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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>UNITED STATES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SECURITIES AND EXCHANGE COMMISSION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Washington, D.C.&nbsp;&nbsp;20549</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 18pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>FORM 8-K</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>CURRENT REPORT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Pursuant to Section 13 or 15(d) of</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>the Securities Exchange Act of 1934</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Date of Report (Date of earliest event reported):</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>September 13, 2012</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 24pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>CORNERSTONE CORE PROPERTIES</B></P>

<P STYLE="font: 24pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>REIT, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Exact name of registrant as specified in
its charter)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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    <TD STYLE="width: 30%; font-weight: bold; text-align: center">Maryland</TD>
    <TD STYLE="width: 5%; font-weight: bold">&nbsp;</TD>
    <TD STYLE="width: 30%; font-weight: bold; text-align: center">000-52566</TD>
    <TD STYLE="width: 5%; font-weight: bold">&nbsp;</TD>
    <TD STYLE="width: 30%; font-weight: bold; text-align: center">73-1721791</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">(State&nbsp;or&nbsp;Other&nbsp;Jurisdiction&nbsp;of&nbsp;Incorporation)</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">(Commission File Number)</TD>
    <TD>&nbsp;</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(I.R.S. Employer Identification</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Number)</P></TD></TR>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>1920 Main Street, Suite 400</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Irvine, California 92614</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Address of principal executive offices)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(949) 852-1007</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Registrant&rsquo;s telephone number, including
area code)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Not Applicable</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Former name or former address, if changed
since last report)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">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.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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    <TD STYLE="width: 3%"><FONT STYLE="font-family: Wingdings">&#168;</FONT></TD>
    <TD STYLE="width: 97%">Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)</TD></TR>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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    <TD STYLE="width: 3%"><FONT STYLE="font-family: Wingdings">&#168;</FONT></TD>
    <TD STYLE="width: 97%">Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14d-2(b)</TD></TR>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<TR STYLE="vertical-align: top">
    <TD STYLE="width: 3%"><FONT STYLE="font-family: Wingdings">&#168;</FONT></TD>
    <TD STYLE="width: 97%">Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)</TD></TR>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<TR STYLE="vertical-align: top">
    <TD STYLE="width: 3%"><FONT STYLE="font-family: Wingdings">&#168;</FONT></TD>
    <TD STYLE="width: 97%">Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)</TD></TR>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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    <TD STYLE="width: 96px; font-weight: bold">Item 1.01</TD>
    <TD STYLE="font-weight: bold">Entry into a Material Definitive Agreement</TD></TR>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">On September 14, 2012 the registrant acquired through a joint
venture a 95% interest in two healthcare related facilities with a total of 221 beds. The transaction was funded in part by a loan
from GE Capital Corporation. The information in this Report sets forth under Items 2.01 and 2.03 related to the joint venture formed
to acquire healthcare properties, including the Medford Facility and Galveston Facility (as defined below) and the related financing
arrangements is incorporated by reference herein.</P>

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    <TD STYLE="width: 96px">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Item 2.01</B></P></TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Completion of Acquisition or Disposition of Assets</B></P></TD></TR>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Joint Venture to Acquire Medford, Oregon Memory Care Facility
and Galveston, Texas Skilled Nursing Facility</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>General</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">On September 14, 2012, through an indirect wholly-owned subsidiary,
we funded an investment in a joint venture, Cornerstone Healthcare Partners, LLC (the &ldquo;JV Entity&rdquo;), that concurrently
acquired a 71-bed memory care facility in Medford, Oregon (the &ldquo;Medford Facility&rdquo;) from Monterey Village, an Oregon
limited partnership (the &ldquo;Medford Seller&rdquo;). Cornerstone Healthcare Real Estate Fund, Inc. (&ldquo;CHREF&rdquo;), a
fund sponsored by an affiliate of our advisor, is our joint venture partner in the $8.5 million transaction.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Medford Facility will be leased by the joint venture to
Radiant Senior Living, the current operator of the property, pursuant to a long-term triple net lease. The lease term is 10 years
with a lessee option to renew for two additional five-year periods. The lease rate for the Medford Facility, calculated as the
first year lease payment as a percentage of the purchase price, is 9%.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Medford Facility provides an initial cash on cash yield,
which is calculated by dividing the first year lease payment, less debt service and asset management and property management fees
paid to our advisor, by the equity contribution, which is estimated to be approximately 12.0%.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">On the same date, through an indirect wholly-owned subsidiary,
we funded an investment in the JV Entity that concurrently acquired a 150-bed skilled-nursing facility in Galveston County, Texas
(the &ldquo;Galveston Facility&rdquo;) from Friendswood Realty, LP, a Texas limited partnership (the &ldquo;Galveston Seller&rdquo;).
