UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act File Number: 811-7154
Cohen & Steers Total Return Realty Fund, Inc.
(Exact name of registrant as specified in charter)
757 Third Avenue, New York, NY 10017
(Address of principal executive offices) (Zip code)
Adam M. Derechin
Cohen & Steers Capital Management, Inc.
757 Third Avenue
New York, New York 10017
(Name and address of agent for service)
Registrant's telephone number, including area code: (212) 832-3232
Date of fiscal year end: December 31
Date of reporting period: June 30, 2005
Item 1. Reports to Stockholders.
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COHEN & STEERS TOTAL RETURN REALTY FUND, INC.
July 28, 2005
To Our Shareholders:
We are pleased to submit to you our report for the quarter and six months
ended June 30, 2005. The net asset value at that date was $19.96 per share. The
fund's stock is traded on the New York Stock Exchange and its share price can
differ from its net asset value; at quarter end, the fund's closing price on the
NYSE was $20.12. The total return, including income, for the Cohen & Steers
Total Return Realty Fund and the comparative benchmarks were:
TOTAL RETURN,
QUARTER ENDED 6/30/05
-------------------------------------
MARKET PRICE(a) NET ASSET VALUE(a)
----------------- -----------------
YEAR YEAR
QUARTER TO DATE QUARTER TO DATE
------- ------- ------- -------
Cohen & Steers Total Return Realty Fund.... 12.1% 3.5% 12.3% 4.7%
NAREIT Equity REIT Index(b)................ 14.5% 6.4% 14.5% 6.4%
Morgan Stanley REIT Preferred Index(c)..... 3.5% 2.8% 3.5% 2.8%
The fund's asset mix at quarter end consisted of 77% REIT common stocks and
23% preferred and other fixed income investments. During the quarter, three
monthly dividends of $0.11 per share were paid to common shareholders. In
addition, three monthly dividends of $0.11 per share were declared and will be
paid to shareholders on July 29, August 31, and September 30.(d)
-------------------
(a) As a closed-end investment company, the price of the fund's New York Stock
Exchange-traded shares will be set by market forces and at times may deviate
from the net asset value per share of the fund.
(b) The NAREIT Equity REIT Index ('Equity REITs') 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 performace of all publicly traded equity REITs as
a whole.
(c) The Morgan Stanley REIT Preferred Index is an unmanaged index of all
exchange-traded perpetual preferred securities of equity REITs, weighted by
capitalization and considered representative of real estate preferred stock
performance.
(d) Please note that distributions paid by the fund to shareholders are subject
to recharacterization for tax purposes. The final tax treatment of these
distributions is reported to shareholders after the close of each fiscal
year on form 1099-DIV. To the extent the fund pays distributions in excess
of its net investment company taxable income, this excess would be a
tax-free return of capital distributed from the fund's assets. To the
extent this occurs, the fund's shareholders of record would be notified
of the approximate amount of capital returned for each such distribution.
Distributions of capital decrease the fund's total assets and, therefore,
could have the effect of increasing the fund's expense ratio. In addition,
in order to make these distributions, the fund may have to sell portfolio
securities at a less than opportune time.
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COHEN & STEERS TOTAL RETURN REALTY FUND, INC.
INVESTMENT REVIEW
In our last quarterly report, we suggested that negative sentiment in the
market for REIT shares, as manifested in the peaking of short interest in the
REIT index trading vehicles, was a bullish contrarian indicator and that REIT
shares were trading at or below the value of their underlying real estate
assets -- not above, as Wall Street analysts had almost unanimously suggested.
Additionally, for quite some time, we have discussed our view that the
risk-adjusted returns of real estate would continue to be relatively attractive
in a low return environment. Recent events have validated all of these beliefs.
During the quarter, continued momentum in the recovery of real estate
fundamentals and REIT earnings, and a flurry of merger and buyout activity,
drove REIT share prices to new highs. Buyout activity reached a crescendo in
June as Catellus, Gables Residential and CRT Properties all announced that they
were being acquired.
The table below illustrates major REIT buyout activity over the last year:
REIT M&A PRICES EXCEED NAVS
Target Target
Total Pre-announce Pre-announce
Property Transaction NAV per Price per Offer Price
Announced Acquirer/Target Type Value (billion) Share Share per Share
--------- --------------- ---- --------------- ----- ----- ---------
08/20/04 General Growth/Rouse Mall $12.6 $39.00-$45.25 $50.61 $67.50
10/04/04 Camden/Summit Apartment $ 1.9 $19.81-$26.75 $27.84 $31.37
10/25/04 Colonial/Cornerstone Apartment $ 1.5 $ 7.75-$ 9.00 $10.07 $10.80
12/19/04 Centro/Kramont Shopping Center $ 1.2 $18.00-$20.00 $20.80 $23.50
06/06/05 ProLogis/Catellus Industrial $ 4.9 $26.00-$30.24 $29.24 $33.80
06/07/05 ING Clarion/Gables Apartment $ 2.8 $31.39-$43.00 $38.12 $43.50
06/17/05 DRA Advisors/CRT Properties Office $ 1.7 $19.50-$20.60 $24.09 $27.80
--------- -----
AVERAGE/TOTAL $26.6
-----
-----
Offer Price Percent Difference
Premium to Between Offer
Pre-announce Price & Midpoint Implied
Announced Price per Share NAV Estimate Cap Rate
--------- --------------- ------------ --------
08/20/04 33.4% 62.2% 5.7%
10/04/04 12.7% 34.8% 5.8%
10/25/04 7.2% 29.0% 6.5%
12/19/04 13.0% 23.7% 6.9%
06/06/05 15.6% 20.2% 6.1%
06/07/05 14.1% 17.0% 5.8%
06/17/05 15.4% 38.7% 7.1%
--------- ----- ----- ----
AVERAGE/T 15.9% 32.2% 6.3%
----- ----- ----
----- ----- ----
Several observations are worth noting. These seven buyouts were sizeable,
totaling approximately $27 billion in value across all four 'core' property
types: retail, apartment, industrial and office. Several of these deals were
public-to-public mergers while others were leveraged buyouts by private sponsors
backed by major institutional sources -- in other words, the acquirers were all
highly credible and sophisticated. In our view, the debt providers for these
transactions have also validated the real estate asset pricing implied by these
deals. On average, the implied capitalization rate (the current income generated
by these properties compared to the price paid for the investment) for these
sales was 6.3%, consistent with the high quality single property transactions
that we observe in the private marketplace but certainly lower than the
capitalization rate regime that existed for many years. Finally, these deals
were all struck at significant premiums to the pre-announcement target stock
prices -- ranging from 7.2% to 33.4%.
