 123,771,504
Deferred compensation (60,500) (77,000)
Distributions greater than net income (3,626,792) (1,540,084)
------------- -------------
260,634,705 122,154,420
------------- -------------
$292,221,713 $133,181,032
============= =============
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
CORNERSTONE REALTY INCOME TRUST, INC.
STATEMENTS OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30, September 30, September 30,
1996 1995 1996 1995
--------------------------------- --------------------------------------
<S> <C>
REVENUE:
Rental income $11,495,302 $4,381,403 $26,714,877 $10,537,107
EXPENSES:
Utility expenses 1,058,723 432,284 2,429,910 1,048,176
Repairs and maintenance 1,421,862 590,857 3,119,215 1,315,562
Taxes and insurance 960,371 367,303 2,351,444 907,957
Property management 425,637 231,676 1,226,873 582,261
Advertising 376,436 87,030 766,021 225,652
General and administrative 349,635 184,867 825,992 439,335
Amortization expense 7,641 7,641 22,923 22,923
Depreciation of rental property 2,451,036 668,457 5,155,108 1,808,539
Other 972,632 340,124 2,272,863 772,158
------------------------------- --------------------------------------
Total expenses 8,023,973 2,910,239 18,170,349 7,122,563
------------------------------- --------------------------------------
Income before interest income (expense) 3,471,329 1,471,164 8,544,528 3,414,544
Interest income 46,438 56,174 237,651 129,688
Interest expense (211,559) (1,359) (554,648) (81,238)
------------------------------- --------------------------------------
Net income $3,306,208 $1,525,979 $8,227,531 $3,462,994
=============================== ======================================
Net income per share $0.14 $0.17 $0.46 $0.48
=============================== ======================================
Weighted average number of shares outstanding 22,542,727 8,874,895 17,696,096 7,185,976
=============================== ======================================
Distributions declared and paid per share 0.25 0.24 0.74 0.71
=============================== ======================================
</TABLE>
See accompanying notes to financial statements.
4
<PAGE>
CORNERSTONE REALTY INCOME TRUST, INC.
STATEMENTS 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) $122,154,420
Net proceeds from the sale of shares 13,655,185 134,997,740 - - 134,997,740
Net income - - - 8,227,531 8,227,531
Cash distributions paid to shareholders ($.744 per share) - - - (10,314,239) (10,314,239)
Amortization of deferred compensation - - 16,500 - 16,500
Shares issued through Additional Share Option 560,884 5,552,753 - - 5,552,753
-------------------------------------------------------------------------
Balance at September 30, 1996 26,970,400 $264,321,997 ($60,500) ($3,626,792) $260,634,705
=========================================================================
</TABLE>
See accompanying notes to financial statements.
5
<PAGE>
CORNERSTONE REALTY INCOME TRUST, INC.
STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Ended
September 30
1996 1995
--------------------------
<S> <C>
Cash flow from operating activities:
Net income $8,227,531 $3,464,994
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 5,178,031 1,836,962
Amortization of deferred compensation 16,500 -
Changes in operating assets and liabilities:
Prepaid expenses (460,067) (112,983)
Other assets (718,133) (127,448)
Accounts payable 122,654 76,686
Accrued expenses 1,304,402 708,464
Rent received in advance 102,236 (18,345)
Tenant security deposits 737,891 255,040
------------- ------------
Net cash provided by operating activities 14,511,045 6,083,370
Cash flow from investing activities:
Acquisitions of rental property (152,147,269) (37,507,525)
Capital improvements (13,772,619) (4,180,769)
------------- ------------
Net cash used in investing activities (165,919,888) (41,688,294)
Cash flow from financing activities:
Proceeds from short-term borrowings 122,112,144 10,000,000
Repayments of short-term borrowings (103,812,144) (9,500,000)
Net proceeds from issuance of shares 140,550,493 39,662,596
Increase in commissions payable to underwriters (6,787) -
Cash distributions paid to shareholders (10,314,239) (4,142,943)
------------ ------------
Net cash provided by financing activities 148,529,467 36,019,653
Increase in cash and cash equivalents (2,879,376) 414,729
Cash and cash equivalents, beginning of year 7,073,147 4,288,438
------------- ------------
Cash and cash equivalents,
end of period $4,193,771 $4,703,167
============= ============
</TABLE>
See accompanying notes to financial statements
6
<PAGE>
CORNERSTONE REALTY INCOME TRUST, INC
Notes to Financial Statements (Unaudited)
September 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 nine months ended September 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.
