EXHIBIT 10.8


                              EMPLOYMENT AGREEMENT

     This EMPLOYMENT  AGREEMENT  ("Agreement")  is made as of September 1, 1996,
between  CORNERSTONE  REALTY  INCOME TRUST  INC.,(the  "Company"),  and GLADE M.
KNIGHT (the "Employee").

                                    RECITALS

     A. The Company is in the  business of buying and  managing  commercial  and
residential real estate properties.

     B.  The  Employee  has  extensive  knowledge  in  various  aspects  of this
business, and has been employed by the Company for some time.

     C. The Company wishes to continue its relationship  with the Employee,  and
both parties desire to reduce their agreement concerning employment to writing.

     NOW,  THEREFORE,  in  consideration  of the  foregoing  and the  agreements
contained herein, the parties hereto agree as follows:

     1.  Employment.  The Company hereby employs the Employee as Chief Executive
Officer, and the Employee hereby accepts such employment for a period of one (1)
year beginning on September 1, 1996 and terminating on August 31, 1997 or unless
terminated  sooner as provided herein. By notice sent to the Employee before the
expiration of this Agreement,  the Company may extend the term of this Agreement
for up to four (4) additional one(1)-year terms.

     2. Duties. During his employment the Employee shall hold such positions and
perform  such  services  as may be  assigned  to him  from  time  to time by the
Chairman of the Board or the Board of  Directors  of the  Company.  The Employee
shall  report  to the  Board  of  Directors  or  such  other  officer  as may be
designated  from  time to time by the Board of  Directors.  The  Employee  shall
devote as much of his  attention  and energies to the business of the Company as
is reasonably required in his judgment and that of the Board of Directors.

     3. Compensation.

         (a) The Employee  shall be compensated on the basis of an annual salary
of $210,000,  which shall be payable in monthly or more frequent installments in
accordance  with the Company's  standard  payroll  practices.  The Company shall
review the Employee's  performance at the end of each fiscal year of the Company
and, in its sole discretion and based on the Employee's  performance  and/or the
financial condition of the Company,  may either maintain or increase his salary.
Any such change in the salary of the Employee shall



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not affect the other terms and conditions of this Agreement,  which shall remain
in full force and effect.

         (b) In addition to the salary set forth in Section  3(a),  the Employee
shall be eligible to receive an annual  bonus to be  determined  by the Board of
Directors in accordance with the incentive  compensation  program or stock award
or stock option program as may be in effect from time to time during the term of
the Employee's employment for which he is eligible.

     4. Benefits.  The Company shall provide the Employee with  vacation,  group
life  insurance,  group  medical  insurance  and other such  benefits  as may be
consistent with the Company's policies  applicable to those employees of similar
rank and position.  The Company may from time to time add to, reduce,  eliminate
or otherwise modify those benefits at its discretion as provided by law.

     5.  Business  Expenses.  The  Company  shall  reimburse  the  Employee  for
reasonable and necessary  business  expenses,  ancillary expenses for travel and
similar  items,  incurred or expended by the Employee in the  performance of his
duties hereunder.  Such reimbursement  shall be in accordance with the Company's
policy and procedures  governing  reimbursement  of such expenses,  which may be
altered or modified from time to time in the Company's sole discretion.

     6. Covenant Not to Compete or Interfere.

         (a) The Employee  agrees that during the term of his employment and for
a period of one (1) year  thereafter if the Employee  terminates his employment,
he will not:

              (i) directly or indirectly,  in the same or a similar  capacity as
that with the Company,  be employed by, affiliated with, direct the business of,
or act on behalf of, a business  that  competes  with the  Company in  Virginia,
North Carolina, or South Carolina.

              (ii) solicit,  sell or attempt to sell any product involved in the
Company's  business to any  customer  or  prospect of the Company  with whom the
Employee had dealings or material  contact  during the course of his  employment
with the Company; or

              (iii) solicit,  induce or attempt to solicit or induce, any person
employed by the Company to leave such employment for employment with a competing
business.

         (b) It is the intention of the parties that this Agreement  provide the
Company the maximum  protection  possible in the  geographic  areas in which the
Company does business and therefore has legitimate business interests.  However,
the parties in no way intend to include a provision which contravenes the public
policy of any state.  If, at the time of enforcement of this paragraph,  a court
should hold the duration, scope or area of restriction

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stated herein  unreasonable under the circumstances  then existing,  the parties
agree that the court may enforce the  restrictive  covenant set forth in Section
6(a) to the extent it deems reasonable.

         (c)  Notwithstanding  the  above  provisions  of this  Section  6,  the
Employee  shall  have the right to  perform  his  duties as  General  Partner of
various  real estate  partnerships  in which he is currently a partner as of the
date of this  Agreement  and to pursue  other  ventures,  including  real estate
ventures with David Lerner  Associates,  Inc.  (other than ventures that compete
with the Company in Virginia, North Carolina, or South Carolina).

