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| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|---|-----------------------------------------------------------------------------------------|

| £ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|--------|------------------------------------------------------------------------------------------|

| CALIFORNIA                                                     | 33-0827161                           |
|----------------------------------------------------------------|--------------------------------------|
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
|                                                           |                                 |
| 1920 MAIN STREET, SUITE 400, IRVINE, CA                        | 92614                                |
| (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                       | (ZIP CODE)                           |

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| PART I.    | FINANCIAL INFORMATION                                                                                                   |   |
|------------|-------------------------------------------------------------------------------------------------------------------------|--------|
|       |                                                                                                                    |   |
| Item 1.    | Financial Statements:                                                                                                   |   |
|       |                                                                                                                    |   |
|       | Condensed Balance Sheets as of March 31, 2009 (unaudited) and December 31, 2008                                         | 3      |
|       |                                                                                                                    |   |
|       | Condensed Statements of Operations for the Three Months Ended March 31, 2009 (unaudited) and March 31, 2008 (unaudited) | 4      |
|       |                                                                                                                    |   |
|       | Condensed Statement of Members’ Capital for the Three Months Ended March 31, 2009 (unaudited)                     | 5      |
|       |                                                                                                                    |   |
|       | Condensed Statements of Cash Flows for the Three Months Ended March 31, 2009 (unaudited) and March 31, 2008 (unaudited) | 6      |
|       |                                                                                                                    |   |
|       | Notes to Condensed Financial Statements (unaudited)                                                                     | 7      |
|       |                                                                                                                    |   |
| Item 2.    | Management’s Discussion and Analysis of Financial Condition and Results of Operations                             | 11     |
|       |                                                                                                                    |   |
| Item 3.    | Quantitative and Qualitative Disclosures About Market Risk                                                              | 13     |
|       |                                                                                                                    |   |
| Item 4(T)  | Controls and Procedures                                                                                                 | 13     |
|       |                                                                                                                    |   |
| PART II.   | OTHER INFORMATION                                                                                                       |   |
|       |                                                                                                                    |   |
| Item 1a.   | Risk Factor                                                                                                             | 14     |
|       |                                                                                                                    |   |
| Item 6.    | Exhibits                                                                                                                | 14     |
|       |                                                                                                                    |   |
| SIGNATURES |                                                                                                                    | 15     |

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CORNERSTONE REALTY FUND, LLC

|                                                                                                                                                                                                                                   |   | March 31,2009 |       |   | December 31,2008 (a) |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------|------------|--------|--------------------------------|--------|
|                                                                                                                                                                                                                                   |   | (unaudited)        |       |   |                           |   |
| ASSETS                                                                                                                                                                                                                                 |   |               |       |   |                           |   |
|                                                                                                                                                                                                                                   |   |               |       |   |                           |   |
| Cash and cash equivalents                                                                                                                                                                                                              |   | $                  | 1,894,000  |   |                           | $      | 2,289,000 |   |
| Investments in real estate                                                                                                                                                                                                             |   |               |       |   |                           |   |   |   |
| Land                                                                                                                                                                                                                                   |   |               | 11,474,000 |   |                           |   | 11,474,000 |   |
| Buildings and improvements, net                                                                                                                                                                                                        |   |               | 19,706,000 |   |                           |   | 19,885,000 |   |
| Intangible lease assets, net                                                                                                                                                                                                           |   |               | 193,000    |   |                           |   | 198,000 |   |
| Intangible in-place lease assets, net                                                                                                                                                                                                  |   |               | 61,000     |   |                           |   | 84,000 |   |
|                                                                                                                                                                                                                                   |   |               | 31,434,000 |   |                           |   | 31,641,000 |   |
|                                                                                                                                                                                                                                   |   |               |       |   |                           |   |   |   |
| Tenant and other receivables, net                                                                                                                                                                                                      |   |               | 273,000    |   |                           |   | 274,000 |   |
| Prepaid expenses and other assets                                                                                                                                                                                                      |   |               | 87,000     |   |                           |   | 36,000 |   |
| Leasing commissions, less accumulated amortization of $416,000 as of March 31, 2009 and $391,000 as of December 31, 2008                                                                                                               |   |               | 147,000    |   |                           |   | 161,000 |   |
|                                                                                                                                                                                                                                   |   |               |       |   |                           |   |   |   |
| Total assets                                                                                                                                                                                                                           |   | $                  | 33,835,000 |   |                           | $      | 34,401,000 |   |
|                                                                                                                                                                                                                                   |   |               |       |   |                           |   |   |   |
| LIABILITIES AND MEMBERS’ CAPITAL                                                                                                                                                                                                 |   |               |       |   |                           |   |   |   |
|                                                                                                                                                                                                                                   |   |               |       |   |                           |   |   |   |
| Liabilities                                                                                                                                                                                                                            |   |               |       |   |                           |   |   |   |
| Accounts payable, accrued and other liabilities                                                                                                                                                                                        |   |               | 230,000    |   |                           |   | 316,000 |   |
| Real estate taxes payable                                                                                                                                                                                                              |   |               | 246,000    |   |                           |   | 219,000 |   |
| Tenant security deposits                                                                                                                                                                                                               |   |               | 276,000    |   |                           |   | 295,000 |   |
| Intangible lease liability, net                                                                                                                                                                                                        |   |               | 25,000     |   |                           |   | 32,000 |   |
| Total liabilities                                                                                                                                                                                                                      |   |               | 777,000    |   |                           |   | 862,000 |   |
|                                                                                                                                                                                                                                   |   |               |       |   |                           |   |   |   |
| Members’ capital (100,000 units authorized as of  March 31, 2009 and December 31, 2008;  99,245 and 99,350 units issued and outstanding as of  March 31, 2009 and December 31, 2008, respectively) |   |               | 33,058,000 |   |                           |   | 33,539,000 |   |
|                                                                                                                                                                                                                                   |   |               |       |   |                           |   |   |   |
| Total liabilities and members’ capital                                                                                                                                                                                           |   | $                  | 33,835,000 |   |                           | $      | 34,401,000 |   |

