UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

FORM N-Q

 

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANAGEMENT INVESTMENT COMPANY

 

Investment Company Act file number 811-10491

 

 

Nuveen Real Estate Income Fund

 

(Exact name of registrant as specified in charter)

 

   333 West Wacker Drive, Chicago, Illinois 60606   

 

 

(Address of principal executive offices) (Zip code)

 

 

Kevin J. McCarthy—Vice President and Secretary
   333 West Wacker Drive, Chicago, Illinois 60606   

 

 

(Name and address of agent for service)

 

Registrant’s telephone number, including area code:

312-917-7700

 

Date of fiscal year end:

12/31

 

Date of reporting period:

3/31/2014

 

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 the first and third fiscal quarters, pursuant to rule 30b1-5 under the Investment Company Act of 1940 (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, 450 Fifth Street, NW, 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

 



 

 

Portfolio of Investments (Unaudited)

 

 

 

Nuveen Real Estate Income Fund (JRS)

 

March 31, 2014

 

Shares

 

Description (1)

 

Value

 

 

 

LONG-TERM INVESTMENTS – 136.1% (95.0% of Total Investments)

 

 

 

 

 

REAL ESTATE INVESTMENT TRUST COMMON STOCKS – 84.5% (59.0% of Total Investments)

 

 

 

 

 

Diversified – 7.1% (5.0% of Total Investments) 

 

 

 

425,056

 

Duke Realty Corporation

 

$     7,174,945

 

97,800

 

Liberty Property Trust

 

3,614,688

 

111,210

 

Vornado Realty Trust (9)

 

10,960,858

 

 

 

Total Diversified

 

21,750,491

 

 

 

Industrial – 5.0% (3.5% of Total Investments) 

 

 

 

379,403

 

Prologis Inc.

 

15,491,024

 

 

 

Office – 9.9% (6.9% of Total Investments) 

 

 

 

87,450

 

Alexandria Real Estate Equities Inc.

 

6,345,372

 

243,090

 

BioMed Realty Trust Inc.

 

4,980,914

 

79,100

 

Boston Properties, Inc.

 

9,059,323

 

85,000

 

Douglas Emmett Inc.

 

2,306,900

 

37,750

 

Kilroy Realty Corporation

 

2,211,395

 

79,500

 

Mack-Cali Realty Corporation

 

1,652,805

 

39,200

 

SL Green Realty Corporation

 

3,944,304

 

 

 

Total Office

 

30,501,013

 

 

 

Residential – 14.2% (9.9% of Total Investments) 

 

 

 

287,076

 

Apartment Investment & Management Company, Class A

 

8,675,437

 

110,288

 

AvalonBay Communities, Inc.

 

14,483,020

 

31,600

 

Bre Properties Inc.

 

1,983,845

 

177,220

 

Equity Residential

 

10,276,988

 

15,650

 

Essex Property Trust Inc.

 

2,661,283

 

215,680

 

UDR Inc.

 

5,571,014

 

 

 

Total Residential

 

43,651,587

 

 

 

Retail – 23.1% (16.1% of Total Investments) 

 

 

 

119,000

 

Brixmor Property Group Inc.

 

2,538,270

 

308,250

 

Developers Diversified Realty Corporation

 

5,079,960

 

6,850

 

Federal Realty Investment Trust

 

785,832

 

365,299

 

General Growth Properties Inc.

 

8,036,578

 

310,550

 

Kimco Realty Corporation

 

6,794,834

 

156,177

 

Macerich Company

 

9,734,512

 

70,260

 

Regency Centers Corporation

 

3,587,476

 

153,349

 

Simon Property Group, Inc.

 

25,149,236

 

89,450

 

Taubman Centers Inc.

 

6,332,166

 

102,300

 

Weingarten Realty Trust

 

3,069,000

 

 

 

Total Retail

 

71,107,864

 

 

 

Specialized – 25.2% (17.6% of Total Investments) 

 

 

 

200,100

 

CubeSmart

 

3,433,716

 

55,650

 

Extra Space Storage Inc.

