UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM N-Q
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF
REGISTERED MANAGEMENT COMPANY
Investment Company Act file number: 811-10481
Exact Name of Registrant
(as specified in charter): Cohen & Steers Quality Income Realty Fund, Inc.
Address of Principal Executive Office: 757 Third Avenue
New York, NY 10017
Name and address of agent for service: John E. McLean
757 Third Avenue
New York, NY 10017
Registrant telephone number, including area code: (212) 832-3232
Date of fiscal year end: December 31
Date of reporting period: March 31, 2005
Item 1. Schedule of Investments
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COHEN & STEERS QUALITY INCOME REALTY FUND, INC.
SCHEDULE OF INVESTMENTS
MARCH 31, 2005 (UNAUDITED)
NUMBER DIVIDEND
OF SHARES VALUE YIELD(a)
--------- -------------- ------------
EQUITIES 155.15%(b)
COMMON STOCK 121.03%
DIVERSIFIED 13.29%
Capital Trust -- Class A.............. 66,100 $ 2,193,198 6.63%
Colonial Properties Trust............. 582,300 22,366,143 7.03
Crescent Real Estate Equities Co...... 996,900 16,289,346 9.18
iStar Financial....................... 400,500 16,492,590 7.12
Vornado Realty Trust.................. 663,443 45,956,697 4.39
--------------
103,297,974
--------------
HEALTH CARE 17.33%
Health Care Property Investors........ 1,113,500 26,133,845 7.16
Healthcare Realty Trust............... 224,600 8,184,424 7.14
Health Care REIT...................... 969,625 31,028,000 7.50
LTC Properties........................ 49,100 851,885 6.92
Nationwide Health Properties.......... 1,205,300 24,359,113 7.32
Ventas................................ 1,766,500 44,091,840 5.77
--------------
134,649,107
--------------
HOTEL 2.38%
Hospitality Properties Trust.......... 391,300 15,800,694 7.13
Strategic Hotel Capital............... 183,400 2,695,980 5.99
--------------
18,496,674
--------------
INDUSTRIAL 2.98%
First Industrial Realty Trust......... 612,900 23,186,007 7.35
--------------
MORTGAGE 4.73%
Gramercy Capital Corp.(c)............. 785,000 13,776,750 4.51
Newcastle Investment Corp............. 776,928 22,997,069 8.45
--------------
36,773,819
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(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.
(b) Percentages indicated are based on the net assets applicable to common
shares of the fund.
(c) This security is restricted and cannot be resold without prior registration
under the Securities Act of 1933 unless pursuant to an exemption therefrom.
The fund prices this security at fair value using procedures approved by the
fund's board of directors.
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COHEN & STEERS QUALITY INCOME REALTY FUND, INC.
SCHEDULE OF INVESTMENTS -- (CONTINUED)
MARCH 31, 2005 (UNAUDITED)
NUMBER DIVIDEND
OF SHARES VALUE YIELD
--------- -------------- ------------
OFFICE 36.04%
Arden Realty.......................... 826,800 $ 27,987,180 5.97%
BioMed Realty Trust................... 59,000 1,215,400 5.24
Brandywine Realty Trust............... 1,140,900 32,401,560 6.20
CarrAmerica Realty Corp. ............. 1,010,600 31,884,430 6.34
Equity Office Properties Trust........ 1,314,400 39,602,872 6.64
Highwoods Properties.................. 415,300 11,138,346 6.34
HRPT Properties Trust................. 1,109,000 13,208,190 7.05
Kilroy Realty Corp. .................. 102,600 4,197,366 4.99
Mack-Cali Realty Corp. ............... 1,073,800 45,475,430 5.95
Maguire Properties.................... 604,800 14,442,624 6.70
Prentiss Properties Trust............. 1,000,200 34,166,832 6.56
Reckson Associates Realty Corp. ...... 794,100 24,378,870 5.53
--------------
280,099,100
--------------
OFFICE/INDUSTRIAL 5.35%
Liberty Property Trust................ 1,065,200 41,596,060 6.25
--------------
RESIDENTIAL 16.66%
APARTMENT 15.93%
AMLI Residential Properties Trust..... 77,000 2,109,030 7.01
American Campus Communities........... 130,800 2,746,800 6.43
Archstone-Smith Trust................. 754,100 25,722,351 5.04
AvalonBay Communities................. 307,200 20,548,608 4.25
Camden Property Trust................. 366,600 17,241,198 5.40
Education Realty Trust................ 220,700 3,670,241 7.16
GMH Communities Trust................. 477,600 5,592,696 7.77
Gables Residential Trust.............. 586,900 19,543,770 7.24
Home Properties....................... 361,600 14,030,080 6.49
Mid-America Apartment Communities..... 309,400 11,293,100 6.41
Town & Country Trust.................. 50,000 1,322,500 6.50
--------------
123,820,374
--------------
MANUFACTURED HOME 0.73%
Affordable Residential Communities.... 448,700 5,676,055 9.88
--------------
TOTAL RESIDENTIAL..................... 129,496,429
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COHEN & STEERS QUALITY INCOME REALTY FUND, INC.
