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 March 31, 2000

                                       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 1-12875

                      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 April 20, 2000, there were outstanding  35,996,759 shares of common
stock, no par value, of the registrant.

<PAGE>

                      CORNERSTONE REALTY INCOME TRUST, INC.
                                    FORM 10-Q

                                      INDEX

<TABLE>
<CAPTION>

                                                                                 Page Number
                                                                                 -----------

<S>                                                                              <C>
PART I.        FINANCIAL INFORMATION

         Item 1.      Financial Statements (Unaudited)

                           Consolidated Balance Sheets - March 31, 2000                3
                           and December 31, 1999

                           Consolidated Statements of Operations -                     4
                           Three months ended March 31, 2000
                           and  March 31, 1999

                           Consolidated Statement of Shareholders' Equity-             5
                           Three months ended March 31, 2000

                           Consolidated Statements of Cash Flows -                     6
                           Three months ended March 31, 2000
                           and March 31, 1999

                           Notes to Consolidated Financial Statements                  7

         Item 2.      Management's Discussion and Analysis                            10
                      of Financial Condition and Results of
                      Operations

         Item 3.      Quantitative and Qualitative Disclosures about                  14
                      Market Risk

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
                                                                                      15

</TABLE>

                                       2

<PAGE>

CORNERSTONE REALTY INCOME TRUST, INC.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)

<TABLE>
<CAPTION>

                                                                                               March 31,              December 31,
                                                                                                 2000                     1999
                                                                                             -------------            -------------
<S>                                                                                          <C>                      <C>
ASSETS

Investment in rental property:
Land .............................................................................           $ 123,364,853            $ 136,326,140
Buildings and property improvements ..............................................             667,620,358              760,712,650
Furniture and fixtures ...........................................................              18,139,708               22,089,948
                                                                                             -------------            -------------
                                                                                               809,124,919              919,128,738
Less accumulated depreciation ....................................................             (64,970,057)             (77,538,085)
                                                                                             -------------            -------------
                                                                                               744,154,862              841,590,653

Cash and cash equivalents ........................................................               4,218,948               16,268,336
Prepaid expenses .................................................................               2,139,830                2,803,488
Other assets .....................................................................              34,558,416                8,602,399
                                                                                             -------------            -------------

                Total Assets .....................................................           $ 785,072,056            $ 869,264,876
                                                                                             =============            =============

LIABILITIES and SHAREHOLDERS' EQUITY

Liabilities
Notes payable-unsecured ..........................................................           $ 105,297,000            $ 157,500,000
Notes payable-secured ............................................................             104,920,300              105,045,682
Distributions payable ............................................................               6,720,337                6,779,012
Accounts payable .................................................................               2,574,949               11,670,338
Accrued expenses .................................................................               4,776,431               11,387,531
Rents received in advance ........................................................                 178,536                  613,214
Tenant security deposits .........................................................               1,655,254                1,903,857
                                                                                             -------------            -------------

                Total Liabilities ................................................             226,122,807              294,899,634

Shareholders' equity
Preferred stock, no par value, authorized 25,000,000
  shares; $25 liquidation preference, Series A
  Cumulative Convertible Redeemable; issued and outstanding ......................             264,125,339              263,656,281
   12,641,304 shares and 12,650,047 shares, respectively
Common stock, no par value, authorized 100,000,000
   shares; issued and outstanding 35,967,485 shares
   and 38,712,037 shares, respectively ...........................................             353,862,474              383,969,899
Deferred compensation ............................................................                 (67,452)                 (72,976)
Distributions greater than net income ............................................             (58,971,112)             (73,187,962)
                                                                                             -------------            -------------

                Total Shareholders' Equity .......................................             558,949,249              574,365,242
                                                                                             -------------            -------------

                Total Liabilities and Shareholders' Equity .......................           $ 785,072,056            $ 869,264,876
                                                                                             =============            =============

</TABLE>

See accompanying notes to consolidated financial statements.