Perhaps even more interesting for the rest of the REIT market, all of these
deals were struck at prices above the commonly perceived value of the target
company's real estate net asset value (NAV). In every instance, the deal price
was greater than most, if not all the published analyst estimates of NAV. These
deals implied lower capitalization rates for major real estate assets than any
of the Wall Street analysts had heretofore been willing to
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COHEN & STEERS TOTAL RETURN REALTY FUND, INC.
use, even though similar implied capitalization rates had been observed in the
private market for some time. As a result, many Wall Street analysts who had
been negative on the REIT sector for most of the previous three years, and who
fostered a sense of disbelief among many investors, turned more positive on the
REIT group, lowering their assumed capitalization rates and boosting their NAV
estimates. In short, although there was near unanimity among REIT pundits that
the stocks had been expensive, the evidence above suggests that they certainly
were not.
As rents and occupancies benefited from strong economic growth, the regional
mall sector was the best performing sector in the fund, returning 21%. Our
overweight and stock selection in the health care sector, which returned 17.4%,
was also among the most significant contributors to our relative performance
during the quarter.
Manufactured housing was the worst performing property sector, with a 7.2%
return. It continues to lag the others as a fundamental recovery has not yet
become visible enough to excite investors. While the for-sale housing boom is
indirectly benefiting the apartment sector by constraining supply of new rental
apartments via condo conversions, there has been no such ancillary impact on the
manufactured home sector. In general, the fund's focus on income caused it to
trail the REIT market as more growth-oriented companies led the second quarter
rally.
Gables Residential and Macerich Company were two of the best performing
holdings during the quarter, with returns of 31.9% and 27.2%, respectively. Our
overweights in Gables Residential, one of the companies that announced buyouts
in June, and Ventas Inc., were two of the largest contributors in the portfolio
at the security level. Laggards during the quarter were iStar Financial and
Newcastle Investment Corp., with returns of 2.8% and 4.0%, respectively.
Our allocation to REIT preferred stocks, which is used to increase the yield
of the income-oriented portfolio and lower its volatility, was the largest
detractor from the fund's performance. REIT preferreds, while generating a 7.7%
current yield at the end of June, as measured by the index, produced a 3.5%
total return in the second quarter and trailed REIT common stock performance
during this period.
INVESTMENT OUTLOOK
In the mid to late 1990s, real estate company share prices as a group
consistently traded at large premiums to NAV -- up to 30% for the REIT group as
a whole. The public market's perception of the value and growth prospects of
real estate assets was clearly ahead of that of the private market, and this
enabled massive amounts of assets to flow from private to public ownership.
REITs were, in fact, the marginal buyers of most large real estate assets during
this time period, and REIT market capitalization expanded dramatically through
IPOs and secondary offerings of existing companies.
Today, the public market and private market views of real estate value are
much more closely aligned, as evidenced by the fact that most commentators see
REIT valuations as closer than many had realized to private market NAV. This has
profound implications for the way the real estate stock cycle will evolve, in
our opinion.
We believe that assets will continue to flow from private to public hands as
skilled public players seek out selective, strategic acquisition and development
opportunities and as the moderate but steady and disciplined pace of IPO
activity continues. Additionally, we think that current strong investor interest
in REITs' investment
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COHEN & STEERS TOTAL RETURN REALTY FUND, INC.
attributes, as well as the improved outlook on the sector by analysts offer an
attractive environment for companies to utilize secondary stock offerings in
order to finance these activities. However, if private market values continue to
be strong as well, as we expect, REIT equity issuance should not get out of hand
as it did during the latter stages of the REIT stock cycle in the late 1990s.
The large premiums to asset value that resulted in many instances in
undisciplined equity issuance contributed significantly to the severity of the
downturn in REIT share prices in 1998 and 1999.
In our view, assets will continue to flow from public to private and from
public to public -- as public companies that can neither create value for
shareholders nor achieve an attractive valuation are taken private or merged
into other public companies. Again, the converging views of real estate asset
value by both private and public capital markets, in conjunction with continued
strong private market demand for real estate assets can potentially serve as a
governor on REIT stock prices -- helping to guard against the massive discounts
to asset value that persisted in late 1999 and 2000 in the aftermath of the REIT
bear market.
Our investment outlook and strategy continues to be predicated on the
beliefs that the U.S. economy will continue to expand, the Federal Reserve is
nearing the end of the monetary tightening cycle, and that most property sectors
will continue to realize improving occupancies and rental rates. We have focused
the portfolio on those sectors that we believe are benefiting most from the
cyclical recovery in occupancies and rents: office, self storage, hotel and
certain segments of the apartment market (including student housing). We have
trimmed some retail holdings based on less attractive relative valuation,
according to our proprietary valuation model, as this sector's fundamentals stay
steady while others' improve. The rally in the second quarter, combined with the
dynamics of the merger environment, has created many shifts in relative
valuation for individual companies, and we continually rebalance the portfolio
to capture those shifts.
In closing, while REIT share prices continue to perform well, and valuations
inch higher, we believe that in a low return environment, with fundamentals
improving and the interaction between private and public real estate increasing,
REITs can continue to provide attractive investment returns.
Sincerely,
MARTIN COHEN ROBERT H. STEERS
MARTIN COHEN ROBERT H. STEERS
Co-chairman Co-chairman
JOSEPH M. HARVEY JAMES S. CORL
JOSEPH M. HARVEY JAMES S. CORL
Portfolio Manager Portfolio Manager
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COHEN & STEERS TOTAL RETURN REALTY FUND, INC.
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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.
JUNE 30, 2005
TOP TEN HOLDINGS
(UNAUDITED)
MARKET % OF
SECURITY VALUE NET ASSETS
-------- ---------- ----------
1. Ventas................................................... $8,507,340 4.61%
2. Vornado Realty Trust..................................... 7,268,160 3.94
3. Macerich Co. ............................................ 7,207,875 3.90
4. Prentiss Properties Trust................................ 6,067,260 3.29
5. Mack-Cali Realty Corp. .................................. 5,938,830 3.22
6. Equity Office Properties Trust........................... 5,938,140 3.22
7. Health Care Property Investors........................... 5,867,680 3.18
8. Arden Realty............................................. 5,756,800 3.12
9. Liberty Property Trust................................... 5,724,852 3.10
10. Brandywine Realty Trust.................................. 5,667,185 3.07
SECTOR BREAKDOWN
(BASED ON NET ASSETS)
(UNAUDITED)
[PIE CHART]
Other Assets in Excess of Liabilities 0.67%
Other 5.30%
Diversified 10.51%
Residential 13.91%
Health Care 14.69%
Office/Industrial 35.12%
Shopping Center 19.80%
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COHEN & STEERS TOTAL RETURN REALTY FUND, INC.