 

2,699,582

 

302,110

 

Health Care Property Investors Inc.

 

11,718,847

 

163,081

 

Health Care REIT, Inc.

 

9,719,628

 

109,000

 

Hospitality Properties Trust

 

2,763,150

 

489,325

 

Host Hotels & Resorts Inc.

 

9,903,938

 

72,150

 

LaSalle Hotel Properties

 

2,259,017

 

77,887

 

Public Storage, Inc., (2)

 

13,123,181

 

217,000

 

Public Storage, Inc.

 

5,134,220

 

157,900

 

RLJ Lodging Trust

 

4,222,246

 

274,750

 

Sunstone Hotel Investors Inc.

 

3,772,318

 

144,940

 

Ventas Inc.

 

8,779,016

 

 

 

Total Specialized

 

77,528,859

 

 

 

Total Real Estate Investment Trusts Common Stocks (cost $184,172,266)

 

260,030,838

 

 

Shares

 

Description (1)

 

Coupon

 

 

 

Ratings (3)

 

Value

 

 

 

CONVERTIBLE PREFERRED SECURITIES – 2.8% (1.9% of Total Investments)

 

 

 

 

 

Office – 2.8% (1.9% of Total Investments) 

 

 

 

 

 

 

 

 

 

340,306

 

CommonWealth REIT

 

6.500%

 

 

 

Ba1

 

$     8,545,083

 

 

 

Total Convertible Preferred Securities (cost $6,068,607)

 

 

 

 

 

 

 

8,545,083

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares

 

Description (1)

 

Coupon

 

 

 

Ratings (3)

 

Value

 

 

 

REAL ESTATE INVESTMENT TRUST PREFERRED STOCKS – 48.8% (34.1% of Total Investments)

 

 

 

 

 

Diversified – 7.4% (5.1% of Total Investments) 

 

 

 

 

 

 

 

 

 

156,000

 

Duke Realty Corporation, Series K

 

6.500%

 

 

 

Baa3

 

$     3,789,240

 

135,100

 

PS Business Parks, Inc.

 

6.450%

 

 

 

Baa2

 

3,249,155

 

14,650

 

PS Business Parks, Inc.

 

6.000%

 

 

 

Baa2

 

329,625

 

267,014

 

Vornado Realty Trust

 

6.875%

 

 

 

BBB-

 

6,886,291

 

134,500

 

Vornado Realty Trust

 

6.625%

 

 

 

BBB-

 

3,359,810

 

134,000

 

Vornado Realty Trust

 

5.700%

 

 

 

BBB-

 

2,910,480

 

103,000

 

Vornado Realty Trust

 

5.400%

 

 

 

BBB-

 

2,159,910

 

 

 

Total Diversified

 

 

 

 

 

 

 

22,684,511

 

 

 

Industrial – 0.9% (0.7% of Total Investments) 

 

 

 

 

 

 

 

 

 

114,700

 

Terreno Realty Corporation

 

7.750%

 

 

 

N/R

 

2,898,469

 

 

 

Office – 8.7% (6.1% of Total Investments) 

 

 

 

 

 

 

 

 

 

40,000

 

Brandywine Realty Trust, Series D

 

6.900%

 

 

 

Ba1

 

1,008,000

 

144,550

 

CommomWealth REIT

 

7.250%

 

 

 

Ba1

 

3,638,324

 

12,359

 

Highwoods Properties, Inc., Series A, (4)

 

8.625%

 

 

 

Baa3

 

14,166,504

 

303,000

 

Hudson Pacific Properties Inc.