CHREF is our joint venture partner in the $15.0 million transaction.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Galveston Facility will be leased by the joint venture to
Mason Friendswood OP, LLC, the current licensee of the property, pursuant to a long-term triple net lease guaranteed personally
by the principal of Mason Friendswood OP, LLC. The lease term is 10 years with a lessee option to renew for two additional five-year
periods. The lease rate for the Galveston Facility is 10%.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Galveston Facility provides an initial cash on cash yield,
which is estimated to be approximately 15.0%.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Parties and Structure</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Capital Contributions. </I>We invested approximately $8.0
million and CHREF invested approximately $0.4 million to fund the acquisitions of the Medford Facility and Galveston Facility.
Upon completion of this transaction, we own a 95% equity interest in the JV Entity and CHREF owns the remaining 5% interest.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Management of the JV Entity</I>. As the manager of the JV
Entity, we generally have the authority to direct and control the business of the JV Entity; however, under the terms of the operating
agreement for the JV Entity, certain major decisions regarding the business of the JV Entity require the unanimous approval of
us and CHREF. Such major decisions include, among others, (i) the sale or transfer of all or substantially all of the JV Entity&rsquo;s
assets, (ii) any merger or consolidation of the JV Entity with any other entity, (iii) admission of new members, (iv) loans of
JV Entity funds, (v) to incur or enter into any lease, conveyance, mortgage or other agreement or indebtedness on behalf of the
JV Entity which requires the personal guarantee of any member or any affiliate of any member and (vi) taking any action to cause
the dissolution of the JV Entity. The operating agreement contains terms, conditions, representations, warranties and indemnities
that are customary and standard for joint ventures in the real estate industry. As the manager of the JV Entity, we may be entitled
to receive compensation for services as shall be determined by consent of all of the members.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Distributions to the JV Entity Members. </I>Distributions
to the members of the JV Entity are made first, in proportion to the remaining balance of capital contributions which were paid
by each member and not returned to such member, until the cumulative amount of capital contributions paid by each member has been
returned to such member; then, in proportion to the percentage interest in the JV Entity held by the member.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Medford Facility</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Farmington Square Medford, a memory care facility with 52 units
and 71 licensed beds, is located within the Medford, Oregon city limits. The facility, consisting of four separate wood-frame,
single-story buildings totaling 32,557 square feet, was constructed in phases between 1990 and 1997 and currently operates at 90%
occupancy.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The operator of the Medford Facility has served in that capacity
since 1991, and has over twenty years of experience operating senior-living facilities in the Pacific Northwest. As described above,
upon the closing of the purchase, the existing operator will continue operating the Medford Facility under a long-term, triple-net
lease. Including the Medford Facility, the operator manages thirteen assisted-living facilities in Oregon and Washington.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Galveston Facility</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Friendship Haven Healthcare and Rehabilitation Center, a skilled-nursing
facility with 150 licensed beds, is located in Galveston County, Texas. The facility, a single-story, 56,968 square foot wood-frame
building, was constructed in 1997 and currently operates at 90% occupancy.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The operator of the Galveston Facility has served in that capacity
since February 2012, and has over twenty years of experience operating senior-living facilities in Texas and Louisiana. As described
above, upon the closing of the purchase, the existing licensed operator will continue operating the Galveston Facility under a
long-term, triple-net lease. Including the Galveston Facility, the operator manages fifteen skilled-nursing facilities in Texas.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In evaluating each property as a potential acquisition and determining
the appropriate amount of consideration to be paid for the property, we considered a variety of factors including overall valuation
of targeted net rental income, quality of and regulatory compliance of the operator, location, demographics, existing and planned
competitive properties and price per bed and analyzed how the property compares to comparable properties in its market.</P>

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        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>ITEM 2.03</B></P></TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Creation of a Direct Financial Obligation or an Obligation
        Under an Off Balance Sheet Arrangement of Registrant.</B></P></TD></TR>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We acquired our interest in the Medford Facility and Galveston
