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: September 30, 2005
Item 1. Schedule of Investments
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COHEN & STEERS QUALITY INCOME REALTY FUND, INC.
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SCHEDULE OF INVESTMENTS
September 30, 2005 (Unaudited)
Number
of Shares Value
------------------ ---------------
COMMON STOCK 117.3%
DIVERSIFIED 11.4%
Colonial Properties Trust 582,300 $ 25,900,704
Digital Realty Trust 79,800 1,436,400
iStar Financial 400,500 16,192,215
Spirit Finance Corp. 700,700 7,882,875
Vornado Realty Trust 602,943 52,226,923
-------------
103,639,117
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HEALTH CARE 18.1%
Health Care Property Investors 1,113,500 30,053,365
Health Care REIT 969,625 35,963,391
Healthcare Realty Trust 354,800 14,241,672
Medical Properties Trust 36,700 359,660
Nationwide Health Properties 1,136,800 26,487,440
Ventas 1,766,500 56,881,300
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163,986,828
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HOTEL 3.1%
DiamondRock Hospitality Co. 343,500 4,036,125
Hospitality Properties Trust 391,300 16,771,118
Strategic Hotel Capital 401,500 7,331,390
-------------
28,138,633
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INDUSTRIAL 2.3%
First Industrial Realty Trust 529,700 21,214,485
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MORTGAGE 4.5%
Gramercy Capital Corp. (a) 785,000 18,808,600
Newcastle Investment Corp. 776,928 21,676,291
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40,484,891
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1
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COHEN & STEERS QUALITY INCOME REALTY FUND, INC.
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SCHEDULE OF INVESTMENTS--(Continued)
September 30, 2005 (Unaudited)
Number
of Shares Value
------------------ ---------------
OFFICE 35.9%
American Financial Realty Trust 1,016,300 $ 14,431,460
Arden Realty 826,800 34,039,356
Brandywine Realty Trust 1,140,900 35,470,581
CarrAmerica Realty Corp. 1,006,700 36,190,865
Equity Office Properties Trust 1,314,400 42,994,024
Glenborough Realty Trust 68,700 1,319,040
Highwoods Properties 415,300 12,255,503
HRPT Properties Trust 1,143,700 14,193,317
Mack-Cali Realty Corp. 1,073,800 48,256,572
Maguire Properties 604,800 18,174,240
Prentiss Properties Trust 1,008,800 40,957,280
Reckson Associates Realty Corp. 794,100 27,436,155
------------
325,718,393
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OFFICE/INDUSTRIAL 7.4%
Duke Realty Corp. 638,700 21,639,156
Liberty Property Trust 1,065,200 45,313,608
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66,952,764
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RESIDENTIAL - APARTMENT 15.4%
American Campus Communities 275,100 6,607,902
AMLI Residential Properties Trust 215,300 6,904,671
Apartment Investment & Management Co. 167,700 6,503,406
Archstone-Smith Trust 660,272 26,325,045
AvalonBay Communities 280,600 24,047,420
Camden Property Trust 366,600 20,437,950
Education Realty Trust 496,800 8,296,560
GMH Communities Trust 583,800 8,564,346
Home Properties 412,900 16,206,325
Mid-America Apartment Communities 309,400 14,390,194
Town and Country Trust 50,000 1,451,000
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139,734,819
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2
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COHEN & STEERS QUALITY INCOME REALTY FUND, INC.
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SCHEDULE OF INVESTMENTS--(Continued)
September 30, 2005 (Unaudited)
Number
of Shares Value
------------------ ---------------
SELF STORAGE 2.1%
Extra Space Storage 390,500 $ 6,005,890
Extra Space Storage (Restricted) (b,c) 58,100 848,899
Sovran Self Storage 87,300 4,273,335
U-Store-It Trust 385,500 7,814,085
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18,942,209
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SHOPPING CENTER 16.4%
COMMUNITY CENTER 4.5%
Cedar Shopping Centers 535,800 7,753,026
Heritage Property Investment Trust 449,100 15,718,500
Inland Real Estate Corp. 239,700 3,753,702
New Plan Excel Realty Trust 222,700 5,110,965
Urstadt Biddle Properties--Class A 544,000 8,247,040
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40,583,233
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REGIONAL MALL 11.9%
Glimcher Realty Trust 688,200 16,840,254
Macerich Co. 781,757 50,767,299
Mills Corp. 737,400 40,615,992
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108,223,545
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TOTAL SHOPPING CENTER 148,806,778
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SPECIALTY 0.7%
Entertainment Properties Trust 148,200 6,614,166
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TOTAL COMMON STOCK
(Identified cost-$725,829,933) 1,064,233,083
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3
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COHEN & STEERS QUALITY INCOME REALTY FUND, INC.
