EXHIBIT 10.1

                          CORNERSTONE REALTY FUND, LLC

                                ESCROW AGREEMENT
                                ----------------



         This Escrow Agreement ("Agreement") is entered into ____________ , 2000
by and among  {Southern  California  Bank }[US Bank National  Association]  (the
"Escrow Agent"),  Cornerstone  Realty Fund, LLC, a California  limited liability
company  (the  "Fund")  and  Private  Equity   Investors   Group,  a  California
corporation (the "Dealer Manager").


                                 R E C I T A L S

         A. The Fund proposes to offer up to  $50,000,000  of limited  liability
company units ("Units") in the Fund, pursuant to a Prospectus dated ____________
, 2000, as amended or supplemented from time to time (the "Prospectus"),  with a
minimum investment required of five Units at $500 per Unit (or two Units at $500
per Unit for tax-qualified retirement plans).

         B. The Dealer  Manager  and others  (collectively,  the  "Participating
Brokers")  have been  named as  Participating  Brokers  in  connection  with the
proposed  offering  of the Units and are  entitled  to certain  commissions  and
selling expense  allowances set forth in those certain selling  agreements among
the  Fund,  the  Participating  Brokers  and the  Managing  Member  of the Fund,
Cornerstone Industrial  Properties,  LLC, a California limited liability company
("Managing Member").

         C. In compliance  with the Prospectus and each Selling  Agreement,  the
Fund proposes to establish an escrow fund with the Escrow Agent for the offering
proceeds received prior to the Initial Closing Date (as hereafter defined).

         D. If subscriptions for at least $3,000,000 are  not  accepted  by  the
Fund prior to _______________, 2001(the "Minimum Offering Termination Date"), no
Units in the Fund will be sold.

         E. The  Escrow  Agent  has  agreed to act as escrow agent in connection
with the proposed offering.

                                A G R E E M E N T
                                -----------------

         It is agreed as follows:

         1. Incorporation  of  Recitals  and  General  Provisions. The  recitals
            ------------------------------------------------
set forth above and the GeneralProvisions attached hereto as  Exhibit "A"  shall
constitute and shall be deemed to be an integral part of this Agreement.

         2. Escrow.
            ------

                  2.1 Escrow Agent.  For a period  commencing on the date hereof
                      ------------
and terminating 15 days after the Minimum Offering  Termination Date, the Escrow
Agent shall act as an escrow  agent and shall  receive and disburse the proceeds


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from the sale of the Units in accordance with the terms of this  Agreement.  The
Escrow Agent hereby represents and warrants to each Participating Broker that it
is a "Bank"  as such  term is  defined  in  Section  3(a)(6)  of the  Securities
Exchange Act of 1934, as amended (the "Act").

                  2.2 Escrow Account. Commencing on the date hereof, the parties
                      --------------
shall  establish an  interest-bearing  escrow account with the Escrow Agent (the
"Escrow Account").  The Participating  Brokers will instruct subscribers to make
checks for  subscriptions of Units payable to the order of the Escrow Agent. Any
checks  received  that are made  payable to a party other than the Escrow  Agent
shall be returned to the Participating Broker who submitted the check.

         3. Deposits into the Escrow  Account.  Proceeds  from the sale of Units
            ----------------------------------
(the  "Proceeds")  shall be received by the Escrow Agent from the  Participating
Brokers and deposited promptly in the Escrow Account;  provided,  however,  that
Proceeds  received  by the Escrow  Agent  within 48 hours  prior to a  scheduled
Initial or Additional  Closing Date (as hereinafter  defined) may be held by the
Escrow Agent until such  closing (but not longer than 48 hours) and,  upon joint
instruction of the Managing  Member and the Dealer Manager,  deposited  directly
into the Fund's account or returned to the subscriber(s).

