SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )

Filed by the Registrant [X]

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 Under Rule 14a-12

NEUBERGER BERMAN REAL ESTATE INCOME FUND INC.
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(Name of Registrant as Specified In Its Charter)

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

Payment of Filing Fee (Check the appropriate box):

[X] No fee required.

[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

(1) Title of each class of securities to which transaction applies:

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pursuant to Exchange Act Rule 0-11 (Set forth the amount 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 Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:
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(4) Date Filed:

[LOGO: NEUBERGER BERMAN]
A Lehman Brothers Company

NEUBERGER BERMAN REAL ESTATE INCOME FUND INC.

605 THIRD AVENUE
NEW YORK, NEW YORK 10158-0180

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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

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Dear Stockholder:

NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders ("Meeting")
of Neuberger Berman Real Estate Income Fund Inc. ("Fund"), will be held on
Tuesday, March 8, 2005, at 11:00 a.m. Eastern time at the offices of Neuberger
Berman, LLC, 605 Third Avenue, 41st Floor, New York, New York 10158-3698 for the
following purposes:

1.To elect five Class III Directors (one of which is to be elected only by
holders of the Fund's preferred stock) to serve until the annual meeting
of stockholders in 2008, or until their successors are elected and
qualified; and

2. To consider and act upon any other business that may properly come before
the Meeting or any adjournments thereof.

You are entitled to vote at the Meeting and any adjournments thereof if you
owned Fund shares at the close of business on January 12, 2005 ("Record Date").
If you attend the meeting, you may vote your shares in person. IF YOU DO NOT
EXPECT TO ATTEND THE MEETING, PLEASE REVIEW THE ENCLOSED MATERIALS AND FOLLOW
THE INSTRUCTIONS THAT APPEAR ON THE ENCLOSED PROXY CARD(S). If we do not hear
from you by a certain date, our proxy solicitor may contact you. If you have any
questions about the proposals or the voting instructions, please call us at
877-461-1899. Any proposal submitted to a vote at the meeting by anyone other
than the officers or directors of the Fund may be voted only in person or by
written proxy.

We will admit to the Meeting (1) all stockholders of record of the Fund as
of the Record Date, (2) persons holding proof of beneficial ownership at the
Record Date such as a letter or account statement from a broker, (3) persons who
have been granted proxies, and (4) such other persons that we, in our sole
discretion, may elect to admit. ALL PERSONS WISHING TO BE ADMITTED TO THE
MEETING MUST PRESENT PHOTO IDENTIFICATION. IF YOU PLAN TO ATTEND THE MEETING,
PLEASE CONTACT US AT 877-461-1899.

Unless proxy cards submitted by corporations and partnerships are signed by
the appropriate persons as indicated in the voting instructions on the proxy
cards, they will not be voted.

By order of the Board of Directors,

/s/ Claudia A. Brandon
Claudia A. Brandon
Secretary

Dated: February 4, 2005

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YOUR VOTE IS IMPORTANT NO MATTER HOW MANY
SHARES OF STOCK YOU OWN.
PLEASE RETURN YOUR PROXY CARD PROMPTLY.

IF YOU OWN SHARES OF COMMON STOCK AND PREFERRED STOCK, THERE WILL BE TWO
PROXY CARDS ENCLOSED. PLEASE FILL OUT AND RETURN EACH ONE.

STOCKHOLDERS ARE INVITED TO ATTEND THE MEETING IN PERSON. ANY STOCKHOLDER
WHO DOES NOT EXPECT TO ATTEND THE MEETING IS URGED TO REVIEW THE ENCLOSED
MATERIALS AND FOLLOW THE INSTRUCTIONS THAT APPEAR ON THE ENCLOSED PROXY CARD(S).
IF WE DO NOT HEAR FROM YOU BY A CERTAIN DATE, OUR PROXY SOLICITOR MAY CONTACT
YOU.

