As filed with the Securities and Exchange Commission on September 28, 2018
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549
FORM N-Q
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF
REGISTERED MANAGEMENT INVESTMENT COMPANY
Investment Company Act file number: 811-21421
NEUBERGER BERMAN REAL ESTATE SECURITIES INCOME FUND INC.
(Exact Name of Registrant as Specified in Charter)
c/o Neuberger Berman Investment Advisers LLC
1290 Avenue of the Americas
 New York, New York 10104-0002
(Address of Principal Executive Offices – Zip Code)
Registrant's telephone number, including area code: (212) 476-8800
Joseph V. Amato, Chief Executive Officer and President
Neuberger Berman Real Estate Securities Income Fund Inc.
c/o Neuberger Berman Investment Advisers LLC
1290 Avenue of the Americas
 New York, New York 10104-0002
Arthur C. Delibert, Esq.
K&L Gates LLP
1601 K Street, N.W.
Washington, D.C. 20006-1600
(Names and Addresses of Agents for Service)
Date of fiscal year end:  October 31
Date of reporting period:  July 31, 2018
Form N-Q is to be used by management investment companies, other than small business investment companies registered on Form N-5 (§§ 239.24 and 274.5 of this chapter), to file reports with the Commission, not later than 60 days after the close of their first and third fiscal quarters, pursuant to Rule 30b1-5 under the Investment Company Act of 1940 (“1940 Act”) (17 CFR 270.30b1-5). The Commission may use the information provided on Form N-Q in its regulatory, disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-Q, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-Q unless the Form displays a currently valid Office of Management and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to the Secretary, Securities and Exchange Commission, 100 F Street, NE, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.

Item 1. Schedule of Investments.
 
 
Schedule of Investments Real Estate Securities Income Fund Inc.
(Unaudited) July 31, 2018
  
    
NUMBER OF
SHARES
VALUE†
  
     
Common Stocks 80.9%
 
Apartments 6.1%
 
187,200
  
Education Realty Trust, Inc.
  
$
7,742,592
(a)
 
79,100
  
Mid-America Apartment Communities, Inc.
    
7,971,698
(a)
 
15,714,290
  
Commercial Financing 8.5%
 
280,100
  
Blackstone Mortgage Trust, Inc. Class A
    
9,282,514
(a)
 
548,500
  
Starwood Property Trust, Inc.
    
12,527,740
(a)
 
21,810,254
  
Data Centers 6.4%
 
74,000
  
CoreSite Realty Corp.
    
8,295,400
(a)
 
68,000
  
Digital Realty Trust, Inc.
    
8,256,560
(a)
 
16,551,960
  
Diversified 1.8%
 
151,800
  
Colony Capital, Inc.
    
935,088
  
 
425,100
  
Lexington Realty Trust
    
3,736,629
  
 
4,671,717
  
Health Care 11.3%
 
536,066
  
Medical Properties Trust, Inc.
    
7,724,711
(a)
 
278,900
  
Omega Healthcare Investors, Inc.
    
8,280,541
(a)
 
102,400
  
Ventas, Inc.
    
5,773,312
(a)
 
115,100
  
Welltower, Inc.
    
7,205,260
(a)(b)
 
28,983,824
  
Home Financing 5.4%
 
185,100
  
AGNC Investment Corp.
    
3,603,897
(a)
 
968,200
  
Annaly Capital Management, Inc.
    
10,379,104
(a)
 
13,983,001
  
Industrial 4.6%
 
69,850
  
Prologis, Inc.
    
4,583,557
(a)
 
262,100
  
STAG Industrial, Inc.
    
7,160,572
(a)
 
11,744,129
  
Infrastructure 11.4%
 
85,200
  
American Tower Corp.
    
12,630,048
(a)
 
151,600
  
Crown Castle International Corp.
    
16,801,828
(a)(b)
 
29,431,876
  
Lodging/Resorts 3.7%
 
139,500
  
LaSalle Hotel Properties
    
4,836,465
(a)
 
145,900
  
Park Hotels & Resorts, Inc.
    
4,563,752
(a)
 
9,400,217
  
Manufactured Homes 2.8%
 
75,200
  
Sun Communities, Inc.
    
7,291,392
(a)
               
Office 5.6%
 
39,600
  
Boston Properties, Inc.
    
4,970,988
(a)
 
191,680
  
Highwoods Properties, Inc.
    
9,413,405
(a)
 
14,384,393
  
Regional Malls 3.8%
 
56,000
  
Simon Property Group, Inc.
    
9,867,760
(a)
               
Self Storage 3.2%
 
86,500
  
Extra Space Storage, Inc.
    
8,128,405
(a)
NUMBER OF
SHARES
VALUE†
  
     
Shopping Centers 2.6%
 
126,832
  
DDR Corp.
  
