0001104659-14-063727.txt : 20140828 0001104659-14-063727.hdr.sgml : 20140828 20140828163250 ACCESSION NUMBER: 0001104659-14-063727 CONFORMED SUBMISSION TYPE: N-CSRS PUBLIC DOCUMENT COUNT: 10 CONFORMED PERIOD OF REPORT: 20140630 FILED AS OF DATE: 20140828 DATE AS OF CHANGE: 20140828 EFFECTIVENESS DATE: 20140828 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COHEN & STEERS INSTITUTIONAL REALTY SHARES INC CENTRAL INDEX KEY: 0001096903 IRS NUMBER: 000000000 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-CSRS SEC ACT: 1940 Act SEC FILE NUMBER: 811-09631 FILM NUMBER: 141072176 BUSINESS ADDRESS: STREET 1: 280 PARK AVE STREET 2: 10TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10017 BUSINESS PHONE: 2128323232 MAIL ADDRESS: STREET 1: 280 PARK AVE STREET 2: 10TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10017 0001096903 S000011976 Cohen & Steers Institutional Realty Shares C000032692 Cohen & Steers Institutional Realty Shares CSRIX N-CSRS 1 a14-12380_1ncsrs.htm N-CSR

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM N-CSR

 

CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES

 

Investment Company Act file number

811-09631

 

Cohen & Steers Institutional Realty Shares, Inc.

(Exact name of registrant as specified in charter)

 

280 Park Avenue, New York, NY

 

10017

(Address of principal executive offices)

 

(Zip code)

 

Tina M. Payne

Cohen & Steers Capital Management, Inc.

280 Park Avenue

New York, New York 10017

(Name and address of agent for service)

 

Registrant’s telephone number, including area code:

(212) 832-3232

 

 

Date of fiscal year end:

December 31

 

 

Date of reporting period:

June 30, 2014

 

 



 

Item 1. Reports to Stockholders.

 



COHEN & STEERS INSTITUTIONAL REALTY SHARES, INC.

To Our Shareholders:

We would like to share with you our report for the six months ended June 30, 2014. The net asset value (NAV) at that date was $47.20 per share.

The total returns, including income and change in NAV, for the Fund and its comparative benchmarks were:

    Six Months Ended
June 30, 2014
 

Cohen & Steers Institutional Realty Shares

   

17.26

%

 

FTSE NAREIT Equity REIT Indexa

   

17.66

%

 

S&P 500 Indexa

   

7.14

%

 

The performance data quoted represent past performance. Past performance is no guarantee of future results. The investment return and the principal value of an investment will fluctuate and shares, if redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Current total returns of the Fund can be obtained by visiting our website at cohenandsteers.com. The Fund's returns assume the reinvestment of all dividends and distributions at NAV. Fund performance reflects fee waivers and/or expense reimbursements, without which the performance would have been lower. Index performance does not reflect the deduction of any fees, taxes or expenses. An investor cannot invest directly in an index. Performance figures for periods shorter than one year are not annualized.

Please note that distributions paid by the Fund to shareholders are subject to recharacterization for tax purposes and are taxable up to the amount of the Fund's investment company taxable income and net realized gains. Distributions in excess of the Fund's investment company taxable income and realized gains are a return of capital distributed from the Fund's assets.

Investment Review

U.S. Real Estate Investment Trusts (REITs) registered strong gains in the first half of 2014, outgaining the broad equity market after broadly underperforming in 2013. The period began with an easing in long-term bond yields as signs emerged that the unusually harsh winter weather had a negative impact on economic activity. Investors were initially apprehensive after data revealed that U.S. gross domestic product (GDP) contracted more than anticipated in the first quarter, but that sentiment soon faded as strong jobs reports and accelerating industrial production painted a more upbeat picture of the economy. The positive data lifted investors' confidence that the recovery had sufficient momentum as the Federal Reserve continued to taper its bond purchases. At the same time, bond yields continued their downward trend amid a combination of an accommodative outlook for U.S. monetary policy and aggressive liquidity measures by the European Central Bank.

a  The FTSE NAREIT Equity REIT Index is an unmanaged, market-capitalization-weighted index of all publicly traded REITs that invest predominantly in the equity ownership of real estate. The index is designed to reflect the performance of all publicly traded equity REITs as a whole. The Standard and Poor's 500 Composite Stock Index (S&P 500 Index) is an unmanaged index of 500 large capitalization, publicly traded stocks representing a variety of industries that is frequently used as a general measure of stock market performance.


1



COHEN & STEERS INSTITUTIONAL REALTY SHARES, INC.

Fundamentals continued to improve for all types of real estate, driving solid returns across the REIT landscape. Apartment REITs (23.6% total returnb) performed well despite continued pressures of new supply. Many companies exhibited better-than-expected cash flow growth, as continued demand for rental housing enabled them to raise rents on existing tenants, even in markets where new tenants were being signed at lower rates. Revenues at self storage REITs (18.1%) also continued to improve amid rising rents and occupancy rates.

The regional mall (16.4%) and shopping center sectors (16.7%) benefited from growing retail sales and improving tenant demand for in-line storefronts in prime locations. Managements also had relatively good success improving the productivity of lower-performing assets through redevelopment. In the office sector (17.8%), asset values and rent-growth expectations continued to improve, particularly in New York City and San Francisco. Industrial REITs (13.1%) also saw evidence of strengthening demand and higher rents. However, with developers ramping up construction to meet the demand for built-to-suit multipurpose facilities, investors showed increasing sensitivity to the potential impact of new supply in select markets.

Fund Performance

The Fund had a positive total return, but modestly underperformed its benchmark. Stock selection in the hotel group (17.2% total return in the index) accounted for most of the underperformance, reflecting an out-of-index position in Orient-Express Hotels which underperformed the broader REIT market. Stock selection and an overweight in the industrial sector also hindered relative returns. Factors that helped performance included stock selection in the regional mall, diversified (15.9%), office, apartment and shopping center sectors.

Investment Outlook

We believe the U.S. economy remains on track for stronger GDP growth and a gradual rise in interest rates. We view this as a favorable backdrop for REITs, as the potential for higher asset values and cash flows should outweigh the likely return of upward-trending Treasury yields. U.S. REITs continue to offer attractive valuations, in our view, as we believe modest premiums to NAVs are justified given the improvement in real estate fundamentals and continued job growth.

Our positive outlook for the U.S. economy leads us to prefer cyclically sensitive names, although we have balanced these positions with attractively valued noncyclical assets that may perform better if tepid growth continues. We continue to favor New York City offices given the continued strengthening in fundamentals. We have also begun to take targeted positions in suburban office companies trading at discounts to their underlying property values.

We continue to see attractive value in high-quality regional mall and shopping center landlords, as well as some owners of Class-B assets that we believe offer potential for attractive risk-adjusted returns. Within the self storage sector, we expect further upside to cash flow growth amid strong demand and limited new supply.

b  Sectors in U.S. dollars as represented by the FTSE NAREIT Equity REIT Index.


2



COHEN & STEERS INSTITUTIONAL REALTY SHARES, INC.

Sincerely,

       

 

 
       

ROBERT H. STEERS

 

JOSEPH M. HARVEY

 
       

Chairman

 

Portfolio Manager

 
       

 

 
       

THOMAS N. BOHJALIAN

 

JON CHEIGH

 
       

Portfolio Manager

 

Portfolio Manager

 

  

  JASON A. YABLON

  Portfolio Manager

The views and opinions in the preceding commentary are subject to change without notice and are as of the date of publication. There is no guarantee that any market forecast set forth in the commentary will be realized. This material represents an assessment of the market environment at a specific point in time, should not be relied upon as investment advice and is not intended to predict or depict performance of any investment.

