EXHIBIT 10.20
                                4,500,000 Shares

                      Cornerstone Realty Income Trust, Inc.

                                  Common Shares

                                 (No Par Value)

                             UNDERWRITING AGREEMENT

                                                                  April 18, 1997

Alex. Brown & Sons Incorporated
Branch, Cabell & Co., Inc.
Freidman, Billings, Ramsey & Co., Inc.
Interstate/Johnson Lane Corporation
c/o Alex. Brown & Sons Incorporated
135 East Baltimore Street
Baltimore, Maryland 21202

Ladies and Gentlemen:

         Cornerstone  Realty Income  Trust,  Inc., a Virginia  corporation  (the
"Company"),  subject to the terms and conditions stated herein, proposes to sell
to the several underwriters (the  "Underwriters")  named in Appendix I hereto an
aggregate of 4,500,000 shares of the Company's Common Shares,  no par value (the
"Firm Shares").  The respective amounts of the Firm Shares to be so purchased by
the  several  Underwriters  are set forth  opposite  their  names in  Appendix I
hereto.  The  Company  also  proposes  to sell at the  Underwriters'  option  an
aggregate of up to 675,000 additional shares of the Company's Common Shares (the
"Optional Shares") as set forth below.

         You have advised the Company (a) that you are  authorized to enter into
this Agreement and (b) that the several  Underwriters  are acting  severally and
not  jointly,  to purchase  the number of Firm Shares set forth  opposite  their
respective  names in  Appendix  I, plus their pro rata  portion of the  Optional
Shares if you elect to exercise  the  over-allotment  option in whole or in part
for the accounts of the several  Underwriters.  The Firm Shares and the Optional
Shares  (to the  extent  the  aforementioned  option is  exercised)  are  herein
collectively called the "Shares."


<PAGE>

         In consideration of the mutual  agreements  contained herein and of the
interests of the parties in the transactions  contemplated  hereby,  the parties
hereto agree as follows:

          1.      REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
                  ---------------------------------------------
                  The Company  represents  and warrants to, and agrees with, the
         Underwriters that:

                  (a) A registration  statement on Form S-3 (File No. 333-23693)
         with respect to the Shares has been  carefully  prepared by the Company
         in conformity  with the  requirements of the Securities Act of 1933, as
         amended  (the  "Act"),  and the Rules and  Regulations  (the "Rules and
         Regulations")   of  the   Securities  and  Exchange   Commission   (the
         "Commission")  thereunder and has been filed with the  Commission.  The
         Company  has  complied  with the  conditions  for the use of Form  S-3.
         Copies  of  such  registration  statement,   including  any  amendments
         thereto, the preliminary  prospectuses (meeting the requirements of the
         Rules and Regulations)  contained  therein and the exhibits,  financial
         statements  and  schedules,   as  finally  amended  and  revised,  have
         heretofore  been  delivered  by the Company to you.  Such  registration
         statement,  together  with  any  registration  statement  filed  by the
         Company  pursuant to Rule 462 (b) of the Act, herein referred to as the
         "Registration   Statement,"  which  shall  be  deemed  to  include  all
         information  omitted therefrom in reliance upon Rule 430A and contained
         in the Prospectus referred to below, has become effective under the Act
         and no post-effective  amendment to the Registration Statement has been
         filed as of the date of this Agreement. "Prospectus" means (a) the form
         of prospectus  first filed with the Commission  pursuant to Rule 424(b)
         or (b) the last  preliminary  prospectus  included in the  Registration
         Statement  filed  prior  to the  time it  becomes  effective  or  filed
         pursuant to Rule 424(a)  under the Act that is delivered by the Company
         to the Underwriters for delivery to purchasers of the Shares,  together
         with the term sheet or abbreviated term sheet filed with the Commission
         pursuant to Rule 424(b)(7) under the Act. Each  preliminary  prospectus
         included  in the  Registration  Statement  prior to the time it becomes
         effective  is herein  referred to as a  "Preliminary  Prospectus."  Any
         reference  herein  to  the  Registration  Statement,   any  Preliminary
         Prospectus or to the Prospectus shall be deemed to refer to and include
         any documents  incorporated by reference  therein,  and, in the case of
         any reference herein to any Prospectus, also shall be deemed to include
         any documents incorporated by reference therein, and any supplements or
         amendments thereto,  filed with the Commission after the date of filing
         of the  Prospectus  under  Rules  424(b)  or  430A,  and  prior  to the
         termination of the offering of the Shares by the Underwriters.

                  (b)  The  Company  has  been  duly  organized  and is  validly
         existing  as a  corporation  in good  standing  under  the  laws of the
         Commonwealth of Virginia, with corporate power and authority to own its
         properties  and conduct its business as  described in the  Registration
         Statement. Each of the subsidiaries of the Company as

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<PAGE>

         listed in Schedule II hereto  (collectively,  the  "Subsidiaries")  has
         been duly  organized and is validly  existing as a corporation  in good
         standing under the laws of the jurisdiction of its incorporation,  with
         corporate  power  and  authority  to own or lease  its  properties  and
         conduct its business as described in the  Registration  Statement.  The
         Subsidiaries  are the only  subsidiaries,  direct or  indirect,  of the
         Company. The Company and each of the Subsidiaries are duly qualified to
         transact  business in all  jurisdictions  in which the conduct of their
         business requires such qualification  except where the failure to be so
         qualified  would  have a  material  adverse  effect  on  the  financial
         position,  results of  operations  or  business  of the Company and its
         subsidiaries  taken  as  a  whole  ("Material  Adverse  Effect").   The
         outstanding  shares of capital stock of each of the  Subsidiaries  have
         been  duly   authorized  and  validly   issued,   are  fully  paid  and
         non-assessable  and, all Preferred Shares of the Subsidiaries are owned
         by the Company and all Common Shares of the  Subsidiaries  are owned by
         the  Company  and  Glade  M.  Knight,  free  and  clear  of all  liens,
         encumbrances  and equities  and claims;  and except as described in the
         Registration  Statement,  no  options,  warrants  or  other  rights  to
         purchase,  agreements or other  obligations to issue or other rights to
         convert  any  obligations  into  shares of capital  stock or  ownership
         interests in the Subsidiaries are outstanding.  The Company's Preferred
         Shares of the  Subsidiaries  represents 95% of  the equity interests in
         each Subsidiary and except as required by law have no voting rights.

                  (c)  The  Company  is   organized  in   conformity   with  the
         requirements for  qualification as a real estate investment trust under
         the Internal  Revenue Code of 1986,  as amended (the  "Code"),  and the
         Company's  method of operation will enable it to meet the  requirements
         for taxation as a real estate investment trust under the Code.

                  (d) The  outstanding  Common  Shares of the Company  have been
         duly   authorized   and   validly   issued   and  are  fully  paid  and
         non-assessable;  the Shares to be issued and sold by the  Company  have
         been  duly  authorized  and when  issued  and paid for as  contemplated
         herein will be validly issued,  fully paid and  non-assessable;  and no
         preemptive  rights of  stockholders  exist  with  respect to any of the
         Shares  or the  issue  and sale  thereof.  Neither  the  filing  of the
         Registration  Statement  nor the  offering  or sale  of the  Shares  as
         contemplated  by this  Agreement  gives rise to any rights,  other than
         those  which have been  waived or  satisfied,  for or  relating  to the
         registration of any Common Shares.

                  (e)   The    information   set   forth   under   the   caption
         "Capitalization"  in the  Prospectus  is true and  correct.  All of the
         Shares conform to the description thereof contained in the Registration
         Statement.  The form of  certificates  for the Shares  conforms  to the
         corporate law of the jurisdiction of the Company's incorporation.



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<PAGE>

                  (f) The  Commission  has not  issued  an order  preventing  or
         suspending the use of any Prospectus  relating to the proposed offering
         of  the  Shares  nor  instituted  proceedings  for  that  purpose.  The
         Registration  Statement contains, and the Prospectus and any amendments
         or supplements thereto will contain,  all statements which are required
         to be stated therein by, and will conform to, the  requirements  of the
         Act and the  Rules  and  Regulations.  The  documents  incorporated  by
         reference  in the  Prospectus,  at the time filed  with the  Commission
         conformed,  in  all  material  respects,  to  the  requirements  of the
         Securities  Exchange  Act of 1934 or the Act,  as  applicable,  and the
         Rules and  Regulations.  The  Registration  Statement and any amendment
         thereto do not contain, and will not contain, any untrue statement of a
         material fact and do not omit, and will not omit, to state any material
         fact required to be stated  therein or necessary to make the statements
         therein  not   misleading.   The  Prospectus  and  any  amendments  and
         supplements  thereto do not contain,  and will not contain,  any untrue
         statement  of material  fact;  and do not omit,  and will not omit,  to
         state any material fact  required to be stated  therein or necessary to
         make the statements  therein,  in the light of the circumstances  under
         which they were  made,  not  misleading;  provided,  however,  that the
         Company  makes  no  representations  or  warranties  as to  information
         contained  in  or  omitted  from  the  Registration  Statement  or  the
         Prospectus,  or any such amendment or supplement, in reliance upon, and
         in conformity with, written information  furnished to the Company by or
         on behalf of any Underwriter through the Representatives,  specifically
         for use in the preparation thereof.

                  (g) The  consolidated  financial  statements  of the  Company,
         together with related notes and schedules as set forth or  incorporated
         by  reference  in  the  Registration  Statement,   present  fairly  the
         financial  position and the results of operations and cash flows of the
         Company at the  indicated  dates and for the  indicated  periods.  Such
         financial  statements  and  related  schedules  have been  prepared  in
         accordance with generally accepted accounting principles,  consistently
         applied  throughout the periods involved,  except as disclosed therein,
         and all  adjustments  necessary for a fair  presentation of results for
         such periods have been made. The summary financial and statistical data
         included or  incorporated  by reference in the  Registration  Statement
         presents  fairly the  information  shown therein and such data has been
         compiled on a basis consistent with the financial  statements presented
         therein  and the  books  and  records  of the  Company.  The pro  forma
         financial statements and other pro forma financial information included
         in the  Registration  Statement and the  Prospectus  present fairly the
         information  shown therein,  have been prepared in accordance  with the
         Commission's  rules and guidelines  with respect to pro forma financial
         statements,  have  been  properly  compiled  on  the  pro  forma  bases
         described therein,  and, in the opinion of the Company, the assumptions
         used in the preparation thereof are reasonable and the adjustments used
         therein  are  appropriate  to  give  effect  to  the   transactions  or
         circumstances referred to therein.