 

8.375%

 

 

 

N/R

 

7,938,600

 

 

 

Total Office

 

 

 

 

 

 

 

26,751,428

 

 

 

Residential – 0.6% (0.4% of Total Investments) 

 

 

 

 

 

 

 

 

 

75,000

 

Campus Crest Communities

 

8.000%

 

 

 

Ba1

 

1,886,250

 

 

 

Retail – 22.1% (15.4% of Total Investments) 

 

 

 

 

 

 

 

 

 

681,000

 

CBL & Associates Properties Inc.

 

7.375%

 

 

 

BB

 

17,113,530

 

26,750

 

DDR Corporation

 

6.500%

 

 

 

Baa3

 

643,605

 

449,650

 

General Growth Properties

 

6.375%

 

 

 

B

 

10,436,377

 

95,000

 

Glimcher Realty Trust

 

6.875%

 

 

 

B1

 

2,237,250

 

50,964

 

Glimcher Realty Trust, Series G

 

8.125%

 

 

 

B1

 

1,283,783

 

158,000

 

Inland Real Estate Corporation

 

8.125%

 

 

 

N/R

 

4,079,560

 

29,000

 

Kimco Realty Corporation

 

6.900%

 

 

 

Baa2

 

747,330

 

239,200

 

Kimco Realty Corporation

 

6.000%

 

 

 

Baa2

 

5,429,840

 

175,000

 

Regency Centers Corporation

 

6.625%

 

 

 

Baa3

 

4,165,000

 

61,120

 

Saul Centers, Inc.

 

8.000%

 

 

 

N/R

 

1,570,784

 

144,000

 

Saul Centers, Inc.

 

6.875%

 

 

 

N/R

 

3,480,480

 

374,200

 

Taubman Centers Incorporated, Series K

 

6.250%

 

 

 

N/R

 

8,584,148

 

86,350

 

Taubman Centers Incorporated, Series J

 

6.500%

 

 

 

N/R

 

2,043,905

 

30,700

 

Urstadt Biddle Properties

 

7.125%

 

 

 

N/R

 

753,685

 

38,000

 

Weingarten Realty Trust

 

8.100%

 

 

 

BBB

 

786,600

 

185,702

 

Weingarten Realty Trust

 

6.500%

 

 

 

Baa3

 

4,583,125

 

 

 

Total Retail

 

 

 

 

 

 

 

67,939,002

 

 

 

Specialized – 9.1% (6.4% of Total Investments) 

 

 

 

 

 

 

 

 

 

240,000

 

Health Care REIT, Inc.

 

6.500%

 

 

 

Baa3

 

5,904,000

 

328,150

 

Public Storage, Inc., Series R

 

6.350%

 

 

 

A

 

8,272,660

 

50,000

 

Public Storage, Inc., Series W

 

5.200%

 

 

 

A

 

1,051,000

 

47,000

 

Public Storage, Inc., Series X

 

5.200%

 

 

 

A3

 

989,350

 

139,400

 

Strategic Hotel Capital Inc., Series B

 

8.250%

 

 

 

N/R

 

3,544,942

 

292,950

 

Strategic Hotel Capital Inc., Series C

 

8.250%

 

 

 

N/R

 

7,385,270

 

40,000

 

Ventas Realty LP

 

5.450%

 

 

 

BBB+

 

924,000

 

 

 

Total Specialized

 

 

 

 

 

 

 

28,071,222

 

 

 

Total Real Estate Investment Trust Preferred Stocks (cost $149,198,994)

 

 

 

150,230,882

 

 

 

Total Long-Term Investments (cost $339,439,867)

 

 

 

 

 

 

 

418,806,803

 

 

Principal

 

 

 

 

 

 

 

 

 

 

 

Amount (000)

 

Description (1)

 

Coupon

 

Maturity

 

 

 

Value

 

 

 

SHORT-TERM INVESTMENTS – 7.1% (5.0% of Total Investments)

 

 

 

 

 

 

$         21,970

 

Repurchase Agreement with Fixed Income Clearing Corporation, dated 3/31/14, repurchase price $21,970,471, collateralized by $16,390,000 U.S. Treasury Bonds, 6.125%, due 11/15/27, value $22,413,325