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CORNERSTONE REALTY FUND, LLC

|                                                 |   | Three Months Ended |    |
|------------------------------------------------------|--------|--------------------|---------|
|                                                 |   | March 31,     |    |
|                                                 |   | 2009               |    |   | 2008 |   |
|                                                 |   |               |    |   |   |   |
| Revenues                                             |   |               |    |   |   |   |
| Rental revenues                                      |   | $                  | 773,000 |   |   | $ | 849,000 |   |
| Tenant reimbursements and other income               |   |               | 150,000 |   |   |   | 181,000 |   |
|                                                 |   |               | 923,000 |   |   |   | 1,030,000 |   |
| Expenses                                             |   |               |    |   |   |   |   |   |
| Property operating and maintenance                   |   |               | 202,000 |   |   |   | 230,000 |   |
| Property taxes                                       |   |               | 143,000 |   |   |   | 145,000 |   |
| General and administrative                           |   |               | 79,000  |   |   |   | 68,000 |   |
| Depreciation and amortization                        |   |               | 238,000 |   |   |   | 264,000 |   |
|                                                 |   |               | 662,000 |   |   |   | 707,000 |   |
|                                                 |   |               |    |   |   |   |   |   |
| Interest income                                      |   |               | 1,000   |   |   |   | 23,000 |   |
|                                                 |   |               |    |   |   |   |   |   |
| Net income                                           |   | $                  | 262,000 |   |   | $ | 346,000 |   |
|                                                 |   |               |    |   |   |   |   |   |
| Net income allocable to managing member              |   | $                  | 26,000  |   |   | $ | 35,000 |   |
|                                                 |   |               |    |   |   |   |   |   |
| Net income allocable to unit holders                 |   |  $            | 236,000 |   |   | $ | 311,000 |   |
|                                                 |   |               |    |   |   |   |   |   |
| Per unit amounts:                                    |   |               |    |   |   |   |   |   |
| Basic and diluted income allocable to unit holders   |   | $                  | 2.38    |   |   | $ | 3.12 |   |
|                                                 |   |               |    |   |   |   |   |   |
| Basic and diluted weighted average units outstanding |   |               | 99,333  |   |   |   | 99,683 |   |

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CORNERSTONE REALTY FUND, LLC

| Balance, December 31, 2008            |   | $      | 33,539,000 |   |
|---------------------------------------|--------|--------|------------|--------|
|                                  |   |   |       |   |
| Cash distributions to unit holders    |   |   | (626,000   | )      |
| Cash distributions to managing member |   |   | (81,000    | )      |
| Units repurchased and retired         |   |   | (36,000    | )      |
| Net income                            |   |   | 262,000    |   |
|                                  |   |   |       |   |
| Balance, March 31, 2009               |   | $      | 33,058,000 |   |