                                       3

<PAGE>

CORNERSTONE REALTY INCOME TRUST, INC.
CONSOLIDATED STATEMENTS  OF OPERATIONS (UNAUDITED)

<TABLE>
<CAPTION>

                                                                                                        Three Months Ended
                                                                                                  March 31,              March 31,
                                                                                                    2000                   1999
                                                                                               ------------------------------------
<S>                                                                                            <C>                     <C>
REVENUE:
           Rental income ...........................................................           $ 37,097,915            $ 23,467,091
           Other income ............................................................                   --                 1,061,287

EXPENSES:
           Property and maintenance ................................................              9,040,274               6,098,887
           Taxes and insurance .....................................................              4,027,996               2,062,366
           Property management .....................................................                692,482                 549,368
           General and administrative ..............................................                484,961                 448,596
           Amortization expense ....................................................                   --                    55,657
           Other depreciation ......................................................                  5,742                   5,742
           Depreciation of rental property .........................................              9,065,610               5,802,371
           Other ...................................................................                 21,460                 297,706
                                                                                               ------------------------------------

                                   Total expenses ..................................             23,338,525              15,320,693
                                                                                               ------------------------------------

Income before interest and dividend income (expense) ...............................             13,759,390               9,207,685

   Interest and dividend income ....................................................                109,889                  90,874
   Interest expense ................................................................             (4,651,686)             (3,415,448)
                                                                                               ------------------------------------

Income before gains on sales of investments and
   minority interest in operating partnership.......................................              9,217,593               5,883,111

   Gains on sales of investments ...................................................             23,406,233                    --
                                                                                               ------------------------------------

Income before minority interest in operating partnership ...........................             32,623,826               5,883,111

  Minority Interest of unitholders in operating partnership ........................                   --                    50,701
                                                                                               ------------------------------------

Net income .........................................................................           $ 32,623,826            $  5,832,410

Distributions to preferred shareholders ............................................              7,997,200                    --
                                                                                               ------------------------------------

Net income available to common shareholders ........................................           $ 24,626,626            $  5,832,410
                                                                                               ====================================


Net Income per share-basic and diluted .............................................           $       0.65            $       0.15
                                                                                               ====================================

Distributions per common share .....................................................           $       0.27            $       0.26
                                                                                               ====================================

See accompanying notes to consolidated financial statements.

</TABLE>

                                       4

<PAGE>

CORNERSTONE REALTY INCOME TRUST, INC.
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (UNAUDITED)

<TABLE>
<CAPTION>

                                                            Number            Common                 Number
                                                          of Common            Stock              of Preferred
                                                            Shares             Amount                 Shares
                                                        ---------------------------------------------------------
<S>                                                      <C>               <C>                     <C>
Balance at December 31, 1999 ......................      38,712,037        $ 383,969,899           12,650,047

Net income ........................................            --                   --                   --
Cash distributions declared to common
  shareholders ($.27 per share)....................            --                   --                   --
Distributions for Series A Convertible ............            --                   --                   --
   Preferred Stock
Imputed distributions on Series A
   Convertible Preferred Stock.....................            --                   --                   --
Purchase of common stock ..........................      (2,949,000)         (32,100,505)                --
Preferred stock converted to common stock .........          13,829              218,575               (8,743)
Amortization of deferred compensation .............            --                   --                   --
Shares issued through dividend reinvestment plan...         190,619            1,774,505                 --
                                                        ---------------------------------------------------------
Balance at March 31, 2000 .........................      35,967,485        $ 353,862,474           12,641,304
                                                        ---------------------------------------------------------

<CAPTION>

                                                       Preferred                               Distributions            Total
                                                         Stock               Deferred          Greater Than         Shareholders'
                                                         Amount            Compensation          Net Income             Equity
                                                      --------------------------------------------------------------------------
<S>                                                   <C>                   <C>                  <C>               <C>
Balance at December 31, 1999 ......................    $263,656,281             ($72,976)        ($73,187,962)      $574,365,242

