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COHEN & STEERS TOTAL RETURN REALTY FUND, INC.
October 25, 2004
To Our Shareholders:
We are pleased to submit to you our report for the quarter and nine months
ended September 30, 2004. The net asset value at that date was $18.11. In
addition, during the quarter, three $0.085 per share monthly dividends were
declared and paid. In addition, three monthly dividends of $0.085 per share were
declared and will be paid on October 29, 2004, November 30, 2004 and
December 31, 2004.
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 7.1%. Based on the market
price of the fund's shares, which ended the quarter at $18.01, the fund's total
return was 7.1%. (The fund's common stock is traded on the New York Stock
Exchange and its share price can differ from its net asset value.) This compares
to the NAREIT Equity REIT Index(a) and Morgan Stanley REIT Preferred Index's
total return of 8.2% and 5.7%, respectively. For the nine months ended
September 30, 2004, the fund's total return was 11.3% (6.0% based on the
fund's market price), compared to NAREIT Equity REIT Index and Morgan Stanley
REIT Preferred Index total returns of 14.2% and 4.4%, respectively. The fund's
asset mix at the end of the quarter was 80% REIT common stocks and 20% preferred
and other fixed income investments.
In the third quarter of 2004, REITs enjoyed a strong rebound from the second
quarter correction. In fact, the NAREIT Equity REIT Index went on to surpass its
late March highs on the basis of investor views about a number of factors, such
as the strength of continuing economic growth, improving real estate
fundamentals and rising real estate asset values. In April and early May, REIT
prices fell 18% as many investors believed that REITs were overvalued and that
interest rates were the most important determinant of REIT stock prices. A
rising interest rate environment, as conventional wisdom surmised, must be
negative for REITs.
Since mid-May, however, REITs have returned 24%. The reasons, we believe,
are clear. There is a real economic recovery underway in the United States, as
well as a recovery in real estate fundamentals. We view this recovery as
broad-based, with solid GDP growth and material job growth. Yet it has taken
many by surprise, particularly those who thought that a stronger economy, as
evidenced by the March payroll report, and accompanying higher interest rates
would be negative for REITs. This recovery has resulted in higher occupancy
levels for most property types, higher-than-expected reported earnings for
REITs, higher earnings expectations in the future, and higher real estate asset
values.
-------------------
(a) The NAREIT Equity REIT Index is an unmanaged, market capitalization weighted
index of all publicly traded REITs that invest predominantly in the equity
ownership of real estate. The index is designed to reflect the performance
of all publicly traded equity REITs as a whole. The Morgan Stanley REIT
Preferred Index is a preferred stock market capitalization-weighted
total-return index of perpetual preferred securities of all equity REITs.
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COHEN & STEERS TOTAL RETURN REALTY FUND, INC.
Consistent with our investment thesis, the more cyclical property
types -- office, industrial, apartment, hotel and self-storage -- demonstrated
some of the largest improvements in fundamentals. For example, office REIT
occupancy levels were flat in the first quarter but then improved by 0.5% in the
second quarter. Apartment revenues were flat in the first quarter and up 0.3% in
the second quarter. Industrial occupancies swung from a decline of 0.4% in the
first quarter to an increase of 0.7% in the second quarter. Mixed
office/industrial REITs' occupancies declined 0.1% in the first quarter and
increased 1.1% in the second quarter.
Commensurate with the fundamental climate, REITs experienced earnings growth
in the first quarter that was essentially flat, and essentially in-line with
consensus expectations. In the second quarter, however, REIT earnings growth not
only accelerated, but pulled meaningfully away from subdued expectations.
Whereas the consensus expectation for the second quarter called for 1.6%
earnings growth across the REIT sector, actual reported earnings instead
increased by 3.8%. The more economically sensitive property types experienced
the greatest acceleration in earnings growth and many swung from a
year-over-year decline to a year-over-year increase in earnings for the first
time in many quarters. Reported cash flow growth per share in the first and
second quarter, as segregated by property type were as follows:
2004 REIT CASH FLOW GROWTH
PROPERTY TYPE 1ST QUARTER 2ND QUARTER DIFFERENCE
------------- ----------- ----------- ----------
Self Storage.......................... -9.1% 7.2% 16.3%
Industrial............................ -5.0 7.8 12.8
Office................................ -8.7 0.2 8.9
Office/Industrial..................... -7.4 0.8 8.2
Diversified........................... 0.0 4.0 4.0
Shopping Center....................... 9.6 13.2 3.6
Apartment............................. -4.7 -2.7 2.0
Health Care........................... 3.3 2.2 -1.1
Regional Mall......................... 11.6 8.7 -2.9
Manufactured Home..................... -13.0 -16.7 -3.7
Net Lease............................. 10.8 -6.1 -16.9
All REITs............................. 0.0% 3.8% 3.8%
Source: Citigroup. The data presented are for the REIT industry as a whole and
is not indicative of the past or future performance of the fund.