SCHEDULE OF INVESTMENTS
JUNE 30, 2005 (UNAUDITED)
NUMBER VALUE DIVIDEND
OF SHARES (NOTE 1) YIELD(a)
--------- ------------ ------------
EQUITIES 99.33%
COMMON STOCK 77.57%
DIVERSIFIED 8.31%
Colonial Properties Trust.............. 82,100 $ 3,612,400 6.14%
Crescent Real Estate Equities Co....... 61,500 1,153,125 8.00
iStar Financial........................ 55,200 2,295,768 7.04
Spirit Finance Corp.................... 86,900 1,021,075 6.47
Vornado Realty Trust................... 90,400 7,268,160 3.78
------------
15,350,528
------------
HEALTH CARE 11.30%
Health Care Property Investors......... 217,000 5,867,680 6.21
Healthcare Realty Trust................ 42,200 1,629,342 6.79
Health Care REIT....................... 27,600 1,040,244 6.58
Nationwide Health Properties........... 161,800 3,820,098 6.27
Ventas................................. 281,700 8,507,340 4.77
------------
20,864,704
------------
HOTEL 1.76%
DiamondRock Hospitality Co............. 47,400 535,620 6.11
Hospitality Properties Trust........... 38,700 1,705,509 6.54
Strategic Hotel Capital................ 55,500 999,000 4.89
------------
3,240,129
------------
INDUSTRIAL 1.40%
First Industrial Realty Trust.......... 64,700 2,581,530 6.97
------------
MORTGAGE 1.72%
Newcastle Investment Corp.............. 105,527 3,181,639 8.29
------------
See accompanying notes to financial statements.
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COHEN & STEERS TOTAL RETURN REALTY FUND, INC.
SCHEDULE OF INVESTMENTS -- (CONTINUED)
JUNE 30, 2005 (UNAUDITED)
NUMBER VALUE DIVIDEND
OF SHARES (NOTE 1) YIELD(a)
--------- ------------ ------------
OFFICE 25.85%
American Financial Realty Trust........ 117,300 $ 1,804,074 7.02%
Arden Realty........................... 160,000 5,756,800 5.61
Brandywine Realty Trust................ 184,900 5,667,185 5.74
CarrAmerica Realty Corp................ 154,500 5,589,810 5.53
Equity Office Properties Trust......... 179,400 5,938,140 6.04
HRPT Properties Trust.................. 157,400 1,956,482 6.76
Kilroy Realty Corp..................... 56,600 2,687,934 4.30
Mack-Cali Realty Corp.................. 131,100 5,938,830 5.56
Maguire Properties..................... 93,000 2,635,620 5.65
Prentiss Properties Trust.............. 166,500 6,067,260 6.15
Reckson Associates Realty Corp......... 110,000 3,690,500 5.07
------------
47,732,635
------------
OFFICE/INDUSTRIAL 4.10%
Duke Realty Corp....................... 58,500 1,852,110 5.87
Liberty Property Trust................. 129,200 5,724,852 5.51
------------
7,576,962
------------
RESIDENTIAL 11.09%
APARTMENT 10.92%
American Campus Communities............ 37,900 859,572 5.95
Apartment Investment & Management Co... 11,500 470,580 5.87
Archstone-Smith Trust.................. 120,300 4,645,986 4.45
AvalonBay Communities.................. 59,400 4,799,520 3.51
Camden Property Trust.................. 53,500 2,875,625 4.73
Education Realty Trust................. 68,400 1,251,720 6.50
GMH Communities Trust.................. 49,900 691,115 6.57
Gables Residential Trust............... 21,600 933,768 5.57
Home Properties........................ 47,000 2,021,940 5.86
Mid-America Apartment Communities...... 35,400 1,607,868 5.15
------------
20,157,694
------------
MANUFACTURED HOME 0.17%
Affordable Residential Communities..... 24,300 324,405 5.62
------------
TOTAL RESIDENTIAL...................... 20,482,099
------------
See accompanying notes to financial statements.
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COHEN & STEERS TOTAL RETURN REALTY FUND, INC.
SCHEDULE OF INVESTMENTS -- (CONTINUED)
JUNE 30, 2005 (UNAUDITED)
NUMBER VALUE DIVIDEND
OF SHARES (NOTE 1) YIELD(a)
--------- ------------ ------------
SELF STORAGE 1.15%
Extra Space Storage.................... 54,200 $ 776,686 6.35%
Extra Space Storage (Restricted)(b,c).. 8,000 108,908 6.35
Sovran Self Storage.................... 6,200 281,852 5.32
U-Store-It Trust....................... 50,000 952,500 5.88
------------
2,119,946
------------
SHOPPING CENTER 10.89%
COMMUNITY CENTER 2.55%
Cedar Shopping Centers................. 35,400 522,150 6.10
Heritage Property Investment Trust..... 51,300 1,796,526 6.00
Inland Real Estate Corp................ 55,300 889,224 5.97
Urstadt Biddle Properties -- Class A... 86,600 1,499,912 5.08
------------
4,707,812
------------
REGIONAL MALL 8.34%
Glimcher Realty Trust.................. 95,500 2,650,125 6.92
Macerich Co............................ 107,500 7,207,875 3.88
Mills Corp............................. 91,100 5,537,969 4.13
------------
15,395,969
------------
TOTAL SHOPPING CENTER.................. 20,103,781
------------
TOTAL COMMON STOCK
(Identified cost -- $82,931,699) 143,233,953
------------
PREFERRED STOCK 21.76%
DIVERSIFIED 2.20%
Colonial Properties Trust, 8.125%,
Series D............................ 14,600 383,250 7.73
Colonial Properties Trust, 7.62%,
Series E............................ 49,500 1,212,750 7.80
Crescent Real Estate Equities Co.,
6.75%, Series A (Convertible)....... 60,500 1,289,255 7.93
Digital Realty, 8.50%, Series A........ 10,700 277,291 8.22
iStar Financial, 7.875%, Series E...... 25,000 644,625 7.64
iStar Financial, 7.80%, Series F....... 10,000 256,000 7.62
------------
4,063,171
------------
See accompanying notes to financial statements.