Net income .....................................            --                     --              32,623,826         32,623,826
Cash distributions declared to common ..........            --                     --             (10,409,776)       (10,409,776)
  shareholders ($.27 per share)
Distributions for Series A Convertible .........            --                     --              (7,309,567)        (7,309,567)
   Preferred Stock
Imputed distributions on Series A ..............         687,633                   --                (687,633)             --
   Convertible Preferred Stock
Purchase of common stock .......................            --                     --                   --           (32,100,505)
Preferred stock converted to common stock ......        (218,575)                  --                   --                 --
Amortization of deferred compensation ..........            --                     5,524                --                 5,524
Shares issued through dividend reinvestment plan            --                     --                   --             1,774,505
                                                   -----------------------------------------------------------------------------
Balance at March 31, 2000 ......................    $264,125,339                ($67,452)        ($58,971,112)      $558,949,249
                                                   =============================================================================

</TABLE>


See accompanying notes to consolidated financial statements.

                                       5

<PAGE>

CORNERSTONE REALTY INCOME TRUST, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

<TABLE>
<CAPTION>


                                                                                                         Three Months Ended
                                                                                                    March 31,           March 31,
                                                                                                      2000                1999
                                                                                                  ----------------------------------
<S>                                                                                               <C>                 <C>
Cash flow from operating activities:

   Net income ..............................................................................      $  32,623,826       $   5,832,410
   Adjustments to reconcile net income to net cash
   provided by operating activities
     Gain on sale on investments ...........................................................        (23,406,233)               --
     Depreciation and amortization .........................................................          9,071,352           5,863,770
     Minority interest of unitholders in operating partnership .............................               --                50,701
     Amortization of deferred compensation .................................................              5,524              11,523
     Amortization of Apple Realty Group contract purchase ..................................               --               134,798
     Amortization of deferred financing costs ..............................................            117,103              56,625
     Changes in operating assets and liabilities:
       Operating assets ....................................................................        (25,409,463)           (690,590)
       Operating liabilities ...............................................................        (16,389,770)         (1,048,141)
                                                                                                  -------------       -------------

                               Net cash provided by  operating activities ..................        (23,387,661)         10,211,096

Cash flow from investing activities:

   Acquistions of rental property ..........................................................         (8,791,131)               --
   Proceeds from the sale of land ..........................................................               --               764,668
   Net proceeds from the sale of investments ...............................................        128,182,171                --
   Capital improvements ....................................................................         (7,620,367)         (2,524,328)
                                                                                                  -------------       -------------

                               Net cash used in investing activities .......................        111,770,673          (1,759,660)

Cash flow from financing activities:

   Proceeds from short-term borrowings .....................................................         71,517,000           9,231,093
   Repayments of short-term borrowings .....................................................       (123,720,000)         (5,621,000)
   Repayment of mortgage notes .............................................................           (125,382)               --
   Net proceeds from issuance of common stock ..............................................          1,774,505           2,532,068
   Purchase of common stock ................................................................        (32,100,505)               --
   Cash distributions to operating partnership unitholders .................................            (50,190)            (48,330)
   Cash distributions paid to preferred shareholders .......................................         (7,318,052)               --
   Cash distributions paid to common shareholders ..........................................        (10,409,776)        (10,169,836)
                                                                                                  -------------       -------------

                               Net cash provided by (used in) financing activities .........       (100,432,400)         (4,076,005)

                               Increase (decrease) in cash and cash equivalents ............        (12,049,388)          4,375,431

Cash and cash equivalents, beginning of year ...............................................         16,268,336           2,590,364
                                                                                                  -------------       -------------

Cash and cash equivalents, end of period ...................................................      $   4,218,948       $   6,965,795
                                                                                                  =============       =============

Supplemental information:

   Non-cash transactions associated with:

                Accretion of preferred dividends ...........................................            687,633                --

See accompanying notes to consolidated financial statements.

</TABLE>

                                        6

<PAGE>

                      CORNERSTONE REALTY INCOME TRUST, INC
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                                 MARCH 31, 2000


(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 three  months  ended  March 31,  2000 are not  necessarily
      indicative of the results that may be expected for the year ended December
      31, 2000.  These financial  statements  should be read in conjunction with
      the Company's December 31, 1999 Annual Report on Form 10-K.

      The  Company  did not have any  items of  comprehensive  income  requiring
      separate reporting and disclosure for the periods presented.