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<PAGE>

                  (h) Ernst & Young LLP,  KPMG Peat Marwick LLP,  L.P.  Martin &
         Company, P.C. and Dixon, Odom & Co., L.L.P., who have certified certain
         of the financial  statements  filed with the  Commission as part of, or
         incorporated  by  reference  in,  the   Registration   Statement,   are
         independent  public accountants with respect to the Company as required
         by the Act and the Rules and Regulations.

                  (i) There is no proceeding,  action,  suit, claim,  inquiry or
         investigation  pending or, to the knowledge of the Company,  threatened
         against  the  Company  or any of the  Subsidiaries  before any court or
         administrative agency or otherwise which if determined adversely to the
         Company or any of its  Subsidiaries  would result in a Material Adverse
         Effect or to prevent the consummation of the transactions  contemplated
         hereby, except as set forth in the Registration Statement.

                  (j) The Company will have, at the Closing Date, as hereinafter
         defined,  good  and  marketable  title  in  fee  simple  to  all of the
         properties  described in the  Prospectus  (the  "Properties")  free and
         clear  of  all  liens,   encumbrances,   claims,   security  interests,
         restrictions  and  defects  except  such  as (i) are  described  in the
         Prospectus or (ii) would not have a Material Adverse Effect. All liens,
         encumbrances,  claims,  security  interests,  restrictions  and defects
         affecting  the  Properties  which are  required to be  disclosed in the
         Prospectus are disclosed therein. The Company does not own or lease any
         material  real  property,  except as  described in the  Prospectus.  No
         person has an option or right of first  refusal to purchase all or part
         of any property or any interest therein. Each of theProperties complies
         with all applicable  codes,  laws and regulations  (including,  without
         limitation,  building and zoning codes,  laws and  regulations and laws
         relating  to access  to the  properties),  except if and to the  extent
         disclosed in the Prospectus and except for such failures to comply that
         would not  individually  or in the  aggregate  have a Material  Adverse
         Effect.  The Company  has no  knowledge  of any  pending or  threatened
         condemnation proceedings,  zoning change, or other proceeding or action
         that will in any manner  affect the size of, use of,  improvements  on,
         construction  on  or  access  to  any  of  its  property,  except  such
         proceedings or actions that would not have a Material Adverse Effect.

         The  Company  has  obtained  an  owner's  title  insurance   policy  or
         commitment  from a title  insurance  company  to issue such a policy on
         each of its Properties with coverage in an amount at least equal to the
         cost of acquisition of such property, including the principal amount of
         any indebtedness assumed with respect to the property.

                  (k) The Company and the  Subsidiaries  have filed all Federal,
         State, local and foreign income tax returns which have been required to
         be filed and have  paid all taxes  indicated  by said  returns  and all
         assessments  received  by them or any of them to the  extent  that such
         taxes  have  become  due.  All  material  tax  liabilities   have  been
         adequately provided for in the financial statements of the Company.



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<PAGE>

                  (l)  Since the  respective  dates as of which  information  is
         given  in  the  Registration   Statement,  as  it  may  be  amended  or
         supplemented,  there has not been any  material  adverse  change or any
         development  involving  a  prospective  material  adverse  change in or
         affecting  the  earnings,  business,  management,  properties,  assets,
         rights, operations, condition (financial or otherwise), or prospects of
         the  Company  and its  Subsidiaries  taken as a whole,  whether  or not
         occurring in the ordinary course of business.

                  (m) Neither the Company nor any of the Subsidiaries is or with
         the giving of notice or lapse of time or both, will be, in violation of
         or in default under its Articles of  Incorporation  or By-Laws or under
         any  agreement,  lease,  contract,  indenture  or other  instrument  or
         obligation  to  which  it is a  party  or by  which  it,  or any of its
         properties,  is bound and which  violation  or default  is of  material
         significance  in  respect  of  the  business,  management,  properties,
         assets,  rights,  operations,  condition  (financial  or  otherwise) or
         prospects  of the Company and the  Subsidiaries  taken as a whole.  The
         execution and delivery of this  Agreement and the  consummation  of the
         transactions  herein  contemplated  and the  fulfillment  of the  terms
         hereof will not conflict with or result in a breach of any of the terms
         or  provisions  of, or  constitute  a  default  under,  any  indenture,
         mortgage,  deed of trust or other  agreement or instrument to which the
         Company  or  any  Subsidiary  is  a  party,   or  of  the  Articles  of
         Incorporation  or  By-laws  of  the  Company  or  any  order,  rule  or
         regulation  applicable to the Company or any Subsidiary of any court or
         of any regulatory body or administrative  agency or other  governmental
         body having  jurisdiction  and which conflict,  breach or default would
         have a Material Affect.

                  (n) Each approval, consent, order, authorization, designation,
         declaration  or filing  by or with any  regulatory,  administrative  or
         other  governmental body necessary in connection with the execution and
         delivery by the Company of this Agreement and the  consummation  of the
         transactions herein  contemplated  (except such additional steps as may
         be required by the Commission,  the National  Association of Securities
         Dealers, Inc. (the "NASD") or as may be necessary to qualify the Shares
         for public offering by the Underwriters  under state securities or Blue
         Sky laws) has been obtained or made and is in full force and effect.

                  (o)  The  Company  and  each  of the  Subsidiaries  holds  all
         material   licenses,   certificates   and  permits  from   governmental
         authorities which are necessary to the conduct of their businesses; and
         neither the  Company  nor any of the  Subsidiaries  has  infringed  any
         patents,  patent rights, trade names,  trademarks or copyrights,  which
         infringement  is  material  to the  business  of the  Company  and  the
         Subsidiaries  taken  as a  whole.  The  Company  knows  of no  material
         infringement  by  others  of  patents,   patent  rights,  trade  names,
         trademarks or copyrights owned by or licensed to the Company.



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                  (p) Neither the Company,  nor to the Company's best knowledge,
         any of its  officers,  directors or other  affiliates  has taken or may
         take,  directly or indirectly,  any action  designed to cause or result
         in, or which has  constituted or which might  reasonably be expected to
         constitute,  the  stabilization  or  manipulation  of the  price of the
         Common Shares to facilitate the sale or resale of the Shares.

                  (q) Neither the Company nor any  Subsidiary is an  "investment
         company"  within the meaning of such term under the Investment  Company
         Act of 1940 and the rules and regulations of the Commission thereunder.

                  (r) The  Company  maintains  a system of  internal  accounting
         controls   sufficient  to  provide   reasonable   assurances  that  (i)
         transactions  are executed in accordance with  management's  general or
         specific authorization;  (ii) transactions are recorded as necessary to
         permit preparation of financial statements in conformity with generally
         accepted  accounting  principles  and to  maintain  accountability  for
         assets;  (iii) access to assets is permitted  only in  accordance  with
         management's general or specific  authorization;  and (iv) the recorded
         accountability   for  assets  is  compared  with  existing   assets  at
         reasonable  intervals and  appropriate  action is taken with respect to
         any differences.

                  (s) The Company  and each of its  Subsidiaries  carry,  or are
         covered by,  insurance in such amounts and covering such risks that the
         Company  believes  is  adequate  for the  conduct  of their  respective
         businesses  and the  value of  their  respective  properties  and as is
         customary  for  companies  engaged  in  similar  industries.  Except as
         otherwise disclosed in the Prospectus, neither the Company, nor, to its
         knowledge,  any former owner of any of the Properties has authorized or
         conducted or has knowledge of the generation, transportation,  storage,
         presence, use, treatment,  disposal,  release, or other handling of any
         hazardous  substance,  hazardous waste,  hazardous material,  hazardous
         constituent, toxic substance, pollutant, contaminant,  asbestos, radon,
         polychlorinated   biphenyls   ("PCBs"),   petroleum  product  or  waste
         (including crude oil or any fraction  thereof),  natural gas, liquefied
         gas, synthetic gas or other material defined, regulated,  controlled or
         potentially   subject  to  any   remediation   requirement   under  any
         environmental law (collectively,  "Hazardous Materials"), on, in, under
         or  affecting  the  Properties  except  in  material   compliance  with
         applicable  laws; to the knowledge of the Company,  the  Properties and
         the  Company's  operations  with  respect  to  the  Properties  are  in
         substantial   compliance  with  all  federal,  state  and  local  laws,
         ordinances,  rules,  regulations  and other  governmental  requirements
         relating  to  pollution,  control of  chemicals,  management  of waste,
         discharges of materials into the environment,  health,  safety, natural
         resources,  and the environment  (collectively,  "Environmental Laws"),
         and the Company has been,  and is, in substantial  compliance  with all
         licenses,   permits,   registrations   and  government   authorizations
         necessary to operate under all applicable Environmental Laws. Except as
         otherwise disclosed in the Prospectus, neither the Company nor to



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<PAGE>

         the knowledge of the Company, any former owner of any of the Properties
         has received any written or oral notice from any governmental entity or
         any  other  person  and  there  is  no  pending  or  threatened  claim,
         litigation  or  anyadministrative  agency  proceeding  that:  alleges a
         violation of any  Environmental  Laws by the Company;  alleges that the
         Company is a liable party or a potentially  responsible party under the
         Comprehensive  Environmental Response,  Compensation and Liability Act,
         42 U.S.C.  ss. 9601, et seq., or any state  superfund law; has resulted
         in or could result in the attachment of an environmental lien on any of
         the  Properties;  or  alleges  that  the  Company  is  liable  for  any
         contamination  of the  environment,  contamination  of the  Properties,
         damage to natural resources,  property damage, or personal injury based
         on their  activities or the activities of their  predecessors  or third
         parties (whether at the Real Property or elsewhere) involving Hazardous
         Materials,  whether arising under the  Environmental  Laws,  common law
         principles, or other legal standards.

