Edgar Filing: COHEN & STEERS QUALITY INCOME REALTY FUND INC

Section 240.14a-101 Schedule 14A.
Information required in proxy statement.
Schedule 14A Information
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No. )
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Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12

Cohen & Steers Quality Income Realty Fund, Inc.
.................................................................
(Name of Registrant as Specified In Its Charter)

.................................................................
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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on which the filing fee is calculated and state how it was
determined):

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[ ] Fee paid previously with preliminary materials.

[ ] Check box if any part of the fee is offset as provided by
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COHEN & STEERS QUALITY INCOME
REALTY FUND, INC.
757 THIRD AVENUE, NEW YORK, NEW YORK 10017
(212) 832-3232

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

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
APRIL 28, 2005

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

To the Stockholders of
COHEN & STEERS QUALITY INCOME REALTY FUND, INC.:

NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the
'Meeting') of Cohen & Steers Quality Income Realty Fund, Inc. (the 'Fund') will
be held at the offices of the Fund, 757 Third Avenue, 20th Floor, New York, New
York 10017, on April 28, 2005 at 10:00 a.m. New York City time, for the
following purposes, all of which are more fully described in the accompanying
Proxy Statement dated March 18, 2005:

1. To elect four Directors of the Fund, to hold office for a term of
three years or for a term of one year, as the case may be, and until their
successors are duly elected and qualified; and

2. To transact such other business as may properly come before the
Meeting or any adjournment thereof.

The holders of the Fund's Taxable Auction Market Preferred Shares have equal
voting rights with the holders of the Fund's common stock (i.e., one vote per
share), and will vote together with the holders of common stock as a single
class on the proposal to elect Bonnie Cohen, Richard E. Kroon and C. Edward
Ward, Jr. as Directors and other business that may properly come before the
Meeting. The holders of Taxable Auction Market Preferred Shares, voting
separately as a class, will vote for the election of Willard H. Smith Jr., who
has been designated as one of the two Directors representing the holders of the
Fund's Taxable Auction Market Preferred Shares (see 'Proposal One: Election of
Directors').

The Directors have fixed the close of business on March 10, 2005 as the
record date for the determination of stockholders entitled to notice of and to
vote at the Meeting or any adjournment thereof. The enclosed proxy is being
solicited on behalf of the Directors.

By order of the Board of Directors,

Robert H. Steers

ROBERT H. STEERS
Secretary

New York, New York
March 18, 2005

YOUR VOTE IS IMPORTANT

PLEASE INDICATE YOUR VOTING INSTRUCTIONS ON THE ENCLOSED PROXY CARD, SIGN
AND DATE IT, AND RETURN IT IN THE ENVELOPE PROVIDED, WHICH NEEDS NO POSTAGE IF
MAILED IN THE UNITED STATES. IN ORDER TO SAVE THE FUND ANY ADDITIONAL EXPENSE OF
FURTHER SOLICITATION, PLEASE MAIL YOUR PROXY PROMPTLY.

PROXY STATEMENT
TABLE OF CONTENTS

PAGE
----

Introduction................................................ 1
Proposal One: Election of Directors......................... 2
Independent Registered Public Accounting Firm............... 8
Fees Paid to PricewaterhouseCoopers LLP..................... 8
Certain Information Regarding the Investment Manager and the
Administrator............................................. 9
Officers of the Fund........................................ 10
Submission of Proposals for the Next Annual Meeting of
Stockholders.............................................. 10
Stockholder Communications.................................. 10
Other Matters............................................... 11
Votes Required.............................................. 11

PROXY STATEMENT

COHEN & STEERS QUALITY INCOME
REALTY FUND, INC.
757 THIRD AVENUE
NEW YORK, NEW YORK 10017
(212) 832-3232

-------------------
ANNUAL MEETING OF STOCKHOLDERS
APRIL 28, 2005

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

INTRODUCTION

This Proxy Statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Directors of Cohen & Steers Quality Income
Realty Fund, Inc., a Maryland corporation (the 'Fund'), to be voted at the
Annual Meeting of Stockholders of the Fund, to be held at the offices of the
Fund, 757 Third Avenue, 20th Floor, New York, New York 10017, on April 28, 2005
at 10:00 a.m. New York City time, and at any adjournments thereof (collectively,
the 'Meeting'). The solicitation will be by mail and the cost (including
printing and mailing this Proxy Statement, meeting notice and form of proxy, as
well as any necessary supplementary solicitation) will be borne by the Fund
pursuant to the terms of the investment advisory agreement described below. The
Notice of Meeting, Proxy Statement and Proxy are being mailed to stockholders on
or about March 18, 2005.

