COHEN & STEERS REALTY SHARES INC, 485BPOS, 2000-04-25

COHEN & STEERS REALTY SHARES INC
485BPOS, 2000-04-25

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 25, 2000

FILE NOS. 33-40215
811-6302
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]

PRE-EFFECTIVE AMENDMENT NO. [ ]

POST-EFFECTIVE AMENDMENT NO. 11 [x]

AND

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ ]

AMENDMENT NO. 12 [x]

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COHEN & STEERS REALTY SHARES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)

757 THIRD AVENUE, NEW YORK, NY 10017
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE) (ZIP CODE)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (212) 832-3232
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<S> <C>
ROBERT H. STEERS COPY TO:
COHEN & STEERS REALTY SHARES, INC. SARAH E. COGAN, ESQ.
757 THIRD AVENUE, SIMPSON THACHER & BARTLETT
NEW YORK, NY 10017 425 LEXINGTON AVE.
(NAME AND ADDRESS OF AGENT OF SERVICE OF PROCESS) NEW YORK, NY 10017
</TABLE>
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APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING: As soon as practicable after
the effective date of this registration statement

IT IS PROPOSED THAT THIS FILING WILL BECOME EFFECTIVE (CHECK APPROPRIATE BOX):

[ ] IMMEDIATELY UPON FILING PURSUANT TO PARAGRAPH (B)

[x] ON MAY 1, 2000 PURSUANT TO PARAGRAPH (B)

[ ] 60 DAYS AFTER FILING PURSUANT TO PARAGRAPH (A)(1)

[ ] ON [DATE] PURSUANT TO PARAGRAPH (A)(1)

[ ] 75 DAYS AFTER FILING PURSUANT TO PARAGRAPH (A)(2)

[ ] ON [DATE] PURSUANT TO PARAGRAPH (A)(2) OF RULE 485

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[Logo]

757 THIRD AVENUE
NEW YORK, NEW YORK 10017

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A NO-LOAD MUTUAL FUND
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PROSPECTUS

Investment Adviser
Cohen & Steers Capital Management, Inc.
757 Third Avenue
New York, New York 10017
Telephone: (212) 832-3232

Transfer Agent
Chase Global Funds Services Company
P.O. Box 2798
Boston, Massachusetts 02208-2798
Telephone: (800) 437-9912

AS WITH ALL MUTUAL FUNDS, THE SECURITIES AND EXCHANGE COMMISSION HAS NOT
APPROVED OR DISAPPROVED OF THE FUND'S SHARES OR DETERMINED WHETHER THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANYONE WHO INDICATES OTHERWISE IS
COMMITTING A CRIME.

MAY 1, 2000
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TABLE OF CONTENTS

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PAGE
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<S> <C>
RISK/RETURN SUMMARY......................................... 1

Investment Objective and Principal Investment
Strategies........................................... 1

Who Should Invest....................................... 1

Principal Risks......................................... 1

Historical Fund Performance............................. 2

FEES AND EXPENSES OF THE FUND............................... 3

INVESTMENT OBJECTIVE, PRINCIPAL INVESTMENT STRATEGIES AND
RELATED RISKS............................................. 4

Objective............................................... 4

Principal Investment Strategies......................... 4

Principal Risks of Investing in the Fund................ 5

MANAGEMENT OF THE FUND...................................... 6

The Investment Adviser.................................. 6

Portfolio Managers...................................... 7

HOW TO PURCHASE AND SELL FUND SHARES........................ 7

Pricing of Fund Shares.................................. 7

Purchase Minimums....................................... 7

Form of Payment......................................... 8

Purchases of Fund Shares................................ 8

Exchange Privilege...................................... 9

How to Sell Fund Shares................................. 9

ADDITIONAL INFORMATION...................................... 10

Shareholder Services Plan............................... 10

Dividends and Distributions............................. 11

Tax Considerations...................................... 11

FINANCIAL HIGHLIGHTS........................................ 12
</TABLE>

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COHEN & STEERS REALTY SHARES, INC.

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RISK/RETURN SUMMARY
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INVESTMENT OBJECTIVE AND PRINCIPAL INVESTMENT STRATEGIES

The investment objective of Cohen & Steers Realty Shares, Inc. (the 'Fund') is
total return through investment in real estate securities. In pursuing total
return, the Fund equally emphasizes both capital appreciation and current
income. The Fund may change its investment objective without shareholder
approval, although it has no current intention to do so.

Normally, the Fund invests substantially all of its assets in common stocks and
other equity securities issued by real estate companies, such as 'real estate
investment trusts' ('REITs'). A real estate company generally derives at least
50% of its revenue from real estate or has at least 50% of its assets in real
estate. A REIT is a company dedicated to owning, and usually operating, income
producing real estate, or to financing real estate. The Fund's investment
portfolio includes shares of Equity REITs, which are companies that invest the
majority of their assets directly in real property and derive income primarily
from the collection of rents. Equity REITs can also realize capital gains by
selling properties that have appreciated in value. REITs are not taxed on income
distributed to shareholders provided they comply with the requirements of the
Internal Revenue Code.

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WHO SHOULD INVEST

Cohen & Steers Realty Shares may be suitable for you if you are seeking:

Some exposure to real estate to add to your portfolio mix;

A fund that may perform differently than a general stock or bond fund to add
to your portfolio;

Liquidity in a real estate-related investment;

High current income; and

The potential for long-term capital growth.

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PRINCIPAL RISKS

Investment Risk. An investment in the Fund is subject to investment risk,
including the possible loss of the entire principal amount that you invest.

Stock Market Risk. Your investment in Fund shares represents an indirect
investment in the REIT shares and other real estate securities owned by the
Fund. The value of these equity securities, like other stock market investments,
may move up or down, sometimes rapidly and unpredictably. Your Fund shares at
any point in time may be worth less than what you invested, even after taking
into account the reinvestment of Fund dividends and distributions.

Real Estate Markets and REIT Risk. Additionally, since the Fund concentrates its
assets in the real estate industry, your investment in the Fund will be closely
linked to the performance of the real estate markets. Property values may fall
due to increasing vacancies or declining rents resulting from unanticipated
economic, legal, cultural or technological developments. REIT prices also may
drop because of the failure of borrowers to pay their loans and poor management.

Smaller Companies. Even the larger REITs in the industry tend to be small to
medium-sized companies in relation to the equity markets as a whole. REIT shares
therefore can be more volatile than, and perform differently from,

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larger company stocks. There may be less trading in a smaller company's stock,
which means that buy and sell transactions in that stock could have a larger
impact on the stock's price than is the case with larger company stocks.
Further, smaller companies may have fewer business lines; changes in any one
line of business, therefore, may have a greater impact on a smaller company's
stock price than is the case for a larger company. As of March 31, 2000, the
market capitalization of REITs ranged in size from approximately $5 million to
$6.3 billion.

Less Diversification. As a 'non-diversified' investment company, the Fund can
invest in fewer individual companies than a diversified investment company.
Because a concentrated portfolio is more likely to experience large market price
fluctuations, the Fund could be subject to a greater risk of loss than a
diversified company.

Your investment in the Fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.

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HISTORICAL FUND PERFORMANCE

You should review the following information regarding the past performance of
the Fund. It shows how the Fund's investment return can change from year to year
and how the Fund's returns can vary from the performance of selected broad
market indices over various time periods. This information is intended to give
you some indication of the risk associated with an investment in the Fund. Past
performance is not, however, an indication as to how the Fund may perform in the
future.

THIS CHART SHOWS THE FUND'S TOTAL RETURN FOR EACH YEAR SINCE THE FUND COMMENCED
OPERATIONS.

COHEN & STEERS REALTY SHARES
ANNUAL TOTAL RETURNS

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HIGHEST QUARTERLY RETURN DURING THIS PERIOD: 20.50%
LOWEST QUARTERLY RETURN DURING THIS PERIOD: - 11.88%
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THIS TABLE SHOWS THE FUND'S AVERAGE ANNUAL TOTAL RETURNS FOR THE PAST ONE AND
FIVE YEARS AND THE PERIOD SINCE THE FUND COMMENCED OPERATIONS, AND COMPARES
THESE RETURNS WITH THE PERFORMANCE OF THREE INDICES.

AVERAGE ANNUAL TOTAL RETURNS
(for periods ended December 31, 1999)

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<CAPTION>
SINCE
1 YEAR 5 YEARS INCEPTION**
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<S> <C> <C> <C>
Cohen & Steers Realty Shares................................ 2.68% 9.42% 11.97%
NAREIT Equity REIT Index*................................... -4.62% 8.09% 10.22%
Wilshire Real Estate Securities Index*...................... -3.17% 8.36% 7.48%
S&P 500'r'*................................................. 21.04% 28.54% 20.04%
</TABLE>

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* The NAREIT Index of Equity REITs is comprised of 165 real estate investment
trusts. The Wilshire Real Estate Securities Index is comprised of 119
companies operating in the real estate industry and includes REITs. This
Index does not include REITs with investments in health care facilities. The
Fund invests in REITs with health care facilities. The Standard & Poor's 500
Composite Stock Index ('S&P 500') is an unmanaged index of 500 large
capitalization, publicly traded stocks representing a variety of industries.
Performance figures include reinvestment of income dividends and capital
gains distributions. You should note that the Fund is a professionally
managed mutual fund while the indices are unmanaged, do not incur expenses
and are not available for investment.

** The inception date was July 2, 1991.

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FEES AND EXPENSES OF THE FUND
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THIS TABLE DESCRIBES THE FEES AND EXPENSES THAT YOU COULD PAY IF YOU BUY AND
HOLD SHARES OF THE FUND.

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<S> <C> <C>
SHAREHOLDER FEES (fees paid directly from your
investment): None
ANNUAL FUND OPERATING EXPENSES* (expenses that are
deducted from Fund assets):
MANAGEMENT FEE................................................ 0.85%
OTHER EXPENSES
SERVICE FEE*.................................... 0.05%
OTHER EXPENSES:................................. 0.22%
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TOTAL OTHER EXPENSES.......................................... 0.27%
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TOTAL ANNUAL FUND OPERATING EXPENSES:**....................... 1.12%
</TABLE>

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* While the Fund has adopted a shareholder services plan, to date the Fund has
not paid any service fees. The Fund's actual 1999 operating expenses,
therefore, were 1.07% of average net assets for the year before expense
reductions from directed brokerage arrangement (see the following footnote).
Shareholders will receive a notice from the Fund before the Fund begins to
pay service fees.

** The investment adviser has directed certain portfolio transactions to brokers
who paid a portion of the Fund's expenses. For the year ended December 31,
1999, the Fund's expenses were reduced by $199,795 under these arrangements.
Although the Fund did not pay these expenses directly, this amount has been
added to the Fund's 'Other Expenses' in accordance with disclosure
regulations. Had these costs not been reflected in the table, the Fund's
'Total Operating Expenses' would have been 1.11% (1.06% without the service
fees). The Management of the Fund believes these arrangements benefit the
Fund and the Fund's shareholders and intends to continue such arrangements in
the current year.

EXAMPLE

THIS EXAMPLE IS INTENDED TO HELP YOU COMPARE THE COST OF INVESTING IN THE FUND
WITH THE COST OF INVESTING IN OTHER MUTUAL FUNDS. THE EXAMPLE ASSUMES THAT YOU
INVEST $10,000 IN THE FUND FOR THE TIME PERIODS INDICATED AND THEN REDEEM ALL OF
YOUR SHARES AT THE END OF THOSE PERIODS. THE EXAMPLE ALSO ASSUMES THAT YOUR
INVESTMENT HAS A 5% RETURN EACH YEAR AND THAT THE FUND'S OPERATING EXPENSES
REMAIN THE SAME. ALTHOUGH YOUR ACTUAL COSTS MAY BE HIGHER OR LOWER, BASED ON
THESE ASSUMPTIONS YOUR COSTS WOULD BE:

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<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
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<S> <C> <C> <C>
$114 $356 $617 $1,363
</TABLE>

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INVESTMENT OBJECTIVE, PRINCIPAL INVESTMENT STRATEGIES
AND RELATED RISKS
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OBJECTIVE

The investment objective of Cohen & Steers Realty Shares, Inc. is total return
through investment in real estate securities. The Fund pursues its investment
objective of total return by seeking, with approximately equal emphasis, capital
appreciation and current income. There can be no assurance that the Fund will
achieve its investment objective. The Fund, of course, will concentrate its
investments in the real estate industry.

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PRINCIPAL INVESTMENT STRATEGIES

In making investment decisions on behalf of the Fund, the investment adviser
relies on a fundamental analysis of each company. The investment adviser reviews
each company's potential for success in light of the company's current financial
condition, its industry position, and economic, and market conditions. The
investment adviser evaluates a number of factors, including growth potential,
earnings estimates and the quality of management.

The following are the Fund's principal investment strategies. A more detailed
description of the Fund's investment policies and restrictions and more detailed
information about the Fund's investments are contained in the Fund's Statement
of Additional Information ('SAI').

Real Estate Companies
For purposes of the Fund's investment policies, a real estate company is one
that:

derives at least 50% of its revenues from the ownership, construction,
financing, management or sale of commercial, industrial, or residential real
estate; or

has at least 50% of its assets in such real estate.

Under normal circumstances, the Fund will invest substantially all of its assets
in the equity securities of real estate companies. These equity securities can
consist of:

common stocks (including REIT shares);

rights or warrants to purchase common stocks;

securities convertible into common stocks where the conversion feature
represents, in the investment adviser's view, a significant element of the
securities' value; and

preferred stocks.

Real Estate Investment Trusts

The Fund may invest without limit in shares of real estate investment trusts
('REITs'). REITs pool investors' funds for investment primarily in income
producing real estate or real estate related loans or interests. A REIT is not
taxed on income distributed to shareholders if, among other things, it
distributes to its shareholders substantially all of its taxable income (other
than net capital gains) for each taxable year. As a result, REITSs tend to pay
relatively higher dividends than other types of companies and the Fund intends
to use these REIT dividends in an effort to meet the current income goal of its
investment objective.

Types of REITs. REITs can generally be classified as Equity REITs, Mortgage
REITs and Hybrid REITs. Equity REITs invest the majority of their assets
directly in real property and derive their income primarily from rents. Equity
REITs can also realize capital gains by selling properties that have appreciated
in value. Mortgage REITs invest the majority of their assets in real estate
mortgages and derive their income primarily from interest payments. Hybrid REITs
combine the characteristics of both Equity REITs and

<PAGE>

Mortgage REITs. The Fund invests primarily in Equity REITs.

Defensive Position

When the Fund's investment adviser believes that market or general economic
conditions justify a temporary defensive position, the Fund may deviate from its
investment objective and invest all or any portion of its assets in high-grade
debt securities without regard to whether the issuer is a real estate company.
When and to the extent the Fund assumes a temporary defensive position, it may
not pursue or achieve its investment objective.

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PRINCIPAL RISKS OF INVESTING IN THE FUND

Because prices of equity securities fluctuate from day to day, the value of the
Fund's portfolio and the Fund's price per share will vary based upon general
market conditions.

General Risks of Securities Linked to the Real Estate Market

The Fund will not invest in real estate directly, but only in securities issued
by real estate companies. However, because of its policy of concentration in the
securities of companies in the real estate industry, the Fund is also subject to
the risks associated with the direct ownership of real estate. These risks
include:

declines in the value of real estate;

risks related to general and local economic conditions;

possible lack of availability of mortgage funds;

overbuilding;

extended vacancies of properties;

increased competition;

increases in property taxes and operating expenses;

changes in zoning laws;

losses due to costs resulting from the clean-up of environmental problems;

liability to third parties for damages resulting from environmental problems;

casualty or condemnation losses;

limitations on rents;

changes in neighborhood values and the appeal of properties to tenants; and

changes in interest rates

Thus, the value of the Fund's shares may change at different rates compared to
the value of shares of a mutual fund with investments in a mix of different
industries.

In addition to these risks, Equity REITs may be affected by changes in the value
of the underlying property owned by the trusts, while Mortgage REITs may be
affected by the quality of any credit extended. Further, Equity and Mortgage
REITs are dependent upon management skills and generally may not be diversified.
Equity and Mortgage REITs are also subject to heavy cash flow dependency,
defaults by borrowers and self-liquidation. In addition, Equity and Mortgage
REITs could possibly fail to qualify for tax free pass-through of income under
the Internal Revenue Code of 1986, as amended ('Code'), or to maintain their
exemptions from registration under the Investment Company Act of 1940, as
amended ('1940 Act'). The above factors may also adversely affect a borrower's
or a lessee's ability to meet its obligations to the REIT. In the event of a
default by a borrower or lessee, the REIT may experience delays in enforcing its
rights as a mortgagee or lessor and may incur substantial costs associated with
protecting its investments.

In addition, even the larger REITs in the industry tend to be small to
medium-sized companies in relation to the equity markets as a whole. There may
be less trading in a smaller company's stock, which means that buy and sell
transactions in that stock could have a larger impact on the stock's price than
is the case with larger company stocks. Smaller companies also

<PAGE>

may have fewer lines of business so that changes in any one line of business may
have a greater impact on a smaller company's stock price than is the case for a
larger company. Further, smaller company stocks may perform in different cycles
than larger company stocks. Accordingly, REIT shares can be more volatile
than -- and at times will perform differently from -- large company stocks such
as those found in the Dow Jones Industrial Average.

Portfolio Turnover
The Fund anticipates that its annual portfolio turnover rate will not exceed
150%, but the turnover rate will not be a limiting factor when the investment
adviser deems portfolio changes appropriate. The turnover rate may vary greatly
from year to year. An annual turnover rate of 150% occurs, for example, when all
of the securities held by the Fund are replaced one and one-half times in a
period of one year. A higher turnover rate results in correspondingly greater
brokerage commissions and other transactional expenses which are borne by the
Fund. High portfolio turnover may result in the realization of net short-term
capital gains by the Fund which, when distributed to shareholders, will be
taxable as ordinary income. See 'Tax Considerations.'

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MANAGEMENT OF THE FUND
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THE INVESTMENT ADVISER

Cohen & Steers Capital Management, Inc., with offices located at 757 Third
Avenue, New York, New York 10017, has been retained to provide investment
advice, and, in general, to conduct the management and investment program of the
Fund under the overall supervision and control of the Board of Directors of the
Fund. Cohen & Steers Capital Management, Inc., a registered investment adviser,
was formed in 1986 and is a leading U.S. manager of portfolios dedicated to
investments in REITs. Its current clients include pension plans, endowment funds
and mutual funds, including Cohen & Steers Realty Income Fund, Inc. and Cohen &
Steers Total Return Realty Fund, Inc., which are closed-end investment
companies, and Cohen & Steers Equity Income Fund, Inc., Cohen & Steers
Institutional Realty Shares, Inc., Cohen & Steers Special Equity Fund, Inc. and
the Fund, which are open-end investment companies. All of Cohen & Steers' client
accounts are invested principally in real estate securities.

Under its Investment Advisory Agreement with the Fund, the investment adviser
furnishes a continuous investment program for the Fund's portfolio, makes the
day-to-day investment decisions for the Fund, and generally manages the Fund's
investments in accordance with the stated policies of the Fund, subject to the
general supervision of the Board of Directors of the Fund. The investment
adviser performs certain administrative services for the Fund and provides
persons satisfactory to the Board of Directors of the Fund to serve as officers
of the Fund. Such officers, as well as certain other employees and Directors of
the Fund, may be directors, officers, or employees of the investment adviser.

The investment adviser also selects brokers and dealers to execute the Fund's
portfolio transactions. Consistent with the Conduct Rules of the National
Association of Securities Dealers, Inc., and subject to seeking best price and
execution, the investment adviser may consider sales of shares of the Fund as a
factor in the selection of brokers and dealers to execute portfolio transactions
on behalf of the Fund.

For its services under the Advisory Agreement, and for paying the ordinary
operating expenses of the Fund, the Fund pays the investment adviser a monthly
management fee at the annual rate of 0.85% of the average daily net asset value
of the Fund up to $2.5 billion, plus 0.75% of such assets in excess of $2.5
billion. This fee is higher than that incurred by most other

<PAGE>

investment companies. The Fund's effective management fee during 1999 was 0.85%
of assets. In addition to this investment advisory fee, the Fund pays other
operating expenses such as administrative, transfer agency, custodial, legal and
accounting fees.

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PORTFOLIO MANAGERS

The Fund's portfolio managers, who have managed the Fund since its inception,
are

Martin Cohen -- Mr. Cohen is a Director, President and Treasurer of the Fund.
He is, and has been since their inception, President of Cohen & Steers Capital
Management, Inc., the Fund's investment adviser, and Vice President of Cohen &
Steers Securities, Inc., the Fund's distributor.

Robert H. Steers -- Mr. Steers is a Director, Chairman and Secretary of the
Fund. He is, and has been since their inception, Chairman of Cohen & Steers
Capital Management, Inc., the Fund's investment adviser, and President of
Cohen & Steers Securities, Inc., the Fund's distributor.

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HOW TO PURCHASE AND SELL FUND SHARES
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PRICING OF FUND SHARES

The price at which you can purchase and redeem the Fund's shares is the net
asset value of the shares next determined after we receive your order in proper
form. Proper form means that your request includes the fund name and account
number, states the amount of the transaction (in dollars or shares), includes
the signatures of all owners exactly as registered in the account, signature
guarantees (if necessary), any supporting legal documentation that may be
required and any outstanding certificates representing shares to be redeemed. We
calculate our net asset value per share as of the close of trading on the New
York Stock Exchange generally 4:00 p.m. Eastern Time, on each day the Exchange
is open for trading. We determine net asset value per share by adding the market
value of all securities and other assets in the Fund's portfolio, subtracting
the Fund's liabilities, and dividing by the total number of shares of the Fund
then outstanding. Securities for which market prices are unavailable will be
valued at fair value as determined by the Fund's Board of Directors.

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PURCHASE MINIMUMS

You may open an account with the Fund with a minimum investment of $10,000. (We
are authorized to waive these minimums for particular investors.) Additional
investments must be at least $500 or, if as a result of redemption the value of
your account is less than $10,000, the minimum additional investment is the
greater of $500 or the amount necessary to increase the value of your account to
$10,000. We are free to reject any purchase order.

You may invest in the Fund through accounts with certain brokers, in which case
your broker may charge you a transaction fee when you purchase or redeem shares.
Brokers are free to increase or decrease the investment minimums, except that
the minimum for initial investments may not be reduced below $2,000.

<PAGE>

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FORM OF PAYMENT

We will accept payment for shares in two forms:

1. A check drawn on any bank or domestic savings institution. Checks must be
payable in U.S. dollars and will be accepted subject to collection at full face
value.

2. A bank wire or Federal Reserve Wire of federal funds.

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PURCHASES OF FUND SHARES

Initial Purchase By Wire

1. Telephone toll free from any U.S. continental state: (800) 437-9912. When you
contact the transfer agent, you will need the following information:

name of the Fund;

name(s) in which shares are to be registered;

address;

social security or tax identification number (where applicable);

dividend payment election;

amount to be wired;

name of the wiring bank; and

name and telephone number of the person to be contacted in connection with the
order.

The transfer agent will assign you an account number and a wire reference
control number.

2. Instruct the wiring bank to transmit at least the required minimum amount
(see 'Purchase Minimums' above) to the custodian:

The Chase Manhattan Bank
One Chase Manhattan Plaza
New York, NY 10081-1000
ABA # 021000021
Account: DDA # 910-2-733012
Attn: Cohen & Steers Realty Shares
For further credit to: (Account name)
Account Number: provided by Transfer Agent
Wire Reference Control #: provided by Transfer Agent

3. Complete the Subscription Agreement attached to the end of this Prospectus.
Mail the Subscription Agreement to the transfer agent:

Chase Global Funds Services Company
P.O. Box 2798
Boston, MA 02208-2798

Initial Purchase By Mail

1. Complete the Subscription Agreement included at the end of this Prospectus.

2. Mail the Subscription Agreement and a check in at least the required minimum
amount (see 'Purchase Minimums' above), payable to the Fund, to the transfer
agent at the above address.

Additional Purchases By Wire

1. Telephone toll free from any U.S. continental state: (800) 437-9912. When you
contact the transfer agent, you will need the following information:

name of the Fund;

account number;

amount to be wired;

name of the wiring bank; and

name and telephone number of the person to be contacted in connection with the
order.

The transfer agent will assign you a wire reference control number.

2. Instruct the wiring bank to transmit at least the required minimum amount
(see 'Purchase Minimums' above) to the custodian:

The Chase Manhattan Bank
One Chase Manhattan Plaza
New York, NY 10081-1000
ABA # 021000021
Account: DDA # 910-2-733012
Attn: Cohen & Steers Realty Shares

<PAGE>

For further credit to: (Account Name)
Account Number: provided by Transfer Agent
Wire Reference Control #: provided by Transfer Agent

Additional Purchases By Mail

1. Make a check payable to the Fund in at least the required minimum amount (see
'Purchase Minimums' above). Write your Fund account number on the check.

2. Mail the check and the detachable stub from your account statement (or a
letter providing your account number) to the transfer agent at the address set
forth above.

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EXCHANGE PRIVILEGE

You may exchange some or all of your Fund shares for shares of the other mutual
funds managed by Cohen & Steers, or for shares of Cohen & Steers Vista Cash
Management Fund, subject to any applicable initial sales charges. If you acquire
shares of other Cohen & Steers funds by purchase (rather than by exchange of
Fund shares), you may exchange those shares for Fund shares, subject to any
applicable contingent deferred sales charges.

An exchange of shares may result in your realizing a taxable gain or loss for
income tax purposes. See 'Tax Considerations.' The exchange privilege is
available to shareholders residing in any state in which the shares being
acquired may be legally sold. Before you exercise the exchange privilege, you
should read the prospectus of the fund whose shares you are acquiring. Your
broker may limit or prohibit your right to use the exchange privilege.

There is no charge for the exchange privilege (although your broker may impose a
transaction fee). We may limit or terminate your exchange privilege if you make
exchanges more than four times a year. We have adopted reasonable procedures
that are designed to ensure that any telephonic exchange instructions are
genuine. Neither the Fund nor its agents will be liable for any loss or expenses
if we act in accordance with these procedures. WE MAY MODIFY OR REVOKE THE
EXCHANGE PRIVILEGE FOR ALL SHAREHOLDERS UPON 60 DAYS PRIOR WRITTEN NOTICE. For
additional information concerning exchanges, or to make an exchange, please call
the transfer agent at (800) 437-9912.

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HOW TO SELL FUND SHARES

You may sell or 'redeem' your shares by telephone or through the transfer agent.

Redemption By Telephone

To redeem shares by telephone, call the Fund's transfer agent at
(800) 437-9912. In order to be honored at that day's price, we must receive any
telephone redemption requests by 4:00 p.m., Eastern Time. If we receive your
telephone redemption request after 4:00 p.m., Eastern Time, your redemption will
be honored at the next day's price.

If you would like to change your telephone redemption instructions, you must
send the transfer agent written notification signed by all of the account's
registered owners, accompanied by signature guarantee(s), as described below.

We may modify or suspend telephone redemption privileges without notice during
periods of drastic economic or market changes. WE MAY MODIFY OR TERMINATE THE
TELEPHONE REDEMPTION PRIVILEGE AT ANY TIME ON 30 DAYS NOTICE TO SHAREHOLDERS.

Redemption By Mail

You can redeem Fund shares by sending a written request for redemption to the
transfer agent:

<PAGE>

Chase Global Funds Services Company
P.O. Box 2798
Boston, Massachusetts 02208-2798
Attn: Cohen & Steers Realty Shares

A written redemption request must:

state the number of shares or dollar amount to be redeemed;

identify your account number and tax identification number; and

be signed by each registered owner exactly as the shares are registered.

If the shares to be redeemed were issued in certificate form, the certificate
must be endorsed for transfer (or be accompanied by a duly executed stock power)
and must be submitted to the transfer agent together with a redemption request.

Other Redemption Information
Payment of Redemption Proceeds. The Fund will send you the proceeds by check. If
you made the election to receive redemption proceeds by wire on the Subscription
Agreement, the Fund will send you the proceeds by wire to your designated bank
account. When proceeds of a redemption are to be paid to someone other than the
shareholder, either by wire or check, you must send a letter of instruction and
the signature(s) on the letter of instruction must be guaranteed, as described
below, regardless of the amount of the redemption. The transfer agent will
normally mail checks for redemption proceeds within five business days.
Redemptions by wire will normally be sent within two business days. The Fund
will delay the payment of redemption proceeds, however, if your check used to
pay for the shares to be redeemed has not cleared, which may take up to 15 days
or more.

The Fund will pay redemption proceeds in cash, by check or wire, unless the
Board of Directors believes that economic conditions exist which make redeeming
in cash detrimental to the best interests of the Fund. In the event that this
were to occur, all or a portion of your redemption proceeds would consist of
readily marketable portfolio securities of the Fund transferred into your name.
You would then incur brokerage costs in converting the securities to cash.

Signature Guarantee. The guarantor of a signature must be a trust company or
national bank, a member bank of the Federal Reserve System, a member firm of a
national securities exchange or any other guarantor approved by the Fund's
transfer agent. For redemptions made by corporations, executors, administrators
or guardians, the transfer agent may require additional supporting documents
evidencing the authority of the person making the redemption (including evidence
of appointment or incumbency). For additional information regarding the specific
documentation required, contact the transfer agent at (800) 437-9912. The
transfer agent will not consider your redemption request to be properly made
until it receives all required documents in proper form.

Redemption of Small Accounts. If your Fund account has a value of $2,000 or less
as the result of any voluntary redemption, we may redeem your remaining shares.
We will, however, give you 30 days notice of our intention to do so. During this
30-day notice period, you may make additional investments to increase your
account value to $10,000 (the minimum purchase amount) or more and avoid having
the Fund automatically liquidate your account.

================================================================================
ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
SHAREHOLDER SERVICES PLAN

The Fund has adopted a shareholder services plan which provides that the Fund
may obtain the services of qualified financial institutions to act as
shareholder servicing agents for their customers. Under this plan, the Fund may
enter into agreements pursuant to which the shareholder servicing agents perform
certain shareholder services not otherwise provided by

<PAGE>

the Fund's transfer agent. For these services, the Fund may pay the shareholder
servicing agent a fee of up to 0.05% of the average daily net assets of the Fund
owned by investors for which the shareholder servicing agent maintains a
servicing relationship.

Among the services provided by shareholder servicing agents are: answering
customer inquiries regarding account matters; assisting in designating and
changing various account options; aggregating and processing purchase and
redemption orders and transmitting and receiving funds for shareholder orders;
transmitting, on behalf of the Fund, proxy statements, prospectuses and
shareholder reports to shareholders and tabulating proxies; processing dividend
payments and providing subaccounting services for Fund shares held beneficially;
and providing such other services as the Fund or a shareholder may request.

- --------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS

The Fund will declare and pay dividends from its investment income quarterly.
The Fund intends to distribute net realized capital gains, if any, at least once
each year, normally in December. The transfer agent will automatically reinvest
your dividends and distributions in additional shares of the Fund unless you
elected on your Subscription Agreement to have them paid to you in cash.

- --------------------------------------------------------------------------------
TAX CONSIDERATIONS

The following brief tax discussion assumes you are a U.S. shareholder. In the
SAI we have provided more detailed information regarding the tax consequences of
investing in the Fund.

Dividends paid to you out of the Fund's 'investment company taxable income'
(which includes dividends the Fund receives on REIT shares, interest income, and
net short-term capital gains) will be taxable to you as ordinary income.
Distributions of net capital gains (the excess of net long-term capital gains
over net short-term capital losses), if any, are taxable to you as long-term
capital gains, regardless of how long you have held your Fund shares. A
distribution of an amount in excess of the Fund's earnings is treated as a
non-taxable return of capital that reduces your tax basis in your Fund shares;
any such distributions in excess of your tax basis are treated as gain from a
sale of your shares. The tax treatment of your dividends and distributions will
be the same regardless of whether they were paid to you in cash or reinvested in
additional Fund shares.

A distribution will be treated as paid to you on December 31 of the current
calendar year if it is declared by the Fund in October, November or December
with a record date in such a month and paid during January of the following
year.

Each year, we will notify you of the tax status of dividends and other
distributions.

If you redeem your Fund shares, or exchange them for shares of another Cohen &
Steers fund, you may realize a capital gain or loss which will be long-term or
short-term, depending on your holding period for the shares.

We may be required to withhold U.S. federal income tax at the rate of 31% of all
taxable distributions payable if you:

fail to provide us with your correct tax payer identification number;

fail to make required certifications; or

have been notified by the IRS that you are subject to backup withholding.