TO AVOID THE ADDITIONAL EXPENSE TO THE FUND OF FURTHER SOLICITATION, WE ASK
YOUR COOPERATION IN VOTING YOUR PROXY PROMPTLY, NO MATTER HOW LARGE OR SMALL
YOUR HOLDINGS MAY BE.
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[LOGO: NEUBERGER BERMAN]
A Lehman Brothers Company

NEUBERGER BERMAN REAL ESTATE INCOME FUND INC.

605 THIRD AVENUE
NEW YORK, NEW YORK 10158-0180

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PROXY STATEMENT

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ANNUAL MEETING OF STOCKHOLDERS
MARCH 8, 2005

INTRODUCTION

This Proxy Statement is furnished to the stockholders of Neuberger Berman
Real Estate Income Fund Inc. ("Fund"), by the Board of Directors of the Fund in
connection with the solicitation of stockholder votes by proxy to be voted at
the Annual Meeting of Stockholders or any adjournments thereof ("Meeting") to be
held on Tuesday, March 8, 2005, at 11:00 a.m. Eastern time at the offices of
Neuberger Berman, LLC ("Neuberger Berman"), 605 Third Avenue, 41st Floor, New
York, New York 10158-3698. The matters to be acted upon at the Meeting are set
forth in the accompanying Notice of Annual Meeting. It is expected that the
Notice of Annual Meeting, this Proxy Statement and form of proxy first will be
mailed to stockholders on or about February 4, 2005.

If an enclosed proxy card is executed properly and returned, shares
represented thereby will be voted at the Meeting in accordance with the
instructions on the proxy card. A proxy may nevertheless be revoked at any time
prior to its use by written notification received by the Fund, by the execution
of a subsequently dated proxy card or by attending the Meeting and voting in
person. However, if no instructions are specified on a proxy card, shares will
be voted "FOR" the election of each nominee for Director and "FOR" or "AGAINST"
any other matters acted upon at the Meeting in the discretion of the persons
named as proxies.

The close of business on January 12, 2005, has been fixed as the record
date for the determination of stockholders entitled to notice of and to vote at
the Meeting ("Record Date"). On that date, the Fund had 4,157,116.626 shares of
common stock ("Common Shares") and 1,680 shares of preferred stock ("Preferred
Shares") outstanding and entitled to vote.

Holders of the Fund's outstanding Common Shares and Preferred Shares will
vote together as a single class to elect four of the Class III Directors. As
described herein under the section entitled "Election of Directors -- Proposal,"
holders of the Fund's Preferred Shares will vote separately from holders of the
Common Shares to elect one additional Class III Director. As to any other

business that may properly come before the Meeting or any adjournments thereof,
holders of the Common Shares and Preferred Shares may vote together as a single
class or separately, depending on the requirements of the Investment Company Act
of 1940, as amended ("1940 Act"), the Maryland General Corporation Law and the
Fund's charter with respect to said item of business. Each full share of the
Fund's Common Shares or Preferred Shares is entitled to one vote and each
fractional share of the Fund's Common Shares or Preferred Shares is entitled to
a proportionate share of one vote.

Solicitation is made primarily by the mailing of this Proxy Statement and
the accompanying proxy card(s). Supplementary solicitations may be made by mail,
telephone, and electronic transmission or in person by regular employees of
Neuberger Berman Management Inc. ("NB Management"), affiliates of NB Management
or other representatives of the Fund. NB Management serves as the Fund's
investment manager and administrator. In addition, the Fund has engaged
Georgeson Shareholder Communications Inc., a proxy solicitation firm, to assist
in the solicitation of proxies. The aggregate cost of retaining Georgeson
Shareholder Communications Inc. is expected to be about $33,000 plus expenses in
connection with the solicitation of proxies. All expenses in connection with
preparing this Proxy Statement and its enclosures, and additional solicitation
expenses including reimbursement of brokerage firms and others for their
expenses in forwarding proxy solicitation material to the beneficial owners of
shares, will be borne by the Fund.