In accordance with the Fund's by-laws, the presence in person or by proxy of
the holders of record of a majority of the shares of the Fund issued and
outstanding and entitled to vote thereat shall constitute a quorum at the
Meeting. If, however, a quorum shall not be present or represented at the
Meeting or if fewer shares are present in person or by proxy than is the minimum
required to take action with respect to any proposal presented at the Meeting,
the holders of a majority of the shares of the Fund present in person or by
proxy shall have the power to adjourn the Meeting from time to time, without
notice other than announcement at the Meeting, until the requisite number of
shares entitled to vote at the Meeting shall be present. At any adjourned
Meeting, if the relevant quorum is subsequently constituted, any business may be
transacted which might have been transacted at the Meeting as originally called.
For purposes of determining the presence of a quorum for transacting business at
the Meeting, abstentions and broker 'non-votes' (that is, proxies from brokers
or nominees indicating that they have not received instructions from the
beneficial owner or other persons entitled to vote shares on a particular matter
with respect to which the brokers or nominees do not have discretionary power)
will be treated as shares that are present but which have not been voted. For
this reason, abstentions and broker non-votes will have no effect on obtaining
the requisite approval of each proposal.

The Board of Directors has fixed the close of business on March 10, 2005 as
the record date for the determination of stockholders entitled to notice of and
to vote at the Meeting. The outstanding voting shares of the Fund as of
March 10, 2005 consisted of 38,733,605 shares of common stock and 17,360 Taxable
Auction Market Preferred Shares, liquidation preference $25,000 per share, each
share being entitled to one vote. All properly executed proxies received prior
to the Meeting will be voted at the Meeting in accordance with the instructions
marked thereon or as otherwise provided therein. Accordingly, unless
instructions to the contrary are marked, proxies will be voted for the election
of the Directors. Any stockholder may revoke his proxy at any time prior to
exercise thereof by giving written

notice to the Secretary of the Fund at its offices at 757 Third Avenue, New
York, New York 10017, or by signing another proxy of a later date or by
personally casting his vote at the Meeting.

THE MOST RECENT ANNUAL AND SEMI-ANNUAL REPORTS OF THE FUND, INCLUDING
FINANCIAL STATEMENTS, HAVE BEEN PREVIOUSLY MAILED TO STOCKHOLDERS. IF YOU HAVE
NOT RECEIVED THESE REPORTS OR WOULD LIKE TO RECEIVE ADDITIONAL COPIES FREE OF
CHARGE, PLEASE CONTACT LAWRENCE B. STOLLER, ASSISTANT SECRETARY OF THE FUND AT
757 THIRD AVENUE, NEW YORK, NEW YORK 10017, (800) 330-7348, AND THEY WILL BE
SENT PROMPTLY BY FIRST-CLASS MAIL.

PROPOSAL ONE
ELECTION OF DIRECTORS

At the Meeting, three Directors will be elected to serve for a term of three
years and until their successors are duly elected and qualified and one Director
will be elected to serve for a term of one year and until his successor is duly
elected and qualified. The nominees for Director are Bonnie Cohen, Willard H.
Smith Jr. and Richard E. Kroon, for terms to expire in 2008 and C. Edward Ward,
Jr., for a term to expire in 2006. It is the intention of the persons named in
the enclosed proxy to nominate and vote in favor of the nominees. Ms. Cohen and
Mr. Smith are standing for re-election. Mr. Kroon and Mr. Ward were elected as
Directors by the other Directors of the Fund effective as of November 4, 2004.
Mr. Kroon and Mr. Ward were nominated by the Nominating Committee of the Fund's
Board of Directors after first being identified as potential Directors by
several members of that Committee. At the Meeting, the holders of the Fund's
Taxable Auction Market Preferred Shares will have equal voting rights with the
holders of the Fund's common stock (i.e., one vote per share), and will vote
together with the holders of the Fund's common stock as a single class on the
election of Messrs. Kroon and Ward and Ms. Cohen. The holders of the Fund's
Taxable Auction Market Preferred Shares, voting separately as a class, have the
right to elect two Directors of the Fund. The holders of the Fund's common stock
do not have the right to vote with respect to the election of these two
Directors, who are Martin Cohen and Willard H. Smith Jr. Mr. Smith is standing
for re-election at the meeting as his term expires in 2005. The holders of the
Fund's Taxable Auction Market Preferred Shares, voting separately as a class,
will vote for the election of Mr. Smith. Mr. Cohen is not standing for
re-election at the meeting as his term does not expire until 2007. In addition
to the Fund, each nominee also currently serves as Director of the thirteen
other funds within the Cohen & Steers Fund Complex.

