Cornerstone Realty Acquires Richmond Apartment Community and Completes New Secured Financings.

Business Editors

RICHMOND, Va.--(BUSINESS WIRE)--June 26, 2001

Cornerstone Realty Income Trust, Inc. (NYSE: TCR) announced today that it has purchased Chase Gayton Apartments in Richmond, Va. for $21.2 million and closed on two new secured financing arrangements.

Commenting on the recent developments, Chairman and Chief Executive Officer Glade M. Knight said, "We are extremely pleased to increase our presence in the Richmond market with the Chase Gayton purchase. It is a high-quality apartment community that will fit well into our current portfolio of multifamily properties. In addition, our new financing arrangements were completed under very favorable terms for the company. Following these financings, our debt-to-total-market-capitalization ratio stands at 48% and 24 of our 73 apartment communities remain unencumbered."

Built in 1984, Chase Gayton contains 328 garden-style apartments in 16 two- and three-story buildings on approximately 28 acres in Henrico County, located west of the City of Richmond. With an average apartment size of 950 square feet, Chase Gayton offers one-, two- and three-bedroom floor plans and its amenities include a clubhouse, fitness center, swimming pool, lighted tennis and volleyball courts, laundry facility, additional storage units, and controlled-access units. The community is currently 97% occupied. Cornerstone now operates five apartment communities with 1,381 units in the Richmond area.

Cornerstone's new financing arrangements include $65 million in secured financing through First Union Securities, Inc. The 10-year loan bears a fixed interest rate of 7.16% per year and is secured by eight of Cornerstone's 73 apartment communities. In addition, the company has placed $8.5 million in secured financing through ARCS Commercial Mortgage Co., L.P. The 10-year loan bears an interest rate of 7.1% and is secured by one Cornerstone property. Net proceeds from the new loans have been used to reduce the company's balance on its unsecured line of credit to $60 million from $100 million and to fund acquisitions.

Certain statements contained herein constitute "forward-looking statements" within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the future results, performance or achievements of the Company to be materially different from any forward-looking statements. Such factors include, among others, risks associated with future economic and rental conditions in specific markets and general competitive factors.

Cornerstone Realty Income Trust, Inc. (NYSE:TCR) is a fully integrated, self-managed and self-advised real estate company that has operated as a real estate investment trust (REIT) since 1993. The company focuses on the ownership and management of multifamily communities in select markets in Virginia, North Carolina, South Carolina, Georgia and Texas. Currently Cornerstone owns 73 apartment communities with 18,452 units. For more information about Cornerstone, visit the company's web site at www.cornerstonereit.com.