--------------------------------------------------------------------------------
COHEN & STEERS TOTAL RETURN REALTY FUND, INC.
October 9, 2003
To Our Shareholders:
We are pleased to submit to you our report for the quarter and nine months
ended September 30, 2003. The net asset value at that date was $15.68. In
addition, during the quarter, three $0.085 per share monthly dividends were
declared and paid.
INVESTMENT REVIEW
For the quarter, Cohen & Steers Total Return Realty Fund had a total return,
based on income and change in net asset value, of 6.8%, bringing the year to
date total return to 21.8%.
The REIT bull market rolled on in the third quarter, in a fashion totally
consistent with what we expected at this point in the economic and real estate
cycle. In our view, prices rose because investors recognized the bottoming of
fundamentals, turned their attention to the recovery currently in force and
anticipated that the recovery would continue over the next several quarters. We
believe that recent developments and events validated this price advance. This
has frustrated the growing chorus of REIT skeptics, many of whom believe that
the sector had outperformed for too long and valuations were stretched to
unsustainable levels. Analyst predictions -- such as 'REITs will lag a rising
stock market' and 'REITs are interest rate sensitive' -- never came to pass as
REITs performed well as stock prices rose and interest rates experienced a
record increase.
Widespread expectations by economists that U.S. GDP grew 5% in the third
quarter had a positive impact on most asset classes, with the exception of
long-term bonds. This economic strength was evidenced by improving consumer and
business confidence, strong retail sales, increasing factory orders and growing
manufacturing strength. Despite concerns about the 'jobless recovery,' signs
finally appeared that job losses were abating and, by September, there was an
actual increase in jobs.
Indicators of improving health in the property market abound. Commentators
have noted that vacancy rates in the office sector appear to be nearing their
bottom. The prospect for future job growth should facilitate further improvement
in this sector. In addition, developers and lenders have shown much greater
restraint in this downturn than in the office market in the early 1990s, which
should help the market recover more quickly than it did in the last recession.
The apartment sector, which has been battered over the past several years,
showed moderate signs of improvement during the third quarter. Indicators such
as revenue per available room in the hotel industry turned positive for the
first time in over two years, and hotel stocks were the star performers of the
quarter, rising 21%. Retail sales trends and as a result regional mall
fundamentals continued to be very positive and the stocks rose over 13% in the
quarter.
--------------------------------------------------------------------------------
1
--------------------------------------------------------------------------------
COHEN & STEERS TOTAL RETURN REALTY FUND, INC.
During the quarter, the fund's best performing investments were in the
health care, apartment, and regional mall sectors, with each sector contributing
a total return in excess of 10%. The worst performing sector was the diversified
sector, which had a total return of 5%. The stock with the most significant
positive impact on the fund's performance was Mills Corp., an owner and operator
of regional malls, while the stock with the most significant negative impact was
Crescent Real Estate Equities, which owns a diversified portfolio of properties,
including office, retail and hotel. REIT preferred stocks underperformed REIT
common stocks during the quarter as a result of the sharp increase in bond
yields during July. While over longer periods of time REIT preferred stocks have
tended to not have a high correlation to the bond market, REIT preferreds would
be expected to underperform during brief periods of rising interest rates, as
was experienced during the third quarter. Importantly, with economic and general
real estate conditions improving, and with so many REITs having taken advantage
of the low interest rate environment to lower their borrowing costs, REITs'
credit profiles are as strong as ever, which we believe should be beneficial to
our REIT preferred holdings.
At the company level, good news far outweighed bad, as a growing number of
REIT managements affirmed or increased earnings guidance, or reported improving
fundamental trends. In the office sector, the recent sale of New York's General
Motors Building for $1.4 billion, nearly $800 per square foot, was a seminal
event. The auction of this property attracted multiple bidders from both the
public and private market and the final selling price far exceeded most
expectations. This transaction provided hard evidence of the value of class A
office properties and in our view had a very positive impact on large New York
office owners such as Vornado Realty Trust (up 36% this year). Whereas office
REITs as a whole have not been the single best performing sector in the REIT
industry, we believe their 22% return this year likely indicates expectations
that service sector job growth will translate into better occupancies and rents
in the future. Responding to strong trends in retail sales, most regional mall
owners have reported double digit earnings increases that have been accompanied
by exceptional dividend increases. Further, the major mall owners have all
completed new property developments or acquisitions that have boosted both
current earnings and prospective growth rates.