SUMMARY OF VOTING RIGHTS ON PROPOSAL 1

TAXABLE
COMMON AUCTION MARKET
SHAREHOLDERS PREFERRED SHAREHOLDERS
------------ ----------------------

Bonnie Cohen................................................ 38,733,605 17,360
Richard E. Kroon............................................ 38,733,605 17,360
C. Edward Ward, Jr. ........................................ 38,733,605 17,360
Willard H. Smith Jr. ....................................... N/A 17,360

At the Annual Meeting of Stockholders held on April 24, 2003, the Fund's
stockholders elected the Board of Directors to staggered terms. Accordingly, the
term of office of only a single class of Directors will expire in 2005. As a
result of this system, only those Directors in any one class may be changed in
any one year, and it would require two years or more to change a majority of the
Board of Directors. This system of electing Directors, which may be regarded as
an 'anti-takeover' provision, may have the effect of maintaining the continuity
of management and, thus, make it more difficult for the Fund's stockholders to
change the majority of Directors.

The nominees have consented to serve as Directors. The Board of Directors of
the Fund knows of no reason why a nominee would be unable to serve, but in the
event of such unavailability, the proxies received will be voted for such
substitute nominee as the Board of Directors may recommend.

Certain information concerning Messrs. Kroon, Ward and Smith and Ms. Cohen
and the other members of the Board of Directors is set forth as follows:

NUMBER OF
FUNDS
WITHIN
FUND
COMPLEX
OVERSEEN BY
PRINCIPAL OCCUPATION DURING PAST DIRECTOR
POSITION HELD FIVE YEARS (INCLUDING OTHER LENGTH OF TERM (INCLUDING
NAME, ADDRESS AND AGE* WITH FUND DIRECTORSHIPS HELD) TIME SERVED OF OFFICE THE FUND)
---------------------- --------- ------------------- ----------- --------- ---------

Disinterested Directors
Bonnie Cohen ................. Director Private Consultant. Prior Since 2002 2008'D' 14
Age: 62 thereto, Undersecretary of
State, United States Department
of State. Board Member of
Wellsford Real Properties, Inc.

George Grossman .............. Director Attorney-at-Law. Since 2002 2006 14
Age: 51

Richard E. Kroon ............. Director Board member of Finlay Since 2008'D' 14
Age: 62 Enterprises, Inc. (operator of November
department store fine jewelry 2004
leased departments), and several
private companies; member of
Investment Subcommittee,
Monmouth University. Retired
Chairman and Managing Partner of
Sprout Group venture capital
funds, then an affiliate of
Donaldson, Lufkin and Jenrette
Securities Corporation; and
former chairman of the National
Venture Capital Association.

Richard J. Norman ............ Director Private Investor. President of Since 2002 2007 14
Age: 61 the Board of Directors of
Maryland Public Television,
Board Member of The Salvation
Army. Prior thereto, Investment
Representative of Morgan Stanley
Dean Witter.

Frank K. Ross ................ Director Professor of Accounting, Howard Since March 2007 14
Age: 61 University; Board member of 2004
NCRIC Group, Inc. (insurance)
and Pepco Holdings, Inc.
(electric utility). Formerly,
Midatlantic Area Managing
Partner for Audit and Risk
Advisory Services at KPMG LLP
and Managing Partner of its
Washington, DC office.

Willard H. Smith Jr. ........ Director Board member of Essex Property Since 2002 2008'D' 14
Age: 68 Trust, Inc., Highwoods
Properties, Inc., Realty Income
Corporation and Crest Net Lease,
Inc. Managing Director at
Merrill Lynch & Co., Equity
Capital Markets Division, from
1983 to 1995.

(table continued on next page)

(table continued from previous page)

C. Edward Ward, Jr. ......... Director Member of The Board of Trustees Since 2006'D' 14
Age: 58 of Manhattan College, Riverdale, November
New York. Formerly head of 2004
closed-end fund listing for the
New York Stock Exchange

Interested Directors**

Martin Cohen ................. Director, President Co-Chairman and Co-Chief Since 2002 2007 14
Age: 56 and Treasurer Executive Officer of Cohen &
Steers Capital Management, Inc.,
the Fund's Adviser, and its
parent company, Cohen & Steers,
Inc. Prior thereto, President of
the Adviser.

Robert H. Steers ............. Director, Chairman Co-Chairman and Co-Chief Since 2002 2006 14
Age: 52 of the Board and Executive Officer of Cohen &
Secretary Steers Capital Management, Inc.,
the Fund's Adviser, and its
parent company, Cohen & Steers
Inc. Prior thereto, Chairman of
the Adviser.