(2)   INVESTMENT IN RENTAL PROPERTY

      Disposition  of Investments
      On March 10, 2000, the Company closed the sale of 16 properties containing
      3,609 apartment  units. The proceeds of the sale were used to pay down the
      Company's  existing line of credit and fund $35 million tax free exchange.
      At March 31, 2000 $27 million  is  held  in escrow  pending  completion of
      tax free exchange.

      Acquisition
      On March 16,  2000,  the  Company  purchased  The  Enclave at the  Meadows
      Apartments, a 168- unit apartment community,  located in Asheville,  North
      Carolina for a purchase price of $8.8 million. The purchase was structured
      as a tax free exchange using proceeds from the sale described above.

(3)   NOTES PAYABLE

      Unsecured
      During 1999,  the Company's  $175 million  unsecured line of credit with a
      consortium  of six banks was  increased  to $185  million and the maturity
      date was  extended to July 9, 2002.  The  unsecured  line of credit  bears
      interest at one month LIBOR plus 120 basis points.  In connection with the
      sale of the 16 properties in March 2000, the Company repaid $90 million of
      the  Company's  unsecured  line of  credit.  The  Company  had  additional
      borrowings  under its unsecured line of credit of $45 million during 2000.
      At March 31,  2000,  the Company had an unused  borrowing  capacity of $80
      million under the unsecured  line of credit.  In addition,  the Company is
      obligated  to pay  lenders a  quarterly  commitment  fee equal to .20% per
      annum of the  unused  portion  of the  line.  At  March  31,  2000,  total
      unsecured borrowings under these agreements were $105 million.

                                       7

<PAGE>

      During 1999, the Company increased the $5 million unsecured line of credit
      for general  corporate  purposes to $7.5  million.  The general  corporate
      purpose line of credit bears interest at LIBOR plus 120 basis points.  The
      maturity  date is October 31, 2000.  At March 31, 2000,  borrowings  under
      this agreement were $297,000.

(3)   RELATED PARTIES

      Mr. Glade M. Knight,  Chairman and Chief Executive Officer of the Company,
      also served as the Chairman and Chief Executive Officer of Apple. Prior to
      the merger the Company provided advisory,  property management,  and asset
      acquisition  services to Apple.  The  services of the Company  rendered to
      Apple terminated upon the consummation of the merger.

      The Company provided property management services and advisory services to
      Apple.  Property  management  fees were 5% of monthly gross  revenues plus
      certain  expense  reimbursements.  Advisory  fees were .1% to 25% of total
      capital raised by Apple,  depending on the financial performance of Apple.
      The amount of fees received by the Company  under the contracts  described
      above for the three months ended March 31, 1999 was $747,803.

      Prior to the merger,  the Company  provided  real estate  acquisition  and
      disposal services for Apple. Under the terms of the contract,  the Company
      received a real estate commission equal to 2% of the purchase price of the
      properties  acquired.  The Company  amortized  the  purchase  price of the
      contract through the date of the merger.  For the three months ended March
      31, 1999, the Company received  $313,484 in real estate  commissions under
      this  contract  and  amortized  $134,798  of the  purchase  price  of this
      contract.

      The Company received  distributions on its investment in Apple through the
      date of the merger. The Company  recognized  dividend income for the three
      months ended March 31, 1999 of $83,550 on its investment in Apple.

                                       8


<PAGE>


(5)  EARNINGS PER SHARE

      The  following  table  sets  forth the  computation  of basic and  diluted
      earnings per share in accordance with FAS 128:

                                                  Three Months     Three Months
                                                         Ended            Ended
                                                       3/31/00          3/31/99
                                                       -------          -------
      Numerator:
           Net income available to                 $24,626,626     $  5,832,410
           common shareholders
           Numerator for basic and diluted
           earnings per share - income
           available to common stockholders
           after assumed conversion                 24,626,626        5,832,410
      Denominator:
           Denominator for basic
           earnings per share-weighted-
           average shares                           37,997,170       39,315,952
      Effect of dilutive securities:
           Stock options
           Series A Convertible Preferred
           Stock*                                           --               --
      --------------------------------------------------------------------------
      Denominator for diluted earnings
           per share-adjusted weighted-
           average shares and assumed
           conversions                              37,997,170       39,315,952
      --------------------------------------------------------------------------
      Basic and diluted earnings per
           common share                            $      .65      $       0.15
      --------------------------------------------------------------------------

         *Series  A  Convertible  Preferred  Stock was not  included in dilutive
                  earnings  per common  share  calculation  since its effect was
                  anti-dilutive.