In March 1995, The FASB issued Statement No. 121, Accounting for the
Impairment of Long-Lived Assets and for Long Lived Assets to be
Disposed Of, which requires impairment losses to be recorded on
long-lived assets used in operations when indicators of impairment are
present and the undiscounted cash flows estimated to be generated by
those assets are less than the assets' carrying amount. Statement 121
also addresses the accounting for long-lived assets that are expected
to be disposed of. The Company has adopted Statement 121 in the first
quarter of 1996 and the effect of adoption is not material.
(2) Notes 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
September 30, 1996 the interest rate on the unsecured line of credit
was 7.0805%.
The Company borrowed $73,107,144 in conjunction with property
acquisitions and improvements against the line of credit and repaid
$65,712,144 during the quarter ended September 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 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 any time.
7
<PAGE>
(3) Common Stock
The Company received gross proceeds of $156,376,760, ($140,550,493 net
of selling commissions and other offering expenses) from the sale of
14,216,069 shares for the nine months ended September 30, 1996. During
1996, David Lerner Associates, Inc. has earned a total of $15,637,676
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 1996, approximately $6,169,726 ($5,552,753 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 $10,314,239 (.744
cents per share) to shareholders.
(4) Related Parties
For all periods prior to and including the three months ended September
30, 1996, the Company operated as an "externally advised" and
"externally-managed" REIT. Cornerstone Advisors, Inc. served as the
advisor, Cornerstone Management Group, Inc. served as the Property
manager, and Property acquisition services were provided by Cornerstone
Realty Group, Inc. Glade M. Knight, Chairman and Chief Executive
Officer of the Company, owned all of the stock of Cornerstone Advisors,
Inc., Cornerstone Management Group, Inc. and Cornerstone Realty Group,
Inc. (collectively, the "External Companies"). By agreement among Mr.
Knight, Stanley J. Olander, Jr. (Chief Financial Officer of the
Company), and Debra A. Jones (Chief Operating Officer of the Company),
Mr. Knight held part of the beneficial ownership of the External
Companies for the account and interest of each of Mr. Olander and Ms.
Jones.
As of October 1, 1996, the Company entered into a series of related
transactions with the External Companies, the effect of which would be
to convert the Company into a "self-administered" and "self-managed"
REIT. The transactions were unanimously approved by the Board of
Directors.
To effect the conversion, the Company agreed to issue 1,400,000 shares
to Cornerstone Management Group, Inc. in exchange for the assignment of
all of its rights and interest in, to and under its management
agreements with the Company. On October 1, 1996, the Company issued
700,000 shares, and the balance of such shares will be issued on
September 30, 1997. No distributions are payable with respect to these
shares until they are issued. However, there are no conditions to the
issuance of the deferred shares other than the passage of time.
In addition, in October 1996, the Company paid to Cornerstone Realty
Group, Inc., and Cornerstone Advisors, Inc. $1,325,100 in exchange for
the assignment by them of all of their rights and interests in, to and
under their property acquisition
8
<PAGE>
agreement and advisory agreement with the Company. Also on such date,
the Company paid to Cornerstone Realty Group, Inc. $100,000 and paid to
Glade M. Knight, individually, $350,000 for the personal property and
building, respectively, located at 306 East Main Street, Richmond,
Virginia, which previously had served as the principal executive office
of the External Companies. This space now serves as the principal
executive office of the Company. Finally, the Company paid
approximately $138,000 to certain lenders, representing the balanced
owed on certain automobile loans, in exchange for the conveyance by
Cornerstone Realty Group, Inc., to the Company of such automobiles.
Immediately following the assignment by each of the External Companies
of its rights and interest in, to and under its respective agreements
with the Company, the Company terminated each such agreement.
Furthermore, as of September 1, 1996, the Company entered into an
employment agreement with each of Glade M. Knight, Stanley J. Olander,
Jr. and Debra A. Jones who are now executive officers of the Company.