The industry-wide improvement in REIT balance sheets and growth prospects
has continued unabated this year. The refinancing or retirement of high cost
debt and preferred stock has improved financial strength and flexibility. This,
in turn, has enhanced equity values. Still, it is notable that unsecured
borrowing by REITs this year, at $6.4 billion, trails the $8.1 billion raised in
the same period last year, suggesting that REITs are taking advantage of low
interest rates without increasing financial leverage. Many companies have taken
advantage of strong stock prices to issue what we consider to be judicious
amounts of common equity. This equity has in many cases been used to replace
debt or make property acquisitions, often contributing to increased earnings.
Whereas some commentators and analysts have argued that equity issuance is a
warning sign, the $3.8 billion in common equity raised in the first nine months
of 2003 significantly trails the $4.7 billion raised in the same period of 2002.
(As a point of reference, the record for REIT equity issuance was $20 billion in
1997.) Further, considering that the equity market capitalization of the REIT
industry is now over $200 billion, this equity issuance is rather insignificant.
--------------------------------------------------------------------------------
2
--------------------------------------------------------------------------------
COHEN & STEERS TOTAL RETURN REALTY FUND, INC.
Many commentators and analysts have attributed the REIT rally simply to
money flows, implying that rising prices are exclusively the result of
irrational technical factors rather than fundamental factors. Indeed, while $3.0
billion has been invested in real estate mutual funds so far this year, this is
well below absolute levels experienced historically. (As with equity issuance,
fund inflows reached their peak in 1997, with $4.1 billion of new assets being
invested in real estate mutual funds.) Further, as a percentage of the existing
$23.5 billion in fund assets, it is an even less significant statistic. This
flow of funds, in our opinion, is the result of the aforementioned fundamental
factors. To believe that funds flows are the drivers of bull markets in our view
places cause and effect in reverse order. Demand for an asset class is based on
its investment merits, and that is what causes money to flow into that asset
class.
INVESTMENT OUTLOOK
Perhaps the most passionate debate in the REIT industry revolves around the
current level of stock valuations. Following their strong price advance this
year, REITs are trading, on average, at a modest premium to net asset value
(NAV), approximately 5% to 10% compared to their long-term average of 0%. In
addition, they are trading at a price/cash flow multiple of 11.5, above their
long-term average of 11.3. REIT skeptics assert that this limits any further
upside price potential, and makes them vulnerable to a price decline.
Overlooked, however, is the fact that improving fundamentals are already
translating into higher earnings -- thereby resulting in declining future
price/cash flow ratios. Similarly, as property level cash flows increase, so are
underlying property values. Almost every company that has reported or forecasted
improving operations has seen Wall Street earnings estimates and NAV estimates
rise, sometimes substantially.
Just as fundamental events have validated price movements to date, further
strong returns from REITs (as well as stocks in general), will require the
anticipation of ongoing improvement in economic and real estate fundamentals. As
this economic recovery proceeds, we expect continued increases in earnings and
NAV estimates. As long as this prospect remains intact, we would expect share
prices to perform in accordance.
One further factor often overlooked is the access to capital and
acquisitions that is available to most of the established high quality REITs.
Their strengthened balance sheets have provided them with wide flexibility in
acquiring and financing property. Their access to public and private debt and
equity capital is simply unprecedented. Just a few of the many examples are the
international joint ventures the ProLogis company has established, raising over
$1 billion of equity for investment in Europe and Asia. AMB Property Corp. has
raised $200 million for the acquisition of domestic industrial properties.
Health Care Property Investors has raised $200 million of equity in a joint
venture to purchase medical office buildings. CBL & Associates and Developers
Diversified have sold large shopping center portfolios to newly created
companies in Australia, while retaining the management of them. As investor
appetite for real estate has grown, more and more REITs are becoming the
beneficiaries of this capital, and they are seeing more and more attractive
acquisition opportunities. This has
--------------------------------------------------------------------------------
3
--------------------------------------------------------------------------------
COHEN & STEERS TOTAL RETURN REALTY FUND, INC.
enabled them to achieve a competitive rate of return on new investments as well
as to earn management and incentive fees. Again, we expect these transactions to
boost both current and future earning power.