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SCHEDULE OF INVESTMENTS--(Continued)
September 30, 2005 (Unaudited)
Number
of Shares Value
------------------ ---------------
PREFERRED STOCK 29.0%
DIVERSIFIED 6.1%
Colonial Properties Trust, 8.125%, Series D 64,900 $ 1,680,910
Colonial Properties Trust, 7.62%, Series E 80,900 2,017,646
Crescent Real Estate Equities Co., 6.75%, Series
A (Convertible) (d) 1,671,000 37,012,650
Digital Realty Trust, 8.50%, Series A 122,000 3,214,700
Entertainment Properties Trust, 7.75%, Series B 128,000 3,244,800
iStar Financial, 7.80%, Series F 167,081 4,429,317
iStar Financial, 7.65%, Series G 90,400 2,276,272
iStar Financial, 7.50%, Series I 61,600 1,559,712
--------------
55,436,007
--------------
HEALTH CARE 0.3%
Health Care REIT, 7.625%, Series F 68,900 1,743,170
Omega Healthcare Investors, 8.375%, Series D 40,000 1,037,600
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2,780,770
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HOTEL 4.5%
FelCor Lodging Trust, 8.00%, Series C 104,300 2,597,070
Highland Hospitality Corp., 7.875%, Series A 75,000 1,856,250
Host Marriott Corp., 10.00%, Series C 30,700 781,008
Host Marriott Corp., 8.875%, Series E 10,000 273,000
Innkeepers USA Trust, 8.00%, Series C 91,300 2,387,495
LaSalle Hotel Properties, 10.25%, Series A 1,000,000 26,600,000
Strategic Hotel Capital, 8.50%, Series A, 144A (e) 132,200 3,470,250
Sunstone Hotel Investors, 8.00%, Series A 111,000 2,830,500
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40,795,573
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MORTGAGE 0.2%
Newcastle Investment Corp., 9.75%, Series B 56,000 1,486,800
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4
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COHEN & STEERS QUALITY INCOME REALTY FUND, INC.
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SCHEDULE OF INVESTMENTS--(Continued)
September 30, 2005 (Unaudited)
Number
of Shares Value
------------------ ---------------
OFFICE 3.0%
Brandywine Realty Trust, 7.375%, Series D 38,300 $ 961,330
Cousins Properties, 7.50%, Series B 200,000 5,120,000
Highwoods Properties, 8.625%, Series A 13,195 14,148,834
HRPT Properties Trust, 8.75%, Series B 120,000 3,181,200
Kilroy Realty Corp., 7.50%, Series F 55,500 1,411,920
Maguire Properties, 7.625%, Series A 106,600 2,702,310
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27,525,594
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OFFICE/INDUSTRIAL 0.2%
ProLogis, 8.54%, Series C 4,000 221,000
PS Business Parks, 8.75%, Series F 4,100 106,231
PS Business Parks, 7.00%, Series H 40,000 994,000
PS Business Parks, 7.60%, Series L 14,700 375,732
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1,696,963
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RESIDENTIAL 4.0%
APARTMENT 3.9%
Apartment Investment & Management Co.,
10.00%, Series R 940,000 24,308,400
Associated Estates Realty Corp., 8.70%, Series B 90,000 2,344,500
Home Properties, 9.00%, Series F 196,000 5,107,760
Mid-America Apartment Communities, 8.30%, Series H 138,100 3,604,410
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35,365,070
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MANUFACTURED HOME 0.1%
American Land Lease, 7.75%, Series A 22,000 547,800
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TOTAL RESIDENTIAL 35,912,870
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5
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COHEN & STEERS QUALITY INCOME REALTY FUND, INC.
