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T. Rowe Price
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Semiannual Report
Real Estate Fund
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June 30, 1998
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REPORT HIGHLIGHTS
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Real Estate Fund
* The broad market powered ahead in the first half of 1998, but real estate
stocks lagged because of negative sentiment toward the group.
* Your fund provided a negative return for the last six months but a
respectable one for the eight months since its inception, putting it ahead
of its benchmarks for both periods.
* The lagging performance of real estate stocks was in marked contrast to the
strong financial conditions of the underlying companies.
* We added to several holdings in the belief that the market will eventually
reward their earnings growth with higher price valuations.
* Stock valuations in the sector look attractive to us, and we expect the gap
in performance versus the S&P 500 to narrow.
<PAGE>
Fellow Shareholders
During the first half of 1998 the broad stock market was strong, but it was
a challenging environment for real estate securities. Although the fundamentals
of most real estate companies were favorable, their underlying stocks were
disappointing because of negative sentiment toward the group.
================================================================================
Performance Comparison
Since
Inception
Periods Ended 6/30/98 .................... 6 Months 8 Months
Real Estate Fund ......................... -2.05% 5.61%
Wilshire Real Estate
Securities Index ......................... -5.31 -1.25
Lipper Real Estate
Funds Average ............................ -4.43 -0.68
================================================================================
While your fund posted a negative return for the first half of 1998,
results exceeded those of the Wilshire Real Estate Securities Index and the
average of other real estate funds. For the eight months since the birth of the
fund, the return was a respectable 5.61% in an exceedingly difficult environment
that produced negative returns for both benchmarks. We were frustrated to find
that the share prices of our portfolio companies did not reflect the solid
financial conditions of the companies themselves. Once again, investor attention
was focused on the large-capitalization growth stocks that dominate the
unmanaged Standard & Poor's 500 Index, which gained 17.71% during the past six
months. In our view, the market will eventually recognize the value in real
estate stocks and reward them with attractive share price valuations. So, while
we were not able to hit any home runs during the past six and eight months, we
are heartened that we bested the Wilshire index every month since inception.
DIVIDEND DISTRIBUTION
Your Board of Directors declared a second quarter income dividend of $0.09
per share, paid on June 29, 1998, to shareholders of record on June 25, bringing
total distributions for the first half to $0.14 per share. You should have
already received your check or statement reflecting this activity.
INVESTMENT STRATEGY
We would like to welcome shareholders who joined us since our initial
shareholder letter and briefly review our investment strategy. Your fund seeks
attractive returns from real estate securities through a combination of capital
appreciation and current income. In pursuit of the best investment alternatives,
we will employ rigorous, bottom-up fundamental research. Our strategy includes
direct contact with companies and interviews with management in an effort to
invest in superior organizations.
<PAGE>
Our intent to provide shareholders with broader exposure to real estate
opportunities is enhanced by the flexibility of our investment program. We
review each holding for its individual merits and in the context of the entire
portfolio. We strive to produce a well-diversified portfolio, poised to take
advantage of numerous opportunities across the real estate spectrum. While we
believe strongly in portfolio diversification, at times we may selectively
concentrate fund holdings when our conviction level is particularly high.
================================================================================
Industry Diversification
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Percent of Net Assets
12/31/97 6/30/98
Diversified .................................. 14% 17%
Apartment/Residential ........................ 14 13
Office ....................................... 8 13
Office and Industrial ........................ 9 9
Lodging and Leisure .......................... 8 8
Shopping Center .............................. 8 8
Industrial ................................... 6 8
Regional Mall ................................ 4 6
Services ..................................... 6 5
Manufactured Housing ......................... 3 4
Other Real Estate ............................ 2 3
Self-Storage ................................. 3 2
Miscellaneous ................................ 5 1
Reserves ..................................... 10 3
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Total ........................................ 100% 100%
================================================================================
MARKET ENVIRONMENT AND PORTFOLIO REVIEW
We continued to find appealing valuations among real estate stocks,
primarily due to a contraction in price/earnings multiples as investors focused
on large-cap, S&P 500 stocks in recent months. Indeed, we have not seen real
estate securities look this attractive in several years. Often, selling pressure
in our group seemed to defy logic considering the strong fundamentals of real
estate companies and the compelling opportunities we uncovered. In this
environment, we increased our positions in companies whose share prices were
unduly punished, in our view.