The improvement in fundamentals confounded those who believed that earnings
growth would remain stagnant and that REITs were fully valued. Again, this
acceleration in reported earnings growth was particularly unexpected for some of
the more cyclical property types. Consensus expectations for apartments were for
a further deterioration in the second quarter of -6%. Instead the earnings
decline shrunk to -2.7%. The consensus expected the industrial REITs to
persist in negative territory with a -1% earnings estimate for the second
quarter. Instead, earnings increased 0.8%.
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COHEN & STEERS TOTAL RETURN REALTY FUND, INC.
Perhaps as important, this jolt in fundamentals has now forced many Wall
Street analysts to revise their earnings expectations upward for the REIT sector
in future periods. (Our proprietary estimates for REIT earnings growth have been
consistent for some time: approximately 4% in 2004 and 10% in 2005, contingent
on continued strength in the U.S. economy.) Just since the end of June,
consensus REIT earnings growth expectations for 2005 have increased 2.9
percentage points, from 6.4% to 9.3%. And again, the more cyclical the sector,
the further behind the curve the analysts have been in their estimates for 2005.
For example, expectations for hotel earnings have increased by 7.8 percentage
points, office earnings by 5 percentage points, and mall earnings by 3.3
percentage points since June.
We believe that the broad-based improvement in real estate fundamentals is
also having a significant impact on the value of real estate assets,
contributing to higher REIT stock prices. Evidence of higher occupancies and
higher rents for most property types has, in our view, led many REIT investors,
analysts and managements to reflect significantly higher estimates of net asset
value (NAV) for REIT stocks. In addition to improving property level income, we
believe higher replacement costs are also pushing up NAVs. As property markets
tighten (especially in densely populated urban areas) and commodity costs rise,
the cost of the inputs to a real estate asset -- land, steel, concrete, wood,
and labor, among others -- are all rising. As a result of all these factors, it
has been our contention for some time that Wall Street NAVs for REIT stocks were
too low, making the stocks themselves look expensive on a historical basis. In
late September, Merrill Lynch's research team raised their NAV estimates for the
entire REIT sector by approximately 9%, corroborating our view that the stocks
are not overvalued relative to asset value.
The fund's best performing investments during the quarter were in the
regional mall and health care sectors, which produced total returns of 12.4% and
11.3% respectively, while the worst performing sector for the fund was the
manufactured housing sector, which had a -10.3% total return. Kramont Realty
Trust (shopping center) and Kilroy Realty Corporation (office) were the fund's
best performing holdings, contributing total returns of 18.3% and 13.0%
respectively. Laggards during the quarter included Affordable Residential
Communities, with a total return of -10.3% and Maguire Properties that had a
total return of -0.2%.
INVESTMENT OUTLOOK
For now, it seems that the consensus view of future REIT earnings growth is
finally catching up with our own. Further, Wall Street estimates are generally
not yet available for 2006, although we believe 2006 may be an even better year
for REIT earnings growth than 2005, as higher occupancies and rents begin to
work their way through REITs' income statements.
One implication of the REIT market having now more or less correctly
anticipated the improving fundamental picture is that the period of multiple
expansion for REITs is likely drawing to a close. This implies to us that
returns going forward are likely to be more in accordance with historical norms.
For example, with REITs yielding 5.1% at quarter-end, and growth anticipated to
be approximately 10% in 2005, the potential total return for REITs would be in
line with historical norms over the next 12 months if earnings multiples remain
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COHEN & STEERS TOTAL RETURN REALTY FUND, INC.
unchanged. In short, we believe the REIT bull market is maturing. It is
reasonable to expect that returns going forward are going to be lower than they
have been over the last 18 months.