The presence at the Meeting, in person or by proxy, of stockholders
entitled to vote 33-1/3% of the shares outstanding and entitled to vote at the
Meeting is required for a quorum. The affirmative vote of the holders of a
plurality of the Fund's Common Shares and Preferred Shares voted at the meeting,
voting as a single class, is required to elect four of the Fund's Class III
Directors. The affirmative vote of the holders of a plurality of the Fund's
Preferred Shares voted at the meeting, voting separately from the holders of
Common Shares, is required to elect one additional Class III Director for the
Fund. With respect to other items of business (and the Fund is not currently
aware of any other items to be brought before the Meeting), the necessary
affirmative vote will depend on the requirements of the 1940 Act, the Maryland
General Corporation Law and the Fund's charter with respect to said item of
business. If a quorum is not present at the Meeting or a quorum is present but
sufficient votes to approve a proposed item are not received, or for any other
reason, the persons named as proxies may propose one or more adjournments of
such Meeting to permit further solicitation of proxies. Subject to the rules
established by the Chairman of the Meeting, the holders of a majority of the
shares entitled to vote at the Meeting and present in person or by proxy may
vote to adjourn, or, if no stockholder entitled to vote is present in person or
by proxy, any officer present entitled to preside or act as secretary of the
Meeting may adjourn the Meeting. In the former case, the persons named as
proxies will vote those proxies that they are entitled to vote in favor of such
item "FOR" such an adjournment, and will vote those proxies required to be voted
against such item "AGAINST" such an adjournment. A stockholder vote may be taken
on the nominations in this Proxy Statement prior to any such adjournment if
sufficient votes have been received and it is otherwise appropriate.

The Fund expects that broker-dealer firms holding shares of the Fund in
"street name" for the benefit of their customers and clients will request the
instructions of such customers and clients on how to vote their shares on each
proposal at the Meeting. The Fund understands that, under the rules of the New
York Stock Exchange ("NYSE"), such broker-dealers may grant authority to the
proxies designated by the Fund to vote on the election of Directors for the Fund
if no instructions have been received prior to the date specified in the
broker-dealer firm's request for voting instructions. Certain broker-dealer
firms may exercise discretion over shares held in their names for which no
instructions are received by voting such shares in the same proportion as they
have voted shares for which they have received instructions.

In tallying stockholder votes, abstentions and "broker non-votes" (i.e.,
shares held by brokers or nominees as to which instructions have not been
received from the beneficial owners or the persons entitled to vote and either
(i) the broker or nominee does not have discretionary voting power or (ii) the
broker or nominee returns the proxy but expressly declines to vote on a
particular matter) will be counted as shares that are present and entitled to
vote for purposes of determining the presence of a quorum. Accordingly,
abstentions and broker non-votes effectively will be a vote against any
adjournment but will have no effect on the election of the Directors because the
required vote is a plurality of the votes cast.

As of January 12, 2005, the Fund does not know of any person other than
those identified below who owns beneficially 5% or more of the outstanding
Common Shares or Preferred Shares of the Fund.

NUMBER OF PERCENTAGE OF
COMMON SHARES COMMON SHARES
COMMON STOCKHOLDER OWNED* AS OF JANUARY 12, 2005*
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Lola Brown Trust No. 1B** 4,900 0.12%
Ernest Horejsi Trust No. 1B** 463,200 11.14%
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* This information is based on the joint Schedule 13D filed September 2, 2004
by these trusts along with Stewart R. Horejsi, as updated by the Schedule TO
filed September 10, 2004, reporting aggregate holdings of 468,100 of the
Fund's outstanding Common Shares by these entities as of September 10, 2004
(which equals approximately 11.26% of the Fund's outstanding Common Shares as
of the Record Date). The Schedule 13D indicates that, because of the
relationships between Mr. Horejsi and the two trusts, Mr. Horejsi may be
deemed to share indirect beneficial ownership of such shares. Due to these
relationships, the two trusts and Mr. Horejsi could be viewed as a group and
will hereinafter be referred to as the "Horejsi Group." No subsequent
amendment to the joint Schedule 13D of the Horejsi Group had been received by
the Fund through January 12, 2005. Likewise, through January 12, 2005, the
Fund had not received any amendments to the Schedule TO reporting increased
share ownership among the Horejsi Group.

