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SEC Registration No. 333-107750
Filed pursuant to Rule 424(b)(3)

[THE FOLLOWING IS TEXT TO A STICKER TO BE ATTACHED TO THE FRONT COVER OF THE PROSPECTUS IN A MANNER THAT WILL NOT OBSCURE THE RISK FACTORS]

SUPPLEMENTAL INFORMATION—The Prospectus of Cornerstone Realty Fund, LLC consists of this sticker, the Prospectus dated November 1, 2004, Supplement No. 1 dated January 28, 2005 and Supplement No. 2 dated February 11, 2005. Supplement Nos. 1 and 2 contain descriptions of the status of the offering, a property which the fund has purchased, revisions to "Management's Discussion and Financial Condition and Results of Operations" and financial statements and pro forma financial information.

CORNERSTONE REALTY FUND, LLC

SUPPLEMENT NO. 2
DATED FEBRUARY 11, 2005
TO THE PROSPECTUS DATED NOVEMBER 1, 2004
OF CORNERSTONE REALTY FUND, LLC

        This Supplement No. 2 supplements, modifies or supersedes certain information contained in the prospectus of Cornerstone Realty Fund, LLC, dated November 1, 2004, and must be read in conjunction with such prospectus and Supplement No. 1 dated January 28, 2005.

        The purpose of this Supplement No. 2 is to include the financial statements and pro forma financial information relating to the acquisition of the Zenith Drive Center located in Glenview, Illinois as described in Supplement No. 1.

        We are not aware of any material factors relating to Zenith Drive Center other than those discussed in Supplement No. 1 that would cause the historical financial information presented in this Supplement to be not necessarily indicative of future results.

INDEX TO FINANCIAL STATEMENTS

The following section regarding Zenith Drive Center is inserted at the end of the "Index to Financial Statements" on page F-1 of our prospectus.

Zenith Drive Center
	Report of Independent Registered Public Accounting Firm	F-41
	Statements of Revenue and Certain Expenses for the Year Ended December 31, 2003 and the Nine Months Ended September 30, 2004 (unaudited)	F-42
	Notes to Statements of Revenue and Certain Expenses	F-43
Cornerstone Realty Fund, LLC
	Summary of Unaudited Pro Forma Financial Information	F-45
	Unaudited Pro Forma Condensed Balance Sheet as of September 30, 2004	F-46
	Unaudited Pro Forma Condensed Statement of Operations for the Year Ended December 31, 2003	F-48
	Unaudited Pro Forma Condensed Statement of Operations for the Nine Months Ended September 30, 2004	F-49

The following financial statements and pro forma financial information relating to the acquisition of the Zenith Drive Center located in Glenview, Illinois are inserted following page F-40 of our prospectus:

1

Report of Independent Registered Public Accounting Firm

To the Members
Cornerstone Realty Fund, LLC

        We have audited the accompanying statement of revenue and certain expenses of Zenith Drive Center for the year ended December 31, 2003. This statement of revenue and certain expenses is the responsibility of the management of Zenith Drive Center. Our responsibility is to express an opinion on the statement of revenue and certain expenses based on our audit.

        We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the statement of revenue and certain expenses is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

        The accompanying statement of revenue and certain expenses was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission (for inclusion in the current report on Form 8-K/A of Cornerstone Realty Fund, LLC) as described in Note 1 and is not intended to be a complete presentation of the revenue and expenses of the property.

        In our opinion, the statement of revenue and certain expenses of Zenith Drive Center presents fairly, in all material respects, the revenue and certain expenses described in Note 1 of Zenith Drive Center for the year ended December 31, 2003, in conformity with accounting principles generally accepted in the United States.

/s/ BDO SEIDMAN, LLP

Costa Mesa, California
January 4, 2005

F-41

ZENITH DRIVE CENTER
STATEMENTS OF REVENUE AND CERTAIN EXPENSES

		Year ended December 31, 2003		Nine months ended September 30, 2004
				(Unaudited)
Revenue
	Rental revenue	$	557,775	$	432,973
	Tenant reimbursements		44,534		29,408
	Other		2,850		1,400
Total revenue			605,159		463,781
Certain Expenses
	Property operating and maintenance		85,893		68,023
	Property taxes		104,256		79,368
	Insurance		9,027		7,299
Total certain expenses			199,176		154,690
Excess of revenue over certain expenses		$	405,983	$	309,091

See accompanying notes to statements of revenue and certain expenses.