Visit Cohen & Steers online at cohenandsteers.com

For more information about the Cohen & Steers family of mutual funds, visit cohenandsteers.com. Here you will find fund net asset values, fund fact sheets and portfolio highlights, as well as educational resources and timely market updates.

Our website also provides comprehensive information about Cohen & Steers, including our most recent press releases, profiles of our senior investment professionals and their investment approach to each asset class. The Cohen & Steers family of mutual funds invests in major real asset categories focused on global listed real estate, commodities, global listed infrastructure & MLPs, as well as preferred securities and large cap value equities.


3



COHEN & STEERS INSTITUTIONAL REALTY SHARES, INC.

Performance Review (Unaudited)

Average Annual Total Returns—For Periods Ended June 30, 2014

   

1 Year

 

5 Years

 

10 Years

 

Since Inceptiona

 

Fund

   

14.40

%

   

23.05

%

   

10.62

%

   

12.95

%

 

The performance data quoted represent past performance. Past performance is no guarantee of future results. The investment return and principal value of an investment will fluctuate and shares, if redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Performance information current to the most recent month end can be obtained by visiting our website at cohenandsteers.com. Total return assumes the reinvestment of all dividends and distributions at NAV. The performance table does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. During the periods presented above, the investment manager waived fees and/or reimbursed expenses. Without this arrangement, performance would have been lower.

The annualized gross and net expense ratios, respectively, were 0.77% and 0.75% as disclosed in the May 1, 2014 prospectus. The investment manager has contractually agreed to waive its fee and/or reimburse the Fund so that the Fund's total annual operating expenses (excluding acquired fund fees and expenses and extraordinary expenses) do not exceed 0.75% of the average daily net assets of the Fund. This commitment will remain in place for the life of the Fund.

a  Inception date of February 14, 2000.


4



COHEN & STEERS INSTITUTIONAL REALTY SHARES, INC.

Expense Example
(Unaudited)

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs and (2) ongoing costs including management fees and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

The example is based on an investment of $1,000 Invested at the beginning of the period and held for the entire period January 1, 2014—June 30, 2014.

Actual Expenses

The first line of the following table provides information about actual account values and expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The second line of the following table provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing cost of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

    Beginning
Account Value
January 1, 2014
  Ending
Account Value
June 30, 2014
  Expenses Paid
During Perioda
January 1, 2014–
June 30, 2014
 

Actual (17.26% return)

 

$

1,000.00

   

$

1,172.60

   

$

4.04

   

Hypothetical (5% annual return before expenses)

 

$

1,000.00

   

$

1,021.08

   

$

3.76

   

a  Expenses are equal to the Fund's annualized expense ratio of 0.75% multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). If the Fund had borne all of its expenses that were assumed by the investment manager, the annualized expense ratio would have been 0.76%.


5



COHEN & STEERS INSTITUTIONAL REALTY SHARES, INC.

June 30, 2014
Top Ten Holdings
(Unaudited)

Security

 

Value

  % of
Net
Assets
 

Simon Property Group

 

$

307,787,772

     

10.6

   

Equity Residential

   

156,514,806

     

5.4

   

Prologis

   

147,632,713

     

5.1

   

Public Storage

   

137,234,900

     

4.7

   

Ventas

   

123,426,345

     

4.2

   

SL Green Realty Corp.

   

121,885,366

     

4.2

   

Vornado Realty Trust

   

117,121,126

     

4.0

   

UDR

   

108,530,604

     

3.7

   

General Growth Properties

   

87,419,474

     

3.0

   

Host Hotels & Resorts

   

72,416,355

     

2.5

   

Sector Breakdown

(Based on Net Assets)
(Unaudited)


6




COHEN & STEERS INSTITUTIONAL REALTY SHARES, INC.

SCHEDULE OF INVESTMENTS

June 30, 2014 (Unaudited)

        Number
of Shares
 

Value

 

COMMON STOCK

 

97.9%

                 

FINANCIAL—BANKS

 

0.2%

                 

FCB Financial Holdings, Class A, 144Aa,b,c,d

       

289,434

   

$

5,004,314

   

REAL ESTATE

 

97.7%

                 

DIVERSIFIED

 

8.9%

                 

American Assets Trust

       

785,059

     

27,123,788

   

American Realty Capital Properties

       

3,758,842

     

47,098,290

   

Cousins Properties

       

2,362,468

     

29,412,727

   

Forest City Enterprises, Class Ad

       

1,861,558

     

36,989,158

   

Vornado Realty Trust

       

1,097,359

     

117,121,126

   
     

257,745,089

   

HEALTH CARE

 

9.2%

                 

Health Care REIT

       

1,127,419

     

70,655,348

   

Healthcare Trust of America, Class A

       

2,747,020

     

33,074,121

   

Omega Healthcare Investors

       

1,118,522

     

41,228,721

   

Ventas

       

1,925,528

     

123,426,345

   
     

268,384,535

   

HOTEL

 

10.0%

                 

Belmond Ltd., Class A (Bermuda)d

       

1,395,838

     

20,295,484

   

DiamondRock Hospitality Co.

       

3,132,524

     

40,158,958

   

Hilton Worldwide Holdingsd

       

1,746,446

     

40,692,192

   

Host Hotels & Resorts

       

3,290,157

     

72,416,355

   

La Quinta Holdingsd

       

907,863

     

17,376,498

   

Strategic Hotels & Resortsd

       

3,883,653

     

45,477,577

   

Sunstone Hotel Investors

       

3,621,488

     

54,068,816

   
     

290,485,880

   

INDUSTRIALS

 

6.4%

                 

First Industrial Realty Trust

       

1,158,680

     

21,829,531

   

Gramercy Property Trust

       

2,820,026

     

17,061,157

   

Prologis

       

3,592,911

     

147,632,713

   
     

186,523,401

   

See accompanying notes to financial statements.
7



COHEN & STEERS INSTITUTIONAL REALTY SHARES, INC.

SCHEDULE OF INVESTMENTS—(Continued)

June 30, 2014 (Unaudited)

        Number
of Shares
 

Value

 

OFFICE

 

11.3%

                 

BioMed Realty Trust

       

1,636,441

   

$

35,723,507

   

Boston Properties

       

121,465

     

14,354,734

   

Brandywine Realty Trust

       

8,870

     

138,372

   

Corporate Office Properties Trust

       

1,247,140

     

34,682,963

   

Douglas Emmett

       

1,559,572

     

44,011,122

   

Empire State Realty Trust, Class A

       

1,337,637

     

22,071,010

   

Kilroy Realty Corp.

       

647,199

     

40,307,554

   

Mack-Cali Realty Corp.

       

767,069

     

16,476,642

   

SL Green Realty Corp.

       

1,114,024

     

121,885,366

   
     

329,651,270

   

RESIDENTIAL

 

15.2%

                 

APARTMENT

 

14.8%

                 

American Homes 4 Rent, Class A

       

769,516

     

13,666,604

   

Apartment Investment & Management Co.

       

1,676,670

     

54,106,141

   

Education Realty Trust

       

979,396

     

10,518,713

   

Equity Residential

       

2,484,362

     

156,514,806

   

Essex Property Trust

       

117,062

     

21,645,935

   

Home Properties

       

868,257

     

55,533,718

   

Post Properties

       

183,833

     

9,827,712

   

UDR

       

3,790,800

     

108,530,604

   
     

430,344,233

   

MANUFACTURED HOME

 

0.4%

                 

Toll Brothersd

       

346,868

     

12,799,429

   

TOTAL RESIDENTIAL

           

443,143,662

   

SELF STORAGE

 

8.6%

                 

CubeSmart

       

2,198,711

     

40,280,386

   

Extra Space Storage

       

811,406

     

43,207,370

   

Public Storage

       

800,904

     

137,234,900

   

Sovran Self Storage

       

398,101

     

30,753,302

   
     

251,475,958

   

See accompanying notes to financial statements.
8



COHEN & STEERS INSTITUTIONAL REALTY SHARES, INC.