---------

* The address of each Director is 757 Third Avenue, New York, New York 10017.

** 'Interested person,' as defined in the Investment Company Act of 1940, as
amended, of the Fund because of the affiliation with Cohen & Steers Capital
Management, Inc., the Fund's investment manager and its parent company,
Cohen & Steers, Inc.

'D' If elected at the Meeting.

The Fund does not have a policy with regard to the Directors' attendance at
annual meetings and none of the Directors attended the Fund's 2004 annual
meeting.

During the Fund's fiscal year ended December 31, 2004, the Board of
Directors met seven times. Each Director attended at least 75% of the aggregate
number of meetings of the Board of Directors and the Committees for which he or
she was eligible. The Fund maintains four standing Board Committees, the Audit
Committee, the Nominating Committee, the Contract Review Committee and the
Governance Committee of the Board of Directors. The Directors serving on each
Committee are not 'interested persons' of the Fund, as defined in Section
2(a)(19) of the Investment Company Act of 1940, as amended (the 'Act'), and
otherwise satisfy the applicable standards for independence of a committee
member of an investment company issuer under the federal securities laws and
under applicable listing standards of the New York Stock Exchange. The members
of the Nominating and Contract Review Committees are Ms. Cohen and Messrs.
Kroon, Grossman, Norman, Ross, Smith and Ward. The members of the Governance
Committee are Messrs. Norman, Ward and Smith. The members of the Audit Committee
are Ms. Cohen and Messrs. Ross, Kroon and Grossman. The Board of Directors
determined that Mr. Ross meets the requirements necessary to serve as an audit
committee

financial expert and that the Audit Committee members are financially literate,
for purposes of the New York Stock Exchange listing standards.

The Audit Committee met four times during the fiscal year ended
December 31, 2004 and operates pursuant to a written charter adopted by the
Board. The main function of the Audit Committee is to oversee the Fund's
accounting and financial reporting policies and practices and its internal
controls, including by assisting with the Board's oversight of the integrity of
the Fund's financial statements, the Fund's compliance with legal and regulatory
requirements, the selection, retention, qualifications and independence of the
Fund's independent auditors and the performance of the Fund's internal control
systems and independent auditors.

The Nominating Committee met twice during the fiscal year ended
December 31, 2004 and operates pursuant to a written charter adopted by the
Board. A current copy of the charter is not available on the Fund's website, but
it was filed with the Fund's proxy statement in 2004. The main functions of the
Nominating Committee are (i) to identify individuals qualified to become members
of the Board in the event that a position is vacated or created, (ii) to select
the Director nominees for the next annual meeting of stockholders and (iii) to
set any necessary standards or qualifications for service on the Board. The
Nominating Committee will consider director candidates recommended by
stockholders, provided that any such stockholder recommendation is submitted in
writing to the Fund, to the attention of the Secretary, at the address of the
principal executive offices of the Fund and further provided that such
recommendation includes all other information specified in the charter.

The Nominating Committee requires that Director candidates have a college
degree or equivalent business experience. The Committee may take into account a
wide variety of factors in considering Director candidates, including (but not
limited to): (i) availability and commitment of a candidate to attend meetings
and perform his or her responsibilities on the Board, (ii) relevant industry and
related experience, (iii) educational background, (iv) financial and other
relevant experience, (v) an assessment of the candidate's character, integrity,
ability and judgment (vi) whether or not the candidate serves on boards of, or
is otherwise affiliated with, competing financial service organizations or their
related mutual fund complexes, (vii) whether or not the candidate has any
relationships that might impair his or her independence and (viii) overall
interplay of a candidate's experience, skill and knowledge with that of other
Committee members. In identifying potential nominees for the Board, the
Committee may consider candidates recommended by one or more of the following
sources: (i) the Fund's current Directors, (ii) the Fund's officers, (iii) the
Fund's investment manager, (iv) the Fund's stockholders (see above) and (v) any
other source the Committee deems to be appropriate. The Committee may, but is
not required to, retain a third party search firm at the Fund's expense to
identify potential candidates.

The Contract Review Committee met twice during the fiscal year ended
December 31, 2004 and operates pursuant to a written charter adopted by the
Board in September 2004. The main functions of the Contract Review Committee are
to make recommendations to the Board of Directors after reviewing advisory and
other contracts that the Fund has with the Adviser and to select third parties
to provide evaluative reports and other information regarding the services
provided by the Adviser to the Board.

The Governance Committee did not meet during the fiscal year ended
December 31, 2004. It operates pursuant to a written charter adopted by the
Board in September 2004. The main function of the Governance Committee is to
assist the Board in the oversight of appropriate and effective governance of the
Fund. The Governance Committee oversees, among other things, the structure and

composition of the Board committees, the size of the Board and the compensation
of independent directors for service on the Board and any Board committee.