F-42

ZENITH DRIVE CENTER
NOTES TO STATEMENTS OF REVENUE AND CERTAIN EXPENSES

1.     Organization and Summary of Significant Accounting Policies

Organization

        The accompanying statement of revenue and certain expenses includes the operations of Zenith Drive Center (the "Property") located in Glenview, Illinois, which was acquired by Cornerstone Realty Fund, LLC (the "Fund"), from a nonaffiliated third party. The Property was acquired on January 25, 2005 for $5,200,000 and has 38,008 leasable square feet (unaudited).

Basis of Presentation

        The accompanying statements of revenue and certain expenses have been prepared in accordance with the requirements of the Securities and Exchange Commission Regulation S-X, Rule 3-14. Accordingly, the statements exclude items not comparable to the proposed future operations of the Property such as mortgage interest, leasehold rental, depreciation, corporate expenses, and federal and state income taxes.

        The accompanying statements are not representative of the actual operations for the periods presented, as certain expenses that may not be comparable to the expenses expected to be incurred by the Fund in the future operations of the Property have been excluded. The statement for the nine months ended September 30, 2004 is unaudited and reflects all adjustments (consisting only of normal recurring adjustments), which are, in the opinion of management, necessary for a fair presentation of the operating results for the interim period presented. The results of operations for the nine months ended September 30, 2004 are not necessarily indicative of the results for the entire fiscal year ending December 31, 2004.

Revenue Recognition

        Rental revenue is recognized on an accrual basis as it is earned over the lives of the respective tenant leases on a straight-line basis. Rental receivables are periodically evaluated for collectibility.

Use of Estimates

        The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of revenue and certain expenses during the reporting period. Actual results could differ materially from the estimates in the near term.

2.     Industrial Property

        The future minimum lease payments to be received under existing operating leases as of December 31, 2003, are as follows:

2004	$	369,362
2005		119,653
2006		91,194
2007		71,275
2008		55,570
Thereafter		184,500
	$	891,554

F-43

        Industrial space in the Property is generally leased to tenants under lease terms which provide for the tenants to pay increases in operating expenses in excess of specified amounts. The above future minimum lease payments do not include specified payments for tenant reimbursements of operating expenses.

        The leases include scheduled base rent increases over their respective terms; the difference between base rental income on a straight-line basis and amounts currently due pursuant to the lease agreements was not significant.

        One tenant represents approximately 14% of the rental income of the Property for the each of the periods presented.

F-44

CORNERSTONE REALTY FUND, LLC
UNAUDITED PRO FORMA FINANCIAL INFORMATION

        The following Unaudited Pro Forma Condensed Statements of Operations of Cornerstone Realty Fund, LLC (the "Fund") for the year ended December 31, 2003 and for the nine months ended September 30, 2004 have been prepared as if the acquisition of Zenith Drive Center had occurred as of January 1, 2003 and Unaudited Condensed Balance Sheet of the Fund as of September 30, 2004 has been prepared as if the acquisition of Zenith Drive Center had occurred on September 30, 2004.

        Such Unaudited Pro Forma Financial Information is based in part upon (i) the Audited Financial Statements of the Fund for the year ended December 31, 2003 included in the Fund's Annual Report on Form 10-K for the year ended December 31, 2003; (ii) the Unaudited Financial Statements of the Fund as of and for the nine months ended September 30, 2004 included in the Fund's Quarterly Report on Form 10-Q for the quarter ended September 30, 2004; and (iii) the Historical Statements of Revenue and Certain Expenses of Zenith Drive Center for the year ended December 31, 2003 and for the nine months ended September 30, 2004 (unaudited) filed herewith.

        The Unaudited Pro Forma Financial Information is presented for information purposes only and is not necessarily indicative of the financial position or results of operations of the Fund that would have occurred if the acquisition of Zenith Drive Center had been completed on the date indicated, nor does it purport to be indicative of future financial position or results of operations. In the opinion of the Fund's managing member, all material adjustments necessary to reflect the effect of this transaction have been made.