** The address of each of these entities is c/o Badlands Trust Company, P.O. Box
801 (614 Broadway), Yankton, South Dakota 57078.

In addition, the Directors and officers of the Fund, in the aggregate,
owned less than 1% of the Fund's outstanding shares as of January 12, 2005.

NB Management serves as the investment manager and administrator to the
Fund. NB Management provides investment management and advisory services to

private accounts of institutional and individual clients and to mutual funds. NB
Management is located at 605 Third Avenue, New York, New York 10158-0180. NB
Management retains Neuberger Berman, 605 Third Avenue, New York, New York
10158-3698, as sub-adviser with respect to the Fund. As of September 30, 2004,
Neuberger Berman affiliates had approximately $65.6 billion in assets under
management. Neuberger Berman and NB Management are indirect wholly owned
subsidiaries of Lehman Brothers Holdings Inc., a publicly held company.

STOCKHOLDERS OF RECORD OR BENEFICIAL OWNERS AS OF THE RECORD DATE MAY
OBTAIN A FREE COPY OF THE FUND'S ANNUAL REPORT FOR THE FISCAL YEAR ENDED OCTOBER
31, 2004, WHICH INCLUDES AUDITED FINANCIAL STATEMENTS, BY WRITING NB MANAGEMENT
AT 605 THIRD AVENUE, 2ND FLOOR, NEW YORK, NEW YORK 10158-0180, OR BY CALLING
TOLL FREE 877-461-1899.

Stockholders may send communications that they would like to direct to the
Board of Directors of the Fund to the attention of Philip R. Carroll, Chief
Compliance Officer of the Fund, Neuberger Berman Funds, 605 Third Avenue, 21st
Floor, New York, NY, 10158-0180. The Board has directed Mr. Carroll to send such
communications to the chairperson of the Code of Ethics Committee. Nominee
recommendations and stockholder proposals should be directed to the attention of
Claudia A. Brandon, Secretary of the Funds, Neuberger Berman Funds, 605 Third
Avenue, 21st Floor, New York, NY, 10158-0180 as described in this Proxy
Statement under "Information Regarding the Fund's Process for Nominating
Director Candidates" and "Stockholder Proposals."

ELECTION OF DIRECTORS
PROPOSAL

The Board of Directors of the Fund is divided into three classes (Class I,
Class II and Class III). The terms of office of Class I, Class II and Class III
Directors will expire at the annual meeting of stockholders held in 2006, 2007
and 2005, respectively, and at each third annual meeting of stockholders
thereafter. Each Director shall hold office until his or her successor is
elected and qualified or until his or her earlier death, resignation or removal.
The classification of the Fund's Directors helps to promote the continuity and
stability of the Fund's management and policies because the majority of the
Directors at any given time will have prior experience as Directors of the Fund.
At least two stockholder meetings, instead of one, are required to effect a
change in a majority of the Directors, except in the event of vacancies
resulting from removal for cause or other reasons, in which case the remaining
Directors may fill the vacancies so created, to the extent permitted by the 1940
Act.

Holders of the Fund's Preferred Shares are entitled, as a class, to the
exclusion of the holders of all other classes of stock of the Fund, to elect two
Directors of the Fund (regardless of the total number of Directors serving on
the Fund's Board of Directors). One of those two Directors, Howard A. Mileaf, is
a Class III Director currently up for election. The other is a Class II Director
up for election in 2007. The Class II Director is not a nominee to be considered
at the Meeting.

The term of each current Class III Director expires in 2005, but each
expressed his or her willingness to serve another term as Director of the Fund
if nominated by the Board of Directors.