     7.  Confidentiality.  The  Employee  agrees  that,  during  the term of his
employment  and  thereafter,  he  will  not  use or  allow  others  to  use  any
confidential  or  proprietary  information  of the  Company  (in  whatever  form
received or proposed to be used) in any  business or venture if the use would or
could be expected to have any material  detrimental effect on the Company or its
business,  results of operations,  financial  condition,  reputation or affairs,
whether immediately or at any time in the future.

     8.  Termination.  Unless  extended as provided in Section 1, this Agreement
shall terminate automatically on August 31, 1997 and may be sooner terminated as
follows:

         (a)  The  Company  may  terminate  the  Employee's  employment  and its
obligations under this Agreement in the event of the disability of the Employee.
For purposes of this Agreement, "disability" means the inability of the Employee
to  perform  the  essential   functions  of  his  position,   after   reasonable
accommodation in accordance with the Americans with Disabilities Act, because of
a medically  determinable physical or mental impairment which can be expected to
result in death or to continue for a period of at least six consecutive  months,
or because any such  condition  has  continued  for a period of six  consecutive
months.  The Company shall give the Employee or his representative 30 days prior
written  notice of its decision to  terminate  his  employment  pursuant to this
provision,  and upon any such  termination the Company shall pay the Employee or
his  representative,  as the case may be, an amount  equal to his then  existing
annual salary in a one time lump sum payment. Thereafter, the Company shall have
no further  obligations to the Employee under this Agreement other than for such
benefits as it may be required to provide under an applicable benefits policy.

         (b)  The  Company  may  terminate  the  Employee's  employment  and its
obligations  under this  Agreement  at any time  without  notice for cause.  For
purposes  of this  Agreement,  "cause"  means (i) the  Employee's  continued  or
deliberate  neglect  of his  duties;(ii)  willful  misconduct  by  the  Employee
injurious to the Company,  whether  monetary or otherwise;  (iii) the Employee's
violation of any code or standard of ethics generally applicable to employees of
the Company;  (iv) the  Employee's  active  disloyalty  to the Company;  (v) the
Employee's  conviction of a felony; (vi) the Employee's habitual  drunkenness or
drug abuse; (vii) the Employee's excessive absenteeism unrelated to a disability
as described  above; or (viii) the Employee's  breach of this Agreement.  If the
Company  terminates the Employee's  employment  pursuant to this  provision,  it
shall have no further obligation to the Employee

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under this  Agreement  other than for such  benefits  as it may be  required  to
provide under an applicable benefits policy.

         (c) This Agreement  shall terminate  automatically  upon the Employee's
death.   In  this  event,   the  Company  shall  pay  the  Employee's   personal
representative  an amount equal to his then existing annual salary in a one-time
lump sum payment within 30 days of his death.  The Company shall have no further
obligations to the Employee under this Agreement other than for such benefits as
it may be required to provide under an applicable benefits policy.

     9. Survival of Obligations.  The obligations of the Employee under Sections
6 and 7 of this  Agreement  shall survive the  termination of his employment and
this Agreement,  regardless of the reason for or method of termination.  Each of
the provisions in these Sections  shall be  enforceable  independently  of every
other provision,  and the existence of any claim or cause of action the Employee
may have against the Company, whether predicated on this Agreement or otherwise,
shall not  constitute  a defense to the  enforcement  of these  Sections  by the
Company.

     10. Enforcement and Severability.

         (a) In the event of a breach or  threatened  breach by the  Employee of
any of the  provisions  of this  Agreement,  the Company shall be entitled to an
injunction  restraining the Employee from breaching the same.  Nothing contained
herein  shall be construed as  prohibiting  the Company from  pursuing any other
remedies  available to it for such breach or  threatened  breach,  including the
recovery of damages from the  Employee.  The Employee  agrees to pay the Company
all its attorney fees incurred in enforcing its rights under this Agreement.

         (b) If any provision of this Agreement is deemed void or unenforceable,
such provision shall not be deemed part of this Agreement, which otherwise shall
remain in full force and effect.

         (c) A waiver  by the  Company  of a  breach  of any  provision  of this
Agreement by the  Employee  shall not operate or be construed as a waiver of any
subsequent breach by the Employee.

     11. GOVERNING LAW, JURISDICTION AND WAIVER OF JURY TRIAL.

         (a) THIS  AGREEMENT  SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF VIRGINIA.

         (b) THE PARTIES  AGREE THAT ANY AND ALL CAUSES OF ACTION  ARISING UNDER
THIS AGREEMENT BY AND BETWEEN THEM SHALL ONLY


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HAVE JURISDICTION AND VENUE IN THE CIRCUIT COURT OF HENRICO COUNTY, COMMONWEALTH
OF VIRGINIA.  THE PARTIES FURTHER CONSENT TO THE  JURISDICTION AND VENUE OF THAT
COURT FOR THE  RESOLUTION  OF SUCH  CAUSES  OF ACTION  UPON  PROPER  SERVICE  OF
PROCESS.