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COHEN & STEERS TOTAL RETURN REALTY FUND, INC.
SCHEDULE OF INVESTMENTS -- (CONTINUED)
JUNE 30, 2005 (UNAUDITED)
NUMBER VALUE DIVIDEND
OF SHARES (NOTE 1) YIELD(a)
--------- ------------ ------------
HEALTH CARE 3.39%
Health Care REIT, 7.625%, Series F..... 17,000 $ 429,590 7.56%
Nationwide Health Properties, 7.677%,
Series P............................ 47,000 4,805,750 7.51
Windrose Medical, 7.50%, Series A...... 40,800 1,020,000 7.52
------------
6,255,340
------------
HOTEL 0.67%
Eagle Hospitality Properties Trust,
8.25%, Series A..................... 13,600 349,520 8.02
FelCor Lodging Trust, 9.00%,
Series B............................ 589 15,061 8.80
FelCor Lodging Trust, 8.00%,
Series C............................ 17,000 417,010 8.15
Host Marriott Corp, 10.00%, Series C... 3,500 92,435 9.47
Host Marriott Financial Trust, 6.75%,
QUIPS(d) (Convertible).............. 3,200 188,800 5.73
Sunstone Hotel Investors, 8.00%,
Series A............................ 7,000 180,250 7.77
------------
1,243,076
------------
INDUSTRIAL 0.30%
EastGroup Properties, 7.95%,
Series D............................ 21,000 560,700 7.45
------------
OFFICE 3.47%
Alexandria Real Estate Equities, 9.10%,
Series B............................ 13,900 366,404 8.65
HRPT Properties Trust, 8.75%,
Series B............................ 52,800 1,429,824 8.09
Highwoods Properties, 8.625%,
Series A............................ 4,300 4,601,000 8.06
------------
6,397,228
------------
RESIDENTIAL -- APARTMENT 2.82%
Apartment Investment & Management Co.,
9.375%, Series G.................... 113,200 3,011,120 8.80
Apartment Investment & Management Co.,
10.10%, Series Q.................... 25,000 649,500 9.74
Apartment Investment & Management Co.,
10.00%, Series R.................... 18,100 473,315 9.56
Mid-America Apartment Communities,
8.30%, Series H..................... 17,300 449,800 8.00
Post Properties, 8.50%, Series A....... 11,000 624,800 7.48
------------
5,208,535
------------
See accompanying notes to financial statements.
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COHEN & STEERS TOTAL RETURN REALTY FUND, INC.
SCHEDULE OF INVESTMENTS -- (CONTINUED)
JUNE 30, 2005 (UNAUDITED)
NUMBER VALUE DIVIDEND
OF SHARES (NOTE 1) YIELDA
--------- ------------ ------------
SHOPPING CENTER 8.91%
COMMUNITY CENTER 1.33%
Cedar Shopping Centers, 8.875%,
Series A............................ 10,000 $ 267,000 8.31%
Developers Diversified Realty Corp.,
8.60%, Series F..................... 1,600 42,352 8.12
Ramco-Gershenson Property Trust, 9.50%,
Series B............................ 11,600 308,676 8.94
Saul Centers, 8.00%, Series A.......... 26,800 701,892 7.64
Urstatdt Biddle Properties, 8.50%,
Series C............................ 4,000 434,000 7.83
Urstatdt Biddle Properties, 7.50%,
Series D............................ 27,000 696,600 7.29
------------
2,450,520
------------
REGIONAL MALL 7.58%
CBL & Associates Properties, 8.75%,
Series B............................ 13,000 692,250 8.23
CBL & Associates Properties, 7.75%,
Series C............................ 13,000 356,850 7.07
Glimcher Realty Trust, 8.125%,
Series G............................ 16,000 408,800 7.95
Mills Corp., 9.00%, Series B........... 73,800 1,987,803 8.35
Mills Corp., 9.00%, Series C........... 25,000 674,125 8.34
Mills Corp., 8.75%, Series E........... 26,000 704,600 8.08
Pennsylvania Real Estate Investment
Trust, 11.00%, Series A............. 55,400 3,268,600 9.32
Simon Property Group, 8.375%, Series
J................................... 13,000 877,500 6.21
Taubman Centers, 8.30%, Series A....... 139,500 3,520,980 8.24
Taubman Centers, 7.625%, Series H...... 59,900 1,506,484 7.59
------------
13,997,992
------------
TOTAL SHOPPING CENTER.................. 16,448,512
------------
TOTAL PREFFERED STOCK
(Identified cost -- $35,284,891) 40,176,562
------------
TOTAL EQUITIES (Identified
cost -- $118,216,590)........... 183,410,515
------------
See accompanying notes to financial statements.
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COHEN & STEERS TOTAL RETURN REALTY FUND, INC.
SCHEDULE OF INVESTMENTS -- (CONTINUED)
JUNE 30, 2005 (UNAUDITED)
PRINCIPAL VALUE
AMOUNT (NOTE 1)
---------- ------------
COMMERCIAL PAPER 1.00%
San Paolo U.S. Finance Company,
2.20%, due 07/01/2005
(Identified cost -- $1,850,000)........ $1,850,000 $ 1,850,000
------------
TOTAL INVESTMENTS (Identified
cost -- $120,066,590)................ 100.33% 185,260,515
LIABILITIES IN EXCESS OF OTHER
ASSETS............................... (0.33)% (611,303)
-------- ------------
NET ASSETS (Equivalent to $19.96 per
share based on 9,249,159 shares of
capital stock outstanding)........... 100.00% $184,649,212
------- ------------
------- ------------
-------------------
Note: Percentages indiciated are based on the net assets of the fund.
(a) Dividend yield is computed by dividing the security's current annual
dividend rate by its value on June 30, 2005. The current annual dividend
rate does not reflect any potential reclassifications to capital gain or
return of capital.
(b) Resale is restricted. Security acquired 6/20/05 at a cost of $107,760;
equals 0.06% of net assets.
(c) Fair valued security; equals 0.06% of net assets.
(d) QUIPS Quarterly Income Preferred Securities.
See accompanying notes to financial statements.