The Nominating Committee of the Fund reviewed the qualifications,
experience and background of each incumbent Director. Based upon this review,
the Committee determined that nominating the incumbents would be in the best
interests of the Fund's stockholders. The Fund's Board believes that the
incumbents are well suited for service on the Board due to their familiarity
with the Fund as a result of their prior service as Directors, their knowledge
of the financial services sector, and their substantial experience in serving as
directors or trustees, officers or advisers of public companies and business
organizations, including other investment companies.

At a meeting on December 15, 2004, the Board of Directors received the
recommendation of the Nominating Committee. After discussion and consideration
of, among other things, the backgrounds of the incumbents, the Fund's Board
voted to nominate Robert A. Kavesh, Howard A. Mileaf, Edward I. O'Brien, William
E. Rulon, and Candace L. Straight for election as Class III Directors with a
term expiring in 2008. The Fund has a policy that at least three-fourths of all
Directors be Independent Fund Directors. Independent Fund Directors are those
who are not associated with the Fund's investment adviser or sub-adviser or
their affiliates, or with any broker-dealer used by the Fund, the investment
adviser or the sub-adviser in the past six months.

It is the intention of the persons named in the enclosed proxy card(s) to
vote in favor of the election of each nominee named in this Proxy Statement.

Each nominee has consented to be named in this Proxy Statement and to serve as
Director if elected. The Fund's Board of Directors has no reason to believe that
any nominee will become unavailable for election as a Director, but if that
should occur before the Meeting, the proxies will be voted for such other
nominees as the Board of Directors may recommend.

None of the Directors is related to any other. The following tables set
forth certain information regarding each Director of the Fund. Unless otherwise
noted, each Director has engaged in the principal occupation listed in the
following table for five years or more. The business address of each listed
person is 605 Third Avenue, New York, New York 10158.

INFORMATION REGARDING NOMINEES
FOR ELECTION AT 2005 ANNUAL MEETING

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NUMBER OF
PORTFOLIOS IN
FUND COMPLEX OTHER DIRECTORSHIPS
OVERSEEN BY HELD OUTSIDE FUND COMPLEX
NAME AND AGE PRINCIPAL OCCUPATION(S) DIRECTOR BY DIRECTOR
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CLASS III
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Independent Fund Directors
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Robert A. Kavesh Marcus Nadler 41 Director, DEL
(77) Professor Emeritus of Laboratories, Inc.
Finance and Economics, (cosmetics and
New York University pharmaceuticals) since
Stern School 1978; Director, The
of Business. Caring Community
(not-for-profit).
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Howard A. Mileaf Retired. Formerly, Vice 41 Director, WHX
(68) President and Special Corporation (holding
Counsel, WHX company) since
Corporation (holding August 2002; Director,
company) 1993 to 2001. Webfinancial Corporation
(holding company)
since December 2002;
Director, State Theatre
of New Jersey
(not-for-profit theater)
since 2000; formerly,
Director, Kevlin
Corporation (manufacturer
of microwave and
other products).
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William E. Rulon Retired. Formerly, 41 Director, Pro-Kids Golf
(72) Senior Vice President, and Learning Academy
Foodmaker, Inc. (teach golf and computer
(operator and franchiser usage to "at risk"
of restaurants) until children) since 1998;
January 1997. formerly, Director,
Prandium, Inc.
(restaurants) from March
2001 until July 2002.
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Candace L. Straight Private investor and 41 Director, The
(57) consultant specializing Proformance Insurance
in the insurance Company (personal lines
industry; formerly, property and casualty
Advisory Director, insurance) since March
Securitas Capital LLC 2004; Director,
(a global private equity Providence Washington
investment firm (property and casualty
dedicated to making insurance company) since
investments in the December 1998; Director,
insurance sector) 1998 Summit Global Partners
to December 2002. (insurance brokerage
firm) since October 2000.
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Director who is an "Interested Person"
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Edward I. O'Brien* Formerly, Member, 41 Director, Legg Mason,
(76) Investment Policy Inc. (financial services
Committee, Edward holding company) since
Jones 1993 to 2001; 1993; formerly, Director,
President, Securities Boston Financial Group
Industry Association (real estate and tax
(SIA) (securities shelters) 1993 to 1999.
industry's representative
in government relations
and regulatory matters
at the federal and state
levels) from 1974 to
1992; Adviser to SIA,
November 1992 to
November 1993.
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INFORMATION REGARDING DIRECTORS
WHOSE CURRENT TERMS CONTINUE