         4. Subscriber Information.  Each Participating Broker shall provide the
            ----------------------
Escrow  Agent  with the  name,  address,  social  security  number  or  taxpayer
identification  number, and the amount to be deposited for each subscriber whose
funds are  deposited  with the Escrow Agent  pursuant to Section 2 hereof.  Such
Participating  Broker shall also notify the Escrow Agent if a properly  executed
U.S.  Treasury  Department  Form W-9 has not been received  from any  subscriber
whose funds are deposited with the Escrow Agent.


         5. Investment of Proceeds.  The  Escrow Agent shall invest all Proceeds
            ----------------------
deposited with it hereunder as directed by the Fund, in (i) Bank accounts,  (ii)
Bank money-market  accounts,  (iii) short-term  certificates of deposit of Banks
located in the United States, or (iv) short-term securities issued or guaranteed
by the U.S.  government.  The term  "Bank" is defined in Section  3(a)(6) of the
Act. Such investments  shall be made in a manner consistent with the requirement
that the  Proceeds be  available  for  delivery by the Escrow Agent at the times
described herein. After any reductions made in accordance with Section {11} [10]
hereof, income received from investment of the Proceeds shall be credited to the
subscribers  in  proportion  to the  amounts  deposited  with  respect  to  each
subscriber  and in proportion to the number of days the collected  Proceeds from
each  subscriber are held in the Escrow  Account.  Pursuant to the provisions of
this Agreement,  Escrow Agent shall disburse all income earned (less any amounts
required to be withheld by the Escrow Agent under the applicable  federal income
tax laws)  directly to the Fund with respect to the  Proceeds,  and the Managing
Member shall determine and disburse to each subscriber his or her  proportionate
share of such income  computed as provided  above.  The Fund is aware that there
may be a  forfeiture  of  interest  in the  event  of early  withdrawal  from an
interest bearing account of investment.


         6. Initial  Closing Date.  The term  "Qualifying  Subscriptions"  shall
            ----------------------
refer to all  subscriptions  which have been received by the Managing Member and
which the  Managing  Member  intends  to accept  into the  Fund.  If  Qualifying
Subscriptions  have been received for at least  $3,000,000 of Units on or before
the Minimum  Offering  Termination  Date,  the Managing  Member shall notify the
Escrow Agent and by instructions (which may accompany such notice or be provided


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subsequently)  given at least 2 business  days in  advance,  shall  specify  the
"Initial  Closing  Date"  (which must be not more than 10 days after the Minimum
Offering  Termination Date), the approximate amount of Qualifying  Subscriptions
for the Fund to be accepted as of such Initial Closing Date, the identity of the
subscribers whose subscriptions are anticipated to be accepted as of the Initial
Closing Date, and the approximate  amount of the Proceeds to be paid to the Fund
and to each Participating Broker, respectively. On the Initial Closing Date, the
Escrow Agent,  upon  telephonic  notice from the Managing  Member and the Dealer
Manager that all  contingencies  for payment have been  satisfied as required by
Rule 15c2-4  under the Act (which  notice the  Managing  Member  shall  promptly
confirm  in  writing)  shall pay to the Fund and each  Participating  Broker the
amounts  specified by such notice,  and shall  additionally  pay to the Fund the
interest  earned on such Proceeds for  disbursement  to subscribers  pursuant to
Section 5 hereof.

         7. Rejected  Subscriptions.  From time to time, upon  instructions from
            -----------------------
the Managing Member identifying those subscribers whose  subscriptions have been
rejected,  the  Escrow  Agent  shall  return  such funds to the  subscribers  so
identified with such interest as has been credited to them pursuant to Section 5
hereof.  If the Managing  Member rejects any  subscription  for which the Escrow
Agent has already  collected  funds,  the Escrow  Agent shall  promptly  issue a
refund check to the rejected  subscriber.  If the  Managing  Member  rejects any
subscription  for which the  Escrow  Agent has not yet  collected  funds but has
submitted the subscriber's check for collection, the Escrow Agent shall promptly
issue a check in the amount of the subscriber's check to the rejected subscriber
after the Escrow Agent has cleared  such funds.  If the Escrow Agent has not yet
submitted a rejected  subscriber's check for collection,  the Escrow Agent shall
promptly remit the subscriber's check directly to the subscriber.