Facility subject to a secured loan.&nbsp;&nbsp;On September 13, 2012, we entered into a loan agreement with General Electric Capital
Corporation (&ldquo;GE Loan&rdquo;) for a loan in the aggregate amount of approximately $16.5 million secured by security interests
in the Medford Facility and Galveston Facility. The GE Loan, which bears interest at LIBOR, with a floor of 50 basis points, plus
a spread of 4.50%, matures on September 12, 2017, at which time all outstanding principal, accrued and unpaid interest and any
other amounts due under the loan agreement will become due.&nbsp;The GE Loan is interest-only and may be voluntarily prepaid within
the twelve&ndash;month lockout period provided the borrower pays a penalty equal to the sum of the Libor Breakage Amount, as
defined in the loan agreement, and two percent of the outstanding balance of the loan. The loan may be prepaid with no penalty
after the expiration of the twelve-month lockout period.&nbsp;&nbsp;Interest payments on the GE Loan are due monthly.&nbsp; After
the lockout period, principal and interest payments are due monthly based on 25-year amortization schedule.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Additionally, as disclosed in Item 2.03 on Form 8-K filed with
the Securities Exchange Commission on August 6, 2012, we acquired our interest in the Portland Properties, as defined therein,
subject to a secured loan. On August 1, 2012, we entered into a loan agreement with the Sellers for a loan (the &ldquo;Seller Loan&rdquo;)
in the aggregate amount of approximately $5.8 million secured by security interests in the Portland Properties.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">On September 14, 2012, we repaid the entire principal balance
of the Seller Loan with proceeds from the GE Loan. Consequently, the GE Loan is secured, in part, by the Portland Properties.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>ITEM 5.02</B></P></TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Departure of Director and Principal Executive Officer; Appointment
        of Officer</B></P></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">On September 18, 2012, Terry G. Roussel resigned as Chairman,
CEO, Secretary, and Director of the Company and from his management and director roles at Cornerstone Realty Advisors, the Company&rsquo;s
advisor. There are no current plans to name a new Chairman /CEO. Mr. Roussel&rsquo;s action was voluntary and is supported by the
independent directors as appropriate to the Company&rsquo;s ongoing strategic repositioning initiative. Mr. Roussel&rsquo;s resignation
was not due to any disagreement with the Company on any matter relating to the Company&rsquo;s operations, policies or practices.
Ongoing executive leadership will be provided by Kent Eikanas, the Company&rsquo;s President and Chief Operating Officer, who will
serve in the interim as the Company&rsquo;s principal executive officer. Concurrently with Mr. Roussel&rsquo;s resignation, Mr.
Eikanas will also be appointed President, Chief Operating Officer and the sole board member of Cornerstone Realty Advisors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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    <TD STYLE="width: 96px; font-size: 10pt; font-weight: bold">Item 9.01</TD>
    <TD STYLE="font-size: 10pt; font-weight: bold">Financial Statements and Exhibits.</TD></TR>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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    <TD STYLE="width: 72px; font-size: 10pt">(a)</TD>
    <TD STYLE="font-size: 10pt"><I><U>Financial statements of businesses acquired.</U></I> Audited financial statements for the Medford Facility and Galveston Facility will be filed by amendment to this Form 8-K no later than November 28, 2012.</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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    <TD STYLE="width: 72px; font-size: 10pt">(b)</TD>
    <TD STYLE="font-size: 10pt"><I><U>Pro forma financial information.</U> </I>Unaudited pro forma financial information will be filed by amendment to this Form 8-K no later than November 28, 2012.</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>SIGNATURE</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">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.</P>

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        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">CORNERSTONE CORE PROPERTIES REIT, INC.</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 10pt; width: 55%">Dated: September 19, 2012</TD>
    <TD STYLE="font-size: 10pt; width: 3%">By:</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; font-size: 10pt; width: 42%">/s/ Timothy C. Collins</TD></TR>
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    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="font-size: 10pt">Timothy C. Collins</TD></TR>
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    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="font-size: 10pt">Chief  Financial Officer</TD></TR>
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[{"type": "8-K", "sequence": "1", "filename": "v323973_8k.htm", "description": "8-K", "secsgml_size_bytes": 28235}]
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
September 13, 2012
CORNERSTONE CORE PROPERTIES
REIT, INC.
(Exact name of registrant as specified in
its charter)
Maryland
000-52566
73-1721791
(State or Other Jurisdiction 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.