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NUMBER OF
PORTFOLIOS IN
FUND COMPLEX OTHER DIRECTORSHIPS
OVERSEEN BY HELD OUTSIDE FUND COMPLEX
NAME AND AGE PRINCIPAL OCCUPATION(S) DIRECTOR BY DIRECTOR
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CLASS I
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Independent Fund Directors
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Faith Colish (69) Counsel, Carter Ledyard 41 Director, American Bar
& Millburn LLP (law Retirement Association
firm) since October (ABRA) since 1997
2002; formerly, (not-for-profit
Attorney-at-Law and membership association).
President, Faith Colish,
A Professional
Corporation, 1980
to 2002.
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C. Anne Harvey (67) Consultant, C. A. 41 President, Board of
Harvey Associates, Associates to The
since June 2001; National Rehabilitation
formerly, Director, Hospital's Board of
AARP, 1978 Directors, since 2002;
to December 2001. formerly, Member,
Individual Investors
Advisory Committee to
the New York Stock
Exchange Board of
Directors, 1998 to June
2002; formerly, Member,
American Savings
Education Council's
Policy Board (ASEC),
1998 to 2000; formerly,
Member, Executive
Committee, Crime
Prevention Coalition of
America, 1997 to 2000.
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Cornelius T. Ryan Founding General 41 Director, Capital Cash
(73) Partner, Oxford Partners Management Trust
and Oxford Bioscience (money market fund),
Partners (venture capital Naragansett Insured
partnerships) and Tax-Free Income Fund,
President, Oxford Rocky Mountain Equity
Venture Corporation. Fund, Prime Cash Fund,
several private companies
and QuadraMed
Corporation (NASDAQ).
- ----------------------------------------------------------------------------------------------------------

Peter P. Trapp (60) Regional Manager for 41 None
Atlanta Region, Ford
Motor Credit Company
since August 1997;
formerly, President,
Ford Life Insurance
Company, April 1995
to August 1997.
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Director who is an "Interested Person"
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Peter E. Sundman* Executive Vice 41 Director and Vice
(45) President, Neuberger President, Neuberger &
Berman Inc. (holding Berman Agency, Inc.
company) since 1999; since 2000; formerly,
Head of Neuberger Director, Neuberger
Berman Inc.'s Mutual Berman Inc. (holding
Funds and Institutional company) from October
Business since 1999; 1999 through March
President and Director, 2003; Trustee, Frost
NB Management since Valley YMCA.
1999; Executive Vice
President, Neuberger
Berman since 1999;
formerly, Principal,
Neuberger Berman from
1997 until 1999;
formerly, Senior Vice
President, NB
Management from 1996
to 1999.
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CLASS II
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Independent Fund Directors
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John Cannon (75) Consultant. Formerly, 41 Independent Trustee or
Chairman, CDC Director of three series of
Investment Advisers OppenheimerFunds:
(registered investment Limited Term New York
adviser), 1993 to Municipal Fund,
January 1999; formerly, Rochester Fund
President and Chief Municipals, and
Executive Officer, AMA Oppenheimer Convertible
Investment Advisors, an Securities Fund,
affiliate of the American since 1992.
Medical Association.
- ----------------------------------------------------------------------------------------------------------

