UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

FORM N-Q

 

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANY

 

Investment Company Act file number

811-21616

 

 

RMR F.I.R.E. FUND

(Exact name of registrant as specified in charter)

 

400 CENTRE STREET

NEWTON, MASSACHUSETTS

 

 

02458

(Address of principal executive offices)

 

(Zip code)

 

Adam D. Portnoy, President

RMR F.I.R.E. Fund

400 Centre Street

Newton, Massachusetts 02458

(Name and address of agent for service)

 

Copy to:

 

Brian D. O’Sullivan

State Street Bank and Trust Company

  801 Pennsylvania Avenue, Tower II, 4th Floor

Kansas City, Missouri 64102

 

Christina T. Simmons, Esq.

State Street Bank and Trust Company

 100 Huntington Avenue, 3rd Floor

Boston, Massachusetts 02116

 

Registrant’s telephone number, including area code:

(617) 332-9530

 

 

Date of fiscal year end:

December 31

 

 

 

 

Date of reporting period:

September 30, 2008

 

 



 

RMR F.I.R.E. Fund

Portfolio of Investments  –  September 30, 2008 (unaudited)

 

Company

 

Shares

 

Value

 

Common Stocks – 90.7%

 

 

 

 

 

Financial Services – 10.2%

 

 

 

 

 

Banks – 8.8%

 

 

 

 

 

Bank of America Corp.

 

10,000

 

$

350,000

 

Fifth Third Bancorp

 

3,000

 

35,700

 

FNB Corp.

 

14,250

 

227,715

 

KeyCorp

 

7,000

 

83,580

 

National City Corp.

 

12,400

 

21,700

 

Regions Financial Corp.

 

4,000

 

38,400

 

Trustco Bank Corp. NY

 

23,400

 

274,014

 

 

 

 

 

1,031,109

 

Other Financial Services – 1.4%

 

 

 

 

 

Centerline Holding Co.

 

1,800

 

3,582

 

Visa, Inc. - Class A

 

2,730

 

167,595

 

 

 

 

 

171,177

 

Total Financial Services (Cost $2,382,294)

 

 

 

1,202,286

 

 

 

 

 

 

 

Real Estate – 75.8%

 

 

 

 

 

Apartments – 10.7%

 

 

 

 

 

Apartment Investment & Management Co. *

 

13,460

 

471,369

 

AvalonBay Communities, Inc. *

 

3,000

 

295,260

 

Home Properties, Inc. *

 

300

 

17,385

 

Mid-America Apartment Communities, Inc. *

 

5,000

 

245,700

 

UDR, Inc. *

 

9,000

 

235,350

 

 

 

 

 

1,265,064

 

Diversified – 9.6%

 

 

 

 

 

CapLease, Inc. *

 

15,000

 

118,950

 

Franklin Street Properties Corp. *

 

3,000

 

39,000

 

Lexington Corporate Properties Trust *

 

56,400

 

971,208

 

National Retail Properties, Inc. *

 

143

 

3,425

 

 

 

 

 

1,132,583

 

Health Care – 20.6%

 

 

 

 

 

Care Investment Trust, Inc. *

 

3,050

 

35,014

 

HCP, Inc. *

 

8,850

 

355,151

 

Health Care REIT, Inc. *

 

2,254

 

119,980

 

Healthcare Realty Trust, Inc. *

 

18,500

 

539,275

 

Medical Properties Trust, Inc. *

 

28,465

 

323,078

 

Nationwide Health Properties, Inc. *

 

26,400

 

949,872

 

OMEGA Healthcare Investors, Inc. *

 

5,000

 

98,300

 

 

 

 

 

2,420,670

 

Hospitality – 6.5%

 

 

 

 

 

Ashford Hospitality Trust, Inc. *

 

51,000

 

206,550

 

DiamondRock Hospitality Co. *

 

14,000

 

127,400

 

FelCor Lodging Trust, Inc. *

 

14,359

 

102,810

 

Host Hotels & Resorts, Inc. *

 