(6)      SUBSEQUENT EVENTS

         On May 11, 2000, the Company purchased Greystone Crossing Apartments, a
         408-unit apartment  community located in Charlotte,  North Carolina for
         $26.8 million. The purchase was structured as a tax fee exchange.

                                       9

<PAGE>

ITEM 2.  MANAGEMENT'S  DISCUSSION  AND ANALYSIS OF FINANCIAL  CONDITION  AND
         RESULTS OF OPERATIONS


     This  report  contains  forward-looking  statements  within the  meaning of
     Section 27A of the Securities  Act of 1993, as amended,  and Section 21E of
     the  Securities  Exchange  Act of 1934,  as amended.  Such  forward-looking
     statements include,  without limitation,  statements concerning anticipated
     improvements in financial  operations  from completed and planned  property
     renovations,  and expected benefits from the Company's acquisition of Apple
     Residential  Income Trust  ("Apple").  Such  statements  involve  known and
     unknown risks, uncertainties,  and other factors which may cause the actual
     results,  performance,  or  achievement  of the  Company  to be  materially
     different  from the results of operations or plans  expressed or implied by
     such forward-looking  statements. Such factors include, among other things,
     unanticipated  adverse  business  developments  affecting the Company,  the
     possibility   that  the  merger  with  Apple  will  not  have  the  effects
     anticipated by the Company,  and adverse changes in the real estate markets
     and general and local  economies  and  business  conditions.  Although  the
     Company  believes  that  the  assumptions  underlying  the  forward-looking
     statements contained herein are reasonable, any of the assumptions could be
     inaccurate,  and therefore  there can be no assurance that such  statements
     included in this  quarterly  report will prove to be accurate.  In light of
     the significant  uncertainties  inherent in the forward-looking  statements
     included herein,  the inclusion of such information  should not be regarded
     as a representation  by the Company or any other person that the results or
     conditions  described in such statements or the objectives and plans of the
     Company will be achieved.


     RESULTS OF OPERATIONS

     INCOME AND OCCUPANCY
     The Company's property operations for the three months ended March 31, 2000
     include the results of  operations  for the full  quarter of 71  properties
     acquired to date.  The  operations of the 16  properties  sold on March 10,
     2000 are reflected  through the sale date. The increased  rental income and
     operating  expenses for the first  quarter 2000 over the first quarter 1999
     is primarily due to the effect of the properties acquired through the Apple
     merger in July 1999.

     Substantially  all of the Company's  income is from the rental operation of
     apartment  communities.  Rental income for the first three months increased
     to $37 million in 2000 from $23 million in 1999.  Rental income is expected
     to continue to increase from the impact of planned improvements,  which are
     being made in an effort to improve the properties' marketability,  economic
     occupancies, and rental rates.

     Overall economic  occupancy for the Company's  properties  averaged 93% and
     90% for the  three  months  ended  March 31,  2000 and 1999,  respectively.
     Overall average rental rates for the portfolio  increased 3.8% from $612 at
     March  31,  1999,  to $635 at March 31,  2000.  This  increase  is due to a
     combination  of  increased  rental  rates  from  new  leases  and  property
     renovation as well as the acquisition of the properties of Apple.

                                       10

<PAGE>

     COMPARABLE PROPERTY OPERATIONS
     The  Company's   "same-property"   portfolio  consists  of  65  properties,
     including 27 Apple  properties,  acquired prior to 1999,  containing 16,207
     apartment units owned by the Company or Apple since January 1, 1999. The 16
     properties sold in March 2000 have been eliminated. On a comparative basis,
     the 65  properties  acquired  prior to 1999  provided  rental and operating
     income of $30.1  million and $19 million,  respectively  during the quarter
     ended March 31, 2000 and $28.1  million and $18 million for the same period
     in 1999.  This represents an increase from the quarter ended March 31, 1999
     to the quarter  ended March 31, 2000 of 7% and 8% for rental and  operating
     income, respectively.