Backup withholding is not an additional tax. Any amounts withheld may be
credited against your U.S. federal income tax liability.

Fund distributions also may be subject to state and local taxes.

You should consult with your own tax adviser regarding the particular
consequences of investing in the Fund.

<PAGE>

================================================================================
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------

The financial highlights table is intended to help you understand the Fund's
financial performance for the past five years. Certain information reflects
financial results for a single Fund share. The total returns in the table
represent the rate that an investor would have earned or lost on an investment
in the Fund (assuming reinvestment of all dividends and distributions). This
information has been audited by PricewaterhouseCoopers LLP, whose report, along
with the Fund's audited financial statements, are included in the current annual
report, which is available free of charge upon request.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------------
PER SHARE OPERATING PERFORMANCE 1999 1998 1997 1996 1995
- ------------------------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year........................ $ 37.98 $ 50.18 $ 45.09 $ 34.62 $32.90
Income from investment operations
Net investment income.................................. 2.01 1.97 1.87 1.86 1.86
Net realized and unrealized gain/(loss) on investments
and foreign currency forward contract................. (1.10) (10.89) 7.40 11.04 1.69
-------- -------- -------- -------- ------
Total from investment operations.................... 0.91 (8.92) 9.27 12.90 3.55
-------- -------- -------- -------- ------
Less dividends and distributions to shareholders from:
Net investment income.................................. (1.69) (1.59) (1.88) (1.76) (1.33)
Net Realized gain on investments....................... -- (1.56) (2.30) (0.55) --
Tax return of capital.................................. (0.29) (0.13) -- (0.12) (0.50)
-------- -------- -------- -------- ------
Total dividends and distributions to shareholders... (1.98) (3.28) (4.18) (2.43) (1.83)
-------- -------- -------- -------- ------
Net asset value, end of year.............................. $ 36.91 $ 37.98 $ 50.18 $ 45.09 $34.62
-------- -------- -------- -------- ------
-------- -------- -------- -------- ------
- ---------------------------------------------------------------------------------------------------------------
Total investment return................................... 2.68% -18.07% 21.16% 38.48% 11.13%
-------- -------- -------- -------- ------
-------- -------- -------- -------- ------
- ---------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
Net assets, end of year
(in millions)......................................... $1,465.0 $1,933.3 $3,433.0 $2,036.4 $793.1
-------- -------- -------- -------- ------
-------- -------- -------- -------- ------
Ratios of expenses to average daily net assets (before
expense reduction).................................... 1.07% 1.04% 1.06% 1.10% 1.16%
-------- -------- -------- -------- ------
-------- -------- -------- -------- ------
Ratios of expenses to average daily net assets (net of
expense reduction).................................... 1.06% 1.03% 1.05% 1.08% 1.12%
-------- -------- -------- -------- ------
-------- -------- -------- -------- ------
Ratios of net investment income to average daily net
assets (before expense reduction)..................... 5.15% 4.23% 4.02% 5.27% 6.01%
-------- -------- -------- -------- ------
-------- -------- -------- -------- ------
Ratios of net investment income to average daily net
assets (net of expense reduction)..................... 5.16% 4.24% 4.04% 5.28% 6.05%
-------- -------- -------- -------- ------
-------- -------- -------- -------- ------
Portfolio turnover rate................................ 21.34% 30.18% 40.44% 33.23% 22.68%
-------- -------- -------- -------- ------
-------- -------- -------- -------- ------
</TABLE>

<PAGE>

COHEN & STEERS REALTY SHARES, INC.

SUBSCRIPTION AGREEMENT

<TABLE>
<S> <C>
1 ACCOUNT TYPE (Please print; indicate only one registration type)
[ ] INDIVIDUAL OR JOINT ACCOUNT

_________________________________________________________________ ______-______-_______________
Name Social Security Number

_________________________________________________________________
Name of Joint Registrant, if any.
(For joint registrations, the account registrants will be joint
tenants with the right of survivorship and not tenants in common
unless tenants in common or community property registrations are
requested.)

[ ] TRUST [ ] CORPORATION [ ] PARTNERSHIP [ ] OTHER ENTITY

_________________________________________________________________ __________ -___________________________
Name of Entity Tax Identification Number

_________________________________________________________________ _______________________________________
Name of Trust Agreement (if applicable) Date of Trust Agreement (if applicable)

[ ] UNIFORM GIFT TO MINORS, OR [ ] UNIFORM TRANSFER TO MINORS (where allowed by Law)

_________________________________________________________________ Under the __________(state of residence
Name of Adult Custodian (only one permitted) of minor) Uniform Gifts/Transfer to
Minor's Act

_________________________________________________________________ ________-________-_____________________
Name of Minor (only one permitted) Minor's Social Security Number

2 MAILING ADDRESS

_________________________________________________________________ (_________)_____________________________
Street or P.O. Box Home Telephone Number

_________________________________________________________________ (_________)_____________________________
City and State Zip Code Business Telephone Number

3 INVESTMENT INFORMATION

$ _________ Amount to invest ($10,000 minimum investment). Do not send cash. Investment will be paid for by
(please check one):
[ ] Check or draft made payable to 'Cohen & Steers Realty Shares, Inc.'

[ ] Wire through the Federal Reserve System.* ___________________________________
Wire Reference Control Number

* Call (800) 437-9912 to notify the Fund of investments by wire and to obtain a Wire Reference Control Number.
See the PURCHASE OF FUND SHARES section of the Prospectus for wire instructions.

4 EXCHANGE PRIVILEGES

Exchange privileges will be automatically granted unless you check the box below. Shareholders wishing to
exchange into other Cohen & Steers Funds should consult the EXCHANGE PRIVILEGE section of the Prospectus. (Note:
If shares are being purchased through a dealer, please contact your dealer for availability of this service.)

[ ] I decline the exchange privilege.
</TABLE>

PLEASE CONTINUE APPLICATION ON REVERSE SIDE.

<PAGE>

<TABLE>
<S> <C>
5 REDEMPTION PRIVILEGES

Shareholders may select the following redemption privileges by checking the box(es) below. See HOW TO SELL FUND
SHARES section of the Prospectus for further details. Redemption privileges will be automatically declined for
boxes not checked.

[ ] I authorize the Transfer Agent to redeem shares in my account(s) by telephone, in accordance with the
procedures and conditions set forth in the Fund's current Prospectus.

[ ] I wish to have redemption proceeds paid by wire (please complete Section 7).

6 DISTRIBUTION OPTIONS

Dividends and capital gains may be reinvested or paid in cash. If no options are selected below, both dividends
and capital gains will be reinvested in additional Fund shares.

Dividends [ ] Reinvest. [ ] Pay in cash.

Capital Gains [ ] Reinvest. [ ] Pay in cash.

[ ] I wish to have my distributions paid by wire (please complete Section 7).

7 BANK OF RECORD (FOR WIRE INSTRUCTIONS)

PLEASE ATTACH A VOIDED CHECK FROM YOUR BANK ACCOUNT.

______________________________________________________ ______________________________
Bank Name Bank ABA Number

______________________________________________________ ______________________________
Street or P.O. Box Bank Account Number

______________________________________________________ ______________________________
City and State Zip Code Account Name

8 SIGNATURE AND TAXPAYER CERTIFICATION

By signing this form, the Investor represents and warrants that: (a) the Investor has the full right, power and
authority to invest in the Fund; and (b) the Investor has received a current prospectus of the Fund and agrees to
be bound by its terms. Persons signing as representatives or fiduciaries of corporations, partnerships, trusts or
other organizations are required to furnish corporate resolutions or similar documents providing evidence that
they are authorized to effect securities transactions on behalf of the Investor (alternatively, the secretary or
designated officer of the organization may certify the authority of the persons signing on the space provided
below). In addition, signatures of representatives or fiduciaries of corporations and other entities must be
accompanied by a signature guarantee by a commercial bank that is a member of the Federal Deposit Insurance
Corporation, a trust company or a member of a national securities exchange.

PLEASE CHECK ONE:

[ ] U.S. CITIZEN/TAXPAYER

UNDER THE PENALTIES OF PERJURY, THE UNDERSIGNED CERTIFIES THAT: (1) THE TAXPAYER IDENTIFICATION NUMBER PROVIDED
IS CORRECT, AND (2) I/WE ARE NOT SUBJECT TO BACKUP WITHHOLDING BECAUSE: (A) I/WE ARE EXEMPT FROM BACKUP
WITHHOLDING, OR (B) I/WE HAVE NOT BEEN NOTIFIED BY THE INTERNAL REVENUE SERVICE ('IRS') THAT I/WE ARE SUBJECT TO
BACKUP WITHHOLDING AS A RESULT OF A FAILURE TO REPORT ALL INTEREST OR DIVIDENDS, OR (C) THE IRS HAS NOTIFIED ME
THAT I AM NO LONGER SUBJECT TO BACKUP WITHHOLDING. NOTE: IF YOU HAVE BEEN NOTIFIED BY THE IRS THAT YOU ARE
CURRENTLY SUBJECT TO BACKUP WITHHOLDING BECAUSE OF UNDER-REPORTING INTEREST OF DIVIDENDS ON YOUR TAX RETURN, YOU
MUST CROSS OUT ITEM 2 ABOVE.

[ ] NON U.S. CITIZEN/TAXPAYER (FORM W-8 ATTACHED)

INDICATE COUNTRY OF RESIDENCE FOR TAX PURPOSES __________________________

UNDER PENALTY OF PERJURY, I/WE CERTIFY THAT I/WE ARE NOT U.S. CITIZENS AND I/WE ARE EXEMPT FOREIGN PERSONS AS
DEFINED BY THE IRS. THE IRS DOES NOT REQUIRE YOUR CONSENT TO ANY PROVISION OF THIS DOCUMENT OTHER THAN THE
CERTIFICATIONS REQUIRED TO AVOID BACKUP WITHHOLDING.

I certify that (1) the information provided on this Subscription Agreement is true, correct and complete, (2) I
have read the prospectus for the Fund and agree to the terms thereof, and (3) I am of legal age or an emancipated
minor.

x ____________________________________ _________ x __________________________________ _________
Signature (Owner, Trustee, Etc.) Date Signature (Joint Owner, Co-Trustee) Date
</TABLE>

Mail to: Chase Global Funds Services Company, P.O. Box 2798, Boston, MA 02208

<PAGE>

[Logo]

TO OBTAIN ADDITIONAL INFORMATION ABOUT THE FUND

If you would like additional information about Cohen & Steers Realty Shares,
Inc., the following documents are available to you without any charge, upon
request:

Annual/Semi-Annual Reports -- Additional information about the Fund's
investments is available in the Fund's annual and semi-annual report to
shareholders. In these reports, you will find a discussion of the market
conditions and investment strategies that significantly affected the Fund's
performance during its most recent fiscal year.

Statement of Additional Information -- Additional information about the Fund's
structure and operations can be found in the Statement of Additional
Information ('SAI'). The information presented in the SAI is incorporated
by reference into the prospectus and is legally considered to be part of
this prospectus.

To request a free copy of any of the materials described above, or to make any
other inquiries, please contact us:

<TABLE>
<S> <C>
By telephone (800) 437-9912
By mail Cohen & Steers Realty Shares
c/o Chase Global Fund Services Company
P.O. Box 2798
Boston, Massachusetts 02208-2798

By e-mail [email protected]

On the Internet http://www.cohenandsteers.com
</TABLE>

Our prospectus and SAI may also be available from your broker or financial
adviser. Reports and other information about the Fund (including the Fund's SAI)
may also be obtained from the Securities and Exchange Commission (the 'SEC'):

By going to the SEC's Public Reference Room in Washington, D.C. where you can
review and copy the information. Information on the operation of the Public
Reference Room may be obtained by calling the SEC at 1-202-942-8090.

By accessing the SEC's Internet site at http://www.sec.gov where you can view,
download and print the information.

By electronic request at the following e-mail address: [email protected], or
by writing to the Public Reference Section of the SEC, Washington, D.C.
20549-0102. Upon payment of a duplicating fee, copies of the information
will be sent to you.

SEC File No. 811-6302

757 THIRD AVENUE, NEW YORK, NEW YORK 10017

<PAGE>

[Logo]

757 THIRD AVENUE
NEW YORK, NEW YORK 10017
(800) 437-9912
- --------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION

MAY 1, 2000

THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS,
BUT SHOULD BE READ IN CONJUNCTION WITH THE PROSPECTUS OF
COHEN & STEERS REALTY SHARES, INC., DATED THE SAME DATE AS THE STATEMENT OF
ADDITIONAL INFORMATION,
AS SUPPLEMENTED FROM TIME TO TIME (THE 'PROSPECTUS'). THIS
STATEMENT OF ADDITIONAL INFORMATION IS INCORPORATED BY REFERENCE IN ITS
ENTIRETY INTO THE PROSPECTUS. THE FINANCIAL STATEMENTS AND NOTES
CONTAINED IN THE ANNUAL REPORT AND SEMI-ANNUAL REPORT
ARE INCORPORATED BY REFERENCE INTO THIS STATEMENT OF
ADDITIONAL INFORMATION. COPIES OF THE STATEMENT OF ADDITIONAL
INFORMATION, PROSPECTUS, ANNUAL AND SEMI-ANNUAL REPORTS MAY BE
OBTAINED FREE OF CHARGE BY WRITING OR CALLING THE ADDRESS
OR PHONE NUMBER SHOWN ABOVE.

- --------------------------------------------------------------------------------

<PAGE>

================================================================================
TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
Investment Objectives and Policies.......................... 3

Investment Restrictions..................................... 9

Management of the Fund...................................... 10

Compensation of Directors and Certain Officers.............. 11

Investment Advisory and Other Services...................... 12

Portfolio Transactions and Brokerage........................ 14

Organization and Description of Capital Stock............... 15

Determination of Net Asset Value............................ 16

Sale of Fund Shares......................................... 16

Taxation.................................................... 17

Performance Information..................................... 23

Counsel and Independent Accountants......................... 24

Financial Statements........................................ 24
</TABLE>

<PAGE>

================================================================================
STATEMENT OF ADDITIONAL INFORMATION

Cohen & Steers Realty Shares, Inc. (the 'Fund') is a non-diversified, no-load,
open-end, investment company organized as a Maryland corporation on April 26,
1991.

Much of the information contained in this Statement of Additional Information
expands on subjects discussed in the Prospectus. No investment in the shares of
the Fund should be made without first reading the Prospectus.

================================================================================
INVESTMENT OBJECTIVE AND POLICIES
- --------------------------------------------------------------------------------
ADDITIONAL INFORMATION REGARDING FUND INVESTMENTS

The following descriptions supplement the descriptions of the principal
investment objective, strategies and risks as set forth in the Prospectus.
Except as otherwise provided below, the Fund's investment policies are not
fundamental and may be changed by the Board of Directors of the Fund without the
approval of the shareholders; however, the Fund will not change its investment
policies without written notice to shareholders.

- --------------------------------------------------------------------------------
REAL ESTATE INVESTMENT TRUSTS

REITs are sometimes informally characterized as Equity REITs, Mortgage REITs and
Hybrid REITs. An Equity REIT invests primarily in the fee ownership or leasehold
ownership of land and buildings and derives its income primarily from rental
income. An Equity REIT may also realize capital gains (or losses) by selling
real estate properties in its portfolio that have appreciated (or depreciated)
in value. A Mortgage REIT invests primarily in mortgages on real estate, which
may secure construction, development or long-term loans. A Mortgage REIT
generally derives its income primarily from interest payments on the credit it
has extended. A Hybrid REIT combines the characteristics of Equity REITs and
Mortgage REITs, generally by holding both ownership interests and mortgage
interests in real estate. It is anticipated, although not required, that under
normal circumstances a majority of the Fund's investments in REITs will consist
of Equity REITs.

- --------------------------------------------------------------------------------
FOREIGN SECURITIES

The Fund may invest up to 10% of its total assets in securities of foreign real
estate companies. Investing in securities issued by foreign corporations
involves considerations and possible risks not typically associated with
investing in securities issued by domestic corporations. The values of foreign
investments are affected by changes in currency rates or exchange control
regulations, application of foreign tax laws, including withholding taxes,
changes in governmental administration or economic or monetary policy (in the
United States or abroad) or changed circumstances in dealings between nations.
Costs are incurred in connection with conversions between various currencies. In
addition, foreign brokerage commissions are generally higher than in the United
States, and foreign securities markets may be less liquid, more volatile and
less subject to governmental supervision than in the United States. Investments
in foreign countries could be affected by other factors not present in the
United States, including expropriation, confiscatory taxation, lack of uniform
accounting and auditing standards and potential difficulties in enforcing
contractual obligations which could extend settlement periods.

<PAGE>

- --------------------------------------------------------------------------------
ILLIQUID SECURITIES

The Fund will not invest in illiquid securities if immediately after such
investment more than 15% of the Fund's net assets (taken at market value) would
be invested in such securities. For this purpose, illiquid securities include,
among others, securities that are illiquid by virtue of the absence of a readily
available market or legal or contractual restrictions on resale. Securities that
have legal or contractual restrictions on resale but have a readily available
market are not deemed illiquid for purposes of this limitation.

Historically, illiquid securities have included securities subject to
contractual or legal restrictions on resale because they have not been
registered under the Securities Act of 1933, as amended (the 'Securities Act')
and securities which are otherwise not readily marketable. Securities which have
not been registered under the Securities Act are referred to as private
placements or restricted securities and are purchased directly from the issuer
or in the secondary market. Mutual funds do not typically hold a significant
amount of these restricted or other illiquid securities because of the potential
for delays on resale and uncertainty in valuation. Limitations on resale may
have an adverse effect on the marketability of portfolio securities and a mutual
fund might be unable to dispose of restricted or other illiquid securities
promptly or at reasonable prices and might thereby experience difficulty
satisfying redemptions within seven days. A mutual fund might also have to
register such restricted securities in order to dispose of them, resulting in
additional expense and delay. Adverse market conditions could impede such a
public offering of securities.

In recent years, however, a large institutional market has developed for certain
securities that are not registered under the Securities Act, including
repurchase agreements, commercial paper, foreign securities, municipal
securities and corporate bonds and notes. Institutional investors depend on an
efficient institutional market in which the unregistered security can be readily
resold or on an issuer's ability to honor a demand for repayment. The fact that
there are contractual or legal restrictions on resale to the general public or
to certain institutions may not be indicative of the liquidity of such
investments.

The Securities and Exchange Commission (the 'SEC') has adopted Rule 144A which
allows a broader institutional trading market for securities otherwise subject
to restriction on resale to the general public. Rule 144A establishes a 'safe
harbor' from the registration requirements of the Securities Act of resales of
certain securities to qualified institutional buyers. The Adviser anticipates
that the market for certain restricted securities will expand further as a
result of this new regulation and the development of automated systems for the
trading, clearance and settlement of unregistered securities of domestic and
foreign issuers.

The Adviser will monitor the liquidity of restricted securities in the Fund's
portfolio under the supervision of the Board of Directors. In reaching liquidity
decisions, the Adviser will consider, among other things, the following factors:
(1) the frequency of trades and quotes for the security; (2) the number of
dealers wishing to purchase or sell the security and the number of other
potential purchasers; (3) dealer undertakings to make a market in the security;
and (4) the nature of the security and the nature of the marketplace trades
(e.g., the time needed to dispose of the security, the method of soliciting
offers and the mechanics of the transfer).

- --------------------------------------------------------------------------------
REPURCHASE AGREEMENTS

The Fund may also enter into repurchase agreements. A repurchase agreement is an
instrument under which an investor, such as the Fund, purchases a U.S.
Government security

<PAGE>

from a vendor, with an agreement by the vendor to repurchase the security at the
same price, plus interest at a specified rate. In such a case, the security is
held by the Fund, in effect, as collateral for the repurchase obligation.
Repurchase agreements may be entered into with member banks of the Federal
Reserve System or 'primary dealers' (as designated by the Federal Reserve Bank
of New York) in U.S. Government securities. Repurchase agreements usually have a
short duration, often less than one week. In entering into the repurchase
agreement for the Fund, the Adviser will evaluate and monitor the
creditworthiness of the vendor. In the event that a vendor should default on its
repurchase obligation, the Fund might suffer a loss to the extent that the
proceeds from the sale of the collateral were less than the repurchase price.
If the vendor becomes bankrupt, the Fund might be delayed, or may incur costs or
possible losses of principal and income, in selling the collateral.

- --------------------------------------------------------------------------------
FUTURES CONTRACTS

The Fund may purchase and sell financial futures contracts. A financial futures
contract is an agreement to buy or sell a specific security or financial
instrument at a particular price on a stipulated future date. Although some
financial futures contracts call for making or taking delivery of the underlying
securities, in most cases these obligations are closed out before the settlement
date. The closing of a contractual obligation is accomplished by purchasing or
selling an identical offsetting futures contract. Other financial futures
contracts by their terms call for cash settlements.

The Fund may also buy and sell index futures contracts with respect to any stock
or bond index traded on a recognized stock exchange or board of trade. An index
futures contract is a contract to buy or sell units of an index on a specified
future date at a price agreed upon when the contract is made. The stock index
futures contract specifies that no delivery of the actual stocks making up the
index will take place. Instead, settlement in cash must occur upon the
termination of the contract, with the settlement being the difference between
the contract price and the actual level of the stock index at the expiration of
the contract.

At the time the Fund purchases a futures contract, an amount of cash or liquid
portfolio securities equal to the market value of the futures contract will be
deposited in a segregated account with the Fund's custodian. When writing a
futures contract, the Fund will maintain with its custodian similar liquid
assets that, when added to the amounts deposited with a futures commission
merchant or broker as margin, are equal to the market value of the instruments
underlying the contract. Alternatively, the Fund may 'cover' its position by
owning the instruments underlying the contract (or, in the case of an index
futures contract, a portfolio with a volatility substantially similar to that of
the index on which the futures contract is based), or holding a call option
permitting the Fund to purchase the same futures contract at a price no higher
than the price of the contract written by the Fund (or at a higher price if the
difference is maintained in liquid assets with the Fund's custodian).

The Fund will be authorized to use financial futures contracts and related
options for 'bona fide hedging' purposes, as such term is used in applicable
regulations of the Commodity Futures Trading Commission ('CFTC'). The Fund will
also be authorized to enter into such contracts and related options for
nonhedging purposes, for example to enhance total return or provide market
exposure pending the investment of cash balances, but only to the extent that
aggregate initial margin deposits plus premiums paid by it for open futures
options positions, less the amount by which any such positions are
'in-the-money,' would not exceed 5% of the Fund's total assets. The Fund may
lose the expected benefit of transactions in financial futures contracts if
interest rates, currency

<PAGE>

exchange rates or securities prices change in an unanticipated manner. Such
unanticipated changes in interest rates, currency exchange rates or securities
prices may also result in poorer overall performance than if the Fund had not
entered into any futures transactions.

- --------------------------------------------------------------------------------
OPTIONS ON SECURITIES AND STOCK-INDICES

The Fund may write covered call and put options and purchase call and put
options on securities or stock indices that are traded on U.S. exchanges.

An option on a security is a contract that gives the purchaser of the option, in
return for the premium paid, the right to buy a specified security (in the case
of a call option) or to sell a specified security (in the case of a put option)
from or to the writer of the option at a designated price during the term of the
option. An option on a securities index gives the purchaser of the option, in
return for the premium paid, the right to receive from the seller cash equal to
the difference between the closing price of the index and the exercise price of
the option.

The Fund may write a call or put option only if the option is 'covered.' A call
option on a security written by the Fund is covered if the Fund owns the
underlying security covered by the call or has an absolute and immediate right
to acquire that security without additional cash consideration (or for
additional cash consideration held in a segregated account by its custodian)
upon conversion or exchange of other securities held in its portfolio. A call
option on a security is also covered if the Fund owns a call option on the same
security and in the same principal amount as the call option written where the
exercise price of the call option held (a) is equal to or less than the exercise
price of the call option written or (b) is greater than the exercise price of
the call option written if the difference is maintained by the Fund in cash or
liquid portfolio securities in a segregated account with its custodian. A put
option on a security written by the Fund is 'covered' if the Fund maintains
similar liquid assets with a value equal to the exercise price in a segregated
account with its custodian, or else owns a put option on the same security and
in the same principal amount as the put option written where the exercise price
of the put option held is equal to or greater than the exercise price of the put
option written. The value of the underlying securities on which options may be
written at any one time will not exceed 25% of the total assets of the Fund. The
Fund will not purchase put or call options if the aggregate premium paid for
such options would exceed 5% of its total assets at the time of purchase.

The Fund will cover call options on stock indices by owning securities whose
price changes, in the opinion of the investment adviser are expected to be
similar to those of the index, or in such other manner as may be in accordance
with the rules of the exchange on which the option is traded and applicable laws
and regulations. Nevertheless, where the Fund covers a call option on a stock
index through ownership of securities, such securities may not match the
composition of the index. In that event, the Fund will not be fully covered and
could be subject to risk of loss in the event of adverse changes in the value of
the index. The Fund will cover put options on stock indices by segregating
assets equal to the option's exercise price, or in such other manner as may be
in accordance with the rules of the exchange on which the option is traded and
applicable laws and regulations.

The Fund will receive a premium for writing a put or call option, which will
increase the Fund's gross income in the event the option expires unexercised or
is closed out at a profit. If the value of a security or an index on which the
Fund has written a call option falls or remains the same, the Fund will realize
a profit in the form of the premium received (less transaction costs) that could
offset all or a portion of any

<PAGE>

decline in the value of the portfolio securities being hedged. If the value of
the underlying security or index rises, however, the Fund will realize a loss in
its call option position, which will reduce the benefit of any unrealized
appreciation in the Fund's stock investments. By writing a put option, the Fund
assumes the risk of a decline in the underlying security or index. To the extent
that the price changes of the portfolio securities being hedged correlate with
changes in the value of the underlying security or index, writing covered put
options on securities or indices will increase the Fund's losses in the event of
a market decline, although such losses will be offset in part by the premium
received for writing the option.

The Fund may also purchase put options to hedge its investments against a
decline in value. By purchasing a put option, the Fund will seek to offset a
decline in the value of the portfolio securities being hedged through
appreciation of the put option. If the value of the Fund's investments does not
decline as anticipated, or if the value of the option does not increase, the
Fund's loss will be limited to the premium paid for the option plus related
transaction costs. The success of this strategy will depend, in part, on the
accuracy of the correlation between the changes in value of the underlying
security or index and the changes in value of the Fund's security holdings being
hedged.

The Fund may purchase call options on individual securities to hedge against an
increase in the price of securities that the Fund anticipates purchasing in the
future. Similarly, the Fund may purchase call options to attempt to reduce the
risk of missing a broad market advance, or an advance in an industry or market
segment, at a time when the Fund holds uninvested cash or short-term debt
securities awaiting investment. When purchasing call options, the Fund will bear
the risk of losing all or a portion of the premium paid if the value of the
underlying security or index does not rise.

There can be no assurance that a liquid market will exist when the Fund seeks to
close out an option position. Trading could be interrupted, for example, because
of supply and demand imbalances arising from a lack of either buyers or sellers,
or the options exchange could suspend trading after the price has risen or
fallen more than the maximum specified by the exchange. Although the Fund may be
able to offset to some extent any adverse effects of being unable to liquidate
an option position, the Fund may experience losses in some cases as a result of
such inability.

- --------------------------------------------------------------------------------
FOREIGN CURRENCY CONTRACTS AND CURRENCY HEDGING TRANSACTIONS

In order to hedge against foreign currency exchange rate risks, the Fund may
enter into forward foreign currency exchange contracts ('forward contracts') and
foreign currency futures contracts ('foreign currency futures'), as well as
purchase put or call options on foreign currencies, as described below. The Fund
may also conduct its foreign currency exchange transactions on a spot (i.e.,
cash) basis at the spot rate prevailing in the foreign currency exchange market.

The Fund may enter into forward contracts to attempt to minimize the risk to the
Fund from adverse changes in the relationship between the U.S. dollar and
foreign currencies. A forward contract is an obligation to purchase or sell a
specific currency for an agreed price on a future date which is individually
negotiated and privately traded by currency traders and their customers. The
Fund may enter into a forward contract, for example, when it enters into a
contract for the purchase or sale of a security denominated in a foreign
currency in order to 'lock in' the U.S. dollar price of the security. In
addition, for example, when the Fund believes that a foreign currency may suffer
or enjoy a substantial movement against another currency, it may enter into a
forward contract to sell an amount of the former foreign currency (or another
currency which acts as a proxy for that currency) approximating the value of
some or

<PAGE>

all of the Fund's portfolio securities denominated in such foreign currency.
This second investment practice is generally referred to as 'cross-hedging.'
Because in connection with the Fund's foreign currency forward transactions an
amount of the Fund's assets equal to the amount of the purchase will be held
aside or segregated to be used to pay for the commitment, the Fund will always
have cash or other liquid assets available sufficient to cover any commitments
under these contracts or to limit any potential risk. The segregated account
will be marked-to-market on a daily basis. In addition, the Fund will not enter
into such forward contracts if, as a result, the Fund will have more than 15% of
the value of its total assets committed to such contracts. While these contracts
are not presently regulated by the CFTC, the CFTC may in the future assert
authority to regulate forward contracts. In such event, the Fund's ability to
utilize forward contracts in the manner set forth above may be restricted.
Forward contracts may limit potential gain from a positive change in the
relationship between the U.S. dollar and foreign currencies. Unanticipated
changes in currency prices may result in poorer overall performance for the Fund
than if it had not engaged in such contracts.

The Fund may enter into exchange-traded foreign currency futures for the
purchase or sale for future delivery of foreign currencies. This investment
technique will be used only to hedge against anticipated future changes in
exchange rates which otherwise might adversely affect the value of the Fund's
portfolio securities or adversely affect the prices of securities that the Fund
intends to purchase at a later date. The successful use of foreign currency
futures will usually depend on the investment adviser's ability to forecast
currency exchange rate movements correctly. Should exchange rates move in an
unexpected manner, the Fund may not achieve the anticipated benefits of foreign
currency futures or may realize losses.

The Fund may purchase and write put and call options on foreign currencies for
the purpose of protecting against declines in the dollar value of foreign
portfolio securities and against increases in the dollar cost of foreign
securities to be acquired. As is the case with other kinds of options, however,
the writing of an option on foreign currency will constitute only a partial
hedge, up to the amount of the premium received, and the Fund could be required
to purchase or sell foreign currencies at disadvantageous exchange rates,
thereby incurring losses. The purchase of an option on foreign currency may
constitute an effective hedge against fluctuation in exchange rates although, in
the event of rate movements adverse to the Fund's position, the Fund may forfeit
the entire amount of the premium plus related transaction costs.

- --------------------------------------------------------------------------------
RISKS OF OPTIONS, FUTURES AND FOREIGN CURRENCY CONTRACTS

Options, futures and foreign currency contracts are forms of derivatives. The
use of options and futures as hedging techniques may not succeed where the price
movements of the securities underlying the options and futures do not follow the
price movements of the portfolio securities subject to the hedge. Gains on
investments in options and futures depend on the portfolio manager's ability to
predict correctly the direction of stock prices, interest rates and other
economic factors. Where a liquid secondary market for options or futures does
not exist, the Fund may not be able to close its position and, in such an event
would be unable to control its losses. The loss from investing in futures
contracts is potentially unlimited. The use of forward foreign currency
contracts may limit gains from a positive change in the relationship between the
U.S. dollar and foreign currencies. Unanticipated changes in currency prices may
cause poorer overall performance for the Fund than if it had not engaged in such
contracts.

<PAGE>

================================================================================
INVESTMENT RESTRICTIONS
- --------------------------------------------------------------------------------

The investment objectives and the general investment policies and investment
techniques of the Fund are described in the Prospectus. The Fund has also
adopted certain investment restrictions limiting the following activities except
as specifically authorized:

The Fund may not:

1. Make loans except through the purchase of debt obligations in accordance with
its investment objective and policies;

2. Borrow money, or pledge its assets, except that the Fund may borrow money
from banks for temporary or emergency purposes, including the meeting of
redemption requests which might require the untimely disposition of securities.
Borrowing in the aggregate may not exceed 15%, and borrowing for purposes other
than meeting redemptions may not exceed 5%, of the value of the Fund's total
assets (including the amount borrowed) less liabilities (not including the
amount borrowed) at the time the borrowing is made. Outstanding borrowings in
excess of 5% of the value of the Fund's total assets will be repaid before any
subsequent investments are made;

3. Invest in illiquid securities if immediately after such investment more than
15% of the Fund's net assets (taken at market value) would be invested in such
securities;

4. Issue any senior securities, except to the extent permitted by the Investment
Company Act of 1940, as amended (the '1940 Act').