AUDIT COMMITTEE REPORT

The Audit Committee has met with PricewaterhouseCoopers LLP, the Fund's
independent registered public accounting firm, to discuss the scope of the
engagement, review the Fund's financial statements, and discuss the statements
and audit results with management. The Audit Committee discussed with
PricewaterhouseCoopers LLP the matters required to be discussed by the Statement
on Auditing Standards 61, received the written disclosures and the letter from
PricewaterhouseCoopers LLP required by the Independence Standards Board Standard
No. 1 and discussed with PricewaterhouseCoopers LLP the independent registered
public accounting firm's independence. Based on these reviews and discussions,
the Audit Committee recommended to the Board of Directors that the audited
financial statements of the Fund be included in the Fund's annual report to
stockholders for the last fiscal year.

March 8, 2005

Submitted by the Audit Committee of the Fund's Board of Directors

Bonnie Cohen
George Grossman
Richard E. Kroon
Richard J. Norman
Frank K. Ross
Willard H. Smith Jr.
C. Edward Ward, Jr.

* * *

As of March 10, 2005, the Directors and officers of the Fund as a group
owned less than 1% of the outstanding securities of the Fund. To the knowledge
of management, no person, owned of record or owned beneficially more than 5% of
the Fund's common shares or Taxable Auction Market Preferred Shares outstanding
as of that date, except that Cede & Co., a nominee for participants in the
Depository Trust Company, held of record 38,733,605 common shares, equal to
approximately 96.68% of the Fund's outstanding common shares, and 17,360 Taxable
Auction Market Preferred Shares, equal to approximately 100% of the Fund's
outstanding preferred shares.

As of March 10, 2005, none of the Directors who are not interested persons
of the Fund nor any of their immediate family members owned any securities in
the Adviser or any person directly or indirectly controlling, controlled by or
under common control with the Adviser.

The following table provides information concerning the dollar range of the
Fund's equity securities owned by each Director and the aggregate dollar range
of securities owned in the Cohen & Steers Fund Complex by each Director.

AGGREGATE DOLLAR RANGE OF
DOLLAR RANGE OF EQUITY EQUITY SECURITIES IN THE
SECURITIES IN THE FUND AS OF COHEN & STEERS FUND COMPLEX
MARCH 10, 2005 AS OF MARCH 10, 2005
-------------- --------------------

Robert H. Steers............................ Over $100,000 Over $100,000
Martin Cohen................................ Over $100,000 Over $100,000
Bonnie Cohen................................ $50,001 - $100,000 Over $100,000
George Grossman............................. $10,001 - $50,000 Over $100,000
Richard E. Kroon............................ $1 - $10,000 $10,001 - $50,000
Richard J. Norman........................... $10,001 - $50,000 Over $100,000
Frank K. Ross............................... $10,001 - $50,000 Over $100,000
Willard H. Smith Jr. ....................... $10,001 - $50,000 Over $100,000
C. Edward Ward, Jr.......................... $1 - $10,000 $10,001 - $50,000

COMPENSATION OF DIRECTORS AND OFFICERS. Directors of the Fund who are not
interested persons of the Fund are paid by the Fund an annual retainer of $4,500
and a fee of $500 for each regular meeting attended and are reimbursed for the
expenses of attendance at such meetings and, for the fiscal year ended
December 31, 2004, such fees and expenses paid by the Fund totaled $48,748.

The following table sets forth information regarding compensation of
Directors by the Fund and by the Cohen & Steers Fund Complex for the fiscal year
ended December 31, 2004. Officers of the Fund, other than the Chief Compliance
Officer who receives less than $60,000 from the Fund, and Directors who are
interested persons of the Fund do not receive any compensation from the Fund or
any other fund in the Cohen & Steers Fund Complex which is a U.S. registered
investment company. In the column headed 'Total Compensation to Directors by
Fund Complex,' the compensation paid to each Director represents the twelve
funds that each Director served in the Cohen & Steers Fund Complex during 2004.
The Directors do not receive any pension or retirement benefits from the Cohen &
Steers Fund Complex.