SCHEDULE OF INVESTMENTS—(Continued)

June 30, 2014 (Unaudited)

        Number
of Shares
 

Value

 

SHOPPING CENTERS

 

27.6%

                 

COMMUNITY CENTER

 

9.4%

                 

Kimco Realty Corp.

       

2,834,531

   

$

65,137,522

   

Ramco-Gershenson Properties Trust

       

1,217,091

     

20,228,052

   

Regency Centers Corp.

       

1,129,280

     

62,878,310

   

Retail Properties of America, Class A

       

1,533,220

     

23,580,924

   

Tanger Factory Outlet Centers

       

661,481

     

23,131,991

   

Washington Prime Groupd

       

576,428

     

10,802,261

   

Weingarten Realty Investors

       

2,014,252

     

66,148,036

   
     

271,907,096

   

FREE STANDING

 

1.8%

                 

National Retail Properties

       

686,041

     

25,513,865

   

Spirit Realty Capital

       

2,404,538

     

27,315,551

   
     

52,829,416

   

REGIONAL MALL

 

16.4%

                 

General Growth Properties

       

3,710,504

     

87,419,474

   

Glimcher Realty Trust

       

2,929,786

     

31,729,582

   

Pennsylvania REIT

       

83,338

     

1,568,421

   

Simon Property Group

       

1,851,021

     

307,787,772

   

Taubman Centers

       

653,862

     

49,569,278

   
     

478,074,527

   

TOTAL SHOPPING CENTERS

           

802,811,039

   

SPECIALTY

 

0.5%

                 

QTS Realty Trust, Class A

       

507,517

     

14,530,212

   

TOTAL REAL ESTATE

           

2,844,751,046

   
TOTAL COMMON STOCK
(Identified cost—$2,071,985,810)
           

2,849,755,360

   

See accompanying notes to financial statements.
9



COHEN & STEERS INSTITUTIONAL REALTY SHARES, INC.

SCHEDULE OF INVESTMENTS—(Continued)

June 30, 2014 (Unaudited)

        Number
of Shares
 

Value

 

SHORT-TERM INVESTMENTS

   

0.7%

                   

MONEY MARKET FUNDS

 
State Street Institutional Treasury Money
Market Fund, 0.00%e
       

19,600,000

   

$

19,600,000

   
TOTAL SHORT-TERM INVESTMENTS
(Identified cost—$19,600,000)
           

19,600,000

   

TOTAL INVESTMENTS (Identified cost—$2,091,585,810)

   

98.6

%

           

2,869,355,360

   

OTHER ASSETS IN EXCESS OF LIABILITIES

   

1.4

             

40,535,720

   
NET ASSETS (Equivalent to $47.20 per share based
on 61,646,775 shares of common stock outstanding)
   

100.0

%

         

$

2,909,891,080

   

Glossary of Portfolio Abbreviations

REIT  Real Estate Investment Trust

Note: Percentages indicated are based on the net assets of the Fund.

a  Fair valued security. This security has been valued at its fair value as determined in good faith under procedures established by and under the general supervision of the Fund's Board of Directors. Aggregate fair valued securities represent 0.2% of the net assets of the Fund.

b  Illiquid security. Aggregate holdings equal 0.2% of the net assets of the Fund.

c  Resale is restricted to qualified institutional investors. Aggregate holdings equal 0.2% of the net assets of the Fund, all of which are illiquid.

d  Non-income producing security.

e  Rate quoted represents the seven-day yield of the Fund.

See accompanying notes to financial statements.
10




COHEN & STEERS INSTITUTIONAL REALTY SHARES, INC.

STATEMENT OF ASSETS AND LIABILITIES

June 30, 2014 (Unaudited)

ASSETS:

 

Investments in securities, at value (Identified cost—$2,091,585,810)

 

$

2,869,355,360

   

Cash

   

19,764,053

   

Receivable for:

 

Investment securities sold

   

26,517,395

   

Dividends

   

6,699,172

   

Fund shares sold

   

4,236,919

   

Other assets

   

14,700

   

Total Assets

   

2,926,587,599

   

LIABILITIES:

 

Payable for:

 

Investment securities purchased

   

6,472,666

   

Fund shares redeemed

   

5,953,192

   

Dividends declared

   

2,488,609

   

Investment management fees

   

1,760,865

   

Directors' fees

   

8,021

   

Other liabilities

   

13,166

   

Total Liabilities

   

16,696,519

   
NET ASSETS applicable to 61,646,775 shares of $0.001 par value of
common stock outstanding
 

$

2,909,891,080

   

NET ASSET VALUE PER SHARE:

 

($2,909,891,080 ÷ 61,646,775 shares outstanding)

 

$

47.20

   

NET ASSETS consist of:

 

Paid-in capital

 

$

2,122,239,376

   
Dividends in excess of net investment income    

(10,367,456

)

 
Accumulated undistributed net realized gain    

20,249,610

   
Net unrealized appreciation    

777,769,550

   
   

$

2,909,891,080

   

See accompanying notes to financial statements.
11



COHEN & STEERS INSTITUTIONAL REALTY SHARES, INC.

STATEMENT OF OPERATIONS

For the Six Months Ended June 30, 2014 (Unaudited)

Investment Income:

 

Dividend income

 

$

29,251,169

   

Expenses:

 

Investment management fees

   

10,068,257

   

Directors' fees and expenses

   

72,896

   

Registration and filing fees

   

68,447

   

Line of credit fees

   

18,844

   

Dues and subscriptions

   

14,460

   

Total Expenses

   

10,242,904

   

Reduction of Expenses (See Note 2)

   

(174,647

)

 

Net Expenses

   

10,068,257

   
Net Investment Income    

19,182,912

   

Net Realized and Unrealized Gain (Loss):

 
Net realized gain on investments    

70,834,212

   
Net change in unrealized appreciation (depreciation) on investments    

334,157,837

   
Net realized and unrealized gain    

404,992,049

   

Net Increase in Net Assets Resulting from Operations

 

$

424,174,961

   

See accompanying notes to financial statements.
12



COHEN & STEERS INSTITUTIONAL REALTY SHARES, INC.

STATEMENT OF CHANGES IN NET ASSETS (Unaudited)

    For the
Six Months Ended
June 30, 2014
  For the
Year Ended
December 31, 2013
 

Change in Net Assets:

 

From Operations:

 

Net investment income

 

$

19,182,912

   

$

41,357,831

   
Net realized gain    

70,834,212

     

134,516,676

   
Net change in unrealized appreciation
(depreciation)
   

334,157,837

     

(100,038,246

)

 
Net increase in net assets resulting
from operations
   

424,174,961

     

75,836,261

   

Dividends and Distributions to Shareholders from:

                 
Net investment income    

(32,631,561

)

   

(41,716,355

)

 

Net realized gain

   

(3,313,641

)

   

(117,733,086

)

 
Total dividends and distributions
to shareholders
   

(35,945,202

)

   

(159,449,441

)

 

Capital Stock Transactions:

 
Increase in net assets from Fund share
transactions
   

90,536,275

     

189,645,741

   

Total increase in net assets

   

478,766,034

     

106,032,561

   

Net Assets:

 

Beginning of period

   

2,431,125,046

     

2,325,092,485

   

End of perioda

 

$

2,909,891,080

   

$

2,431,125,046

   

a  Includes dividends in excess of net investment income and accumulated undistributed net investment income of $10,367,456 and $3,081,193, respectively.