5. Purchase or sell real estate or commodities, except that the Fund may
purchase securities issued by companies in the real estate industry and will, as
a matter of fundamental policy, concentrate its investments in such securities;

6. Pledge, hypothecate, mortgage or otherwise encumber its assets, except to
secure permitted borrowings;

7. Participate on a joint or joint and several basis in any securities trading
account;

8. Invest in companies for the purpose of exercising control;

9. Make short sales of securities or maintain a short position, unless at all
times when a short position is open the Fund owns an equal amount of such
securities or securities convertible into or exchangeable for, without payment
of any further consideration, securities of the same issue as, and equal in
amount to, the securities sold short ('short sales against the box'), and unless
not more than 10% of the Fund's net assets (taken at market value) is held as
collateral for such sales at any one time;

10. Purchase a security if, as a result (unless the security is acquired
pursuant to a plan of reorganization or an offer of exchange), the Fund would
own any securities of an open-end investment company or more than 3% of the
value of the Fund's total assets would be invested in securities of any
closed-end investment company or more than 10% of such value in closed-end
investment companies in general;

11. Invest in interests in oil, gas, or other mineral exploration or development
programs;

12. Purchase securities on margin, except for such short-term credits as may be
necessary for the clearance of transactions and except for borrowings in an
amount not exceeding 10% of the value of the Fund's total assets; or

13. Act as an underwriter of securities, except that the Fund may acquire
restricted securities under circumstances in which, if such securities were
sold, the Fund might be deemed to be an underwriter for purposes of the
Securities Act.

The investment restrictions set forth above have been adopted as fundamental
policies of the Fund. Under the 1940 Act, a fundamental policy may not be
changed without the vote of a majority of the outstanding voting securities of
the Fund, as defined under the 1940 Act. 'Majority of the outstanding voting
securities' means the lesser of (1) 67% or more of the shares present at a
meeting of shareholders of the Fund, if the holders of more than 50% of the
outstanding shares of the Fund are present or represented by proxy, or (2) more
than 50% of the outstanding shares of the Fund.

<PAGE>

================================================================================
MANAGEMENT OF THE FUND
- --------------------------------------------------------------------------------

The overall management of the business and affairs of the Fund is vested with
the Board of Directors. The Directors approve all significant agreements between
the Fund and persons or companies furnishing services to it, including the
Fund's agreements with its investment adviser, administrator, custodian and
transfer agent. The management of the Fund's day-to-day operations is delegated
to its officers, the investment adviser and the Fund's administrator, subject
always to the investment objective and policies of the Fund and to the general
supervision of the Directors. As of April 14, 2000, the Directors and officers
as a group beneficially owned, directly or indirectly, less than 1% of the
outstanding shares of the Fund.

The Directors and officers of the Fund and their principal occupations during
the past five years are set forth below. Each Director and officer of the Fund
is also a director or officer of Cohen & Steers Realty Income Fund, Inc. and
Cohen & Steers Total Return Realty Fund, Inc., both of which are closed-end
investment companies sponsored by the Adviser, and Cohen & Steers Equity Income
Fund, Inc., Cohen & Steers Institutional Realty Shares, Inc. and Cohen & Steers
Special Equity Fund, Inc., which are open-end investment companies also
sponsored by the Adviser. An asterisk (*) has been placed next to the name of
each Director who is an 'interested person' of the Fund, as such term is defined
in the 1940 Act, by virtue of such person's affiliation with the Fund or the
Adviser.

<TABLE>
<CAPTION>
POSITION(S)
HELD WITH
NAME, ADDRESS AND AGE FUND PRINCIPAL OCCUPATION(S) DURING THE PAST 5 YEARS
--------------------- ---- -----------------------------------------------
<S> <C> <C>
Robert H. Steers*............... Director, Chairman Chairman of Cohen & Steers Capital Management, Inc., the Fund's investment
757 Third Avenue and Secretary adviser. President of Cohen & Steers Securities, Inc.
New York, New York
Age: 47

Martin Cohen* .................. Director, President of Cohen & Steers Capital Management, Inc., the Fund's
757 Third Avenue President and investment adviser. Vice President of Cohen & Steers Securities, Inc.
New York, New York Treasurer
Age: 51

Gregory C. Clark ............... Director President of Wellspring Management Group.
376 Mountain Laurel Drive
Aspen, Colorado
Age: 53

George Grossman ................ Director Attorney at law.
17 Elm Place
Rye, New York
Age: 46

Jeffrey H. Lynford ............. Director Chairman of Wellsford Group Inc. since 1986 and of Wellsford Residential
610 Fifth Avenue Property Trust from 1992 to May 1997. Mr. Lynford is also a Trustee of
New York, New York Equity Residential Properties Trust and an Emeritus Trustee of the
Age: 52 National Trust for Historic Preservation.

Willard H. Smith Jr. ........... Director Board member of Essex Property Trust, Inc., Highwoods Properties, Inc.,
5208 Renaissance Avenue Realty Income Corporation and Willis Lease Finance Corporation. Managing
San Diego, California director at Merrill Lynch & Co., Equity Capital Markets Division from
Age: 63 1983 to 1995.
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
POSITION(S)
HELD WITH
NAME, ADDRESS AND AGE FUND PRINCIPAL OCCUPATION(S) DURING THE PAST 5 YEARS
--------------------- ---- -----------------------------------------------
<S> <C> <C>
Elizabeth O. Reagan ............ Vice President Senior Vice President of Cohen & Steers Capital
757 Third Avenue Management, Inc., the Fund's investment adviser, since
New York, New York 1996 and prior to that Vice President of Cohen &
Age: 37 Steers Capital Management, Inc.

Adam Derechin .................. Vice President and Senior Vice President of Cohen & Steers Capital
757 Third Avenue Assistant Management, Inc., the Fund's investment adviser, since
New York, New York Treasurer 1998 and prior to that Vice President of Cohen &
Age: 35 Steers Capital Management, Inc.

Lawrence B. Stoller ............ Assistant Senior Vice President and General Counsel, Cohen &
757 Third Avenue Secretary Steers Capital Management, Inc., the Fund's investment
New York, New York adviser, since 1999. Prior to that, Associate
Age: 36 General Counsel, Neuberger Berman Management Inc.
(money manager); Assistant General Counsel, The
Dreyfus Corporation (money manager); and Associate,
Dechert Price & Rhoads (law firm).
</TABLE>

================================================================================
COMPENSATION OF DIRECTORS AND CERTAIN OFFICERS
- --------------------------------------------------------------------------------

The following table sets forth information regarding compensation of Directors
by the Fund and by the fund complex of which the Fund is a part for the fiscal
year ended December 31, 1999. Officers of the Fund and Directors who are
interested persons of the Fund do not receive any compensation from the Fund or
any other fund in the fund complex which is a U.S. registered investment
company. Each of the other Directors is paid an annual retainer of $5,500, and a
fee of $500 for each meeting attended and is reimbursed for the expenses of
attendance at such meetings. In the Column headed 'Total Compensation From Fund
and Fund Complex Paid to Directors,' the compensation paid to each Director
represents five of the six funds that each Director serves in the fund complex
(Cohen & Steers Institutional Realty Shares, Inc. commenced operations in
January of 2000). The Directors do not receive any pensions or retirement
benefits from the fund complex.

<TABLE>
<CAPTION>
COMPENSATION TABLE
FISCAL YEAR ENDED DECEMBER 31, 1999
TOTAL
COMPENSATION
AGGREGATE FROM FUND AND
COMPENSATION FUND COMPLEX
NAME OF PERSON, POSITION FROM FUND PAID TO DIRECTORS
------------------------ --------- -----------------
<S> <C> <C>
Gregory C. Clark*, Director................................. $7,500 $37,500
Martin Cohen**, Director and President...................... 0 0
George Grossman*, Director.................................. 7,500 37,500
Jeffrey H. Lynford*, Director............................... 7,000 35,000
Willard H. Smith Jr.*, Director............................. 7,500 37,500
Robert H. Steers**, Director and Chairman................... 0 0
</TABLE>

- ---------
* Member of the Audit Committee.

** 'Interested person,' as defined in the 1940 Act of the Fund because of the
affiliation with Cohen & Steers Capital Management, Inc., the Fund's
investment adviser.

<PAGE>

================================================================================
INVESTMENT ADVISORY AND OTHER SERVICES
- --------------------------------------------------------------------------------
THE INVESTMENT ADVISER

Cohen & Steers Capital Management, Inc. ('Cohen & Steers'), with offices located
at 757 Third Avenue, New York, New York 10017 is the investment adviser to the
Fund.

Cohen & Steers, a registered investment adviser, was formed in 1986 and
specializes in the management of real estate securities portfolios. Its current
clients include pension plans of leading corporations, endowment funds and
mutual funds, including Cohen & Steers Realty Income Fund, Inc. and Cohen &
Steers Total Return Realty Fund, Inc., both of which are closed-end investment
companies and Cohen & Steers Equity Income Fund, Inc., Cohen & Steers
Institutional Realty Shares, Inc. and Cohen & Steers Special Equity Fund, Inc.,
which are open-end investment companies. Mr. Cohen and Mr. Steers may be deemed
'controlling persons' of the Adviser on the basis of their ownership of the
Adviser's stock.

Pursuant to an investment advisory agreement (the 'Advisory Agreement'), the
Adviser furnishes a continuous investment program for the Fund's portfolio,
makes the day-to-day investment decisions for the Fund, executes the purchase
and sale orders for the portfolio transactions of the Fund and generally manages
the Fund's investments in accordance with the stated policies of the Fund,
subject to the general supervision of the Board of Directors of the Fund.

Under the Advisory Agreement, the Fund will pay the Adviser a monthly advisory
fee in an amount equal to 1/12th of 0.85% of the average daily value of the net
assets of the Fund up to $2.5 billion, plus 1/12th of 0.75% of such assets in
excess of $2.5 billion. (Prior to April 1, 1997, the monthly advisory fee was
1/12th of .85% of the average daily value of all net assets of the Fund.) For
the fiscal years ended December 31, 1999, 1998 and 1997, the Adviser received
the following advisory fees from the Fund:

<TABLE>
<CAPTION>
GROSS ADVISORY FEE
FISCAL YEAR ENDED ADVISORY FEES WAIVERS NET ADVISORY FEES
----------------- ------------- ------- -----------------
<S> <C> <C> <C>
December 31, 1999 $14,089,229 $0 $14,089,229
December 31, 1998 $22,579,469 $0 $22,579,469
December 31, 1997 $23,991,224 $0 $23,991,224
</TABLE>

The Adviser also provides the Fund with such personnel as the Fund may from time
to time request for the performance of clerical, accounting and other office
services, such as coordinating matters with the administrator, the transfer
agent and the custodian, which the Adviser is not required to furnish under the
Advisory Agreement. The personnel rendering these services, who may act as
officers of the Fund, may be employees of the Adviser or its affiliates. The
cost to the Fund of these services must be agreed to by the Fund and is intended
to be no higher than the actual cost to the Adviser or its affiliates of
providing the services. The Fund does not pay for services performed by officers
of the Adviser or its affiliates. The Fund may from time to time hire its own
employees or contract to have services performed by third parties, and the
management of the Fund intends to do so whenever it appears advantageous to the
Fund.

- --------------------------------------------------------------------------------
ADMINISTRATOR AND SUB-ADMINISTRATOR

The Adviser has also entered into an administration agreement with the Fund
(the 'Administration Agreement') under which the Adviser performs certain
administrative

<PAGE>

functions for the Fund, including (i) providing office space, telephone, office
equipment and supplies for the Fund; (ii) paying compensation of the Fund's
officers for services rendered as such; (iii) authorizing expenditures and
approving bills for payment on behalf of the Fund; (iv) supervising preparation
of the periodic updating of the Fund's registration statement, including the
Prospectus and Statement of Additional Information, for the purpose of filings
with the SEC and state securities administrators and monitoring and maintaining
the effectiveness of such filings, as appropriate; (v) supervising preparation
of quarterly reports to the Fund's shareholders, notices of dividends, capital
gains distributions and tax credits, and attending to routine correspondence and
other communications with individual shareholders; (vi) supervising the daily
pricing of the Fund's investment portfolio and the publication of the net asset
value of the Fund's shares, earnings reports and other financial data;
(vii) monitoring relationships with organizations providing services to the
Fund, including the Custodian, Transfer Agent and printers; (viii) providing
trading desk facilities for the Fund; (ix) supervising compliance by the Fund
with recordkeeping requirements under the 1940 Act and regulations thereunder,
maintaining books and records for the Fund (other than those maintained by the
Custodian and Transfer Agent) and preparing and filing of tax reports other than
the Fund's income tax returns; and (x) providing executive, clerical and
secretarial help needed to carry out these responsibilities. For its services
under the Administration Agreement, the Adviser receives a monthly fee from the
Fund at the annual rate of 0.02% of the Fund's average daily net assets.

In accordance with the terms of the Administration Agreement and with the
approval of the Fund's Board of Directors, the Adviser has caused the Fund to
retain Chase Manhattan Bank ('Chase') as sub-administrator under a fund
accounting and administration agreement (the 'Sub-Administration Agreement').
Under the Sub-Administration Agreement, Chase has assumed responsibility for
performing certain of the foregoing administrative functions, including
(i) determining the Fund's net asset value and preparing these figures for
publication; (ii) maintaining certain of the Fund's books and records that are
not maintained by the Adviser, custodian or transfer agent; (iii) preparing
financial information for the Fund's income tax returns, proxy statements,
shareholders reports, and SEC filings; and (iv) responding to shareholder
inquiries. The Adviser remains responsible for monitoring and overseeing the
performance by Chase and Chase Global Funds Services Company of their
obligations to the Fund under their respective agreements with the Fund, subject
to the overall authority of the Fund's Board of Directors.

Under the terms of the Administration Agreement, the Fund pays Chase a monthly
administration fee at the annual rate of 0.08% on the first $500 million of the
Fund's average daily net assets and at lower rates on the Fund's average daily
net assets in excess of that amount. Chase Global Funds Services Company, P.O.
Box 2798, Boston, Massachusetts 02208, a wholly-owned subsidiary of Chase, has
been retained by Chase to provide to the Fund the administrative services
described above. Chase also serves as the Fund's custodian and transfer agent.
See 'Custodian and Transfer and Dividend Disbursing Agent,' below. Chase Global
Funds Services Company has been similarly retained by Chase to provide transfer
agency services to the Fund and is hereafter sometimes referred to as the
'Transfer Agent.'

For the fiscal years ended December 31, 1999, 1998 and 1997, the Adviser
received Administration fees from the Fund in the amounts of $331,299, $539,651
and $572,847, respectively, and Chase received sub-administration fees from the
Fund in the amounts of $819,174, $1,156,631 and $1,215,695.

<PAGE>

- --------------------------------------------------------------------------------
DISTRIBUTOR

Cohen & Steers Securities, Inc., an affiliate of the Adviser, serves without
charge as the Distributor of shares of the Fund. Cohen & Steers Securities, Inc.
is not obligated to sell any specific amount of shares and will sell shares, as
agent for the Fund, on a continuous basis only against orders to purchase
shares.

- --------------------------------------------------------------------------------
CUSTODIAN AND TRANSFER AND DIVIDEND DISBURSING AGENT

Chase, which has its principal business at One Chase Manhattan Plaza, New York,
New York 10081-1000 has been retained to act as custodian of the Fund's
investments and as the Fund's transfer and dividend disbursing agent. Chase has
retained its wholly-owned subsidiary, Chase Global Funds Services Company, to
provide transfer and dividend disbursing agency services to the Fund. Neither
Chase nor Chase Global Funds Services Company has any part in deciding the
Fund's investment policies or which securities are to be purchased or sold for
the Fund's portfolio.

- --------------------------------------------------------------------------------
CODE OF ETHICS

The Fund, and the Investment Adviser and Distributor, have adopted codes of
ethics that are designed to ensure that the interests of Fund shareholders come
before the interests of those involved in managing the Fund. The codes of
ethics, among other things, prohibit management personnel from investing in
REITs and real estate securities, prohibit purchases in an initial public
offering and require pre-approval for investments in private placements. The
Fund's Independent Directors are prohibited from purchasing or selling any
security if they knew or reasonably should have known at the time of the
transaction that, within the most recent 15 days, the security is being or has
been considered for purchase or sale by the Fund, or is being purchased or sold
by the Fund.

================================================================================
PORTFOLIO TRANSACTIONS AND BROKERAGE
- --------------------------------------------------------------------------------

Subject to the supervision of the Directors, decisions to buy and sell
securities for the Fund and negotiation of its brokerage commission rates are
made by the Adviser. Transactions on U.S. stock exchanges involve the payment by
the Fund of negotiated brokerage commissions. There is generally no stated
commission in the case of securities traded in the over-the-counter market but
the price paid by the Fund usually includes an undisclosed dealer commission or
mark-up. In certain instances, the Fund may make purchases of underwritten
issues at prices which include underwriting fees.

In selecting a broker to execute each particular transaction, the Adviser will
take the following into consideration: the best net price available; the
reliability, integrity and financial condition of the broker; the size and
difficulty in executing the order; and the value of the expected contribution of
the broker to the investment performance of the Fund on a continuing basis.
Accordingly, the cost of the brokerage commissions to the Fund in any
transaction may be greater than that available from other brokers if the
difference is reasonably justified by other aspects of the portfolio execution
services offered. Subject to such policies and procedures as the Directors may
determine, the Adviser shall not be deemed to have acted unlawfully or to have
breached any duty solely by reason of its having caused the Fund to pay a broker
that provides research services to the Adviser an amount of commission for
effecting a portfolio investment transaction in excess of the amount of
commission another broker would have charged for effecting that transaction, if
the Adviser determines in good faith that such

<PAGE>

amount of commission was reasonable in relation to the value of the research
service provided by such broker viewed in terms of either that particular
transaction or the Adviser's ongoing responsibilities with respect to the Fund.
Research and investment information is provided by these and other brokers at no
cost to the Adviser and is available for the benefit of other accounts advised
by the Adviser and its affiliates, and not all of the information will be used
in connection with the Fund. While this information may be useful in varying
degrees and may tend to reduce the Adviser's expenses, it is not possible to
estimate its value and in the opinion of the Adviser it does not reduce the
Adviser's expenses in a determinable amount. The extent to which the Adviser
makes use of statistical, research and other services furnished by brokers is
considered by the Adviser in the allocation of brokerage business but there is
no formula by which such business is allocated. The Adviser does so in
accordance with its judgment of the best interests of the Fund and its
shareholders. The Adviser may also take into account payments made by brokers
effecting transactions for the Fund to other persons on behalf of the Fund for
services provided to it for which it would be obligated to pay (such as
custodial and professional fees). In addition, consistent with the Conduct Rules
of the National Association of Securities Dealers, Inc., and subject to seeking
best price and execution, the Adviser may consider sales of shares of the Fund
as a factor in the selection of brokers and dealers to enter into portfolio
transactions with the Fund.

For the fiscal years ended December 31, 1999, 1998 and 1997, the Fund paid a
total of $2,993,493, $4,794,426, and $5,415,596 in brokerage commissions,
respectively. Of such amount, $965,531, $1,125,213, and $1,244,671,
respectively, was placed with brokers or dealers who provide research and
investment information. The Fund's annualized portfolio turnover rate for the
fiscal year ended December 31, 1999 was 21.34%.

================================================================================
ORGANIZATION AND DESCRIPTION OF CAPITAL STOCK
- --------------------------------------------------------------------------------

The Fund was incorporated on April 26, 1991 as a Maryland corporation and is
authorized to issue 200,000,000 shares of Common Stock, $0.001 par value. The
Fund presently has one class of shares. The Fund's shares have no preemptive,
conversion, exchange or redemption rights. Each share has equal voting,
dividend, distribution and liquidation rights. All shares of the Fund, when duly
issued, will be fully paid and nonassessable. Shareholders are entitled to one
vote per share. All voting rights for the election of Directors are
noncumulative, which means that the holders of more than 50% of the shares
outstanding can elect 100% of the Directors then nominated for election if they
choose to do so and, in such event, the holders of the remaining shares will not
be able to elect any Directors. The foregoing description is subject to the
provisions contained in the Fund's Articles of Incorporation and By-Laws.

The Board of Directors is authorized to reclassify and issue any unissued shares
of the Fund without shareholder approval. Accordingly, in the future, the
Directors may create additional series of shares with different investment
objectives, policies or restrictions. Any issuance of shares of another class
would be governed by the 1940 Act and Maryland law.

As of April 14, 2000, there were 29,937,026 shares of the Fund's common stock
outstanding. Also as of that date, the Fund knew of no person who owned 5% or
more of the Fund's shares.

<PAGE>

================================================================================
DETERMINATION OF NET ASSET VALUE
- --------------------------------------------------------------------------------

Net asset value per share is determined by the Fund on each day the New York
Stock Exchange is open for trading, and on any other day during which there is a
sufficient degree of trading in the investments of the Fund to affect materially
the Fund's net asset value.

For purposes of determining the Fund's net asset value per share, readily
marketable portfolio securities listed on the New York Stock Exchange are
valued, except as indicated below, at the last sale price reflected on the
consolidated tape at the close of the New York Stock Exchange on the business
day as of which such value is being determined. If there has been no sale on
such day, the securities are valued at the mean of the closing bid and asked
prices on such day. If no bid or asked prices are quoted on such day, then the
security is valued by such method as the Directors shall determine in good faith
to reflect its fair market value. Readily marketable securities not listed on
the New York Stock Exchange but listed on other domestic or foreign securities
exchanges or admitted to trading on the National Association of Securities
Dealers Automatic Quotations, Inc. ('NASDAQ') National List are valued in a like
manner. Portfolio securities traded on more than one securities exchange are
valued at the last sale price on the business day as of which such value is
being determined as reflected on the tape at the close of the exchange
representing the principal market for such securities.

Readily marketable securities traded in the over-the-counter market, including
listed securities whose primary market is believed by the Adviser to be
over-the-counter, but excluding securities admitted to trading on the NASDAQ
National List, are valued at the mean of the current bid and asked prices as
reported by NASDAQ or, in the case of securities not quoted by NASDAQ, the
National Quotation Bureau or such other comparable sources as the Directors deem
appropriate to reflect their fair market value. Where securities are traded on
more than one exchange and also over-the-counter, the securities will generally
be valued using the quotations the Board of Directors believes reflect most
closely the value of such securities.

For purposes of determining the Fund's net asset value per share, all assets and
liabilities initially expressed in foreign currencies will be converted into
U.S. dollars at the mean of the bid and asked prices of such currencies against
the U.S. dollar last quoted by a major bank which is a regular participant in
the institutional foreign exchange markets or on the basis of a pricing service
which takes into account the quotes provided by a number of such major banks.

================================================================================
SALE OF FUND SHARES
- --------------------------------------------------------------------------------

Payment of the price for shares that are sold or 'redeemed' may be made either
in cash or in portfolio securities (selected in the discretion of the Board of
Directors of the Fund and taken at their value used in determining the Fund's
net asset value per share as described in the Prospectus and in this Statement
of Additional Information), or partly in cash and partly in portfolio
securities. However, payments will be made wholly in cash unless the Board of
Directors believes that economic conditions exist which would make such a
practice detrimental to the best interests of the Fund. If payment for shares
redeemed is made wholly or partly in portfolio securities, brokerage costs may
be incurred by the investor in converting the securities to cash. The Fund will
not distribute in kind portfolio securities that are not readily marketable. The

<PAGE>

Fund has filed a formal election with the Securities and Exchange Commission
pursuant to which the Fund will only effect a redemption in portfolio securities
where the particular stockholder of record is redeeming more than $250,000 or 1%
of the Fund's total net assets, whichever is less, during any 90-day period. In
the opinion of the Adviser, however, the amount of a redemption request would
have to be significantly greater than $250,000 or 1% of total net assets before
a redemption wholly or partly in portfolio securities was made.

================================================================================
TAXATION
- --------------------------------------------------------------------------------

Set forth below is a discussion of certain U.S. federal income tax issues
concerning the Fund and the purchase, ownership, and disposition of Fund shares.
This discussion does not purport to be complete or to deal with all aspects of
federal income taxation that may be relevant to shareholders in light of their
particular circumstances. This discussion is based upon present provisions of
the Internal Revenue Code of 1986, as amended (the 'Code'), the regulations
promulgated thereunder, and judicial and administrative ruling authorities, all
of which are subject to change, which change may be retroactive. Prospective
investors should consult their own tax advisors with regard to the federal tax
consequences of the purchase, ownership, or disposition of Fund shares, as well
as the tax consequences arising under the laws of any state, foreign country, or
other taxing jurisdiction.

- --------------------------------------------------------------------------------
TAXATION OF THE FUND

The Fund intends to qualify annually and to elect to be treated as a regulated
investment company under the Code.

To qualify as a regulated investment company, the Fund must, among other things,
(a) derive in each taxable year at least 90% of its gross income from dividends,
interest, payments with respect to securities loans and gains from the sale or
other disposition of stock, securities or foreign currencies or other income
derived with respect to its business of investing in such stock, securities or
currencies; (b) diversify its holdings so that, at the end of each quarter of
the taxable year, (i) at least 50% of the market value of the Fund's assets is
represented by cash and cash items (including receivables), U.S. Government
securities, the securities of other regulated investment companies and other
securities, with such other securities of any one issuer limited for the
purposes of this calculation to an amount not greater than 5% of the value of
the Fund's total assets and not greater than 10% of the outstanding voting
securities of such issuer, and (ii) not more than 25% of the value of its total
assets is invested in the securities of any one issuer (other than U.S.
Government securities or the securities of other regulated investment
companies); and (c) distribute at least 90% of its investment company taxable
income (which includes, among other items, dividends, interest and net
short-term capital gains in excess of net long-term capital losses) each taxable
year.

As a regulated investment company, the Fund generally will not be subject to
U.S. federal income tax on its investment company taxable income and net capital
gains (the excess of net long-term capital gains over net short-term capital
losses), if any, that it distributes to shareholders. The Fund intends to
distribute to its shareholders, at least annually, substantially all of its
investment company taxable income and net capital gains. Amounts not distributed
on a timely basis in accordance with a calendar year distribution requirement
are subject to a nondeductible 4% excise tax. To prevent imposition of the
excise tax, the Fund must distribute during each calendar year an amount equal
to the sum of (1) at least 98% of its

<PAGE>

ordinary income (not taking into account any capital gains or losses) for the
calendar year, (2) at least 98% of its capital gains in excess of its capital
losses (adjusted for certain ordinary losses) for the one-year period ending on
October 31 of the calendar year, and (3) any ordinary income and capital gains
for previous years that was not distributed during those years. A distribution
will be treated as paid on December 31 of the current calendar year if it is
declared by the Fund in October, November or December with a record date in such
a month and paid by the Fund during January of the following calendar year. Such
distributions will be taxable to shareholders in the calendar year in which the
distributions are declared, rather than the calendar year in which the
distributions are received. To prevent application of the excise tax, the Fund
intends to make its distributions in accordance with the calendar year
distribution requirement.

- --------------------------------------------------------------------------------
DISTRIBUTIONS

Dividends paid out of the Fund's investment company taxable income will be
taxable to a U.S. shareholder as ordinary income. If a portion of the Fund's
income consists of dividends paid by U.S. corporations, a portion of the
dividends paid by the Fund may be eligible for the corporate dividends-received
deduction. Distributions of net capital gains (the excess of net long-term
capital gains over net short-term capital losses), if any, designated as capital
gain dividends are taxable to a shareholder as long-term capital gains,
regardless of how long the shareholder has held Fund shares. Shareholders
receiving distributions in the form of additional shares, rather than cash,
generally will have a cost basis in each such share equal to the net asset value
of a share of the Fund on the reinvestment date. A distribution of an amount in
excess of the Fund's current and accumulated earnings and profits will be
treated by a shareholder as a return of capital which is applied against and
reduces the shareholder's basis in his or her shares. To the extent that the
amount of any such distribution exceeds the shareholder's basis in his or her
shares, the excess will be treated by the shareholder as gain from a sale or
exchange of the shares.

Shareholders will be notified annually as to the U.S. federal tax status of
distributions, and shareholders receiving distributions in the form of
additional shares will receive a report as to the net asset value of those
shares.

- --------------------------------------------------------------------------------
OPTIONS AND HEDGING TRANSACTIONS

The taxation of equity options and over-the-counter options on debt securities
is governed by Code section 1234. Pursuant to Code section 1234, the premium
received by the Fund for selling a put or call option is not included in income
at the time of receipt. If the option expires, the premium is short-term capital
gain to the Fund. If the Fund enters into a closing transaction, the difference
between the amount paid to close out its position and the premium is received is
short-term capital gain or loss. If a call option written by the Fund is
exercised, thereby requiring the Fund to sell the underlying security, the
premium will increase the amount realized upon the sale of such security and any
resulting gain or loss will be capital gain or loss, and will be long-term or
short-term depending upon the holding period of the security. With respect to a
put or call option that is purchased by the Fund, if the option is sold, any
resulting gain or loss will be a capital gain or loss, and will be long-term or
short-term, depending upon the holding period of the option. If the option
expires, the resulting loss is a capital loss and is long-term or short-term
depending upon the holding period of the option. If the option is exercised, the
cost of the option, in the case of a call option, is added to the basis of the
purchased security and, in the case of a put option, reduces the amount realized
on the underlying security in determining gain or loss.

<PAGE>

Certain options, futures contracts and forward contracts in which the Fund may
invest are 'section 1256 contracts.' Gains or losses on section 1256 contracts
generally are considered 60% long-term and 40% short-term capital gains or
losses; however, foreign currency gains or losses (as discussed below) arising
from certain section 1256 contracts may be treated as ordinary income or loss.
Also, section 1256 contracts held by the Fund at the end of each taxable year
(and, generally, for purposes of the 4% excise tax, on October 31 of each year)
are 'marked-to-market' (that is, treated as sold at fair market value),
resulting in unrealized gains or losses being treated as though they were
realized.

Generally, the hedging transactions undertaken by the Fund may result in
'straddles' for U.S. federal income tax purposes. The straddle rules may affect
the character of gains (or losses) realized by the Fund. In addition, losses
realized by the Fund on positions that are part of a straddle may be deferred
under the straddle rules, rather than being taken into account in calculating
the taxable income for the taxable year in which the losses are realized.
Because only a few regulations implementing the straddle rules have been
promulgated, the tax consequences to the Fund of engaging in hedging
transactions are not entirely clear. Hedging transactions may increase the
amount of short-term capital gain realized by the Fund which is taxed as
ordinary income when distributed to shareholders.

The Fund may make one or more of the elections available under the Code which
are applicable to straddles. If the Fund makes any of the elections, the amount,
character and timing of the recognition of gains or losses from the affected
straddle positions will be determined under rules that vary according to the
election(s) made. The rules applicable under certain of the elections may
operate to accelerate the recognition of gains or losses from the affected
straddle positions.

Because the straddle rules may affect the character of gains or losses, defer
losses and/or accelerate the recognition of gains or losses from the affected
straddle positions, the amount which may be distributed to shareholders, and
which will be taxed to them as ordinary income or long-term capital gain, may be
increased or decreased as compared to a fund that did not engage in such hedging
transactions.

Notwithstanding any of the foregoing, the Fund may recognize gain (but not loss)
from a constructive sale of certain 'appreciated financial positions' if the
Fund enters into a short sale, offsetting notional principal contract, futures
or forward contract transaction with respect to the appreciated position or
substantially identical property. Appreciated financial positions subject to
this constructive sale treatment are interests (including options, futures and
forward contracts and short sales) in stock, partnership interests, certain
actively traded trust instruments and certain debt instruments. Constructive
sale treatment does not apply to certain transactions closed prior to the end of
the 30th day after the close of the taxable year, if certain conditions are met.

- --------------------------------------------------------------------------------
CURRENCY FLUCTUATIONS -- 'SECTION 988' GAINS OR LOSSES

Under the Code, gains or losses attributable to fluctuations in exchange rates
which occur between the time the Fund accrues receivables or liabilities
denominated in a foreign currency and the time the Fund actually collects such
receivables, or pays such liabilities, generally are treated as ordinary income
or ordinary loss. Similarly, on disposition of debt securities denominated in a
foreign currency, gains or losses attributable to fluctuations in the value of
foreign currency between the date of acquisition of the security and the date of
disposition also are treated as ordinary gain or loss. These gains or losses,
referred to under the Code as 'Section 988' gains or losses, may increase or
decrease the amount of the Fund's investment company taxable income to be
distributed to its shareholders as ordinary income.