This being said, REITs are generally not at peak valuation levels, in our
view. On average, our estimates indicate that REITs are trading at about a 6%
premium to NAV. This is above the historical average of 2%, but certainly far
from the 25% premiums generally associated with past valuation peaks. This NAV
premium, if sustained, may actually contribute to REIT earnings growth near term
as companies seeking to issue stock will generally have the ability to do so at
a premium to NAV and acquire or develop new assets at par. This can in turn
contribute meaningfully to earnings accretion. For this reason, we believe that
equity issuance by REITs will increase from recent levels as the more
forward-looking companies look to capitalize -- literally -- on improving
fundamentals by acquiring more assets today in a bid to boost earnings in the
future. The types of companies we remain invested in are those that we view as
offering the greatest potential for rising income and that we believe will
benefit most from economic strength. As a result, we believe that our REIT
investments, driven both by improving property fundamentals within their
existing real estate portfolios and by expanding external acquisition and
development opportunities, still offer the potential to generate attractive
total returns for shareholders.
Sincerely,
Martin Cohen Robert H. Steers
MARTIN COHEN ROBERT H. STEERS
President Chairman
Joseph M. Harvey
JOSEPH M. HARVEY
Portfolio Manager
VISIT COHEN & STEERS ONLINE AT COHENANDSTEERS.COM
For more information about any of our funds, visit
cohenandsteers.com, where you'll find daily net asset
values, fund fact sheets and portfolio highlights. You can
also access newsletters, education tools and market updates
covering the REIT, utility and preferred securities sectors.
In addition, our Web site contains comprehensive information
about our firm, including our most recent press releases,
profiles of our senior investment professionals, and an
overview of our investment approach.
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COHEN & STEERS TOTAL RETURN REALTY FUND, INC.
SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 2004 (UNAUDITED)
NUMBER DIVIDEND
OF SHARES VALUE YIELD(a)
--------- ------------ ------------
EQUITIES 99.02%(b)
COMMON STOCK 79.61%
DIVERSIFIED 9.84%
Colonial Properties Trust.............. 82,100 $ 3,302,062 6.66%
Crescent Real Estate Equities Co....... 170,600 2,685,244 9.53
iStar Financial........................ 36,900 1,521,387 6.77
Vornado Realty Trust................... 143,200 8,975,776 4.53
------------
16,484,469
------------
HEALTH CARE 10.51%
Health Care Property Investors......... 230,000 5,980,000 6.42
Health Care REIT....................... 27,600 971,520 6.82
Nationwide Health Properties........... 161,800 3,357,350 7.13
Ventas................................. 281,700 7,301,664 5.02
------------
17,610,534
------------
HOTEL 1.19%
Hospitality Properties Trust........... 38,400 1,631,616 6.78
Strategic Hotel Capital................ 27,300 369,096 6.51
------------
2,000,712
------------
INDUSTRIAL 1.43%
First Industrial Realty Trust.......... 64,700 2,387,430 7.43
------------
MORTGAGE 1.89%
Newcastle Investment Corp.............. 103,027 3,162,929 7.82
------------
-------------------
(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.
(b) Percentages indicated are based on the net assets of the fund.
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COHEN & STEERS TOTAL RETURN REALTY FUND, INC.
SCHEDULE OF INVESTMENTS -- (CONTINUED)
SEPTEMBER 30, 2004 (UNAUDITED)
NUMBER DIVIDEND
OF SHARES VALUE YIELD
--------- ------------ ------------
OFFICE 21.95%
Arden Realty........................... 160,000 $ 5,212,800 6.20%
Brandywine Realty Trust................ 184,900 5,265,952 6.18
CarrAmerica Realty Corp................ 155,100 5,071,770 6.12
Equity Office Properties Trust......... 203,400 5,542,650 7.34
HRPT Properties Trust.................. 71,900 790,181 7.64
Mack-Cali Realty Corp.................. 150,800 6,680,440 5.69
Maguire Properties..................... 93,000 2,260,830 6.58
Prentiss Properties Trust.............. 165,300 5,950,800 6.22
------------
36,775,423
------------
OFFICE/INDUSTRIAL 6.40%
Kilroy Realty Corp..................... 56,600 2,152,498 5.21
Liberty Property Trust................. 135,600 5,402,304 6.12
Reckson Associates Realty Corp......... 110,000 3,162,500 5.91
------------
10,717,302
------------
RESIDENTIAL 12.22%
APARTMENT 12.01%
Archstone-Smith Trust.................. 152,900 4,837,756 5.44
AvalonBay Communities.................. 69,900 4,209,378 4.65
Camden Property Trust.................. 78,900 3,645,180 5.50
Gables Residential Trust............... 122,900 4,197,035 7.06
Home Properties........................ 47,000 1,859,320 6.27
Mid-America Apartment Communities...... 35,400 1,378,830 6.01
------------
20,127,499
------------
MANUFACTURED HOME 0.21%
Affordable Residential Communities..... 24,300 354,780 8.56
------------
TOTAL RESIDENTIAL...................... 20,482,279
------------
SELF STORAGE 0.14%
Sovran Self Storage.................... 6,200 242,916 6.18
------------
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COHEN & STEERS TOTAL RETURN REALTY FUND, INC.