F-45

CORNERSTONE REALTY FUND, LLC
(a California limited liability company)
UNAUDITED PROFORMA CONDENSED BALANCE SHEET

ASSETS

			September 30, 2004(A)		Recent Acquisition(B)			Proforma September 30, 2004
			(unaudited)
Assets
	Cash and cash equivalents		$	7,873,682	$	(5,001,164	)	$	2,872,518
	Investments in real estate
		Land		4,539,400		900,000			5,439,400
		Buildings and improvements, less accumulated depreciation of $277,734		7,636,970		4,300,000			11,936,970
		Intangible asset—in place leases, less accumulated amortization of $95,957		71,457		—			71,457
				12,247,827		5,200,000			17,447,827
	Other assets
		Tenant and other receivables		69,321		—			69,321
		Prepaid insurance		8,817		—			8,817
		Leasing commissions, less accumulated amortization of $9,580		39,338		—			39,338
Total assets			$	20,238,985	$	198,836		$	20,437,821
LIABILITIES AND MEMBERS' CAPITAL
Liabilities
	Accounts payable and accrued Liabilities		$	53,139	$	20,409		$	73,548
	Real estate taxes payable			140,030		118,151			258,181
	Tenant security deposits			141,264		60,276			201,540
Total liabilities				334,433		198,836			533,269
Members' capital (100,000 units authorized, 48,728 units issued and outstanding in 2004 and 33,012 units issued and outstanding in 2003)				19,904,552		—			19,904,552
			$	20,238,985	$	198,836		$	20,437,821

(A)

Derived from the unaudited financial statements as of September 30, 2004.

(B)

Represents adjustment for the acquisition of the Zenith Drive Center, based on historical operating results. Depreciation is based on a preliminary allocation of the purchase price to land ($900,000) and buildings ($4,300,000) with buildings depreciated on a straight-line method over a 39-year period. The Company has not currently completed its purchase accounting in accordance with Financial Accounting Standards Board Statement No. 141, Business Combinations ("FAS 141"). Under FAS 141, the purchase price is allocated to a property's tangible (primarily land and building) and intangible (primarily in-place leases) assets at its estimated fair value. Specifically, the Company is in the process of determining the value, if any, attributable to the in-place leases of the Zenith Drive Center at the acquisition date. The finalization of the purchase accounting under FAS 141 could have the impact of decreasing the allocation to tangible assets as presented above for an allocation to intangible assets which are amortized over a shorter period (typically the remaining life of the applicable in-place leases) than buildings.

F-46

CORNERSTONE REALTY FUND, LLC
UNAUDITED PRO FORMA CONDENSED STATEMENT OF OPERATIONS

For the Year Ended December 31, 2003
(Unaudited)

		Cornerstone Realty Fund, LLC Historical(A)			Recent Acquisition(B)			Cornerstone Realty Fund, LLC Pro Forma
Revenues
	Rental revenue	$	750,727		$	557,775		$	1,308,502
	Tenant reimbursements		136,963			44,534			181,497
			887,690			602,309			1,489,999
Expenses
	Property operating and maintenance		(135,491	)		(94,920	)		(230,411	)
	Property taxes		(162,592	)		(104,256	)		(266,848	)
	General and administrative expenses		(174,875	)		—			(174,875	)
	Interest expense on advances payable to managing member		(3,993	)		—			(3,993	)
	Depreciation and Amortization		(115,063	)		(110,256	)		(225,319	)
			(592,014	)		(309,432	)		(901,446	)
Interest, dividends and other			25,542			2,850			28,392
Net income		$	321,218		$	295,727		$	616,945
Net income allocable to managing member		$	32,122					$	61,695
Net income allocable to unitholders		$	289,096					$	555,250
Per share amounts:
Basic and diluted income allocable to unitholders		$	11.92					$	22.89
Basic and diluted weighted average units outstanding			24,256						24,256

(A)

Represents the historical results of operations of the Fund for the year ended December 31, 2003. Certain reclassifications have been made to the historical statement of operations of the Fund to conform to the pro forma financial information presentation.