         (c) THE PARTIES DESIRE TO AVOID THE ADDITIONAL TIME AND EXPENSE RELATED
TO A JURY TRIAL OF ANY DISPUTES  ARISING UNDER THIS  AGREEMENT.  THEREFORE,  THE
PARTIES WAIVE THE RIGHT TO A TRIAL BY JURY OF ANY CLAIM OR COUNTERCLAIM  BROUGHT
BY EITHER PARTY AGAINST THE OTHER  ARISING OUT OF OR IN ANY WAY  CONNECTED  WITH
THIS AGREEMENT. THE PARTIES ACKNOWLEDGE AND AGREE THAT THIS WAIVER IS KNOWINGLY,
FREELY AND VOLUNTARILY GIVEN, IS DESIRED BY BOTH PARTIES, AND IS IN THE INTEREST
OF BOTH PARTIES.

     12.  Notices.  Any notice  required  or  permitted  to be given  under this
Agreement shall be sufficient if in writing and given by telex,  fax,  telegram,
telecopy,  hand-delivery or by first class mail, in the case of the Employee, to
either his office or personal  residence,  or in the case of the Company, to the
Chief Executive Officer or Chairman.

     13.  Assignment.  This  Agreement  is  personal  in  nature  and may not be
assigned by the Company  without the  written  consent of the  Employee.  In the
event of the sale to any person,  partnership,  corporation  or other  entity of
substantially  all the assets of the Company,  the Employee  may, at his option,
consent to the  assignment  of this  Agreement  or receive at closing a lump sum
payment equal to three times his then current annual  compensation  to terminate
this Agreement.

     14. Parachute Tax.

         (a) In the event that the Employee would, except for this paragraph, be
subject to a tax pursuant to Section 4999 of the Internal  Revenue Code of 1986,
as amended (the  "Code"),  as a result of  receiving  "parachute  payments"  (as
defined  in  Section  280G(b)(2)(A)  and  (d)(3) of the Code)  pursuant  to this
Agreement or any other arrangements  between the Company and the Employee,  or a
deduction  would  not be  allowed  to the  Company  for all or any  part of such
payments  by reason of  Section  280G(a)  of the Code,  such  payments  shall be
reduced so that the aggregate  "present value" (as defined in Section 280G(d)(4)
of the Code) of such  payments  is an amount  equal to one  dollar  less than an
amount equal to three times the Employee's "base amount," (as defined in Section
280G(b)(3)(a)  and  (d)(1)  and  (2) of the  Code).  To  achieve  such  required
reduction  in  aggregate  present  value,  the Employee  shall  determine  which
parachute payments shall be reduced and the amount of each reduction.  To enable
the Employee to make such determination,  the Company shall provide the Employee
with such information as is reasonably necessary for such determination.

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         (b) Prior to making any payment under this Section 14, either party may
request a determination as to whether such payment would constitute a "parachute
payment,"  and,  if so,  the  amount by which the  payment  must be  reduced  in
accordance  herewith.  If such a  determination  is requested,  it shall be made
promptly,  at the Company's expense,  by independent tax counsel selected by the
Company and approved by the Employee (which  approval shall not  unreasonably be
withheld). The determination of such tax counsel shall be conclusive and binding
on the parties.  The Company shall provide such  information  as tax counsel may
reasonably request,  and such counsel may engage accountants or other experts at
the  Company's  expense to the extent that they deem  necessary  or advisable to
enable them to reach a determination.

     15. Entire Agreement.  This instrument contains the entire agreement of the
parties,  supersedes any prior  employment or consulting  agreement  between the
parties and may be changed only by an  agreement in writing  signed by the party
against  whom  enforcement  of any waiver,  change,  modification,  extension or
discharge is sought.  Both parties  acknowledge that they have read these terms,
have had the opportunity to consult counsel, and fully understand and freely and
voluntarily agree to the provisions set forth herein.

     16. Relationship to Other  Transactions.  This Agreement is entered into in
anticipation  of and subject to the  completion  of certain  other  transactions
involving  the  proposed  acquisition  by  the  Company  of  certain  assets  of
Cornerstone Management Group, Inc.,  Cornerstone Advisors,  Inc. and Cornerstone
Realty Group,  Inc., which  transactions are designated to permit the Company to
become a "self-administered REIT" (the "Self- Administration Transactions").  If
such  Self-Administration  Transactions are not closed by October 31, 1996, this
Agreement shall automatically be terminated and of no further force or effect.

     IN WITNESS WHEREOF,  the parties have executed this Agreement as of the day
first above written.

                                                     CORNERSTONE REALTY INCOME
                                                     TRUST, INC.

                                                     By: /s/ Glade M. Knight
                                                     Name:  Glade M. Knight
                                                     Title: Chairman

                                                     /s/ Glade M. Knight
                                                         Employee


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