<PAGE>

- --------------------------------------------------------------------------------
SALE OR EXCHANGE OF FUND SHARES

Upon the sale or other disposition of shares of the Fund, including an exchange
of shares in the Fund for shares of another Cohen & Steers fund, a shareholder
may realize a capital gain or loss which will be long-term or short-term,
depending upon the shareholder's holding period for the shares. A shareholder
who exchanges shares in the Fund for shares of another Cohen & Steers fund will
have a tax basis in the newly-acquired fund shares equal to the amount invested
and will begin a new holding period for federal income tax purposes.

If a shareholder exchanges shares in the Fund for shares in another Cohen &
Steers fund pursuant to a reinvestment right, the sales charge incurred in the
purchase of the Fund shares exchanged may not be added to tax basis in
determining gain or loss for federal income tax purposes. Instead, the sales
charge for the exchanged Fund shares shall be added to basis for purposes of
determining gain or loss on the disposition of the newly-acquired fund shares,
if such newly-acquired fund shares are not disposed of in a similar exchange
transaction. Any loss realized on a sale or exchange will be disallowed to the
extent the shares disposed of are replaced (including through reinvestment of
dividends) within a period of 61 days beginning 30 days before and ending 30
days after disposition of the shares. Any loss realized by a shareholder on a
disposition of Fund shares held by the shareholder for six months or less will
be treated as a long-term capital loss to the extent of any distributions of net
capital gains received by the shareholder with respect to such shares.

- --------------------------------------------------------------------------------
INVESTMENTS IN REAL ESTATE INVESTMENT TRUSTS

The Fund may invest in real estate investment trusts ('REITs') that hold
residual interests in real estate mortgage investment conduits ('REMICs'). Under
Treasury regulations that have not yet been issued, but may apply retroactively,
a portion of the Fund's income from a REIT that is attributable to the REIT's
residual interest in a REMIC (referred to in the Code as an `excess inclusion')
will be subject to federal income tax in all events. These regulations are also
expected to provide that excess inclusion income of a regulated investment
company, such as the Fund, will be allocated to shareholders of the regulated
investment company in proportion to the dividends received by such shareholders,
with the same consequences as if the shareholders held the related REMIC
residual interest directly. In general, excess inclusion income allocated to
shareholders (i) cannot be offset by net operating losses (subject to a limited
exception for certain thrift institutions), (ii) will constitute unrelated
business taxable income to entities (including a qualified pension plan, an
individual retirement account, a 401(k) plan, a Keogh plan or other tax-exempt
entity) subject to tax on unrelated business income, thereby potentially
requiring such an entity that is allocated excess inclusion income, and
otherwise might not be required to file a tax return, to file a tax return and
pay tax on such income, and (iii) in the case of a foreign shareholder, will not
qualify for any reduction in U.S. federal withholding tax. In addition, if at
any time during any taxable year a 'disqualified organization' (as defined in
the Code) is a record holder of a share in a regulated investment company, then
the regulated investment company will be subject to a tax equal to that portion
of its excess inclusion income for the taxable year that is allocable to the
disqualified organization, multiplied by the highest federal income tax rate
imposed on corporations. The Adviser does not intend on behalf of the Fund to
invest in REITs, a substantial portion of the assets of which consists of
residual interests in REMICs.

<PAGE>

- --------------------------------------------------------------------------------
PASSIVE FOREIGN INVESTMENT COMPANIES

The Fund may invest in shares of foreign corporations that may be classified
under the Code as passive foreign investment companies ('PFICs'). In general, a
foreign corporation is classified as a PFIC if at least one-half of its assets
constitute investment-type assets, or 75% or more of its gross income is
investment-type income. If the Fund receives a so-called `excess distribution'
with respect to PFIC stock, the Fund itself may be subject to a tax on a portion
of the excess distribution, whether or not the corresponding income is
distributed by the Fund to shareholders. In general, under the PFIC rules, an
excess distribution is treated as having been realized ratably over the period
during which the Fund held the PFIC shares. The Fund will itself be subject to
tax on the portion, if any, of an excess distribution that is so allocated to
prior Fund taxable years and an interest factor will be added to the tax, as if
the tax had been payable in such prior taxable years. Certain distributions from
a PFIC as well as gain from the sale of PFIC shares are treated as excess
distributions. Excess distributions are characterized as ordinary income even
though, absent application of the PFIC rules, certain excess distributions might
have been classified as capital gain.

The Fund may be eligible to elect alternative tax treatment with respect to PFIC
shares. Under an election that currently is available in come circumstances, the
Fund would be required to include in its gross income its share of the earnings
of a PFIC on a current basis, regardless of whether distributions were received
from the PFIC in a given year. If this election were made, the special rules,
discussed above, relating to the taxation of excess distributions, would not
apply. In addition, another election would involve marking to market the Fund's
PFIC shares at the end of each taxable year, with the result that unrealized
gains would be treated as though they were realized and reported as ordinary
income. Any marked-to-market losses and any loss from an actual disposition of
PFIC shares would be deductible as ordinary losses to the extent of any net
marked-to-market gains included in income in prior years.

- --------------------------------------------------------------------------------
FOREIGN WITHHOLDING TAXES

Income received by the Fund from sources within foreign countries may be subject
to withholding and other taxes imposed by such countries.

- --------------------------------------------------------------------------------
BACKUP WITHHOLDING

The Fund may be required to withhold U.S. federal income tax at the rate of 31%
of all taxable distributions payable to shareholders who fail to provide the
Fund with their correct taxpayer identification number or to make required
certifications, or who have been notified by the Internal Revenue Service that
they are subject to backup withholding. Corporate shareholders and certain other
shareholders specified in the Code generally are exempt from such backup
withholding. Backup withholding is not an additional tax. Any amounts withheld
may be credited against the shareholder's U.S. federal income tax liability.

- --------------------------------------------------------------------------------
FOREIGN SHAREHOLDERS

U.S. taxation of income from the Fund to a shareholder who is a nonresident
alien individual, a foreign trust or estate, a foreign corporation or foreign
partnership ('foreign shareholder') depends on whether the income of the Fund is
'effectively connected' with a U.S. trade or business carried on by the
shareholder.

Income Not Effectively Connected. If the income from the Fund is not
'effectively connected' with a U.S. trade or business carried on by the foreign

<PAGE>

shareholder, distributions of investment company taxable income will be subject
to a U.S. tax of 30% (or lower treaty rate, except in the case of any excess
inclusion income allocated to the shareholder (see 'Taxation -- Investments in
Real Estate Investment Trusts,' above)), which tax is generally withheld from
such distributions.

Distributions of capital gain dividends and any amounts retained by the Fund
which are designated as undistributed capital gains will not be subject to U.S.
tax at the rate of 30% (or lower treaty rate) unless the foreign shareholder is
a nonresident alien individual and is physically present in the United States
for more than 182 days during the taxable year and meets certain other
requirements. However, this 30% tax on capital gains of nonresident alien
individuals who are physically present in the United States for more than the
182 day period only applies in exceptional cases because any individual present
in the United States for more than 182 days during the taxable year is generally
treated as a resident for U.S. income tax purposes; in that case, he or she
would be subject to U.S. income tax on his or her worldwide income at the
graduated rates applicable to U.S. citizens, rather than the 30% U.S. tax. In
the case of a foreign shareholder who is a nonresident alien individual, the
Fund may be required to withhold U.S. income tax at a rate of 31% of
distributions of net capital gains unless the foreign shareholder certifies his
or her non-U.S. status under penalties of perjury or otherwise establishes an
exemption. See 'Taxation -- Backup Withholding,' above. If a foreign shareholder
is a nonresident alien individual, any gain such shareholder realizes upon the
sale or exchange of such shareholder's shares of the Fund in the United States
will ordinarily be exempt from U.S. tax unless (i) the gain is U.S. source
income and such shareholder is physically present in the United States for more
than 182 days during the taxable year and meets certain other requirements, or
is otherwise considered to be a resident alien of the United States, or (ii) at
any time during the shorter of the period during which the foreign shareholder
held shares of the Fund and the five year period ending on the date of the
disposition of those shares, the Fund was a `U.S. real property holding
corporation' and the foreign shareholder held more than 5% of the shares of the
Fund, in which event the gain would be taxed in the same manner as for a U.S.
shareholder as discussed above and a 10% U.S. withholding tax would be imposed
on the amount realized on the disposition of such shares to be credited against
the foreign shareholder's U.S. income tax liability on such disposition. A
corporation is a 'U.S. real property holding corporation' if the fair market
value of its U.S. real property interests equals or exceeds 50% of the fair
market value of such interests plus its interests in real property located
outside the United States plus any other assets used or held for use in a
business. In the case of the Fund, U.S. real property interests include
interests in stock in U.S. real property holding corporations (other than stock
of a REIT controlled by U.S. persons and holdings of 5% or less in the stock of
publicly traded U.S. real property holding corporations) and certain
participating debt securities.

Income Effectively Connected. If the income from the Fund is 'effectively
connected' with a U.S. trade or business carried on by a foreign shareholder,
then distributions of investment company taxable income and capital gain
dividends, any amounts retained by the Fund which are designated as
undistributed capital gains and any gains realized upon the sale or exchange of
shares of the Fund will be subject to U.S. income tax at the graduated rates
applicable to U.S. citizens, residents and domestic corporations. Foreign
corporate shareholders may also be subject to the branch profits tax imposed by
the Code.

The tax consequences to a foreign shareholder entitled to claim the benefits of
an applicable tax treaty may differ from those described herein. Foreign
shareholders are advised to consult their own tax advisers with respect to the
particular tax consequences to them of an investment in the Fund.

<PAGE>

================================================================================
PERFORMANCE INFORMATION
- --------------------------------------------------------------------------------

From time to time, the Fund may quote the Fund's total return, aggregate total
return or yield in advertisements or in reports and other communications to
shareholders. The Fund's performance will vary depending upon market conditions,
the composition of its portfolio and its operating expenses. Consequently, any
given performance quotation should not be considered representative of the
Fund's performance in the future. In addition, because performance will
fluctuate, it may not provide a basis for comparing an investment in the Fund
with certain bank deposits or other investments that pay a fixed yield for a
stated period of time. Investors comparing the Fund's performance with that of
other mutual funds should give consideration to the quality and maturity of the
respective investment companies' portfolio securities.

- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN

The Fund's 'average annual total return' figures described in the Prospectus are
computed according to a formula prescribed by the SEC. The formula can be
expressed as follows:

P(1 + T)'pp'n = ERV

Where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = Ending Redeemable Value of a hypothetical $1,000 investment
made at the beginning of a 1-, 5-, or 10-year period at the
end of a 1-, 5-, or 10-year period (or fractional portion
thereof), assuming reinvestment of all dividends and
distributions.

The Fund's average annual total return for the year ended December 31, 1999, for
the five years ended December 31, 1999 and for the period from July 2, 1991
(commencement of operations) to December 31, 1999 were 2.68%, 9.42% and 11.97%,
respectively.

- --------------------------------------------------------------------------------
AGGREGATE TOTAL RETURNS

The Fund's aggregate total return figures described in the Prospectus represent
the cumulative change in the value of an investment in the Fund for the
specified period and are computed by the following formula.

AGGREGATE TOTAL RETURN = ERV - P
-------
P

Where: P = a hypothetical initial payment of $1,000.
ERV = Ending Redeemable Value of a hypothetical $1,000 investment
made at the beginning of the 1-, 5- or 10-year period at the
end of the 1-, 5- or 10-year period (or fractional portion
thereof), assuming reinvestment of all dividends an
distributions.

<PAGE>

- --------------------------------------------------------------------------------
YIELD

Quotations of yield for the Fund will be based on all investment income per
share earned during a particular 30-day period (including dividends and
interest), less expenses accrued during the period ('net investment income') and
are computed by dividing net investment income by the maximum offering price per
share on the last day of the period, according to the following formula:

a - b
2[(--------- + 1)'pp'6 - 1]
cd

Where: a = dividends and interest earned during the period,
b = expenses accrued for the period (net of reimbursements),
c = the average daily number of shares outstanding during the
period that were entitled to receive dividends, and
d = the maximum offering price per share on the last day of the
period.

In reports or other communications to shareholders of the Fund or in advertising
materials, the Fund may compare its performance with that of (i) other mutual
funds listed in the rankings prepared by Lipper Analytical Services, Inc.,
publications such as Barrons, Business Week, Forbes, Fortune, Institutional
Investor, Kiplinger's Personal Finance, Money, Morningstar Mutual Fund Values,
The New York Times, The Wall Street Journal and USA Today or other industry or
financial publications or (ii) the Standard and Poor's Index of 500 Stocks, the
Dow Jones Industrial Average and other relevant indices and industry
publications. The Fund may also compare the historical volatility of its
portfolio to the volatility of such indices during the same time periods.
(Volatility is a generally accepted barometer of the market risk associated with
a portfolio of securities and is generally measured in comparison to the stock
market as a whole -- the beta -- or in absolute terms -- the standard
deviation.)

================================================================================
COUNSEL AND INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------

Simpson Thacher & Bartlett serves as counsel to the Fund, and is located at 425
Lexington Avenue, New York, New York 10017-3909.

PricewaterhouseCoopers LLP, 1177 Avenue of the Americas, New York, New York
10036, have been appointed as independent accountants for the Fund.

================================================================================
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------

The Fund's audited financial statements for the year ended December 31, 1999,
including notes thereto, are incorporated by reference in this Statement of
Additional Information from the Fund's Annual Report dated as of December
31, 1999.

<PAGE>

PART C

OTHER INFORMATION

ITEM 23. EXHIBITS

(a) Articles of Incorporation,* with Articles Supplementary filed with the
Secretary of State of the State of Maryland on December 26, 1996(2)

(b) By-Laws*

(c) The rights of security holders are defined in the Registrant's Articles
of Incorporation (Article FIFTH and Article SEVENTH, Sections (b) and (c)) filed
as Exhibit (a) to this Registration Statement and the Registrant's By-Laws
(Article II and Article VI) filed as Exhibit (b) to this Registration Statement.

(d) (i) Investment Advisory Agreement*

(ii) Amendment to Form of Investment Advisory Agreement(2)

(e) Distribution Agreement*

(f) Not Applicable

(g) Form of Custodian Agreement*

(h) (i) Form of Transfer Agency Agreement*

(ii) Form of Administration Agreement(1)

(iii) Shareholder Service Plan(2)

(iv) Form of Shareholder Service Agreement(2)

(i) (i) Opinion and Consent of Dechert Price & Rhoads*

(ii) Opinion and Consent of Venable, Baetjer and Howard*

(j) Consent of Independent Accountants*

(k) Not Applicable

(l) Investment Representation Letter*

(m) Not Applicable

(n) Not Applicable

(p) Code of Ethics

(i) Fund*

(ii) Adviser/Distributor*

(q) Not Applicable

- ---------

(1) Filed with Post-Effective Amendment No. 6 on March 12, 1996 and incorporated
by reference herein.

(2) Filed with Post-Effective Amendment No. 7 on March 31, 1997 and incorporated
by reference herein.

* Filed herein.

ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT

None.

ITEM 25. INDEMNIFICATION

It is the Registrant's policy to indemnify its directors, officers,
employees and other agents to the maximum extent permitted by Section 2-418 of
the General Corporation Law of the State of Maryland as set forth in Article
EIGHTH of Registrant's Articles of Incorporation, filed as Exhibit (a), and
Article VIII, Section 1, of the Registrant's By-Laws, filed as Exhibit (b). The
Liability of the Registrant's directors and officers is dealt with in Article
EIGHTH of Registrant's Articles of Incorporation and Article VIII, Section 1
through Section 6, of the Registrant's By-Laws. The liability of Cohen & Steers
Capital Management, Inc., the Registrant's investment adviser (the 'Adviser'),
for any loss suffered by

C-1

<PAGE>

the Registrant or its shareholders is set forth in Section 5 of the Investment
Advisory Agreement, filed as Exhibit (d) to this Registration Statement. The
liability of Cohen & Steers Capital Management, Inc., the Registrant's
administrator, for any loss suffered by the Registrant or its shareholders is
set forth in Section 6 of the Administration Agreement, filed as Exhibit (h)(ii)
to this Registration Statement. The liability of Cohen & Steers Securities,
Inc., the Registrant's distributor, for any loss suffered by the Registrant of
its shareholders is set forth in Section 8 of the Distribution Agreement filed
as Exhibit (e) to this Registration Statement.

ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER

The descriptions of the Adviser under the caption 'Management of the Fund'
in the Prospectus and in the Statement of Additional Information constituting
Parts A and B, respectively, of this Registration Statement are incorporated by
reference herein.

The following is a list of the Directors and Officers of the Adviser. None
of the persons listed below has had other business connections of a substantial
nature during the past two fiscal years.

<TABLE>
<CAPTION>
NAME TITLE
---- -----
<S> <C>
Robert H. Steers..................... Chairman, Director
Martin Cohen......................... President, Director
Joseph M. Harvey..................... Senior Vice President & Director of
Research
Steven R. Brown...................... Senior Vice President
Elizabeth O. Reagan.................. Senior Vice President
John J. McCombe...................... Senior Vice President
Adam Derechin........................ Senior Vice President
Lawrence B. Stoller.................. Senior Vice President and General
Counsel
William J. Frischling................ Senior Vice President
James S. Corl........................ Senior Vice President
Sheila J. Stoltz..................... Vice President
Michael J. Kozoriz................... Vice President
Jay J. Chen.......................... Vice President
Terrance R. Ober..................... Vice President
</TABLE>

Cohen & Steers Capital Management, Inc. acts as investment adviser to, in
addition to the Registrant, the following investment companies:

Cohen & Steers Equity Income Fund, Inc.

Cohen & Steers Institutional Realty Shares, Inc.

Cohen & Steers Realty Income Fund, Inc.

Cohen & Steers Total Return Realty Fund, Inc.

Cohen & Steers Special Equity Fund, Inc.

Frank Russell Investment Management Company -- Real Estate Securities
Fund

Russell Insurance Funds -- Real Estate Securities Fund

American Skandia Trust -- AST Cohen & Steers Realty Portfolio

ITEM 27. PRINCIPAL UNDERWRITERS

(a) Cohen & Steers Securities, Inc. is the principal underwriter for the
Registrant.

(b) The following are directors and officers of Cohen & Steers Securities,
Inc. The principal address of these persons is 757 Third Avenue, N.Y., N.Y.
10017.

<TABLE>
<CAPTION>
POSITION AND POSITION AND
NAME OFFICES WITH DISTRIBUTOR OFFICES WITH REGISTRANT
---- ------------------------ -----------------------
<S> <C> <C>
Robert H. Steers........ President Chairman, Director and
Secretary
Martin Cohen............ Vice President President, Director and
Treasurer
Jay J. Chen............. Assistant Treasurer None
</TABLE>

C-2

<PAGE>

ITEM 28. LOCATION OF ACCOUNTS AND RECORDS

The majority of the accounts, books and other documents required to be
maintained by Section 31(a) of the Investment Company Act of 1940, as amended
and the Rules thereunder will be maintained as follows: journals, ledgers,
securities records and other original records will be maintained principally at
the offices of the Registrant's Sub-Administrator and Custodian, The Chase
Manhattan Bank, One Chase Manhattan Plaza, New York, New York 10081-1000. All
other records so required to be maintained will be maintained at the offices of
Cohen & Steers Capital Management, Inc., 757 Third Avenue, New York, New York
10017.

ITEM 29. MANAGEMENT SERVICES

Not applicable.

ITEM 30. UNDERTAKINGS

Not applicable

C-3

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, and
the Investment Company Act of 1940, as amended, the Registrant certifies that it
meets all the requirements for effectiveness of this Registration Statement
under Rule 485(b) under the Securities Act of 1933, as amended and has duly
caused this Post-Effective Amendment No. 11 to its Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of New York and the State of New York, on the 25th day of April, 2000.

COHEN & STEERS REALTY SHARES, INC.

By: /s/ MARTIN COHEN
..................................
NAME: MARTIN COHEN
TITLE: PRESIDENT

Pursuant to the requirements of the Securities Act of 1933, as amended, this
Post-Effective Amendment No. 11 has been signed below by the following persons
in the capacities and on the date indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
By: /s/ MARTIN COHEN President, Treasurer and Director April 25, 2000
..........................................
(MARTIN COHEN)

By: /s/ ROBERT H. STEERS Director April 25, 2000
.........................................
(ROBERT H. STEERS)

By: * Director April 25, 2000
.........................................
(GREGORY C. CLARK)

By: * Director April 25, 2000
.........................................
(GEORGE GROSSMAN)

By: * Director April 25, 2000
.........................................
(JEFFREY H. LYNFORD)

By: * Director April 25, 2000
.........................................
(WILLARD H. SMITH JR.)

By: /s/ ROBERT H. STEERS April 25, 2000
.........................................
* ROBERT H. STEERS
AS ATTORNEY-IN-FACT
</TABLE>

C-4

STATEMENT OF DIFFERENCES
------------------------

The registered trademark symbol shall be expressed as ................ 'r'
Characters normally expressed as superscript shall be preceded by .... 'pp'

<PAGE>

ARTICLES OF INCORPORATION

COHEN & STEERS REALTY SHARES, INC.

FIRST: (1) The name of the incorporator is Edward J. Burke.

(2) The incorporator's post office address is One Battery Park
Plaza, New York, New York 10004.

(3) The incorporator is over eighteen years of age.

(4) The incorporator is forming the corporation named in these
Articles of Incorporation under the general laws of the State of Maryland.

SECOND: The name of the corporation (hereinafter called the
"Corporation") is Cohen & Steers Realty Shares, Inc.

THIRD: (1) The purposes for which the Corporation is formed is to
conduct, operate and carry on the business of an investment company registered
under the Investment Company Act of 1940.

(2) The Corporation may engage in any other business and shall
have all powers conferred upon or permitted to corporations by the Maryland
General Corporation Law.

<PAGE>

FOURTH: The post office address of the principal office of the
Corporation within the State of Maryland is 32 South Street, Baltimore, Maryland
21202 in care of The Corporation Trust, Incorporated; and the resident agent of
the Corporation in the State of Maryland is The Corporation Trust, Incorporated,
32 South Street, Baltimore, Maryland 21202.

FIFTH: (1) The total number of shares of stock of all classes which
the Corporation shall have authority to issue is fifty million (50,000,000), all
of which shall be Common Stock having a par value of one-tenth of one cent
($.00l) per share and an aggregate par value of fifty thousand dollars
($50,000). Such shares and the holders thereof shall be subject to the following
provisions:

(a) Each holder of Common Stock may require the Corporation to
redeem all or any part of the Common Stock owned by that holder, upon request to
the Corporation or its designated agent, at the net asset value of the shares of
Common Stock next determined following receipt of the request in a form approved
by the Corporation and accompanied by surrender of the certificate or
certificates for the shares, if any. The Board of Directors may establish
procedures for redemption of Common Stock. The right of a holder of Common Stock
redeemed by the Corporation to receive dividends thereon and all other

<PAGE>

rights with respect to the shares shall terminate at the time as of which the
redemption price has been determined, except the right to receive the redemption
price and any dividend or distribution to which that holder had become entitled
as the record stockholder on the record date for that dividend.

(b) (i) The term "Minimum Amount" when used herein shall mean
ten thousand dollars ($10,000) unless otherwise fixed by the Board of Directors
from time to time, provided that the Minimum Amount may not in any event exceed
one hundred thousand dollars ($100,000). The Board of Directors may establish
differing Minimum Amounts for categories of holders of Common Stock based on
such criteria as the Board of Directors may deem appropriate.

(ii) If the net asset value of the shares of Common
Stock held by a stockholder shall be less than the Minimum Amount then in effect
with respect to the category of holders in which the stockholder is included,
the Corporation may redeem all of those shares, upon notice given to the holder
in accordance with, paragraph (iii) of this subsection (b), to the extent that
the Corporation may lawfully effect such redemption under the laws of the State
of Maryland.

(iii) The notice referred to in paragraph (ii) of this
subsection (b) shall be in writing

<PAGE>

personally delivered or deposited in the mail, at least thirty days (or such
other number of days as may be specified from time to time by the Board of
Directors) prior to such redemption. If mailed, the notice shall be addressed to
the stockholder at his post office address as shown on the books of the
Corporation, and sent by first class mail, postage prepaid. The price for shares
acquired by the Corporation pursuant to this subsection (b) shall be an amount
equal to the net asset value of such shares.

(c) Payment for shares of Common Stock redeemed by the
Corporation shall be made by the Corporation within seven business days of such
surrender out of the funds legally available therefor, provided that the
Corporation may suspend the right of the stockholders to redeem shares of Common
Stock and may postpone the right of those holders to receive payment for any
shares when permitted or required to do so by applicable statutes or
regulations. Payment of the aggregate price of shares surrendered for redemption
may be made in cash or, at the option of the Corporation, wholly or partly in
such portfolio securities of the Corporation as the Corporation shall select.

(d) Shares of Common Stock shall be entitled to dividends or
distributions, in cash, in property or in shares of Common Stock, as may be
declared from time

<PAGE>

to time by the Board of Directors, acting in its sole discretion, out of the
assets lawfully available therefor. The Board of Directors may provide that
dividends shall be payable only with respect to those shares of Common Stock
that have been held of record continuously by the stockholder for a specified
period, not to exceed 72 hours, prior to the record date of the dividend.

(e) On each matter submitted to a vote of the stockholders,
each holder of Common Stock shall be entitled to one vote for each share
standing in his name on the books of the Corporation. All holders of shares of
stock shall vote as a single class except with respect to any matter which
affects only one or more classes of stock, in which case only the holders of
shares of the class or classes affected shall be entitled to vote.

(f) The Board of Directors is authorized to classify or to
reclassify, from time to time, any unissued shares of stock of the Corporation,
whether now or hereafter authorized, by setting, changing or eliminating the
preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends, qualifications or terms and conditions of or rights
to require redemption of the stock.

(g) The Corporation may issue shares of Common Stock in
fractional denominations to the same extent

<PAGE>

as its whole shares, and shares in fractional denominations shall be shares of
stock having proportionately to the respective fractions represented thereby all
the rights of whole shares, including without limitation, the right to vote, the
right to receive dividends and distributions, and the right to participate upon
liquidation of the Corporation, but excluding the right to receive a stock
certificate representing fractional shares.

(2) No stockholder shall be entitled to any preemptive right
other than as the Board of Directors may establish.

SIXTH: The number of directors of the Corporation shall be one. The
number of directors of the Corporation may be changed pursuant to the By-Laws of
the Corporation. The name of the initial director who shall serve until the
first annual meeting or until his successor is duly chosen and qualifies is
Robert H. Steers.

SEVENTH: The following provisions are inserted for the purpose of
defining, limiting and regulating the powers of the Corporation and of the Board
of Directors and stockholders.

(a) In addition to its other powers explicitly or implicitly
granted under these Articles of Incorporation, by law or otherwise, the Board of
Directors of the Corporation:

<PAGE>

(i) is expressly authorized to make, alter, amend or
repeal the By-Laws of the Corporation;

(ii) may from time to time determine whether, to what
extent, at what times and places, and under what conditions and regulations the
accounts and books of the Corporation, or any of them, shall be open to the
inspection of the stockholders, and no stockholder shall have any right to
inspect any account, book or document of the Corporation except as conferred by
statute or as authorized by the Board of Directors of the Corporation;

(iii) is empowered to authorize, without stockholder
approval, the issuance and sale from time to time of shares of stock of the
Corporation whether now or hereafter authorized;

(iv) is authorized to adopt procedures for determination
of the net asset value of shares of any class of the Corporation's stock; and

(v) is authorized to declare dividends out of funds
legally available therefor on shares of each class of stock of the Corporation
payable in such amounts and at such times as it determines, including
declaration by means of a formula or similar method and including dividends
declared or payable more frequently than meetings of the Board of Directors.

<PAGE>

(b) Notwithstanding any provision of the Maryland General
Corporation Law requiring a greater proportion than a majority of the votes of
the Corporation's stock entitled to be cast in order to take or authorize any
action, any such action may be taken or authorized upon the concurrence of a
majority of the aggregate number of votes entitled to be cast thereon.

(c) The presence in person or by proxy of the holders of
shares entitled to cast one-third of the votes entitled to be cast shall
constitute a quorum at any meeting of the stockholders, except with respect to
any matter which, under applicable statutes or regulatory requirements, requires
approval by a separate vote of one or more classes of stock, in which case the
presence in person or by proxy of the holders of shares entitled to cast
one-third of the votes entitled to be cast on the matter shall constitute a
quorum.

(d) Any determination made in good faith by or pursuant to the
direction of the Board of Directors, as to the amount of the assets, debts,
obligations, or liabilities of the Corporation, as to the amount of any reserves
or charges set up and the propriety thereof, as to the time of or purpose for
creating such reserves or charges, as to the use, alteration or cancellation of
any reserves or charges (whether or not any debt, obligation, or

<PAGE>

liability for which such reserves or charges shall have been created shall be
then or thereafter required to be paid or discharged), as to the value of or the
method of valuing any investment owned or held by the Corporation, as to market
value or fair value of any investment or fair value of any other asset of the
Corporation, as to the allocation of any asset of the Corporation to a
particular class or classes of the Corporation's stock, as to the charging of
any liability of the Corporation to a particular class or classes of the
Corporation's stock, as to the number of shares of the Corporation outstanding,
as to the estimated expense to the Corporation in connection with purchases of
its shares, as to the ability to liquidate investments in orderly fashion, or as
to any other matters relating to the issue, sale, redemption or other
acquisition or disposition of investments or shares of the Corporation, shall be
final and conclusive and shall be binding upon the Corporation and all holders
of its shares, past, present and future, and shares of the Corporation are
issued and sold on the condition and understanding that any and all such
determinations shall be binding as aforesaid.

EIGHTH: (1) To the full extent that limitations on the liability of
directors and officers are permitted by the Maryland General Corporation Law, no
director or officer of the Corporation shall have any liability to the

<PAGE>

Corporation or its Stockholders for damages. This limitation on liability
applies to events occurring at the time a person serves as a director or officer
of the Corporation whether or not that person is a director or officer at the
time of any proceeding in which liability is asserted.

(2) The Corporation shall indemnify and advance expenses to
its currently acting and its former directors to the full extent that
indemnification of directors is permitted by the Maryland General Corporation
Law. The Corporation shall indemnify and advance expenses to its officers to the
same extent as its directors and may do so to such further extent as is
consistent with law. The Board of Directors may by By-Law, resolution or
agreement make further provision for indemnification of directors, officers,
employees and agents to the full extent permitted by the Maryland Corporation
Law.

(3) No provision of this Article shall be effective to protect
or purport to protect any director or officer of the Corporation against any
liability to the Corporation or its stockholders to which he would otherwise be
subject by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his office.

<PAGE>

(4) References to the Maryland General Corporation Law in this
Article are to that law as from time to time amended. No amendment to the
charter of the Corporation shall affect any right of any person under this
Article based on any event, omission or proceeding prior to the amendment.

NINTH: The Corporation reserves the right to amend, alter, change or
repeal any provision contained in these Articles of Incorporation or in any
amendment hereto in the manner now or hereafter prescribed by the laws of the
State of Maryland, including any amendment which alters the contract rights, as
expressly set forth in these Articles of Incorporation, of any outstanding
stock, and all rights conferred upon stockholders herein are granted subject to
this reservation.

IN WITNESS WHEREOF, the undersigned, being the incorporator of the
Corporation, has adopted and signed these Articles of Incorporation and does
hereby acknowledge that the adoption and signing are his act.

/s/ Edward J. Burke
-------------------
Edward J. Burke

Dated: April 26, 1991

<PAGE>

BY-LAWS

COHEN & STEERS REALTY SHARES, INC.

----------

ARTICLE I

Offices

Section 1. Principal Office in Maryland. The Corporation shall have
a principal office in the City of Baltimore, State of Maryland.

Section 2. Other Offices. The Corporation may have offices also at
such other places within and without the State of Maryland as the Board of
Directors may from time to time determine or as the business of the Corporation
may require.

ARTICLE II

Meetings of Stockholders

Section 1. Place of Meeting. Meetings of stockholders shall be held
at such place, either within the State of Maryland or at such other place within
the United States, as shall be fixed from time to time by the Board of
Directors.

Section 2. Annual Meetings. The Corporation shall not be required to
hold an annual meeting of stockholders in

<PAGE>

any year in which the election of directors is not required to be acted on by
stockholders under the Investment Company Act of 1940. If the Corporation is
required to hold a meeting of stockholders to elect directors, the meeting shall
be designated as the annual meeting of stockholders for that year and shall be
held no later than 120 days after the occurrence of the event requiring the
meeting. Any business may be considered at an annual meeting of stockholders
without the purpose of the meeting having been specified in the notice.

