FIRST AMENDMENT TO THE 1992 INCENTIVE PLAN NONSTATUTORY STOCK OPTION AGREEMENT BETWEEN

                                                                   EXHIBIT 10.26



                                 FIRST AMENDMENT
                                     TO THE

                               1992 INCENTIVE PLAN
                       NONSTATUTORY STOCK OPTION AGREEMENT

                                     BETWEEN

                      CORNERSTONE REALTY INCOME TRUST, INC.

                                       AND

                               XXXXX X. XXXXXXXXXX

     FIRST  AMENDMENT,  dated as of January 29, 1998, to the 1992 Incentive Plan
Nonstatutory  Stock Option Agreement  between  Cornerstone  Realty Income Trust,
Inc.  (the  "Company")  and [name],  as amended and restated as of March 1, 1996
(the "Agreement").

     The Company  maintains  the  Cornerstone  Realty  Income  Trust,  Inc. 1992
Incentive  Plan,  as  amended  and  restated  effective  as of July 8, 1994 (the
"Plan").  The Committee has the authority under Plan Section 13(a) to modify the
terms of previously granted Incentive Awards and now wishes to do so.

     NOW THEREFORE, the Agreement is amended as follows:

     I. The first  sentence of Section 2(c) of the  Agreement is hereby  deleted
and replaced with the following:  "Subject to the provisions of Section 3 below,
each  Option  shall be fully  exercisable  immediately  upon  receipt and may be
exercised while  Participant is employed by the Employer or while Participant is
a director of the Company and for up to three years following the date he ceases
to be a director of the Company."





     II. The first  sentence of Section 3(a) of the Agreement is hereby  deleted
and replaced with the following:  "In the event of termination of  Participant's
employment with the Employer for any reason other than death or Disability,  and
before the  exercise in full of an Option,  the  Participant  may  exercise  the
Option at any time while  Participant is a director of the Company and for up to
three years following the date he ceases to be a director of the Company for the
number of shares remaining subject to the Option."

     III. This Amendment shall be effective as of January 29, 1998.

     IV. In all  respects  not amended,  the  Agreement  is hereby  ratified and
confirmed.  To record the  adoption of the  Amendment  as set forth  above,  the
Company has caused this document to be signed on the 29th day of January, 1998.

                                           Cornerstone Realty Income Trust, Inc.

                                           By:     /s/ Xxxxxxx X. Xxxxxxx, Xx.
                                              ----------------------------------
                                           Title:  Chief Financial Officer
                                                 -------------------------------


Agreed to and Accepted:

 /s/ Xxxxx X. Xxxxxxxxxx
--------------------------------
Xxxxx X. Xxxxxxxxxx, Participant


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