A vast number of investors have become more interested in current income,
due no doubt to the combination of market volatility, the low interest rate
environment and the general focus on dividends brought on by the recently
enacted legislation reducing the tax on corporate dividends. (REITs are excluded
from this lower tax rate.) Strong dividend income, and indeed the possibility
for dividend growth, are an important part of this equation and the REIT
industry remains on the forefront of delivering growing income to shareholders.
Despite the softest real estate market in 10 years and flat to declining cash
flows industry-wide, REIT managements were able to add value by making judicious
investment decisions and taking advantage of favorable capital and financing
markets. This is demonstrated by the fact that REIT dividends, based on a
weighted average of the 100 largest companies in the NAREIT Equity REIT Index,
grew in 2002 at a 3.5% rate and continue to grow so far in 2003, at a 3.4% rate.
We expect 48 of these 100 largest REITs to increase their dividends this year
while only six will have reduced them. In our view, this year should be the
trough year for REIT earnings, and we expect the rate of dividend growth to rise
in 2004 and accelerate thereafter. Therefore, just like in the price/cash flow
ratio and NAV analyses, we believe the current average REIT dividend yield (6.0%
at quarter-end) must be viewed in the context of future growth potential as
well.
With respect to our outlook for the major property sectors, our portfolio
weights reflect our view that the office sector is in the early stages of
recovery, while it still has some of the lowest valuations. Regional mall growth
rates have remained strong and valuations have remained favorable; however,
their dividend yields have been driven down, causing us to limit our holdings in
this sector. Rising interest rates and the creation of new jobs have begun to
improve apartment demand, and we have increased our holdings in this sector
accordingly. Industrial valuations appear to already anticipate an early
recovery in fundamentals, which coupled with the lack of satisfactory yield has
caused us to maintain a low weighting in this sector. While shopping center
fundamentals have remained sound, we believe the sector is fully valued and
likely to experience a slowing growth rate.
Notwithstanding our long-term view of REIT industry prospects, we believe it
would not be reasonable to expect a continuation of the extraordinary returns
REITs have delivered so far this year. While we do not consider REITs to be
expensive, the undervaluation they may have experienced in recent years has in
our view been corrected. Our forecast is for a reversion to the long-term
average total return -- which was 11.6% for the 10-year period ended September
30, 2003 -- with most of that return coming from dividends. Successful
investing, particularly in real estate, requires a long-term time horizon. It is
therefore ironic that so many real estate analysts have adopted a posture that
embraces short-term market-timing. If we have learned anything from the past few
tumultuous years of the securities markets, it is that market-timing is a trap
for the unsophisticated. We believe
--------------------------------------------------------------------------------
4
--------------------------------------------------------------------------------
COHEN & STEERS TOTAL RETURN REALTY FUND, INC.
more than ever in the power of REITs to deliver competitive total returns over
the long-term while providing investors with excellent portfolio diversification
benefits.
Sincerely,
MARTIN COHEN ROBERT H. STEERS
MARTIN COHEN ROBERT H. STEERS
President Chairman
GREG E. BROOKS
GREG E. BROOKS
Portfolio Manager
Cohen & Steers is online at COHENANDSTEERS.COM
We have enhanced both the look and features of our Web site
to give you more information about our company, our funds
and the REIT market in general. Check out our new
interactive Asset Allocation Tool, which allows you to
hypothetically add REITs to any portfolio to see how they
impact expected total returns and risk. Or try the Fund
Performance Calculator and see how our funds have performed
versus the S&P 500 Index or Nasdaq Composite. As always, you
can also get daily net asset values, fund fact sheets,
portfolio highlights, recent news articles and our overall
insights on the REIT market.
So visit us today at COHENANDSTEERS.COM
--------------------------------------------------------------------------------
5
--------------------------------------------------------------------------------
COHEN & STEERS TOTAL RETURN REALTY FUND, INC.
SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 2003 (UNAUDITED)
NUMBER DIVIDEND
OF SHARES VALUE YIELD(a)
--------- ------------ ----------
EQUITIES 99.29%
COMMON STOCK 78.59%
DIVERSIFIED 9.77%
Colonial Properties Trust......................... 82,100 $ 2,958,063 7.38%
Crescent Real Estate Equities Co. ................ 170,600 2,473,700 10.34
iStar Financial................................... 36,900 1,437,255 6.80
Newcastle Investment Corp. ....................... 15,500 356,345 8.70
Vornado Realty Trust.............................. 144,700 6,951,388 5.66
------------
14,176,751
------------
HEALTH CARE 9.57%
Health Care Property Investors.................... 115,000 5,370,500 7.11
Health Care REIT.................................. 27,600 851,460 7.59
Nationwide Health Properties...................... 161,800 2,829,882 8.46
Ventas............................................ 281,700 4,822,704 6.25
------------
13,874,546
------------
HOTEL 0.34%
Hospitality Properties Trust...................... 14,200 498,136 8.21
------------
INDUSTRIAL 2.68%
First Industrial Realty Trust..................... 64,700 2,074,929 8.54
Keystone Property Trust........................... 89,500 1,813,270 6.52
------------
3,888,199
------------
OFFICE 23.47%
Arden Realty...................................... 160,000 4,467,200 7.23
Brandywine Realty Trust........................... 184,900 4,750,081 6.85
CarrAmerica Realty Corp. ......................... 155,100 4,629,735 6.70
Equity Office Properties Trust.................... 203,400 5,599,602 7.26
Highwoods Properties.............................. 60,800 1,450,688 7.12
Mack-Cali Realty Corp. ........................... 155,800 6,107,360 6.43
Maguire Properties................................ 93,000 1,906,500 7.80
Prentiss Properties Trust......................... 165,300 5,124,300 7.23
------------
34,035,466
------------
-------------------
(a) Dividend yield is computed by dividing the security's current annual
dividend rate by the last sale price on the principal exchange, or market,
on which such security trades.
--------------------------------------------------------------------------------
6
--------------------------------------------------------------------------------
COHEN & STEERS TOTAL RETURN REALTY FUND, INC.
SCHEDULE OF INVESTMENTS -- (CONTINUED)
SEPTEMBER 30, 2003 (UNAUDITED)
NUMBER DIVIDEND
OF SHARES VALUE YIELD
--------- ------------ --------
OFFICE/INDUSTRIAL 6.33%
Kilroy Realty Corp. .............................. 56,600 $ 1,615,930 6.94%
Liberty Property Trust............................ 135,600 5,014,488 6.54
Reckson Associates Realty Corp. -- Class B........ 110,000 2,546,500 11.19
------------
9,176,918
------------
RESIDENTIAL -- APARTMENT 12.98%
Apartment Investment & Management Co. ............ 40,800 1,605,888 8.33
Archstone-Smith Trust............................. 152,900 4,033,502 6.48
AvalonBay Communities............................. 69,900 3,271,320 5.98
Camden Property Trust............................. 78,900 3,032,127 6.61
Gables Residential Trust.......................... 122,900 3,972,128 7.46
Home Properties of New York....................... 47,000 1,842,400 6.22
Mid-America Apartment Communities................. 35,400 1,068,372 7.75
------------
18,825,737
------------
SELF STORAGE 0.14%
Sovran Self Storage............................... 6,200 205,530 7.27
------------
SHOPPING CENTER 13.31%
COMMUNITY CENTER 4.57%
Developers Diversified Realty Corp. .............. 22,600 675,062 5.49
Federal Realty Investment Trust................... 67,200 2,476,992 5.32
Heritage Property Investment Trust................ 51,300 1,481,544 7.27
Kramont Realty Trust.............................. 69,500 1,178,025 7.67
Urstadt Biddle Properties -- Class A.............. 60,000 810,000 6.22
------------
6,621,623
------------
REGIONAL MALL 8.74%
CBL & Associates Properties....................... 43,100 2,150,690 5.25
Glimcher Realty Trust............................. 95,200 2,005,864 9.11
Macerich Co. ..................................... 110,500 4,171,375 6.04
Mills Corp. ...................................... 110,600 4,352,110 5.74
------------
12,680,039
------------
TOTAL SHOPPING CENTER............................. 19,301,662
------------
TOTAL COMMON STOCK (Identified
cost -- $89,033,906)....................... 113,982,945
------------
--------------------------------------------------------------------------------
7
--------------------------------------------------------------------------------
COHEN & STEERS TOTAL RETURN REALTY FUND, INC.