Section 3. Notice of Annual Meeting. Written or printed notice of
the annual meeting, stating the place, date and hour thereof, shall be given to
each stockholder entitled to vote thereat and each other shareholder entitled to
notice thereof not less than ten nor more than ninety days before the date of
the meeting.

Section 4. Special Meetings. Special meetings of stockholders may be
called by the chairman, the president or by the Board of Directors and shall be
called by the secretary upon the written request of holders of shares entitled
to cast not less than twenty-five percent of all the votes entitled to be cast
at such meeting. Such request shall state the purpose or purposes of such
meeting and the matters proposed to be acted on thereat. In the case of

<PAGE>

such request for a special meeting, upon payment by such stockholders to the
Corporation of the estimated reasonable cost of preparing and mailing a notice
of such meeting, the secretary shall give the notice of such meeting. The
secretary shall not be required to call a special meeting to consider any matter
which is substantially the same as a matter acted upon at any special meeting of
stockholders held within the preceding twelve months unless requested to do so
by holders of shares entitled to cast not less than a majority of all votes
entitled to be cast at such meeting. Notwithstanding the foregoing, to the
extent required by the Investment Company Act of 1940, special meetings of
stockholders for the purpose of voting upon the question of removal of any
director or directors of the Corporation shall be called by the secretary upon
the written request of holders of shares entitled to cast not less than ten
percent of all the votes entitled to be cast at such meeting.

Section 5. Notice of Special Meeting. Written or printed notice of a
special meeting of stockholders, stating the place, date, hour and purpose
thereof, shall be given by the secretary to each stockholder entitled to vote
thereat and each other shareholder entitled to notice thereof not less than ten
nor more than ninety days before the date fixed for the meeting.

<PAGE>

Section 6. Business of Special Meetings. Business transacted at any
special meeting of stockholders shall be limited to the purposes stated in the
notice thereof.

Section 7. Quorum. The holders of shares entitled to cast one-third
of the votes entitled to be cast thereat, present in person or represented by
proxy, shall constitute a quorum at all meetings of the stockholders for the
transaction of business, except with respect to any matter which, under
applicable statutes or regulatory requirements or the Corporation's charter,
requires approval by a separate vote of one or more classes of stock, in which
case the presence in person or by proxy of the holders of shares entitled to
cast one-third of the votes entitled to be cast on the matter shall constitute a
quorum. A meeting of stockholders convened on the date for which it is called
may be adjourned from time to time without further notice to a date not more
than 120 days after the record date.

Section 8. Voting. When a quorum is present at any meeting, the
affirmative vote of a majority of the votes cast by stockholders entitled to
vote on the matter, shall decide any question brought before such meeting
(except that directors may be elected by the affirmative vote of a plurality of
the votes cast), unless the question is one upon which by express provision of
the Investment Company

<PAGE>

Act of 1940, as from time to time in effect, or other statutes or rules or
orders of the Securities and Exchange Commission or any successor thereto or of
the Articles of Incorporation a different vote is required, in which case such
express provision shall govern and control the decision of such question.

Section 9. Proxies. Each stockholder shall at every meeting of
stockholders be entitled to vote in person or by written proxy signed by the
stockholder or by his duly authorized attorney-in-fact. No proxy shall be voted
after eleven months from its date, unless otherwise provided in the proxy.

Section 10. Record Date. In order that the Corporation may determine
the stockholders entitled to notice of or to vote at any meeting of stockholders
or any adjournment thereof, to express consent to corporate action in writing
without a meeting, or to receive payment of any dividend or other distribution
or allotment of any rights, or entitled to exercise any rights in respect of any
change, conversion or exchange of stock or for the purpose of any other lawful
action, the Board of Directors may fix, in advance, a record date which shall be
not more than ninety days and, in the case of a meeting of stockholders, not
less than ten days prior to the date on which the particular

<PAGE>

action requiring such determination of stockholders is to be taken. In lieu of
fixing a record date, the Board of Directors may provide that the stock transfer
books shall be closed for a stated period, but not to exceed, in any case,
twenty days. If the stock transfer books are closed for the purpose of
determining stockholders entitled to notice of or to vote at a meeting of
stockholders, such books shall be closed for at least ten days immediately
preceding such meeting. If no record date is fixed and the stock transfer books
are not closed for the determination of stockholders: (1) The record date for
the determination of stockholders entitled to notice of, or to vote at, a
meeting of stockholders shall be at the close of business on the day on which
notice of the meeting of stockholders is mailed or the day thirty days before
the meeting, whichever is the closer date to the meeting; and (2) The record
date for the determination of stockholders entitled to receive payment of a
dividend or an allotment of any rights shall be at the close of business on
the day on which the resolution of the Board of Directors, declaring the
dividend or allotment of rights, is adopted, provided that the payment or
allotment date shall not be more than sixty days after the date of the adoption
of such resolution. If a record date has been fixed for the determination of
stockholders entitled to vote

<PAGE>

at a meeting, only the stockholders of record on the record date shall be
entitled to vote at the meeting and such stockholders shall be entitled to vote
at the meeting notwithstanding the subsequent transfer or redemption of the
shares owned of record on such date.

Section 11. Inspectors of Election. The directors, in advance of any
meeting, may, but need not, appoint one or more inspectors to act at the meeting
or any adjournment thereof. If an inspector or inspectors are not appointed,
the person presiding at the meeting may, but need not, appoint one or more
inspectors. In case any person who may be appointed as an inspector fails to
appear or act, the vacancy may be filled by appointment made by the directors in
advance of the meeting or at the meeting by the person presiding thereat. Each
inspector, if any, before entering upon the discharge of his duties, may be
required to take and sign an oath faithfully to execute the duties of inspector
at such meeting with strict impartiality and according to the best of his
ability. The inspectors, if any, shall determine the number of shares
outstanding and the voting power of each, the shares represented at the meeting,
the existence of a quorum, the validity and effect of proxies, and shall receive
votes, ballots or consents, hear and determine all challenges and questions
arising in

<PAGE>

connection with the right to vote, count and tabulate all votes, ballots or
consents, determine the result, and do such acts as are proper to conduct the
election or vote with fairness to all stockholders. On request of the person
presiding at the meeting or any stockholder, the inspector or inspectors, if
any, shall make a report in writing of any challenge, question or matter
determined by him or them and execute a certificate of any fact found by him or
them.

Section 12. Informal Action by Stockholders. Except to the extent
prohibited by the Investment Company Act of 1940, as from time to time in
effect, or rules or orders of the Securities and Exchange Commission or any
successor thereto, any action required or permitted to be taken at any meeting
of stockholders may be taken without a meeting if a consent in writing, setting
forth such action, is signed by all the stockholders entitled to vote on the
subject matter thereof and any other stockholders entitled to notice of a
meeting of stockholders (but not to vote thereat) have waived in writing any
rights which they may have to dissent from such action, and such consent and
waiver are filed with the records of the Corporation.

<PAGE>

ARTICLE III

Board of Directors

Section 1. Number of Directors. The number of directors constituting
the entire Board of Directors (which initially was fixed at one in the
Corporation's Articles of Incorporation) may be increased or decreased from time
to time by the vote of a majority of the entire Board of Directors within the
limits permitted by law but at no time may be more than twenty, but the tenure
of office of a director in office at the time of any decrease in the number of
directors shall not be affected as a result thereof. The directors shall be
elected to hold offices at the annual meeting of stockholders and each director
shall hold office until the next annual meeting of stockholders or until his
successor is elected and qualifies. Any director may resign at any time upon
written notice to the Corporation. Any director may be removed, either with or
without cause, at any meeting of stockholders duly called and at which a quorum
is present by the affirmative vote of the majority of the votes entitled to be
cast thereon, and the vacancy on the Board of Directors caused by such removal
may be filled by the stockholders at the time of such removal. Directors need
not be stockholders.

<PAGE>

Section 2. Vacancies and Newly-Created Directorships. Any vacancy
occurring in the Board of Directors for any cause other than by reason of an
increase in the number of directors may be filled by a majority of the remaining
members of the Board of Directors although such majority is less than a quorum.
Any vacancy occurring by reason of an increase in the number of directors may be
filled by a majority of the entire Board of Directors. A director elected by the
Board of Directors to fill a vacancy shall be elected to hold office until the
next annual meeting of stockholders or until his successor is elected and
qualifies.

Section 3. Powers. The business and affairs of the Corporation shall
be managed by or under the direction of the Board of Directors which may
exercise all such powers of the Corporation and do all such lawful acts and
things as are not by statute or by the Articles of Incorporation or by these
By-Laws conferred upon or reserved to the stockholders.

Section 4. Meetings. The Board of Directors of the Corporation or
any committee thereof may hold meetings, both regular and special, either within
or without the State of Maryland. Regular meetings of the Board of Directors may
be held without notice at such time and at such place as

<PAGE>

shall from time to time be determined by the Board of Directors. Special
meetings of the Board of Directors may be called by the chairman, the president
or by two or more directors. Notice of special meetings of the Board of
Directors shall be given by the secretary to each director at least three days
before the meeting if by mail or at least 24 hours before the meeting if given
in person or by telephone or by telegraph. The notice need not specify the
business to be transacted.

Section 5. Quorum and Voting. During such times when the Board of
Directors shall consist of more than one director, a quorum for the transaction
of business at meetings of the Board of Directors shall consist of one-third of
the entire Board of Directors, but in no event less than two directors. The
action of a majority of the directors present at a meeting at which a quorum is
present shall be the action of the Board of Directors. If a quorum shall not be
present at any meeting of the Board of Directors, the directors present thereat
may adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present.

Section 6. Committees. The Board of Directors may appoint from among
its members an executive committee and

<PAGE>

other committees of the Board of Directors, each committee to be composed of two
or more of the directors of the Corporation. The Board of Directors may delegate
to such committees any of the powers of the Board of Directors except those
which may not by law be delegated to a committee. Such committee or committees
shall have the name or names as may be determined from time to time by
resolution adopted by the Board of Directors. Unless the Board of Directors
designates one or more directors as alternate members of any committee, who may
replace an absent or disqualified member at any meeting of the committee, the
members of any such committee present at any meeting and not disqualified from
voting may, whether or not they constitute a quorum, appoint another member of
the Board of Directors to act at the meeting in the place of any absent or
disqualified member of such committee. At meetings of any such committee, a
majority of the members or alternate members of such committee shall constitute
a quorum for the transaction of business and the act of a majority of the
members or alternate members present at any meeting at which a quorum is present
shall be the act of the committee.

Section 7. Minutes of Committee Meetings. The committees shall keep
regular minutes of their proceedings.

<PAGE>

Section 8. Informal Action by Board of Directors and Committees. Any
action required or permitted to be taken at any meeting of the Board of
Directors or of any committee thereof may be taken without a meeting if a
written consent thereto is signed by all members of the Board of Directors or of
such committee, as the case may be, and such written consent is filed with the
minutes of proceedings of the Board of Directors or committee, provided,
however, that such written consent shall not constitute approval of any matter
which pursuant to the Investment Company Act of 1940 and the rules thereunder
requires the approval of directors by vote cast in person at a meeting.

Section 9. Meetings by Conference Telephone. The members of the
Board of Directors or any committee thereof may participate in a meeting of the
Board of Directors or committee by means of a conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other at the same time and such participation shall
constitute presence in person at such meeting, provided, however, that such
participation shall not constitute presence in person with respect to matters
which pursuant to the Investment Company

<PAGE>

Act of 1940 and the rules thereunder require the approval of directors by vote
cast in person at a meeting.

Section 10. Fees and Expenses. The directors may be paid their
expenses of attendance at each meeting of the Board of Directors and may be paid
a fixed sum for attendance at each meeting of the Board of Directors, a stated
salary as director or such other compensation as the Board of Directors may
approve. No such payment shall preclude any director from serving the
Corporation in any other capacity and receiving compensation therefor. Members
of special or standing committees may be allowed like reimbursement and
compensation for attending committee meetings.

ARTICLE IV

Notices

Section 1. General. Notices to directors and stockholders mailed to
them at their post office addresses appearing on the books of the Corporation
shall be deemed to be given at the time when deposited in the United States
mail.

Section 2. Waiver of Notice. Whenever any notice is required to be
given under the provisions of the statutes, of the Articles of Incorporation or
of these By-Laws, each person entitled to said notice waives notice

<PAGE>

if, before or after the meeting he signs a written waiver of notice and such
waiver is filed with the records of the meeting. Attendance of a person at a
meeting shall constitute a waiver of notice of such meeting except when the
person attends a meeting for the express purpose of objecting, at the beginning
of the meeting, to the transaction of any business because the meeting is not
lawfully called or convened.

ARTICLE V

Officers

Section 1. General. The officers of the Corporation shall be chosen
by the Board of Directors and shall be a chairman of the Board of Directors, a
president, a secretary and a treasurer. The Board of Directors may choose also
such vice presidents and additional officers or assistant officers as it may
deem advisable. Any number of offices, except the offices of president and vice
president and chairman and vice president, may be held by the same person. No
officer shall execute, acknowledge or verify any instrument in more than one
capacity if such instrument is required by law to be executed, acknowledged or
verified by two or more officers.

Section 2. Other Officers and Agents. The Board of Directors may
appoint such other officers and agents as

<PAGE>

it desires who shall hold their offices for such terms and shall exercise such
powers and perform such duties as shall be determined from time to time by the
Board of Directors.

Section 3. Tenure of Officers. The officers of the Corporation shall
hold office at the pleasure of the Board of Directors. Each officer shall hold
his office until his successor is elected and qualifies or until his earlier
resignation or removal. Any officer may resign at any time upon written notice
to the Corporation. Any officer elected or appointed by the Board of Directors
may be removed at any time by the Board of Directors when, in its judgment, the
best interests of the Corporation will be served thereby. Any vacancy occurring
in any office of the Corporation by death, resignation, removal or otherwise
shall be filled by the Board of Directors.

Section 4. Chairman of the Board of Directors. The chairman of the
Board of Directors shall preside at all meetings of the stockholders and of the
Board of Directors. Unless otherwise determined by the Board of Directors, he
shall be the chief executive officer and shall have general and active
management of the business of the Corporation and shall see that all orders and
resolutions of the Board of Directors are carried into effect. He shall be ex
officio a member of all committees designated by the Board of

<PAGE>

Directors except as otherwise determined by the Board Directors. He shall have
authority to execute instruments and contracts on behalf of the Corporation
except where required by law to be otherwise signed and executed and except
where the signing and execution thereof shall be expressly delegated by the
Board of Directors to some other officer or agent of the Corporation.

Section 5. President. The president shall act under the direction of
the chairman and in the absence or disability of the chairman shall perform the
duties and exercise the powers of the chairman. Unless otherwise determined by
the Board of Directors, he shall be the chief operating officer and shall
perform such other duties and have such other powers as the chairman or the
Board of Directors may from time to time prescribe. He shall have authority to
execute instruments and contracts on behalf of the Corporation except where
required by law to be otherwise signed and except where the signing and
execution thereof shall be expressly delegated by the Board of Directors to some
other officer or agent of the Corporation.

Section 6. Vice Presidents. The vice presidents shall act under the
direction of the chairman and the president and in the absence or disability of
the president shall perform the duties and exercise the powers of the

<PAGE>

president. They shall perform such other duties and have such other powers as
the chairman, the president or the Board of Directors may from time to time
prescribe. The Board of Directors may designate one or more executive vice
presidents or may otherwise specify the order of seniority of the vice
presidents and, in that event, the duties and powers of the president shall
descend to the vice presidents in the specified order of seniority.

Section 7. Secretary. The secretary shall act under the direction of
the chairman and the president. Subject to the direction of the chairman and the
president he shall attend all meetings of the Board of Directors and all
meetings of stockholders and record the proceedings in a book to be kept for
that purpose and shall perform like duties for the committees designated by the
Board of Directors when required. He shall give, or cause to be given, notice of
all meetings of stockholders and special meetings of the Board of Directors, and
shall perform such other duties as may be prescribed by the chairman or the
Board of Directors. He shall keep in safe custody the seal of the Corporation
and shall affix the seal or cause it to be affixed to any instrument requiring
it.

Section 8. Assistant Secretaries. The assistant secretaries in the
order of their seniority, unless

<PAGE>

otherwise determined by the chairman, the president or the Board of
Directors, shall, in the absence of or disability of the secretary, perform the
duties and exercise the powers of the secretary. They shall perform such other
duties and have such other powers as the chairman, the president or Board of
Directors may from time to time prescribe.

Section 9. Treasurer. The treasurer shall act under the direction of
the chairman and the president. Subject to the direction of the chairman and the
president he shall have the custody of the corporate funds and securities and
shall keep full and accurate accounts of receipts and disbursements in books
belonging to the Corporation and shall deposit all moneys and other valuable
effects in the name and to the credit of the Corporation in such depositories as
may be designated by the Board of Directors. He shall disburse the funds of the
Corporation as may be ordered by the chairman, the president or the Board of
Directors, taking proper vouchers for such disbursements, and shall render to
the chairman, the president and the Board of Directors, at its regular meetings,
or when the Board of Directors so requires, an account of all his transactions
as treasurer and of the financial condition of the Corporation.

<PAGE>

Section 10. Assistant Treasurers. The assistant treasurers in the
order of their seniority, unless otherwise determined by the chairman, the
president or the Board of Directors, shall, in the absence or disability of the
treasurer, perform the duties and exercise the powers of the treasurer. They
shall perform such other duties and have such other powers as the chairman, the
president or the Board of Directors may from time to time prescribe.

ARTICLE VI

Certificates of Stock

Section 1. General. Every holder of stock of the Corporation who has
made full payment of the consideration for such stock shall be entitled upon
request to have a certificate, signed by, or in the name of the Corporation by,
the chairman, the president or a vice president and countersigned by the
treasurer or an assistant treasurer or the secretary or an assistant secretary
of the Corporation, certifying the number of whole shares of each class of stock
owned by him in the Corporation.

Section 2. Fractional Share Interests. The Corporation may issue
fractions of a share of stock. Fractional shares of stock shall have
proportionately to the respective fractions represented thereby all the rights
of whole shares, including the right to vote, the right to

<PAGE>

receive dividends and distributions and the right to participate upon
liquidation of the Corporation, excluding, however, the right to receive a stock
certificate representing such fractional shares.

Section 3. Signatures on Certificates. Any of or all the signatures
on a certificate may be a facsimile. In case any officer who has signed or whose
facsimile signature has been placed upon a certificate shall cease to be such
officer before such certificate is issued, it may be issued with the same effect
as if he were such officer at the date of issue. The seal of the Corporation or
a facsimile thereof may, but need not, be affixed to certificates of stock.

Section 4. Lost, Stolen or Destroyed Certificates. The Board of
Directors may direct a new certificate or certificates to be issued in place of
any certificate or certificates theretofore issued by the Corporation alleged to
have been lost, stolen or destroyed, upon the making of any affidavit of that
fact by the person claiming the certificate or certificates to be lost, stolen
or destroyed. When authorizing such issue of a new certificate or certificates,
the Board of Directors may, in its discretion and as a condition precedent to
the issuance thereof, require the owner of such lost, stolen or destroyed

<PAGE>

certificate or certificates, or his legal representative, to give the
Corporation a bond in such sum as it may direct as indemnity against any claim
that may be made against the Corporation with respect to the certificate or
certificates alleged to have been lost, stolen or destroyed.

Section 5. Transfer of Shares. Upon request by the registered owner
of shares, and if a certificate has been issued to represent such shares upon
surrender to the Corporation or a transfer agent of the Corporation of a
certificate for shares of stock duly endorsed or accompanied by proper evidence
of succession, assignment or authority to transfer, it shall be the duty of the
Corporation, if it is satisfied that all provisions of the Articles of
Incorporation, of the By-Laws and of the law regarding the transfer of shares
have been duly complied with, to record the transaction upon its books, issue a
new certificate to the person entitled thereto upon request for such
certificate, and cancel the old certificate, if any.

Section 6. Registered Owners. The Corporation shall be entitled to
recognize the person registered on its books as the owner of shares to be the
exclusive owner for all purposes including voting and dividends, and the
Corporation shall not be bound to recognize any equitable or other claim to or
interest in such share or shares on the

<PAGE>

part of any other person, whether or not it shall have express or other notice
thereof, except as otherwise provided by the laws of Maryland.

ARTICLE VII

Miscellaneous

Section 1. Reserves. There may be set aside out of any funds of the
Corporation available for dividends such sum or sums as the Board of Directors
from time to time, in their absolute discretion, think proper as a reserve or
reserves to meet contingencies, or for such other purpose as the Board of
Directors shall think conducive to the interest of the Corporation, and the
Board of Directors may modify or abolish any such reserve.

Section 2. Dividends. Dividends upon the stock of the Corporation
may, subject to the provisions of the Articles of Incorporation and of
applicable law, be declared by the Board of Directors at any time. Dividends may
be paid in cash, in property or in shares of the Corporation's stock, subject to
the provisions of the Articles of Incorporation and of applicable law.

Section 3. Capital Gains Distributions. The amount and number of
capital gains distributions paid to the stockholders during each fiscal year
shall be determined by the Board of Directors. Each such payment shall be

<PAGE>

accompanied by a statement as to the source of such payment, to the extent
required by law.

Section 4. Checks. All checks or demands for money and notes of the
Corporation shall be signed by such officer or officers or such other person or
persons as the Board of Directors may from time to time designate.

Section 5. Fiscal Year. The fiscal year of the Corporation shall be
fixed by resolution of the Board of Directors.

Section 6. Seal. The corporate seal shall have inscribed thereon the
name of the Corporation, the year of its organization and the words "Corporate
Seal, Maryland." The seal may be used by causing it or a facsimile thereof to be
impressed or affixed or in another manner reproduced or by placing the word
"(seal)" adjacent to the signature of the person authorized to sign the document
on behalf of the Corporation.

ARTICLE VIII

Indemnification

Section 1. Indemnification of Directors and Officers. The
Corporation shall indemnify its directors to the fullest extent that
indemnification of directors is permitted by the Maryland General Corporation
Law. The Corporation shall indemnify its officers to the same extent

<PAGE>

as its directors and to such further extent as is consistent with law. The
Corporation shall indemnify its directors and officers who while serving as
directors or officers also serve at the request of the Corporation as a
director, officer, partner, trustee, employee, agent or fiduciary of another
corporation, partnership, joint venture, trust, other enterprise or employee
benefit plan to the fullest extent consistent with law. The indemnification and
other rights provided by this Article shall continue as to a person who has
ceased to be a director or officer and shall inure to the benefit of the heirs,
executors and administrators of such a person. This Article shall not protect
any such person against any liability to the Corporation or any stockholder
thereof to which such person would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office ("disabling conduct").

Section 2. Advances. Any current or former director or officer of
the Corporation seeking indemnification within the scope of this Article shall
be entitled to advances from the Corporation for payment of the reasonable
expenses incurred by him in connection with the matter as to which he is seeking
indemnification without

<PAGE>

requiring a preliminary determination of ultimate entitlement to indemnification
except as provided below, to the fullest extent permissible under the Maryland
General Corporation Law. The person seeking indemnification shall provide to the
Corporation a written affirmation of his good faith belief that the standard of
conduct necessary for indemnification by the Corporation has been met and a
written undertaking to repay any such advance if it should ultimately be
determined that the standard of conduct has not been met. In addition, at least
one of the following additional conditions shall be met: (a) the person seeking
indemnification shall provide a security in form and amount acceptable to the
Corporation for his undertaking; (b) the Corporation is insured against losses
arising by reason of the advance; or (c) a majority of a quorum of directors of
the Corporation who are neither "interested persons" as defined in Section 2(a)
(19) of the Investment Company Act of 1940, as amended, nor parties to the
proceeding ("disinterested non-party directors"), or independent legal counsel,
in a written opinion, shall have determined, based on a review of facts readily
available to the Corporation at the time the advance is proposed to be made,
that there is reason to believe that the person seeking indemnification will
ultimately be found to be entitled to indemnification.

<PAGE>

Section 3. Procedure. At the request of any person claiming
indemnification under this Article, the Board of Directors shall determine, or
cause to be determined, in a manner consistent with the Maryland General
Corporation Law, whether the standards required by this Article have been met.
Indemnification shall be made only following: (a) a final decision on the merits
by a court or other body before whom the proceeding was brought that the person
to be indemnified was not liable by reason of disabling conduct or (b) in the
absence of such a decision, a reasonable determination, based upon a review of
the facts, that the person to be indemnified was not liable by reason of
disabling conduct by (i) the vote of a majority of a quorum of disinterested
non-party directors or (ii) an independent legal counsel in a written opinion.

Section 4. Indemnification of Employees and Agents. Employees and
agents who are not officers or directors of the Corporation may be indemnified,
and reasonable expenses may be advanced to such employees or agents, as may be
provided by action of the Board of Directors or by contract, subject to any
limitations imposed by the Investment Company Act of 1940.

Section 5. Other Rights. The Board of Directors may make further
provision consistent with law for

<PAGE>

indemnification and advance of expenses to directors, officers, employees and
agents by resolution, agreement or otherwise. The indemnification provided by
this Article shall not be deemed exclusive of any other right, with respect to
indemnification or otherwise, to which those seeking indemnification may be
entitled under any insurance or other agreement or resolution of stockholders or
disinterested directors or otherwise. The rights provided to any person by this
Article shall be enforceable against the Corporation by such person who shall be
presumed to have relied upon it in serving or continuing to serve as a director,
officer, employee, or agent as provided above.

Section 6. Amendments. References in this Article are to the
Maryland General Corporation Law and to the Investment Company Act of 1940 as
from time to time amended. No amendment of these By-laws shall effect any right
of any person under this Article based on any event, omission or proceeding
prior to the amendment.

ARTICLE IX

Amendments

The Board of Directors shall have the power to make, alter and
repeal by-laws of the Corporation.

<PAGE>

INVESTMENT ADVISORY AGREEMENT

COHEN & STEERS REALTY SHARES, INC.
757 Third Avenue
New York, New York 10017

June 28, 1991

COHEN & STEERS CAPITAL
MANAGEMENT, INC.
757 Third Avenue
New York, New York 10017

Dear Sirs:

We, the undersigned Cohen & Steers Realty Shares, Inc., herewith
confirm our agreement with you as follows:

1. We are an open-end, non-diversified management investment company
registered under the Investment Company Act of 1940 (the "Act"). we are
currently authorized to issue separate classes of shares and our Directors are
authorized to reclassify and issue any unissued shares to any number of
additional classes or series (portfolios) each having its own investment
objective, policies and restrictions, all as more fully described in the
prospectus and the statement of additional information constituting parts of the
Registration Statement filed on our behalf under the Securities Act of 1933 and
the Act. We propose to engage in the business of investing and reinvesting our
assets in securities of the type and in accordance with the limitations
specified in our Articles of Incorporation, By-Laws, Registration Statement
filed

<PAGE>

with the Securities and Exchange Commission under the Securities Act of 1933 and
the Act, and any representations maze in our prospectus and statement of
additional information, all in such manner and to such extent as may from time
to time be authorized by our Board of Directors. We enclose copies of the
documents listed above and will from time to time furnish you with any
amendments thereof.

2. (a) We hereby employ you to manage the investment and
reinvestment of our assets as above specified and, without limiting the
generality of the foregoing, to provide management and other services specified
below.

(b) You will make decisions with respect to all purchases and
sales of our portfolio securities. To carry out such decisions, you are hereby
authorized, as our agent and attorney-in-fact, for our account and at our risk
and in our name, to place orders for the investment and reinvestment of our
assets. In all purchases, sales and other transactions in our portfolio
securities you are authorized to exercise full discretion and act for us in the
same manner and with the same force and effect as we might do with respect to
such purchases, sales or other as well as with respect to all other things
necessary or incidental to the furtherance or conduct of such purchases, sales
or other transactions.

(c) You will report to our Board of Directors at each meeting
thereof all changes in our portfolio since the prior report, and will also keep
us in touch with important developments

<PAGE>

affecting our portfolio and on your own initiative will furnish us from time to
time with such information as you may believe appropriate for this purpose,
whether concerning the individual issuers whose securities are included in our
portfolio, the industries in which they engage, or the conditions prevailing in
the economy generally. You will also furnish us with such statistical and
analytical information with respect to our portfolio securities as you may
believe appropriate or as we reasonably may request. In making such purchases
and sales of our portfolio securities, you will bear in mind the policies set
from time to time by our Board of Directors as well as the limitations imposed
by our Articles of Incorporation and in our Registration Statement under the Act
and the Securities Act of 1933, the limitations in the Act and of the Internal
Revenue Code of 1936, as amended, in respect of regulated investment companies.

(d) is understood that you will from time to time employ or
associate with yourselves such persons as you believe to be particularly fitted
to assist you in the execution of your duties hereunder, the cost of performance
of such duties to be borne and paid by you. No obligation may be incurred on our
behalf in any such respect. During the continuance if this agreement at our
request you will provide us persons satisfactory to our Board of Directors to
serve as our officers.

3. We propose to retain the services of an administrator, which
shall be a firm acceptable to you, to administer all aspects of our operations
except those which are

<PAGE>

your responsibility pursuant to this agreement. We will bear the cost of and pay
the fee of the administrator. Our initial administrator will be Mutual Funds
Service Company.

4. It is further agreed that you shall be responsible for the
portion of our net expenses (except interest, taxes, brokerage, expenditures
which are capitalized in accordance with generally accepted accounting
principles and extraordinary expenses, all to the extent permitted by applicable
state law and regulation) incurred by us during each of our fiscal years or
portion thereof that this agreement is in effect between us which, in any such
year exceeds the limits applicable to us under the laws or regulations of any
state in which our shares are qualified for sale (reduced pro rata for any
portion of less than a year). We hereby confirm that, subject to the foregoing,
we shall be responsible and hereby assume the obligation for payment of all our
other expenses, including: (a) payment of the fee payable to you under paragraph
6 hereof; (b) charges and expenses of our administrator, custodian, transfer,
and dividend disbursing agent; (c) fees of directors who are not your affiliated
persons; (d) legal and auditing expenses; (e) compensation of our officers,
Directors and employees who do not devote any part of their time to your affairs
or the affairs of your affiliates other than us; (f) costs of printing our
prospectuses and stockholder reports; (g) costs of proxy solicitation; (h) cost
of maintenance of corporate existence; (i) interest charges, taxes, brokerage
fees and commissions; (j) costs of stationery and supplies; (k) expenses and

<PAGE>

fees related to registration and filing with the Securities and Exchange
commission and with state regulatory authorities; and (l) upon the approval of
the Board of Directors, costs of your personnel or your affiliates rendering
clerical, accounting and other office services.

5. We shall expect of you, and you will give us the benefit of, your
best judgment and efforts in rendering these services to us, and we agree as an
inducement to your undertaking these services that you shall not be liable
hereunder for any mistake of judgment or in any event whatsoever, except for
lack of good faith, provided that nothing herein shall be deemed to protect, or
purport to protect, you against any liability to us or to our security holders
to which you would otherwise be subject by reason of willful misfeasance, bad
faith or gross negligence in the performance of your duties hereunder, or by
reason of your reckless disregard of your obligations and duties hereunder.

6. In consideration of the foregoing we will pay you a monthly fee
at an annualized rate of .85 of 1% of our average daily net assets. Such fee
shall be payable in arrears on the last day of each calendar month for services
performed hereunder during such month. If our initial Registration Statement is
declared effective by the Securities and Exchange Commission after the beginning
of a month or this agreement terminates prior to the end of a month, such fee
shall be prorated according to the proportion which such portion of the month
bears to the full month.

<PAGE>

7. This agreement shall become effective on the date on which our
pending Registration Statement on Form N-1A relating to our shares becomes
effective and shall remain in effect until the first meeting of our shareholders
held after such date and, if approved by the vote of a majority of the
outstanding voting securities, as defined in the Act, at such meeting, continue
in effect until December 31, 1992 and may be continued for successive
twelve-month periods (computed from each January 1) with respect to each
portfolio provided that such continuance is specifically approved at least
annually by the Board of Directors or by majority vote of the holders of the
outstanding voting securities of such portfolio (as defined in the Act), and, in
either case, by a majority of the Board of Directors who are not interested
persons as defined in the Act, of any party to this agreement (other than as
Directors of our corporation), provided further, however, that if the
continuation of this agreement is not approved, you may continue to render the
services described herein in the manned to the extent permitted by the Act and
the rules and regulations thereunder. Upon the effectiveness of this agreement,
it shall supersede all previous agreements between us covering the subject
matter hereof. This agreement may be terminated at any time, without the payment
of any penalty, by vote of a majority of the outstanding voting securities (as
so defined) or by a vote of a majority of the Board of Directors on 60 days'
written notice to you, or by you on 60 days' written notice to us.