 

0.000%

 

4/01/14

 

 

 

$   21,970,471

 

 

 

Total Short-Term Investments (cost $21,970,471)

 

 

 

 

 

 

 

21,970,471

 

 

 

Total Investments (cost $361,410,338) – 143.2%

 

 

 

 

 

 

 

440,777,274

 

 

 

Borrowings –  (40.1)%  (5), (6)

 

 

 

 

 

 

 

(123,500,000

)

 

 

Other Assets Less Liabilities – (3.1)% (7)

 

 

 

 

 

 

 

(9,408,877

)

 

 

Net Assets Applicable to Common Shares – 100%

 

 

 

 

 

 

 

$ 307,868,397

 

 

Investments in Derivatives as of March 31, 2014

 

Interest Rate Swaps outstanding:

 

 

 

 

 

Fund

 

 

 

 

 

Fixed Rate

 

 

 

 

 

Unrealized

 

 

 

Notional

 

Pay/Receive

 

 

 

Fixed Rate

 

Payment

 

Effective

 

Termination

 

Appreciation

 

Counterparty

 

Amount

 

Floating Rate

 

Floating Rate Index

 

(Annualized)

 

Frequency

 

Date (8)

 

Date

 

(Depreciation) (7)

 

JPMorgan

 

$   35,761,000

 

Receive

 

1-Month USD-LIBOR

 

1.255

%

Monthly

 

12/01/14

 

12/01/18

 

$         850,672

 

JPMorgan

 

35,761,000

 

Receive

 

1-Month USD-LIBOR

 

1.673

 

Monthly

 

12/01/14

 

12/01/20

 

1,559,918

 

Morgan Stanley

 

20,727,500

 

Receive

 

1-Month USD-LIBOR

 

2.323

 

Monthly

 

3/29/11

 

3/29/16

 

(768,058

)

 

 

$   92,249,500

 

 

 

 

 

 

 

 

 

 

 

 

 

$      1,642,532

 

 

 

Fair Value Measurements

 

Fair value is defined as the price that the Fund would receive upon selling an investment or transferring a liability in an orderly transaction to an independent buyer in the principal or most advantageous market for the investment. A three-tier hierarchy is used to maximize the use of observable market data and minimize the use of unobservable inputs and to establish classification of fair value measurements for disclosure purposes. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability. Observable inputs are based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability. Unobservable inputs are based on the best information available in the circumstances. The following is a summary of the three-tiered hierarchy of valuation input levels.

 

Level 1 - Inputs are unadjusted and prices are determined using quoted prices in active markets for identical securities.

 

Level 2 - Prices are determined using other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.).

 

Level 3 - Prices are determined using significant unobservable inputs (including management’s assumptions in determining the fair value of investments).

 

The inputs or methodologies used for valuing securities are not an indication of the risks associated with investing in those securities. The following is a summary of the Fund’s fair value measurements as of the end of the reporting period:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Level 1

 

Level 2

 

Level 3

 

Total

 

 

Long-Term Investments:

 

 

 

 

 

 

 

 

 

 

Real Estate Investment Trust Common Stocks

 

$

260,030,838

 

$

 

$

 

$

260,030,838

 

 

Convertible Preferred Securities

 

8,545,083

 

 

 

8,545,083

 

 

Real Estate Investment Trust Preferred Stocks

 

136,064,378

 

14,166,504

 

 

150,230,882

 

 

Short-Term Investments:

 

 

 

 

 

 

 

 

 

 

Repurchase Agreements

 

 

21,970,471

 

 

21,970,471

 

 

Derivatives:

 

 

 

 

 

 

 

 

 

 

Swaps*

 

 

1,642,532

 

 

1,642,532

 

 

Total

 

$

404,640,299

 

$

37,779,507

 

$

 

$

442,419,806

 

 

 

 

 

 

 

 

 

 

 

 

 

* Represents net unrealized appreciation (depreciation) as reported in the Fund’s Portfolio of Investments.