<PAGE>
STARWOOD HOTELS & RESORTS became our largest holding by the end of June as
we bought additional shares. We were disappointed by the stock's performance
during the first half, but not with the company's management. You may not be as
familiar with the name Starwood as with the Westin and Sheraton chains owned by
the company. The company's internal growth prospects appear bright, but the
stock price has suffered from investor uncertainty about proposed new
legislation affecting real estate investment trusts (REITs) and about the
possibility of overbuilding in the industry. In our first report to
shareholders, we highlighted our own concern about new supply in the lodging
sector but also expressed comfort in the upscale and urban locales
characteristic of Starwood. In regard to proposed legislation that would affect
the unique corporate structure of Starwood and three other REITs, we are
confident that the company would restructure so that it could thrive in a new
environment.
We also increased our stake in CRESCENT REAL ESTATE EQUITIES. This company
is led by one of the most highly respected management teams in the industry, and
the stock came under pressure following an announcement of a pending takeover of
Station Casinos. The demographics and underlying stability of Station's
properties contrast markedly with those associated with the Las Vegas Strip, yet
this association hurt the stocks of both Station and Crescent. We noted in our
annual report that Crescent has been adept at seizing opportunities across
various segments, and we believe this would be a good transaction. Crescent
reinforced our view with its statement that it will increase the dividend a
remarkable 66% once the acquisition is final.
==============================
One of our better performers .
. . was Kimco Realty, an
example of how good management
can take advantage of bad
situations.
- ------------------------------
We also increased our position in EQUITY OFFICE PROPERTIES, the nation's
largest publicly traded office building company. We like the company's earnings,
position in the industry, and nationwide portfolio of downtown and suburban
office properties. This diversification provides an opportunity for the company
to benefit from the broad recovery in office properties, while mitigating
exposure to potential downturns in individual markets.
One of our better performers this quarter was KIMCO REALTY, an example of
how good management can take advantage of bad situations. Kimco was able to look
beyond the troubles at Venture Stores, which were tenants at its sites, and find
value in the underlying real estate. When Venture succumbed to bankruptcy, Kimco
was able to realize the potential of the sites by leasing the former Venture
locations at higher rates to stronger tenants. This led to an increase in
estimated earnings for Kimco, which in turn translated into an increase in
Kimco's share price.
<PAGE>
OUTLOOK
We believe the negative investor sentiment toward real estate stocks during
the first half was unwarranted and exaggerated. Therefore, we anticipate an
expansion in price/earnings multiples with generally better performance in the
months ahead. Valuations look attractive to us, and near-term real estate
fundamentals remain strong. In addition, many real estate companies enjoy
healthy financial positions with low debt and high yields. We foresee solid
dividend growth in the near term and expect earnings growth to exceed that of
the broader market. Therefore, we believe the real estate sector has the
potential to narrow the gap in performance with the S&P 500.
Our basic strategy remains unchanged as we seek to invest in superior
organizations with the ability to excel in all market environments. We will
continue to focus on companies with strong management, strong balance sheets,
and strong assets.
