Mail Stop 4561

      September 9, 2005



Terry G. Roussel
President
Cornerstone Realty Fund, Inc.
4590 MacArthur Blvd., Suite 610
Newport Beach, California  92660

Re:	Cornerstone Realty Fund, Inc.
      Amendment No. 4 to Registration Statement on Form S-11
      Filed August 30, 2005
      Registration No. 333-121238

Dear Mr. Roussel:

	We have reviewed your filing and have the following comments.
Where indicated, we think you should revise your document in
response
to these comments.  If you disagree, we will consider your
explanation as to why our comment is inapplicable or a revision is
unnecessary.  Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
supplemental information so we may better understand your
disclosure.
After reviewing this information, we may or may not raise
additional
comments.

	Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects.  We welcome
any questions you may have about our comments or any other aspect
of
our review.  Feel free to call us at the telephone numbers listed
at
the end of this letter.

General

1. We note your response to prior comment 2; however, we are
unable
to agree with your analysis.  It appears that the private
placement
of partnership units to your advisor should be integrated with the
public offering.  Since you have already commenced the private
placement without a registration statement, however, you cannot
now
register those units.  Please revise your document to include a
risk
factor discussing the violation of Section 5 and your possible
liability for the sale to the advisor.  Please discuss with your
auditors whether this contingent liability requires additional
disclosure in the notes to your financial statements.  If not,
please
tell us the basis for your auditor`s conclusion.

2. We note your response to comment 1.  We are unable to locate
disclosure that indicates you will purchase investment grade
properties.  Please revise or advise.

Estimated Use of Proceeds, page 33

3. We note your response to our comment 8.  Considering that
neither
the amount nor the percentage of organization and offering
expenses
is fixed, we continue to believe that your use of proceeds table
should assume the maximum expense amount.  In this regard, we note
your disclosure in footnote (2) that organizational and offering
expenses could be as much as 5%.  Please revise to reflect these
expenses as 5% at the minimum, mid-point, and maximum offering
amounts.

4. Please revise the line item for acquisition fees to reflect 2%
at
all three offering amounts.  We note the footnote disclosure that
acquisition fees previously paid may be allocated to the purchase
price of properties acquired later; however, it does not appear
that
this would have the effect of reducing the fee itself.  Please
revise
or advise.


  *  *  *

      As appropriate, please amend your registration statement in
response to these comments.  You may wish to provide us with
marked
copies of the amendment to expedite our review.  Please furnish a
cover letter with your amendment that keys your responses to our
comments and provides any requested supplemental information.
Detailed cover letters greatly facilitate our review.  Please
understand that we may have additional comments after reviewing
your
amendment and responses to our comments.

      We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings reviewed by the staff to
be
certain that they have provided all information investors require
for
an informed decision.  Since the company and its management are in
possession of all facts relating to a company`s disclosure, they
are
responsible for the accuracy and adequacy of the disclosures they
have made.

	You may contact Kristi Beshears, Accountant, at (202) 551-
3429
or Linda Van Doorn, Senior Assistant Chief Accountant, at (202)
551-
3498 if you have questions regarding comments on the financial
statements and related matters.  Please contact Jeffrey Shady,
Attorney-Advisor, at (202) 551-3471 or me at (202) 551-3780 with
any
other questions.


      Sincerely,



      Karen J. Garnett
      Assistant Director

cc:	Karen Winnett, Esq. (via facsimile)
      Preston Gates & Ellis LLP
??

??

??

??

Terry G. Roussel
Cornerstone Realty Fund, Inc.
September 9, 2005
Page 3