     EXPENSES
     Total  expenses for the first three months  increased 52% to $23 million in
     2000 from $15  million  in 1999.  The  increase  is due  largely  to a full
     quarter of expenses of the properties  acquired  through the acquisition of
     Apple on July 23, 1999. The operating expense ratio (the ratio of operating
     expenses, excluding depreciation, amortization, general and administrative,
     and other  expenses,  to rental  income) was 37% for the three months ended
     March 31, 2000 and 1999.

     Depreciation expense for the first three months has increased to $9 million
     in 2000 from $6 million in 1999. The increase is directly  attributable  to
     the addition of the properties acquired through the Apple merger.

     General and  administrative  expenses totaled  $484,961,  or 1.2% of rental
     income for the three months ended March 31, 2000 and $448,596,  or 1.9% for
     the same  period  in 1999.  These  expenses  represent  the  administrative
     expenses  of the  Company  as  distinguished  from  the  operations  of the
     Company's  properties.  The  decrease  in  percentage  of rental  income is
     attributable  to economies of scale  realized  from the Apple merger as the
     Company provided advisory services to Apple prior to the merger.

     INTEREST AND INVESTMENT INCOME AND EXPENSE
     The Company's  interest income increased to $109,889 in 2000 from $7,324 in
     1999 from the investment of its cash and cash reserves due to investment of
     proceeds  from the sale of  properties  pending  tax  free  exchanges.  The
     Company  incurred  interest expense of $4.7 million and $3.4 million during
     the  first  three  months  of 2000 and 1999.  The  increase  is due to debt
     assumed in the Apple merger  coupled with the increase in interest rates on
     the Company's unsecured line of credit.

     INCOME AND EXPENSE FROM RELATIONSHIP WITH APPLE RESIDENTIAL INCOME TRUST
     Prior  to  the  merger,   the  Company  or  affiliates   provided  property
     management,  advisory,  and real estate  brokerage  services for Apple. The
     fees received by the Company from service  contracts with Apple  terminated
     upon consummation of the merger.

     Property  management  fees  charged  to Apple  were 5% of  gross  revenues.
     Advisory fees charged to Apple were .1% to .25% of total capital  raised by
     Apple.  Real estate  commissions were generally 2% of the purchase price of
     each  property  Apple  acquired.  The  Company  received  $747,803  for the
     quarters  ended  March 31,  1999,  for  advisory  and  property  management
     services  rendered to Apple. The Company received  $313,484 for the quarter
     ended March 31, 1999 in real estate commissions under separate contract and
     amortized  $134,798  as of March  31,  1999 of the  purchase  price of this
     contract.

                                       11

<PAGE>


     LIQUIDITY AND CAPITAL RESOURCES

     The Company's primary sources of liquidity are rental income generated from
     the   properties,   proceeds   from  lines  of  credit,   reinvestment   of
     distributions, and proceeds from secured debt.

     The Company  believes  rental  income  generated  from the  properties  and
     borrowings on its line of credit will be sufficient to meet normal property
     operating expenses,  payment of distributions,  capital  improvements,  and
     payment of mortgage  debt. At March 31, 2000,  the Company had $4.2 million
     in cash and cash  equivalents  and $80 million in  availability  under this
     unsecured line of credit.

     In September  1999, the Board of Directors  authorized the repurchase of up
     to $50 million of the Company's  common  shares.  For the three month ended
     March 31, 2000,  the Company  repurchased  2.9 million  common shares at an
     average price of $10.89 per share.

     CAPITAL  REQUIREMENTS
     The  Company  has an ongoing  capital  expenditure  commitment  to fund its
     renovation  program for recently  acquired  properties.  In  addition,  the
     Company is always assessing  potential  acquisitions and intends to acquire
     additional properties during 2000. However, no material commitments existed
     on April  20,  2000,  other  than  for the  Greystone  Crossing  Apartments
     described  below, for the purchase of additional  properties.  The expected
     source to fund the  improvements  and  acquisitions  is from a  variety  of
     sources including equity,  excess flow from operations over  distributions,
     and debt,  provided  by its line of credit.  The Company may seek to obtain
     additional  debt  financing  to meet its  objectives.  Given the  Company's
     current debt level, the Company is confident that it will be able to obtain
     debt financing from a variety of sources, both secured and unsecured.