SCHEDULE OF INVESTMENTS -- (CONTINUED)
SEPTEMBER 30, 2004 (UNAUDITED)
NUMBER DIVIDEND
OF SHARES VALUE YIELD
--------- ------------ ------------
SHOPPING CENTER 13.83%
COMMUNITY CENTER 4.12%
Developers Diversified Realty Corp..... 22,600 $ 884,790 5.21%
Federal Realty Investment Trust........ 52,400 2,305,600 4.59
Heritage Property Investment Trust..... 51,300 1,496,421 7.20
Kramont Realty Trust................... 69,500 1,292,700 6.99
Urstadt Biddle Properties -- Class A... 60,000 914,400 5.64
------------
6,893,911
------------
REGIONAL MALL 9.71%
CBL & Associates Properties............ 42,100 2,565,995 4.76
Glimcher Realty Trust.................. 95,200 2,313,360 7.90
Macerich Co............................ 107,500 5,728,675 4.58
Mills Corp............................. 109,000 5,653,830 4.59
------------
16,261,860
------------
TOTAL SHOPPING CENTER.................. 23,155,771
------------
SPECIALTY 0.21%
American Campus Communities............ 19,400 360,064 7.27
------------
TOTAL COMMON STOCK (Identified
cost -- $82,645,719)............ 133,379,829
------------
PREFERRED STOCK 19.41%
DIVERSIFIED 1.20%
Colonial Properties Trust, 9.25%,
Series C............................ 600 15,870 8.73
Colonial Properties Trust, 8.125%,
Series D............................ 14,600 385,586 7.69
Crescent Real Estate Equities Co.,
6.75%, Series A (Convertible)....... 75,500 1,601,355 7.97
------------
2,002,811
------------
HEALTH CARE 2.85%
Nationwide Health Properties, 7.677%,
Series P............................ 47,000 4,767,563 7.57
------------
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COHEN & STEERS TOTAL RETURN REALTY FUND, INC.
SCHEDULE OF INVESTMENTS -- (CONTINUED)
SEPTEMBER 30, 2004 (UNAUDITED)
NUMBER DIVIDEND
OF SHARES VALUE YIELD
--------- ------------ ------------
HOTEL 0.20%
FelCor Lodging Trust, 9.00%,
Series B............................ 2,900 $ 74,240 8.79%
Host Marriott Corp, 10.00%,
Series C............................ 3,500 94,220 9.29
Host Marriott Financial Trust,
6.75%, QUIPS(a) (Convertible)....... 3,200 171,200 6.32
------------
339,660
------------
OFFICE 3.76%
Alexandria Real Estate Equities,
9.10%, Series B..................... 13,900 375,578 8.44
HRPT Properties Trust, 8.75%,
Series B............................ 52,800 1,439,856 8.03
Highwoods Properties, 8.625%,
Series A............................ 4,300 4,485,438 8.27
------------
6,300,872
------------
RESIDENTIAL -- APARTMENT 3.23%
Apartment Investment & Management Co.,
8.75%, Series D..................... 6,431 162,511 8.67
Apartment Investment & Management Co.,
9.375%, Series G.................... 113,200 3,017,912 8.78
Apartment Investment & Management Co.,
10.10%, Series Q.................... 25,000 662,500 9.55
Apartment Investment & Management Co.,
10.00%, Series R.................... 18,100 482,727 9.37
Mid-America Apartment Communities,
8.30%, Series H..................... 17,300 445,821 8.07
Post Properties, 8.50%, Series A....... 11,000 641,245 7.38
------------
5,412,716
------------
SHOPPING CENTER 8.17%
COMMUNITY CENTER 0.90%
Developers Diversified Realty Corp.,
8.60%, Series F..................... 1,600 42,880 8.02
Ramco-Gershenson Property Trust,
9.50%, Series B..................... 11,600 314,360 8.78
Saul Centers, 8.00%, Series A.......... 26,800 714,220 7.50
Urstatdt Biddle Properties, 8.50%,
Series C............................ 4,000 437,000 7.78
------------
1,508,460
------------
OUTLET CENTER 0.47%
Chelsea Property Group, 8.375%,
Series A............................ 13,000 783,249 6.95
------------
-------------------
(a) (QUIPS) Quarterly Income Preferred Securities
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COHEN & STEERS TOTAL RETURN REALTY FUND, INC.
