COHEN & STEERS
REALTY MAJORS
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[logo] Defined Asset Funds (SM)
Buy with Knowledge o Hold with Confidence
The Realty Majors(SM) Portfolio September 30, 1999
The Realty Majors Portfolio
The Equity Investor Fund Cohen & Steers Realty Majors(SM) Portfolio is a Defined
Asset Fund(SM) with investments in many of the leading Real Estate Investment
Trusts ("REITs") in the U.S. The Portfolio is broadly diversified by both
geographic region and property type and is designed to provide a total
investment return from both current income and capital appreciation.
Investment Overview
The Fund posted negative returns during the third quarter, as did the broader
stock market averages. While real estate fundamentals remain positive, REIT
share prices continued to reflect concerns over the maturity of the real estate
cycle and the future direction of property prices. Although past performance is
no guarantee of future results, the Fund's focus on the nation's leading real
estate companies enabled it to perform better than general real estate
benchmarks since inception. Looking forward, Cohen & Steers believes that REITs
should continue to report solid earnings and dividend growth, reflecting the
high occupancy levels and strong demand for space found in most major real
estate markets today. REIT share prices, meanwhile, are relatively cheap, based
on nearly every valuation measure including price/cash flow multiple, dividend
yield and price in relation to the actual value of the underlying real estate.
These extremes often occur when an asset class or investment discipline falls
out of favor which, according to Cohen & Steers, also tends to be an excellent
time to make or maintain an investment.
Realty Majors in the News Third Quarter 1999
o Archstone Communities completed $166 million of apartment dispositions in
the third quarter, which would place the company on target to dispose $650
million in 1999. Archstone also announced an additional $50 million share
repurchase, in addition to its recently completed $100 million share
repurchase.
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o AvalonBay Communities, through a joint venture with United Dominion Realty
Trust, announced the development of an Internet-based information
technology which will transform the way apartment leases are signed and
services are offered to tenants.
o Equity Office Properties announced its Gateway to the Consumer program,
part of an increasing effort to use its office portfolio as a platform to
enhance growth and encourage brand loyalty. The initiatives include
telecommunications services, common area advertising, office suites, and
in-building ATMs.
o Health Care Property Investors announced an agreement to acquire another
health care REIT, American Health Properties (NYSE: AHE), in a stock-for-
stock merger valued at $1 billion.
o Highwoods Properties announced that it is considering several strategic
options, including business combinations, recapitalizations and mergers, or
a management-led buyout to improve the significant discount to real estate
value at which its common stock has been trading.
o Manufactured Homes Communities doubled its share repurchase program to 2
million common shares.
o ProLogis Trust announced the formation of the European Properties Fund, a
$2.7 billion joint venture with an international syndicate of institutional
investors.
o Post Properties started five new apartment developments valued at $137
million in Charlotte, Austin, Atlanta and Dallas.
o Reckson Services Industries announced that it increased its ownership in
OnSite Access, a provider of Broadband Internet services to office tenants,
to 42%. The company also intends to increase its ownership in VANTAS, the
largest owner of executive office suites in the U.S., from 35% to between
77% and 95%.
o The Rouse Company announced plans for a major share repurchase program.
Rouse intends to sell $500 million of non-core real estate assets and to
use up to $250 million to repurchase stock in the open market.
o Spieker Properties, Carramerica Realty, Crescent Real Estate Equities,
Duke- Weeks Realty, Equity Office Properties, Highwoods Properties, and
Mack- Cali Realty, along with venture capitalist Kleiner Perkins
spearheaded the formation of Broadband Access, a new telecommunications
company that will provide high speed Internet access and telephone service
to office tenants.
o Vornado Realty Trust acquired two Manhattan office buildings for $250
million and issued $325 million of perpetual preferred stock at 8.25%.
o Second quarter 1999 Funds From Operations (cash flow) growth averaged 11.6%
for the companies in the Realty Majors Portfolio.
Geographic Diversification as of 9/30/99
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[Graphic representation of the U.S., divided into sections and labeled with
section names and percentages.]