See accompanying notes to financial statements.
13




COHEN & STEERS INSTITUTIONAL REALTY SHARES, INC.

FINANCIAL HIGHLIGHTS (Unaudited)

The following table includes selected data for a share outstanding throughout each period and other performance information derived from the financial statements. It should be read in conjunction with the financial statements and notes thereto.

    For the Six
Months Ended
 

For the Year Ended December 31,

 

Per Share Operating Performance:

 

June 30, 2014

 

2013

 

2012

 

2011

 

2010

 

2009

 
Net asset value,
beginning of period
 

$

40.77

   

$

42.08

   

$

39.48

   

$

37.99

   

$

30.53

   

$

24.05

   
Income (loss) from investment
operations:
 
Net investment income    

0.33

a,b

   

0.71

a

   

0.58

     

0.48

b

   

0.86

     

0.66

   
Net realized and unrealized
gain
   

6.69

     

0.72

     

5.59

     

1.86

     

7.47

     

6.81

   
Total from investment
operations
   

7.02

     

1.43

     

6.17

     

2.34

     

8.33

     

7.47

   
Less dividends and distributions
to shareholders from:
 
Net investment income    

(0.54

)

   

(0.72

)

   

(0.56

)

   

(0.45

)

   

(0.87

)

   

(0.66

)

 

Net realized gain

   

(0.05

)

   

(2.02

)

   

(3.01

)

   

(0.40

)

   

     

   

Tax return of capital

   

     

     

     

     

     

(0.33

)

 
Total dividends and
distributions to
shareholders
   

(0.59

)

   

(2.74

)

   

(3.57

)

   

(0.85

)

   

(0.87

)

   

(0.99

)

 
Net increase (decrease) in net
asset value
   

6.43

     

(1.31

)

   

2.60

     

1.49

     

7.46

     

6.48

   

Net asset value, end of period

 

$

47.20

   

$

40.77

   

$

42.08

   

$

39.48

   

$

37.99

   

$

30.53

   

Total investment returnc

   

17.26

%d

   

3.46

%

   

15.91

%

   

6.25

%

   

27.63

%

   

32.73

%

 

See accompanying notes to financial statements.
14



COHEN & STEERS INSTITUTIONAL REALTY SHARES, INC.

FINANCIAL HIGHLIGHTS (Unaudited)—(Continued)

    For the Six
Months Ended
 

For the Year Ended December 31,

 

Ratios/Supplemental Data:

 

June 30, 2014

 

2013

 

2012

 

2011

 

2010

 

2009

 
Net assets, end of period
(in millions)
 

$

2,909.9

   

$

2,431.1

   

$

2,325.1

   

$

1,790.4

   

$

1,407.5

   

$

974.8

   
Ratio of expenses to average
daily net assets (before expense
reduction)
   

0.76

%e

   

0.77

%

   

0.77

%

   

0.77

%

   

0.77

%

   

0.77

%

 
Ratio of expenses to average
daily net assets (net of expense
reduction)
   

0.75

%e

   

0.75

%

   

0.75

%

   

0.75

%

   

0.75

%

   

0.75

%

 
Ratio of net investment income
to average daily net assets
(before expense reduction)
   

1.42

%e

   

1.59

%

   

1.41

%

   

1.19

%

   

1.33

%

   

2.76

%

 
Ratio of net investment income
to average daily net assets
(net of expense reduction)
   

1.43

%e

   

1.61

%

   

1.42

%

   

1.21

%

   

1.35

%

   

2.79

%

 

Portfolio turnover rate

   

24

%d

   

75

%

   

85

%

   

92

%

   

104

%

   

119

%

 

a  Calculation based on average shares outstanding.

b  15.6% and 17.0% of gross income was attributable to dividends paid by Simon Property Group for the six months ended June 30, 2014 and the year ended December 31, 2011, respectively.

c  Return assumes the reinvestment of all dividends and distributions at NAV.

d  Not annualized.

e  Annualized.

See accompanying notes to financial statements.
15




COHEN & STEERS INSTITUTIONAL REALTY SHARES, INC.

NOTES TO FINANCIAL STATEMENTS (Unaudited)

Note 1. Organization and Significant Accounting Policies

Cohen & Steers Institutional Realty Shares, Inc. (the Fund) was incorporated under the laws of the State of Maryland on October 13, 1999 and is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as a non-diversified, open-end management investment company. The Fund's investment objective is total return.

The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America (GAAP). The preparation of the financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.

Portfolio Valuation: Investments in securities that are listed on the New York Stock Exchange (NYSE) are valued, except as indicated below, at the last sale price reflected at the close of the NYSE 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 ask prices on such day or, if no ask price is available, at the bid price.

Securities not listed on the NYSE but listed on other domestic or foreign securities exchanges are valued in a similar manner. Securities traded on more than one securities exchange are valued at the last sale price reflected at the close of the exchange representing the principal market for such securities on the business day as of which such value is being determined. If after the close of a foreign market, but prior to the close of business on the day the securities are being valued, market conditions change significantly, certain non-U.S. equity holdings may be fair valued pursuant to procedures established by the Board of Directors.

Readily marketable securities traded in the over-the-counter market, including listed securities whose primary market is believed by Cohen & Steers Capital Management, Inc. (the investment manager) to be over-the-counter, are valued at the last sale price on the valuation date as reported by sources deemed appropriate by the Board of Directors to reflect their fair market value. If there has been no sale on such day, the securities are valued at the mean of the closing bid and ask prices on such day or, if no ask price is available, at the bid price.

Short-term debt securities with a maturity date of 60 days or less are valued at amortized cost, which approximates fair value. Investments in open-end mutual funds are valued at their closing net asset value.

The policies and procedures approved by the Fund's Board of Directors delegate authority to make fair value determinations to the investment manager, subject to the oversight of the Board of Directors. The investment manager has established a valuation committee (Valuation Committee) to administer, implement and oversee the fair valuation process according to the policies and procedures approved annually by the Board of Directors. Among other things, these procedures allow the Fund to


16



COHEN & STEERS INSTITUTIONAL REALTY SHARES, INC.

NOTES TO FINANCIAL STATEMENTS (Unaudited)—(Continued)

utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

Securities for which market prices are unavailable, or securities for which the investment manager determines that the bid and/or ask price or a counterparty valuation does not reflect market value, will be valued at fair value, as determined in good faith by the Valuation Committee, pursuant to procedures approved by the Fund's Board of Directors. Circumstances in which market prices may be unavailable include, but are not limited to, when trading in a security is suspended, the exchange on which the security is traded is subject to an unscheduled close or disruption or material events occur after the close of the exchange on which the security is principally traded. In these circumstances, the Fund determines fair value in a manner that fairly reflects the market value of the security on the valuation date based on consideration of any information or factors it deems appropriate. These may include, but are not limited to, recent transactions in comparable securities, information relating to the specific security and developments in the markets.

The Fund's use of fair value pricing may cause the net asset value of Fund shares to differ from the net asset value that would be calculated using market quotations. Fair value pricing involves subjective judgments and it is possible that the fair value determined for a security may be materially different than the value that could be realized upon the sale of that security.

Fair value is defined as the price that the Fund would expect to receive upon the sale of an investment or expect to pay to transfer a liability in an orderly transaction with an independent buyer in the principal market or, in the absence of a principal market, the most advantageous market for the investment or liability. The hierarchy of inputs that are used in determining the fair value of the Fund's investments is summarized below.

•  Level 1—quoted prices in active markets for identical investments

•  Level 2—other significant observable inputs (including quoted prices for similar investments, interest rates, credit risk, etc.)