SCHEDULE OF INVESTMENTS -- (CONTINUED)
SEPTEMBER 30, 2003 (UNAUDITED)
NUMBER DIVIDEND
OF SHARES VALUE YIELD
--------- ------------ --------
PREFERRED STOCK 20.70%
DIVERSIFIED 1.33%
Colonial Properties Trust, 9.25%, Series C........ 600 $ 16,170 8.57%
Colonial Properties Trust, 8.125%, Series D....... 14,600 379,600 7.81
Crescent Real Estate Equities Co., 6.75%, Series A
(Convertible)................................... 75,500 1,528,875 8.35
------------
1,924,645
------------
HEALTH CARE 2.46%
Nationwide Health Properties, 7.677%, Series P.... 47,000 3,569,062 10.11
------------
HOTEL 0.21%
FelCor Lodging Trust, 9.00%, Series B............. 2,900 71,369 9.14
Host Marriott Corp, 10.00%, Series C.............. 3,500 87,500 10.00
Host Marriott Financial Trust, 6.75%, QUIPS
(Convertible)(a)................................ 3,200 140,800 7.68
------------
299,669
------------
INDUSTRIAL 0.34%
Keystone Property Trust, 9.125%, Series D......... 18,800 499,140 8.59
------------
OFFICE 4.22%
Alexandria Real Estate Equities, 9.10%,
Series B........................................ 13,900 384,474 8.24
HRPT Properties Trust, 8.75%, Series B............ 52,800 1,415,568 8.17
Highwoods Properties, 8.625%, Series A............ 4,300 4,316,125 8.59
------------
6,116,167
------------
RESIDENTIAL -- APARTMENT 3.76%
Apartment Investment & Management Co., 8.75%,
Series D........................................ 6,431 161,097 8.74
Apartment Investment & Management Co., 9.375%,
Series G........................................ 113,200 3,071,116 8.63
Apartment Investment & Management Co., 10.10%,
Series Q........................................ 25,000 664,750 9.51
Apartment Investment & Management Co., 10.00%,
Series R........................................ 18,100 481,460 9.40
Mid-America Apartment Communities, 8.30%,
Series H........................................ 17,300 451,530 7.97
Post Properties, 8.50%, Series A.................. 11,000 616,000 7.59
------------
5,445,953
------------
SHOPPING CENTER 8.38%
COMMUNITY CENTER 0.53%
Developers Diversified Realty Corp., 8.60%,
Series F........................................ 1,600 42,720 8.05
Ramco-Gershenson Property Trust, 9.50%,
Series B........................................ 11,600 323,640 8.53
Urstatdt Biddle Properties, 8.50%, Series C....... 4,000 407,000 8.35
------------
773,360
------------
-------------------
(a) QUIPS Quarterly Income Preferred Securities
--------------------------------------------------------------------------------
8
--------------------------------------------------------------------------------
COHEN & STEERS TOTAL RETURN REALTY FUND, INC.