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COHEN & STEERS TOTAL RETURN REALTY FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2005 (UNAUDITED)
ASSETS:
Investments in securities, at value (Identified
cost -- $120,066,590) (Note 1)....................... $185,260,515
Dividends and interest receivable....................... 879,215
Receivable for investment securities sold............... 571,281
Other assets............................................ 14,413
------------
Total Assets....................................... 186,725,424
------------
LIABILITIES:
Payable for investment securities purchased............. 1,891,236
Payable to investment advisor........................... 104,859
Payable to administrator................................ 8,141
Payable for directors fees.............................. 7,824
Other liabilities....................................... 64,152
------------
Total Liabilities.................................. 2,076,212
------------
NET ASSETS applicable to 9,249,159 shares of $0.001 par
value common stock outstanding............................ $184,649,212
------------
------------
NET ASSET VALUE PER SHARE:
($184,649,212 [div] 9,249,159 shares outstanding)......... $ 19.96
------------
------------
MARKET PRICE PER SHARE...................................... $ 20.12
------------
------------
MARKET PRICE PREMIUM TO NET ASSET VALUE PER SHARE........... 0.80%
------------
------------
NET ASSETS consist of:
Paid-in capital......................................... $111,082,965
Dividends in excess of net investment income............ (3,897,685)
Accumulated undistributed net realized gain on
investments.......................................... 12,270,007
Net unrealized appreciation on investments.............. 65,193,925
------------
$184,649,212
------------
------------
See accompanying notes to financial statements.
--------------------------------------------------------------------------------
13
--------------------------------------------------------------------------------
COHEN & STEERS TOTAL RETURN REALTY FUND, INC.
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2005 (UNAUDITED)
Investment Income (Note 1):
Dividend income......................................... $2,964,489
Interest income......................................... 29,363
----------
Total Income....................................... 2,993,852
----------
Expenses:
Investment advisory fees (Note 2)....................... 603,777
Reports to shareholders................................. 67,650
Professional fees....................................... 43,907
Directors' fees and expenses (Note 2)................... 25,044
Administration fees..................................... 12,825
Custodian fees and expenses............................. 11,946
Registration and filing fees............................ 9,789
Transfer agent fees and expenses........................ 7,783
Miscellaneous........................................... 4,371
----------
Total Expenses..................................... 787,092
----------
Net Investment Income....................................... 2,206,760
----------
Net Realized and Unrealized Gain (Loss) on Investments:
Net realized gain on investments........................ 12,501,452
Net change in unrealized appreciation on investments.... (6,309,407)
----------
Net realized and unrealized gain on investments.... 6,192,045
----------
Net Increase in Net Assets Resulting from Operations........ $8,398,805
----------
----------
See accompanying notes to financial statements.
--------------------------------------------------------------------------------
14
--------------------------------------------------------------------------------
COHEN & STEERS TOTAL RETURN REALTY FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE FOR THE
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 2005 DECEMBER 31, 2004
---------------- -----------------
Change in Net Assets:
From Operations:
Net investment income................... $ 2,206,760 $ 5,947,413
Net realized gain on investments........ 12,501,452 3,223,829
Net change in unrealized appreciation on
invesments........................... (6,309,407) 26,674,230
------------ ------------
Net increase in net assets
resulting from operations........ 8,398,805 35,845,472
------------ ------------
Dividends and Distributions to Shareholders
from (Note 1):
Net investment income................... (6,104,445) (5,947,413)
Net realized gain on investments........ -- (3,210,876)
Tax return of capital................... -- (1,478,257)
------------ ------------
Total dividends and distributions
to shareholders.................. (6,104,445) (10,636,546)
------------ ------------
Total increase in net assets....... 2,294,360 25,208,926
Net Assets:
Beginning of period..................... 182,354,852 157,145,926
------------ ------------
End of period(a)........................ $184,649,212 $182,354,852
------------ ------------
------------ ------------
-------------------
(a) Includes dividends in excess of net investment income of $3,897,685 and $0,
respectively.
See accompanying notes to financial statements.
--------------------------------------------------------------------------------
15
--------------------------------------------------------------------------------
COHEN & STEERS TOTAL RETURN REALTY FUND, INC.
FINANCIAL HIGHLIGHTS (UNAUDITED)
The following table includes selected data for a share outstanding
throughout each period and other performance information derived from the
financial statements. It should be read in conjunction with the financial
statements and notes thereto.
FOR THE SIX FOR THE YEAR ENDED DECEMBER 31,
MONTHS ENDED ---------------------------------------------------------
PER SHARE OPERATING PERFORMANCE: JUNE 30, 2005 2004 2003 2002 2001 2000
-------------------------------- -------------- --------- --------- --------- --------- ---------
Net asset value, beginning of period... $19.72 $16.99 $13.52 $13.41 $12.35 $ 10.63
------ ------ ------ ------ ------ -------
Income from investment operations:
Net investment income............... 0.24(a) 0.64 0.58 0.64 0.77 0.75
Net realized and unrealized gain on
investments....................... 0.66 3.24 3.92 0.43 1.28 1.93
------ ------ ------ ------ ------ -------
Total income from investment
operations.................... 0.90 3.88 4.50 1.07 2.05 2.68
------ ------ ------ ------ ------ -------
Less dividends and distributions to
shareholders from:
Net investment income............... (0.66) (0.64) (0.58) (0.75) (0.77) (0.74)
Net realized gain on investments.... -- (0.35) (0.35) (0.21) -- --
Tax return of capital............... -- (0.16) (0.10) -- (0.22) (0.22)
------ ------ ------ ------ ------ -------
Total from dividends and
distributions to
shareholders.................. (0.66) (1.15) (1.03) (0.96) (0.99) (0.96)
------ ------ ------ ------ ------ -------
Net increase in net assets...... 0.24 2.73 3.47 0.11 1.06 1.72
------ ------ ------ ------ ------ -------
Net asset value, end of period......... $19.96 $19.72 $16.99 $13.52 $13.41 $ 12.35
------ ------ ------ ------ ------ -------
------ ------ ------ ------ ------ -------
Market value, end of period............ $20.12 $20.12 $17.74 $14.19 $13.60 $ 11.88
------ ------ ------ ------ ------ -------
------ ------ ------ ------ ------ -------
====================================================================================================================
Total market value return(b)........... 3.49%(c) 20.83% 33.36% 11.53% 23.34% 21.53%
------ ------ ------ ------ ------ -------
------ ------ ------ ------ ------ -------
Total net asset value return(b)........ 4.74%(c) 23.65% 34.05% 7.77% 16.82% 26.17%
------ ------ ------ ------ ------ -------
------ ------ ------ ------ ------ -------
====================================================================================================================
RATIOS/SUPPLEMENTAL DATA:
-------------------------
Net assets, end of period (in millions) $184.6 $182.4 $157.1 $125.0 $124.1 $ 91.4
------ ------ ------ ------ ------ -------
------ ------ ------ ------ ------ -------
Ratio of expenses to average daily net
assets (before expense reduction)..... 0.91%(d) 0.92% 0.95% 0.96% 1.18% 1.16%
------ ------ ------ ------ ------ -------
------ ------ ------ ------ ------ -------
Ratio of expenses to average daily net
assets (net of expense reduction)..... 0.91%(d) 0.92% 0.95% 0.96% 1.18% 1.15%
------ ------ ------ ------ ------ -------
------ ------ ------ ------ ------ -------
Ratio of net investment income to
average daily net assets (before
expense reduction).................... 2.56%(d) 3.62% 3.93% 4.59% 5.86% 6.56%
------ ------ ------ ------ ------ -------
------ ------ ------ ------ ------ -------
Ratio of net investment income to
average daily net assets (net of
expense reduction).................... 2.56%(d) 3.62% 3.93% 4.59% 5.86% 6.57%
------ ------ ------ ------ ------ -------
------ ------ ------ ------ ------ -------
Portfolio turnover rate................ 12%(c) 3% 22% 30% 34% 31%
------ ------ ------ ------ ------ -------
------ ------ ------ ------ ------ -------
-------------------
(a) Calculated based on the average shares outstanding during the period.