•  Level 3—significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments)

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

For movements between the levels within the fair value hierarchy, the Fund has adopted a policy of recognizing the transfer at the end of the period in which the underlying event causing the movement occurred. Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. There were no transfers between Level 1 and Level 2 securities as of June 30, 2014.


17



COHEN & STEERS INSTITUTIONAL REALTY SHARES, INC.

NOTES TO FINANCIAL STATEMENTS (Unaudited)—(Continued)

The following is a summary of the inputs used as of June 30, 2014 in valuing the Fund's investments carried at value:

   

Total

  Quoted Prices
In Active
Markets for
Identical
Investments
(Level 1)
  Other
Significant
Observable
Inputs
(Level 2)
  Significant
Unobservable
Inputs
(Level 3)
 
Common Stock—
Financial—Banks
 

$

5,004,314

   

$

   

$

   

$

5,004,314

a

 
Common Stock—
Other Industries
   

2,844,751,046

     

2,844,751,046

     

     

   

Money Market Funds

   

19,600,000

     

     

19,600,000

     

   

Total Investmentsb

 

$

2,869,355,360

   

$

2,844,751,046

   

$

19,600,000

   

$

5,004,314

   

a  Fair valued, pursuant to the Fund's fair value procedures, utilizing significant unobservable inputs and assumptions.

b  Portfolio holdings are disclosed individually on the Schedule of Investments.

Following is a reconciliation of investments for which significant unobservable inputs (Level 3) were used in determining fair value:

    Investments
in Securities
 

Balance as of December 31, 2013

 

$

4,989,842

   

Change in unrealized appreciation (depreciation)

   

14,472

   

Balance as of June 30, 2014

 

$

5,004,314

   

The change in unrealized appreciation (depreciation) attributable to securities owned on June 30, 2014 which were valued using significant unobservable inputs (Level 3) amounted to $14,472.

The following table summarizes the quantitative inputs and assumptions used for investments categorized in Level 3 of the fair value hierarchy.

    Fair Value at
June 30, 2014
  Valuation
Technique
  Unobservable
Inputs
 

Range

 
Common Stock—
Financial—Banks
 

$

5,004,314

    Market comparable
companies
  Price/Book Ratio
Liquidity Discount
  1.12
30%

x – 1.97x

 

The significant unobservable inputs utilized in the fair value measurement of the Fund's Level 3 equity investment in Common Stock—Financial—Banks are the price-to-book ratio and discount for


18



COHEN & STEERS INSTITUTIONAL REALTY SHARES, INC.

NOTES TO FINANCIAL STATEMENTS (Unaudited)—(Continued)

lack of liquidity. Significant changes in these inputs may result in a materially higher or lower fair value measurement.

Security Transactions and Investment Income: Security transactions are recorded on trade date. Realized gains and losses on investments sold are recorded on the basis of identified cost. Interest income is recorded on the accrual basis. Discounts are accreted and premiums are amortized over the life of the respective securities. Dividend income is recorded on the ex-dividend date. Distributions from Real Estate Investment Trusts (REITs) are recorded as ordinary income, net realized capital gain or return of capital based on information reported by the REITs and management's estimates of such amounts based on historical information. These estimates are adjusted when the actual source of distributions is disclosed by the REITs and actual amounts may differ from the estimated amounts.

Dividends and Distributions to Shareholders: Dividends from net investment income and capital gain distributions are determined in accordance with U.S. federal income tax regulations, which may differ from GAAP. Dividends from net investment income, if any, are declared and paid quarterly. Net realized capital gains, unless offset by any available capital loss carryforward, are typically distributed to shareholders at least annually. Dividends and distributions to shareholders are recorded on the ex-dividend date and are automatically reinvested in full and fractional shares of the Fund based on the net asset value per share at the close of business on the payable date unless the shareholder has elected to have them paid in cash.

Distributions paid by the Fund are subject to recharacterization for tax purposes. Based upon the results of operations for the six months ended June 30, 2014, the investment advisor considers it likely that a portion of the distributions will be reclassified to distributions from net realized gains upon the final determination of the Fund's taxable income after December 31, 2014, the Fund's fiscal year end.

Income Taxes: It is the policy of the Fund to continue to qualify as a regulated investment company, if such qualification is in the best interest of the shareholders, by complying with the requirements of Subchapter M of the Internal Revenue Code applicable to regulated investment companies, and by distributing substantially all of its taxable earnings to its shareholders. Accordingly, no provision for federal income or excise tax is necessary. Dividend and interest income from holdings in non-U.S. securities is recorded net of non-U.S. taxes paid. Management has analyzed the Fund's tax positions taken on federal income tax returns as well as its tax positions in non-U.S. jurisdictions in which it trades for all open tax years and has concluded that as of June 30, 2014, no additional provisions for income tax are required in the Fund's financial statements. The Fund's tax positions for the tax years for which the applicable statutes of limitations have not expired are subject to examination by the Internal Revenue Service, state departments of revenue and by foreign tax authorities.

Note 2. Investment Management Fees and Other Transactions with Affiliates

Investment Management Fees: The investment manager serves as the Fund's investment manager pursuant to an investment management agreement (the investment management agreement). Under


19



COHEN & STEERS INSTITUTIONAL REALTY SHARES, INC.

NOTES TO FINANCIAL STATEMENTS (Unaudited)—(Continued)

the terms of the investment management agreement, the investment manager provides the Fund with day-to-day investment decisions and generally manages the Fund's investments in accordance with the stated policies of the Fund, subject to the supervision of the Board of Directors.

For the services provided to the Fund, the investment manager receives a fee, accrued daily and paid monthly, at the annual rate of 0.75% of the average daily net assets of the Fund.

The investment manager is also responsible, under the investment management agreement, for the performance of certain administrative functions for the Fund. Additionally, the investment manager pays certain expenses of the Fund, including administrative and custody fees, transfer agent fees, professional fees, and reports to shareholders.

The investment manager has contractually agreed to waive its fee and/or reimburse the Fund so that the Fund's total annual operating expenses (excluding acquired fund fees and expenses, and extraordinary expenses) do not exceed 0.75% of the average daily net assets of the Fund. This commitment will remain in place for the life of the Fund. For the six months ended June 30, 2014, fees waived and/or expenses reimbursed totaled $174,647.

Directors' and Officers' Fees: Certain directors and officers of the Fund are also directors, officers, and/or employees of the investment manager. The Fund does not pay compensation to directors and officers affiliated with the investment manager.

Note 3. Purchases and Sales of Securities

Purchases and sales of securities, excluding short-term investments, for the six months ended June 30, 2014, totaled $670,508,992 and $632,069,817, respectively.

Note 4. Income Tax Information

As of June 30, 2014, the federal tax cost and net unrealized appreciation and depreciation in value of securities held were as follows:

Cost for federal income tax purposes

 

$

2,091,585,810

   

Gross unrealized appreciation

 

$

781,868,055

   

Gross unrealized depreciation

   

(4,098,505

)

 

Net unrealized appreciation

 

$

777,769,550

   


20



COHEN & STEERS INSTITUTIONAL REALTY SHARES, INC.