COMPENSATION TABLE
FISCAL YEAR ENDED DECEMBER 31, 2004

TOTAL
COMPENSATION
AGGREGATE PAID TO
COMPENSATION DIRECTORS BY
NAME OF PERSON, POSITION FROM FUND FUND COMPLEX
------------------------ --------- ------------

Bonnie Cohen, Director...................................... $7,500 $85,625
Martin Cohen*, Director and President....................... $ 0 $ 0
George Grossman, Director................................... $7,500 $85,625
Richard E. Kroon, Director.................................. $2,125 $25,500
Richard J. Norman, Director................................. $7,500 $85,625
Frank K. Ross, Director..................................... $5,875 $71,000
Willard H. Smith Jr., Director.............................. $7,500 $85,625
Robert H. Steers*, Director and Chairman.................... $ 0 $ 0
C. Edward Ward, Jr., Director............................... $2,125 $25,500

---------

* 'Interested person,' as defined in the Act, of the Fund because of the
affiliation with Cohen & Steers Capital Management, Inc., the Fund's
investment manager and its parent company, Cohen & Steers, Inc.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE. Section 16(a) of
the Securities Exchange Act of 1934, as amended (the 'Exchange Act'), and
Section 30(h) of the Act, as applied to the Fund, require certain of the Fund's
officers, Directors and investment adviser, affiliates of the investment
adviser, and persons who beneficially own more than 10% of a registered class of
the Fund's outstanding securities ('Reporting Persons') to file reports of
ownership of the Fund's securities and changes in such ownership with the
Securities and Exchange Commission and the New York Stock Exchange. Those
persons are required by Securities and Exchange Commission regulations to
furnish the Fund with copies of all filings. In June 2004, Joseph M. Harvey was
elected as a Vice President of the Fund. A Form 3 was filed on Mr. Harvey's
behalf in August 2004.

THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS OF THE FUND VOTE FOR
THE ELECTION OF EACH NOMINEE TO SERVE AS A DIRECTOR OF THE FUND.

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Audit Committee, at a meeting held on March 8, 2005, selected
PricewaterhouseCoopers LLP, an independent registered public accounting firm, to
audit the accounts of the Fund for the fiscal year ending December 31, 2005.
Their selection also was ratified and approved by the vote, cast in person, of a
majority of the Directors of the Fund, including a majority of the Directors who
are not 'interested persons' of the Fund within the meaning of the Act and who
are 'independent' as defined in the New York Stock Exchange listing standards,
at a meeting held on March 8, 2005. PricewaterhouseCoopers LLP has audited the
accounts of the Fund since prior to the Fund's commencement of business on
February 28, 2002 and does not have any direct financial interest or any
material indirect financial interest in the Fund. A representative of
PricewaterhouseCoopers LLP is expected to be available for the Meeting and to
have the opportunity to make a statement and respond to appropriate questions
from the stockholders. The Audit Committee of the Board of Directors meets at
least twice each year with representatives of PricewaterhouseCoopers LLP to
discuss the scope of their engagement, and review the financial statements of
the Fund and the results of their examination thereof.

FEES PAID TO PRICEWATERHOUSECOOPERS LLP

Aggregate fees billed to the Fund by PricewaterhouseCoopers LLP for the last
two fiscal years for professional services rendered were as follows:

2004 2003
---- ----

Audit Fees.................................................. $80,000 $74,151
Audit-Related Fees.......................................... 15,000 40,000
Tax Fees.................................................... 12,600 9,300
All Other Fees.............................................. -- --

Audit-related fees were billed in connection with the preparation and
issuance of certification reports to rating agencies relating to the Taxable
Auction Market Preferred Shares. Tax fees were billed in connection with the
preparation of tax returns, calculation and designation of dividends and other
miscellaneous tax services.

Aggregate fees billed by PricewaterhouseCoopers LLP for the last two fiscal
years for non-audit services provided to the Adviser (not including a
sub-adviser whose role is primarily portfolio management and is subcontracted or
overseen by another investment adviser) and any entity controlling, controlled
by, or under common control with the Adviser that provides ongoing services to

the registered investment company, where the engagement relates directly to the
operations and financial reporting of the registrant, were as follows:

2004 2003
---- ----

Audit-Related Fees.......................................... -- --
Tax Fees.................................................... -- --
All Other Fees.............................................. $62,500 $49,500

These other fees were billed in connection with internal control reviews and
AIMR performance reviews.

The Audit Committee is required to pre-approve audit and non-audit services
performed for the Fund by its principal accountant. The Audit Committee also is
required to pre-approve non-audit services performed by the Fund's principal
accountant for the Adviser and any sub-adviser (not including any sub-adviser
whose role is primarily portfolio management and is subcontracted with or
overseen by another investment adviser) and/or to any entity controlling,
controlled by or under common control with the Fund's investment adviser that
provides ongoing services to the Fund, if the engagement for services relates
directly to the operations and financial reporting of the Fund.