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SCHEDULE OF INVESTMENTS--(Continued)
September 30, 2005 (Unaudited)
Number
of Shares Value
------------------ ---------------
SHOPPING CENTER 10.5%
COMMUNITY CENTER 4.8%
Cedar Shopping Centers, 8.875%, Series A 61,000 $ 1,586,000
Developers Diversified Realty Corp., 8.60%, Series F 1,039,400 26,920,460
Developers Diversified Realty Corp., 7.375%, Series H 41,500 1,054,100
Federal Realty Investment Trust, 8.50%, Series B 276,300 7,194,852
Urstadt Biddle Properties, 8.50%, Series C 24,000 2,604,000
Urstadt Biddle Properties, 7.50%, Series D 160,000 4,120,800
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43,480,212
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FREE STANDING 0.1%
Commercial Net Lease Realty, 9.00%, Series A 25,000 660,250
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REGIONAL MALL 5.6%
CBL & Associates Properties, 8.75%, Series B 430,000 22,446,000
CBL & Associates Properties, 7.375%, Series D 325,000 8,216,000
Glimcher Realty Trust, 8.75%, Series F 35,000 903,350
Glimcher Realty Trust, 8.125%, Series G 40,000 1,015,600
Mills Corp., 9.00%, Series B 55,300 1,446,095
Mills Corp., 9.00%, Series C 159,600 4,167,156
Mills Corp., 8.75%, Series E 84,000 2,226,000
Mills Corp., 7.875%, Series G 275,600 7,082,920
Simon Property Group, 8.75%, Series F 30,000 774,300
Simon Property Group, 8.375%, Series J 14,000 912,625
Taubman Centers, 8.30%, Series A 72,094 1,826,862
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51,016,908
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TOTAL SHOPPING CENTER 95,157,370
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SPECIALTY 0.2%
Capital Automotive REIT, 7.50%, Series A 80,000 1,784,000
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TOTAL PREFERRED STOCK
(Identified cost-$247,184,587) 262,575,947
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6
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COHEN & STEERS QUALITY INCOME REALTY FUND, INC.
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SCHEDULE OF INVESTMENTS--(Continued)
September 30, 2005 (Unaudited)
Principal
Amount Value
------------------ ---------------
COMMERCIAL PAPER 1.2%
San Paolo U.S. Finance Co., 2.750%, due 10/3/05
(Identified cost-$11,054,311) $ 11,056,000 $ 11,054,311
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TOTAL INVESTMENTS (Identified cost-$984,068,831) 147.5% 1,337,863,341
OTHER ASSETS IN EXCESS OF LIABILITIES 0.3% 3,431,762
LIQUIDATION VALUE OF PREFERRED SHARES (47.8)% (434,000,000)
----- ---------------
NET ASSETS APPLICABLE TO COMMON SHARES
(Equivalent to $23.35 per share based on 38,856,074
shares of common stock outstanding) 100.0% $ 907,295,103
===== ==============
Note: Percentages indicated are based on the net assets applicable to common
shares of the fund.
(a) Resale is restricted. Security acquired 12/3/04 at a cost of $13,556,950;
equals 2.1% of net assets applicable to common shares.
(b) Fair valued security. The total of all fair valued securities equals 0.1% of
net assets applicable to common shares.
(c) Resale is restricted. Security acquired 6/20/2005 at a cost of $782,607;
equals 0.1% of net assets applicable to common shares.
(d) 410,000 shares segregated as collateral for interest rate swap transactions.
(e) Resale is restricted to qualified institutional investors; equals 0.4% of
net assets applicable to common shares.
7
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COHEN & STEERS QUALITY INCOME REALTY FUND, INC.
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SCHEDULE OF INVESTMENTS--(Continued)
September 30, 2005 (Unaudited)
Interest Rate Swaps:
Unrealized
Notional Fixed Floating Rate (a) Termination Appreciation/
Counterparty Amount Rate (reset monthly) Date (Depreciation)
------------------------ ---------------------- ------------ ----------------- --------------- --------------
Fleet Global Markets $14,000,000 3.212% 3.700% October 2, 2008 $ 436,506
Merrill Lynch Derivative Products 46,000,000 5.210 3.680 April 5, 2007 (517,752)
Merrill Lynch Derivative Products 46,000,000 5.580 3.680 April 5, 2009 (1,559,783)
Royal Bank of Canada 26,000,000 4.137 3.830 May 26, 2010 436,579
Royal Bank of Canada 14,000,000 3.680 3.818 October 22, 2008 330,463
Royal Bank of Canada 44,000,000 4.258 3.704 March 10, 2009 467,537
UBS AG 24,000,000 5.120 3.768 April 15, 2007 (234,750)
UBS AG 24,000,000 5.495 3.768 April 15, 2009 (744,599)
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$(1,385,800)
============
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(a) Based on LIBOR (London Interbank Offered Rate). Represents rates in effect
at September 30, (2005.)
8
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.
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/ Adam M. Derechin
--------------------------------
Name: Adam M. Derechin
Title: President
Date: November 17, 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 By: /s/ Jay J. Chen
-------------------------------- ---------------------------------------
Name: Adam M. Derechin Name: Jay J. Chen
Title: President and principal Title: Treasurer and principal
executive officer financial officer
Date: November 17, 2005