 

Income Tax Information

 

The following information is presented on an income tax basis. Differences between amounts for financial statement and federal income tax purposes are primarily due to timing differences in recognizing certain gains and losses on investment transactions. To the extent that differences arise that are permanent in nature, such amounts are reclassified within the capital accounts on the Statement of Assets and Liabilities presented in the annual report, based on their federal tax basis treatment; temporary differences do not require reclassification. Temporary and permanent differences do not impact the net asset value of the Fund.

 

As of March 31, 2014, the cost of investments (excluding investments in derivatives) was $365,974,945.

 

Gross unrealized appreciation and gross unrealized depreciation of investments as (excluding investments in derivatives) of March 31, 2014, were as follows:

 

 

 

 

 

 

 

 

 

Gross unrealized:

 

 

 

Appreciation

$

82,860,732

 

 

Depreciation

(8,058,403

)

 

 

 

 

 

Net unrealized appreciation (depreciation) of investments

$

74,802,329

 

 

 

 

 

 

 

 

For Fund portfolio compliance purposes, the Fund’s industry classifications refer to any one or more of the industry sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by Fund management. This definition may not apply for purposes of this report, which may combine industry sub-classifications into sectors for reporting ease.

(1)

All percentages shown in the Portfolio of Investments are based on net assets applicable to common shares unless otherwise noted.

(2)

Investment, or portion of investment, has been pledged to collateralize the net payment obligations for investments in derivatives.

(3)

Ratings: Using the highest of Standard & Poor’s Group (“Standard & Poor’s”), Moody’s Investors Service, Inc. (“Moody’s”) or Fitch, Inc. (“Fitch”) rating. Ratings below BBB by Standard & Poor’s, Baa by Moody’s or BBB by Fitch are considered to be below investment grade. Holdings designated N/R are not rated by any of these national rating agencies.

(4)

For fair value measurement disclosure purposes, Real Estate Investment Trust Preferred Stocks categorized as Level 2.

(5)

Borrowings as a percentage of Total Investments is 28.0%.

(6)

The Fund may pledge up to 100% of its eligible investments in the Portfolio of Investments as collateral for Borrowings. As of the end of the reporting period investments with a value of $272,832,959 have been pledged as collateral for Borrowings.

(7)

Other Assets Less Liabilities includes the Unrealized Appreciation (Depreciation) of derivative instruments as listed within Investments in Derivatives as of the end of the reporting period.

(8)

Effective date represents the date on which both the Fund and Counterparty commence interest payment accruals on each contract.

(9)

Investment, or a portion of investment, is out on loan. The total value of investments out on loan as of the end of the reporting period was $23,800.

USD-LIBOR

United States Dollar - London Inter-Bank Offered Rate.

 



Item 2. Controls and Procedures.

 

a.

 

The registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”) (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of this report that includes the disclosure required by this paragraph, based on their evaluation of the controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rule 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934 (17 CFR 240.13a-15(b) or 240.15d-15(b)).

 

 

 

b.

 

There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d)) 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.

 

File as exhibits as part of this Form a separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the 1940 Act (17 CFR 270.30a-2(a)), exactly as set forth below: EX-99 CERT Attached hereto.

 


 


 

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.

 

(Registrant)  Nuveen Real Estate Income Fund

 

 

By (Signature and Title)

/s/ Kevin J. McCarthy

 

 

Kevin J. McCarthy

 

 

Vice President and Secretary

 

 

 

Date: May 30, 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 (Signature and Title)

/s/ Gifford R. Zimmerman

 

 

Gifford R. Zimmerman

 

 

Chief Administrative Officer (principal executive officer)

 

 

 

Date: May 30, 2014

 

 

By (Signature and Title)

/s/ Stephen D. Foy

 

 

Stephen D. Foy

 

 

Vice President and Controller (principal financial officer)

 

 

 

Date: May 30, 2014