The Audit Committee may delegate pre-approval authority to one or more of
its members who are independent members of the board of directors of the Fund.
The member or members to whom such authority is delegated shall report any
pre-approval decisions to the Audit Committee at its next scheduled meeting. The
Audit Committee may not delegate its responsibility to pre-approve services to
be performed by the Fund's principal accountant for the Adviser.

None of the services described above were approved by the Audit Committee
pursuant to paragraphs (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.

For the fiscal years ended December 31, 2004 and December 31, 2003, the
aggregate fees billed by PricewaterhouseCoopers LLP for non-audit services
rendered to the Fund and for non-audit services rendered to the Adviser (not
including any sub-adviser whose role is primarily portfolio management and is
subcontracted with or overseen by another investment adviser) and/or to any
entity controlling, controlled by or under common control with the Adviser that
provides ongoing services to the registrant were $95,600 and $98,800,
respectively.

The Audit Committee considered whether the provision of non-audit services
that were rendered to the Adviser (not including any sub-adviser whose role is
primarily portfolio management and is subcontracted with or overseen by another
investment adviser) and/or to any entity controlling, controlled by or under
common control with the Adviser that provides ongoing services to the Fund that
were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of
Regulation S-X was compatible with maintaining the principal accountant's
independence.

CERTAIN INFORMATION REGARDING THE INVESTMENT MANAGER AND
THE ADMINISTRATOR

The Fund has retained Cohen & Steers Capital Management, Inc., a New York
corporation with offices at 757 Third Avenue, New York, New York 10017, to serve
as its investment manager and administrator (the 'Adviser') under an investment
management agreement dated February 25, 2002 and an administration agreement,
dated February 25, 2002. Martin Cohen and Robert H. Steers are 'controlling
persons' of the Adviser on the basis of their ownership of more than 25% of the
stock of the Adviser's parent company, Cohen & Steers, Inc. Their address is 757
Third Avenue, New York, New

York 10017. State Street Bank and Trust Company, with offices at 225 Franklin
Street, Boston, Massachusetts 02110, serves as sub-administrator to the Fund.

OFFICERS OF THE FUND

The principal officers of the Fund and their principal occupations during
the past five years are set forth below. The address of each of the following
persons is 757 Third Avenue, New York, New York 10017.

Robert H. Steers, Chairman of the Board and Secretary (see Proposal One,
'Election of Directors,' at page 4 for biographical information).

Martin Cohen, President and Treasurer (see Proposal One, 'Election of
Directors,' at page 4 for biographical information).

Adam M. Derechin, Vice President and Assistant Treasurer, age 40, joined the
Adviser in 1993 and has been the Chief Operating Officer since 2003 and prior to
that was a Senior Vice President.

Joseph M. Harvey, Vice President, age 41, joined the Adviser in 1992 and has
been President since 2003 and prior to that was a Senior Vice President.

Lawrence B. Stoller, Assistant Secretary, age 41, joined the Adviser in 1999
and has been Executive Vice President and General Counsel of the Adviser since
2005. From 1999 to 2005 he was Senior Vice President and General Counsel of the
Adviser.

John E. McLean, Chief Compliance Officer, age 34, joined the Adviser in 2003
as Vice President and Associate General Counsel. Prior to that, he served as
Vice President, Law & Regulation at J. & W. Seligman & Co. and as an associate
at Battle Fowler LLP.

SUBMISSION OF PROPOSALS FOR THE NEXT
ANNUAL MEETING OF STOCKHOLDERS

All proposals by stockholders of the Fund which are intended to be presented
at the Fund's next Annual Meeting of Stockholders, to be held in 2006, must be
received by the Fund (address to Cohen & Steers Quality Income Realty Fund,
Inc., 757 Third Avenue, New York, New York 10017) for inclusion in the Fund's
proxy statement and proxy relating to that meeting no later than November 18,
2005. Any stockholder who desires to bring a proposal for consideration at the
Fund's 2006 Annual Meeting of Stockholders without including such proposal in
the Fund's proxy statement must deliver written notice thereof to the Secretary
or Assistant Secretary of the Fund (address to Cohen & Steers Quality Income
Realty Fund, Inc., 757 Third Avenue, New York, New York 10017) during the 30 day
period from December 29, 2005 to January 28, 2006.

STOCKHOLDER COMMUNICATIONS

Stockholders may send written communications to the Board to the attention
of the Board of Directors, c/o Cohen & Steers Funds, 757 Third Avenue, New York,
NY 10017. Stockholder communications must be signed by the stockholder and
identify the class and number of shares held by the stockholder. Each properly
submitted stockholder communication shall be provided to the Board at its next
regularly scheduled meeting or if such communication requires more immediate
attention, it will be forwarded to the Directors promptly after receipt.