                  None  of  the  entities  which  prepared   appraisals  of  the
         Company's   properties,   nor  the  entities  which  prepared  Phase  I
         environmental  assessment reports with respect to such properties,  was
         employed for such purpose on a contingent  basis or has any substantial
         interest  in the  Company,  and none of their  directors,  officers  or
         employees is connected  with the Company as a promoter,  selling agent,
         voting trustee, officer, director or employee.

                  (t) The Company is in compliance in all material respects with
         all presently  applicable  provisions of the Employee Retirement Income
         Security  Act of  1974,  as  amended,  including  the  regulations  and
         published  interpretations  thereunder ("ERISA"); no "reportable event"
         (as defined in ERISA) has occurred  with respect to any "pension  plan"
         (as defined in ERISA) for which the Company  would have any  liability;
         the Company  has not  incurred  and does not expect to incur  liability
         under  (i)  Title  IV of ERISA  with  respect  to  termination  of,  or
         withdrawal from, any "pension plan" or (ii) Sections 412 or 4971 of the
         Internal  Revenue Code of 1986, as amended,  including the  regulations
         and  published  interpretations   thereunder  (the  "Code");  and  each
         "pension  plan" for which the Company would have any liability  that is
         intended  to be  qualified  under  Section  401(a)  of the  Code  is so
         qualified in all material respects and nothing has occurred, whether by
         action  or by  failure  to act,  which  would  cause  the  loss of such
         qualification. To the best of the Company's knowledge, no general labor
         problem exists or is imminent with the employees of the Company.

                  (u) The  Company has not  incurred  any  liability  for a fee,
         commission  or other  compensation  on account of the  employment  of a
         broker or finder in connection  with the  transactions  contemplated by
         this Agreement other than as contemplated hereby.



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<PAGE>

                  (v) To the knowledge of the executive officers of the Company,
         other than the Subsidiaries,  except as disclosed in the Prospectus, no
         corporation, partnership, limited liability company or any other entity
         of which the Company or any of such officers  owns a material  interest
         is providing any services to Apple.

                  Any certificate signed by any officer of the Company on behalf
         of the Company and delivered to you or to counsel for the  Underwriters
         in connection  with the  consummation of the offering shall be deemed a
         representation  and warranty by such entity to each  Underwriter  as to
         the matters covered thereby.

         2.       PURCHASE, SALE AND DELIVERY OF THE FIRM SHARES.

                  ----------------------------------------------
                  (a) On the basis of the representations, warranties, covenants
         and  agreements  herein  contained,   and  subject  to  the  terms  and
         conditions  herein  set  forth,  the  Company  agrees  to  sell  to the
         Underwriters and each Underwriter agrees, severally and not jointly, to
         purchase, at a price of $9.765 per share, the number of Firm Shares set
         forth  opposite  the name of each  Underwriter  in  Appendix  I hereof,
         subject to adjustments in accordance with Section 9 hereof.

                  (b) Payment for the Firm Shares to be sold  hereunder is to be
         made in New York Clearing  House funds by wire transfer to the order of
         the  Company  against   delivery  of   certificates   therefor  to  the
         Underwriters for the several accounts of the Underwriters. Such payment
         and  delivery  are to be  made at the  offices  of  Alex.  Brown & Sons
         Incorporated,  1 South  Street,  Baltimore,  Maryland,  at 10:00  a.m.,
         Baltimore  time,  (i) on the third  business day after the date of this
         Agreement if this Agreement is executed and delivered on or before 4:00
         p.m.,  Eastern Standard time, (ii) on the fourth business day after the
         date of this  Agreement if this  Agreement is executed and delivered on
         or after 4:01 p.m.  Eastern  Standard  time or (iii) at such other time
         and date not later than five  business  days  thereafter as you and the
         Company shall agree upon,  such time and date being herein  referred to
         as the "Closing  Date." (As used herein,  "business day" means a day on
         which the New York  Stock  Exchange  is open for  trading  and on which
         banks in New York are open for business and are not permitted by law or
         executive  order to be closed.)  The  certificates  for the Firm Shares
         will be delivered in such  denominations  and in such  registrations as
         the  Underwriters  request  in writing  not later than the second  full
         business day prior to the Closing Date,  and will be made available for
         inspection by the  Underwriters  at least one business day prior to the
         Closing Date.

                  (c) In  addition,  on the  basis  of the  representations  and
         warranties  herein  contained  and subject to the terms and  conditions
         herein set forth,  the Company  hereby  grants an option to the several
         Underwriters  to purchase the Optional Shares at the price per share as
         set forth in the first  paragraph of this Section 2. The option granted
         hereby may be  exercised in whole or in part by giving  written  notice
         (i) at



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<PAGE>

         any time before the Closing Date and (ii) only once  thereafter  within
         30 days  after  the  date of this  Agreement,  by you,  to the  Company
         setting  forth the number of  Optional  Shares as to which the  several
         Underwriters are exercising the option,  the names and denominations in
         which the Optional Shares are to be registered and the time and date at
         which such certificates are to be delivered. The time and date at which
         certificates   for  Optional  Shares  are  to  be  delivered  shall  be
         determined by the  Underwriters but shall not be earlier than three nor
         later than 10 full business days after the exercise of such option, nor
         in any event prior to the Closing Date (such time and date being herein
         referred to as the "Option Closing  Date").  If the date of exercise of
         the option is three or more days before the Closing Date, the notice of
         exercise  shall set the Closing Date as the Option  Closing  Date.  The
         number of Optional Shares to be purchased by each Underwriter  shall be
         in the same  proportion  to the total  number of Optional  Shares being
         purchased  as the  number  of  Firm  Shares  being  purchased  by  such
         Underwriter  bears to the total number of Firm Shares,  adjusted by you
         in such manner as to avoid fractional  shares.  The option with respect
         to the Optional Shares granted hereunder may be exercised only to cover
         over-allotments in the sale of the Firm Shares by the Underwriters. The
         Underwriters may cancel such option at any time prior to its expiration
         by giving written notice of such  cancellation  to the Company.  To the
         extent, if any, that the option is exercised,  payment for the Optional
         Shares shall be made on the Option  Closing  Date in New York  Clearing
         House  funds  by wire  transfer  to the  order of the  Company  against
         delivery of certificates  therefor at the offices of Alex. Brown & Sons
         Incorporated, 1 South Street, Baltimore, Maryland.

         3.       OFFERING BY THE UNDERWRITERS.
                  ----------------------------
                  It is understood that the several  Underwriters  are to make a
         public offering of the Firm Shares as soon as they deem it advisable to
         do so. The Firm Shares are to be initially offered to the public at the
         initial  public  offering  price  set  forth  in  the  Prospectus.  The
         Underwriters  may  from  time  to time  thereafter  change  the  public
         offering price and other selling terms. To the extent,  if at all, that
         any Optional  Shares are  purchased  pursuant to Section 2 hereof,  the
         Underwriters will offer them to the public on the foregoing terms.

                  It is further understood that you will act as the Underwriters
         in the offering and sale of the Shares in accordance  with an Agreement
         Among   Underwriters   entered  into  by  you  and  the  several  other
         Underwriters.

         4.       COVENANTS OF THE COMPANY.
                  ------------------------
                  The Company covenants and agrees with the several Underwriters
         that:



                                       10
<PAGE>

                  (a) The  Company  will (i) use its best  efforts  to cause the
         Registration Statement to become effective or, if the procedure in Rule
         430A of the Rules and  Regulations  is followed,  to prepare and timely
         file with the Commission under Rule 424(b) of the Rules and Regulations
         a  Prospectus  in  a  form  approved  by  the  Underwriters  containing
         information  previously  omitted  at the time of  effectiveness  of the
         Registration  Statement  in  reliance  on Rule  430A of the  Rules  and
         Regulations,  (ii) not file any amendment to the Registration Statement
         or  supplement  to the  Prospectus  or  any  document  incorporated  by
         reference  therein of which the Underwriters  shall not previously have
         been  advised and  furnished  with a copy or to which the  Underwriters
         shall have reasonably objected in writing or which is not in compliance
         with the Rules and  Regulations  and (iii)  file on a timely  basis all
         reports and any definitive proxy or information  statements required to
         be filed by the Company with the  Commission  subsequent to the date of
         the  Prospectus  and prior to the  termination  of the  offering of the
         Shares by the Underwriters.

                  (b) The Company will advise the Underwriters promptly (i) when
         the  Registration  Statement or any  post-effective  amendment  thereto
         shall have become  effective,  (ii) of receipt of any comments from the
         Commission, (iii) of any request of the Commission for amendment of the
         Registration  Statement or for  supplement to the Prospectus or for any
         additional  information,  and (iv) of the issuance by the Commission of
         any  stop  order  suspending  the  effectiveness  of  the  Registration
         Statement or the use of the  Prospectus  or of the  institution  of any
         proceedings for that purpose.  The Company will use its best efforts to
         prevent the issuance of any such stop order  preventing  or  suspending
         the use of the Prospectus and to obtain as soon as possible the lifting
         thereof, if issued.

                  (c) The  Company  will  cooperate  with  the  Underwriters  in
         endeavoring to qualify the Shares for sale under the securities laws of
         such  jurisdictions  as the Underwriters may reasonably have designated
         in writing and will make such  applications,  file such documents,  and
         furnish  such  information  as  may be  reasonably  required  for  that
         purpose,  provided  the  Company  shall not be required to qualify as a
         foreign corporation, to file a general consent to service of process or
         to subject itself to taxation in any  jurisdiction  where it is not now
         so  qualified,  required  to  file  such a  consent  or so  subject  to
         taxation.  The Company will,  from time to time,  prepare and file such
         statements,  reports, and other documents, as are or may be required to
         continue  such  qualifications  in  effect  for so long a period as the
         Underwriters may reasonably request for distribution of the Shares.