<PAGE>

8. This agreement may not be transferred, assigned, sold or in any
manner hypothecated or pledged by you and this agreement shall terminate
automatically in the event of any such transfer, assignment, sale, hypothecation
or pledge by you. The terms "transfer", "assignment" and "sale" as used in this
paragraph shall have the meanings ascribed thereto by governing law and any
interpretation thereof contained in rules or regulations promulgated by the
Securities and Exchange Commission thereunder.

9. Except to the extent necessary to perform your obligations
hereunder, nothing herein shall be deemed to limit or restrict your right, or
the right of any of your officers, directors or employees, who may also be a
Director, officer or employee of ours, or persons otherwise affiliated with us
(within the meaning of the Act) to engage in any other business or to devote
time and attention to the management or other aspects of any other business,
whether of a similar or dissimilar nature, or to render services of any kind to
any other trust, corporation, firm, individual or association.

10. This agreement shall be construed in accordance with the laws of
the State of New York, provided, however, that nothing herein shall be construed
as being inconsistent with the Act.

<PAGE>

If the foregoing is in accordance with your understanding, will you
kindly so indicate by signing and returning to us the enclosed copy hereof.

Very truly yours,

COHEN & STEERS REALTY SHARES, INC.

By: /s/ Robert H. Steers
------------------------------------
Chairman

Agreed to and accepted
as of the date first set forth above

COHEN & STEERS CAPITAL MANAGEMENT, INC.

By: /s/ Martin Cohen
-----------------------------------
President

<PAGE>

COHEN & STEERS REALTY SHARES, INC.
757 Third Avenue
New York, New York 10017

March 11, 1992

Cohen & Steers Securities, Inc.
757 Third Avenue
New York, New York 10017

Dear Sirs:

1. In consideration of the agreements on your part herein contained and of
the payment by us to you of a fee of $1 per year and on the terms and conditions
set forth herein, we have agreed that you shall be, for the period of this
agreement, a distributor, as our agent, for the unsold portion of such number of
shares of our common stock, $.001 par value per share, as may be effectively
registered from time to time under the Securities Act of 1933, as amended
(herein after referred to as the 'Act').

2. We hereby agree that you will act as our agent, and hereby appoint you
our agent, to offer, and to solicit offers to subscribe to, the unsold balances
of shares of our common stock as shall then be effectively registered under the
Act. All subscriptions for shares of our common stock obtained by you shall be
directed to us for acceptance and shall not be binding on us until accepted by
us. You shall have no authority to make binding subscriptions on our behalf. We
reserve the right to

<PAGE>

sell shares of our common stock through other distributors or directly to
investors through subscriptions received by us at our principal office in New
York, New York. The right given to you under this agreement shall not apply to
shares of our common stock issued in connection with (a) the merger or
consolidation of any other investment company with us, (b) our acquisition by
purchase or otherwise of all or substantially all of the assets or stock of any
other investment company, or (c) the reinvestment in shares of our common stock
by our stockholders of dividends or other distributions or any other offering by
us of securities to our stockholders.

3. You will use your best efforts to obtain subscriptions to shares of our
common stock upon the terms and conditions contained herein and in the then
current Prospectus and Statement of Additional Information including the
offering price. You will send to us promptly all subscriptions placed with you.
We will advise you of the approximate net asset value per share or net asset
value per share (as used in the Prospectus or Statement of Additional
Information) on any date requested by you and at such other times as it shall
have been determined by us. We shall furnish you from time to time, for use in
connection with the offering of shares of our common stock, such other
information with respect to us and shares of our common stock as you may
reasonably request. We shall supply you with such copies of our current
Prospectus and Statement of Additional

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<PAGE>

Information in effect from time to time as you may request. You are not
authorized to give any information or to make any representations, other than
those contained in the Registration Statement, Prospectus or Statement of
Additional Information, as then in effect, filed under the Act covering shares
of our common stock or which we may authorize in writing. You may use employees,
agents and other persons who may not be your employees or agents, at your cost
and expense, to assist you in carrying out your obligations hereunder, but no
such employee, agent or other person shall be deemed to be your agent or have
any rights under this agreement.

4. We reserve the right to suspend the offering of shares of our common
stock at any time, in the absolute discretion of our Board of Directors, and
upon notice of such suspension you shall cease to offer shares of our common
stock hereunder.

5. Both of us will cooperate with each other in taking such action as may be
necessary to qualify shares of our common stock for sale under the securities
laws of such states as we may designate, provided, that you shall not be
required to register as a broker-dealer or file a consent to service of process
in any such state. Pursuant to our Investment Advisory Agreement dated June 28,
1991, with Cohen & Steers Capital Management, Inc., we will pay all fees and
expenses of registering shares of our common stock under the Act and of

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<PAGE>

qualification of shares of our common stock and our qualification under
applicable state securities laws. You shall pay all expenses relating to your
broker-dealer qualification.

6. We represent to you that our Registration Statement, Prospectus and
Statement of Additional Information (as in event from time to time) under the
Act have been or will be, as the case may be, carefully prepared in conformity
with the requirements of the Act and the rules and regulations of the Securities
and Exchange Commission thereunder. We represent and warrant to you that your
Registration Statement, Prospectus and Statement of Additional Information
contain or will contain all statements required to be stated therein in
accordance with the Act and the rules and regulations of said commission, and
that all statements of fact contained or to be contained therein are or will be
true and correct at the time indicated or the effective date as the case may be;
that our Registration Statement, Prospectus and Statement of Additional
Information when any of them shall become effective or be authorized for use,
will not include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading to a purchaser of shares of our common stock. We will
from time to time file such amendment or amendments to our Registration
Statement, Prospectus and Statement of Additional Information as, in the light
of future developments, shall, in the opinion of our

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<PAGE>

counsel, be necessary in order to have our Registration Statement, Prospectus
and Statement of Additional Information at all times contain all material facts
required to be stated therein or necessary to make any statements therein not
misleading to a purchaser of shares of our common stock, but, if we shall not
file such amendment or amendments within fifteen days after receipt by us of a
written request from you to do so, you may, at your option, terminate this
agreement immediately. We shall not file any amendment to our Registration
Statement, Prospectus or Statement of Additional Information without giving you
reasonable notice thereof in advance; provided, however, that nothing contained
in this agreement shall in any way limit our right to file at any time such
amendments to our Registration Statement, Prospectus or Statement of Additional
Information of whatever character, as we may deem advisable, such right being in
all respects absolute and unconditional. We represent and warrant to you that
any amendment to our Registration Statement, Prospectus or Statement of
Additional Information hereafter filed by us will, when it becomes effective,
contain all statements required to be stated therein in accordance with the Act
and the rules and regulations of said commission, that all statements of fact
contained therein will, when the same shall become effective, be true and
correct and that no such amendment, when it becomes effective, will include an
untrue statement of a material fact or will omit to state a material fact
required to

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<PAGE>

be stated therein or necessary to make the statements therein not misleading to
a purchaser of our shares.

7. We agree to indemnify, defend and hold you, and any person who controls
you within the meaning of Section 15 of the Act, free and harmless from and
against any and all claims, demands, liabilities and expenses (including the
cost of investigating or defending such claims, demands or liabilities and any
counsel fees incurred in connection therewith) which you or any such controlling
person may incur, under the Act, or under common law or otherwise, arising out
of or based upon any alleged untrue statement of a material fact contained in
our Registration Statement, Prospectus or Statement of Additional Information in
effect from time to time under the Act or arising out of or based upon any
alleged omission to state a material fact required to be stated in either
thereof or necessary to make the statements in either thereof not misleading:
provided, however, that in no event shall anything herein contained be so
construed as to protect you against any liability to us or our security holders
to which you would otherwise be subject by reason of willful misfeasance, bad
faith, or gross negligence in the performance of your duties, or by reason of
your reckless disregard of your obligations and duties under this agreement. Our
agreement to indemnify you and any such controlling person as aforesaid is
expressly conditioned upon our being notified of any action brought against you
or any such controlling person, such

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<PAGE>

notification to be given by letter or by telephone addressed to us at our
principal office in New York, New York, and sent to us by the person against
whom such action is brought within ten days after the summons or other first
legal process shall have been served. The failure so to notify us of any such
action shall not relieve us from any liability which we have to the person
against whom such action is brought by reason of any such alleged untrue
statement or omission otherwise than on account of our indemnity agreement
contained in this paragraph 7. We will be entitled to assume the defense of any
suit brought to enforce any such claim, and to retain counsel of good standing
chosen by us and approved by you. In the event we do elect to assume the defense
of any such suit and retain counsel of food standing approved by you, the
defendant or defendants in such suit shall bear the fees and expense of any
additional counsel retained by any of them; but in the case we do not elect to
assume the defense of any such suit, or in case you do not approve of counsel
chosen by us, we will reimburse you or the controlling person or persons named
as defendant or defendants in such suit, for the fees and expenses of any
counsel retained by you or them. Our indemnification agreement contained in this
paragraph 7 and our representations and warranties in this agreement shall
remain operative and in full force and effect regardless of any investigation
made by or on behalf of you or any controlling person and shall survive the sale
of any shares of our common

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<PAGE>

stock made pursuant to subscriptions obtained by you. This agreement of
indemnity will inure exclusively to your benefit, to the benefit of your
successors and assigns, and to the benefit of any controlling persons and their
successors and assigns. We agree promptly to notify you of this commencement of
any litigation or proceeding against us in connection with the issue and sale of
any shares of our common stock.

8. You agree to indemnify, defend and hold us, our several officers and
directors, and any person who controls us within the meaning of Section 15 of
the Act, free and harmless from and against any and all claims, demands,
liabilities, and expenses (including the cost of investigating or defending such
claims, demands or liabilities and any reasonable counsel fees incurred in
connection therewith) which we, our officers or directors, or any such
controlling person may incur under the Act or under chosen law or otherwise, but
only to the extent that such liability, or expense incurred by us, our officers
or directors or such controlling person resulting from such claims or demands
shall arise out of or be based upon any alleged untrue statement of a material
fact contained in information furnished in writing by you to us for use in our
Registration Statement, Prospectus or Statement of Additional Information in
effect from time to time under the Act, or shall arise our of or be based upon
any alleged omission to state a material fact in connection with such
information required to be stated in the Registration

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<PAGE>

Statement, Prospectus or Statement of Additional Information or necessary to
make such information not misleading. Your agreement to indemnify us, our
officers or directors, and any such controlling person as aforesaid is expressly
conditioned upon your being notified of any action brought against us, our
officers or directors or any such controlling person, such notification to be
given by letter or telegram addressed to you at your principal office in New
York, New York, and sent to you by the person against whom such action is
brought, within ten days after the summons or other first legal process shall
have been served. You shall have a right to control the defense of such action,
with counsel of you own choosing, satisfactory to us, if such action is based
upon such alleged misstatement or omission on your part, and in ay other event
you and we, our officers or directors or such controlling person shall each have
the right to participate in the defense or preparation of the defense of any
such action. The failure so to notify you of any such action shall not relieve
you from any liability which you may have to us, to our officers or directors,
or to such controlling person by reason of any such untrue statement or omission
on your part otherwise than on account of your indemnity agreement contained in
this paragraph 8.

9. We agree to advise you immediately:

(a) of any request by the Securities and Exchange Commission for
amendments to our Registration Statement,

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<PAGE>

Prospectus or Statement of Additional Information or for additional information,

(b) in the event of the issuance by the Securities and Exchange
Commission of any stop order suspending the effectiveness of our
Registration Statement, Prospectus or Statement of Additional Information or
the initiation of any proceedings for that purpose,

(c) of the happening of any material event which makes untrue any
statement made in our Registration Statement, Prospectus or Statement of
Additional Information or which requires the making of a change in any
thereof in order to make the statements therein not misleading, and

(d) of all action of any Securities and Exchange Commission with respect
to any amendments to our Registration Statement, Prospectus or Statement of
Additional Information which may from time to time be filed with the
Securities and Exchange Commission under the Act.

10. This Agreement shall become effective on the date hereof and shall
remain in effect until December 31, 1993, and thereafter automatically for
successive twelve-month periods (computed from each January 1) provided that
such continuance is specifically approved at least annually by a vote of a
majority of our outstanding voting securities, as defined in the Investment
Company Act of 1940, as amended, or by our Board of Directors, and in either
case by a majority of our directors who

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<PAGE>

are not parties to this agreement or interested persons, as defined in the
Investment Company Act of 1940, of any such party. This agreement may be
terminated at any time, without the payment of any penalty, by vote of a
majority of our outstanding voting securities (as so defined), or by a vote of a
majority of our Directors who are not parties to this agreement or interested
persons (as defined in the Investment Company Act of 1940, as amended) of any
party to this agreement, on sixty days' written notice to you, or by you on
sixty days' written notice to us.

11. This agreement may not be transferred, assigned, sold or in any manner
hypothecated or pledged by you and this agreement shall terminate automatically
in the event of any such transfer, assignment, sale, hypothecation or pledge.
The terms 'transfer', 'assignment', and 'sale' as used in this paragraph shall
have the meanings ascribed thereto by governing law and any interpretation
thereof contained in rules or regulations promulgated by the Securities and
Exchange Commission thereunder.

12. Except to the extent necessary to perform your obligations hereunder,
nothing herein shall be deemed to limit or restrict your right, or the right of
any of your officers, directors or employees who may also be a director, officer
of employee of ours, to engage in any other business or to devote time and
attention to the management or other aspects of any other business, whether of a
similar or dissimilar nature, or to

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<PAGE>

render services of any kind to any other corporation, firm, individual or
association.

If the foregoing is in accordance with your understanding, will you kindly
so indicate by signing and returning to us the enclosed copy hereof.

Very truly yours,
Cohen & Steers Realty Shares, Inc.

By /s/ Martin Cohen
___________________________________
Martin Cohen
President

Accepted:
Cohen & Steers Securities, Inc.

By /s/ Robert H. Steers
---------------------------------
Robert H. Steers
Chairman

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<PAGE>

MUTUAL FUND
CUSTODY AGREEMENT

THIS AGREEMENT is made as of this 28th day of June, 1991 by and
between Cohen & Steers Realty Shares Inc. (the "Company"), and UNITED STATES
TRUST COMPANY OF NEW YORK, a New York corporation ("U.S. Trust").

RECITAL

WHEREAS, the Company is registered as an open-end non-diversified,
management investment company under the Investment Company Act of 1940, as
amended ("the 1940 Act"); and

WHEREAS, the Company desires to retain U.S. Trust to serve as the
Company's custodian and U.S. Trust is willing to furnish such services;

NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, it is agreed between the parties hereto as follows:

1. Appointment. The Company hereby appoints U.S. Trust to act as
custodian of the portfolio securities, cash and other property of each Fund of
the Company and any future Funds for the period and pursuant to the terms set
forth in this Agreement. U.S. Trust accepts such appointment and agrees to
furnish the services herein set forth in return for the compensation as provided
in Paragraph 21 of this Agreement.

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<PAGE>

2. Delivery of Documents. The Company has furnished U.S. Trust with
copies properly certified or authenticated of each of the following:

(a) Resolutions of the Company's Board of Directors
authorizing the appointment of U.S. Trust as Custodian of the portfolio
securities, cash and other property of each Fund of the Company and approving
this Agreement;

(b) Incumbency and signature certificates identifying and
containing the signatures of the Company's officers and/or the persons
authorized to sign Written Instructions, as hereinafter defined, on behalf of
the Company;

(c) The Company's Articles of Incorporation filed with the
State Department of Assessments & Taxation of the State of Maryland on April 26,
1991 and all amendments thereto (such Articles of Incorporation, as currently in
effect and as they shall from time to time be amended, are herein called the
"Charter");

(d) The Company's By-Laws and all amendments thereto (such
By-Laws, as currently in effect and as they shall from time to time be amended,
are herein called the "By-Laws");

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<PAGE>

(e) Resolutions of the Company's Board of Directors appointing
the investment advisor to the portfolio of the Company (herein "the Fund") and
resolutions of the Company's Board of Directors and Initial Shareholders
approving the proposed Investment Advisory Agreement between Cohen & Steers
Capital Management Inc., the company's Investment Adviser (the "Adviser"), dated
as of June ___, 1991.

(f) Resolutions of the Company's Board of Directors appointing
United States Trust Co. of New York as the administrator for the Company and
approving a proposed Fund Accounting and Administration Agreement between U.S.
Trust Company of New York and the Company dated as of June __, 1991 (the
"Administration Agreement");

(g) The Advisory Agreement and the Administration Agreement;

(h) The Company's Notification of Registration filed pursuant
to Section 8(a) of the 1940 Act on Form N-8A with the Securities and Exchange
Commission ("SEC") on April 29, 1991;

(i) The Company's Registration Statement on Form N-1A under
the 1940 Act and the Securities Act of 1933, as amended ("the 1933 Act") and any
amendments thereto as filed with the SEC; and

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<PAGE>

(j) The Company's most recent prospectus and statement of
additional information and information (such prospectus, as currently in
effect, all amendments and supplements thereto are herein called the
"Prospectus").

The Company will furnish U.S. Trust from time to time with copies of
all amendments of or supplements to the foregoing, if any, and with comparable
documents with respect to any Fund of the Company organized after the date of
this Agreement. The Company will also furnish U.S. Trust with the opinion of
counsel for the Company with respect to the validity of the Shares and the
status of such Shares under the Securities Act of 1933, filed with the S.E.C.

3. Definitions.

(a) "Authorized Person". As used in this Agreement, the term
"Authorized Person" means the Company's President, Treasurer and any other
person, whether or not any such person is an officer or employee of the Company,
duly authorized by the Board of Directors of the Company to give Written
Instructions on behalf of the Company and listed on Attachment A which may be
amended from time to time.

(b) "Book-Entry System". As used in this Agreement, the term
"Book-Entry System" means the Federal Reserve/Treasury book-entry system for
United States and federal agency securities, its successor or successors and its
nominee or nominees.

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<PAGE>

(i) any and all securities and other property of any
Fund which the Company may from time to time deposit, or cause to be
deposited, with U.S. Trust or which U.S. Trust may from time to time hold
for any Fund;

(ii) all income in respect of any of such securities or
other property;

(iii) all proceeds of the sale of any of such securities
or other property; and

(iv) all proceeds of the sale of securities issued by
the Company, which are received by U.S. Trust from time to time from or on
behalf of the Company.

(d) "Securities Depository". As used in this Agreement, the
term "Securities Depository" shall mean The Depository Trust Company, a clearing
agency registered with the SEC or its successor or successors and its nominee or
nominees; and shall also mean any other registered clearing agency, its
successor or successors specifically identified in a certified copy of a
resolution of the Company's Board of Directors approving deposits by U.S. Trust
therein.

(e) "Written Instructions". Means instructions

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<PAGE>

(i) instructions delivered by mail, tested telegram,
cable, telex, facsimile sending device, and received by U.S. Trust, signed
by two Authorized Persons or by persons reasonably believed by U.S. Trust
to be Authorized Persons; or

(ii) transmitted electronically through the U.S. Trust
Asset Management System or any similar electronic instruction system
acceptable to U.S. Trust.

4. Delivery and Registration of the Property. The Company will
deliver or cause to be delivered to U.S. Trust all securities and all moneys
owned by it, including cash received for the issuance of its Shares, at any time
during the period of this Agreement, except for securities and moneys to be
delivered to any subcustodian appointed pursuant to Paragraph 7 hereof. U.S.
Trust will not be responsible for such securities and such moneys until actually
received by it. All securities delivered to U.S. Trust or to any such
subcustodian (other than in bearer form) shall be registered in the name of the
Company or in the name of a nominee of the Company or in the name of U.S. Trust
or any nominee of U.S. Trust (with or without indication of fiduciary status) or
in the name of any subcustodian or any nominee of such subcustodian appointed
pursuant to Paragraph 7 hereof or shall be properly endorsed and in form for
transfer satisfactory to U.S. Trust.

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<PAGE>

5. Voting Rights. With respect to all securities, however
registered, it is understood that the voting and other rights and powers shall
be exercised by the Company. U.S. Trust's only duty shall be to mail to the
Company any documents received, including proxy statements and offering
circulars, with any proxies for securities registered in a nominee name executed
by such nominee. Where warrants, options, tenders or other securities have fixed
expiration dates, the Company understands that in order for U.S. Trust to act,
U.S. Trust must receive the Company's instructions at its offices in New York,
addressed as U.S. Trust may from time to time request, by no later than noon
(N.Y. City time) at least one business day prior to the last scheduled date to
act with respect thereto (or such earlier date or time as U.S. Trust may notify
the Company). Absent U.S. Trust's timely receipt of such instructions, such
instruments will expire without liability to U.S. Trust. Corporate reports need
not be forwarded to the Company.

6. Receipt and Disbursement of Money.

(a) U.S. Trust shall open and maintain a separate custody
account or accounts for each Fund in the name of such Fund, subject only to
draft or order by U.S. Trust acting pursuant to the terms of this Agreement, and
shall hold in such account or accounts, subject to the provisions hereof, all
cash received by it from or for the

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<PAGE>

account of each Fund of the Company. U.S. Trust shall make payments of cash to,
or for the account of, the Company from such cash only (i) for the purchase of
securities for each of the Funds as provided in Paragraph 12 hereof; (ii) for
the redemption on Shares of each class as provided in subparagraph (b) of
Paragraph 10 hereof; (iii) upon receipt of Written Instructions, for the payment
of dividends or other distributions of Shares of each class, or for the payment
of interest, taxes, administration or advisory fees or expenses which are to be
borne by the Company or by any Fund under the terms of this Agreement, the
Advisory Agreement, the Administration Agreement; (iv) upon receipt of Written
Instructions for payments in connection with the conversion, exchange or
surrender of securities owned or subscribed to by the Company for the Fund and
held by or to be delivered to U.S. Trust; (v) to a subcustodian pursuant to
Paragraph 7 hereof; or (vi) upon receipt of Written Instructions for other
corporate purposes.

(b) U.S. Trust is hereby authorized to endorse and collect all
checks, drafts or other orders for the payment of money received as custodian
for the account of the Fund of the Company.

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<PAGE>

7. Receipt of Securities.

(a) Except as provided by Paragraph 8 hereof, U.S. Trust shall
hold all securities and non-cash property received by it for the account of the
Fund of the Company. All such securities and non-cash property are to be held or
disposed of by U.S. Trust for the Fund of the Company pursuant to the terms of
this Agreement. In the absence of Written Instructions accompanied by a
certified resolution authorizing the specific transaction by the Company's
Board, U.S. Trust shall have no power or authority to withdraw, deliver, assign,
hypothecate, pledge or otherwise dispose of any such securities and investments,
except in accordance with the express terms provided for in this Agreement. In
no case may any director, officer, employee or agent of the Company withdraw any
securities. In connection with its duties under this Paragraph 7, U.S. Trust
may, at its own expense, enter into subcustodian agreements with other banks or
trust companies for the receipt of certain securities and cash to be held by
U.S. Trust for the account of the Fund of the Company pursuant to this
Agreement; provided that each such bank or trust company has an aggregate
capital, surplus and undivided profits, as shown by its last published report,
of not less than twenty million dollars ($20,000,000) and that such bank or
trust company agrees with U.S. Trust to comply with all relevant provisions of
the 1940 Act and applicable rules and

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<PAGE>

regulations thereunder. U.S. Trust Co. of New York will be liable for acts or
omissions of any such Custodian.

(b) Promptly after the close of business on each day U.S.
Trust shall furnish the Company with confirmations and a summary of all
transfers to or from the account of each Fund of the Company during said day.
Where securities are transferred to an account of any Fund of the Company
established pursuant to Paragraph 8 hereof, U.S. Trust shall also by book-entry
or otherwise identify as belonging to such Fund of the Company the quantity of
securities in a fungible bulk of securities registered in the name of U.S. Trust
(or its nominee) or shown in U.S. Trust's account on the books of a Securities
Depository of the Book-Entry System. At least monthly and from time to time,
U.S. Trust shall furnish the Company with a detailed statement of the Property
held for each Fund of the Company under this Agreement.

8. Use of Securities Depository of the Book-Entry System. The
Company shall deliver to U.S. Trust a certified resolution of the Board of
Directors of the Company approving, authorizing and instructing U.S. Trust on a
continuous and ongoing basis until instructed to the contrary by Written
Instructions actually received by U.S. Trust (i) to deposit in a Securities
Depository or the Book-Entry System all securities of each Fund of the Company
eligible for deposit therein and (ii) to utilize a

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<PAGE>

Securities Depository or the Book-Entry System to the extent possible in
connection with the performance of its duties hereunder, including without
limitation settlements of purchases and sales of securities by each Fund of the
Company, and deliveries and returns of securities collateral in connection with
borrowings. Without limiting the generality of such use, it is agreed that the
following provisions shall apply thereto:

(a) Securities and any cash of each Fund of the Company
deposited in a Securities Depository or the Book-Entry System will at all times
be segregated from any assets and cash controlled by U.S. Trust in other than a
fiduciary or custodian capacity but may be commingled with other assets held in
such capacities. U.S. Trust will effect payment for securities and receive and
deliver securities in accordance with accepted industry practices in the place
where the transaction is settled, unless Company has given U.S. Trust Written
Instructions to the contrary.

(b) All books and records maintained by U.S. Trust which
relate to each Fund of the Company's participation in a Securities Depository or
the Book-Entry System will at all times during U.S. Trust's regular business
hours be open to the inspection of the Company's duly authorized employees or
agents, and the Company will be furnished with all information in respect of the
services rendered to it as it may require.

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<PAGE>

9. Instructions Consistent with Charter, etc. Unless otherwise
provided in this Agreement, U.S. Trust shall act only upon Written Instructions.
U.S. Trust may assume that any Written Instructions received hereunder are not
in any way inconsistent with any provision of such Charter or By-Laws or any
vote or resolution of the Company's Board of Directors, or of any committee
thereof. U.S. Trust shall be entitled to rely upon any Written Instructions
actually received by U.S. Trust pursuant to this Agreement. The Company agrees
that U.S. Trust shall incur no liability to the Company in acting upon Written
Instructions given to U.S. Trust. In accord with instructions from the Customer,
as required by accepted industry practice or as U.S. Trust may elect in
effecting the execution of Customer instructions, advances of cash or other
Property made by U.S. Trust, arising from the purchase, sale, redemption,
transfer or other disposition of Property of the Customer, or in connection with
the disbursement of funds to any party, or in payment of fees, expenses, claims
or liabilities owed to U.S. Trust by the Customer, or to any other party which
has secured judgment in a Court of Law against the Customer which creates an
overdraft in the Accounts or overdelivery of Property shall be deemed a loan by
U.S. Trust to the Customer, payable on demand, bearing interest at such rate
customarily charged by U.S. Trust for similar loans.

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<PAGE>

The Company agrees that test arrangements, authentication methods or
other security devices to be used with respect to instructions which the Company
may give by telephone, telex, TWX, facsimile transmission, bank wire or other
teleprocess, or through an electronic instruction system, shall be processed in
accordance with terms and conditions for the use of such arrangements, methods
or devices as U.S. Trust may put into effect and modify from time to time. The
Company shall safeguard any test keys, identification codes or other security
devices which U.S. Trust makes available to the Company and agrees that the
Company shall be responsible for any loss, liability or damage incurred by U.S.
Trust or by the Company as a result of U.S. Trust's acting in accordance with
instructions from any unauthorized person using the proper security device,
provided that such person did not obtain such security device solely as a result
of U.S. Trust's negligence or willful misconduct. U.S. Trust may electronically
record, but shall not be obligated to so record, any instructions given by
telephone and any other telephone discussions with respect to the Account. In
the event that the Company uses U.S. Trust's Asset Management System or any
successor electronic communications or information system, the Company agrees
that U.S. Trust is not responsible for the consequences of the failure of that
system to perform for any reason, beyond the reasonable control of U.S. Trust,
or

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<PAGE>

for the failure to perform for any reason, beyond the reasonable control of U.S.
Trust, of any communications carrier, utility, communications network or the
failure to perform for any reason, beyond the reasonable control of U.S. Trust,
of communications or computer equipment. In the event that system is inoperable,
the Company agrees to notify U.S. Trust immediately, and U.S. Trust agrees that
it will accept the communication of transaction instructions by telephone,
facsimile transmission on equipment compatible to U.S. Trust's facsimile
receiving equipment or by letter, at no additional charge to the Company.

10. Transactions Not Requiring Instructions. U.S. Trust is
authorized to take the following action without Written Instructions:

(a) Collection of Income and Other Payments. U.S. Trust shall:

(i) collect and receive for the account of each Fund of
the Company, all income and other payments and distributions, including
(without limitation) stock dividends, rights, warrants and similar items,
included or to be included in the Property of such Fund, and promptly
advise the Company of such receipt and shall credit such income, as
collected, to the Company's account for such Fund. From time to time, U.S.
Trust may elect to credit, but shall not be so obligated, the Accounts
with interest, dividends or

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<PAGE>

principal payments on payable or contractual settlement date, in
anticipation of receiving same from a payor, central depository, broker or
other agent employed by the Customer or U.S. Trust. Any such crediting and
posting shall be at the Customer's sole risk, and U.S. Trust shall be
authorized to reverse any such advance posting in the event it does not
receive good funds from any such payor, central depository, broker or
agent of the Customer.

(ii) with respect to securities of foreign issue, effect
collection of dividends, interest and other income, and to notify the
Company of any call for redemption, offer of exchange, right of
subscription, reorganization, or other proceedings affecting such
securities, or any default in payments due thereon. It is understood,
however, that U.S. Trust shall be under no responsibility for any failure
or delay in effecting such collections or giving such notice with respect
to securities of foreign issue, regardless of whether or not the relevant
information is published in any financial service available to it unless
such failure or delay is due to its negligence; however, this sentence
shall not be construed as creating any such responsibility with respect to
securities of non-foreign issue, other than such responsibility as may be
part of the general respon-

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<PAGE>

sibility of U.S. Trust. Collections of income in foreign currency are, to
the extent possible, to be converted into United States dollars unless
otherwise instructed in writing, and in effecting such conversion U.S.
Trust may use such methods or agencies as it may see fit, including the
facilities of its own foreign division at customary rates. All risk and
expenses incident to such collection and conversion is for the account of
the Company and U.S. Trust shall have no responsibility for fluctuations
in exchange rates affecting any such conversion.

(iii) endorse and deposit for collection in the name of
the Company, checks, drafts, or other orders for the payment of money on
the same day as received;

(iv) receive and hold for the account of each Fund of
the Company all securities received by the Fund as a result of a stock
dividend, share split-up or reorganization, recapitalization, readjustment
or other rearrangement or distribution of rights or similar securities
issued with respect to any portfolio securities of such Fund of the
Company held by U.S. Trust hereunder;

(v) present for payment and collect the amount payable
upon all securities which may mature or be called, redeemed or retired, or
otherwise become

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<PAGE>

payable on the date such securities become payable;

(vi) take any action which may be necessary and proper
in connection with the collection and receipt of such income and other
payments and the endorsement for collection of checks, drafts and other
negotiable instruments;

(vii) with respect to domestic securities, to exchange
securities in temporary form for securities in definitive form, to effect
an exchange of the shares where the par value of stock is changed, and to
surrender securities at maturity or when advised of earlier call for
redemption, against payment therefore in accordance with accepted industry
practice. The Company understands that U.S. Trust subscribes to one or
more nationally recognized services that provide information with respect
to calls for redemption of bonds or other corporate actions. U.S. Trust
shall not be liable for failure to redeem any called bond or take other
action if notice of such call or action was not provided by any service to
which it subscribes. U.S. Trust shall have no duty to notify the Company
of any rights, duties, limitations, conditions or other information set
forth in any security (including mandatory or optional put, call and
similar provisions), but U.S. Trust shall forward to the Company or the
Adviser any notices or other documents

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<PAGE>

subsequently received in regard to any such security. When fractional
shares of stock of a declaring corporation are received as a stock
distribution, U.S. Trust is authorized to sell the fraction received and
credit the Company's account. Unless specifically instructed to the
contrary in writing, U.S. Trust is authorized to exchange securities in
bearer form for securities in registered form. If any Property registered
in the name of a nominee of U.S. Trust or in the nominee of any entity
employed by U.S. Trust is called for partial redemption by the issuer of
such Property, U.S. Trust is authorized to allot the called portion to the
respective beneficial holders of the Property in such manner deemed to be
fair and equitable by U.S. Trust in its sole discretion.