         8. Failure to Meet Minimum  Subscription.  If Qualifying  Subscriptions
            --------------------------------------
for at least  $3,000,000 of Units have not been received by the Minimum Offering
Termination  Date, then the Escrow Agent,  upon  instructions  from the Managing
Member,  shall promptly return all collected  funds and  uncollected  checks and
other instruments to the subscribers, with such interest as has been credited to
them pursuant to Section 5 hereof.  Prior to the Initial  Closing Date, the Fund
is aware and  understands  that it is not  entitled to any funds  received  into
escrow and no amounts  deposited in the Escrow Account shall become the property
of the Fund or any other  entity,  or be subject to the debts of the Fund or any
other entity.

         9. Notice  of   Extension  or  Termination of Offering.    Upon   final
            ----------------------------------------------
termination of the offering, the Managing  Member  shall  instruct Escrow  Agent
pursuant to Section 6 as to the disposition of any remaining funds  and interest
thereon.

        10. Fees. The Escrow Agent, for services rendered under this  Agreement,
             ----
shall  receive a fee as set forth on Exhibit "B" hereto.  The fees of the Escrow
Agent  shall  be paid by the  Fund.  If  Qualifying  Subscriptions  for at least
$3,000,000 of Units have not been received by the Minimum  Offering  Termination
Date, then the fees of the Escrow Agent shall be paid by the Managing Member. In
no event shall the fees of the Escrow Agent be deducted from or otherwise offset
against the Proceeds (or interest earned thereon) of subscribers.

        11. Resignation. The Escrow Agent shall have the right to resign at  any
             -----------
time and be discharged  from its duties as escrow agent  hereunder by giving the
Fund at least 30 days prior written notice thereof;  provided,  however, that if
the Escrow Agent shall  exercise its right of  resignation  hereunder,  it shall
receive as its fee for  services  rendered as escrow  agent a fee as provided in
Section 10 hereof.


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<PAGE>

        12. Duties and  Responsibilities  of Escrow Agent.  The  Escrow    Agent
            -------------------------------------------
shall have no duties or responsibilities other than those set forth  herein  and
shall:

                  (a) Be  under no  duty to  enforce payment of any subscription
 which is to be paid to and held by it hereunder;

                  (b) Be  under  no duty to  accept  funds,  checks,  drafts  or
instruments  for the payment of money from anyone  other than the  Participating
Brokers or the  Managing  Member or to give any receipt  therefor  except to the
Participating Brokers or the Managing Member;

                  (c)  Be  protected   in  acting  upon  any  notice,   request,
certificate,  approval,  consent or other  paper  believed  by it to be genuine,
signed by the proper party or parties and in  accordance  with the terms of this
Agreement;

                  (d) Be deemed  conclusively  to have given and  delivered  any
notice  required to be given or  delivered  hereunder if the same is in writing,
signed by any one of its  authorized  officers  and  mailed,  by  registered  or
certified  mail,  in a sealed  postpaid  wrapper,  addressed  to the Fund at the
following address:

                           Cornerstone Realty Fund, LLC
                           4590 MacArthur Blvd.
                           Suite 610
                           Newport Beach, CA  92660

                  (e) Be  indemnified  and held harmless by the Managing  Member
from  any and all  claims  made  against  it  (including  claims  regarding  the
disbursement  of  funds),  or any and all  expenses  incurred  by it  (including
reasonable  attorneys'  fees),  by reason of its  acting  or  failing  to act in
connection with any of the transactions contemplated hereby and against any loss
it may sustain in carrying out the terms of this Agreement,  except such claims,
expenses or losses which are occasioned by its bad faith,  negligence or willful
misconduct; and

                  (f) Not be liable for any forgeries or impersonations concern-
ing any documents to be handled by it.