$
1,737,598
  
 
298,100
  
Kimco Realty Corp.
    
4,975,289
(a)
 
6,712,887
  
Single Family Homes 1.2%
 
142,747
  
American Homes 4 Rent Class A
    
3,160,419
(a)
Specialty 0.9%
 
64,700
  
Iron Mountain, Inc.
    
2,271,617
(a)
Timber 1.6%
 
119,600
  
Weyerhaeuser Co.
    
4,087,928
(a)
               
Total Common Stocks
 (Cost $206,656,396)
  
208,196,069
  
       
Preferred Stocks 56.4%
 
Data Centers 1.0%
 
95,000
  
Digital Realty Trust, Inc., Ser. C, 6.63%
    
2,525,100
  
Diversified 8.1%
 
194,139
  
Colony Capital, Inc., Ser. B, 8.25%
    
4,999,079
  
 
16,212
  
Colony Capital, Inc., Ser. H, 7.13%
    
382,441
  
 
533,591
  
Colony Capital, Inc., Ser. I, 7.15%
    
12,448,678
  
 
125,000
  
Colony Capital, Inc., Ser. J, 7.13%
    
2,915,000
  
 
20,745,198
  
Free Standing 0.9%
 
98,922
  
National Retail Properties, Inc., Ser. F, 5.20%
    
2,400,837
(a)
               
Home Financing 3.2%
 
325,000
  
Annaly Capital Management, Inc., Ser. F, 6.95%
    
8,277,750
(a)
               
Industrial 4.7%
 
100,000
  
PS Business Parks, Inc., Ser. U, 5.75%
    
2,517,000
  
 
255,500
  
Rexford Industrial Realty, Inc., Ser. A, 5.88%
    
6,285,300
(a)
 
125,600
  
STAG Industrial, Inc., Ser. C, 6.88%
    
3,271,880
(a)
 
12,074,180
  
Lodging/Resorts 10.8%
 
379,000
  
Ashford Hospitality Trust, Inc., Ser. G, 7.38%
    
9,152,850
(a)
 
185,800
  
Eagle Hospitality Properties Trust, Inc., Ser. A, 8.25%
    
0
*(c)(d)
 
349,300
  
Pebblebrook Hotel Trust, Ser. D, 6.38%
    
8,708,049
(a)
 
192,000
  
Sunstone Hotel Investors, Inc., Ser. E, 6.95%
    
5,001,600
(a)
 
200,000
  
Sunstone Hotel Investors, Inc., Ser. F, 6.45%
    
5,010,000
(a)
 
27,872,499
  
Office 2.8%
 
6,000
  
Highwoods Properties, Inc., Ser. A, 8.63%
    
7,198,184
(a)
 
 
See Notes to Schedule of Investments

Schedule of Investments Real Estate Securities Income Fund Inc.
(Unaudited) (cont’d)
 
 
 
NUMBER OF
SHARES
VALUE†
  
     
Regional Malls 10.9%
 
323,015
  
CBL & Associates Properties, Inc., Ser. D, 7.38%
  
$
6,230,960
(a)
 
185,000
  
CBL & Associates Properties, Inc., Ser. E, 6.63%
    
3,220,850
  
 
292,289
  
Pennsylvania Real Estate Investment Trust, Ser. C, 7.20%
    
6,874,637
(a)
 
227,439
  
Taubman Centers, Inc., Ser. J, 6.50%
    
5,715,542
(a)
 
255,000
  
Washington Prime Group, Inc., Ser. H, 7.50%
    
5,954,250
  
 
27,996,239
  
Self Storage 3.1%
 
40,500
  
Public Storage, Ser. E, 4.90%
    
984,150
(a)
 
275,000
  
Public Storage, Ser. Y, 6.38%
    
7,106,000
(a)
 
8,090,150
  
Shopping Centers 5.9%
 
45,678
  
Cedar Realty Trust, Inc., Ser. B, 7.25%
    
1,140,169
  
 
124,100
  
Cedar Realty Trust, Inc., Ser. C, 6.50%
    
2,882,843
  
 
250,000
  
DDR Corp., Ser. K, 6.25%
    
6,062,500
(a)
 
41,800
  
Kimco Realty Corp., Ser. K, 5.63%
    
1,022,010
  
 
70,131
  
Saul Centers, Inc., Ser. C, 6.88%
    
1,756,781
  
 
90,000
  
Urstadt Biddle Properties, Inc., Ser. G, 6.75%
    
2,264,400
  
 
15,128,703
  
Single Family Homes 5.0%
 
223,000
  
American Homes 4 Rent, Ser. D, 6.50%
    
5,842,600
  
 
40,000
  
American Homes 4 Rent, Ser. E, 6.35%
    
1,039,600
  
 
116,700
  
American Homes 4 Rent, Ser. F, 5.88%
    
2,880,156
(a)
 