Respectfully submitted,
/s/
David M. Lee
Chairman of the Investment Advisory Committee
July 24, 1998
<PAGE>
T. Rowe Price Real Estate Fund
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Portfolio Highlights
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TWENTY-FIVE LARGEST HOLDINGS
Percent of
Net Assets
6/30/98
Starwood Hotels & Resorts .................................... 5.0%
Crescent Real Estate Equities ................................ 4.5
Equity Office Properties ..................................... 3.0
Vornado Realty Trust ......................................... 2.8
Reckson Associates Realty .................................... 2.6
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CarrAmerica Realty ........................................... 2.4
Simon DeBartolo Group ........................................ 2.3
CBL & Associates Properties .................................. 2.2
Meridian Industrial Trust .................................... 2.2
Duke Realty Investments ...................................... 2.2
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Kilroy Realty ................................................ 2.2
Security Capital U.S. Realty ................................. 2.1
Avalon Bay Communities ....................................... 2.1
Weeks ........................................................ 2.1
Manufactured Home Communities ................................ 2.1
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Kimco Realty ................................................. 2.1
Post Properties 2.1
Patriot American Hospitality ................................. 2.1
Security Capital Atlantic .................................... 2.1
Arden Realty ................................................. 2.0
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Camden Property Trust ........................................ 2.0
Spieker Properties ........................................... 2.0
AMB Property ................................................. 2.0
Koger Equity ................................................. 2.0
Mack-Cali Realty ............................................. 2.0
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Total ........................................................ 60.2%
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<PAGE>
T. Rowe Price Real Estate Fund
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================================================================================
Portfolio Highlights
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MAJOR PORTFOLIO CHANGES
Listed in descending order of size
6 Months Ended 6/30/98
Ten Largest Purchases
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Starwood Hotels & Resorts
Crescent Real Estate Equities
Colonial Properties Trust
Equity Office Properties
Vornado Realty Trust
CarrAmerica Realty *
Reckson Associates Realty
Kilroy Realty
Meridian Industrial Trust
Security Capital Atlantic
Ten Largest Sales
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Glenborough Realty Trust **
FelCor Suite Hotels **
Security Capital Pacific Trust **
Hilton **
Cabot Industrial **
Colonial Properties Trust
Hospital Properties Trust **
Avalon Bay Communities
Regency Realty **
Excel Realty Trust **
* Position added
** Position eliminated
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<PAGE>
T. Rowe Price Real Estate Fund
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Performance Comparison
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This chart shows the value of a hypothetical $10,000 investment in the fund
over the past 10 fiscal year periods or since inception (for funds lacking
10-year records). The result is compared with a broad-based average or index.
The index return does not reflect expenses, which have been deducted from the
fund's return.
[Real Estate Fund SEC graph shown here]
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Average Annual Compound Total Return
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This table shows how the fund would have performed each year if its actual
(or cumulative) returns for the periods shown had been earned at a constant
rate.
================================================================================
Since Inception
Periods Ended 6/30/98 6 Months Inception Date
Real Estate Fund -2.05% 5.61% 10/31/97
Investment return and principal value represent past performance and will
vary. Shares may be worth more or less at redemption than at original
purchase.
================================================================================
<PAGE>
<TABLE>
T. Rowe Price Real Estate Fund
- ------------------------------------------------------------------------------------------------------------------------------------
Unaudited
For a share outstanding throughout each period
====================================================================================================================================
Financial Highlights
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<CAPTION>
6 Months 10/31/97
Ended Through
6/30/98 12/31/97
<S> <C> <C>
NET ASSET VALUE
Beginning of period ........................................................... $ 10.69 $ 10.00
Investment activities
Net investment income ................................................. 0.18* 0.08*
Net realized and unrealized gain (loss) ............................... (0.41) 0.70
Total from investment activities ...................................... (0.23) 0.78
Distributions
Net investment income ................................................. (0.14) (0.09)
Redemption fees
added to paid-in-capital ...................................................... .01 --
NET ASSET VALUE
End of period ................................................................. $ 10.33 $ 10.69
Ratios/Supplemental Data
Total return^ ................................................................. (2.05)%* 7.82%*
Ratio of expenses to average net assets ....................................... 1.00%*+ 1.00%*+
Ratio of net investment income to average net assets .......................... 4.41%*+ 6.07%*+
Portfolio turnover rate ....................................................... 26.8% 8.4%
Net assets, end of period (in thousands) ...................................... $ 36,977 $ 7,259
<FN>
^ Total return reflects the rate that an investor would have earned on an investment in the fund during each period, assuming
reinvestment of all distributions and payment of no redemption or account fees.