The following table is a summary of payments by the Company during the
nine months ended September 30, 1996 and 1995:
1996 1995
----- -----
Cornerstone Management Group $1,226,873 $582,261
Cornerstone Realty Group, Inc. $1,957,624 $579,150
Cornerstone Advisors, Inc. $ 295,759 $144,610
(5) Subsequent Events
In October, 1996, the Company distributed to its shareholders
approximately $5,620,673 (24.9 cents per share) of which approximately
$3,402,528 was reinvested in the purchase of additional shares through
the Additional Share Option.
On October 31, 1996, effective October 1, 1996, the Company acquired
Greenbrier Apartments, a 258 unit apartment community located in
Fredericksburg, Virginia, for $11,099,525.
(6) Acquisitions (unaudited)
The following unaudited pro forma information for the nine months ended
September 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.
9
<PAGE>
Nine Months Nine Months
Ended Ended
9/30/96 9/30/95
Rental Income $31,313,296 $28,858,280
Net Income $10,147,452 $ 9,824,396
Net Income Per Share $ .47 $ .44
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, Meadow Creek, Trolley Square, Paces Glen, Savannah West and
Doctors Park 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.
10
<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 September 30, 1996. During the quarter, the Company
closed the sale to investors of 6,668,874 shares at $11 per share
representing gross proceeds to the Company of $73,357,614 and net
proceeds after payment of underwriter fees of $66,021,853. The Company
capitalized $13,772,619 of improvements to its various properties
during the quarter. It is anticipated that some $3,000,000 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 September 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>
Paces Glen Apartments July 1996 172 $ 7,425,000 Charlotte, NC
Savannah West Apartments July 1996 456 $ 9,843,620 Augusta, GA
(formerly Oak Park Apartments)
Signature Place Apartments August 1996 171 $ 5,462,948 Greenville, NC
(formerly Doctors Park Apartments)
Hampton Glen Apartments September 1996 232 $11,599,931 Glen Allen, VA
Sterling Chase Apartments September 1996 272 $10,205,457 Charlotte, NC
Highland Hills Apartments September 1996 264 $12,100,000 Carrboro, NC
Parkside at Woodlake September 1996 266 $14,663,886 Durham, NC
</TABLE>
The balance on the line of credit as of June 30, 1996 was $13,705,000.
During the quarter ended September 30, 1996 the Company borrowed
$73,107,144 against the line of credit in conjunction with property
acquisitions and improvements and repaid $65,712,144 of the balance and
expects to repay the balance within sixty days. As of September 30,
1996, the outstanding debt balance included $21,100,000 on the line of
credit and the $5,500,000 unsecured note as discussed in Note 2.
Cash and cash equivalents totaled $4,193,771 at September 30, 1996.
During July 1996, the Company distributed $3,393,770 (24.9 cents per
share) to its shareholders of which $2,524,236 was reinvested in
additional shares per the terms of the Company's Additional Share
Option. The reinvested funds netted the Company $2,271,812 after
payment of underwriter fees.
While the Company is always assessing potential acquisitions, no
material commitments existed on November 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 have been raised in conjunction with the acquisition of
properties to fund capital expenditures for currently held properties.
In addition, the Company will acquire new properties as funds are
available.
11
<PAGE>
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.
The Company was converted into a "self-administered" and "self-managed"
REIT effective October 1, 1996. As a result of this conversion the
Company issued 1,400,000 shares, 700,000 shares issued in October 1996
and 700,000 shares to be issued by September 30, 1997, and paid
approximately $1,913,100 to the various entities for several assets and
various contracts. (See Note 4).
Results of Operations
The Company's property operations for the nine months ended September
30, 1996 reflect the operations of the Company's pre-1996 acquisitions
and the 1996 acquisitions since the propertys' appropriate acquisition
dates. The results of operations for the nine months ended September
30, 1995 reflect the operations of the 1993 and 1994 acquisitions and
the 1995 acquisitions since the propertys' appropriate acquisition
dates. The increase in income and expenses for the three months and
nine months ended September 30, 1996 over 1995 is mainly due to the
full months of operation in 1996 of all of the 1995 acquisitions and
the operations of the 1996 acquisitions. For the nine months ended
September 30, 1996, and September 30, 1995 rental income for the 1993
and 1994 acquisitions was $9,327,285 and $8,647,686, respectively which
represents a 8% increase. Rental income for the same acquisitions for
the quarter ended September 30, 1996 and 1995 was $3,276,792 and
$3,023,539 respectiviely which represents a 8% increase.