(b) Total market value return is computed based upon the New York Stock Exchange
market price of the fund's shares and excludes the effects of brokerage
commissions. Dividends and distributions, if any, are assumed for purposes
of this calculation, to be reinvested at prices obtained under the fund's
dividend reinvestment plan. Total net asset value return measures the
changes in value over the period indicated, taking into account dividends
as reinvested.
(c) Not annualized.
(d) Annualized.
See accompanying notes to financial statements.
--------------------------------------------------------------------------------
16
--------------------------------------------------------------------------------
COHEN & STEERS TOTAL RETURN REALTY FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1. SIGNIFICANT ACCOUNTING POLICIES
Cohen & Steers Total Return Realty Fund, Inc. (the fund) was incorporated
under the laws of the State of Maryland on September 4, 1992 and is registered
under the Investment Company Act of 1940 as amended, as a nondiversified,
closed-end management investment company. The fund's investment objective is
maximum total return.
The following is a summary of significant accounting policies consistently
followed by the fund in the preparation of its financial statements. The
policies are in conformity with accounting principles generally accepted in the
United States of America (GAAP). The preparation of the financial statements in
accordance with GAAP requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of income and expenses during the
reporting period. Actual results could differ from those estimates.
Portfolio Valuation: Investments in securities that are listed on the New
York Stock Exchange are valued, except as indicated below, at the last sale
price reflected at the close of the New York Stock Exchange on the business day
as of which such value is being determined. If there has been no sale on such
day, the securities are valued at the mean of the closing bid and asked prices
for the day or, if no asked price is available, at the bid price.
Securities not listed on the New York Stock Exchange but listed on other
domestic or foreign securities exchanges or admitted to trading on the National
Association of Securities Dealers Automated Quotations, Inc. (Nasdaq) national
market system are valued in a similar manner. Securities traded on more than one
securities exchange are valued at the last sale price on the business day as of
which such value is being determined as reflected on the tape at the close of
the exchange representing the principal market for such securities.
Readily marketable securities traded in the over-the-counter market,
including listed securities whose primary market is believed by Cohen & Steers
Capital Management, Inc. to be over-the-counter, but excluding securities
admitted to trading on the Nasdaq National List, are valued at the official
closing prices as reported by Nasdaq, the National Quotation Bureau, or such
other comparable sources as the Board of Directors deems appropriate to reflect
their fair market value. If there has been no sale on such day, the securities
are valued at the mean of the closing bid and asked prices for the day, or if no
asked price is available, at the bid price. However, certain fixed-income
securities may be valued on the basis of prices provided by a pricing service
when such prices are believed by the Board of Directors to reflect the fair
market value of such securities. Where securities are traded on more than one
exchange and also over-the-counter, the securities will generally be valued
using the quotations the Board of Directors believes most closely reflect the
value of such securities.
Securities for which market prices are unavailable will be valued at fair
value pursuant to procedures approved by the fund's Board of Directors.
Circumstances in which market prices may be unavailable include, but
--------------------------------------------------------------------------------
17
--------------------------------------------------------------------------------
COHEN & STEERS TOTAL RETURN REALTY FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)
are not limited to, when trading in a security is suspended, the exchange on
which the security is traded is subject to an unscheduled close or disruption or
material events occur after the close of the exchange on which the security is
principally traded. In these circumstances, the fund determines fair value in a
manner that fairly reflects the market value of the security on the valuation
date based on consideration of any information or factors it deems appropriate.
These may include recent transactions in comparable securities, information
relating to the specific security and developments in the markets.
The fund's use of fair value pricing may cause the net asset value of fund
shares to differ from the net asset value that would be calculated using market
quotations. Fair value pricing involves subjective judgments and it is possible
that the fair value determined for a security may be materially different than
the value that could be realized upon the sale of that security.
To the extent the fund holds securities that are primarily listed on foreign
exchanges that trade on weekends or days when the fund does not price its
shares, the value of the securities held in the fund may change on days when you
will not be able to purchase or redeem fund shares.
Short-term debt securities, which have a maturity date of 60 days or less,
are valued at amortized cost, which approximates value.
Security Transactions and Investment Income: Security transactions are
recorded on trade date. Realized gains and losses on investments sold are
recorded on the basis of identified cost. Interest income is recorded on the
accrual basis. Dividend income is recorded on the ex-dividend date. The fund
records distributions received in excess of income from underlying investments
as a reduction of cost of investments and/or realized gain. Such amounts are
based on estimates if actual amounts are not available, and actual amounts of
income, realized gain and return of capital may differ from the estimated
amounts. The fund adjusts the estimated amounts of the components of
distributions (and consequently its net investment income) as an increase to
unrealized appreciation/(depreciation) and realized gain/(loss) on investments
as necessary once the issuers provide information about the actual composition
of the distributions.
Dividends and Distributions to Shareholders: Dividends from net investment
income are declared and paid monthly. Dividends and distributions to
shareholders are recorded on the ex-dividend date. Distributions paid by the
fund are subject to recharacterization for tax purposes. Based upon the results
of operations for the six months ended June 30, 2005, the advisor considers it
likely that a portion of the dividends will be reclassified to return of capital
and distributions of net realized capital gains upon the final determination of
the fund's taxable income for the year. Net realized capital gains, unless
offset by any available capital loss carryforward, are distributed to
shareholders annually.