* Excludes expenses in excess of a 1.00% voluntary expense limitation in effect through 12/31/99.
+ Annualized.
</FN>
</TABLE>
The accompanying notes are an integral part of these financial statements. >>>
<PAGE>
T. Rowe Price Real Estate Fund
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Unaudited June 30, 1998
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Statement of Net Assets
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Shares/Par Value
In thousands
Common Stocks 97.1%
REAL ESTATE 96.1%
Apartment/Residential 12.6%
Apartment Investment & Management, REIT .................. 13,500 $ 533
Avalon Bay Communities, REIT ............................. 20,436 777
Camden Property Trust, REIT .............................. 25,000 744
Equity Residential Properties Trust, REIT ................ 15,000 711
Gables Residential Trust, REIT ........................... 14,000 380
Post Properties, REIT .................................... 19,800 762
Security Capital Atlantic, REIT .......................... 34,000 759
4,666
Diversified 16.8%
AMB Property ............................................. 30,000 735
Colonial Properties Trust, REIT .......................... 19,000 589
Cousins Properties, REIT ................................. 23,000 687
Crescent Real Estate Equities, REIT ...................... 50,000 1,681
Security Capital U.S. Realty * ........................... 58,400 777
Trizec Hahn .............................................. 33,000 708
Vornado Realty Trust, REIT ............................... 26,000 1,032
6,209
Industrial 7.7%
Eastgroup Properties, REIT ............................... 33,800 678
Meridian Industrial Trust, REIT .......................... 35,300 812
Security Capital Industrial Trust, REIT .................. 23,800 595
Weeks, REIT .............................................. 24,500 775
2,860
Lodging & Leisure 8.3%
Homestead Village * ...................................... 39,000 463
Patriot American Hospitality, REIT ....................... 31,800 761
Starwood Hotels & Resorts, REIT .......................... 38,000 1,836
3,060
Manufactured Housing 3.9%
Manufactured Home Communities, REIT ...................... 32,000 772
Sun Communities, REIT .................................... 19,800 656
1,428
<PAGE>
Office 12.8%
Arden Realty, REIT ....................................... 29,000 $ 750
Boston Properties, REIT .................................. 16,000 552
CarrAmerica Realty, REIT ................................. 30,700 871
Equity Office Properties, REIT ........................... 39,000 1,107
Koger Equity, REIT ....................................... 36,000 727
Mack-Cali Realty, REIT ................................... 21,000 722
4,729
Office & Industrial 8.9%
Duke Realty Investments, REIT ............................ 34,000 803
Kilroy Realty, REIT ...................................... 32,000 800
Reckson Associates Realty, REIT .......................... 40,000 945
Spieker Properties, REIT ................................. 19,100 740
3,288
Other Real Estate 3.2%
Catellus Development * ................................... 37,300 660
St. Joe .................................................. 19,000 520
1,180
Regional Mall 5.6%
CBL & Associates Properties, REIT ........................ 34,000 825
Macerich, REIT ........................................... 13,900 407
Simon DeBartolo Group, REIT .............................. 25,600 832
2,064
Self Storage 2.4%
Public Storage, REIT ..................................... 12,600 353
Storage USA, REIT ........................................ 15,300 535
888
Shopping Center 8.5%
Developers Diversified Realty, REIT ...................... 14,000 549
Federal Realty Investment Trust, REIT .................... 23,000 553
JP Realty, REIT .......................................... 29,900 704
Kimco Realty, REIT ....................................... 18,800 771
Weingarten Realty Investors, REIT ........................ 13,800 577
3,154
Services 5.4%
Insignia Financial Group (Class A) * ..................... 24,400 598
Lasalle Partners * ....................................... 9,000 400
Reckson Service Industries * ............................. 15,040 51
Security Capital Group (Class B) * ....................... 22,000 $ 586
Trammell Crow * .......................................... 11,000 368
2,003
Total Real Estate ........................................ 35,529
Miscellaneous Common Stocks 1.0% ....................... 363
Total Common Stocks (Cost $36,884) ...................... 35,892
<PAGE>
Short-Term Investments 1.8%
Money Market Funds 1.8%
Reserve Investment Fund, 5.69% # ......................... 681,875 682
Total Short-Term Investments (Cost $682) ................ 682
Total Investments in Securities
98.9% of Net Assets (Cost $37,566) ....................... $ 36,574
Other Assets Less Liabilities ............................ 403
NET ASSETS ............................................... $ 36,977
Net Assets Consist of:
Accumulated net investment income-net of distributions ... $ 158
Accumulated net realized gain/loss-net of distributions... 145
Net unrealized gain (loss) ............................... (992)
Paid-in-capital applicable to 3,578,599 shares of
$0.0001 par value capital stock outstanding;
1,000,000,000 shares authorized .......................... 37,666
NET ASSETS ............................................... $ 36,977
NET ASSET VALUE PER SHARE ................................ $ 10.33
* Non-income producing
# Seven-day yield
REIT Real Estate Investment Trust
The accompanying notes are an integral part of these financial statements.