                  (d) The  Company  will  deliver  to, or upon the order of, the
         Underwriters,  from time to time,  as many  copies  of any  Preliminary
         Prospectus as the Underwriters may reasonably request. The Company will
         deliver  to, or upon the order of, the  Underwriters  during the period
         when delivery of a Prospectus is required under the Act, as many copies
         of  the  Prospectus  in  final  form,  or  as  thereafter   amended  or



                                       11
<PAGE>

         supplemented,  as the Underwriters may reasonably request.  The Company
         will deliver to the  Underwriters  at or before the Closing Date,  four
         signed copies of the Registration  Statement and all amendments thereto
         including  all  exhibits  filed  therewith,  and  will  deliver  to the
         Underwriters  such  number  of  copies  of the  Registration  Statement
         (including  such number of copies of the exhibits filed  therewith that
         may  reasonably be  requested),  including  documents  incorporated  by
         reference therein,  and of all amendments  thereto, as the Underwriters
         may reasonably request.

                  (e) The Company will comply in all material  respects with the
         Act and the Rules and Regulations,  and the Securities  Exchange Act of
         1934  (the  "Exchange  Act"),  and the  rules  and  regulations  of the
         Commission   thereunder,   so  as  to  permit  the  completion  of  the
         distribution  of the Shares as  contemplated  in this Agreement and the
         Prospectus.  If during the period in which a prospectus  is required by
         law to be delivered by an Underwriter or dealer,  any event shall occur
         as a  result  of  which,  in  the  judgment  of the  Company  or in the
         reasonable written opinion of the Underwriters, it becomes necessary to
         amend or  supplement  the  Prospectus  in order to make the  statements
         therein,  in the light of the  circumstances  existing  at the time the
         Prospectus is delivered to a purchaser,  not  misleading,  or, if it is
         necessary at any time to amend or supplement  the  Prospectus to comply
         with any law,  the  Company  promptly  will either (i) prepare and file
         with  the  Commission  an  appropriate  amendment  to the  Registration
         Statement or supplement to the Prospectus or (ii) prepare and file with
         the Commission an appropriate filing under the Securities  Exchange Act
         of 1934 which shall be  incorporated  by reference in the Prospectus so
         that the  Prospectus  as so amended or  supplemented  will not,  in the
         light of the circumstances when it is so delivered,  be misleading,  or
         so that the Prospectus will comply with the law.

                  (f) The Company will make generally  available to its security
         holders,  as soon as it is  practicable  to do so, but in any event not
         later  than 15 months  after  the  effective  date of the  Registration
         Statement,  an  earnings  statement  (which  need  not be  audited)  in
         reasonable detail,  covering a period of at least 12 consecutive months
         beginning after the effective date of the Registration Statement, which
         earning  statement  shall satisfy the  requirements of Section 11(a) of
         the Act and Rule 158 of the Rules and  Regulations  and will advise you
         in writing when such statement has been so made available.

                  (g) The  Company  will,  for a period of five  years  from the
         Closing Date, deliver to the Underwriters  copies of annual reports and
         copies of all other documents, reports and information furnished by the
         Company  to its  stockholders  or filed  with any  securities  exchange
         pursuant to the  requirements  of such exchange or with the  Commission
         pursuant to the Act or the Securities Exchange Act of 1934, as amended.
         The Company  will  deliver to the  Underwriters  similar  reports  with
         respect



                                       12
<PAGE>

         to significant  subsidiaries,  as that term is defined in the Rules and
         Regulations,  which are not  consolidated  in the  Company's  financial
         statements.

                  (h) No offering,  sale, short sale or other disposition of any
         Common Shares of the Company or other  securities  convertible  into or
         exchangeable  or exercisable  for shares of Common Shares or derivative
         of Common Shares (or  agreement for such),  except for issuances by the
         Company pursuant to the Company's Stock Incentive Plan, Directors' Plan
         and Dividend  Reinvestment  Plan and Stock Purchase and the issuance by
         the Company of Common Shares not registered under the Act and not to be
         registered  under the Act until  the first  anniversary  of the date of
         this Agreement that have been issued as consideration for the Company's
         acquisition of additional  properties,  will be made for a period of 12
         months after the date of this Agreement, directly or indirectly, by the
         Company  otherwise than hereunder or with the prior written  consent of
         Alex. Brown & Sons  Incorporated,  which consent shall not unreasonably
         be withheld.

                  (i) The Company has caused  each  officer and  director of the
         Company to furnish to you, on or prior to the date of this agreement, a
         letter  or  letters,   in  form  and  substance   satisfactory  to  the
         Underwriters,  pursuant  to which each such  person  shall agree not to
         offer,  sell,  sell short or otherwise  dispose of any Common Shares of
         the  Company  or other  capital  stock  of the  Company,  or any  other
         securities  convertible,  exchangeable or exercisable for Common Shares
         or  derivative  of Common  Shares  owned by such  person or request the
         registration  for the offer or sale of any of the  foregoing  (or as to
         which such  person has the right to direct  the  disposition  of) for a
         period  of 12  months  after the date of this  Agreement,  directly  or
         indirectly, except with the prior written consent of Alex. Brown & Sons
         Incorporated ("Lockup Agreements").

                  (j) The Company will use its best efforts to list,  subject to
         notice of issuance, the Shares on the New York Stock Exchange.

                  (k) The Company  shall  apply the net  proceeds of its sale of
         the Shares as set forth in the Prospectus.

                  (l)  The  Company  will  use its  best  efforts  to  meet  the
         requirements  to qualify as a real  estate  investment  trust under the
         Code.

                  (m) The  Company  shall not  invest,  or  otherwise  use,  the
         proceeds  received by the Company from its sale of the Shares in such a
         manner as would  require  the  Company  or any of the  Subsidiaries  to
         register as an investment  company under the Investment  Company Act of
         1940, as amended (the "1940 Act").



                                       13
<PAGE>

                  (n) The  Company  will  maintain  a  transfer  agent  and,  if
         necessary under the  jurisdiction of  incorporation  of the Company,  a
         registrar for the Common Shares.

                  (o) The Company  will not take,  directly or  indirectly,  any
         action designed to cause or result in, or that has constituted or might
         reasonably be expected to constitute, the stabilization or manipulation
         of the price of any securities of the same class or convertible into or
         exchangeable for Common Shares.

                  (p) The Company on or before the Closing Date,  shall purchase
         the number of common shares of Apple equal to approximately 9.5% of the
         issued  and  outstanding  common  shares of Apple as of the date of the
         initial  filing of the  Registration  Statement and (ii) at each of the
         Company's quarterly meetings of its Board of Directors, the Board shall
         consider an additional  purchase of Apple common shares and the Company
         shall purchase the number of Apple common shares  necessary to increase
         the   Company's   aggregate   holdings  of  Apple   common   shares  to
         approximately 9.5% of the issued and outstanding Apple common shares as
         of the date of such Board meeting unless the Board determines that such
         purchase is not in the best  interest of the  Company.  Notwithstanding
         any other  provisions  of this  paragraph,  no purchase of Apple common
         shares  by the  Company  shall be  required  (a) if a  majority  of the
         Company's  Board of  Directors,  including a majority of the  Company's
         Independent  Directors  (as defined in the Company's  Bylaws)  resolves
         that the purchase of common shares of Apple is not in the best interest
         of the Company.

                  (q) Between October 1, 1997 and December 31, 1997, the Company
         shall (i) call a special  meeting  of the  Board of  Directors  for the
         purpose of the Board  considering,  or (ii) at any other meeting of the
         Board of  Directors  (provided  proper  notice of the  subject has been
         given),  cause the Board of Directors  to  consider,  the merits of the
         Company proposing to purchase or acquire Apple or its assets.

         5.   COSTS AND EXPENSES.
              ------------------
              The Company will pay all costs,  expenses and fees incident to the
         performance  of the  obligations  of the Company under this  Agreement,
         including,  without  limiting  the  generality  of the  foregoing,  the
         following:  accounting fees of the Company;  the fees and disbursements
         of counsel for the Company;  the cost of printing and delivering to, or
         as requested by, the Underwriters copies of the Registration Statement,
         Preliminary   Prospectuses,   the  Prospectus,   this  Agreement,   the
         Underwriters' Selling Memorandum,  the Underwriters' Invitation Letter,
         the Listing  Application,  the Blue Sky Survey and any  supplements  or
         amendments thereto; the filing fees of the Commission;  the filing fees
         incident to securing any required review by the National Association of
         Securities  Dealers,  Inc. (the "NASD") of the terms of the sale of the
         Shares;  the  Listing  Fee of the  New  York  Stock  Exchange;  and the



                                       14
<PAGE>

         expenses,  including the reasonable fees and  disbursements  of counsel
         for  the Underwriters, incurred in connection with the qualification of
         the Shares under State  securities or Blue Sky laws.  The Company shall
         not, however, be required to pay for any of the Underwriters'  expenses
         (other  than  those  related  to  reviews  under  NASD  regulation  and
         qualifications under State securities or Blue Sky laws) except that, if
         this  Agreement  shall not be  consummated  because the  conditions  in
         Section 6 hereof  are not  satisfied,  or  because  this  Agreement  is
         terminated by the Representatives  pursuant to Section 11 hereof, or by
         reason of any failure,  refusal or inability on the part of the Company
         to perform any  undertaking  or satisfy any condition of this Agreement
         or to comply with any of the terms hereof on its part to be  performed,
         unless such  failure to satisfy  said  condition or to comply with said
         terms be due to the default or omission  of any  Underwriter,  then the
         Company  shall  reimburse  the  several   Underwriters  for  reasonable
         out-of-pocket expenses,  including reasonable fees and disbursements of
         counsel,   reasonably   incurred  in  connection  with   investigating,
         marketing  and  proposing to market the Shares or in  contemplation  of
         performing their  obligations  hereunder;  but the Company shall not in
         any event be liable to any of the several  Underwriters  for damages on
         account  of loss of  anticipated  profits  from the sale by them of the
         Shares.