--------------------------------------------------------------------------------
18
--------------------------------------------------------------------------------
COHEN & STEERS TOTAL RETURN REALTY FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)
Dividends from net investment income and capital gain distributions are
determined in accordance with U.S. federal income tax regulations, which may
differ from GAAP.
Federal Income Taxes: It is the policy of the fund to qualify as a regulated
investment company, if such qualification is in the best interest of the
shareholders, by complying with the requirements of Subchapter M of the Internal
Revenue Code applicable to regulated investment companies, and by distributing
substantially all of its taxable earnings to its shareholders. Accordingly, no
provision for federal income or excise tax is necessary.
Borrowings and Leverage: The fund may borrow for leveraging purposes when an
investment opportunity arises but the advisor believes that it is not
appropriate to liquidate any existing investments. The fund will only borrow
when the advisor believes that the cost of borrowing to carry the assets to be
acquired through leverage will be lower than the return earned by the fund on
its longer-term portfolio investments. Should the differential between interest
rates on borrowed funds and the return from investment assets purchased with
such funds narrow, the fund would realize less of a positive return, with the
additional risk that, during periods of adverse market conditions, the market
value of the fund's entire portfolio holdings (including those acquired through
leverage) may decline far in excess of incremental returns the fund may have
achieved in the interim. The fund had no borrowings during the six months ended
June 30, 2005.
NOTE 2. INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Investment Advisory Fees: Cohen & Steers Capital Management, Inc. (the
advisor) serves as the fund's investment advisor pursuant to an advisory
agreement (the advisory agreement). Under the terms of the advisory agreement,
the advisor provides the fund with day-to-day investment decisions and generally
manages the fund's investments in accordance with the stated policies of the
fund, subject to the supervision of the fund's Board of Directors.
For the services under the advisory agreement, the fund pays the advisor an
advisory fee, accrued daily and paid monthly at an annual rate of 0.70% of the
fund's average daily net assets.
Director's Fees: Certain directors and officers of the fund are also
directors, officers and/or employees of the advisor. None of the directors and
officers so affiliated received compensation from the fund for their services.
NOTE 3. PURCHASES AND SALES OF SECURITIES
Purchases and sales of securities, excluding short-term investments, for the
six months ended June 30, 2005 totaled $21,621,375 and $23,496,788,
respectively.
--------------------------------------------------------------------------------
19
--------------------------------------------------------------------------------
COHEN & STEERS TOTAL RETURN REALTY FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)
NOTE 4. INCOME TAX INFORMATION
At June 30, 2005 the cost of investments and net unrealized appreciation for
federal income tax purposes were as follows:
Aggregate cost................................... $ 120,066,590
--------------
--------------
Gross unrealized appreciation.................... $ 65,234,861
Gross unrealized depreciation.................... (40,936)
--------------
Net unrealized appreciation...................... $ 65,193,925
--------------
--------------
NOTE 5. COMMON STOCK
The fund is authorized to issue 100 million shares of common stock at a par
value of $0.001 per share. At June 30, 2005, the advisor owned 46,136 shares of
the fund.
--------------------------------------------------------------------------------
20
--------------------------------------------------------------------------------
COHEN & STEERS TOTAL RETURN REALTY FUND, INC.
AVERAGE ANNUAL TOTAL RETURNS
(PERIODS ENDED JUNE 30, 2005) (UNAUDITED)
BASED ON NET ASSET VALUE
---------------------------------------------------
SINCE INCEPTION
ONE YEAR FIVE YEARS TEN YEARS (9/27/93)
-------- ---------- --------- ---------------
24.61% 19.43% 14.47% 12.59%
BASED ON MARKET VALUE
---------------------------------------------------
SINCE INCEPTION
ONE YEAR FIVE YEARS TEN YEARS (9/27/93)
-------- ---------- --------- ---------------
26.27% 19.66% 15.18% 12.14%
The performance data quoted represents past performance. Past performance is
no guarantee of future results. The investment return will vary and the
principal value of an investment will fluctuate and shares, if redeemed, may be
worth more or less than their original cost. Current performance may be lower or
higher than the 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.
OTHER INFORMATION
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 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.
The fund files its complete schedule of portfolio holdings with the SEC for
the first and third quarters of each fiscal year on Form N-Q. The fund's
Forms N-Q are available (i) without charge, upon request by calling
1-800-330-7348, or (ii) on the SEC's website at http://www.sec.gov. In addition,
the Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in
Washington, DC. Information on the operation of the Public Reference Room may be
obtained by calling 1-800-SEC-0330.
Please note that the distributions paid by the fund to shareholders are
subject to recharacterization for tax purposes. The final tax treatment of these
distributions is reported to shareholders on their 1099-DIV forms, which
--------------------------------------------------------------------------------
21
--------------------------------------------------------------------------------
COHEN & STEERS TOTAL RETURN REALTY FUND, INC.
are mailed to shareholders after the close of each fiscal year. The fund may pay
distributions in excess of the fund's net investment company taxable income and
this excess would be a tax-free return of capital distributed from the fund's
assets. To the extent this occurs, the fund's shareholders of record will be
notified of the estimated amount of capital returned to shareholders for each
such distribution and this information will also be available at
cohenandsteers.com. Distributions of capital decrease the fund's total assets
and, therefore, could have the effect of increasing the fund's expense ratio. In
addition, in order to make these distributions, the fund may have to sell
portfolio securities at a less than opportune time.
The fund's board of directors approved the removal of the self-tender
provision contained in the prospectus that required the board to consider and
conduct a tender offer each year unless the fund's shares trade at an average
discount of less than 3% during a 12 week period prior to a date in the first
quarter designated by the board.
--------------------------------------------------------------------------------
22
--------------------------------------------------------------------------------
COHEN & STEERS TOTAL RETURN REALTY FUND, INC.
PROXY RESULTS
During the six month period ended June 30, 2005, Cohen & Steers Total Return
Realty Fund, Inc. shareholders voted on the following proposals at the annual
meeting held on April 28, 2005. The description of each proposal and number of
shares voted are as follows:
-----------------------------------------------------------------------------------------
SHARES VOTED AUTHORITY
FOR WITHHELD
-----------------------------------------------------------------------------------------
1. To elect Directors
Bonnie Cohen............................................. 8,165,467 102,792
Richard E. Kroon......................................... 8,170,622 97,637
Willard H. Smith Jr. .................................... 8,172,325 95,934
C. Edward Ward, Jr. ..................................... 8,180,408 87,851
--------------------------------------------------------------------------------
23
--------------------------------------------------------------------------------
COHEN & STEERS TOTAL RETURN REALTY FUND, INC.