<PAGE>
T. Rowe Price Real Estate Fund
- --------------------------------------------------------------------------------
Unaudited
================================================================================
Statement of Operations
- --------------------------------------------------------------------------------
In thousands
6 Months
Ended
6/30/98
Investment Income
Income
Dividend ................................................ $ 746
Interest ................................................ 34
Total income ............................................ 780
Expenses
Shareholder servicing ................................... 77
Custody and accounting .................................. 60
Organization ............................................ 45
Registration ............................................ 16
Prospectus and shareholder reports ...................... 13
Legal and audit ......................................... 4
Directors ............................................... 3
Reimbursed by manager ................................... (70)
Total expenses .......................................... 148
Net investment income ........................................... 632
Realized and Unrealized Gain (Loss)
Net realized gain (loss) on securities .......................... 121
Change in net unrealized gain or loss on securities ............. (1,290)
Net realized and unrealized gain (loss) ......................... (1,169)
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS .......................................... $ (537)
The accompanying notes are an integral part of these financial statements.
<PAGE>
T. Rowe Price Real Estate Fund
- --------------------------------------------------------------------------------
Unaudited
================================================================================
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
In thousands
6 Months 10/31/97
Ended Through
6/30/98 12/31/97
Increase (Decrease) in Net Assets
Operations
Net investment income ........................... $ 632 $ 47
Net realized gain (loss) ........................ 121 28
Change in net unrealized gain or loss ........... (1,290) 298
Increase (decrease) in net assets from operations (537) 373
Distributions to shareholders
Net investment income ........................... (474) (52)
Capital share transactions *
Shares sold ..................................... 37,427 6,845
Distributions reinvested ........................ 443 50
Shares redeemed ................................. (7,184) (57)
Redemption fees received ........................ 43 --
Increase (decrease) in net assets from capital
share transactions .............................. 30,729 6,838
Net Assets
Increase (decrease) during period ....................... 29,718 7,159
Beginning of period ..................................... 7,259 100
End of period ........................................... $ 36,977 $ 7,259
*Share information
Shares sold ..................................... 3,542 670
Distributions reinvested ........................ 43 5
Shares redeemed ................................. (686) (6)
Increase (decrease) in shares outstanding ....... 2,899 669
The accompanying notes are an integral part of these financial statements.
<PAGE>
T. Rowe Price Real Estate Fund
- --------------------------------------------------------------------------------
Unaudited June 30, 1998
================================================================================
Notes to Financial Statements
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NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
T. Rowe Price Real Estate Fund, Inc. (the fund) is registered under the
Investment Company Act of 1940 as a diversified, open-end management investment
company and commenced operations on October 31, 1997.
The accompanying financial statements are prepared in accordance with
generally accepted accounting principles for the investment company industry;
these principles may require the use of estimates by fund management.