120,900
  
American Homes 4 Rent, Ser. G, 5.88%
    
2,989,857
(a)
 
12,752,213
  
Total Preferred Stocks
 (Cost $152,270,808)
  
145,061,053
  
       
Total Options Purchased(d) 0.0%(e)
(Cost $33,878)
  
20,925
  
       
Short-Term Investments 6.7%
 
Investment Companies 6.7%
17,120,235
  
State Street Institutional U.S. Government Money Market Fund Premier Class, 1.83%(f) (Cost  $17,120,235)
    
17,120,235
(g)
             
Total Investments 144.0%
 (Cost $376,081,317)
  
370,398,282
  
Liabilities Less Other Assets (44.0)%
  
(113,208,724)
  
       
Net Assets Applicable to Common Stockholders 100.0%
  
$
257,189,558
  
*
Non-income producing security.
(a)
All or a portion of this security is pledged with the custodian in connection with the Fund's loans payable outstanding.
(b)
All or a portion of the security is pledged as collateral for options written.
(c)
Defaulted security.
(d)
Illiquid security.
(e)
See "Purchased option contracts" under Derivative Instruments.
(f)
Represents less than 0.05% of net assets.
(g)
Represents 7-day effective yield as of July 31, 2018.
(h)
All or a portion of this security is segregated with obligations for options written with a total value of $17,120,235.
 (i)
Includes the impact of the Fund’s open positions in derivatives at July 31, 2018.
 
See Notes to Schedule of Investments
Schedule of Investments Real Estate Securities Income Fund Inc.
(Unaudited) (cont’d)
 
Derivative Instruments

Purchased option contracts ("options purchased")
      
       
 
At July 31, 2018, the Fund had outstanding options purchased as follows:
            
    
Description
  
Number of
Contracts
  
Notional
Amount
    
Exercise Price
  
Expiration Date
  
Value
  
Calls
      
Real Estate Management & Development
      
Brookfield Property Partners LP
    
4,185
    
8,495,550
 
  
$
25
  
9/21/2018
  
$
20,925
 
Total options purchased (cost $33,878)
                        
$
20,925
 
 
Written option contracts ("options written")
     
 
At July 31, 2018, the Fund had outstanding options written as follows:
            
     
Description
  
Number of
Contracts
  
Notional
Amount
    
Exercise Price
  
Expiration Date
  
Value
  
Puts
      
Real Estate Management & Development
      
Brookfield Property Partners LP
    
4,185
    
(8,495,550
)
  
$
25
  
9/21/2018
  
$
(2,762,100
)
Total options written (premium received $2,975,789)
                        
$
(2,762,100
)
 
At July 31, 2018, the Fund had securities pledged in the amount of $9,414,440 to cover collateral requirements for options written.
 
See Notes to Schedule of Investments
Schedule of Investments Real Estate Securities Income Fund Inc.
(Unaudited) (cont’d)
  
  
The following is a summary, categorized by Level (see Notes to Schedule of Investments), of inputs used to value the Fund's investments as of July 31, 2018:
 
Asset Valuation Inputs
  
                         
   
Level 1
    
Level 2
    
Level 3
    
Total
  
Investments:
  
Common Stocks(a)
  
$
208,196,069
    
$
—
    
$
—
    
$
208,196,069
  
Preferred Stocks
                                
   Lodging/Resorts
    
27,872,499
      
0
      
—
      
27,872,499
  
   Office
    
—
      
7,198,184
      
—
      
7,198,184
  
   Other Preferred Stocks(a)
    
109,990,370
      
—
      
—
      
109,990,370
  
Total Preferred Stocks
    
137,862,869
      
7,198,184
      
—
      
145,061,053
  
Options Purchased(b)
    
20,925
      
—
      
—
      
20,925
  
Short-Term Investments
    
—
      
17,120,235
      
—
      
17,120,235
  
Total Investments
  
$
346,079,863
    
$
24,318,419
    
$
—
    
$
370,398,282
  
 
   
(a)
  
The Schedule of Investments provides information on the industry categorization for the portfolio.
  
(b)
  
The “Purchased option contracts” table under Derivative Instruments provides information on the industry or sector categorization for the portfolio.
  