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CORNERSTONE REALTY FUND, LLC

|                                                                             |   | Three Months Ended |      |
|----------------------------------------------------------------------------------|--------|--------------------|-----------|
|                                                                             |   | March 31,     |      |
|                                                                             |   | 2009               |      |   | 2008 |   |
| OPERATING ACTIVITIES                                                             |   |               |      |   |   |   |
| Net income                                                                       |   | $                  | 262,000   |   |   | $ | 346,000 |   |
| Adjustments to reconcile net income to net cash provided by operating activities |   |               |      |   |   |   |   |   |
| Depreciation and amortization                                                    |   |               | 238,000   |   |   |   | 264,000 |   |
| Changes in operating assets and liabilities                                      |   |               |      |   |   |   |   |   |
| Other assets                                                                     |   |               | (62,000   | ) |   |   | (81,000 | ) |
| Accounts payable, accrued and other liabilities                                  |   |               | (84,000   | ) |   |   | (27,000 | ) |
|                                                                             |   |               |      |   |   |   |   |   |
| Net cash provided by operating activities                                        |   |               | 354,000   |   |   |   | 502,000 |   |
|                                                                             |   |               |      |   |   |   |   |   |
| INVESTING ACTIVITIES                                                             |   |               |      |   |   |   |   |   |
| Investments in real estate                                                       |   |               | (6,000    | ) |   |   | (38,000 | ) |
|                                                                             |   |               |      |   |   |   |   |   |
| Net cash used in investing activities                                            |   |               | (6,000    | ) |   |   | (38,000 | ) |
|                                                                             |   |               |      |   |   |   |   |   |
| FINANCING ACTIVITIES                                                             |   |               |      |   |   |   |   |   |
| Cash distributions to unit holders                                               |   |               | (626,000  | ) |   |   | (628,000 | ) |
| Cash distributions to managing member                                            |   |               | (81,000   | ) |   |   | (44,000 | ) |
| Units repurchased and retired                                                    |   |               | (36,000   | ) |   |   | (32,000 | ) |
|                                                                             |   |               |      |   |   |   |   |   |
| Net cash used in financing activities                                            |   |               | (743,000  | ) |   |   | (704,000 | ) |
|                                                                             |   |               |      |   |   |   |   |   |
| Net decrease in cash                                                             |   |               | (395,000  | ) |   |   | (240,000 | ) |
|                                                                             |   |               |      |   |   |   |   |   |
| Cash and cash equivalents at beginning of period                                 |   |               | 2,289,000 |   |   |   | 4,201,000 |   |
|                                                                             |   |               |      |   |   |   |   |   |
| Cash and cash equivalents at end of period                                       |   | $                  | 1,894,000 |   |   | $ | 3,961,000 |   |
|                                                                             |   |               |      |   |   |   |   |   |
| Supplemental disclosure of non-cash financing and investing activities:          |   |               |      |   |   |   |   |   |
|                                                                             |   |               |      |   |   |   |   |   |
| Cash distribution declared not paid                                              |   | $                  | -         |   |   | $ | 996,000 |   |

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CORNERSTONE REALTY FUND, LLC

| 1. | Organization and Business |
|----|---------------------------|

|   | — | CIP generally has complete and exclusive discretion in the management and control of our operations; however, unit holders holding the majority of all outstanding and issued units have certain specified voting rights which include the removal and replacement of the Managing Member. |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | — | Net Cash Flow from Operations, as defined, will be distributed 90% to the unit holders and 10% to the Managing Member until the unit holders have received either an 8% or 12% cumulative, non-compounded annual return on their Invested Capital Contributions, as defined.  The 12% return applies to specified early investors for the twelve-month period subsequent to the date of their Invested Capital Contributionsand is in lieu of the 8% return during that period. |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | — | Net Sales Proceeds, as defined, will be distributed first, 100% to the unit holders in an amount equal to their Invested Capital Contributions; then, 90% to the unit holders and 10% to the Managing Member until the unit holders have received an amount equal to the unpaid balance of their aggregate cumulative, non-compounded annual return on their Invested Capital Contributions; and thereafter, 50% to the unit holdersand 50% to the Managing Member. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | — | Net Income, as defined, is allocated first, 10% to the Managing Member and 90% to the unit holders until Net Income allocated equals cumulative Net Losses, as defined, previously allocated in such proportions; second, in proportion to and to the extent of Net Cash Flow from Operations and Net Sales Proceeds previously distributed to the members, exclusive of distributions representing a return of Invested Capital Contributions;and then 50% to the Managing Member and 50% to the unit holders. |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | — | Net Loss is allocated first, 50% to the Managing Member and 50% to the unit holders, until Net Loss allocated equals cumulative Net Income previously allocated in such proportions; then remaining Net Loss is allocated 10% to the Managing Member and 90% to the unit holders. |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | — | All allocations and distributions to the unit holders are to be pro rata in proportion to their ownership shares. |
|--------|---------|-------------------------------------------------------------------------------------------------------------------|

|   | — | Effective February 22, 2007, our Operating Agreement was amended to permit repurchase of units on such terms and conditions as the Managing Member may determine. |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2. | Summary of Significant Accounting Policies |
|----|--------------------------------------------|