     The  Company  capitalized  $7.6  million  of  improvements  to its  various
     properties  during the first quarter of 2000. It is  anticipated  that some
     $25 million in additional capital improvements will be completed during the
     next twelve months on the current portfolio.

     Capital  resources  are expected to grow with the future sale of its shares
     and from cash flow from operations.  Approximately 17% of all first quarter
     2000 common stock divided  distributions,  or $1.8 million, were reinvested
     in  additional  common  shares.  In general,  the  Company's  liquidity and
     capital resources are expected to be adequate to meet its cash requirements
     in 2000.

     DISPOSITION OF INVESTMENTS
     As  part  of  its  strategic  repositioning,  the  Company  has  undertaken
     proactive  portfolio  review  analyses  with the  objective of  identifying
     properties  that  no  longer  meet  the  Company's   long-term   investment
     objectives due to location,  age and other factors. The disposition program
     allows the Company to reduce the age of its existing portfolio and increase
     shareholder  value by capturing the hidden  equity in the Company's  mature
     assets and will allow the  Company to reinvest  the net  proceeds in assets
     with higher  growth  potential.  The  proceeds  from the sale paid down $90
     million of the  Company's  existing line of credit and  repurchased  common
     stock.  The remaining  amount of the proceeds from the sale will be used to
     complete tax free exchanges.

                                       12

<PAGE>


    ACQUISITION

     On March 16,  2000,  the  Company  purchased  The  Enclave  at the  Meadows
     Apartments,  a 168-unit apartment  community,  located in Asheville,  North
     Carolina for a purchase price of $8.8 million.  On May 11, 2000 the Company
     purchased  Greystone Crossing  Apartments,  a 408-unit apartment  community
     located in Charlotte,  North Carolina for $26.8 million. The purchases were
     structured as a tax free exchange  using  proceeds from the sale  described
     above.

    NOTES PAYABLE
    The Company has a $185 million  unsecured line of credit with the consortium
    of six banks for which the maturity date is July 9, 2002. The line of credit
    bears interest at one month LIBOR plus 120 basis points.  At March 31, 2000,
    borrowings  under the agreement  were $105 million.  At March 31, 2000,  the
    Company had an unused borrowing  capacity of $80 million under the unsecured
    line of credit.

    The  Company  has  available  a $7.5  million  unsecured  line of credit for
    general corporate purposes. This line of credit bears interest at LIBOR plus
    120 basis  points and the maturity  date is October 31,  2000.  At March 31,
    2000, the Company's borrowings under this agreement were $297,000.






                                       13

<PAGE>


ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes since December 31, 1999. See the information
provided in the Company's  Annual Report on Form 10-K under Item  7-Management's
Discussion and Analysis of Financial Condition and Results of Operations.














                                       14

<PAGE>


PART II, ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

   (a)   Exhibits - Exhibit 27-Financial Data Schedule

   (b)   The following  table lists the reports on Form 8-K filed by the Company
         during the quarter  ended March 31,  2000,  the items  reported and the
         financial statements included in such filings.

<TABLE>
<CAPTION>


         Type and Date
         of Reports                     Items Reported      Financials Statements Filed
<S>                                     <C>                 <C>

         Form 8-K dated and             5                   None
         filed January 18, 2000

         Form 8-K dated and             5,7                 None
         filed February 28, 2000

         Form 8-K dated                 5,7                 None
         March 10, 2000 and filed
         March 14, 2000

         Form 8-K dated                 2                   None
         March 10, 2000 and filed
         March 27, 2000


</TABLE>

                                       15

<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:    5-15-00                   BY:    /s/ Stanley J. Olander
     -------------------                 ------------------------------------
                                   Stanley J. Olander
                                   Vice President and Chief Financial Officer


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