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Section Name States Percentage
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North West Central North Dakota, South Dakota, 4%
Nebraska, Kansas, Oklahoma,
Minnesota, Iowa, Missouri, Arkansas,
Louisiana
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Pacific Washington, Oregon, California 21%
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Mountain Idaho, Nevada, Utah, Arizona, 9%
Montana, Wyoming, Colorado, New
Mexico
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South West Central Texas 10%
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North East Central Wisconsin, Michigan, Illinois, 13%
Indiana, Ohio
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New England Maine, New Hampshire, Vermont, 3%
Massachusetts, Connecticut, Rhode
Island
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Mid-Atlantic New York, Pennsylvania, New Jersey 16%
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South Atlantic Delaware, Maryland, West Virginia, 22%
Virginia, North Carolina, South
Carolina, Georgia, Florida
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South East Central Kentucky, Tennessee, Mississippi, 2%
Alabama
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Portfolio Highlights as of 9/30/99
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Symbol RMP001
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Number of Holdings 28
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Total Net Assets $496 million
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NAV per Unit $0.79281
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Termination Date April, 2001
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Investment Consultant Cohen & Steers Capital Management
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Total Returns(1)
Past performance is no guarantee of future results.
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YEAR TO ONE ANNUALIZED
DATE YEAR SINCE 4/23/98
9/30/98-
9/30/99
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Realty Majors Portfolio -3.8% -4.2% -8.7%
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Dow Jones REIT Index(2) -3.1% -5.3% -11.5%
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S&P REIT Index(2) -4.6% -8.4% -14.6%
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DJIA(2) 14.0% 34.0% 10.8%
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S&P 500 Index(2) 5.4% 27.8% 11.5%
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(1)Change in stock prices plus dividends reinvested divided by initial price.
The Portfolio reflects deduction of ongoing expenses of .348 annually.
(2)The Dow Jones Equity REIT Total Return Index reflects both price changes and
dividend payouts of 118 equity REIT stocks. The S&P REIT Index is a
capitalization weighted index of 100 REIT stocks. The Dow Jones Industrial
Average is a price-weighted index of 30 large-cap common stocks chosen as
representative of American industry. The S&P 500 Stock Price Composite Index
(S&P 500 Index) is a capitalization weighted index of 500 large-cap common
stocks. The names "Dow Jones Industrial Average" and "Dow Jones REIT Index"
are the property of Dow Jones & Company, Inc. "S&P REIT Index" and "S&P 500
Index" are trademarks of The McGraw-Hill Companies, Inc.
Dividend Review
Twenty-three of the Realty Majors increased their dividends by an average of
14.1% since the inception of the Fund (see reverse for details).
Dividends are paid monthly or can be reinvested in additional units of the Fund.
The annual dividend and current yield for each of the Realty Majors are listed
on the back of this form.
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Sector Diversification as of 9/30/99
[Pie chart divided into sections labeled with section names and percentages]
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Section Name Percentage
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Shopping Centers 6%
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Regional Malls 14%
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Self Storage 5%
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Office/Industrial 8%
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Industrial 12%
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Apartment 24%
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Diversified 5%
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Health Care 4%
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Office 22%
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[copyright symbol] 1999 Merrill Lynch, Pierce, Fenner & Smith Incorporated.
Member SIPC.
This material is authorized for client distribution only when accompanied or
preceded by a current prospectus.
Dividend Changes since inception -- 4/23/98 through 9/30/99
Twenty-three companies have announced dividend increases averaging 14.1% (since
inception).
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% Change
Company New Dividend Since 4/23/98
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Crescent Real Estate Equities Co. $2.20 44.7%
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Equity Office Properties Trust 1.68 31.3
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Duke-Weeks Realty Corp. 1.56 30.0
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Kimco Realty Corp. 2.40 25.0(3)
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AvalonBay Communities, Inc. 2.08 23.8
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Reckson Associates Realty Corp. 1.49 18.8
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Mack-Cali Realty Corp. 2.32 16.0
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ProLogis Trust 1.31 14.8
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Equity Residential Properties Trust 3.04 13.4
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First Industrial Realty Trust, Inc. 2.40 13.2
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Vornado Realty Trust 1.76 10.0
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Health Care Properties Investors, Inc. 2.80 9.4
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% Change
Company New Dividend Since 4/23/98
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Highwoods Properties $2.22 8.8%
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Archstone Communities Trust 1.48 8.8
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Post Properties Inc. 2.80 7.7
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Nationwide Health Properties, Inc. 1.80 7.1
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The Rouse Company 1.20 7.1
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Spieker Properties Inc. 2.44 7.0
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Developers Diversified Realty Corp. 1.40 6.9
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Manufactured Home Communities, Inc. 1.55 6.9
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Arden Realty Inc. 1.78 6.0