MEET THE COHEN & STEERS FAMILY OF OPEN-END FUNDS:
FOR TOTAL RETURN: FOR TOTAL RETURN:
COHEN & STEERS COHEN & STEERS
REALTY SHARES INSTITUTIONAL REALTY SHARES
DESIGNED FOR INVESTORS SEEKING MAXIMUM TOTAL DESIGNED FOR INSTITUTIONAL INVESTORS SEEKING
RETURN, INVESTING PRIMARILY IN REITS MAXIMUM TOTAL RETURN, INVESTING PRIMARILY IN
SYMBOL: CSRSX REITS
SYMBOL: CSRIX
FOR HIGH CURRENT INCOME: FOR CAPITAL APPRECIATION:
COHEN & STEERS COHEN & STEERS
REALTY INCOME FUND REALTY FOCUS FUND
DESIGNED FOR INVESTORS SEEKING HIGH CURRENT DESIGNED FOR INVESTORS SEEKING MAXIMUM CAPITAL
INCOME, INVESTING PRIMARILY IN REITS APPRECIATION, INVESTING IN A LIMITED NUMBER OF
SYMBOLS: CSEIX, CSBIX, CSCIX, CSDIX REITS AND OTHER REAL ESTATE SECURITIES
SYMBOLS: CSFAX, CSFBX, CSFCX, CSSPX
FOR TOTAL RETURN: FOR TOTAL RETURN:
COHEN & STEERS COHEN & STEERS
INTERNATIONAL REALTY FUND UTILITY FUND
DESIGNED FOR INVESTORS SEEKING MAXIMUM TOTAL DESIGNED FOR INVESTORS SEEKING MAXIMUM TOTAL
RETURN, INVESTING PRIMARILY IN INTERNATIONAL RETURN, INVESTING PRIMARILY IN UTILITIES
REAL ESTATE SECURITIES SYMBOLS: CSUAX, CSUBX, CSUCX, CSUIX
SYMBOLS: IRFAX, IRFCX, IRFIX
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. THE PROSPECTUS CONTAINS THIS AND OTHER
INFORMATION ABOUT THE FUND.
PLEASE READ THE PROSPECTUS CAREFULLY BEFORE INVESTING.
COHEN & STEERS SECURITIES, LLC, DISTRIBUTOR
--------------------------------------------------------------------------------
24
--------------------------------------------------------------------------------
COHEN & STEERS TOTAL RETURN REALTY FUND, INC.
OFFICERS AND DIRECTORS KEY INFORMATION
Robert H. Steers INVESTMENT ADVISOR
Director and co-chairman Cohen & Steers Capital Management, Inc.
757 Third Avenue
Martin Cohen New York, NY 10017
Director and co-chairman (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 E. Kroon Computershare
Director 250 Royall Street
Canton, MA 02021
Richard J. Norman (800) 426-5523
Director
LEGAL COUNSEL
Frank K. Ross Simpson Thacher & Bartlett LLP
Director 425 Lexington Avenue
New York, NY 10017
Willard H. Smith Jr.
Director New York Stock Exchange Symbol: RFI
C. Edward Ward, Jr. Web site: cohenandsteers.com
Director
This report is for shareholder
Adam M. Derechin information. This is not
President and chief executive officer a prospectus intended for use in the
purchase or sale of fund shares. Past
Joseph M. Harvey performance is of course no guarantee
Vice president of future results and your investment
maybe worth more or less at the time
James S. Corl you sell.
Vice president
Lawrence B. Stoller
Secretary
Jay J. Chen
Treasurer
John E. McLean
Chief compliance officer and assistant secretary
--------------------------------------------------------------------------------
25
COHEN & STEERS
TOTAL RETURN REALTY FUND
------------------------------
SEMIANNUAL REPORT
JUNE 30, 2005
COHEN & STEERS
TOTAL REUTRN REALTY FUND
757 THIRD AVENUE
NEW YORK, NY 10017
Item 2. Code of Ethics.
Not applicable.
Item 3. Audit Committee Financial Expert.
Not applicable.
Item 4. Principal Accountant Fees and Services.
Not applicable.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Schedule of Investments.
Included in Item 1 above.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies.
Not applicable.
Item 8. Portfolio Managers of Closed-End Investment Companies.
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers.
None.
Item 10. Submission of Matters to a Vote of Security Holders.
None.
Item 11. Controls and Procedures.
(a) The registrant's principal executive officer and principal financial officer
have concluded, based upon their evaluation of the registrant's disclosure
controls and procedures as conducted
within 90 days of the filing date of this report, that these disclosure controls
and procedures provide reasonable assurance that material information required
to be disclosed by the registrant in the report it files or submits on Form
N-CSR is recorded, processed, summarized and reported within the time periods
specified in the Securities and Exchange Commission's rules and forms and that
such material information is accumulated and communicated to the registrant's
management, including its principal executive officer and principal financial
officer, as appropriate, in order to allow timely decisions regarding required
disclosure.
(b) There were no changes in the registrant's internal control over financial
reporting that occurred during the second fiscal quarter of the period covered
by this report that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial reporting.
Item 12. Exhibits.
(a)(1) Not applicable.
(a) (2) Certifications of principal executive officer and principal financial
officer as required by Rule 30a-2(a) under the Investment Company Act of 1940.
(a)(3) Not applicable.
(b) Certifications of principal executive officer and principal financial
officer as required by Rule 30a- 2(b) under the Investment Company Act of 1940.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
COHEN & STEERS TOTAL RETURN REALTY FUND, INC.
By: /s/ Adam M. Derechin
-------------------------------
Name: Adam M. Derechin
Title: President and Chief Executive Officer
Date: August 23, 2005
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/ Adam M. Derechin
-------------------------------
Name: Adam M. Derechin
Title: President and Chief Executive Officer
(principal executive officer)
By: /s/ Jay J. Chen
----------------------------------------
Name: Jay J. Chen
Title: Treasurer
(principal financial officer)
Date: August 23, 2005
STATEMENT OF DIFFERENCES
------------------------
The division sign shall be expressed as ................................. [div]
The section symbol shall be expressed as................................. 'SS'