VALUATION Equity securities listed or regularly traded on a securities
exchange are valued at the last quoted sales price on the day the valuations are
made. A security which is listed or traded on more than one exchange is valued
at the quotation on the exchange determined to be the primary market for such
security. Listed securities not traded on a particular day and securities
regularly traded in the over-the-counter market are valued at the mean of the
latest bid and asked prices. Other equity securities are valued at a price
within the limits of the latest bid and asked prices deemed by the Board of
Directors, or by persons delegated by the Board, best to reflect fair value.
Investments in mutual funds are valued at the closing net asset value per
share of the mutual fund on the day of valuation.
Assets and liabilities for which the above valuation procedures are
inappropriate or are deemed not to reflect fair value are stated at fair value
as determined in good faith by or under the supervision of the officers of the
fund, as authorized by the Board of Directors.
OTHER Income and expenses are recorded on the accrual basis. Investment
transactions are accounted for on the trade date. Realized gains and losses are
reported on the identified cost basis. Dividend income and distributions to
shareholders are recorded by the fund on the ex-dividend date. Income and
capital gain distributions are determined in accordance with federal income tax
regulations and may differ from those determined in accordance with generally
accepted accounting principles. Effective June 30, 1998, the fund recognized in
expense its remaining unamortized organization costs. Results of operations and
net assets were not affected by this charge, due to the expense limitation
provisions of the investment management agreement.
NOTE 2 - INVESTMENT TRANSACTIONS
Purchases and sales of portfolio securities, other than short-term
securities, aggregated $38,071,000 and $7,588,000, respectively, for the six
months ended June 30, 1998.
<PAGE>
NOTE 3 - FEDERAL INCOME TAXES
No provision for federal income taxes is required since the fund intends
to continue to qualify as a regulated investment company and distribute all of
its taxable income.
At June 30, 1998, the aggregate cost of investments for federal income
tax and financial reporting purposes was $37,566,000, and net unrealized loss
aggregated $992,000, of which $635,000 related to appreciated investments and
$1,627,000 to depreciated investments.
NOTE 4 - RELATED PARTY TRANSACTIONS
The investment management agreement between the fund and T. Rowe Price
Associates, Inc. (the manager) provides for an annual investment management fee.
The fee is computed daily and paid monthly, consisting of an individual fund fee
equal to 0.30% of average daily net assets and a group fee. The group fee is
based on the combined assets of certain mutual funds sponsored by the manager or
Rowe Price-Fleming International, Inc. (the group). The group fee rate ranges
from 0.48% for the first $1 billion of assets to 0.30% for assets in excess of
$80 billion. At June 30, 1998, and for the six months then ended, the effective
annual group fee rate was 0.32%. The fund pays a pro-rata share of the group fee
based on the ratio of its net assets to those of the group.
Under the terms of the investment management agreement, the manager is
required to bear any expenses through December 31, 1999, which would cause the
fund's ratio of expenses to average net assets to exceed 1.00%. Thereafter,
through December 31, 2001, the fund is required to reimburse the manager for
these expenses, provided that average net assets have grown or expenses have
declined sufficiently to allow reimbursement without causing the fund's ratio of
expenses to average net assets to exceed 1.00%. Pursuant to this agreement,
$110,000 of management fees were not accrued by the fund for the six months
ended June 30, 1998, and $116,000 of other expenses were borne by the manager.
Additionally, $23,000 of unaccrued 1997 fees and expenses are subject to
reimbursement through December 31, 2001.
In addition, the fund has entered into agreements with the manager and
two wholly owned subsidiaries of the manager, pursuant to which the fund
receives certain other services. The manager computes the daily share price and
maintains the financial records of the fund. T. Rowe Price Services, Inc., is
the fund's transfer and dividend disbursing agent and provides shareholder and
administrative services to the fund. T. Rowe Price Retirement Plan Services,
Inc., provides subaccounting and recordkeeping services for certain retirement
accounts invested in the fund. The fund incurred expenses pursuant to these
related party agreements totaling approximately $95,000 for the six months ended
June 30, 1998, of which $17,000 was payable at period-end.