SCHEDULE OF INVESTMENTS -- (CONTINUED)
SEPTEMBER 30, 2003 (UNAUDITED)
NUMBER DIVIDEND
OF SHARES VALUE YIELD
--------- ------------ --------
OUTLET CENTER 0.46%
Chelsea Property Group, 8.375%, Series A.......... 13,000 $ 675,188 8.07%
------------
REGIONAL MALL 7.39%
CBL & Associates Properties, 8.75%, Series B...... 13,000 703,950 8.09
Crown American Realty Trust, 11.00%, Series A..... 55,400 3,177,190 9.59
Mills Corp., 9.00%, Series B...................... 73,800 1,963,080 8.46
Mills Corp., 9.00%, Series C...................... 25,000 667,500 8.43
Mills Corp., 8.75%, Series E...................... 26,000 687,700 8.28
Taubman Centers, 8.30%, Series A.................. 139,500 3,512,610 8.26
------------
10,712,030
------------
TOTAL SHOPPING CENTER............................. 12,160,578
------------
TOTAL PREFERRED STOCK (Identified
cost -- $26,999,814)....................... 30,015,214
------------
TOTAL EQUITIES (Identified
cost -- $116,033,720)...................... 143,998,159
------------
PRINCIPAL
AMOUNT
---------
CORPORATE BOND 0.45%
Host Marriott, LP, 9.50%, due 01/15/07
(Identified cost -- $600,523)............ $600,000 660,000
------------
TOTAL INVESTMENTS (Identified cost -- $116,634,243).99.74%
144,658,159
OTHER ASSETS IN EXCESS OF LIABILITIES............... 0.26%
371,941
------------
NET ASSETS (Equivalent to $15.68 per share based on
9,249,159 shares of capital stock outstanding)...100.00% 145,030,100
------- ------------
------- ------------
--------------------------------------------------------------------------------
9
--------------------------------------------------------------------------------
COHEN & STEERS TOTAL RETURN REALTY FUND, INC.
FINANCIAL HIGHLIGHTS(a)
SEPTEMBER 30, 2003 (UNAUDITED)
NET ASSET VALUE
TOTAL NET ASSETS PER SHARE
-------------------------- ---------------
NET ASSET VALUE:
Beginning of period: 12/31/02............... $125,036,348 $13.52
Net investment income................... $ 6,873,808 $ 0.74
Net realized and unrealized gain on
investments.......................... 20,056,615 2.17
Distributions from net investment
income............................... (6,936,671) (0.75)
----------- ------
Net decrease in net asset value............. 19,993,752 2.16
------------ ------
End of period: 9/30/03...................... $145,030,100 $15.68
------------ ------
------------ ------
AVERAGE ANNUAL TOTAL RETURNS(b)
(PERIODS ENDED SEPTEMBER 30, 2003) (UNAUDITED)
SINCE INCEPTION
ONE YEAR FIVE YEARS TEN YEARS (9/27/93)
-------- ---------- --------- ---------
21.09% 11.33% 10.82% 10.94%
REINVESTMENT PLAN
We urge shareholders who want to take advantage of this plan
and whose shares are held in 'Street Name' to consult your
broker as soon as possible to determine if you must change
registration into your own name to participate.
Notice is hereby given in accordance with Section 23(c) of
the Investment Company Act of 1940 that the fund may
purchase, from time to time, shares of its common stock in
the open market.
-------------------
(a) Financial information included in this report has been taken from the
records of the fund without examination by independent accountants.
(b) Based on net asset value.
--------------------------------------------------------------------------------
10
--------------------------------------------------------------------------------
COHEN & STEERS TOTAL RETURN REALTY FUND, INC.
PRIVACY POLICY
The fund is committed to maintaining the privacy of its
shareholders and to safeguarding their personal information.
The following is provided to help you understand what
personal information the fund collects, how we protect that
information, and why in certain cases we may share this
information with others.
The fund does not receive any personal information relating
to shareholders who purchase shares through an intermediary
that acts as the record owner of the shares. In the case of
shareholders who are record owners of the fund, to conduct
and process your business in an accurate and efficient
manner, we must collect and maintain certain personal
information about you. This is the information we collect on
applications or other forms, and from the transactions you
make with us.
The fund does not disclose any personal information about
its shareholders or former shareholders to anyone, except as
required or permitted by law or as is necessary to service
shareholder accounts. We will share information with
organizations, such as the fund's transfer agent, that
assist the fund in carrying out its daily business
operations. These organizations will use this information
only for purposes of providing the services required or as
otherwise as may be required by law. These organizations are
not permitted to share or use this information for any other
purpose. In addition, the fund restricts access to personal
information about its shareholders to employees of the
adviser who have a legitimate business need for the
information.