         6.       CONDITIONS OF OBLIGATIONS OF THE UNDERWRITERS.
                  ---------------------------------------------
                  The several  obligations of the  Underwriters  to purchase the
         Firm Shares on the Closing Date and the Optional Shares, if any, on the
         Option  Closing  Date  are  subject  to the  accuracy  in all  material
         respects,  as of the Closing Date or the Option  Closing  Date,  as the
         case may be,  of the  representations  and  warranties  of the  Company
         contained herein, and to the performance by the Company in all material
         respects  of  its  covenants  and  obligations  hereunder  and  to  the
         following additional conditions:

                  (a)  The   Registration   Statement  and  all   post-effective
         amendments  thereto shall have become effective and any and all filings
         required by Rule 424 and Rule 430A of the Rules and  Regulations  shall
         have been  made,  and any  request  of the  Commission  for  additional
         information (to be included in the Registration Statement or otherwise)
         shall have been  disclosed to the  Underwriters  and  complied  with to
         their   reasonable   satisfaction.   No  stop  order   suspending   the
         effectiveness  of the Registration  Statement,  as amended from time to
         time,  shall have been issued and no proceedings for that purpose shall
         have  been  taken  or,  to the  knowledge  of  the  Company,  shall  be
         contemplated by the Commission and no injunction, restraining order, or
         order  of  any  nature  by  a  Federal  or  state  court  of  competent
         jurisdiction  shall have been issued as of the Closing Date which would
         prevent the issuance of the Shares.

                  (b) The  Underwriters  shall have received on the Closing Date
         or the Option Closing Date, as the case may be, the opinion of McGuire,
         Woods,  Battle &



                                       15
<PAGE>

         Boothe,  L.L.P., counsel for the Company, dated the Closing Date or the
         Option Closing Date, as the case may be,  addressed to the Underwriters
         to the effect that:

                           (i)  The  Company  has  been  duly  organized  and is
                  validly  existing as a corporation  in good standing under the
                  laws of the Commonwealth of Virginia, with corporate power and
                  authority to own, lease and operate its properties and conduct
                  its business as described in the Registration Statement;  each
                  of the  Subsidiaries  has been duly  organized  and is validly
                  existing as a corporation  in good standing  under the laws of
                  the  jurisdiction of its  incorporation,  with corporate power
                  and authority to own or lease its  properties  and conduct its
                  business  as  described  in the  Registration  Statement;  the
                  Company and each of the  Subsidiaries  are duly  qualified  to
                  transact business in all jurisdictions in which the conduct of
                  their business  requires such  qualification,  or in which the
                  failure to qualify would have a materially adverse effect upon
                  the  business of the Company and the  Subsidiaries  taken as a
                  whole; and the outstanding  shares of capital stock of each of
                  the Subsidiaries  have been duly authorized and validly issued
                  and are fully paid and  non-assessable and are owned of record
                  by the Company or Glade M.  Knight;  the  preferred  shares of
                  each  Subsidiary  held by the Company  represents  95% of  the
                  equity  interests in each  Company and,  except as required by
                  law,  are  not   entitled  to  vote  on  matters   before  the
                  shareholders  of the  Subsidiaries  and, to of such  counsel's
                  knowledge,  the outstanding shares of capital stock of each of
                  the  Subsidiaries  is  owned  free  and  clear  of all  liens,
                  encumbrances and equities and claims, and no options, warrants
                  or other rights to purchase,  agreements or other  obligations
                  to issue or other rights to convert any  obligations  into any
                  shares  of  capital  stock or of  ownership  interests  in the
                  Subsidiaries are outstanding.

                           (ii) The Company has authorized  capital stock as set
                  forth under the caption  "Capitalization"  in the  Prospectus;
                  the  Company's   outstanding  Common  Shares  have  been  duly
                  authorized   and  validly   issued  and  are  fully  paid  and
                  non-assessable;  the Shares conform to the description thereof
                  contained in the  Prospectus;the  certificates for the Shares,
                  assuming they are in the form filed with the  Commission,  are
                  in due and proper  form;  the  Common  Shares,  including  the
                  Optional Shares, if any, to be sold by the Company pursuant to
                  this Agreement  have been duly  authorized and will be validly
                  issued, fully paid and non-assessable when issued and paid for
                  as contemplated by this Agreement; and no preemptive rights of
                  shareholders  exist  with  respect to any of the Shares or the
                  issue or sale thereof.

                           (iii) Except as described in or  contemplated  by the
                  Prospectus,  to the  knowledge of such  counsel,  there are no
                  outstanding   securities   of  the  Company   convertible   or
                  exchangeable  into or  evidencing  the  right to  purchase  or
                  subscribe  for any  shares  of the  Company  and  there are no
                  outstanding or



                                       16
<PAGE>

                  authorized  options,  warrants  or  rights  of  any  character
                  obligating  the Company to issue any shares or any  securities
                  convertible  or  exchangeable  into or evidencing the right to
                  purchase or subscribe for any shares;  and except as described
                  in the Prospectus, to the knowledge of such counsel, no holder
                  of any  securities  of the Company or any other person has the
                  right, contractual or otherwise,  which has not been satisfied
                  or  effectively  waived,  to  cause  the  Company  to  sell or
                  otherwise  issue to them, or to permit them to underwrite  the
                  sale of,  any of the  Shares or the  right to have any  Common
                  Shares or other  securities  of the  Company  included  in the
                  Registration Statement or the right, as a result of the filing
                  of the Registration  Statement,  to require registration under
                  the Act of Common Shares or other securities of the Company.

                           (iv) The Registration  Statement has become effective
                  under the Act and, to the knowledge of such  counsel,  no stop
                  order proceedings with respect thereto have been instituted or
                  are pending or threatened under the Act.

                           (v) The  Registration  Statement,  the Prospectus and
                  each amendment or supplement thereto and document incorporated
                  by  reference  therein  comply  as to  form  in  all  material
                  respects with the  requirements  of the Act or the  Securities
                  Exchange Act of 1934, as applicable,  and the applicable rules
                  and  regulations  thereunder  (except  that such  counsel need
                  express no opinion as to the financial  statements,  financial
                  schedules  and   statistical   information,   including  those
                  incorporated by reference  therein).  To the knowledge of such
                  counsel,  the conditions for the Company's use of Form S-3 for
                  the Offering,  set forth in the General Instructions  thereto,
                  have been satisfied.

                           (vi)  The  statements  under  the  captions  "Certain
                  Transactions," "Federal Income Tax Considerations," and "ERISA
                  Consideration," in the Prospectus,  insofar as such statements
                  constitute  a summary  of  documents  referred  to  therein or
                  matters of law, fairly summarize in all material  respects the
                  information  called  for with  respect to such  documents  and
                  matters of law.

                           (vii) Such counsel does not know of any  contracts or
                  documents  required to be filed as exhibits to or incorporated
                  by reference in the Registration Statement or described in the
                  Registration  Statement  or the  Prospectus  that  are  not so
                  filed, incorporated by reference or described as required, and
                  such   contracts  and  documents  as  are  summarized  in  the
                  Registration Statement or the Prospectus are fairly summarized
                  in all material respects.

                           (viii) Such  counsel  knows of no  material  legal or
                  governmental   proceedings,   actions,   suits,  inquiries  or
                  investigations  pending or threatened



                                       17
<PAGE>

                  against the Company,  or any of its properties,  or any of the
                  Subsidiaries except as set forth in the Prospectus.

                           (ix) The Company has corporate power and authority to
                  enter into, deliver and perform this Agreement.

                           (x) The  Company's  execution  and  delivery  of this
                  Agreement  and the  consummation  of the  transactions  herein
                  contemplated  do not and will not conflict with or result in a
                  breach of any of the terms or  provisions  of, or constitute a
                  default under, the Articles of Incorporation or By-laws of the
                  Company, or any material agreement or instrument known to such
                  counsel to which the Company or any of the  Subsidiaries  is a
                  party or by which the Company or any of the  Subsidiaries  may
                  be bound except for conflicts or breaches which would not have
                  a Material Adverse Effect.

                           (xi) To the  knowledge of such  counsel,  neither the
                  Company nor any of its  Subsidiaries  is in  violation  of its
                  respective  Articles of Incorporation or By-laws,  as the case
                  may be,  and no  material  default  exists  and no  event  has
                  occurred which, with notice or after the lapse of time to cure
                  or  both,  would  constitute  a  material  default  in the due
                  performance  and  observance  of any  agreement or  instrument
                  known  to such  counsel.  To the  knowledge  of such  counsel,
                  neither  the  Company  nor  any  of  its  Subsidiaries  is  in
                  violation  of, or in default  with  respect  to, any  statute,
                  rule, regulation,  order, judgment or decree, except as may be
                  properly  described  in  the  Prospectus  or  such  as in  the
                  aggregate  do not now have and will not in the  future  have a
                  material adverse effect on the financial position,  results of
                  operations or business of the Company.

                           (xii)  This  Agreement  has  been  duly   authorized,
                  executed and delivered by the Company.

                           (xiii) No approval,  consent,  order,  authorization,
                  designation,  declaration or filing by or with any regulatory,
                  administrative  or other  governmental  body is  necessary  in
                  connection  with the execution and delivery of this  Agreement
                  and the consummation of the transactions  herein  contemplated
                  (other  than as may be  required by the NASD or as required by
                  State  securities  and Blue Sky laws as to which such  counsel
                  need express no opinion)  except such as have been obtained or
                  made.

                           (xiv) The Company is organized in conformity with the
                  requirements  for  qualification  as a real estate  investment
                  trust  pursuant to Sections  856 through 860 of the Code,  and
                  the Company's  proposed  method of operation



                                       18
<PAGE>

                  will enable it to meet the requirements for  qualification and
                  taxation as a real estate investment trust under the Code.

                           (xv) The Company is not, and will not be, as a result
                  of the consummation of the  transactions  contemplated by this
                  Agreement  and  application  of the net proceeds  therefrom as
                  described  in  the  Prospectus,  required  to  register  as an
                  investment company under the 1940 Act.