SCHEDULE OF INVESTMENTS -- (CONTINUED)
SEPTEMBER 30, 2004 (UNAUDITED)
NUMBER DIVIDEND
OF SHARES VALUE YIELD
--------- ------------ ------------
REGIONAL MALL 6.80%
CBL & Associates Properties, 8.75%,
Series B..................................... 13,000 $ 698,750 8.15%
Glimcher Realty Trust, 8.125%,
Series G..................................... 16,000 407,200 7.98
Mills Corp., 9.00%, Series B.................... 73,800 2,005,884 8.28
Mills Corp., 9.00%, Series C.................... 25,000 687,500 8.18
Mills Corp., 8.75%, Series E.................... 26,000 702,000 8.11
Pennsylvania Real Estate Investment
Trust, 11.00%, Series A...................... 55,400 3,296,300 9.24
Taubman Centers, 8.30%, Series A................ 139,500 3,587,940 8.09
------------
11,385,574
------------
TOTAL SHOPPING CENTER........................... 13,677,283
------------
TOTAL PREFERRED STOCK (Identified
cost -- $27,602,204)..................... 32,500,905
------------
TOTAL EQUITIES (Identified
cost -- $110,247,923).................... 165,880,734
------------
PRINCIPAL
AMOUNT
---------
CORPORATE BOND 0.39%
Host Marriott, LP, 9.50%, due 01/15/07
(Identified cost -- $600,380)............... $600,000 667,500
------------
TOTAL INVESTMENTS (Identified
cost -- $110,848,303)................. 99.41% 166,548,234(a)
OTHER ASSETS IN EXCESS OF LIABILITIES... 0.59% 982,867
------ ------------
NET ASSETS (Equivalent to $18.11 per
share based on 9,249,159 shares of
capital stock outstanding)............ 100.00% $167,531,101
------ ------------
------ ------------
-------------------
(a) At September 30, 2004, net unrealized appreciation was $55,699,931 based on
cost for federal income tax purposes of $110,848,303. This consisted of
aggregate gross unrealized appreciation on investments of $55,732,496 and
aggregate gross unrealized depreciation on investments of $32,565.
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COHEN & STEERS TOTAL RETURN REALTY FUND, INC.
FINANCIAL HIGHLIGHTS(a)
SEPTEMBER 30, 2004 (UNAUDITED)
NET ASSET VALUE
TOTAL NET ASSETS PER SHARE
-------------------------- ---------------
NET ASSET VALUE:
Beginning of period: 12/31/03............... $157,145,926 $16.99
Net investment income................... $ 4,696,993 $ 0.51
Net realized and unrealized gain on
investments.......................... 12,763,799 1.38
Distributions from net investment
income............................... (7,075,617) (0.77)
----------- ------
Net increase in net asset value............. 10,385,175 1.12
------------ ------
End of period: 9/30/2004.................... $167,531,101 $18.11
------------ ------
------------ ------
AVERAGE ANNUAL TOTAL RETURNS(b)
(PERIODS ENDED SEPTEMBER 30, 2004) (UNAUDITED)
ONE YEAR FIVE YEARS TEN YEARS SINCE INCEPTION (9/27/93)
-------- ---------- --------- -------------------------
22.56% 17.99% 13.07% 11.95%
The performance data quoted represent past performance. Past performance is no
guarantee of future results. The rate of return will vary and the principal
value of an investment will fluctuate and shares, if sold, may be worth more or
less than their original cost. Current performance may be lower or higher than
performance data quoted.