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|                               |   | Lease Intangibles |    |
|------------------------------------|--------|-------------------|---------|
| April 1, 2009 to December 31, 2009 |   | $                 | 46,000  |   |
| 2010                               |   |              | 22,000  |   |
| 2011                               |   |              | 18,000  |   |
| 2012                               |   |              | 18,000  |   |
| 2013                               |   |              | 13,000  |   |
| Thereafter                         |   |              | 112,000 |   |
| Total                              |   | $                 | 229,000 |   |

|                                                         |   | Land   |       |   | Buildings andImprovements |   |       | IntangibleLease Assets |   |   | In-PlaceLease Assets |   |   | IntangibleLeaseLiability |     |
|--------------------------------------------------------------|--------|--------|------------|--------|---------------------------|--------|------------|------------------------|--------|--------|----------------------|--------|--------|--------------------------|----------|
| Investments in real estate and related lease intangibles     |   | $      | 11,474,000 |   |                      | $      | 22,517,000 |                   |   | $      | 365,000              |   |   | $                        | 894,000  |   |   | $ | (155,000 | ) |
|                                                         |   |   |       |   |                      |   |       |                   |   |   |                 |   |   |                     |     |   |   |   |   |   |
| Less: accumulated depreciation and amortization              |   |   | —    |   |                      |   | (2,811,000 | )                      |   |   | (172,000             | )      |   |                     | (833,000 | ) |   |   | 130,000 |   |
| Net investments in real estate and related lease intangibles |   | $      | 11,474,000 |   |                      | $      | 19,706,000 |                   |   | $      | 193,000              |   |   | $                        | 61,000   |   |   | $ | (25,000 | ) |

|                                                         |   | Land   |       |   | Buildings andImprovements |   |       | IntangibleLease Assets |   |   | In-PlaceLeaseAssets |   |   | IntangibleLeaseLiability |     |
|--------------------------------------------------------------|--------|--------|------------|--------|---------------------------|--------|------------|------------------------|--------|--------|---------------------|--------|--------|--------------------------|----------|
| Investments in real estate                                   |   | $      | 11,779,000 |   |                      | $      | 23,829,000 |                   |   | $      | 550,000             |   |   | $                        | 894,000  |   |   | $ | (155,000 | ) |
|                                                         |   |   |       |   |                      |   |       |                   |   |   |                |   |   |                     |     |   |   |   |   |   |
| Less: impairment charge                                      |   |   | (305,000   | )      |                      |   | (1,318,000 | )                      |   |   | (185,000            | )      |   |                     | —  |   |   |   | — |   |
| Investment in real estate values                             |   |   | 11,474,000 |   |                      |   | 22,511,000 |                   |   |   | 365,000             |   |   |                     | 894,000  |   |   |   | (155,000 | ) |
| Less: accumulated depreciation and amortization              |   |   | —    |   |                      |   | (2,626,000 | )                      |   |   | (167,000            | )      |   |                     | (810,000 | ) |   |   | 123,000 |   |
| Net investments in real estate and related lease intangibles |   | $      | 11,474,000 |   |                      | $      | 19,885,000 |                   |   | $      | 198,000             |   |   | $                        | 84,000   |   |   | $ | (32,000 | ) |

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| 3. | Subsequent Event |
|----|------------------|

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

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Item 3.  Quantitative and Qualitative Disclosures About Market Risk

Item 4(T).  Controls and Procedures

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| Item 1A. | Risk Factor |
|----------|-------------|

| Item 6. | Exhibits |
|---------|----------|
|    |     |   |
|    | 31.1     | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|    |     |   |
|    | 31.2     | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|    |     |   |
|    | 32       | Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. §1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |

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SIGNATURES

|   | CORNERSTONE REALTY FUND, LLC |
|--------|------------------------------|
|   |                         |   |
|   | By:                          | CORNERSTONE INDUSTRIAL PROPERTIES, LLC |
|   |                         | its Managing Member |
|   |                         |   |
|   |                         | By: | CORNERSTONE VENTURES, INC. |
|   |                         |   | its Manager |
|   |                         |   |   |   |
|   |                         |   | By: | /s/ TERRY G. ROUSSEL |   |
|   |                         |   |   | Terry G. Roussel, President |
|   |                         |   |   | (Principal Executive Officer) |
|   |                         |   |   |   |
|   |                         |   | By: | /s/ SHARON C. KAISER |   |
|   |                         |   |   | Sharon C. Kaiser, |
|   |                         |   |   | Chief Financial Officer |
|   |                         |   |   | (Principal Financial Officer and |
|   |                         |   |   | Principal Accounting Officer) |

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