        13. Disputes.  If the  Managing Member,  the Participating  Brokers,  or
            --------
anyone else, disagree on any matter connected with this escrow, (i) Escrow Agent
will not have to settle the matter,  (ii) Escrow Agent may wait for a settlement
by appropriate legal proceedings or other means Escrow Agent may require, and in
such event Escrow Agent will not be liable for interest or damage,  (iii) Escrow
Agent will be entitled to such reasonable  compensation for services,  costs and
attorneys' fees as a court may award if Escrow Agent  intervenes in or is made a
party to any legal  proceedings,  (iv)  Escrow  Agent  shall be entitled to hold
documents  and  funds  deposited  in  this  escrow  pending  settlement  of  the
disagreement  by any of the above means,  and (v) Escrow Agent shall be entitled
to file an  interpleader  action and  deposit any  Proceeds or property  with an
appropriate court.

        14. No Legal Advice.  This   transaction   is  an   escrow  and  Escrow
             ---------------
Agent is an escrow holder only and  as escrow  holder Escrow  Agent may not give
legal advice as to any conditions or requirements in this escrow.


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<PAGE>

        15. Notices to Escrow Agent. Any written notice required to be given or
             -----------------------
delivered to the Escrow Agent shall be deemed  conclusively  given and delivered
hereunder if the written notice is mailed, by registered or certified mail, in a
sealed postpaid wrapper, addressed as follows:


               {Southern California Bank} [US Bank National Association]
               4100 Newport Place
               Suite 130
               Newport Beach, CA  92660
               Attn:  Gloria Garriott


        16. Instructions;   Copies  of   Notices.  Any   instructions  or  other
              -----------------------------------
communications to the Escrow Agent provided for herein shall be in writing,  but
may be in telegraphic or telex form if promptly  confirmed in writing. A copy of
this Agreement,  or any amendment or addendum  hereto,  or closing  statement or
document  deposited  in this escrow  shall be furnished by Escrow Agent to those
persons outside of this escrow designated from time to time by the Fund.

        17. Payments.  All disbursements  from the escrow account shall be made
             ---------
to the party concerned,  by Escrow Agent's cashier's check to such party's order
or to  deposit  to  such  party's  bank  account.  All  checks,  documents,  and
correspondence  shall  be  mailed  to such  party  at the  address  given by the
Managing Member.

        18. Miscellaneous.  Nothing in this Agreement is  intended  to  or shall
            -------------
confer upon anyone other than the parties  hereto any legal or equitable  right,
remedy or claim.  This Agreement  shall be construed in accordance with the laws
of the State of California and may be modified only in writing.

         IN WITNESS  WHEREOF,  the undersigned  have caused this Agreement to be
executed on the day and year first hereinabove written.

                CORNERSTONE REALTY FUND, LLC,
                a California limited liability company

                        By:      CORNERSTONE INDUSTRIAL PROPERTIES, LLC,
                                 a California limited liability company

                                 By:      CORNERSTONE VENTURES, INC.,
                                          its Operating Partner

                                          By:
                                             ----------------------------------
                                                 Terry G. Roussel, President



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<PAGE>



                                    PRIVATE EQUITY INVESTORS GROUP,
                                    a California corporation

                                    By:
                                       -------------------------------------
                                            Leonard Robbins, President




ACKNOWLEDGED AND AGREED


{SOUTHERN CALIFORNIA BANK} [US BANK NATIONAL ASSOCIATION]



By:
   --------------------------------------

<PAGE>




                                   EXHIBIT "A"

                               GENERAL PROVISIONS


DEPOSITS  - All funds  received  in escrow  shall be  deposited  in an  interest
--------
bearing  escrow  account  of  {Southern   California  Bank}  [US  Bank  National
Association].


RESPONSIBILITY FOR DEPOSITED PROPERTY - Escrow Agent is not a party to, or bound
-------------------------------------
by, any  provisions  contained in any agreements  which may be deposited  under,
evidenced by, or arise out of these instructions, and with respect thereto, acts
as a depository only and is not  responsible or liable in any manner  whatsoever
for the sufficiency,  correctness,  genuineness,  or validity of any Property or
with  respect  to the form or  execution  of any  agreements,  or the  identity,
authority or right of any person executing or depositing any property herein.