10,000

 

132,900

 

LaSalle Hotel Properties *

 

5,400

 

125,928

 

Sunstone Hotel Investors, Inc. *

 

5,000

 

67,500

 

 

 

 

 

763,088

 

Industrial – 10.1%

 

 

 

 

 

DCT Industrial Trust, Inc. *

 

5,200

 

38,948

 

First Industrial Realty Trust, Inc. *

 

40,200

 

1,152,936

 

 

 

 

 

1,191,884

 

Manufactured Homes – 4.5%

 

 

 

 

 

Sun Communities, Inc. *

 

27,000

 

534,870

 

 

See notes to portfolio of investments.

 



 

Company

 

Shares

 

Value

 

Common Stocks – continued

 

 

 

 

 

Real Estate – continued

 

 

 

 

 

Mortgage – 2.4%

 

 

 

 

 

Anthracite Capital, Inc. *

 

15,000

 

$

80,400

 

Gramercy Capital Corp. *

 

14,394

 

37,281

 

Newcastle Investment Corp. *

 

26,500

 

168,275

 

 

 

 

 

285,956

 

Office – 6.2%

 

 

 

 

 

Boston Properties, Inc. *

 

2,000

 

187,320

 

Brookfield Properties Corp.

 

5,000

 

79,200

 

Parkway Properties, Inc. *

 

300

 

11,358

 

SL Green Realty Corp. *

 

7,000

 

453,600

 

 

 

 

 

731,478

 

Retail – 3.6%

 

 

 

 

 

CBL & Associates Properties, Inc. *

 

3,000

 

60,240

 

Developers Diversified Realty Corp. *

 

3,000

 

95,070

 

Equity One, Inc. *

 

3,000

 

61,470

 

Glimcher Realty Trust *

 

19,300

 

201,492

 

Realty Income Corp. *

 

200

 

5,120

 

 

 

 

 

423,392

 

Specialty – 1.6%

 

 

 

 

 

Getty Realty Corp. *

 

4,000

 

88,680

 

Resource Capital Corp. *

 

15,588

 

94,463

 

 

 

 

 

183,143

 

Total Real Estate (Cost $12,488,869)

 

 

 

8,932,128

 

Other – 4.7%

 

 

 

 

 

Abingdon Investment, Ltd. (a) (b)

 

100,000

 

552,000

 

Total Other (Cost $1,000,000)

 

 

 

552,000

 

Total Common Stocks (Cost $15,871,163)

 

 

 

10,686,414

 

 

 

 

 

 

 

Preferred Stocks – 87.5%

 

 

 

 

 

Real Estate – 81.4%

 

 

 

 

 

Apartments – 18.2%

 

 

 

 

 

Apartment Investment & Management Co., Series U *

 

32,500

 

565,500

 

Apartment Investment & Management Co., Series V *

 

27,700

 

468,130

 

Apartment Investment & Management Co., Series Y *

 

65,000

 

1,105,000

 

 

 

 

 

2,138,630

 

Diversified – 12.1%

 

 

 

 

 

Cousins Properties, Inc., Series B *

 

20,000

 

340,000

 

Digital Realty Trust, Inc., Series A *

 

20,000

 

375,000

 

Duke Realty Corp., Series O *

 

4,000

 

73,960

 

LBA Realty LLC, Series B *

 

45,000

 

630,000

 

 

 

 

 

1,418,960

 

Health Care – 8.4%

 

 

 

 

 

Health Care REIT, Inc., Series F *

 

26,900

 

571,625

 

OMEGA Healthcare Investors Inc., Series D *

 

19,000

 

416,100

 

 

 

 

 

987,725

 

Hospitality – 19.6%

 

 

 

 

 

Ashford Hospitality Trust, Series D *

 

32,000

 

352,000

 

Eagle Hospitality Properties Trust, Inc., Series A (b)*

 

14,000

 

42,000

 

Entertainment Properties Trust, Series B *

 

40,000

 

612,000

 