SCHEDULE OF INVESTMENTS -- (CONTINUED)
MARCH 31, 2005 (UNAUDITED)
NUMBER DIVIDEND
OF SHARES VALUE YIELD
--------- -------------- ------------
SELF STORAGE 1.80%
Extra Space Storage................... 314,300 $ 4,243,050 6.74%
Sovran Self Storage................... 87,300 3,459,699 6.11
U-Store-It Trust...................... 361,700 6,293,580 6.44
--------------
13,996,329
--------------
SHOPPING CENTER 20.47%
COMMUNITY CENTER 8.07%
Cedar Shopping Centers................ 268,100 3,817,744 6.32
Heritage Property Investment Trust.... 449,100 13,329,288 7.08
Inland Real Estate Corp. ............. 94,000 1,412,820 6.25
Kramont Realty Trust.................. 1,293,300 30,263,220 5.56
New Plan Excel Realty Trust........... 222,700 5,591,997 6.57
Urstadt Biddle
Properties -- Class A.............. 544,000 8,296,000 5.77
--------------
62,711,069
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REGIONAL MALL 12.40%
Glimcher Realty Trust................. 605,200 14,343,240 8.11
Macerich Co. ......................... 807,857 43,042,621 4.88
Mills Corp. .......................... 737,400 39,008,460 4.74
--------------
96,394,321
--------------
TOTAL SHOPPING CENTER................. 159,105,390
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TOTAL COMMON STOCK
(Identified
cost -- $696,702,694).......... 940,696,889
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PREFERRED STOCK 34.12%
DIVERSIFIED 7.17%
Colonial Properties Trust, 8.125%,
Series D........................... 64,900 1,643,268 8.02
Colonial Properties Trust, 7.62%,
Series E........................... 55,000 1,302,812 8.04
Crescent Real Estate Equities Co.,
6.75%, Series A (Convertible)(a)... 1,806,200 38,869,424 7.84
Digital Realty Trust, 8.50%,
Series A........................... 122,000 3,172,000 8.17
Entertainment Properties Trust, 7.75%,
Series B........................... 128,000 3,207,680 7.73
iStar Financial, 7.80%, Series F...... 166,681 4,308,704 7.54
iStar Financial, 7.65%, Series G...... 87,300 2,193,849 7.59
iStar Financial, 7.50%, Series I...... 40,200 998,970 7.55
--------------
55,696,707
--------------
-------------------
(a) 410,000 shares segregated as collateral for the interest rate swap
transactions.
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COHEN & STEERS QUALITY INCOME REALTY FUND, INC.
SCHEDULE OF INVESTMENTS -- (CONTINUED)
MARCH 31, 2005 (UNAUDITED)
NUMBER DIVIDEND
OF SHARES VALUE YIELD
--------- -------------- ------------
HEALTH CARE 0.23%
Health Care REIT, 7.625%, Series F.... 28,300 $ 707,500 7.62%
Omega Healthcare Investors, 8.375%,
Series D........................... 40,000 1,040,000 8.05
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1,747,500
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HOTEL 7.16%
FelCor Lodging Trust, 9.00%,
Series B........................... 652,500 16,769,250 8.02
FelCor Lodging Trust, 8.00%,
Series C........................... 104,300 2,451,050 8.31
Host Marriott Corp., 10.00%,
Series B........................... 14,100 354,192 9.92
Host Marriott Corp., 10.00%,
Series C........................... 30,700 785,613 9.77
Host Marriott Corp., 8.875%,
Series E........................... 10,000 269,500 8.23
Innkeepers USA Trust, 8.00%,
Series C........................... 91,300 2,291,630 7.97
LaSalle Hotel Properties, 10.25%,
Series A........................... 1,000,000 26,700,000 9.60
Strategic Hotel Capital, 8.50%,
Series A, 144A..................... 132,200 3,288,475 8.54
Sunstone Hotel Investors, 8.00%,
Series A........................... 111,000 2,769,450 8.00
--------------
55,679,160
--------------
MORTGAGE 0.19%
Newcastle Investment Corp., 9.75%,
Series B........................... 56,000 1,506,400 9.08
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OFFICE 3.28%
Cousins Properties, 7.50%,
Series B........................... 200,000 5,000,000 7.46
HRPT Properties Trust, 8.75%,
Series B........................... 120,000 3,207,600 8.18
Highwoods Properties, 8.625%,
Series A........................... 13,195 13,442,406 8.47
Kilroy Realty Corp., 7.50%,
Series F........................... 49,000 1,215,200 7.56
Maguire Properties, 7.625%,
Series A........................... 106,600 2,649,010 7.67
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25,514,216
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OFFICE/INDUSTRIAL 0.17%
PS Business Parks, 8.75%, Series F.... 4,100 107,010 8.38
PS Business Parks, 7.00%, Series H.... 40,000 971,200 7.20
ProLogis, 8.54%, Series C............. 4,000 234,250 7.29
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1,312,460
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COHEN & STEERS QUALITY INCOME REALTY FUND, INC.