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14d-2(b)
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)
Item 1.01
Entry into a Material Definitive Agreement
On September 14, 2012 the registrant acquired through a joint
venture a 95% interest in two healthcare related facilities with a total of 221 beds. The transaction was funded in part by a loan
from GE Capital Corporation. The information in this Report sets forth under Items 2.01 and 2.03 related to the joint venture formed
to acquire healthcare properties, including the Medford Facility and Galveston Facility (as defined below) and the related financing
arrangements is incorporated by reference herein.
Item 2.01
Completion of Acquisition or Disposition of Assets
Joint Venture to Acquire Medford, Oregon Memory Care Facility
and Galveston, Texas Skilled Nursing Facility
General
On September 14, 2012, through an indirect wholly-owned subsidiary,
we funded an investment in a joint venture, Cornerstone Healthcare Partners, LLC (the "JV Entity"), that concurrently
acquired a 71-bed memory care facility in Medford, Oregon (the "Medford Facility") from Monterey Village, an Oregon
limited partnership (the "Medford Seller"). Cornerstone Healthcare Real Estate Fund, Inc. ("CHREF"), a
fund sponsored by an affiliate of our advisor, is our joint venture partner in the $8.5 million transaction.
The Medford Facility will be leased by the joint venture to
Radiant Senior Living, the current operator of the property, pursuant to a long-term triple net lease. The lease term is 10 years
with a lessee option to renew for two additional five-year periods. The lease rate for the Medford Facility, calculated as the
first year lease payment as a percentage of the purchase price, is 9%.
The Medford Facility provides an initial cash on cash yield,
which is calculated by dividing the first year lease payment, less debt service and asset management and property management fees
paid to our advisor, by the equity contribution, which is estimated to be approximately 12.0%.
On the same date, through an indirect wholly-owned subsidiary,
we funded an investment in the JV Entity that concurrently acquired a 150-bed skilled-nursing facility in Galveston County, Texas
(the "Galveston Facility") from Friendswood Realty, LP, a Texas limited partnership (the "Galveston Seller").
CHREF is our joint venture partner in the $15.0 million transaction.
The Galveston Facility will be leased by the joint venture to
Mason Friendswood OP, LLC, the current licensee of the property, pursuant to a long-term triple net lease guaranteed personally
by the principal of Mason Friendswood OP, LLC. The lease term is 10 years with a lessee option to renew for two additional five-year
periods. The lease rate for the Galveston Facility is 10%.
The Galveston Facility provides an initial cash on cash yield,
which is estimated to be approximately 15.0%.
Parties and Structure
Capital Contributions.
We invested approximately $8.0
million and CHREF invested approximately $0.4 million to fund the acquisitions of the Medford Facility and Galveston Facility.
Upon completion of this transaction, we own a 95% equity interest in the JV Entity and CHREF owns the remaining 5% interest.
Management of the JV Entity
. As the manager of the JV
Entity, we generally have the authority to direct and control the business of the JV Entity; however, under the terms of the operating
agreement for the JV Entity, certain major decisions regarding the business of the JV Entity require the unanimous approval of
us and CHREF. Such major decisions include, among others, (i) the sale or transfer of all or substantially all of the JV Entity's
assets, (ii) any merger or consolidation of the JV Entity with any other entity, (iii) admission of new members, (iv) loans of
JV Entity funds, (v) to incur or enter into any lease, conveyance, mortgage or other agreement or indebtedness on behalf of the
JV Entity which requires the personal guarantee of any member or any affiliate of any member and (vi) taking any action to cause
the dissolution of the JV Entity. The operating agreement contains terms, conditions, representations, warranties and indemnities
that are customary and standard for joint ventures in the real estate industry. As the manager of the JV Entity, we may be entitled
to receive compensation for services as shall be determined by consent of all of the members.
Distributions to the JV Entity Members.
Distributions
to the members of the JV Entity are made first, in proportion to the remaining balance of capital contributions which were paid
by each member and not returned to such member, until the cumulative amount of capital contributions paid by each member has been
returned to such member; then, in proportion to the percentage interest in the JV Entity held by the member.
Medford Facility
Farmington Square Medford, a memory care facility with 52 units
and 71 licensed beds, is located within the Medford, Oregon city limits. The facility, consisting of four separate wood-frame,
single-story buildings totaling 32,557 square feet, was constructed in phases between 1990 and 1997 and currently operates at 90%
occupancy.