(b) Miscellaneous Transactions. U.S. Trust is authorized to
deliver or cause to be delivered Property against payment or other consideration
or written receipt therefor in the following cases:

(i) for examination by a broker selling for the account
of any Fund of the Company in accordance with street delivery custom;

(ii) for the exchange of interim receipts or temporary
securities for definitive securities;

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<PAGE>

(iii) for transfer of securities into the name of the
Company or U.S. Trust or a nominee of either, or for exchange of
securities for a different number of bonds, certificates, or other
evidence, representing the same aggregate face amount or number of units
bearing the same interest rate, maturity date and call provisions, if any;
provided that, in any such case, the new securities are to be delivered to
U.S. Trust.

11. Transactions Requiring Instructions. Upon receipt of Written
Instructions and not otherwise, U.S. Trust, directly or through the use of a
Securities Depository or the Book-Entry System, shall:

(a) Execute and deliver to such persons as may be designated
in such Written Instructions, proxies, consents, authorizations, and any other
instruments whereby the authority of the Company as owner of any securities may
be exercised;

(b) Deliver any securities held for the Company against
receipt of other securities or cash issued or paid in connection with the
liquidation, reorganization, refinancing, merger, consolidation or
recapitalization of any corporation, or the exercise of any conversion
privilege;

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<PAGE>

mittee or other person in connection with the reorganization, refinancing,
merger, consolidation, recapitalization or sale of assets of any corporation,
against receipt of such certificates of deposit, interim receipts or other
instruments or documents as may be issued to it to evidence such delivery;

(d) Make such transfers or exchanges of the assets of the
Company and take such other steps as shall be stated in said instructions to be
for the purpose of effectuating any duly authorized plan of liquidation,
reorganization, merger, consolidation or recapitalization of the Company;

(e) Release securities belonging to the Company to any bank or
trust company for the purpose of pledge or hypothecation to secure any loan
incurred by the Company; provided, however, that securities shall be released
only upon payment to U.S. Trust of the monies borrowed, except that in cases
where additional collateral is required to secure a borrowing already made,
subject to proper prior authorization, further securities may be released for
that purpose; and pay such loan upon redelivery to it of the securities pledged
or hypothecated therefor and upon surrender of the note or notes evidencing the
loan.

12. Purchase of Securities. Promptly after each purchase of
securities by the Adviser, the Company shall deliver to U.S. Trust (as
Custodian) Written Instructions

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<PAGE>

specifying with respect to each such purchase: (a) the name of the issuer and
the title of the securities, (b) the number of shares or the principal amount
purchased and accrued interest, if any, (c) the dates of purchase and
settlement, (d) the purchase price per unit, (e) the total amount payable upon
such purchase, (f) the name of the person from whom or the broker through whom
the purchase was made and (g) the Fund of the Company for which the purchase was
made. U.S. Trust shall upon receipt of securities purchased by or for a Fund of
the Company pay out of the moneys held for the account of such Fund of the
Company the total amount payable to the person from whom or the broker through
whom the purchase was made, provided that the same conforms to the total amount
payable as set forth in such Written Instructions.

13. Sales of Securities. Promptly after each sale of securities by
the Adviser, the Company shall deliver to U.S. Trust (as Custodian) Written
Instructions, specifying with respect to each such sale: (a) the name of the
issuer and the title of the security, (b) the number of shares or principal
amount sold, and accrued interest, if any, (c) the date of sale, (d) the sale
price per unit, (e) the total amount payable to the Company upon such sale, (f)
the name of the broker through whom or the person to whom the sale was made and
(g) the Fund of the Company for which the sale was made. U.S. Trust shall
deliver the securities

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<PAGE>

upon receipt of the total amount payable to the Company upon such sale, provided
that the same conforms to the total amount payable as set forth in such Written
Instructions. Subject to the foregoing, U.S. Trust may accept payment in such
form as shall be satisfactory to it, and may deliver securities and arrange for
payment in accordance with the customs prevailing among dealers in securities.

14. Authorized Shares.

The Company has a fixed number of shares of each class of its
securities.

15. Records.

The books and records pertaining to the Company which are in the
possession of U.S. Trust shall be the property of the Company. Such books and
records shall be prepared and maintained as required by the 1940 Act, as
amended, and other applicable securities laws and rules and regulations. The
Company, or the Company's authorized representatives, shall have access to such
books and records at all times during U.S. Trust's normal business hours, and
such books and records shall be surrendered to the Company promptly upon
request. Upon the reasonable request of the Company, copies of any such books
and records shall be provided by U.S. Trust to the Company or the Company's
authorized representative at the Company's expense.

16. Cooperation with Accountants. U.S. Trust shall cooperate with
the Company's independent certified public accountants and shall take all
reasonable action in

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<PAGE>

the performance of its obligations under this Agreement to assure that the
necessary information is made available to such accountants for the expression
of their unqualified opinion, including but not limited to the opinion included
in the Company's semi-annual report on Form N-SAR.

17. Confidentiality. U.S. Trust agrees on behalf of itself and its
employees to treat confidentially and as the proprietary information of the
Company all records and other information relative to the Company and its prior,
present or potential Shareholders and relative to the advisors and its prior,
present or potential customers, and not to use such records and information for
any purpose other than performance of its responsibilities and duties hereunder,
except after prior notification to and approval in writing by the Company, which
approval shall not be unreasonably withheld and may not be withheld where U.S.
Trust may be exposed to civil or criminal contempt proceedings for failure to
comply, when requested to divulge such information by duly constituted
authorities, or when so requested by the Company. Nothing contained herein,
however, shall prohibit U.S. Trust from advertising or soliciting the public
generally with respect to other products or services, regardless of whether such
advertisement or solicitation may include prior, present or potential
Shareholders of the Company.

18. Equipment Failures. In the event of equipment failures beyond
U.S. Trust's control, U.S. Trust shall,

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<PAGE>

at no additional expense to the Company, take reasonable steps to minimize
service interruptions but shall have no liability with respect thereto. U.S.
Trust shall enter into and shall maintain in effect with appropriate parties one
or more agreements making reasonable provision for emergency use of electronic
data processing equipment to the extent appropriate equipment is available.

19. Right to Receive Advice.

(a) Advice of Company. If U.S. Trust shall be in doubt as to
any action to be taken or omitted by it, it may request, and shall receive, from
the Company directions or advice.

(b) Advice of Counsel. If U.S. Trust shall be in doubt as to
any question of law involved in any action to be taken or omitted by U.S. Trust,
it may request advice at its own cost from counsel of its own choosing (who may
be counsel for the Company or U.S. Trust, at the option of U.S. Trust).

(c) Conflicting Advice. In case of conflict between directions
or advice received by U.S. Trust pursuant to subparagraph (a) of this paragraph
and advice received by U.S. Trust pursuant to subparagraph (b) of this
paragraph, U.S. Trust shall be entitled to rely on and follow the advice
received pursuant to the latter provision alone.

(d) Protection of U.S. Trust. U.S. Trust shall be protected in
any action or inaction which it takes

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<PAGE>

or omits to take in reliance on any directions or advice received pursuant to
subparagraphs (a) or (b) of this paragraph which U.S. Trust, after receipt of
any such directions or advice, in good faith believes to be consistent with such
directions or advice. However, nothing in this paragraph shall be construed as
imposing upon U.S. Trust any obligation (i) to seek such directions or advice,
or (ii) to act in accordance with such directions or advice when received,
unless, under the terms of another provision of this Agreement, the same is a
condition to U.S. Trust's properly taking or omitting to take such action.
Nothing in this subparagraph shall excuse U.S. Trust when an action or omission
on the part of U.S. Trust constitutes willful misfeasance, bad faith, negligence
or reckless disregard by U.S. Trust of its duties under this Agreement.

20. Compliance with Governmental Rules and Regulations. The Company
assumes full responsibility for insuring that the contents of each Prospectus of
the Company complies with all applicable requirements of the 1933 Act, the 1940
Act, and any laws, rules and regulations of governmental authorities having
jurisdiction.

21. Compensation. As compensation for the services rendered by U.S.
Trust during the term of this Agreement, the Company will pay to U.S. Trust, in
addition to reimbursement of its out-of-pocket expenses, monthly fees as
outlined in Attachment B.

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<PAGE>

22. Indemnification. The Company, as sole owner of the Property,
agrees to indemnify and hold harmless U.S. Trust and its nominees from all
taxes, charges, expenses, assessments, claims and liabilities (including,
without limitation, liabilities arising under the 1933 Act, the Securities
Exchange Act of 1934, the 1940 Act, and any state and foreign securities and
blue sky laws, all as or to be amended from time to time) and expenses,
including (without limitation) attorneys' fees and disbursements, arising
directly or indirectly (a) from the fact that securities included in the
Property are registered in the name of any such nominee or (b) without limiting
the generality of the foregoing clause (a) from any action or thing which U.S.
Trust takes or does or omits to take or do (i) at the request or on the
direction of or in reliance on the advice of the Company, or (ii) upon Written
Instructions, provided, that neither U.S. Trust nor any of its nominees shall be
indemnified against any liability to the Company or to its Shareholders (or any
expenses incident to such liability) arising out of (x) U.S. Trust's or such
nominee's own willful misfeasance, bad faith, gross negligence or reckless
disregard of its duties under this Agreement or (y) U.S. Trust's own negligent
failure to perform its duties under this Agreement. In the event of any advance
of cash for any purpose made by U.S. Trust resulting from orders or Written
Instructions of the Company, or in the event that U.S. Trust

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<PAGE>

or its nominee shall incur or be assessed any taxes, charges, expenses,
assessments, claims or liabilities in connection with the performance of this
Agreement, except such as may arise from its or its nominee's own negligent
action, negligent failure to act, willful misconduct, or reckless disregard.

23. Responsibility of U.S. Trust. U.S. Trust shall be under no duty
to take any action on behalf of the Company except as specifically set forth
herein or as may be specifically agreed to by U.S. Trust in writing. In the
performance of its duties hereunder, U.S. Trust shall be obligated to exercise
care and diligence and to act in good faith and to use its best efforts within
reasonable limits to insure the accuracy of all services performed under this
Agreement. U.S. Trust shall be responsible for its own negligent failure to
perform its duties under this Agreement but to the extent that duties,
obligations and responsibilities are not expressly set forth in this Agreement,
U.S. Trust shall not be liable for any act or omission which does not constitute
willful misfeasance, bad faith or negligence on the part of U.S. Trust or
reckless disregard of such duties, obligations and responsibilities. Without
limiting the generality of the foregoing or of any other provision of this
Agreement, U.S. Trust in connection with its duties under this Agreement shall
not be under any duty or obligation to inquire into and shall not be liable for
or in

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<PAGE>

respect of (a) the validity or invalidity or authority or lack thereof of any
advice, direction, notice or other instrument which conforms to the applicable
requirements of this Agreement, if any, and which U.S. Trust believes to be
genuine, (b) the validity of the issue of any securities purchased or sold by
any Fund of the Company, the legality of the purchase or sale thereof or the
propriety of the amount paid or received therefor, (c) the legality of the issue
or sale of any Shares, or the sufficiency of the amount to be received therefor,
(d) the legality of the redemption of any Shares, or the propriety of the amount
to be paid therefor, (e) the legality of the declaration or payment of any
dividend or distribution on Shares, or (f) delays or errors or loss of data
occurring by reason of circumstances beyond U.S. Trust's control, including acts
of civil or military authority, national emergencies, labor difficulties, fire,
mechanical breakdown (except as provided in Paragraph 18), flood or catastrophe,
acts of God, insurrection, war, riots or failure of the mails, transportation,
communication or power supply.

24. Collections. All collections of monies or other property in
respect, or which are to become part, of the Property (but not the safekeeping
thereof upon receipt by U.S. Trust) shall be at the sole risk of the Company. In
any case in which U.S. Trust does not receive any payment due the Company within
a reasonable time after U.S. Trust

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<PAGE>

has made proper demands for the same, it shall so notify the Company in writing,
including copies of all demand letters, any written responses thereto, and
memoranda of all oral responses thereto and to telephonic demands, and await
instructions from the Company. U.S. Trust shall not be obliged to take legal
action for collection unless and until reasonably indemnified to its
satisfaction. U.S. Trust shall also notify the Company as soon as reasonably
practicable whenever income due on securities is not collected in due course.

25. Duration and Termination. This Agreement shall be effective as
of the date hereof and shall continue until termination by the Company or by
U.S. Trust on 60 day's written notice. Upon any termination of this Agreement,
pending appointment of a successor to U.S. Trust or a vote of the Shareholders
of the Company to dissolve or to function without a custodian of its cash,
securities or other property, U.S. Trust shall not deliver cash, securities or
other property of the Company to the Company, but may deliver them to a bank or
trust company of its own selection, having an aggregate capital, surplus and
undivided profits, as shown by its last published report of not less that twenty
million dollars ($20,000,000) as a custodian for the Company to be held under
terms similar to those of this Agreement, provided, however, that U.S. Trust
shall not be required to make any such delivery or payment

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<PAGE>

until full payment shall have been made by the Company of all liabilities
constituting a charge on or against the properties then held by U.S. Trust or on
or against U.S. Trust and until full payment shall have been made to U.S. Trust
of all of its fees, compensation, costs and expenses, subject to the provisions
of Paragraph 21 of this Agreement.

26. Notices. All notices and other communications (collectively
referred to as "Notice" or "Notices" in this paragraph) hereunder shall be in
writing or by confirming telegram, cable, telex or facsimile sending device.
Notices shall be addressed (a) if to U.S. Trust, at U.S. Trust's address, 45
Wall Street, New York, New York 10005; (b) if to the Company, at the address of
the Company; or (c) if to neither of the foregoing, at such other address as
shall have been notified to the sender of any such Notice or other
communication. If the location of the sender of a Notice and the address of the
addressee thereof are, at the time of sending, more than 100 miles apart, the
Notice may be sent by first-class mail, in which case it shall be deemed to have
been given three days after it is sent, or if sent by confirming telegram,
cable, telex or facsimile sending device, it shall be deemed to have been given
immediately, and, if the location of the sender of a Notice and the address of
the addressee thereof are, at the time of sending, not more than 100 miles
apart, the Notice may be sent by first-class mail, in which case it shall be
deemed

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<PAGE>

to have been given two days after it is sent, or if sent by messenger, it shall
be deemed to have been given on the day it is delivered, or if sent by
confirming telegram, cable, telex or facsimile sending device, it shall be
deemed to have been given immediately. All postage, cable, telegram, telex and
facsimile sending device charges arising from the sending of a Notice hereunder
shall be paid by the sender.

27. Further Actions. Each party agrees to perform such further acts
and execute such further documents as are necessary to effectuate the purposes
hereof.

28. Amendments. This Agreement or any part hereof may be changed or
waived only by an instrument in writing signed by the party against which
enforcement of such change or waiver is sought.

29. Miscellaneous. This Agreement embodies the entire Agreement and
understanding between the parties hereto, and supersedes all prior agreements
and understandings relating to the subject matter hereof. Appendix A hereto is
incorporated into and constitutes an integral part of this Agreement. The
captions in this Agreement are included for convenience of reference only and in
no way define or delimit any of the provisions hereof or otherwise affect their
construction or effect. This Agreement shall be deemed to be a contract made in
New York and governed by New York law. If any provision of this Agreement shall
be

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<PAGE>

held or made invalid by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected thereby. This Agreement shall
be binding upon and shall inure to the benefit of the parties hereto and their
respective successors.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their officers designated below as of the day and year first
above written.

[SEAL]

Attest: By
--------------------------- -------------------------------------

[SEAL] UNITED STATES TRUST COMPANY
OF NEW YORK

Attest: By
--------------------------- -------------------------------------

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<PAGE>

TRANSFER AGENCY AGREEMENT

This AGREEMENT made this 3rd day of June, 1991 by and between Cohen &
Steers Realty Shares, Inc., a Maryland corporation having its principal office
at 757 Third Avenue, New York, New York 10018 ("the Fund") and The United States
Trust Company of New York, a New York State chartered bank and trust company
having its principal office at 114 West 47th Street, New York, New York 10036
("UST").

W I T N E S S E T H:

WHEREAS, the Fund desires to appoint UST as the transfer agent, dividend
disbursing agent and agent in connection with certain other activities of the
Fund and UST desires to accept such appointment;

NOW, THEREFORE, in consideration of the mutual covenants contained herein,
the parties hereto agree as follows:

1. Appointment. The Fund hereby appoints and employs UST as transfer agent
for its authorized and issued shares of common stock (the "Shares") of the Fund,
dividend disbursing agent and agent in connection with such plans for the
purchase or periodic redemption of shares as are described in the prospectus
and/or statement of additional information of the Fund corresponding to the date
of this Agreement; and UST hereby accepts such appointment and agrees to act in
such capacities under the terms and conditions set forth herein.

2. Representations and Warranties. (a) UST represents and warrants to the
Fund that:

(i) it is a corporation duly organized and existing and in good
standing under the laws of the State of New York;

(ii) it is duly qualified to carry on its business in The State of
New York;

(iii) it is empowered under applicable laws and by its Certificate
of Incorporation and Bylaws to enter into and perform this Agreement;

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<PAGE>

(iv) all requisite corporate proceedings have been taken to
authorize it to enter into and perform this Agreement;

(v) it has and will continue to have access to the facilities,
personnel and equipment required to perform its duties and obligations
hereunder, and will make reasonable attempts to make alternative arrangements
for access to facilities, personnel and equipment in the event of any
disruption; and

(vi) its entrance into this Agreement shall not cause a material
breach or be in material conflict with any other agreement or obligation of UST.

(b) The Fund represents and warrants to UST that:

(i) it is a non-diversified, open-end management investment company
duly organized and existing and in good standing under the laws of the State of
Maryland;

(ii) it is empowered under applicable laws and by its Certificate of
Incorporation and Bylaws to enter into and perform this Agreement;

(iii) all requisite corporate proceedings have been taken to
authorize it to enter into and perform this Agreement;

(iv) it is an investment company registered under the Investment
Company Act of 1940, as amended; and

(v) a registration statement on Form N-1A (including a prospectus
and statement of additional information) is currently effective and will remain
effective, and to the extent so required, appropriate filings under the
securities laws of the states have been made and will continue to be made, with
respect to all Shares being offered for sale.

3. Documents Furnished by the Fund.

(a) The Fund shall promptly furnish to UST the following documents:

(i) a copy of the Organizational Documents of the Fund;

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<PAGE>

(ii) copies of all account application forms and other documents
related to shareholder accounts or any plans for the purchase or periodic
redemption of Shares; and

(iii) copies of the Fund's registration statement on Form N-1A as
amended and declared effective by the Securities & Exchange Commission.

(b) From time to time the Fund shall also furnish to UST the following
documents:

(i) copies of all amendments to the Organizational Documents of the
Fund;

(ii) copies of all post-effective amendments to the Fund's
registration statement on Form N-1A; and

(iii) such other certificates, documents and opinions as UST shall
deem to be appropriate or necessary for the proper performance of its duties
hereunder.

4. Purchase of Shares. Upon receipt by UST of any order for the purchase
of Shares, UST shall stamp such order with the date of receipt, promptly deposit
all funds received to the account of the Fund maintained with the entity then
acting as custodian for the portfolio securities and cash of the Fund (the
"Custodian"), compute (to the nearest three decimal places) the number of shares
to be purchased according to the public offering price in effect for purchases
made on the date of such receipt as set forth in the Fund's current prospectus,
notify the Fund daily of the deposit of such funds to the Fund's account with
the Custodian and the number of Shares subscribed for, and prepare and mail
confirmations of such purchases to the addresses specified by the persons making
them and, if applicable, send copies of such confirmations to the purchaser's
Broker/Dealer or selling agent, if any. All such actions are subject to any
instructions which the Fund may give to UST with respect to acceptance of orders
for shares so received by it.

Unless otherwise requested by a purchaser, all Shares purchased shall be
credited to a book share account maintained for the purchaser by UST. If a
purchaser or existing shareholder

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<PAGE>

specifically requests in writing, UST as Transfer Agent, shall countersign,
register, issue and mail by first class mail to the purchaser or shareholder, a
share certificate for any whole number of Shares purchased or held in his book
share account, but no share certificate shall be mailed until the purchase price
of the Shares represented thereby shall have been received.

5. Unpaid Checks. In the event that any check or other order for payment
of money with respect to any purchase of Shares is returned unpaid for any
reason, UST shall promptly notify the Fund and purchaser of such nonpayment,
and, in the absence of other instructions from the Fund or the Distributor, take
such steps as may be necessary to cancel promptly any shares purchased on the
basis of such returned check and shall cancel accumulated dividends for such
account, and return such check or other order to the purchaser.

6. Redemption of Shares. Upon receipt of any request for the redemption of
Shares, UST shall stamp such request with the date of receipt, determine whether
such request complies with all requirements for redemption set forth in the
Fund's current prospectus, and if so, compute the redemption price in the manner
set forth therein. If such request does not comply with such requirements for
redemption, UST shall notify the redeeming shareholder of the respects in which
compliance is lacking and effect redemption at such time as all requirements for
redemption are complied with.

UST shall notify the Fund daily of the amount of funds required for
payment upon redemption of Shares and the number of Shares redeemed. Upon the
receipt of such funds from the Custodian, UST shall pay over or cause to be paid
over the redemption proceeds to redeeming shareholders as instructed by them in
the manner described in the Fund's current prospectus, and prepare and mail
confirmations of such redemptions and if applicable send copies of such
confirmations to the appropriate Broker/Dealer or selling agent, if any. UST
shall cancel all share certificates representing redeemed Shares, if any.

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<PAGE>

7. Transfer of Shares. Upon receipt by UST of documentation in proper form
to effect a transfer of Shares, including in the case of Shares for which
certificates have been issued the share certificates in proper form for
transfer, UST shall register such transfer on the Fund's shareholder records
maintained by UST pursuant to instructions received from the transferor, cancel
the certificates representing such Shares, if any, and if so requested,
countersign, register, issue and mail by first class mail new certificates for
the same or a smaller whole number of Shares, and in the case of book share
transfers prepare and mail confirmation of such transfer as instructed by the
shareholder.

8. Administration of Plans. UST shall administer such plans for the
purchase or periodic redemption of Shares as are described in the prospectus
and/or statement of additional information of the Fund corresponding to the date
of this Agreement in accordance with the terms of such plans, or as UST and the
Fund may mutually agree from time to time.

9. Dividends and Distributions. Upon the declaration of any cash dividend
or distribution upon the Shares, the Fund shall furnish to UST a certified copy
of a resolution of the Fund's Board setting forth the date of payment of such
dividend or distribution, the record date as of which shareholders entitled to
payment thereof shall be determined, and the amount payable per share to
shareholders of record as of such record date. In the case of dividends declared
daily or at other regular intervals, such certified resolution may be a standing
resolution setting forth the method of calculating such dividends and the Fund
or its agent shall advise UST of the amount of such dividend at the appropriate
intervals. UST shall notify the Fund and the Custodian of the amount of cash
required to pay the dividend or distribution so that the Fund may instruct its
custodian to make sufficient funds available on or before the payment date.

-5-

<PAGE>

Upon receipt of such funds from the Custodian, UST shall prepare and mail
to shareholders, at their addresses as they appear on the records maintained by
UST or pursuant to any written order of a shareholder on file with UST, checks
representing any dividends and distributions to which they are entitled. If a
shareholder is entitled to receive additional Shares by reason of his decision
to reinvest all or a portion of a dividend or distribution, appropriate credits
shall be made to this book share account and, if specifically so requested in
writing, U.S. Trust shall countersign, register, issue and mail by first class
mail to the shareholder or pursuant to his instructions, a share certificate for
any whole number of shares purchased. UST shall prepare and mail confirmations
of such purchases and send copies of such confirmations to the Fund.

10. Tax Returns and Reports. UST shall prepare, file with the Internal
Revenue Service and with appropriate state or local agencies, and mail to
shareholders such returns for reporting dividends, distributions and redemptions
as are required to be so prepared, filed and/or mailed, and withhold from the
accounts of shareholders such sums as are required to be withheld, under
applicable federal, state and local tax laws, rules and regulations in effect
from time to time.

11. Share Certificates. The Fund shall supply UST with sufficient supplies
of blank share certificates. Such blank share certificates shall be properly
signed, manually or by facsimile signature, by the duly authorized officers of
the Fund, and shall bear the seal or a facsimile thereof of the Fund.

Notwithstanding the death, resignation or removal of any officers of the
Fund authorized to sign such share certificates, UST may continue to countersign
certificates which bear the manual or facsimile signature of such officer until
otherwise directed by the Fund.

UST shall establish and maintain facilities and procedures reasonably
acceptable to the Fund for safekeeping of share certificates, check forms and
facsimile signature

-6-

<PAGE>

imprinting devices if any, and for the preparation or use and for keeping
accounting of such certificates, forms and devices.

UST shall issue a replacement share certificate in lieu of a certificate
which has been lost, stolen or destroyed without any further action by the
Fund's Board or any officer of the Fund, upon receipt by UST of a properly
executed affidavit with respect to such loss, theft or destruction and a lost
certificate bond, in a form satisfactory to UST.

12. Shareholder Mailings, Inquiries and Meetings. UST shall address and
mail all communications by the Fund to its shareholders promptly following the
delivery by the Fund of the material to be mailed.

UST shall answer all correspondence it receives from shareholders and
former shareholders of the Fund relating to their ownership of shares. In
connection with meetings of shareholders, UST shall prepare shareholder lists,
mail and certify as to the mailing of proxy materials, receive and tabulate
proxy cards, render periodic reports to the Fund on the progress of such
tabulation, and provide the Fund with inspectors of election at any meeting of
shareholders.

13. Other Reports and Information. UST shall furnish to the Fund such
information, including shareholder lists, sales information on a state by state
basis and other statistical information, in such form and at such intervals as
may be reasonably requested by the Fund and supported by the UST system.

14. Record Keeping. UST shall keep records relating to the services to be
performed hereunder, in such form and manner as it may deem advisable. To the
extent required by Section 31 of the Investment Company Act of 1940, as amended,
and rules promulgated thereunder, UST agrees that all such records prepared or
maintained by UST relating to the services to be performed by UST hereunder are
the property of the Fund and will be preserved, for the periods prescribed under
Rule 31 a-2 of said rules as specifically noted below, maintained at the expense
of the Fund, and made available in accordance with such section rules. UST shall
upon the Fund's

-7-

<PAGE>

demand surrender promptly to the Fund and cease to retain in its files records
and documents created and maintained by UST pursuant to this Agreement.

If not so turned over to the Fund, such records and documents will be
retained by UST for six years from the year of creation, during the first two of
which such documents will be in readily accessible form. At the end of the
six-year period, such records and documents will either be turned over to the
Fund or destroyed in accordance with the Fund's authorization.

In the case of any requests or demands for the inspection of the
shareholder records of the Fund, UST shall endeavor to notify the Fund and to
secure instructions from an officer of the Fund as to such inspection. UST
reserves the right, however, to exhibit shareholder records to any person
whenever it is advised in writing by its counsel, with a copy to the Fund, that
it may be held liable for the failure to do so.

15. Confidentiality. All books, records, information, and data pertaining
to the business of the parties which are exchanged or received pursuant to the
negotiation or the performance of this Agreement shall remain confidential, and
shall not be voluntarily disclosed to any other person except as may be required
by law.

16. Compensation. For the services to be performed by UST pursuant to this
Agreement, the Fund agrees to pay UST in accordance with the schedules and terms
set forth in Exhibit A and as follows:

(a) Shareholder Service Fee. The Fund agrees to pay UST an Annual Service
Fees per Shareholder account. A "Shareholder account" is an account holding a
least a fraction of a Share and shall be deemed to exist after it is in fact
terminated until the month subsequent to the final federal tax filing deadline
(generally April 15th of the following year). The Annual Service Fee is prorated
and payable monthly based on the total number of accounts on the system at the
billing date each month. Service

-8-

<PAGE>

charges for a partial month's service will be prorated on a thirty (30) day
month basis.

(b) Out of Pocket Expenses. The Fund agrees to reimburse UST for any
equipment and supplies specially ordered by the Fund through UST and for any
other expenses UST may incur at the request of or consented to by the Fund,
including but not limited to expenses for stationery, postage, telephone and
telegraph line toll charges, data communications lines, shipping charges,
messenger services, forms, supplies and costs associated with the termination of
services pursuant to this Agreement:

Postage and the cost of materials for mailings to shareholder accounts
shall be advanced to UST by the Fund at least five (5) business days prior to
the mailing date of such materials.

(c) Additional Services. The Fund may request additional services,
additional processing, or special reports. Such requests may be provided by UST
at additional charges. In this event, the Fund shall submit such requests in
writing together with such specifications as may be reasonably required by UST,
and UST shall respond to such requests in the form of a price quotation. The
Fund's written acceptance of the quotation must be received prior to
implementation of such request.

Additional services will be charged at UST's standard rates.

(d) Terms of Payment. All fees, out-of-pocket expenses, or additional
charges of UST shall be billed on a monthly basis and shall be due and payable
upon receipt of the invoice.

UST will render, after the close of each month in which services have been
furnished, a statement reflecting all of the charges for such month. Charges
remaining unpaid after thirty (30) days shall bear interest in finance charges
equivalent to, in the aggregate, the Prime Rate (as determined by the Morgan
Guaranty Trust Company of New York) plus two (2) points per year and all costs
and expenses of effecting collection of any such sums, including reasonable
attorney's fees, shall be paid by the Fund to UST.

-9-

<PAGE>

In the event that the Fund is more than sixty (60) days delinquent in its
payments of monthly billings in connection with this Agreement (with the
exception of specific amounts which may be contested in good faith by the Fund),
this Agreement may be terminated upon thirty days written notice to the Fund by
UST. The Fund must notify UST in writing of any contested amounts within thirty
(30) days of receipt of a billing for such amounts. Disputed amounts are not due
and payable while they are being investigated.

(e) Taxes. In addition to any other charges specified hereunder, the Fund
shall pay any sales and/or use tax, transfer tax, excise tax, tariff, duty, or
any other tax or payment in lieu thereof imposed by any governmental authority
or agency as a direct result of the provision by UST of goods or services
hereunder, except for taxes based on UST's net income.

(f) Price Adjustment. After the initial term of this Agreement, UST may
increase it's rate for services for any renewal term, upon notice of one hundred
and twenty (120) days prior to the commencement of the renewed term. Such
increased rates shall be based upon UST's then current fees to other users of
service similar to those provided hereunder.

17. Indemnification.

(a) UST shall not be responsible for, and the Fund shall indemnify and
hold UST harmless from and against, any and all losses, damages, costs, charges,
reasonable attorney's fees, payments, expenses and liability arising out of or
attributable to:

(i) all actions of UST or its agents or subcontractors required to
be taken pursuant to this Agreement, provided that such actions are taken in
good faith and without negligence or willful misconduct;

(ii) the Fund's refusal or failure to comply with the terms of this
Agreement, or the Fund's lack of good faith, negligence or willful misconduct,
or the breach of any representation or warranty of the Fund hereunder;

-10-

<PAGE>

(iii) the reliance on or use by UST or its agents or subcontractors
on information, records or documents which are received by UST or its agents or
subcontractors and furnished to it by or on behalf or the Fund, and which have
been prepared and/or maintained by the Fund or any other person or firm (other
than UST or its agents or subcontractors) on behalf of the Fund;

(iv) the reliance on, or the carrying out by UST or its agents or
subcontractors, of any instructions or requests of the Fund; or

(v) the offer or sale of Shares by the Fund in violation of any
requirement under the federal securities laws or regulations or the securities
laws or regulations of any state that such Shares be registered in such state,
or in violation of any stop order or other determination or ruling by any
federal agency or any state with respect to the offer or sale of such Shares in
such state.

(b) UST shall indemnify and hold the Fund and its Trustees, Officers and
Employees harmless from and against any and all losses, damages, costs, charges,
reasonable attorney's fees, payments, expenses, and liability arising out of or
attributable to UST's lack of good faith, negligence or willful misconduct, or
the breach of any representation or warranty of UST hereunder.