NOTES TO FINANCIAL STATEMENTS (Unaudited)—(Continued)

Note 5. Capital Stock

The Fund is authorized to issue 100 million shares of capital stock, at a par value of $0.001 per share. The Board of Directors of the Fund may increase or decrease the aggregate number of shares of common stock that the Fund has authority to issue. Transactions in Fund shares were as follows:

    For the
Six Months Ended
June 30, 2014
  For the
Year Ended
December 31, 2013
 
   

Shares

 

Amount

 

Shares

 

Amount

 

Sold

   

6,779,644

   

$

300,751,760

     

15,038,423

   

$

662,535,300

   
Issued as reinvestment
of dividends and
distributions
   

683,626

     

31,393,829

     

3,422,269

     

140,392,405

   

Redeemed

   

(5,447,159

)

   

(241,609,314

)

   

(14,084,812

)

   

(613,281,964

)

 

Net Increase

   

2,016,111

   

$

90,536,275

     

4,375,880

   

$

189,645,741

   

Note 6. Borrowings

The Fund, in conjunction with other Cohen & Steers open-end funds, is a party to a $200,000,000 syndicated credit agreement (the credit agreement) with State Street Bank and Trust Company, as administrative agent and operations agent, and the lenders identified in the credit agreement, which expires January 23, 2015. The Fund pays a commitment fee of 0.10% per annum on its proportionate share of the unused portion of the credit agreement.

During the six months ended June 30, 2014, the Fund did not borrow under the credit agreement.

Note 7. Other

In the normal course of business, the Fund enters into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is dependent on claims that may be made against the Fund in the future and, therefore, cannot be estimated; however, based on experience, the risk of material loss from such claims is considered remote.

Note 8. Subsequent Events

Management has evaluated events and transactions occurring after June 30, 2014 through the date that the financial statements were issued, and has determined that no additional disclosure in the financial statements is required.


21




COHEN & STEERS INSTITUTIONAL REALTY SHARES, INC.

OTHER INFORMATION

A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available (i) without charge, upon request, by calling 800-330-7348, (ii) on our website at cohenandsteers.com or (iii) on the Securities and Exchange Commission's (the SEC) website at http://www.sec.gov. In addition, the Fund's proxy voting record for the most recent 12-month period ended June 30 is available by August 31 of each year (i) without charge, upon request, by calling 800-330-7348 or (ii) on the SEC's website at http://www.sec.gov.

The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Fund's Forms N-Q are available (i) without charge, upon request, by calling 800-330-7348 or (ii) on the SEC's website at http://www.sec.gov. In addition, the Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 800-SEC-0330.

Please note that distributions paid by the Fund to shareholders are subject to recharacterization for tax purposes. The Fund may also pay distributions in excess of the Fund's net investment company taxable income and this excess could be a tax free return of capital distributed from the Fund's assets. The final tax treatment of all distributions is reported to shareholders on their 1099-DIV forms, which are mailed after the close of each calendar year.

APPROVAL OF INVESTMENT MANAGEMENT AGREEMENT

The Board of Directors of the Fund, including a majority of the directors who are not parties to the Fund's investment management agreement (the Management Agreement), or interested persons of any such party (Independent Directors), has the responsibility under the 1940 Act to approve the Fund's Management Agreement for its initial two year term and its continuation annually thereafter at a meeting of the Board of Directors called for the purpose of voting on the approval or continuation. At a telephonic meeting of the Board of Directors held on June 11, 2014 and at a meeting held in person on June 17, 2014, the Management Agreement was discussed and was unanimously continued for a term ending June 30, 2015 by the Fund's Board of Directors, including the Independent Directors. The Independent Directors were represented by independent counsel who assisted them in their deliberations during the meeting and executive session.

In considering whether to continue the Management Agreement, the Board of Directors reviewed materials provided by the Fund's investment manager (the Investment Manager) and Fund counsel which included, among other things, fee, expense and performance information compared to peer funds (Peer Funds) and performance comparisons to a larger category universe, prepared by an independent data provider; summary information prepared by the Investment Manager; and a memorandum outlining the legal duties of the Board of Directors. The Board of Directors also spoke directly with representatives of the independent data provider and met with investment management personnel. In addition, the Board of Directors considered information provided from time to time by the Investment Manager throughout the year at meetings of the Board of Directors, including presentations


22



COHEN & STEERS INSTITUTIONAL REALTY SHARES, INC.

by portfolio managers relating to the investment performance of the Fund and the investment strategies used in pursuing the Fund's objective. In particular, the Board of Directors considered the following:

(i) The nature, extent and quality of services to be provided by the Investment Manager: The Board of Directors reviewed the services that the Investment Manager provides to the Fund, including, but not limited to, making the day-to-day investment decisions for the Fund, and generally managing the Fund's investments in accordance with the stated policies of the Fund. The Board of Directors also discussed with officers and portfolio managers of the Fund the types of transactions that were being done on behalf of the Fund. Additionally, the Board of Directors took into account the services provided by the Investment Manager to its other funds, including those that have investment objectives and strategies similar to the Fund. The Board of Directors next considered the education, background and experience of the Investment Manager's personnel, noting particularly that the favorable history and reputation of the portfolio managers for the Fund has had, and would likely continue to have, a favorable impact on the Fund. The Board of Directors further noted the Investment Manager's ability to attract qualified and experienced personnel. The Board of Directors also considered the administrative services provided by the Investment Manager, including compliance and accounting services. After consideration of the above factors, among others, the Board of Directors concluded that the nature, extent and quality of services provided by the Investment Manager are adequate and appropriate.

(ii) Investment performance of the Fund and the Investment Manager: The Board of Directors considered the investment performance of the Fund compared to Peer Funds and compared to a relevant benchmark. The Board of Directors noted that the Fund outperformed its benchmark for the one- and ten-year periods ended March 31, 2014. The Board of Directors noted that the Fund underperformed its benchmark for the three- and five-year periods ended March 31, 2014. The Board of Directors noted that the Fund outperformed the median of the Peer Funds for the one- and ten-year periods ended March 31, 2014, ranking in the second and first quintiles, respectively. The Board of Directors noted that the Fund represented the median of the Peer Funds for the five-year period, ranking in the third quintile. The Board of Directors noted that the Fund underperformed the median of the Peer Funds for the three-year period ended March 31, 2014, ranking in the fifth quintile. The Board of Directors engaged in discussions with the Investment Manager regarding the contributors to and detractors from the Fund's performance during the periods. The Board of Directors also considered supplemental information provided by the Investment Manager, including a narrative summary of various factors affecting performance, changes to the global real estate investment team in 2012, and the Investment Manager's performance in managing other real estate funds. The Board of Directors determined that performance, in light of all considerations noted above, was satisfactory.

(iii) Cost of the services to be provided and profits to be realized by the Investment Manager from the relationship with the Fund: Next, the Board of Directors considered the management fees payable by the Fund as well as total expense ratios. As part of its analysis, the Board of Directors gave consideration to the fee and expense analyses provided by the independent data provider. The Board of Directors noted that the Fund's actual and contractual management fees were lower than the median of the Peer Funds, ranking in the third and second quintiles, respectively. The Board of Directors further noted that the Fund's overall total expense ratio was lower than the median of the Peer Funds, ranking the Fund in the second quintile. The Board of Directors considered that the Investment Manager is waiving its fees and/or reimbursing expenses to limit the overall operating expenses of the Fund. The


23



COHEN & STEERS INSTITUTIONAL REALTY SHARES, INC.

Board of Directors also considered that the Investment Manager charges the Fund a unitary fee over the life of the Fund, causing the Investment Manager to reimburse expenses to limit overall total expenses. In light of the considerations above, the Board of Directors concluded that the Fund's expense structure was satisfactory.

The Board of Directors also reviewed information regarding the profitability to the Investment Manager of its relationship with the Fund. The Board of Directors considered the level of the Investment Manager's profits and whether the profits were reasonable for the Investment Manager. The Board of Directors noted that the Investment Manager is currently waiving its fee and/or reimbursing expenses of the Fund. The Board of Directors took into consideration other benefits to be derived by the Investment Manager in connection with the Management Agreement, noting particularly the research and related services, within the meaning of Section 28(e) of the Securities Exchange Act of 1934, as amended, that the Investment Manager receives by allocating the Fund's brokerage transactions. The Board of Directors concluded that the profits realized by the Investment Manager from its relationship with the Fund were reasonable and consistent with the Investment Manager's fiduciary duties.