The operator of the Medford Facility has served in that capacity
since 1991, and has over twenty years of experience operating senior-living facilities in the Pacific Northwest. As described above,
upon the closing of the purchase, the existing operator will continue operating the Medford Facility under a long-term, triple-net
lease. Including the Medford Facility, the operator manages thirteen assisted-living facilities in Oregon and Washington.
Galveston Facility
Friendship Haven Healthcare and Rehabilitation Center, a skilled-nursing
facility with 150 licensed beds, is located in Galveston County, Texas. The facility, a single-story, 56,968 square foot wood-frame
building, was constructed in 1997 and currently operates at 90% occupancy.
The operator of the Galveston Facility has served in that capacity
since February 2012, and has over twenty years of experience operating senior-living facilities in Texas and Louisiana. As described
above, upon the closing of the purchase, the existing licensed operator will continue operating the Galveston Facility under a
long-term, triple-net lease. Including the Galveston Facility, the operator manages fifteen skilled-nursing facilities in Texas.
In evaluating each property as a potential acquisition and determining
the appropriate amount of consideration to be paid for the property, we considered a variety of factors including overall valuation
of targeted net rental income, quality of and regulatory compliance of the operator, location, demographics, existing and planned
competitive properties and price per bed and analyzed how the property compares to comparable properties in its market.
ITEM 2.03
Creation of a Direct Financial Obligation or an Obligation
        Under an Off Balance Sheet Arrangement of Registrant.
We acquired our interest in the Medford Facility and Galveston
Facility subject to a secured loan.  On September 13, 2012, we entered into a loan agreement with General Electric Capital
Corporation ("GE Loan") for a loan in the aggregate amount of approximately $16.5 million secured by security interests
in the Medford Facility and Galveston Facility. The GE Loan, which bears interest at LIBOR, with a floor of 50 basis points, plus
a spread of 4.50%, matures on September 12, 2017, at which time all outstanding principal, accrued and unpaid interest and any
other amounts due under the loan agreement will become due. The GE Loan is interest-only and may be voluntarily prepaid within
the twelve–month lockout period provided the borrower pays a penalty equal to the sum of the Libor Breakage Amount, as
defined in the loan agreement, and two percent of the outstanding balance of the loan. The loan may be prepaid with no penalty
after the expiration of the twelve-month lockout period.  Interest payments on the GE Loan are due monthly.  After
the lockout period, principal and interest payments are due monthly based on 25-year amortization schedule.
Additionally, as disclosed in Item 2.03 on Form 8-K filed with
the Securities Exchange Commission on August 6, 2012, we acquired our interest in the Portland Properties, as defined therein,
subject to a secured loan. On August 1, 2012, we entered into a loan agreement with the Sellers for a loan (the "Seller Loan")
in the aggregate amount of approximately $5.8 million secured by security interests in the Portland Properties.
On September 14, 2012, we repaid the entire principal balance
of the Seller Loan with proceeds from the GE Loan. Consequently, the GE Loan is secured, in part, by the Portland Properties.
ITEM 5.02
Departure of Director and Principal Executive Officer; Appointment
        of Officer
On September 18, 2012, Terry G. Roussel resigned as Chairman,
CEO, Secretary, and Director of the Company and from his management and director roles at Cornerstone Realty Advisors, the Company's
advisor. There are no current plans to name a new Chairman /CEO. Mr. Roussel's action was voluntary and is supported by the
independent directors as appropriate to the Company's ongoing strategic repositioning initiative. Mr. Roussel's resignation
was not due to any disagreement with the Company on any matter relating to the Company's operations, policies or practices.
Ongoing executive leadership will be provided by Kent Eikanas, the Company's President and Chief Operating Officer, who will
serve in the interim as the Company's principal executive officer. Concurrently with Mr. Roussel's resignation, Mr.
Eikanas will also be appointed President, Chief Operating Officer and the sole board member of Cornerstone Realty Advisors.
Item 9.01
Financial Statements and Exhibits.
(a)
Financial statements of businesses acquired.
Audited financial statements for the Medford Facility and Galveston Facility will be filed by amendment to this Form 8-K no later than November 28, 2012.
(b)
Pro forma financial information.
Unaudited pro forma financial information will be filed by amendment to this Form 8-K no later than November 28, 2012.
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 CORE PROPERTIES REIT, INC.
Dated: September 19, 2012
By:
/s/ Timothy C. Collins
Timothy C. Collins
Chief  Financial Officer