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The Macerich Company 1.94 5.4
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Taubman Centers Inc. 0.96 2.1
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(3)Excludes $0.05 Special Dividend
The Realty Majors Portfolio as of 9/30/99
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Price Annual
Company Symbol Per Share Dividend
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Archstone Communities Trust ASN $19.750 $1.48
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Arden Realty Inc. ARI 21.750 1.78
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AvalonBay Communities Inc. AVB 33.875 2.08
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CarrAmerica Realty Corp. CRE 21.938 1.85
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Crescent Real Estate Equities Co. CEI 18.000 2.20
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Developers Diversified Realty Corp. DDR 14.000 1.40
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Duke-Weeks Realty Corp. DRE 19.500 1.56
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Equity Office Properties Trust EOP 23.250 1.68
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Equity Residential Properties Trust EQR 42.375 3.04
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First Industrial Realty Trust, Inc. FR 24.750 2.40
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Health Care Property Investors, Inc. HCP 26.250 2.80
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Highwoods Properties, Inc. HIW 25.875 2.22
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Kimco Realty Corp. KIM 35.750 2.40
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The Macerich Company MAC 23.125 1.94
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Mack-Cali Realty Corp. CLI 26.813 2.32
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Manufactured Home Communities, Inc. MHC 23.375 1.55
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Nationwide Health Properties, Inc. NHP 16.625 1.80
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Post Properties Inc. PPS 39.313 2.80
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ProLogis Trust PLD 18.875 1.31
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Public Storage Inc. PSA 25.188 0.88
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Reckson Associates Realty Corp. RA 20.813 1.49
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Reckson Services Industries, Inc.(5) RSII 15.813 0.00
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The Rouse Company RSE 23.000 1.20
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Simon Property Group Inc. SPG 22.438 2.02
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Spieker Properties Inc. SPK 34.688 2.44
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Taubman Centers Inc. TCO 11.500 0.96
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Vornado Operating Co.(6) VOO 6.000 0.00
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Vornado Realty Trust VNO 32.500 1.76
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Current Market Cap. Property
Company Dividend ($ in Millions) Sector
Yield(4)
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Archstone Communities Trust 7.5% $2,755 Apartment
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Arden Realty Inc. 8.2 1,377 Office
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AvalonBay Communities Inc. 6.1 2,205 Apartment
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CarrAmerica Realty Corp. 8.4 1,465 Office
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Crescent Real Estate Equities 12.2 2,158 Office
Co.
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Developers Diversified Realty 10.0 858 Retail
Corp.
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Duke-Weeks Realty Corp. 8.0 2,286 Office/
Industrial
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Equity Office Properties Trust 7.2 5,859 Office
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Equity Residential Properties 7.2 5,182 Apartment
Trust
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First Industrial Realty Trust, 9.7 942 Industrial
Inc.
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Health Care Property Investors, 10.7 841 Health Care
Inc.
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Highwoods Properties, Inc. 8.6 1,596 Office
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Kimco Realty Corp. 6.7 2,171 Retail
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The Macerich Company 8.4 787 Retail
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Mack-Cali Realty Corp. 8.7 1,589 Office
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Manufactured Home 6.6 610 Manufactured
Communities, Inc. Homes
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Nationwide Health Properties, 10.8 768 Health Care
Inc.
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Post Properties Inc. 7.1 1,517 Apartment
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ProLogis Trust 6.9 3,047 Industrial
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Public Storage Inc. 3.5 3,257 Self Storage
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Reckson Associates Realty 7.1 840 Office/
Corp. Industrial
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Reckson Services Industries, 0.0 401 Diversified
Inc.(5)
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The Rouse Company 5.2 1,663 Retail
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Simon Property Group Inc. 9.0 3,821 Retail
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Spieker Properties Inc. 7.0 2,203 Office/
Industrial
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Taubman Centers Inc. 8.3 613 Retail
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Vornado Operating Co.(6) 0.0 24 Diversified
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Vornado Realty Trust 5.4 2,793 Diversified
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(4)Calculated by annualizing the latest quarterly or semi-annual ordinary
dividend declared and dividing the result by its market value as of the close
of trading on September 30,1999.
(5)Reckson Services Industries, Inc. was spun off from Reckson Associates Realty
Corp. in June, 1998.
(6)Vornado Operating Co. was spun off from Vornado Realty Trust in October,
1998.
The Fund is subject to special risk considerations similar to those associated
with the direct ownership of real estate due to its policy of concentration in
the securities of real estate companies. Real estate valuations may be subject
to factors such as changing general and local economic, financial, competitive
and environmental conditions. The Fund is also classified as non-diversified and
therefore is not limited in the proportion of its assets that may be invested in
a single issuer.
70137IN-10/99
[ML logo] Merrill Lynch
COHEN & STEERS
Realty Majors
[logo] Defined Asset Funds(SM)
Buy With Knowledge o Hold With Confidence