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 description of the policies and procedures that the fund
uses to determine how to vote proxies relating to portfolio
securities is available (i) without charge, upon request, by
calling 1-800-330-7348, (ii) on our Web site at
cohenandsteers.com, or (iii) on the Securities and Exchange
Commission's (SEC) Web site at http://www.sec.gov. In
addition, the fund's proxy voting record for the most recent
12-month period ended June 30 is available (i) without
charge upon request, by calling 1-800-330-7348 or (ii) on
the SEC's Web site at http://www.sec.gov.
-------------------
(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.
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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.
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COHEN & STEERS TOTAL RETURN REALTY FUND, INC.
MEET THE COHEN & STEERS FAMILY OF OPEN-END FUNDS:
FOR HIGH CURRENT INCOME: FOR TOTAL RETURN:
COHEN & STEERS COHEN & STEERS
REALTY INCOME FUND REALTY SHARES
IDEAL FOR INVESTORS SEEKING A HIGH IDEAL FOR INVESTORS SEEKING MAXIMUM TOTAL
DIVIDEND YIELD AND CAPITAL APPRECIATION, RETURN THROUGH BOTH CURRENT INCOME AND
INVESTING PRIMARILY IN REITS CAPITAL APPRECIATION, INVESTING PRIMARILY
IN REITS
A, B, C AND I SHARES AVAILABLE
SYMBOL: CSRSX
SYMBOLS: CSEIX, CSBIX, CSCIX, CSDIX
ALSO AVAILABLE: COHEN & STEERS
INSTITUTIONAL REALTY SHARES (CSRIX)
REQUIRES A HIGHER MINIMUM PURCHASE, BUT
OFFERS A LOWER TOTAL EXPENSE RATIO
FOR TOTAL RETURN: FOR CAPITAL APPRECIATION:
COHEN & STEERS COHEN & STEERS
UTILITY FUND REALTY FOCUS FUND
IDEAL FOR INVESTORS SEEKING MAXIMUM TOTAL IDEAL FOR INVESTORS SEEKING MAXIMUM
RETURN THROUGH BOTH CURRENT INCOME AND CAPITAL APPRECIATION, INVESTING IN A
CAPITAL APPRECIATION, INVESTING PRIMARILY LIMITED NUMBER OF REITS AND OTHER REAL
IN UTILITIES ESTATE COMPANIES
A, B, C AND I SHARES AVAILABLE CONCENTRATED, HIGHLY FOCUSED PORTFOLIO
SYMBOLS: CSUAX, CSUBX, CSUCX, CSUIX A, B, C AND I SHARES AVAILABLE
SYMBOLS: CSFAX, CSFBX, CSFCX, CSSPX
FOR MORE INFORMATION ABOUT ANY COHEN & STEERS FUND
OR TO OBTAIN A PROSPECTUS PLEASE CONTACT US AT:
1-800-330-7348, OR VISIT OUR WEB SITE AT COHENANDSTEERS.COM
PLEASE CONSIDER THE INVESTMENT OBJECTIVES, RISKS, CHARGES AND EXPENSES OF THE
FUND CAREFULLY BEFORE INVESTING. A PROSPECTUS CONTAINING THIS AND OTHER
INFORMATION ABOUT THE FUND MAY BE OBTAINED BY FOLLOWING THE INSTRUCTIONS ABOVE.
PLEASE READ THE PROSPECTUS CAREFULLY BEFORE INVESTING.
COHEN & STEERS SECURITIES, LLC, DISTRIBUTOR
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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
Bonnie Cohen FUND ADMINISTRATOR AND CUSTODIAN
Director State Street Corp.
225 Franklin Street
George Grossman Boston, MA 02110
Director
TRANSFER AGENT
Richard J. Norman Equiserve Trust Company
Director 250 Royall Street
Canton, MA 02021
Frank K. Ross (800) 426-5523
Director
LEGAL COUNSEL
Willard H. Smith Jr. Simpson Thacher & Bartlett LLP
Director 425 Lexington Avenue
New York, NY 10017
Joseph M. Harvey
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.
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13
[COHEN & STEERS
TOTAL RETURN REALTY LOGO]
-----------------------------------
QUARTERLY REPORT
SEPTEMBER 30, 2004
COHEN & STEERS
TOTAL RETURN REALTY FUND
757 THIRD AVENUE
NEW YORK, NY 10017