                  In rendering such opinion,  McGuire,  Woods,  Battle & Boothe,
         L.L.P. may rely as to matters governed by the laws of states other than
         Virginia  or  Federal  laws on  local  counsel  in such  jurisdictions,
         provided that in each case McGuire, Woods, Battle & Booth, L.L.P. shall
         state that they believe that they and the Underwriters are justified in
         relying on such other  counsel.  In  addition  to the matters set forth
         above,  such opinion  shall also include a statement to the effect that
         nothing has come to the  attention of such counsel  which leads them to
         believe  that (i) the  Registration  Statement,  at the time it  became
         effective  under the Act (but after giving effect to any  modifications
         incorporated  therein pursuant to Rule 430A under the Act)and as of the
         Closing Date or the Option Closing Date, as the case may be,  contained
         an untrue  statement of a material  fact or omitted to state a material
         fact required to be stated  therein or necessary to make the statements
         therein not  misleading,  and (ii) the  Prospectus,  or any  supplement
         thereto, on the date it was filed pursuant to the Rules and Regulations
         and as of the Closing Date or the Option  Closing Date, as the case may
         be,  contained  an untrue  statement  of a material  fact or omitted to
         state a material fact necessary in order to make the statements, in the
         light of the  circumstances  under which they are made,  not misleading
         (except  that  such  counsel  need  express  no  view  as to  financial
         statements,   schedules  and  statistical  information  therein).  With
         respect to such statement,  McGuire,  Woods, Battle & Booth, L.L.P. may
         state that their belief is based upon the procedures set forth therein,
         but is without independent check and verification.

                  (c)  The  Underwriters  shall  have  received  from  Hunton  &
         Williams,  counsel for the  Underwriters,  an opinion dated the Closing
         Date or the Option Closing Date, as the case may be,  substantially  to
         the effect  specified in  subparagraphs  (ii),  (iii),  (iv) and (x) of
         Paragraph  (b) of this  Section  6,  and  that  the  Company  is a duly
         organized  and  validly  existing  corporation  under  the  laws of the
         Commonwealth of Virginia. In rendering such opinion,  Hunton & Williams
         may rely as to all matters governed other than by the laws of the State
         of  Virginia or Federal  laws on the opinion of counsel  referred to in
         Paragraph  (b) of this  Section 6. In addition to the matters set forth
         above,  such opinion  shall also include a statement to the effect that
         nothing has come to the  attention of such counsel  which leads them to
         believe that (i) the Registration  Statement, or any amendment thereto,
         as of the time it  became  effective  under the Act (but  after  giving
         effect to any modifications  incorporated therein pursuant to Rule 430A
         under the Act) as of the Closing Date or

                                       19

<PAGE>

         the  Option  Closing  Date,  as the case may be,  contained  an  untrue
         statement  of a  material  fact or  omitted  to state a  material  fact
         required  to be stated  therein  or  necessary  to make the  statements
         therein not  misleading,  and (ii) the  Prospectus,  or any  supplement
         thereto, on the date it was filed pursuant to the Rules and Regulations
         and as of the Closing Date or the Option  Closing Date, as the case may
         be,  contained  an untrue  statement  of a material  fact or omitted to
         state a material fact,  necessary in order to make the  statements,  in
         the  light  of  the  circumstances  under  which  they  are  made,  not
         misleading  (except  that  such  counsel  need  express  no  view as to
         financial statements,  schedules and statistical  information therein).
         With respect to such statement,  Hunton & Williams may state that their
         belief is based upon the procedures  set forth therein,  but is without
         independent check and verification.

                  (d) The Underwriters shall have received, on each of the dates
         hereof,  the Closing Date and the Option  Closing Date, as the case may
         be,  signed  letters  dated the date  hereof,  the Closing  Date or the
         Option  Closing  Date,  as the  case  may  be,  in form  and  substance
         satisfactory  to you, of Ernst & Young LLP, KPMG Peat Marwick LLP, L.P.
         Martin & Company,  P.C. and Dixon, Odom & Co., L.L.P.,  confirming that
         they are independent  public  accountants within the meaning of the Act
         and the  applicable  published  Rules and  Regulations  thereunder  and
         stating that in their  opinion the financial  statements  and schedules
         prepared  and  examined  by  them  and  included  in  the  Registration
         Statement  comply in form in all material  respects with the applicable
         accounting  requirements of the Act and the related published Rules and
         Regulations;  and, with regards to the letter from Ernst & Young,  LLP,
         containing  such other  statements  and  information  as is  ordinarily
         included in accountants' "comfort letters" to Underwriters with respect
         to the  financial  statements  and certain  financial  and  statistical
         information contained in the Registration Statement and Prospectus.

                  (e) The  Underwriters  shall have received on the Closing Date
         or the  Option  Closing  Date,  as the case may be,  a  certificate  or
         certificates  of the Chief  Executive  Officer and the Chief  Financial
         Officer of the Company to the effect  that,  as of the Closing  Date or
         the Option Closing Date, as the case may be:

                           (i) The  Registration  Statement has become effective
                  under the Act and no stop order  suspending the  effectiveness
                  of  the  Registration   Statement  has  been  issued,  and  no
                  proceedings  for such  purpose  have been taken or are, to his
                  knowledge, contemplated by the Commission;

                           (ii)  The   representations  and  warranties  of  the
                  Company  contained in Section 1 hereof are true and correct as
                  of the Closing Date or the Option  Closing  Date,  as the case
                  may be;

                           (iii) All filings required to have been made pursuant
                  to Rules 424 or 430A under the Act have been made;



                                       20
<PAGE>

                           (iv)   He  or  she   has   carefully   examined   the
                  Registration  Statement and the Prospectus  and, in his or her
                  opinion,   as  of  the  effective  date  of  the  Registration
                  Statement,   the  statements  contained  in  the  Registration
                  Statement were true and correct in all material respects,  and
                  such  Registration  Statement and  Prospectus  did not omit to
                  state  a  material  fact  required  to be  stated  therein  or
                  necessary  in  order  to  make  the  statements   therein  not
                  misleading,  and since the effective date of the  Registration
                  Statement,  no event has  occurred  which should have been set
                  forth in a supplement  to or an  amendment  of the  Prospectus
                  which  has  not  been  so set  forth  in  such  supplement  or
                  amendment; and

                           (v)   Since   the   respective   dates  as  of  which
                  information  is  given  in  the  Registration   Statement  and
                  Prospectus,  there has not been any material adverse change or
                  any  development  that is  reasonably  likely  to  result in a
                  material   adverse  change  in  or  affecting  the  condition,
                  financial or  otherwise,  of the Company and its  Subsidiaries
                  taken  as a  whole  or  the  earnings,  business,  management,
                  properties,  assets, rights, operations,  condition (financial
                  or otherwise) or prospects of the Company and the Subsidiaries
                  taken as a  whole,  whether  or not  arising  in the  ordinary
                  course of business.

                  (f) The Company shall have furnished to the Underwriters  such
         further  certificates and documents  confirming the representations and
         warranties,  covenants  and  conditions  contained  herein and  related
         matters as the Underwriters may reasonably have requested.

                  (g) The Shares have been  approved for listing,  upon official
         notice of issuance, on the New York Stock Exchange.

                  (h) The Lockup  Agreements  described in Section 4 are in full
         force and effect.

                  The opinions  and  certificates  mentioned  in this  Agreement
         shall be deemed to be in compliance with the provisions  hereof only if
         they  are in  all  material  respects  reasonably  satisfactory  to the
         Underwriters and to Hunton & Williams, counsel for the Underwriters.

                  If any of the  conditions  hereinabove  provided  for in  this
         Section 6 shall not have been  fulfilled  when and as  required by this
         Agreement  to  be  fulfilled,   the  obligations  of  the  Underwriters
         hereunder  may be  terminated  by the  Underwriters  by  notifying  the
         Company of such  termination  in writing or by  telegram at or prior to
         the Closing Date or the Option Closing Date, as the case may be.



                                       21
<PAGE>

                  In such event, the Company and the  Underwriters  shall not be
         under any  obligation to each other  (except to the extent  provided in
         Sections 5 and 8 hereof).

         7.       CONDITIONS OF THE OBLIGATIONS OF THE COMPANY.
                  ---------------------------------------------
                  The obligations of the Company to sell and deliver the portion
         of the Shares  required to be delivered  as and when  specified in this
         Agreement are subject to the conditions that at the Closing Date or the
         Option  Closing Date, as the case may be, no stop order  suspending the
         effectiveness of the Registration  Statement shall have been issued and
         in effect or proceedings therefor initiated or threatened.

         8.       INDEMNIFICATION.
                  ---------------
                  (a) The Company  agrees to indemnify  and hold  harmless  each
         Underwriter  and each person,  if any,  who  controls  any  Underwriter
         within the meaning of the Act, against any losses,  claims,  damages or
         liabilities to which such  Underwriter or any such  controlling  person
         may become subject under the Act or otherwise,  insofar as such losses,
         claims,  damages or  liabilities  (or actions or proceedings in respect
         thereof)  arise out of or are based  upon (i) any untrue  statement  or
         alleged untrue statement of any material fact contained or incorporated
         by reference in the Registration Statement, any Preliminary Prospectus,
         the  Prospectus  or any amendment or  supplement  thereto,  or (ii) the
         omission or alleged  omission to state therein a material fact required
         to be stated  therein or necessary to make the  statements  therein not
         misleading,   and  will  reimburse  each   Underwriter  and  each  such
         controlling  person  upon  demand  for  any  legal  or  other  expenses
         reasonably  incurred by such Underwriter or such controlling  person in
         connection with investigating or defending any such loss, claim, damage
         or  liability,  action or  proceeding or in responding to a subpoena or
         governmental inquiry related to the offering of the Shares,  whether or
         not such Underwriter or controlling  person is a party to any action or
         proceeding;  provided,  however, that the Company will not be liable in
         any such case to the extent  that (i) any such loss,  claim,  damage or
         liability arises out of or is based upon an untrue statement or alleged
         untrue statement,  or omission or alleged omission made or incorporated
         by reference in the Registration Statement, any Preliminary Prospectus,
         the Prospectus,  or such amendment or supplement,  in reliance upon and
         in conformity with written  information  furnished to the Company by or
         through  the  Underwriters  specifically  for  use in  the  preparation
         thereof;  (ii) such  statement or omission was contained or made in any
         Preliminary Prospectus and corrected in the Prospectus and (a) any such
         loss, claim,damage or liability suffered or incurred by any Underwriter
         (or any person who controls any Underwriter)  resulting from an action,
         claim or suit by any person who purchased  Shares which are the subject
         thereof  from such  Underwriter  in the  offering of the shares and (b)
         such Underwriter  failed to deliver or provide a copy of the Prospectus
         to such  person  at or  prior to the  confirmation  of the sale of such
         Shares in any case where such  delivery is  required  by the Act.  This



                                       22
<PAGE>

         indemnity  agreement  will be in  addition to any  liability  which the
         Company may otherwise have.

