0001104659-07-015909.txt : 20070302 0001104659-07-015909.hdr.sgml : 20070302 20070302144507 ACCESSION NUMBER: 0001104659-07-015909 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20070302 ITEM INFORMATION: Regulation FD Disclosure ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20070302 DATE AS OF CHANGE: 20070302 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CORNERSTONE REALTY FUND LLC CENTRAL INDEX KEY: 0001073149 STANDARD INDUSTRIAL CLASSIFICATION: OPERATORS OF NONRESIDENTIAL BUILDINGS [6512] IRS NUMBER: 330825254 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-51868 FILM NUMBER: 07667234 BUSINESS ADDRESS: STREET 1: 1920 MAIN PLAZA STREET 2: SUITE 400 CITY: IRVINE STATE: CA ZIP: 92614 BUSINESS PHONE: 949 852-1007 MAIL ADDRESS: STREET 1: 1920 MAIN PLAZA STREET 2: SUITE 400 CITY: IRVINE STATE: CA ZIP: 92614 FORMER COMPANY: FORMER CONFORMED NAME: CORNERSTONE INDUSTRIAL PROPERTIES INCOME & GROWTH FUND LLC DATE OF NAME CHANGE: 19981106 8-K 1 a07-7010_18k.htm 8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

March 2, 2007

Date of Report (Date of earliest event reported)

CORNERSTONE REALTY FUND, LLC

(Exact name of registrant as specified in its charter)

California	000-51868	33-0827161
(State of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification Number)

1920 Main Street., Suite 400 Irvine, California 92614
(Address of principal executive offices)

(949) 852-1007

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions.

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14d-2(b)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4©

Item 7.01 Regulation FD Disclosure

Attached hereto as Exhibit 99.1 is a communication to investors issued by Cornerstone Realty Fund, LLC on March 2, 2007.

In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report of Form 8-K, including Exhibit 99.1, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933.

Item 9.01 Financial Statements in Exhibits

(d) Exhibits

99.1 Investor Update dated March 2, 2007

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	CORNERSTONE REALTY FUND, LLC

		By:	CORNERSTONE INDUSTRIAL PROPERTIES, LLC
			Its Managing Member

				By:	CORNERSTONE VENTURES, INC.
					Its Manager

						By:	/s/ TERRY G. ROUSSEL
							Terry G. Roussel, President
Dated: March 2, 2007

EX-99.1 2 a07-7010_1ex99d1.htm EX-99.1

Exhibit 99.1

March 2, 2007

Dear Cornerstone Realty Fund Investor:

Since our last communication, there have been significant developments in Cornerstone Realty Fund. We have successfully concluded the Request for Consent process, with the required number of “For” votes received by February 22, 2007. What does this mean to our investors? We have now obtained investor approval of an amendment to the Fund Operating Agreement which eliminates the prohibition on repurchasing units by the Fund and adds a provision specifically permitting a unit repurchase program. As discussed, it is now our intention to add a unit repurchase program to the Fund. We will provide you with additional information as it becomes available.

As you may recall, the amendment was our response to the deeply discounted unsolicited Mini-Tender Offer from CMG Partners, LLC, an outside, independent and unaffiliated entity. The amendment allows the Fund to adopt a repurchase program that more fairly reflects the value of the units. While we understand that due to changing circumstances, some investors may seek liquidity options for their units, we felt that it was not in the best interest of our clients to tender their units of membership interest to CMG. We are pleased to report that at this point, we have not received a request from even one investor to transfer units to CMG under the terms of the Mini-Tender Offer.

This brings us to the next point. CMG has once again launched a Mini-Tender Offer for units of Cornerstone Realty Fund. You may have already received something in the mail from CMG offering $350 per unit. This is an increase of $50 per unit over CMG’s previous offer. You may also notice that once again CMG has specifically included in the terms of its offer that all distributions paid or declared by the Fund on or after December 1, 2006 would belong to CMG. Therefore, if you were to tender your units on April 30th, 2007, CMG would be entitled to the last six months of distributions that you received, those paid in January and those anticipated to be paid in April. The price you would receive net of the January and April cash distributions would be $337.50 per unit. This is approximately 67% of management’s estimate of the Fund’s current value. In addition, should you desire to tender your units to CMG Partners, you have only 10 days from that date to withdraw your units from their Mini-Tender Offer.

As we have stated in the past, we at Cornerstone value your participation and investment in the Cornerstone Realty Fund. CMG Partners is a private investment group engaged in the business of buying investments at a discount. In this case, CMG Partners is offering to purchase your units in the Fund for $350 per unit, less the amount of cash distributions per unit paid on or after December 1, 2006. This represents a price that is significantly less than the initial purchase price of $500 per unit. For this reason and for others described herein, we are recommending that you reject CMG’s offer.

Summary: “Our Recommendation is to Reject CMG’s Offer”

In summary, we recommend that you reject the offer made by CMG Partners on the following basis:

· The Fund has provided you with a current estimated value between $496 and $514 per unit as of November 15, 2006. CMG’s offer represents a discount of approximately 33% to this current estimated value.

· We believe the real estate portfolio has appreciated and the Fund is paying a 5% annualized cash distribution to investors. Our in-depth knowledge of the Fund’s portfolio forms the basis for our estimates of the real estate portfolio’s current value. Overall, portfolio rents are increasing and we believe that additional value is likely to be realized over our remaining anticipated investment holding period.

· We anticipate higher future values in the Fund. The Fund is also legally required to liquidate in the year 2010. Unless your investment time horizon has been shortened due to circumstances unrelated to your investment in the Fund, the long term nature of the Fund should be maintained to realize its full potential.

In closing, we greatly appreciate your investment in the Fund. We look forward to working with you in the future. If you or your advisors have any questions or would like a copy of the earlier letter addressing the first CMG mini-tender offer, please call us at (877) 805-3333.

Sincerely,

Cornerstone Realty Fund, LLC