OTHER MATTERS

Management does not know of any matters to be presented at the Meeting other
than those mentioned in this Proxy Statement. If any of the persons listed above
is unavailable for election as a director, an event not now anticipated, or if
any other matters properly come before the Meeting, the shares represented by
proxies will be voted with respect thereto in accordance with the best judgment
of the person or persons voting the proxies.

VOTES REQUIRED

The presence in person or by proxy of the holders of a majority of the
outstanding shares is required to constitute a quorum at the Meeting. The
election of the Directors representing the Fund's common stock, as set forth in
Proposal 1, will require a vote of the holders of a plurality of the Fund's
shares present at the Meeting. The vote of the holders of a plurality of the
Fund's Taxable Auction Market Preferred Shares is required to elect Messrs.
Cohen and Smith, who have been designated as representing the holders of the
Fund's Taxable Auction Market Preferred Shares.

If the accompanying form of proxy is executed properly and returned, shares
represented by it will be voted at the Meeting in accordance with the
instructions on the proxy. However, if no instructions are specified, shares
will be voted for the election of the Directors and for any other proposals.

By order of the Board of Directors,

Robert H. Steers

ROBERT H. STEERS
Secretary

March 18, 2005
New York, New York

Appendix I

COHEN & STEERS QUALITY INCOME REALTY FUND, INC.

757 Third Avenue
New York, New York 10017

PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

Revoking any such prior appointments, the undersigned appoints Jay J. Chen and
Lawrence B. Stoller (or, if only one shall act, then that one) proxies with the
power of substitution to vote all the common stock of Cohen & Steers Quality
Income Realty Fund, Inc. (the "Fund") registered in the name of the undersigned
at the Annual Meeting of Stockholders to be held at the offices of Cohen &
Steers Capital Management, Inc., 757 Third Avenue, New York, New York 10017 on
April 28, 2005 at 10:00 a.m., and at any adjournments thereof.

--------------------------------------------------------------------------------
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY IN THE ENCLOSED
ENVELOPE.
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
Please sign exactly as your name(s) appear(s) on the books of the Fund. Joint
owners should each sign personally. Trustees and other fiduciaries should
indicate the capacity in which they sign, and where more than one name appears,
a majority must sign. If a corporation, this signature should be that of an
authorized officer who should state his or her title.
--------------------------------------------------------------------------------

HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?

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

3531
Please mark
|X| votes as in
this example.

-----------------------------------------------
COHEN & STEERS QUALITY INCOME REALTY FUND, INC.
-----------------------------------------------
COMMON SHARES

____
| |
| |
|____| __________________________________________
For all nominee(s) except as written above The shares of common stock represented by this Proxy will be
voted in accordance with the specifications made above. If no
specifications are made, such shares will be voted FOR the
election of all nominees for Director.

Please be sure to sign and date this Proxy.

Signature:______________________ Date:__________ Signature:______________________ Date:__________

Appendix II

COHEN & STEERS QUALITY INCOME REALTY FUND, INC.

757 Third Avenue
New York, New York 10017

PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

Revoking any such prior appointments, the undersigned appoints Jay J. Chen and
Lawrence B. Stoller (or, if only one shall act, then that one) proxies with the
power of substitution to vote all the Taxable Auction Market Preferred Shares
and Auction Market Preferred Shares (together, the "Preferred Shares") of Cohen
& Steers Quality Income Realty Fund, Inc. (the "Fund") registered in the name of
the undersigned at the Annual Meeting of Stockholders to be held at the offices
of Cohen & Steers Capital Management, Inc., 757 Third Avenue, New York, New York
10017 on April 28, 2005 at 10:00 a.m., and at any adjournments thereof.

HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?

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

3531
Please mark
|X| votes as in
this example.

-----------------------------------------------
COHEN & STEERS QUALITY INCOME REALTY FUND, INC.
-----------------------------------------------
PREFERRED SHARES

1. Election of Directors. 2. To transact such other business as may properly come before
Nominees: (01) Bonnie Cohen, (02) Richard E. Kroon, the meeting.
(03) C. Edward Ward Jr. and
(04) William H. Smith Jr.
____ ____
FOR | | | | WITHHELD
ALL | | | | FROM ALL
NOMINEES |____| |____| NOMINEES

____
| |
| |
|____| __________________________________________
For all nominee(s) except as written above The Preferred Shares represented by this Proxy will be voted in
accordance with the specifications made above. If no specifications
aremade, such shares will bevoted FOR the election of all nominees
for Director.

Please be sure to sign and date this Proxy.

Signature:______________________ Date:__________ Signature:______________________ Date:__________

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

The dagger symbol shall be expressed as................................ 'D'