                  (b) Each Underwriter  severally and not jointly will indemnify
         and hold  harmless  the  Company,  each of its  directors,  each of its
         officers who have signed the Registration Statement and each person, if
         any, who controls  the Company  within the meaning of the Act,  against
         any losses,  claims, damages or liabilities to which the Company or any
         such director,  officer, or controlling person may become subject under
         the Act or  otherwise,  insofar  as such  losses,  claims,  damages  or
         liabilities (or actions or proceedings in respect thereof) arise out of
         or are based upon (i) any untrue  statement or alleged untrue statement
         of any  material  fact  contained or  incorporated  by reference in the
         Registration Statement,  any Preliminary Prospectus,  the Prospectus or
         any  amendment  or  supplement  thereto,  or (ii) the  omission  or the
         alleged omission to state therein a material fact required to be stated
         therein or necessary to make the  statements  therein not misleading in
         the light of the  circumstances  under  which they were made;  and will
         reimburse  any  legal  or other  expenses  reasonably  incurred  by the
         Company  or any  such  director,  officer,  or  controlling  person  in
         connection  with  investigating  or  defending  any such  loss,  claim,
         damage, liability,  action or proceeding;  provided, however, that each
         Underwriter will be liable in each case to the extent,  but only to the
         extent,  that such untrue  statement  or alleged  untrue  statement  or
         omission  or  alleged  omission  has  been  made  in  the  Registration
         Statement, any Preliminary Prospectus, the Prospectus or such amendment
         or  supplement,  in  reliance  upon  and  in  conformity  with  written
         information  furnished  to the Company by or through  the  Underwriters
         specifically  for  use  in  the  preparation  thereof.  This  indemnity
         agreement will be in addition to any liability  which such  Underwriter
         may otherwise have.

                  (c)  In  case  any  proceeding   (including  any  governmental
         investigation)  shall be instituted  involving any person in respect of
         which  indemnity may be sought  pursuant to this Section 8, such person
         (the "indemnified party") shall promptly notify the person against whom
         such indemnity may be sought (the "indemnifying  party") in writing. No
         indemnification  provided for in Section 8(a) or (b) shall be available
         to any party who shall fail to give notice as provided in this  Section
         8(c) if the  party to whom  notice  was not given  was  unaware  of the
         proceeding  to which such notice would have related and was  materially
         prejudiced by the failure to give such notice,  but the failure to give
         such notice  shall not relieve the  indemnifying  party or parties from
         any liability  which it or they may have to the  indemnified  party for
         contribution  or otherwise than on account of the provisions of Section
         8(a) or (b). In case any such  proceeding  shall be brought against any
         indemnified  party and it shall  notify the  indemnifying  party of the
         commencement  thereof,  the  indemnifying  party  shall be  entitled to
         participate therein and, to the extent that it shall wish, jointly with
         any other indemnifying party similarly notified,  to assume the defense
         thereof, with counsel selected by the indemnifying party and reasonably
         satisfactory  to such



                                       23
<PAGE>

         indemnified  party and shall pay as incurred the fees and disbursements
         of such counsel related to such proceeding. In any such proceeding, any
         indemnified party shall have the right to retain its own counsel at its
         own expense.  Notwithstanding  the foregoing,  the  indemnifying  party
         shall pay as incurred the fees and expenses of the counsel  retained by
         the indemnified  party in the event (i) the indemnifying  party and the
         indemnified  party shall have mutually  agreed to the retention of such
         counsel,  (ii) the named parties to any such proceeding  (including any
         impleaded   parties)  include  both  the  indemnifying  party  and  the
         indemnified  party  and  representation  of both  parties  by the  same
         counsel  would be  inappropriate  due to actual or potential  differing
         interests  between  them or (iii) the  indemnifying  party  shall  have
         failed to assume the defense and employ counsel  reasonably  acceptable
         to the  indemnified  party  within a  reasonable  period of time  after
         notice  of  commencement  of the  action.  It is  understood  that  the
         indemnifying  party shall not, in  connection  with any  proceeding  or
         related  proceedings  in the  same  jurisdiction,  be  liable  for  the
         reasonable  fees and  expenses of more than one  separate  firm for all
         such indemnified  parties.  The indemnifying  party shall not be liable
         for any  settlement  of any  proceeding  effected  without  its written
         consent  but if  settled  with  such  consent  or if  there  be a final
         judgment for the plaintiff,  the indemnifying party agrees to indemnify
         the indemnified  party from and against any loss or liability by reason
         of such settlement or judgment.  In addition,  the  indemnifying  party
         will not,  without the prior written consent of the indemnified  party,
         settle or  compromise  or consent to the entry of any  judgment  in any
         pending  or   threatened   claim,   action  or   proceeding   of  which
         indemnification may be sought hereunder (whether or not any indemnified
         party  is an  actual  or  potential  party  to such  claim,  action  or
         proceeding)  unless such settlement,  compromise or consent includes an
         unconditional  release of each  indemnified  party  from all  liability
         arising out of such claim, action or proceeding.

                  (d) If the  indemnification  provided for in this Section 8 is
         unavailable to or  insufficient  to hold harmless an indemnified  party
         under  Section  8(a) or (b) above in  respect  of any  losses,  claims,
         damages or liabilities  (or actions or proceedings in respect  thereof)
         referred to therein,  then each indemnifying  party shall contribute to
         the amount  paid or payable  by such  indemnified  party as a result of
         such losses,  claims, damages or liabilities (or actions or proceedings
         in respect thereof) in such proportion as is appropriate to reflect the
         relative  benefits  received  by the  Company  on the one  hand and the
         Underwriters on the other from the offering of the Shares. If, however,
         the allocation  provided by the immediately  preceding  sentence is not
         permitted by applicable law or if the indemnified  party failed to give
         notice required under Section 8(c) above, then each indemnifying  party
         shall  contribute  to such amount  paid or payable by such  indemnified
         party in such  proportion  as is  appropriate  to reflect not only such
         relative benefits but also the relative fault of the Company on the one
         hand  and  the  Underwriters  on  the  other  in  connection  with  the
         statements or omissions which resulted in such losses,  claims, damages
         or liabilities, (or actions or proceedings in respect thereof), as well
         as any other relevant equitable considerations.



                                       24
<PAGE>

         The relative  benefits  received by the Company on the one hand and the
         Underwriters  on the other shall be deemed to be in the same proportion
         as the total net proceeds from the offering (before deducting expenses)
         received by the Company bear to the total  underwriting  discounts  and
         commissions received by the Underwriters,  in each case as set forth in
         the table on the cover page of the Prospectus. The relative fault shall
         be determined  by reference to, among other things,  whether the untrue
         or alleged  untrue  statement  of a material  fact or the  omission  or
         alleged  omission  to state a  material  fact  relates  to  information
         supplied  by the  Company  on the one hand or the  Underwriters  on the
         other  and  the  parties'   relative  intent,   knowledge,   access  to
         information  and  opportunity  to correct or prevent such  statement or
         omission.

                  The  Company and the  Underwriters  agree that it would not be
         just and equitable if contributions  pursuant to this Section 8(d) were
         determined  by pro  rata  allocation  (even  if the  Underwriters  were
         treated  as one  entity  for such  purpose)  or by any other  method of
         allocation which does not take account of the equitable  considerations
         referred toabove in this Section 8(d). The amount paid or payable by an
         indemnified  party  as a  result  of the  losses,  claims,  damages  or
         liabilities (or actions or proceedings in respect thereof)  referred to
         above in this  Section  8(d)  shall be deemed to  include  any legal or
         other  expenses  reasonably  incurred  by  such  indemnified  party  in
         connection  with  investigating  or defending any such action or claim.
         Notwithstanding   the  provisions  of  this   subsection  (d),  (i)  no
         Underwriter shall be required to contribute any amount in excess of the
         underwriting   discounts  and  commissions  applicable  to  the  Shares
         purchased by such  Underwriter  and (ii) no person guilty of fraudulent
         misrepresentation  (within  the  meaning of  Section  11(f) of the Act)
         shall be entitled to contribution from any person who was not guilty of
         such fraudulent  misrepresentation.  The  Underwriters'  obligations in
         this  Section 8(d) to  contribute  are several in  proportion  to their
         respective underwriting obligations and not joint.

                  (e) Any losses, claims,  damages,  liabilities or expenses for
         which  an  indemnified   party  is  entitled  to   indemnification   or
         contribution  under  this  Section 8 shall be paid by the  indemnifying
         party  to the  indemnified  party  as  such  losses,  claims,  damages,
         liabilities  or expenses are incurred.  The indemnity and  contribution
         agreements  contained  in this  Section 8 and the  representations  and
         warranties  of the Company  set forth in this  Agreement  shall  remain
         operative  and  in  full  force  and  effect,  regardless  of  (i)  any
         investigation  made by or on behalf of any  Underwriter  or any  person
         controlling any Underwriter,  the Company, its directors or officers or
         any persons controlling the Company,  (ii) acceptance of any Shares and
         payment  therefor   hereunder,   and  (iii)  any  termination  of  this
         Agreement.  A successor  to any  Underwriter,  or to the  Company,  its
         directors or officers, or any person controlling the Company,  shall be
         entitled  to  the   benefits  of  the   indemnity,   contribution   and
         reimbursement agreements contained in this Section 8.