(iv) The extent to which economies of scale would be realized as the Fund grows and whether fee levels would reflect such economies of scale: The Board of Directors noted that the Investment Manager pays most of the regular operating costs of the Fund and reimburses the Fund for certain expenses to the extent that total expenses exceed the management fee rate. The Board of Directors determined that there were not at this time significant economies of scale that were not being shared with shareholders.

(v) Comparison of services to be rendered and fees to be paid to those under other investment management contracts, such as contracts of the same and other investment advisors or other clients: As discussed above in (iii), the Board of Directors compared the fees paid under the Management Agreement to those under other investment management contracts of other investment advisors managing Peer Funds. The Board of Directors also compared the services rendered, fees paid and profitability under the Management Agreement to those under the Investment Manager's other fund advisory agreements, as well as the services rendered, fees paid and profitability under the Management Agreement to those under the Investment Manager's other advisory contracts with institutional and other clients with similar investment mandates. The Board of Directors also considered the entrepreneurial risk and financial exposure assumed by the Investment Manager in developing and managing the Fund that the Investment Manager does not have with institutional and other clients and other differences in the management of registered investment companies and institutional accounts. The Board of Directors determined that on a comparative basis the fees under the Management Agreement were reasonable in relation to the services provided.

No single factor was cited as determinative to the decision of the Board of Directors. Rather, after weighing all of the considerations and conclusions discussed above, the Board of Directors, including the Independent Directors, unanimously approved the continuation of the Management Agreement.


24



COHEN & STEERS INSTITUTIONAL REALTY SHARES, INC.

Cohen & Steers Privacy Policy

Facts

 

What Does Cohen & Steers Do With Your Personal Information?

 

Why?

 

Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.

 

What?

  The types of personal information we collect and share depend on the product or service you have with us. This information can include:
• Social Security number and account balances
• Transaction history and account transactions
• Purchase history and wire transfer instructions
 

How?

 

All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons Cohen & Steers chooses to share; and whether you can limit this sharing.

 

 

Reasons we can share your personal information

  Does Cohen & Steers
share?
  Can you limit this
sharing?
 
For our everyday business purposes—
such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or reports to credit bureaus
 

Yes

 

No

 
For our marketing purposes—
to offer our products and services to you
 

Yes

 

No

 

For joint marketing with other financial companies—

 

No

 

We don't share

 
For our affiliates' everyday business purposes—
information about your transactions and experiences
 

No

 

We don't share

 
For our affiliates' everyday business purposes—
information about your creditworthiness
 

No

 

We don't share

 

For our affiliates to market to you—

 

No

 

We don't share

 

For non-affiliates to market to you—

 

No

 

We don't share

 

Questions?  Call 800-330-7348


25



COHEN & STEERS INSTITUTIONAL REALTY SHARES, INC.

Cohen & Steers Privacy Policy—(Continued)

Who we are

     

Who is providing this notice?

 

Cohen & Steers Capital Management, Inc., Cohen & Steers Asia Limited, Cohen & Steers UK Limited, Cohen & Steers Securities, LLC, Cohen & Steers Private Funds and Cohen & Steers Open- and Closed-End Funds (collectively, Cohen & Steers).

 

What we do

     

How does Cohen & Steers protect my personal information?

 

To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We restrict access to your information to those employees who need it to perform their jobs, and also require companies that provide services on our behalf to protect your information.

 

How does Cohen & Steers collect my personal information?

  We collect your personal information, for example, when you:
• Open an account or buy securities from us
• Provide account information or give us your contact information
• Make deposits or withdrawals from your account
We also collect your personal information from other companies.
 

Why can't I limit all sharing?

  Federal law gives you the right to limit only:
• sharing for affiliates' everyday business purposes—information about your creditworthiness
• affiliates from using your information to market to you
• sharing for non-affiliates to market to you
State law and individual companies may give you additional rights to limit sharing.
 

Definitions

     

Affiliates

  Companies related by common ownership or control. They can be financial and nonfinancial companies.
• Cohen & Steers does not share with affiliates.
 

Non-affiliates

  Companies not related by common ownership or control. They can be financial and nonfinancial companies.
• Cohen & Steers does not share with non-affiliates.
 

Joint marketing

  A formal agreement between non-affiliated financial companies that together market financial products or services to you.
• Cohen & Steers does not jointly market.
 


26



COHEN & STEERS INSTITUTIONAL REALTY SHARES, INC.

Cohen & Steers Investment Solutions

COHEN & STEERS GLOBAL REALTY SHARES

  •  Designed for investors seeking total return, investing primarily in global real estate equity securities

  •  Symbols: CSFAX, CSFBX*, CSFCX, CSSPX

COHEN & STEERS INSTITUTIONAL REALTY SHARES

  •  Designed for institutional investors seeking total return, investing primarily in REITs

  •  Symbol: CSRIX

COHEN & STEERS REAL ESTATE SECURITIES FUND
(FORMERLY KNOWN AS "COHEN & STEERS
REALTY INCOME FUND")

  •  Designed for investors seeking total return, investing primarily in real estate securities with an emphasis on both income and capital appreciation

  •  Symbols: CSEIX, CSBIX*, CSCIX, CSDIX

COHEN & STEERS INTERNATIONAL REALTY FUND

  •  Designed for investors seeking total return, investing primarily in international real estate securities

  •  Symbols: IRFAX, IRFCX, IRFIX

COHEN & STEERS REALTY SHARES

  •  Designed for investors seeking total return, investing primarily in REITs

  •  Symbol: CSRSX

COHEN & STEERS
INSTITUTIONAL GLOBAL REALTY SHARES

  •  Designed for institutional investors seeking total return, investing primarily in global real estate securities

  •  Symbol: GRSIX

COHEN & STEERS GLOBAL INFRASTRUCTURE FUND

  •  Designed for investors seeking total return, investing primarily in global infrastructure securities

  •  Symbols: CSUAX, CSUBX*, CSUCX, CSUIX

COHEN & STEERS DIVIDEND VALUE FUND

  •  Designed for investors seeking long-term growth of income and capital appreciation, investing primarily in dividend paying common stocks and preferred stocks

  •  Symbols: DVFAX, DVFCX, DVFIX

COHEN & STEERS
PREFERRED SECURITIES AND INCOME FUND

  •  Designed for investors seeking total return (high current income and capital appreciation), investing primarily in preferred and debt securities

  •  Symbols: CPXAX, CPXCX, CPXIX

COHEN & STEERS REAL ASSETS FUND

  •  Designed for investors seeking total return and the maximization of real returns during inflationary environments by investing primarily in real assets

  •  Symbols: RAPAX, RAPCX, RAPIX, RAPRX, RAPZX

COHEN & STEERS
MLP & ENERGY OPPORTUNITY FUND

  •  Designed for investors seeking total return, investing primarily in midstream energy master limited partnership (MLP) units and related stocks

  •  Symbols: MLOAX, MLOCX, MLOIX, MLOZX

COHEN & STEERS
ACTIVE COMMODITIES STRATEGY FUND

  •  Designed for investors seeking total return, investing primarily in a diversified portfolio of exchange-traded commodity future contracts and other commodity-related derivative instruments

  •  Symbols: CDFAX, CDFCX, CDFIX, CDFZX

Distributed by Cohen & Steers Securities, LLC.

COHEN & STEERS GLOBAL REALTY MAJORS ETF

  •  Designed for investors who seek a relatively low-cost "passive" approach for investing in a portfolio of real estate equity securities of companies in a specified index

  •  Symbol: GRI

Distributed by ALPS Distributors, Inc.