(c) At any time UST may apply to any officer of the Fund for instructions,
and may request, through an officer of the Fund, the opinion of the Fund's legal
counsel, with respect to any matter arising in connection with the services to
be performed by UST under this agreement, and UST and its agents and
subcontractors shall not be liable and shall be indemnified by the Fund for any
action taken or omitted by it in reliance upon such instructions or upon the
opinion of such counsel. UST, its agents and subcontractors shall not be liable
and shall be indemnified by the Fund for any action taken or omitted by it in
reliance upon such instructions or upon the opinion of such counsel. UST, its
agents and subcontractors shall be protected and indemnified in acting in a
reasonable manner upon any papers or documents furnished by or on

-11-

<PAGE>

behalf of the Fund, any shareholder of the Fund or any representative of a
shareholder, reasonably believed to be genuine and to have been signed by the
proper person or persons, or upon any instructions, information, data, records
or documents provided UST or its agents or subcontractors by telephone, in
person, or by machine readable input, telex, CRT data entry or similar means
authorized by the Fund, and UST, its agents and subcontractors shall not be held
to have notice absent actual notice of any change or authority of any person
until receipt of written notice thereof from the Fund. UST, its agents and
subcontractors shall also be protected and indemnified in recognizing share
certificates which are reasonably believed to bear the proper manual or
facsimile signatures of the officers of the Fund, and

(d) In the event either party is unable to perform its obligations under
the terms of this Agreement because of acts of God, strikes, interruption of
electrical power or other utilities, equipment or transmission failure or damage
reasonably beyond its control, or other causes reasonably beyond its control,
such party shall not be liable to the other for any damages resulting from such
failure to perform or otherwise from such causes. UST shall use its best efforts
to minimize the likelihood of all damage, loss of data, delays and errors
resulting from uncontrollable events, and should such damage, loss of data,
delays or errors occur, UST shall use its best efforts to mitigate the effects
of such occurrence.

(e) Neither party to this Agreement shall be liable to the other party for
consequential, special or incidental damages under any provision of this
Agreement or for any act or failure to act hereunder.

(f) In order that the indemnification provisions contained in this Section
17 shall apply, upon assertion of a claim for which either party may be required
to indemnify the other, the party seeking indemnification shall promptly notify
the other party of such assertion and shall keep the other party advised with
respect to all developments concerning such claim.

-12-

<PAGE>

The party who may be required to indemnify shall have the option to
participate with the party seeking indemnification in the defense of such claim.
The party seeking indemnification shall in no case confess any claim or make any
compromise in any case in which the other party may be required to indemnify it,
except with the other party's prior written consent.

18. Commencement, Term and Termination.

(a) The commencement date for the services provided hereunder shall be the
same as the Fund's effective date.

(b) This Agreement shall remain in effect for 12 months from the
commencement date (the "Initial Term"). Subsequent to the Initial Term, this
Agreement shall remain in effect indefinitely unless terminated by either party,
without penalty, upon ninety (90) days prior written notice.

(c) Notwithstanding the foregoing, either party hereto may terminate this
Agreement upon written notice if the other party hereto is substantially unable
to perform its duties hereunder because of a force majeure condition which lasts
for more than seven (7) days.

(d) This Agreement may be terminated by either party hereto if the other
party is in material breach of this Agreement. In order to so terminate this
Agreement, written notice shall be given to an officer of the other party of the
non-breaching party's intention to terminate due to a failure to comply with, or
breach of, a material term or condition of this Agreement. Said written notice
shall specifically state the material term and conditions claimed to be breached
and shall provide at least fifteen (15) days in which to correct such alleged
breach. If such breach is not corrected in the time period allowed to correct,
then the notice giving party may terminate this Agreement immediately, upon
written notice.

(e) Should the Fund exercise its right to terminate, all out-of-pocket
expenses reasonably incurred by UST in connection with the movement of records
and materials shall be borne by the Fund.

-13-

<PAGE>

Nothing herein shall be construed to excuse the Fund from payment of all
charges due and payable to UST for services and out-of-pocket expenses and
disbursements provided prior to termination. In the event of termination as
provided for in this Section 18, neither party shall be liable to the other
except for any payments which may be due as provided for in this Agreement and
except that the provisions of Section 15, "Confidentiality" shall survive the
termination of this Agreement for any reason.

19. Use of UST's Name. The Fund shall not use UST's name in any prospectus
or statement of additional information, shareholder report, sales literature or
other material relating to the Fund, otherwise than for the purpose of merely
identifying and describing the functions or UST hereunder, in a manner not
approved by UST in writing before such use; provided, however, that UST shall
consent to all uses of its name required by the Securities and Exchange
Commission, any state securities commission, or any federal or state regulatory
authority and provided, further, that in no case will such approval be
unreasonably withheld.

20. Assignment. Except as hereinafter provided, neither this Agreement nor
any rights or obligations hereunder may be assigned by either party without the
written consent of the other party. This Agreement shall inure to the benefit of
and be binding upon the parties and their respective permitted successors and
assigns. UST may, without further consent on the part of the Fund, subcontract
for the performance hereof with third parties, or subsidiaries or other
affiliates of UST; provided, however, that UST shall be as fully responsible to
the Fund for the acts and omissions of any subcontractor as it is for its own
acts and omissions and shall be responsible for its choice of subcontractor.

21. Amendment. This Agreement may not be amended or modified in any manner
except by a written instrument executed by both parties.

22. Exhibit(s). The Exhibits listed below the signature lines hereof and
which are attached hereto are made a part of this agreement as if fully included
in the text hereof. In the event

-14-

<PAGE>

of any conflict or inconsistency between provisions contained in such Exhibits
and provisions contained in the main body of the Agreement, the provisions
contained in the Exhibits shall prevail.

23. Miscellaneous. This Agreement shall be governed by and construed in
accordance with the laws of The State of New York. The captions in this
Agreement are included for convenience of reference only and in no way define or
limit any of the provisions hereof or otherwise affect their construction or
effect. This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute the entire Agreement between the parties hereto and
supersede any prior oral or written Agreement with respect to the subject of
matter hereof.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed under seal by their officers thereunto duly authorized as of the date
first above written.

COHEN & STEERS REALTY SHARES, INC.

ATTEST: ______________________ By:_______________________________
(Title)

UNITED STATES TRUST COMPANY
OF NEW YORK

ATTEST: By:
------------------------ -------------------------------
SVP (Title)

-15-

<PAGE>

EXHIBIT A

UNITED STATES TRUST COMPANY
OF NEW YORK

TRANSFER AGENCY

FEE SCHEDULE

FOR

COHEN & STEERS REALTY SHARES, INC.

-16-

<PAGE>

EXHIBIT (i)(i)

[LETTERHEAD OF DECHERT PRICE & RHOADS]

June 17, 1991

Cohen & Steers Realty Shares, Inc.
757 Third Avenue
New York, New York 10017

Gentlemen:

In connection with the registration under the Securities Act of 1933 of an
indefinite number of shares of common stock of Cohen & Steers Realty Shares,
Inc. (the 'Fund'), we have examined such matters as we have deemed necessary to
give this opinion. Further, we have relied upon the opinion of Venable, Baetjer
and Howard as to matters of Maryland General Corporation Law.

On the basis of the foregoing, it is our opinion that the shares have been
duly authorized and, when paid for as contemplated by the Fund's Registration
Statement, will be validly issued, fully paid, and non-assessable, assuming the
number of shares outstanding does not exceed the number of shares authorized to
be issued in the Fund's Articles of Incorporation.

We hereby consent to the filing of this opinion as an exhibit to the
Registration State and to all references to our firm therein.

Very truly yours,

DECHERT PRICE & RHOADS

<PAGE>

EXHIBIT (i)(ii)

[LETTERHEAD OF VENABLE, BAETJER, HOWARD & CIVILETTI]

June 17, 1991

Dechert Price & Rhoads
1500 K Street, N.W.
Washington, D.C. 20005-1208

Re: Cohen & Steers Realty Shares, Inc.
----------------------------------
Ladies and Gentlemen:

We have acted as special Maryland counsel for Cohen & Steers Realty Shares,
Inc., a Maryland corporation (the 'Fund'), in connection with the organization
of the Fund and the issuance of shares of its common stock.

As Maryland counsel for the Fund, we are familiar with its Charter and
Bylaws. We have examined the Propsectus and Statement of Additional Information
included in the Fund's Registration Statement on Form N-1A, substantially in the
form in which it is to become effective (the 'Prospectus'), and have examined
and relied upon such corporate records of the Fund and other documents and
certificates as to factual matters as we have deemed necessary to render the
opinion expressed herein. We have assumed without independent verification the
genuineness of all signatures and the conformity with originals of all documents
submitted to us as copies.

Based on such examination, we are of the opinion and so advise you that:

1. The Fund is duly organized and validly existing as a corporation in good
standing under the laws of the State of Maryland.

2. The 4,000 shares of presently issued and outstanding Common Stock of the
Fund have been validly and legally issued and are full paid and
nonassessable.

<PAGE>

Dechert Price & Rhoads
June 17, 1991
Page Two

3. The shares of Common Stock of the Fund to be offered for sale pursuant to
the Prospectus are duly authorized and, when sold, issued and paid for as
contemplated by the Prospectus, will have been validly and legally issued
and will be full paid and nonassessable.

This letter expresses our opinion as to the Maryland General Corporation Law
governing matters such as due organization and the authorization and issuance of
stock, but it does not extend to the securities or 'Blue Sky' laws of Maryland,
to federal securities or to other laws.

You may rely upon our foregoing opinion in rendering your opinion to the
Fund which is to be filed as an exhibit to the Registration Statement. We
consent to the filing of this opinion as an exhibit to the Registration
Statement and the reference to us under the caption 'Counsel and Independent
Auditors' in the Prospectus. We do not thereby admit that we are 'experts' as
that term is used in the Securities Act of 1933 and the regulations thereunder.

Very truly yours,

VENABLE BAETJER & HOWARD

JPS/jal
7733/DCCRP

<PAGE>

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference in this Post-Effective
Amendment No. 11 to the registration statement on Form N-1A ("Registration
Statement") (File Nos. 33-40215 and 811-6302) of our report dated February 3,
2000, relating to the financial statements and financial highlights which
appears in the December 31, 1999 Annual Report to shareholders of Cohen &
Steers Realty Shares, Inc., which is also incorporated by reference into the
Registration Statement. We also consent to the references to us under the
headings "Financial Highlights" and "Counsel and Independent Accountants" in
such Registration Statement.

PricewaterhouseCoopers LLP

New York, New York
April 24, 2000

<PAGE>

EXHIBIT (l)

Cohen & Steers Realty Shares, Inc.
757 Third Avenue
New York, New York 10017

June 12, 1991

Cohen & Steers
Capital Management, Inc.
757 Third Avenue
New York, New York, 10017

Dear Sirs:

Cohen & Steers Realty Shares, Inc. (the 'Fund') hereby accepts your offer to
purchase 4,000 shares at a price of $25.00 per share for an aggregate purchase
price of $100,000. This Agreement is subject to the understanding that you have
no present intention of selling or redeeming the shares so acquired.

Any redemption of these shares by you will be reduced by a pro rate portion
of any then unamortized organization expenses of the Fund. This proration will
be calculated by dividing the number of shares to be redeemed by the aggregate
number of shares held which represent the initial capital of the Fund.

Sincerely,

COHEN & STEERS REALTY SHARES, INC.

By: Martin Cohen, President
.................................

Accepted:

COHEN & STEERS REALTY SHARES, INC.

By: Martin Cohen
.................................
President

<PAGE>

COHEN & STEERS FUNDS

Code of Ethics

Adopted Pursuant to Rule 17j-1
Under the Investment Company Act of 1940

1. Purposes

This Code of Ethics has been adopted by the Board of Directors of each
Cohen & Steers Fund in accordance with Rule 17j-l(c) under the Investment
Company Act of 1940 (the "Act"). Rule 17j-1 generally proscribes fraudulent or
manipulative practices with respect to purchases or sales of securities held or
to be acquired by investment companies. The purpose of this Code of Ethics is to
provide regulations and procedures consistent with the Act and Rule 17j-1
designed to give effect to the general prohibitions set forth in Rule 17j-l(b),
which read as follows:

"(b) Unlawful actions. It shall be unlawful for any affiliated
person of or principal underwriter for a Fund, or any affiliated person
of an investment adviser of or principal underwriter for a Fund, in
connection with the purchase or sale, directly or indirectly, by such
person of a Security Held or to be Acquired by the Fund:

(1) To employ any device, scheme or artifice to
defraud the Fund;

(2) To make any untrue statement of a material fact
to the Fund or omit to state a material fact necessary in
order to make the statements made to the Fund, in light of the
circumstances under which they are made, not misleading;

(3) To engage in any act, practice, or course of
business which operates or would operate as a fraud or deceit
on the Fund; or

(4) To engage in any manipulative practice with
respect to the Fund.

All material changes to this Code also shall be subject to Board
approval. In approving the Code and any material changes, the Directors shall
determine that the Code contains provisions reasonably necessary to prevent
"Access Persons" (as defined below) from engaging in any conduct specified in
Rule 17j-1(b). Prior to approving this Code or any material changes, the
Investment Adviser, on behalf of itself and each Fund, shall provide a
certification that the Fund has adopted procedures reasonably necessary to
prevent Access Persons from violating this Code of Ethics.

2. Application

(a) This Code of Ethics applies to the "Access Persons" of each Fund
(as such term is defined in Section 3).

(b) Each Fund will maintain a list of all its Access Persons and will
provide each

<PAGE>

Access Person with a copy of this Code of Ethics.

3. Definitions

(a) "Fund" means each Cohen & Steers Fund.

(b) "Investment Adviser" means Cohen & Steers Capital Management, Inc.

(d) "Advisory Person" of the Fund or of the Investment Adviser means
(a) any employee of the Fund or of the Investment Adviser (or of any company in
a control relationship to the Fund or Investment Adviser, including any
subsidiary or affiliate of the Investment Adviser), and (b) any other natural
person in a control relationship to the Fund or the Investment Adviser who
obtains information concerning recommendations made to the Fund with regard to
the purchase or sale of Covered Securities by the Fund.

(e) A security is "being considered for purchase or sale" when a
recommendation to purchase or sell a security has been made and communicated or,
with respect to the person making the recommendation, when the person gives
serious consideration to making a recommendation.

(f) "Beneficial ownership" shall be interpreted in the same manner as
it would be in determining whether a person is subject to the provisions of
Section 16 of the Securities Exchange Act of 1934, and the rules and regulations
thereunder.

(g) "Control" shall have the same meaning as that set forth in Section
2(a)(9) of the Act.

(h) "Independent Director" means a director of the Fund who is not an
"interested person" of the Fund within the meaning of Section 2(a)(19) of the
Act.

(i) "Purchase or Sale of a Covered Security" includes, among other
things, the writing of an option to purchase or sell a Covered Security.

(j) "Covered Security" shall have the meaning set forth in Section
2(a)(36) of the Investment Company Act of 1940, except that it shall not include
direct obligations of the Government of the United States; bankers' acceptances,
bank certificates of deposit, commercial paper, and high-quality short-term debt
instruments, including repurchase agreements; or shares issued by registered
open-end Funds.

4. Exempted Transactions

The prohibitions of Section 5 of this Code shall not apply to:

<PAGE>

(a) Purchases or sales effected in any account over which the Access
Person has no direct or indirect influence or control (including any account
that is managed on a discretionary basis by a person other than the Access
Person and with respect to which the Access Person does not in fact influence or
control the transactions).

(b) Purchases or sales of securities that are not eligible for purchase
or sale by a Fund.

(d) Purchases that are part of an automatic dividend reinvestment plan.

(e) Purchases effected upon the exercise of rights issued by an issuer
pro rata to all holders of a class of its securities, to the extent those rights
were acquired from the issuer, and sales of rights so acquired.

(f) Purchases or sales of securities that receive the prior approval of
the Chairman or the President of a Fund (such approving officer having no
personal interest in the purchases or sales) because they: (i) are only remotely
potentially harmful to a Fund, (ii) would be very unlikely to affect a highly
institutional market, or (iii) clearly are not related economically to the
securities to be purchased, or sold or held by a Fund.

5. Prohibited Purchases and Sales

(a) Unless prior approval is obtained in accordance with Section 4(f)
above, no officer, director or employee of the Fund, and no Advisory Person of
the Fund or of the Investment Adviser, shall purchase or sell, directly or
indirectly, any Covered Security in which he has, or by reason of such
transactions acquires, any direct or indirect beneficial ownership and which the
person knew or reasonably should have known at the time of such purchase or sale
that, within the most recent 15 days:

(1) is being or has been considered for purchase or
sale by a Fund; or

(3) is being purchased or sold by a Fund.

(b) No Access Person shall reveal to any other person (except in the
normal course of his duties on behalf of the Fund or the Investment Adviser) any
information regarding securities transactions by the Fund or the consideration
by the Fund or the Investment Adviser of any securities transactions.

<PAGE>

(c) With the exception of the Independent Directors, no Access Person
shall purchase any Covered Security issued in an initial public offering
("IPO"). No Independent Director shall invest in any shares issued in an IPO if,
at the time of that transaction, the Independent Director knew or, in the
ordinary course of fulfilling his official duties, should have known that,
during the 15-day period immediately preceding or after the date of the
transaction, the Covered Security is or was purchased or sold by the Fund, or is
or was being considered for purchase or sale by the Fund.

(d) With the exception of the Independent Directors, no Access Person
shall purchase any Covered Security issued in a private placement unless the
Chairman or President approves the transaction in advance. In determining
whether or not to grant such approval, the Chairman or President will consider
whether the investment opportunity should be reserved for the Fund and whether
the opportunity is being offered by virtue of the Access Person's position with
the Fund or the Investment Adviser. The Assistant Secretary shall maintain a
written record of decisions to permit these transactions, along with the reasons
supporting the decision. Any Access Person who has been authorized to acquire
securities in a private placement must disclose the investment to the Chairman
or President if the Access Person is involved in any subsequent consideration of
an investment in the issuer, and these investment decisions will be subject to
independent review by the Board of Directors.

No Independent Director shall invest in any shares issued in a
private placement if, at the time of that transaction, the Independent Director
knew or, in the ordinary course of fulfilling his official duties, should have
known that, during the 15-day period immediately preceding or after the date of
the transaction, the Covered Security is or was being purchased or sold by the
Fund, or is or was being considered for purchase or sale by the Fund.

6. Reporting

(a) Every Access Person, except the Independent Directors, shall report
to the Secretary or Assistant Secretary of the Fund (i) a list of all Covered
Securities held, and any account held with a broker, dealer or bank, at the time
the person becomes an Access Person; (ii) each year thereafter, a list of all
Covered Securities and accounts held; and (iii) the information described in
Section 6(c) of this Code with respect to transactions in any Covered Security
in which the Access Person has, or by reason of such transaction acquires, any
direct or indirect beneficial ownership in the Covered Security; provided,
however, that an Access Person shall not be required to make a report with
respect to transactions effected in any account over which the Access Person
does not have any direct or indirect influence or control or in any account that
is managed on a discretionary basis by a person other than the Access Person and
with respect to which the Access Person does not in fact influence or control
the transactions. The Secretary or Assistant Secretary of each Fund shall
maintain the reports and other records required by Rule 17j-1 under the Act.

(b) An Independent Director need only report to the Secretary or
Assistant Secretary of the Fund a transaction if the Independent Director, at
the time of that transaction, knew or, in the ordinary course of fulfilling his
official duties, should have known that, during the 15-day

<PAGE>

period immediately preceding or after the date of the transaction, the Covered
Security is or was being purchased or sold by the Fund, or is or was being
considered for purchase or sale by the Fund. An Independent Director need not
provide an initial or annual report of portfolio holdings and accounts.

(c) Every report shall be in writing and shall be delivered not later
than (i) 10 days after the person becomes an Access Person, with respect to the
initial portfolio holdings and accounts report; and (ii) 10 days after the end
of the calendar quarter in which a transaction to which the report relates was
effected. Quarterly reports shall contain the following information:

(1) The date of the transaction, the title, interest rate
and maturity date (if applicable), the number of
shares and the principal amount of each Covered
Security involved;

(2) The nature of the transaction (i.e., purchase, sale
or any other type of acquisition or disposition);

(3) The price at which the transaction was effected;

(4) The name of the broker, dealer or bank with or
through whom the transaction was effected;

(5) The name of any broker, dealer or bank with whom an
account was opened during the quarter; and

(6) The date the report is submitted.

(d) Any report may contain a statement that the report shall not be
construed as an admission by the person making the report that he has any direct
or indirect beneficial ownership in the security to which the report relates.

(e) All reports furnished pursuant to this Section shall be reviewed by
the Funds' Assistant Secretary, who shall report to the Chairman and President
all potential violations of the Code of Ethics. These will be kept confidential,
subject to the rights of inspection by the Directors of each Fund and by the
Securities and Exchange Commission.

(f) The Investment Adviser, on behalf each Fund, shall furnish annually
to the Directors a written report (i) describing any issues arising under this
Code of Ethics or the related supervisory procedures, including but not limited
to information about material violations of the Code of Ethics or procedures,
and sanctions imposed in response to the material violations; and (ii)
certifying that the Fund has adopted procedures reasonably necessary to prevent
Access Persons from violating the Code of Ethics.

<PAGE>

7. Sanctions

Upon receiving notice of a violation of this Code, the Directors of the
each Fund may impose such sanctions as they deem appropriate, including, among
other things, a letter of censure or suspension or termination of the employment
of the violator.

Explanatory Notes to Code of Ethics

1. The information on portfolio holdings, and securities transactions,
received and recorded by the Investment Adviser pursuant to the requirements of
Rule 204-2(a)(12) under the Investment Advisers Act of 1940 shall be deemed to
satisfy the reporting requirements imposed on Access Persons of the Investment
Adviser by Section 6 of this Code of Ethics.

2. For purposes of Section 3(c), 3(d) and 5 of this Code of Ethics, all
employees of the Investment Adviser, and its affiliates and subsidiaries, shall
be deemed Advisory Persons of the Fund or of the Investment Adviser.

September 1999

<PAGE>

COHEN & STEERS CAPITAL MANAGEMENT, INC.

CODE OF ETHICS

INTRODUCTION

This Code of Ethics shall apply to all directors, officers and employees of
Cohen & Steers Capital Management, Inc., and of each of its subsidiaries and
affiliates.

FOR PURPOSES OF THIS CODE:

(a) "Access Person" means any director, officer or employee of Cohen & Steers
Capital Management, Inc., and of each of its subsidiaries or affiliates ("Cohen
& Steers").

(b) Purchase or sale of a security includes, among other things, the writing of
any option to purchase or sell a security or any transaction by reason of which
a person acquires or disposes of any direct or indirect ownership in a security.

(c) A security is "being considered for purchase or sale" when a recommendation
to purchase or sell a security has been made and communicated and, with respect
to the person making the recommendation, when a person seriously considers
making such a recommendation.

THIS CODE APPLIES TO ALL TRANSACTIONS (OTHER THAN BONA FIDE CLIENT TRANSACTIONS)
IN ALL ACCOUNTS IN WHICH AN ACCESS PERSON MAY EXERCISE CONTROL OR HAS A
BENEFICIAL INTEREST. UPON DISCOVERING A VIOLATION OF THIS CODE, THE CHAIRMAN OR
PRESIDENT MAY IMPOSE SUCH SANCTIONS AS DEEMED APPROPRIATE, INCLUDING A LETTER OF
CENSURE OR SUSPENSION OR EVEN TERMINATION OF THE EMPLOYMENT OF THE VIOLATOR.
FURTHER, ANY PROFITS REALIZED IN CONNECTION WITH A VIOLATION OF THIS CODE WILL
BE REQUIRED TO BE DISGORGED.

PROHIBITED TRANSACTIONS

The following transactions are prohibited, except as provided for below:

(a) No Access Person shall purchase or sell any security that the Access Person
knew or reasonably should have known is being or has been considered for
purchase or sale for a Client, or is being purchased or sold by a Client.

<PAGE>

(b) No Access Person shall purchase or sell any security issued or guaranteed
by a real estate investment trust or other company engaged in the real estate
business (as defined below), except that an Access Person may invest in shares
of Cohen & Steers Realty Shares, Inc., Cohen & Steers Special Equity Fund, Inc.
and Cohen & Steers Equity Income Fund, Inc. and, with the written prior approval
of the Chairman or President, shares of Cohen & Steers Realty Income Fund, Inc.
and Cohen & Steers Total Return Realty Fund, Inc. (see Attachment A).

(d) No Access Person shall purchase any security issued in a private placement
unless the Chairman or President approves the transaction in advance. In
determining whether or not to grant approval, the Chairman or President will
consider whether the investment opportunity should be reserved for a Client and
whether the opportunity is being offered by virtue of the Access Person's
position with Cohen & Steers. The general counsel shall maintain a written
record of decisions to permit these transactions, along with the reasons
supporting the decision. Any Access Person who has been authorized to acquire
securities in a private placement must disclose the investment to the Chairman
or President if the Access Person is involved in any subsequent consideration of
an investment in the issuer, and these investment decisions will be subject to
independent review by investment personnel with no personal interest in the
issuer.

(e) No Access Person shall execute any securities transaction on a day during
which any Client has a pending buy or sell order in that same security until
that order is executed or withdrawn. Furthermore, no Access Person shall buy or
sell a security within seven calendar days before or after a Client trades in
that security.

(f) No Access Person shall receive any gift of more than de minimis value from
any person or entity that does business with or on behalf of Cohen & Steers, its
affiliates and subsidiaries, or a Client.

(g) No Access Person shall serve on the board of directors of a publicly traded
company, unless approved in advance by the Chairman or President. This
authorization will be provided only if the Chairman or President concludes that
service on the board would be consistent with the interests of Clients. Access
Persons who have received this approval shall not trade for a Client or their
own account in the securities of the company while in possession of material,
non-public information ("Inside Information"). Cohen & Steers' Inside
Information Policy and Procedures provide further details on the obligations of
Access Persons concerning Inside Information.

EXEMPTED TRANSACTIONS

<PAGE>

The prohibitions of this Code shall not apply to:

(a) Purchases or sales effected in any account over which the Access Person has
no direct or indirect influence (including any account that is managed on a
discretionary basis by a person other than the Access Person and with respect to
which the Access Person does not in fact influence or control the transactions).

(b) Purchases or sales that are non-volitional on the part of either the Access
Person or a Client.

(d) Purchases effected upon the exercise of rights issued by an issuer pro rata
to all holders of a class of its securities, to the extent these rights were
acquired from the issuer, and sales of rights so acquired.

(e) Purchases or sales that receive the prior approval of the Chairman or
President of Cohen & Steers (such approving officer having no personal interest
in such purchases or sales) because they: (i) are only remotely potentially
harmful to any Client account, (ii) would be very unlikely to affect a highly
institutional market, or (iii) clearly are not related economically to the
securities to be purchased, or sold or held on behalf of a Client or (iv) are a
result of the sale of securities that were acquired prior to February 1995 (and
such person was an employee of Cohen & Steers Capital Management, Inc. prior to
February 1995) or acquired prior to the time a person became an employee of
Cohen & Steers. The general counsel shall maintain a written record of decisions
to permit these transactions, along with the reasons supporting the decision.

REPORTING

(a) Every Access Person shall report all transactions in any security in which
the Access Person has, or by reason of such transaction acquires, any direct or
indirect beneficial ownership in the security; provided, however, that an Access
Person shall not be required to report transactions effected for any account
over which the Access Person does not have any direct or indirect influence or
control.

(b) Every report shall be made not later than 10 days after the end of the
calendar quarter in which the transaction to which the report relates was
effected, and shall contain the following information:

(i) the date of the transaction, the title, interest rate and maturity
date (if applicable), the number of shares, and the principal amount of
the security involved;

(ii) the nature of the transaction (i.e., purchase, sale or any other
type of acquisition or disposition);

<PAGE>

(iii) the price at which the transaction was effected;

(iv) the name of the broker, dealer or bank with or through whom the
transaction was effected;

(v) with respect to any account established by the Access Person during
the quarter, the name of the broker, dealer or bank with whom the
Access Person established the account and the date the account was
established; and

(vi) the date the report is submitted.

(c) Any report may contain a statement that the report shall not be construed
as an admission that the person making the report has any direct or indirect
beneficial ownership in the security to which the report relates.

(d) Every Access Person must provide a list of all personal securities holdings
no later than 10 days after commencement of employment ("Initial Holdings
Report") and no later than 30 days after the beginning of each year ("Annual
Holdings Report") thereafter (see Attachment B). Both the Initial Holdings
Report and Annual Holdings Report also shall provide the name of any broker,
dealer or bank with whom the Access Person maintained an account in which any
securities were held for the direct or indirect benefit of the Access Person.
Each Annual Holdings Report must provide information that is current as of a
date no more than 30 days before the report is submitted. Both the Initial
Holdings Report and the Annual Holdings Report shall state the date the report
is submitted by the Access Person.

(e) The Applicant's compliance administrator and general counsel shall be
responsible for reviewing all quarterly securities transaction reports, the
Initial Holdings Report and the Annual Holdings Report, and shall report to the
Chairman and President all potential violations of this Code of Ethics. The
Chairman and President, in consultation with the general counsel, shall
determine the appropriate response to any violation.

(f) All Access Persons must certify on the attached form initially and annually
thereafter that they have read and understand this Code of Ethics and that they
recognize that they are subject to the provisions of this Code. Furthermore, all
Access Persons must certify annually that they have complied with the
requirements of the Code of Ethics and that they have reported all personal
securities transactions and accounts required to be reported pursuant to the
Code.

FUND BOARD APPROVAL AND REPORTING

The Board of Directors of each Cohen & Steers Fund, including a majority of the
Directors who are not "interested persons" (as defined in the Investment Company
Act of

<PAGE>

1940), must approve this Code and any material changes to the Code. This
approval shall be based on a determination that the Code contains provisions
reasonably necessary to prevent Access Persons from engaging in any conduct
prohibited by Rule 17j-1 under the Investment Company Act of 1940. In connection
with this approval, Cohen & Steers shall provide a certification to the Board
that Cohen & Steers has adopted procedures reasonably necessary to prevent
Access Persons from violating the Code.

Cohen & Steers shall furnish annually to the Directors a written report (i)
describing any issues arising under the Code of Ethics and related supervisory
procedures, including but not limited to information about material violations
of the Code or procedures and sanctions imposed in response to the material
violations, and (ii) certifying that Cohen & Steers has adopted procedures that
are reasonably necessary to prevent Access Persons from violating the Code.

ADDITIONAL DEFINITIONS

(a) "Beneficial ownership" shall be interpreted in the same manner as it would
be in determining whether a person is subject to the provisions of Section 16 of
the Securities Exchange Act of 1934, and the rules and regulations thereunder,
except that the determination of direct or indirect beneficial ownership shall
apply to all securities which an Access Person has or acquires.

(b) "Security" shall have the meaning set forth in Section 2(a) (36) of the
Investment Company Act, except that it shall not include direct obligations of
the Government of the United States; bankers' acceptances, bank certificates of
deposit, commercial paper and high-quality short-term debt instruments,
including repurchase agreements; and shares of registered open-end investment
companies.

(c) A company is engaged in the "real estate business" if it derives at least
50% of its revenues from the ownership, construction, financing, management or
sale of commercial, industrial or residential real estate or has at least 50% of
its assets in such real estate. Any questions as to whether a company is engaged
in the real estate business should be referred to the Chairman or President.

<PAGE>

COHEN & STEERS CAPITAL MANAGEMENT, INC.
CERTIFICATION OF PERSONAL SECURITIES TRANSACTIONS
AND COMPLIANCE WITH THE CODE OF ETHICS

I hereby certify that I have received, read and understand the
Cohen & Steers Code of Ethics. Furthermore, I understand that I am
subject to the Code of Ethics and that any failure to follow the Code
could subject me to discipline, including the possible termination of
my employment with Cohen & Steers.

I further certify that, for the preceding calendar year, I
have complied with the requirements of the Code of Ethics in effect
for the year and that I have reported all personal securities
transactions, holdings and accounts required to be reported pursuant
to this Code.

---------------------------------------------------------------------
Name

---------------------------------------------------------------------
Signature

---------------------------------------------------------------------
Date

<PAGE>

ATTACHMENT B

COHEN & STEERS CAPITAL MANAGEMENT INC.
Personal Securities Holdings and Accounts

Name: ___________________________________

As agreed by signing the Code of Ethics, my personal securities holdings are as
follows:

---------------------------------- -----------------------------------------------
# OF SHARES/FACE VALUE SECURITY
---------------------------------- -----------------------------------------------
<S> <C>

---------------------------------- -----------------------------------------------

</TABLE>

In addition, I maintain accounts with the following brokers, dealers or banks:

1. _______________________________________________________

2. _______________________________________________________

3. _______________________________________________________

4. _______________________________________________________

5. _______________________________________________________

<PAGE>

ATTACHMENT B

Attach an additional schedule if necessary.

*Include all transactions which: (a) involve securities (except direct
obligations of the U.S. Government; money market instruments; and mutual funds)
in which you have direct or indirect "beneficial ownership" (beneficial
ownership meaning yourself, your spouse, minor children or relatives of yours or
your spouse sharing your home) and, (b) occurred in accounts over which you have
direct or indirect influence or control.

SIGNATURE

DATE