SCHEDULE OF INVESTMENTS -- (CONTINUED)
MARCH 31, 2005 (UNAUDITED)
NUMBER DIVIDEND
OF SHARES VALUE YIELD
--------- -------------- ------------
RESIDENTIAL 4.67%
APARTMENT 4.60%
Apartment Investment & Management Co.,
10.10%, Series R................... 940,000 $ 24,722,000 9.51%
Associated Estates Realty Corp.,
8.70%, Series B.................... 90,000 2,304,000 8.50
Home Properties, 9.00%, Series F...... 196,000 5,141,080 8.65
Mid-America Apartment Communities,
8.30%, Series H.................... 138,100 3,549,170 8.07
--------------
35,716,250
--------------
MANUFACTURED HOME 0.07%
American Land Lease, 7.75%,
Series A........................... 22,000 561,000 7.64
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TOTAL RESIDENTIAL..................... 36,277,250
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SHOPPING CENTER 10.99%
COMMUNITY CENTER 5.00%
Cedar Shopping Centers, 8.875%,
Series A........................... 61,000 1,601,250 8.45
Developers Diversified Realty Corp.,
8.60%, Series F.................... 1,039,400 27,325,826 8.18
Federal Realty Investment Trust,
8.50%, Series B.................... 276,300 7,321,950 8.02
Urstadt Biddle Properties, 8.50%,
Series C........................... 24,000 2,640,000 7.73
--------------
38,889,026
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FREE STANDING 0.09%
Commercial Net Lease Realty, 9.00%,
Series A........................... 25,000 667,500 8.43
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REGIONAL MALL 5.90%
CBL & Associates Properties, 8.75%,
Series B........................... 430,000 23,073,800 8.15
CBL & Associates Properties, 7.375%,
Series D........................... 325,000 8,034,000 7.46
Glimcher Realty Trust, 8.75%,
Series F........................... 40,000 1,040,000 8.41
Glimcher Realty Trust, 8.125%,
Series G........................... 40,000 1,004,000 8.09
Mills Corp., 9.00%, Series B.......... 55,300 1,459,920 8.56
Mills Corp., 9.00%, Series C.......... 159,600 4,175,136 8.60
Mills Corp., 8.75%, Series E.......... 84,000 2,194,080 8.37
Simon Property Group, 8.75%,
Series F........................... 30,000 781,800 8.39
Simon Property Group, 8.375%,
Series J........................... 14,000 910,000 6.44
Taubman Centers, 8.30%, Series A...... 127,600 3,218,072 8.23
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45,890,808
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TOTAL SHOPPING CENTER................. 85,447,334
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COHEN & STEERS QUALITY INCOME REALTY FUND, INC.