ISHARES COHEN & STEERS
REALTY MAJORS INDEX FUND

  •  Designed for investors who seek a relatively low-cost "passive" approach for investing in a portfolio of real estate equity securities of companies in a specified index

  •  Symbol: ICF

Distributed by SEI Investments Distribution Co.

*  Class B shares are no longer offered except through dividend reinvestment and permitted exchanges by existing Class B shareholders.

Please consider the investment objectives, risks, charges and expenses of the fund carefully before investing. A summary prospectus and prospectus containing this and other information can be obtained by calling 800-330-7348 or by visiting cohenandsteers.com. Please read the summary prospectus and prospectus carefully before investing.


27



COHEN & STEERS INSTITUTIONAL REALTY SHARES, INC.

OFFICERS AND DIRECTORS

Robert H. Steers
Director and Co-Chairman

Martin Cohen
Director and Co-Chairman

Michael G. Clark
Director

Bonnie Cohen
Director

George Grossman
Director

Richard E. Kroon
Director

Richard J. Norman
Director

Frank K. Ross
Director

C. Edward Ward, Jr.
Director

Adam M. Derechin
President and Chief Executive Officer

Joseph M. Harvey
Vice President

Thomas N. Bohjalian
Vice President

Jon Cheigh
Vice President

Francis C. Poli
Secretary

James Giallanza
Treasurer and Chief Financial Officer

Lisa D. Phelan
Chief Compliance Officer

Tina M. Payne
Assistant Secretary

Neil Bloom
Assistant Treasurer

KEY INFORMATION

Investment Manager

Cohen & Steers Capital Management, Inc.
280 Park Avenue
New York, NY 10017
(212) 832-3232

Co-administrator and Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, MA 02111

Transfer Agent

Boston Financial Data Services, Inc.
30 Dan Road
Canton, MA 02021
(800) 437-9912

Legal Counsel

Ropes & Gray LLP
1211 Avenue of the Americas
New York, NY 10036

Distributor

Cohen & Steers Securities, LLC
280 Park Avenue
New York, NY 10017

Nasdaq Symbol: CSRIX

Website: cohenandsteers.com

This report is authorized for delivery only to shareholders of Cohen & Steers Institutional Realty Shares, Inc. unless accompanied or preceded by the delivery of a currently effective prospectus setting forth details of the Fund. Performance data quoted represent past performance. Past performance is no guarantee of future results and your investment may be worth more or less at the time you sell your shares.


28




COHEN & STEERS

INSTITUTIONAL REALTY SHARES

280 PARK AVENUE

NEW YORK, NY 10017

eDelivery NOW AVAILABLE

Stop traditional mail delivery; receive your shareholder reports and prospectus online.

Sign up at cohenandsteers.com

CSRIXSAR

Semiannual Report June 30, 2014

Cohen & Steers Institutional Realty Shares




 

Item 2. Code of Ethics.

 

Not applicable.

 

Item 3. Audit Committee Financial Expert.

 

Not applicable.

 

Item 4. Principal Accountant Fees and Services.

 

Not applicable.

 

Item 5. Audit Committee of Listed Registrants.

 

Not applicable.

 

Item 6. Schedule of Investments.

 

Included in Item 1 above.

 

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

 

Not applicable.

 

Item 8.  Portfolio Managers of Closed-End Management Investment Companies.

 

Not applicable.

 

Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.

 

Not Applicable.

 

Item 10. Submission of Matters to a Vote of Security Holders.

 

None.

 

Item 11. Controls and Procedures.

 

(a) The registrant’s principal executive officer and principal financial officer have concluded, based upon their evaluation of the registrant’s disclosure controls and procedures as conducted within 90 days of the filing date of this report, that these disclosure controls and procedures provide reasonable assurance that material information required to be disclosed by the registrant in the report it files or submits on Form N-CSR is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms

 



 

and that such material information is accumulated and communicated to the registrant’s management, including its principal executive officer and principal financial officer, as appropriate, in order to allow timely decisions regarding required disclosure.

 

(b) There were no changes in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

 

Item 12. Exhibits.

 

(a)(1)  Not applicable.

 

(a)(2) Certifications of principal executive officer and principal financial officer as required by Rule 30a-2(a) under the Investment Company Act of 1940.

 

(a)(3)  Not applicable.

 

(b) Certifications of principal executive officer and principal financial officer as required by Rule 30a- 2(b) under the Investment Company Act of 1940.

 



 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

COHEN & STEERS INSTITUTIONAL REALTY SHARES, INC.

 

 

By:

/s/ Adam M. Derechin

 

 

Name: Adam M. Derechin

 

 

Title: President and Chief Executive Officer

 

 

 

 

Date:

August 28, 2014

 

 

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

 

By:

/s/ Adam M. Derechin

 

 

Name:

Adam M. Derechin

 

 

Title:

President and Chief Executive Officer

 

 

 

(Principal Executive Officer)

 

 

 

 

 

By:

/s/ James Giallanza

 

 

Name:

James Giallanza

 

 

Title:

Treasurer and Chief Financial Officer

 

 

 

(Principal Financial Officer)

 

 

 

 

 

 

 

Date:

August 28, 2014

 

 


EX-99.CERT 2 a14-12380_1ex99dcert.htm EX-99.CERT

EX-99.CERT

 

EXHIBIT 12 (a)(2)

RULE 30a-2(a) CERTIFICATIONS

 

I, Adam M. Derechin, certify that:

 

1.                                      I have reviewed this report on Form N-CSR of Cohen & Steers Institutional Realty Shares, Inc.;

 

2.                                      Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.                                      Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

 

4.                                      The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

 

(a)         designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b)         designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c)          evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and

 

(d)         disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period

 



 

covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.                                      The registrant’s other certifying officer and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

(a)         all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

 

(b)         any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

 

Date:  August 28, 2014

 

 

 

/s/ Adam M. Derechin

 

Adam M. Derechin

 

Principal Executive Officer

 



 

EXHIBIT 12 (a)(2)

RULE 30a-2(a) CERTIFICATIONS

 

I, James Giallanza, certify that:

 

1.                                      I have reviewed this report on Form N-CSR of Cohen & Steers Institutional Realty Shares, Inc.;

 

2.                                      Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.                                      Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

 

4.                                      The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

 

(a)         designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b)         designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c)          evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and

 

(d)         disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period

 



 

covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.                                      The registrant’s other certifying officer and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

(a)         all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

 

(b)         any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

 

Date:  August 28, 2014

 

 

 

/s/ James Giallanza

 

James Giallanza

 

Principal Financial Officer

 


 

EX-99.906CERT 3 a14-12380_1ex99d906cert.htm EX-99.906CERT

EX-99.906CERT

 

EXHIBIT 12 (b)

RULE 30a-2(b) CERTIFICATIONS

 

In connection with the report of Cohen & Steers Institutional Realty Shares, Inc. (the “Company”) on Form N-CSR as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Adam M. Derechin, Principal Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

 

(1)                                 The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

(2)                                 The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

 

/s/ Adam M. Derechin

 

Adam M. Derechin

 

Principal Executive Officer

 

Date:  August 28, 2014

 



 

EXHIBIT 12 (b)

RULE 30a-2(b) CERTIFICATIONS

 

In connection with the report of Cohen & Steers Institutional Realty Shares, Inc. (the “Company”) on Form N-CSR as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, James Giallanza, Principal Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

 

(1)                                 The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

(2)                                 The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

 

/s/ James Giallanza

 

James Giallanza

 

Principal Financial Officer

 

Date:  August 28, 2014

 


 

 

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