The occupancy levels for the Company's properties averaged 92% and 95%
at the end of the nine months ended September 30, 1996 and 1995,
respectively and 93% and 95% for the quarter ended September 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 $476 to $517 per month for the nine months ended September 30,
1995 and 1996, respectively. Average rental rates for the quarter ended
September 30, 1996 and 1995 increased from $466 to $533 per month.
The Company's revenue is primarily from rental operation of its
apartment communities. Rental income for the first nine months
increased to $26,714,877 in 1996 from $10,537,107 in 1995 and for the
quarter ended increased to $11,495,302 in 1996 from $4,381,403 in 1995.
The increase is due to a combination of rental increases and property
acquisitions with the latter having the most significant impact. 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 nine months ended September 30, 1996
and 1995 was $237,651 and $129,688, respectively. For the quarter ended
September 30, 1996 and 1995, interest income was $46,438 and $56,174.
12
<PAGE>
Total expenses for the first nine months increased to $18,170,349 in
1996 from $7,122,563 in 1995 and for the quarter ended increased to
$8,023,973 in 1996 from $2,910,239 in 1995. The increases are due
largely to the acquisition of properties. The operating expense ratio
(the ratio of rental expenses, excluding general and administrative,
amortization and depreciation expense, to rental income) was 46% for
the nine months ended September 30, 1996 and 1995 and 45% and 47% for
the quarter ended September 30, 1996 and 1995, respectively. In
addition, the Company incurred interest expense of $554,648 and $81,238
during the first nine months of 1996 and 1995, respectively, and
$211,559 and $1,359 during the quarter ended September 30, 1996 and
1995, respectively, which related to the short-term borrowings on
property acquisitions and improvements.
Depreciation expense for the first nine months has increased to
$5,155,108 in 1996 from $1,808,539 in 1995. The increase is due to the
1996 acquisitions and a full nine months of depreciation for 1995
acquisitions. For the quarter ended September 30, 1996 and 1995,
depreciation expense has increased to $2,451,036 from $668,457 for the
same reasons.
General and administrative expenses totaled 3% of the total rental
income for the quarter ended and the nine months ended September 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 nine months ended September
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. Inflation may also cause
capital appreciation of the Company's properties over time, as rental
rates and replacement costs increase.
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 September 30, 1996, the items reported and the
financial statements included in such filings.
<TABLE>
<CAPTION>
Type and Date
of Reports Items Reported Financial Statements Filed
------------------- -------------- --------------------
<S> <C>
Form 8-K/A (date of 7 Historical Statement of Income and Direct
Original Report: Operating Expenses of Longmeadow
April 30, 1996) Apartments for the twelve months ended
December 31, 1995.
Historical Statement of Income and Direct
Operating Expenses of Trophy Chase
(Westfield) Apartments for the twelve
months ended December 31, 1995, 1994,
and 1993.
Historical Statement of Income and Direct
Operating Expenses of Beacon Hill
Apartments for the twelve months ended
April 30, 1996.
Historical Statement of Income and Direct
Operating Expenses of Meadow Creek
Apartments for the twelve months ended
April 30, 1996.
Historical Statement of Income and Direct
Operating Expenses of Summerwalk
(Lakewood) Apartments for the twelve
months ended December 31, 1995.
Historical Statement of Income and Direct
Operating Expenses of Willow Creek
Apartments for the twelve months ended
December 31, 1995.
Form 8-K dated 2, 7 None
June 26, 1996
</TABLE>
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: 11/13/96 BY: /s/ Stanley J. Olander
------------- ----------------------
Stanley J. Olander
Vice President and Treasurer
15
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JUL-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 4,193,771
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 295,616,335
<DEPRECIATION> 9,410,082
<TOTAL-ASSETS> 292,221,713
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 246,321,997
<OTHER-SE> (3,687,292)
<TOTAL-LIABILITY-AND-EQUITY> 292,221,713
<SALES> 0
<TOTAL-REVENUES> 26,714,877
<CGS> 0
<TOTAL-COSTS> 18,170,349
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 554,648
<INCOME-PRETAX> 8,227,531
<INCOME-TAX> 0
<INCOME-CONTINUING> 8,227,531
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8,227,531
<EPS-PRIMARY> 0.46
<EPS-DILUTED> 0<F1><F2>
<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>