SCHEDULE OF INVESTMENTS -- (CONTINUED)
MARCH 31, 2005 (UNAUDITED)
NUMBER DIVIDEND
OF SHARES VALUE YIELD
--------- -------------- ------------
SPECIALTY 0.26%
Capital Automotive REIT, 7.50%,
Series A........................... 80,000 $ 1,980,000 7.58%
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TOTAL PREFERRED STOCK
(Identified
cost -- $248,302,703).......... 265,161,027
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TOTAL EQUITIES (Identified
cost -- $945,005,397).......... 1,205,857,916
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PRINCIPAL
AMOUNT
-----------
COMMERCIAL PAPER 1.31%
Prudential FDG Corp., 2.12%, due
04/01/05
(Identified cost -- $10,161,000).... $10,161,000 10,161,000
----------- --------------
TOTAL INVESTMENTS (Identified
cost -- $955,166,397).............. 156.46% 1,216,018,916(a)
LIABILITIES IN EXCESS OF OTHER
ASSETS............................. (0.62)% (4,773,212)
LIQUIDATION VALUE OF TAXABLE AUCTION
MARKET PREFERRED SHARES: SERIES T,
SERIES W, SERIES TH, AND SERIES F
(Equivalent to $25,000 per share
based on 2,800 shares outstanding). (36.03)% (280,000,000)
LIQUIDATION VALUE OF AUCTION MARKET
PREFERRED SHARES: SERIES M28 AND
SERIES M7 (Equivalent to $25,000
per share based on 2,400 shares
outstanding for Series M28 and
3,760 shares outstanding for
Series M7)......................... (19.81)% (154,000,000)
------ --------------
NET ASSETS APPLICABLE TO COMMON
SHARES (Equivalent to $20.00 per
share based on 38,856,074 shares
of capital stock outstanding)...... 100.00% $ 777,245,704
------ --------------
------ --------------
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(a) At March 31, 2005, net unrealized appreciation was $260,852,519 based on
cost for federal income tax purposes of $955,166,397. This consisted of
aggregate gross unrealized appreciation on investments of $262,868,941
and aggregate gross unrealized depreciation on investments of $2,016,422.
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COHEN & STEERS QUALITY INCOME REALTY FUND, INC.
SCHEDULE OF INVESTMENTS -- (CONTINUED)
MARCH 31, 2005 (UNAUDITED)
NOTE 1. INVESTMENTS IN INTEREST RATE SWAPS
The fund has entered into interest rate swap transactions with Merrill Lynch
Derivative Products, UBS AG, Banc of America and Royal Bank of Canada. Under the
agreements, the fund receives a floating rate of interest and pays a respective
fixed rate of interest on the nominal values of the swaps. The fund has
segregated 410,000 shares of Crescent Real Estate Equities Co., 6.75%, Series A
as collateral for the interest rate swap transactions. Details of the interest
rate swap transactions as of March 31, 2005 are as follows:
UNREALIZED
NOTIONAL FLOATING RATE(a) APPRECIATION/
COUNTERPARTY AMOUNT FIXED RATE (RESET MONTHLY) TERMINATION DATE (DEPRECIATION)
--------------------------------- ----------- ---------- --------------- ---------------- --------------
Banc of America.................. $14,000,000 3.2120% 2.7160% October 2, 2008 $ 522,109
Merrill Lynch Derivative
Products....................... $46,000,000 4.5600% 2.7450% April 5, 2005 (61,401)
Merrill Lynch Derivative
Products....................... $46,000,000 5.2100% 2.7450% April 5, 2007 (1,000,122)
Merrill Lynch Derivative
Products....................... $46,000,000 5.5800% 2.7450% April 5, 2009 (1,935,636)
Royal Bank of Canada............. $14,000,000 3.6800% 2.8500% October 22, 2008 314,216
Royal Bank of Canada............. $44,000,000 4.2580% 2.7600% March 9, 2010 442,347
UBS AG........................... $24,000,000 4.4500% 2.8100% April 15, 2005 (30,890)
UBS AG........................... $24,000,000 5.1200% 2.8100% April 15, 2007 (476,355)
UBS AG........................... $24,000,000 5.4950% 2.8100% April 15, 2009 (931,537)
-----------
$(3,157,269)
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(a) Based on LIBOR (London Interbank Offered Rate). Represents rates in effect
at March 31, 2005.
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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) are effective based on their evaluation of these disclosure
controls and procedures required by Rule 30a-3(b) under the Investment
Company Act of 1940 and Rule 13a-15(b) or 15d-15(b) under the Securities
Exchange Act as of a date within 90 days of the filing of this report.
(b) During the last fiscal quarter, there were no changes in the
registrant's internal control over financial reporting (as defined in
Rule 30a-3(d) under the Investment Company Act of 1940) that has
materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
Item 3. Exhibits.
(a) Certifications of principal executive officer and principal financial
officer as required by Rule 30a-2(a) under the Investment Company Act of
1940.
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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 QUALITY INCOME REALTY FUND, INC.
By: /s/ Robert H. Steers
--------------------------------
Name: Robert H. Steers
Title: Chairman
Date: May 27, 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/ Robert H. Steers By: /s/ Martin Cohen
-------------------------------- ---------------------------------------
Name: Robert H. Steers Name: Martin Cohen
Title: Chairman, Secretary Title: President, Treasurer
and principal executive officer and principal financial officer
Date: May 27, 2005
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