DEFAULTS - Escrow  Agent  shall not be required to take or be bound by notice of
--------
any default of any person,  including any Principal,  or to take any action with
respect to such  default  whether or not such  action  involves  any  expense or
liability. These instructions shall not be subject to modification or rescission
except  upon  receipt  by Escrow  Agent (at the office  named  above) of written
instructions from each of the Principals or their successors in interest, and no
such rescission or modification shall be effective unless and until consented to
by Escrow Agent in writing.

NOTICES - Principals hereby indemnify and hold Escrow Agent harmless against any
-------
loss, liability,  damage, cost or expense, including reasonable attorneys' fees,
(a)  related  in any way to Escrow  Agent's  acting  upon any  notice,  request,
waiver, consent,  receipt or other paper or document believed by Escrow Agent to
be  signed by  Principals  or any  other  proper  person,  and (b)  incurred  in
connection with any act or thing done hereunder.

EXERCISE  OF  JUDGMENT  - Escrow  Agent  shell  not be  liable  for any error of
----------------------
judgment or for any act done or step taken or omitted by it in good faith or for
any mistake of fact or law or for anything  which Escrow Agent may do or refrain
from doing in connection  herewith,  except its own gross  negligence or willful
misconduct.  Escrow Agent shall have duties only to Principals, and no person or
entity shall be deemed a third party beneficiary of these instructions.

COUNSEL - Escrow  Agent  may  consult  with  legal  counsel  in the event of any
------
dispute or  question  as to the  construction  of these  instructions  or Escrow
Agent's duties  thereunder,  and Escrow Agent shall incur no liability and shall
be fully protected in acting in accordance with the opinion and  instructions of
counsel,

DISAGREEMENTS - In the event of any disagreement between the Principals,  or any
-------------
of  them  or any  other  person  or  persons  whether  or  not  named  in  these
instructions,  and adverse claims or demands are made in connection  with or for
any of the  Property,  Escrow Agent shall be entitled at its option to refuse to
comply  with  any  such  claim  or  demand  so long as such  disagreement  shall
continue,  and in so doing,  Escrow  Agent  shall not be or  become  liable  for
damages or interest to the Principals, or any of them, or to any other person or
persons for Escrow Agent's failure or refusal to comply with such conflicting or
adverse  claims or  demands.  Escrow  Agent  shall be entitled to continue so to
refrain and refuse so to act until:


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<PAGE>

     a. the rights of the adverse  claimants  have been fully  adjudicated  in a
court assuming and having jurisdiction of the claimants and the Property; or

     b. all differences shall have been adjusted by agreement,  and Escrow Agent
shall have been  notified  thereof in  writing by all  persons  deemed by Escrow
Agent, in its sole discretion, to have an interest therein.

In  addition,  Escrow  Agent,  in its  sole  discretion,  may  file  a  suit  in
interpleader  for the purpose of having the  respective  rights of all claimants
adjudicated,  and may deposit  with the court all of the  Property  deposited in
escrow;  and the Principals  agree to pay all costs and counsel fees incurred by
Escrow Agent in such action,  such costs and fees to be included in the judgment
in any such action.

INDEMNITY - In consideration of this appointment by Escrow Agent, the Principals
---------
agree to indemnify and hold Escrow Agent  harmless as to any liability  incurred
by Escrow  Agent to any  person,  firm or  corporation  by reason of its  having
accepted  same or in  carrying  out any of the terms  hereof,  and to  reimburse
Escrow Agent for all its expenses,  including  among other things,  counsel fees
and court costs  incurred by reason of its position or actions taken pursuant to
these Escrow  Instructions.  The  Principals  hereby agree that the Escrow Agent
shall  not be  liable  to any of them  for any  actions  taken by  Escrow  Agent
pursuant to the terms hereof.