FelCor Lodging Trust, Inc., Series C *

 

64,000

 

704,000

 

Grace Acquisition I, Inc., Series B (b)*

 

50,000

 

150,000

 

Host Marriott Corp., Series E *

 

10,000

 

174,000

 

Strategic Hotels & Resorts, Inc., Series A *

 

10,000

 

122,000

 

Strategic Hotels & Resorts, Inc., Series B *

 

13,700

 

157,550

 

 

 

 

 

2,313,550

 

Manufactured Homes – 1.0%

 

 

 

 

 

Hilltop Holdings, Inc., Series A

 

6,900

 

122,475

 

 

See notes to portfolio of investments.

 



 

Company

 

Shares

 

Value

 

Preferred Stocks – continued

 

 

 

 

 

Real Estate – continued

 

 

 

 

 

Mortgage – 5.7%

 

 

 

 

 

Anthracite Capital, Inc., Series D *

 

6,000

 

$

54,720

 

Gramercy Capital Corp., Series A *

 

20,000

 

148,000

 

HomeBanc Corp., Series A *

 

10,000

 

60

 

MFA Mortgage Investments, Inc., Series A *

 

13,800

 

266,340

 

RAIT Investment Trust, Series B *

 

20,300

 

203,000

 

 

 

 

 

672,120

 

Office – 6.1%

 

 

 

 

 

Alexandria Real Estate Equities, Inc., Series C *

 

31,600

 

722,060

 

Retail – 10.3%

 

 

 

 

 

CBL & Associates Properties, Inc., Series D *

 

10,000

 

144,000

 

Glimcher Realty Trust, Series F *

 

26,500

 

306,870

 

Glimcher Realty Trust, Series G *

 

41,000

 

433,780

 

Taubman Centers, Inc., Series G *

 

15,000

 

322,500

 

 

 

 

 

1,207,150

 

Total Real Estate (Cost $16,810,673)

 

 

 

9,582,670

 

 

 

 

 

 

 

Financial Services – 6.1%

 

 

 

 

 

Corts-UNUM Provident Financial Trust

 

38,000

 

722,000

 

Total Financial Services (Cost $982,300)

 

 

 

722,000

 

Total Preferred Stocks (Cost $17,792,973)

 

 

 

10,304,670

 

 

 

 

 

 

 

Other Investment Companies – 11.0%

 

 

 

 

 

Alpine Total Dynamic Dividend Fund

 

29,960

 

274,434

 

Cohen & Steers Premium Income Realty Fund, Inc.

 

13,350

 

154,593

 

Cohen & Steers REIT and Preferred Income Fund, Inc.

 

8,000

 

103,760

 

LMP Real Estate Income Fund, Inc.

 

12,411

 

142,602

 

Neuberger Berman Real Estate Securities Income Fund, Inc.

 

45,507

 

325,375

 

The Zweig Total Return Fund, Inc.

 

60,850

 

223,319

 

Ultra Real Estate ProShares

 

2,500

 

67,500

 

Total Other Investment Companies (Cost $2,427,848)

 

 

 

1,291,583

 

 

 

 

 

 

 

Short-Term Investments – 1.1%

 

 

 

 

 

Other Investment Companies – 1.1%

 

 

 

 

 

Dreyfus Cash Management, Institutional Shares, 2.71% (c) (Cost $128,000)

 

128,000

 

128,000

 

Total Investments – 190.3% (Cost $36,219,984) (d)

 

 

 

22,410,667

 

 

 

 

 

 

 

Other assets less liabilities – 1.4%

 

 

 

168,063

 

Preferred Shares, at liquidation preference – (91.7)%

 

 

 

(10,800,000

)

Net Assets applicable to common shareholders – 100%

 

 

 

$

11,778,730

 

 


Notes to Portfolio of Investments

 

*

Real Estate Investment Trust, or REIT

(a)

Rule 144A securities. Securities restricted for resale to Qualified Institutional Buyers (4.7% of net assets).