                                       25
<PAGE>

         9.       DEFAULT BY UNDERWRITERS.
                  -----------------------
                  If on the Closing Date or the Option Closing Date, as the case
         may be, any Underwriter  shall fail to purchase and pay for the portion
         of the Shares which such Underwriter has agreed to purchase and pay for
         on such date  (otherwise  than by reason of any  default on the part of
         the Company),  you shall use your reasonable  efforts to procure within
         36  hours  thereafter  one or more of the  other  Underwriters,  or any
         others, to purchase from the Company such amounts as may be agreed upon
         and upon the terms  set  forth  herein,  the Firm  Shares  or  Optional
         Shares,  as  the  case  may  be,  which  thedefaulting  Underwriter  or
         Underwriters failed to purchase.  If during such 36 hours you shall not
         have procured such other  Underwriters,  or any others, to purchase the
         Firm  Shares  or  Optional  Shares,  as the case may be,  agreed  to be
         purchased by the defaulting  Underwriter or  Underwriters,  then (a) if
         the aggregate number of shares with respect to which such default shall
         occur does not exceed 10% of the Firm Shares or Optional Shares, as the
         case may be, covered hereby, the other Underwriters shall be obligated,
         severally,  in proportion to the  respective  numbers of Firm Shares or
         Optional  Shares,  as the case may be,  which  they  are  obligated  to
         purchase hereunder,  to purchase the Firm Shares or Optional Shares, as
         the case may be,  which such  defaulting  Underwriter  or  Underwriters
         failed to purchase,  or (b) if the  aggregate  number of shares of Firm
         Shares or Optional  Shares,  as the case may be, with  respect to which
         such  default  shall  occur  exceeds 10% of the Firm Shares or Optional
         Shares,  as the case may be,  covered  hereby,  the Company or you will
         have the right,  by written notice given within the next 36-hour period
         to the parties to this Agreement,  to terminate this Agreement  without
         liability  on the  part of the  non-defaulting  Underwriters  or of the
         Company except to the extent provided in Section 8 hereof. In the event
         of a default by any Underwriter or  Underwriters,  as set forth in this
         Section 9, the Closing Date or Option Closing Date, as the case may be,
         may be postponed for such period,  not exceeding seven days, as you may
         determine  in  order  that the  required  changes  in the  Registration
         Statement  or  in  the   Prospectus  or  in  any  other   documents  or
         arrangements  may be  effected.  The term  "Underwriter"  includes  any
         person substituted for a defaulting Underwriter. Any action taken under
         this  Section 9 shall  not  relieve  any  defaulting  Underwriter  from
         liability  in respect of any  default  of such  Underwriter  under this
         Agreement.

         10.      NOTICES.
                  -------
                  All  communications  hereunder shall be in writing and, except
         as otherwise provided herein, will be mailed,  delivered or telegraphed
         and confirmed as follows:



                                       26
<PAGE>

                  If to the Underwriters:

                         Alex. Brown & Sons Incorporated
                         1 South Street
                         Baltimore, Maryland 21202-3220
                         Attention: William G. Byrnes

                           with a copy to:

                         Alex. Brown & Sons Incorporated
                         1 South Street
                         Baltimore, Maryland 21202-3220
                         Attention: General Counsel

                  If to the Company:

                           Cornerstone Realty Income Trust, Inc.
                           306 East Main Street
                           Richmond, Virginia 23219
                           Attention: Glade M. Knight

                           with a copy to:

                           McGuire, Woods, Battle & Booth, L.L.P.
                           One James Center
                           901 East Cary Street
                           Richmond, Virginia 23219
                           Attention: Leslie A. Grandis, Esq.

         11.      TERMINATION.
                  -----------
                  This  Agreement  may be  terminated  by you by  notice  to the
         Company as follows:

                  (a) at any  time  prior  to the  earlier  of (i) the  time the
         Shares are released by you for sale by notice to the  Underwriters,  or
         (ii) 11:30 a.m. on the first  business day  following  the date of this
         Agreement;

                  (b) at  any  time  prior  to the  Closing  Date  if any of the
         following  has  occurred:  (i) since the  respective  dates as of which
         information is given in the Registration  Statement and the Prospectus,
         any material adverse change or any development  involving a prospective
         material  adverse  change in or affecting the  condition,  financial or
         otherwise,  of the Company and its Subsidiaries taken as a



                                       27
<PAGE>

         whole  or  the  earnings,  business,  management,  properties,  assets,
         rights, operations,  condition (financial or otherwise) or prospects of
         the  Company  and its  Subsidiaries  taken as a whole,  whether  or not
         arising  in the  ordinary  course of  business,  (ii) any  outbreak  or
         escalation of hostilities  or declaration of war or national  emergency
         or other  national  or  international  calamity  or crisis or change in
         economic  or  political  conditions  if the  effect  of such  outbreak,
         escalation,  declaration,  emergency, calamity, crisis or change on the
         financial  markets  of the  United  States  would,  in your  reasonable
         judgment,  make it  impracticable  to market  the  Shares or to enforce
         contracts for the sale of the Shares, or (iii) suspension of trading in
         securities  generally on the New York Stock  Exchange or American Stock
         Exchange or limitation on prices  (other than  limitations  on hours or
         numbers of days of trading)  for  securities  on either such  Exchange,
         (iv) the enactment,  publication,  decree or other  promulgation of any
         statute,  regulation,  rule or order of any court or other governmental
         authority  which in your  reasonable  opinion  materially and adversely
         affects or that is reasonably likely to materially and adversely affect
         the business or operations of the Company, (v) declaration of a banking
         moratorium  by United  States or New York State  authorities,  (vi) the
         suspension of trading of the Common Shares by the Commission on the New
         York  Stock  Exchange  or  (vii)  the  taking  of  any  action  by  any
         governmental  body or  agency  in  respect  of its  monetary  or fiscal
         affairs which in your reasonable  opinion has a material adverse effect
         on the securities markets in the United States; or

                  (c)      as provided in Sections 6 and 9 of this Agreement.

         12.      SUCCESSORS.
                  ----------
                  This  Agreement has been and is made solely for the benefit of
         the  Underwriters  and the  Company  and their  respective  successors,
         executors,   administrators,  heirs  and  assigns,  and  the  officers,
         directors  and  controlling  persons  referred to herein,  and no other
         person will have any right or obligation hereunder. No purchaser of any
         of the  Shares  from any  Underwriter  shall be deemed a  successor  or
         assign merely because of such purchase.

         13.      INFORMATION PROVIDED BY UNDERWRITERS.
                  ------------------------------------
                  The Company and the  Underwriters  acknowledge  and agree that
         the only information furnished or to be furnished by any Underwriter to
         the  Company  for  inclusion  in any  Prospectus  or  the  Registration
         Statement  consists of the  information set forth in the last paragraph
         on the front  cover page  (insofar as such  information  relates to the
         Underwriters),  legends required by Item 502(d) of Regulation S-K under
         the Act and the  information  under the caption  "Underwriting"  in the
         Prospectus.



                                       28
<PAGE>

         14.      MISCELLANEOUS.
                  -------------
                  The reimbursement, indemnification and contribution agreements
         contained in this  Agreement and the  representations,  warranties  and
         covenants  in this  Agreement  shall  remain in full  force and  effect
         regardless  of  (a)  any  termination  of  this   Agreement,   (b)  any
         investigation made by

         or on behalf of any Underwriter or controlling person thereof, or by or
         on behalf of the Company or its  directors or officers and (c) delivery
         of and payment for the Shares under this Agreement.

                  This  Agreement  may be executed in two or more  counterparts,
         each of which shall be deemed an  original,  but all of which  together
         shall constitute one and the same instrument.

                  This  Agreement   shall  be  governed  by,  and  construed  in
         accordance with, the laws of the State of Maryland.

                                       29

<PAGE>

         If the foregoing letter is in accordance with your understanding of our
agreement,  please  sign  and  return  to us  the  enclosed  duplicates  hereof,
whereupon it will become a binding  agreement  among the Company and the several
Underwriters in accordance with its terms.

                                          Very truly yours,

                                          CORNERSTONE REALTY INCOME TRUST, INC.

                                          By:   /s/ Glade M. Knight
                                                ------------------------------

                                          Its:  Chairman
                                                ------------------------------

The foregoing  Underwriting Agreement is hereby confirmed and accepted as of the
date first above written.

ALEX. BROWN & SONS INCORPORATED
BRANCH, CABELL & CO., INC.
FREIDMAN, BILLINGS, RAMSEY & CO., INC.
INTERSTATE/JOHNSON LANE CORPORATION

By:  ALEX. BROWN & SONS INCORPORATED

By: /s/ Illegible
    ---------------------------

Its: Managing Director
     --------------------------



                                       30

<PAGE>


                                   APPENDIX I



                            SCHEDULE OF UNDERWRITERS


                                                           Number of Firm Shares
     Underwriter                                              to be Purchased
     -----------                                           ---------------------

Alex. Brown & Sons Incorporated                                  750,000
Freidman, Billings, Ramsey & Co., Inc.                           750,000
Interstate Johnston Lane Corporation                             750,000
Branch Cabell & Company, Inc.                                    750,000
Dean Witter Reynolds, Inc.                                        90,000
Donaldson, Lurkin & Jenrette Securities Corporation               90,000
A.G. Edwards & Sons, Inc.                                         90,000
Goldman, Sachs & Co.                                              90,000
Leiman Brothers, Inc.                                             90,000
Merrill Lynch, Pierce, Fenner & Smith Incorporated                90,000
Morgan Stanley & Co. Incorporated                                 90,000
PaineWebber Incorporated                                          90,000
Prudential Securities Incorporated                                90,000
Smith Barney Inc.                                                 90,000
EVEREN Securities, Inc.                                           60,000
Jefferies & Company                                               60,000
Edgar M. Norris & Co., Inc.                                       60,000
Ormes Capital Markets, Inc.                                       60,000
Pennsylvania Merchant Group Ltd.                                  60,000
Raymond James & Associates, Inc.                                  60,000
Sands Brothers & Co., Ltd.                                        60,000
Scott & Stringfellow, Inc.                                        60,000
The Seidler Companies Incorporated                                60,000
Tucker Anthony Incorporated                                       60,000
                                                               ---------
          Total                                                4,500,000


                                       31

<PAGE>

                                   APPENDIX II

                            SCHEDULE OF SUBSIDIARIES

1.  Apple Residential Advisors, Inc.

2.  Apple Residential Management Group, Inc.


                                       32