(B)

Represents adjustment for the acquisition of the Zenith Drive Center, based on historical operating results. Depreciation is based on a preliminary allocation of the purchase price to land ($900,000) and buildings ($4,300,000) with buildings depreciated on a straight-line method over a 39-year period. The Company has not currently completed its purchase accounting in accordance with Financial Accounting Standards Board Statement No. 141, Business Combinations ("FAS 141"). Under FAS 141, the purchase price is allocated to a property's tangible (primarily land and building) and intangible (primarily in-place leases) assets at its estimated fair value. Specifically, the Company is in the process of determining the value, if any, attributable to the in-place leases of the Zenith Drive Center at the acquisition date. The finalization of the purchase accounting under FAS 141 could have the impact of decreasing the allocation to tangible assets as presented above for an allocation to intangible assets which are amortized over a shorter period (typically the remaining life of the applicable in-place leases) than buildings.

F-47

CORNERSTONE REALTY FUND, LLC
UNAUDITED PRO FORMA CONDENSED STATEMENT OF OPERATIONS

For the Nine Months Ended September 30, 2004
(Unaudited)

		Cornerstone Realty Fund, LLC Historical(A)			Recent Acquisition(B)			Cornerstone Realty Fund, LLC Pro Forma
Revenues
	Rental revenue	$	904,360		$	432,973		$	1,337,333
	Amortization of in-place leases		(95,957	)		—			(95,957	)
	Tenant reimbursements		169,623			29,408			199,031
			978,026			462,381			1,440,407
Expenses
	Property operating and maintenance		(206,685	)		(75,322	)		(282,007	)
	Property taxes		(150,907	)		(79,368	)		(230,275	)
	General and administrative expenses		(141,971	)		—			(141,971	)
	Interest expense on advances payable to managing member		—			—			—
	Depreciation and Amortization		(156,788	)		(82,892	)		(239,680	)
			(656,351	)		(237,582	)		(893,933	)
Interest, dividends and other			10,174			1,400			11,574
Net income		$	331,849		$	226,199		$	558,048
Net income allocable to managing member		$	33,185					$	55,805
Net income allocable to unitholders		$	298,664					$	502,243
Per share amounts:
Basic and diluted income allocable to unitholders		$	7.37					$	12.39
Basic and diluted weighted average units outstanding			40,532						40,532

(A)

Represents the historical results of operations of the Fund for the nine months ended September 30, 2004. Certain reclassifications have been made to the historical statement of operations of the Fund to conform to the pro forma financial information presentation.

(B)

Represents adjustment for the acquisition of the Zenith Drive Center, based on historical operating results. Depreciation is based on a preliminary allocation of the purchase price to land ($900,000) and buildings ($4,300,000) with buildings depreciated on a straight-line method over a 39-year period. The Company has not currently completed its purchase accounting in accordance with Financial Accounting Standards Board Statement No. 141, Business Combinations ("FAS 141"). Under FAS 141, the purchase price is allocated to a property's tangible (primarily land and building) and intangible (primarily in-place leases) assets at its estimated fair value. Specifically, the Company is in the process of determining the value, if any, attributable to the in-place leases of the Zenith Drive Center at the acquisition date. The finalization of the purchase accounting under FAS 141 could have the impact of decreasing the allocation to tangible assets as presented above for an allocation to intangible assets which are amortized over a shorter period (typically the remaining life of the applicable in-place leases) than buildings.

F-48

QuickLinks

CORNERSTONE REALTY FUND, LLC
INDEX TO FINANCIAL STATEMENTS
Report of Independent Registered Public Accounting Firm
ZENITH DRIVE CENTER STATEMENTS OF REVENUE AND CERTAIN EXPENSES
ZENITH DRIVE CENTER NOTES TO STATEMENTS OF REVENUE AND CERTAIN EXPENSES
CORNERSTONE REALTY FUND, LLC UNAUDITED PRO FORMA FINANCIAL INFORMATION
CORNERSTONE REALTY FUND, LLC (a California limited liability company) UNAUDITED PROFORMA CONDENSED BALANCE SHEET
CORNERSTONE REALTY FUND, LLC UNAUDITED PRO FORMA CONDENSED STATEMENT OF OPERATIONS For the Year Ended December 31, 2003 (Unaudited)
CORNERSTONE REALTY FUND, LLC UNAUDITED PRO FORMA CONDENSED STATEMENT OF OPERATIONS For the Nine Months Ended September 30, 2004 (Unaudited)