(b)

As of September 30, 2008, the Fund held securities fair valued in accordance with policies adopted by the board of trustees aggregating to $744,000 and 3.3% of market value.

(c)

Rate reflects 7 day yield as of September 30, 2008.

(d)

Although subject to adjustments to the extent 2008 distributions by the issuers of the Fund’s investments are characterized as return of capital, the cost, gross unrealized appreciation and gross unrealized depreciation of the Fund’s investments for federal income tax purposes, as of September 30, 2008, are as follows:

 

Cost

 

$

36,219,984

 

 

 

 

 

Gross unrealized appreciation

 

$

516,728

 

Gross unrealized depreciation

 

(14,326,045

)

Net unrealized depreciation

 

$

(13,809,317

)

 

Reference should be made to the Fund’s financial statements for the year ended December 31, 2007, and six months ended June 30, 2008, for further information concerning the income tax characterization of the Fund’s investment income and distributions.

 



 

Fair Value Measurements

 

The Fund has adopted the provisions of Financial Accounting Standards Board Statement of Financial Accounting Standards No. 157, Fair Value Measurements, or FAS 157, effective January 1, 2008. In accordance with FAS 157, fair value is defined as the price that the Fund would receive upon selling an investment in a timely transaction to an independent buyer in the principal or most advantageous market of the investment. FAS 157 established a three tier hierarchy to maximize the use of observable market data and minimize the use of unobservable inputs and to establish classification of fair value measurements for disclosure purposes. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk, for example, the risk inherent in a particular valuation technique used to measure fair value including such a pricing model and/or the risk inherent in the inputs to the valuation technique. Inputs may be observable or unobservable. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The three tier hierarchy of inputs is summarized in the three broad levels listed below.

 

·                  Level 1 – quoted prices in active markets for identical investments

·                  Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, credit risk, etc.)

·                  Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)

 

The valuation techniques used by the Fund to measure fair value during the period ended September 30, 2008 maximized the use of observable inputs and minimized the use of unobservable inputs. The Fund utilized broker quotes, company financial information and other market indicators to value the securities whose prices were not readily available.

 

The following is a summary of the inputs used as of September 30, 2008 in valuing the Fund’s investments carried at value:

 

Valuation Inputs

 

Investments in 
Securities

 

Level 1 - Quoted prices

 

$

21,666,667

 

Level 2 - Other significant observable inputs

 

192,000

 

Level 3 – Significant unobservable inputs

 

552,000

 

Total

 

$

22,410,667

 

 

Following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining value:

 

 

 

Investments in 
Securities 
Characterized 
as Level 3

 

Balance as of 12/31/07

 

$

796,000

 

Accrued discounts/premiums

 

 

Realized gain/loss and change in unrealized appreciation/depreciation

 

(244,000

)

Net purchases/sales

 

 

Net transfers in and/or out of Level 3

 

 

Balance as of 09/30/08

 

$

552,000

 

Net change in unrealized appreciation/depreciation from investments still held as of 09/30/08

 

$

(244,000

)

 



 

Item 2.  Controls and Procedures.

 

(a)  The registrant’s principal executive officer and principal financial officer have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”)), are effective, as of a date within 90 days of the filing date of this report, based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended.

 

(b)  There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the registrant’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

 

Item 3. Exhibits.

 

(a)(1) Certification of Principal Executive Officer, as required by Rule 30a-2(a) under the 1940 Act.

(a)(2) Certification of Principal Financial Officer, as required by Rule 30a-2(a) under the 1940 Act.

 



 

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.

 

RMR F.I.R.E. FUND

 

By:

/s/ Adam D. Portnoy

 

 

Adam D. Portnoy

 

 

President

 

 

 

 

Date:

November 28, 2008

 

 

 

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 D. Portnoy

 

 

Adam D. Portnoy

 

 

President

 

 

 

 

Date:

November 28, 2008

 

 

 

By:

/s/ Mark L. Kleifges

 

 

Mark L. Kleifges

 

 

Treasurer

 

 

 

 

Date:

November 28, 2008