COURT ORDERS - Escrow Agent is hereby authorized,  in its exclusive  discretion,
------------
to obey and comply with all writs,  orders,  judgments or decrees  issued by any
court or administrative agency affecting any money,  documents or things held by
Escrow  Agent,  Escrow  Agent shall not be liable to any of the parties  hereto,
their successors,  heirs or personal representatives by reason of Escrow Agent's
compliance with such writ, order,  judgment or decree,  notwithstanding  if such
writ,  order,  judgment  or decree  is later  reversed,  modified,  set aside or
vacated.

ATTORNEY'S  FEES - If any  action be  brought  to  interpret  or  enforce  these
----------------
instructions, or any part thereof, the Principals jointly and severally agree to
pay to Escrow Agent all Escrow Agent's attorney fees,  accounting fees,  special
and extra service fees and other costs related to such action.

CANCELLATION  - In the event the escrow  established  hereby is  cancelled,  the
------------
Principals  jointly and severally shall nevertheless pay to the Escrow Agent the
initial fee  together  with all costs end  expenses of Escrow  Agent,  including
attorney fees.  Notwithstanding  anything in these instructions to the contrary,
Escrow Agent may, in its sole  discretion,  upon ten (10) days written notice to
any of the  Principals,  resign  as  Escrow  Agent  and  shall  be  entitled  to
reimbursement  for  those  costs  and  expenses  incurred  to the  date  of such
resignation. Upon cancellation by the Principals or resignation by Escrow Agent,
after  deducting  Escrow  Agent's fees,  costs and expenses,  the balance of any
funds or Property shall be returned to the respective  Principals who shall have
deposited same.

FEES AND CHARGES - In the event that (a) Escrow Agent  performs any services not
----------------
specifically  provided for herein or (b) there is an assignment or attachment of
any  interest  in the  subject  matter of the escrow  established  hereby or any
modification thereof, or (c) any dispute or controversy arises hereunder, or (d)
Escrow Agent is named a party to, or intervenes in, any litigation pertaining to
this escrow or the subject matter  thereof,  Escrow Agent shall,  in addition to
fees and charges for ordinary services, be reasonably  compensated therefore and
reimbursed for all costs and expenses,  including  attorneys'  fees,  occasioned
thereby.  Escrow  Agent  shall  have a  first  lien  on the  Property  for  such


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<PAGE>
compensation and expenses, and the Principals agree jointly and severally to pay
the same for its ordinary services hereunder.

Escrow  Agent  shall  be  entitled  to an  initial,  non-refundable  set-up  fee
-------------
("initial fee") of $1,500.00,  payable concurrently with its acceptance,  and to
additional  compensation for wire fees, messenger fees, $250.00 yearly hold-open
fee (due if escrow open over 1 year from the date of these instructions), and/or
any other  reasonable and necessary  out-of-pocket  expenses  incurred by Escrow
Agent.

The  Principals  understand  that  Escrow  Agent will  charge  additional  fees,
including  premium  hourly fees, for any services  performed  according to these
Escrow  Instructions,  or any  modification  or  any  service  not  specifically
provided therein,  that involve  concerted  effort,  employees working overtime,
expedited handling of any aspect of the Escrow, or other similar services.

SIGNATURES - These  instructions may be executed in counterparts,  each of which
---------
so  executed  shall  be  deemed  as  original,  irrespective  of the date of its
execution and delivery,  and said counterparts together shall constitute one and
the same instrument.





                                      A-3
<PAGE>



            {SOUTHERN CALIFORNIA BANK} [US BANK NATIONAL ASSOCIATION]


                                SCHEDULE OF FEES

                                       FOR

                          CORNERSTONE realty fund, LLC

Acceptance Fee (Non-Refundable).......................................$1,500.00
Additional Escrow Fees of $1.00 per $1,000.00 subscription
 funds  as received in escrow in excess of $1,500,000.00.
 Yearly Hold-Open Fee (due if escrow open over 1 year
 from the date of these instructions)...................................$250.00
Wire fee, per wire......................................................$ 25.00
Disbursement fee, per check.............................................$ 15.00
Reasonable and customary charges for unscheduled services,
   including messenger fees, federal express charges or other
   out-of pocket expense................................................various


















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