<PAGE>
The fund may invest in the Reserve Investment Fund and Government Reserve
Investment Fund (collectively, the Reserve Funds), open-end management
investment companies managed by T. Rowe Price Associates, Inc. The Reserve Funds
are offered as cash management options only to mutual funds and other accounts
managed by T. Rowe Price and its affiliates and are not available to the public.
The Reserve Funds pay no investment management fees. Distributions from the
Reserve Funds to the fund for the six months ended June 30, 1998, totaled
$34,000 and are reflected as interest income in the accompanying Statement of
Operations.
<PAGE>
T. Rowe Price Shareholder Services
- --------------------------------------------------------------------------------
INVESTMENT SERVICES AND INFORMATION
KNOWLEDGEABLE SERVICE REPRESENTATIVES
BY PHONE 1-800-225-5132 Available Monday through Friday from 8 a.m. to
10 p.m. ET and weekends from 8:30 a.m. to 5 p.m. ET.
IN PERSON Available in T. Rowe Price Investor Centers. Account
Services
CHECKING Available on most fixed income funds ($500 minimum).
AUTOMATIC INVESTING From your bank account or paycheck.
AUTOMATIC WITHDRAWAL Scheduled, automatic redemptions.
DISTRIBUTION OPTIONS Reinvest all, some, or none of your
distributions.
AUTOMATED 24-HOUR SERVICES Including Tele*Access [Registration Mark]
and the T. Rowe Price Web site on the Internet. Address:
www.troweprice.com
DISCOUNT BROKERAGE*
INDIVIDUAL INVESTMENTS Stocks, bonds, options, precious metals, and
other securities at a savings over regular commission rates.
INVESTMENT INFORMATION
COMBINED STATEMENT Overview of all your accounts with T. Rowe Price.
SHAREHOLDER REPORTS Fund managers' reviews of their strategies and
results.
T. ROWE PRICE REPORT Quarterly investment newsletter discussing
markets and financial strategies.
PERFORMANCE UPDATE Quarterly review of all T. Rowe Price fund results.
INSIGHTS Educational reports on investment strategies and financial
markets.
INVESTMENT GUIDES Asset Mix Worksheet, College Planning Kit,
Diversifying Overseas: A Guide to International Investing, Personal
Strategy Planner, Retirees Financial Guide, and Retirement Planning
Kit.
*A division of T. Rowe Price Investment Services, Inc. Member NASD/SIPC.
<PAGE>
FOR YIELD, PRICE, LAST TRANSACTION,
CURRENT BALANCE, OR TO CONDUCT
TRANSACTIONS, 24 HOURS, 7 DAYS
A WEEK, CALL TELE*ACCESS [REGISTRATION MARK]:
1-800-638-2587 toll free
FOR ASSISTANCE
WITH YOUR EXISTING
FUND ACCOUNT, CALL:
Shareholder Service Center
1-800-225-5132 toll free
410-625-6500 Baltimore area
TO OPEN A DISCOUNT BROKERAGE
ACCOUNT OR OBTAIN INFORMATION,
CALL: 1-800-638-5660 toll free
INTERNET ADDRESS:
www.troweprice.com
T. Rowe Price Associates
100 East Pratt Street
Baltimore, Maryland 21202
This report is authorized for
distribution only to shareholders
and to others who have received
a copy of the prospectus of the
T. Rowe Price Real Estate Fund.
INVESTOR CENTERS:
101 East Lombard St.
Baltimore, MD 21202
T. Rowe Price
Financial Center
10090 Red Run Blvd.
Owings Mills, MD 21117
Farragut Square
900 17th Street, N.W.
Washington, D.C. 20006
ARCO Tower
31st Floor
515 South Flower St.
Los Angeles, CA 90071
4200 West Cypress St.
10th Floor
Tampa, FL 33607
T. Rowe Price Investment Services, Inc., Distributor. F12-051 6/30/98