As of the period ended July 31, 2018, no securities were transferred from one level (as of October 31, 2017) to another.
The following is a summary, categorized by Level (see Notes to Schedule of Investments), of inputs used to value the Fund's derivatives as of July 31, 2018:
   
Other Financial Instruments
Level 1
  
Level 2
  
Level 3
  
Total
  
Options Written
              
Liabilities
  
$
(2,762,100
)
  
$
—
    
$
—
    
$
(2,762,100
)
Total
  
$
(2,762,100
)
  
$
—
    
$
—
    
$
(2,762,100
)
 
 
See Notes to Schedule of Investments
July 31, 2018
Notes to Schedule of Investments (Unaudited)
  
   
 
†
In accordance with Accounting Standards Codification 820 “Fair Value Measurement” (“ASC 820”), all investments held by Neuberger Berman Real Estate Securities Income Fund Inc. (the “Fund”) are carried at the value that Neuberger Berman Investment Advisers LLC ("Management") believes the Fund would receive upon selling an investment in an orderly transaction to an independent buyer in the principal or most advantageous market for the investment under current market conditions. Various inputs, including the volume and level of activity for the asset or liability in the market, are considered in valuing the Fund's investments, some of which are discussed below. Significant Management judgment may be necessary to value investments in accordance with ASC 820.
ASC 820 established a three-tier hierarchy of inputs to create a classification of value measurements for disclosure purposes. The three-tier hierarchy of inputs is summarized in the three broad Levels listed below.
    
•
Level 1 – quoted prices in active markets for identical investments
•
Level 2 – other observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, amortized cost, etc.)
•
Level 3 – unobservable inputs (including the Fund's own assumptions in determining the fair value of investments)
      
 
The inputs or methodology used for valuing an investment are not necessarily an indication of the risk associated with investing in those securities.
  
The value of the Fund’s investments in equity securities, certain preferred stocks and exchange-traded options purchased and options written, for which market quotations are readily available, is generally determined by Management by obtaining valuations from independent pricing services based on the latest sale price quoted on a principal exchange or market for that security (Level 1 inputs). Securities traded primarily on the NASDAQ Stock Market are normally valued at the NASDAQ Official Closing Price (“NOCP”) provided by NASDAQ each business day. The NOCP is the most recently reported price as of 4:00:02 p.m., Eastern Time, unless that price is outside the range of the “inside” bid and asked prices (i.e., the bid and asked prices that dealers quote to each other when trading for their own accounts); in that case, NASDAQ will adjust the price to equal the inside bid or asked price, whichever is closer. Because of delays in reporting trades, the NOCP may not be based on the price of the last trade to occur before the market closes. If there is no sale of a security on a particular day, the independent pricing services may value the security based on market quotations. The value of certain preferred stock is determined by Management by obtaining valuations from independent pricing services which are based on market information which may include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, benchmark securities, bids, offers, and reference data, such as market research publications, when available (generally Level 2 inputs).
  
Management has developed a process to periodically review information provided by independent pricing services for all types of securities.
  
Investments in non-exchange traded investment companies are valued using the respective fund’s daily calculated net asset value per share (Level 2 inputs).
  
If a valuation is not available from an independent pricing service, or if Management has reason to believe that the valuation received does not represent the amount the Fund might reasonably expect to receive on a current sale in an orderly transaction, Management seeks to obtain quotations from brokers or dealers (generally considered Level 2 or Level 3 inputs depending on the number of quotes available). If such quotations are not readily available, the security is valued using methods the Fund’s Board of Directors has approved in the good-faith belief that the resulting valuation will reflect the fair value of the security. Numerous factors may be considered when determining the fair value of a security based on Level 2 or Level 3 inputs, including available analyst, media or other reports, securities within the same industry with recent highly correlated performance, trading in futures or American Depositary Receipts and whether the issuer of the security being fair valued has other securities outstanding.
  
Fair value prices are necessarily estimates, and there is no assurance that such a price will be at or close to the price at which the security is next quoted or next trades.

 


For information on the Fund’s significant accounting policies, please refer to the Fund’s most recent stockholder reports.

Item 2. Controls and Procedures.
(a)
Based on an evaluation of the disclosure controls and procedures (as defined in Rule 30a-3(c) under the 1940 Act), as of a date within 90 days of the filing date of this report, the Chief Executive Officer and President and the Treasurer and Principal Financial and Accounting Officer of the Registrant have concluded that such disclosure controls and procedures are effectively designed to ensure that information required to be disclosed by the Registrant on Form N-Q is accumulated and communicated to the Registrant’s management to allow timely decisions regarding required disclosure.
 (b)
There were no significant changes in the Registrant’s internal controls over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the Registrant’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting.
Item 3. Exhibits.
The certifications required by Rule 30a-2(a) of the 1940 Act are filed herewith.
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.
Neuberger Berman Real Estate Securities Income Fund Inc.
 
 
By:
/s/ Joseph V. Amato
 
 
Joseph V. Amato
 
 
Chief Executive Officer and President
 
 
Date:  September 28, 2018
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/ Joseph V. Amato
 
 
Joseph V. Amato
 
 
Chief Executive Officer and President
 
 
Date:  September 28, 2018
 
 
By:
/s/ John M. McGovern
 
 
John M. McGovern
 
 
Treasurer and Principal Financial
and Accounting Officer
 

Date:  September 28, 2018