--------------------------------------------------------------------------------
11
--------------------------------------------------------------------------------
COHEN & STEERS TOTAL RETURN REALTY FUND, INC.
MEET THE COHEN & STEERS FAMILY OF OPEN-END FUNDS:
FOR HIGH CURRENT IMCOME: FOR TOTAL RETURN:
COHEN & STEERS COHEN & STEERS
EQUITY INCOME FUND REALTY SHARES
IDEAL FOR INVESTORS SEEKING A HIGH DIVIDEND IDEAL FOR INVESTORS SEEKING MAXIMUM TOTAL
YIELD AND CAPITAL APPRECIATION, INVESTING RETURN THROUGH BOTH CURRENT INCOME AND
PRIMARILY IN REITS CAPITAL APPRECIATION, INVESTING PRIMARILY IN
REITS
A, B, C AND I SHARES AVAILABLE
SYMBOL: CSRSX
SYMBOLS: CSEIX, CSBIX, CSCIX, CSDIX
FOR CAPITAL APPRECIATION FOR TOTAL RETURN
COHEN & STEERS COHEN & STEERS
SPECIAL EQUITY FUND INSTITUTIONAL REALTY SHARES
IDEAL FOR INVESTORS SEEKING MAXIMUM CAPITAL IDEAL FOR INVESTORS SEEKING MAXIMUM TOTAL
APPRECIATION, INVESTING IN A LIMITED NUMBER RETURN THROUGH BOTH CURRENT INCOME AND
OF COMPANIES ENGAGED IN THE REAL ESTATE OR CAPITAL APPRECIATION, INVESTING PRIMARILY IN
RELATED INDUSTRIES REITS
CONCENTRATED, HIGHLY FOCUSED PORTFOLIO OFFERS LOW TOTAL EXPENSE RATIO
SYMBOL: CSSPX HIGHER MINIMUM PURCHASE REQUIRED
SYMBOL: CSRIX
FOR MORE INFORMATION ABOUT ANY COHEN & STEERS FUND
OR TO OBTAIN A PROSPECTUS PLEASE CONTACT US AT:
1-800-330-REIT, OR VISIT OUR WEB SITE AT COHENANDSTEERS.COM
THE PROSPECTUS CONTAINS MORE INFORMATION ABOUT EACH FUND INCLUDING ALL CHARGES AND EXPENSES,
AND SHOULD BE READ CAREFULLY BEFORE YOU INVEST.
COHEN & STEERS SECURITIES, LLC, DISTRIBUTOR
--------------------------------------------------------------------------------
12
--------------------------------------------------------------------------------
COHEN & STEERS TOTAL RETURN REALTY FUND, INC.
OFFICERS AND DIRECTORS KEY INFORMATION
Robert H. Steers INVESTMENT ADVISOR
Director and chairman Cohen & Steers Capital Management, Inc.
757 Third Avenue
Martin Cohen New York, NY 10017
Director and president (212) 832-3232
Gregory C. Clark FUND ADMINISTRATOR AND CUSTODIAN
Director State Street Corp.
225 Franklin Street
Bonnie Cohen Boston, MA 02110
Director
TRANSFER AGENT
George Grossman Equiserve Trust Company
Director 150 Royall Street
Canton, MA 02021
Richard J. Norman (800) 426-5523
Director
LEGAL COUNSEL
Willard H. Smith Jr. Simpson Thacher & Bartlett
Director 425 Lexington Avenue
New York, NY 10017
Greg E. Brooks
Vice president New York Stock Exchange Symbol: RFI
Adam Derechin Web site: cohenandsteers.com
Vice president and assistant treasurer
This report is for shareholder
Lawrence B. Stoller information. This is not a
Assistant secretary prospectus intended for use in the
purchase or sale of fund shares.
Past performance is of course no
guarantee of future results and your
investment may be worth more or less
at the time you sell.
--------------------------------------------------------------------------------
13
COHEN & STEERS
TOTAL RETURN REALTY FUND
757 THIRD AVENUE
NEW YORK, NY 10017
COHEN & STEERS
TOTAL RETURN REALTY FUND
-------------------------
QUARTERLY REPORT
SEPTEMBER 30, 2003