Barry Hirsch (71) Attorney-at-Law. 41 None
Formerly, Senior
Counsel, Loews
Corporation (diversified
financial corporation)
May 2002 until April
2003; formerly, Senior
Vice President,
Secretary and General
Counsel, Loews
Corporation.
- ----------------------------------------------------------------------------------------------------------
Tom D. Seip (54) General Partner, Seip 41 Director, H&R Block,
Investments LP (a Inc. (financial services
private investment company) since May
partnership); formerly, 2001; Director, Forward
President and CEO, Management, Inc. (asset
Westaff, Inc. (temporary management) since 2001;
staffing), May 2001 to formerly, Director,
January 2002; Senior General Magic (voice
Executive at the Charles recognition software)
Schwab Corporation 2001 to 2002; Director,
from 1983 to 1999, E-Finance Corporation
including Chief (credit decisioning
Executive Officer, services) 1999 to 2003;
Charles Schwab formerly, Director, Save-
Investment Daily.com (micro
Management, Inc. and investing services) 1999
Trustee, Schwab Family to 2003; Director,
of Funds and Schwab Offroad Capital Inc.
Investments from 1997 (pre-public internet
to 1998 and Executive commerce company).
Vice President-Retail
Brokerage, Charles
Schwab Investment
Management from 1994
to 1997.
- ----------------------------------------------------------------------------------------------------------

- ----------------------------------------------------------------------------------------------------------
NUMBER OF
PORTFOLIOS IN
FUND COMPLEX OTHER DIRECTORSHIPS
OVERSEEN BY HELD OUTSIDE FUND COMPLEX
NAME AND AGE PRINCIPAL OCCUPATION(S) DIRECTOR BY DIRECTOR
- ----------------------------------------------------------------------------------------------------------
Director who is an "Interested Person"
- ----------------------------------------------------------------------------------------------------------

Jack L. Rivkin*(64) Executive Vice 41 Director, Dale Carnegie
President and Chief and Associates, Inc.
Investment Officer, (private company) since
Neuberger Berman Inc. 1998; Director, Emagin
(holding company) Corp. (public company)
since 2002 and 2003, since 1997; Director,
respectively; Executive Solbright, Inc. (private
Vice President and company) since 1998;
Chief Investment Director, Infogate, Inc.
Officer, Neuberger (private company)
Berman since December since 1997; Director,
2002 and 2003, Broadway Television
respectively; Director Network (private
and Chairman, NB company) since 2000.
Management since
December 2002;
formerly, Executive
Vice President,
Citigroup Investments,
Inc. from September
1995 to February 2002;
formerly, Executive
Vice President,
Citigroup Inc. from
September 1995 to
February 2002.
- ----------------------------------------------------------------------------------------------------------

* Indicates a director who is an "interested person" within the meaning of the
1940 Act. Mr. Sundman and Mr. Rivkin are interested persons of the Fund by
virtue of the fact that each is an officer and/or director of NB Management
and Executive Vice President of Neuberger Berman. Mr. O'Brien is an interested
person of the Fund by virtue of the fact that he is a director of Legg Mason,
Inc., a wholly owned subsidiary of which, from time to time, serves as a
broker or dealer to the Fund and other funds or accounts for which NB
Management serves as investment manager.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Under Section 16(a) of the Securities Exchange Act of 1934, as amended
("1934 Act"), Section 30(h) of the 1940 Act and Securities and Exchange
Commission ("SEC") regulations thereunder, certain of the Fund's officers and
the Fund's Directors and portfolio managers, persons owning more than 10% of the
Fund's stock and certain officers and principals of the Fund's investment
manager and sub-adviser are required to report their transactions in the Fund's
stock to the SEC and the NYSE. Based solely on the review by the Fund of the
copies of such reports received by it, the Fund believes that, during its fiscal
year ended October 31, 2004, all filing requirements applicable to such persons
were met.

BOARD OF DIRECTORS AND COMMITTEE MEETINGS

The Fund's Board met seven times during the fiscal year ended October 31,
2004. Each Director other than William Rulon attended at least 75% of the total
number of meetings of the Board and of any committee of which he or she was a
member during that period.

The Board has established several standing committees to oversee particular
aspects of the Fund's management. The standing committees of the Board are
described below. The Board does not have a standing compensation committee.

AUDIT COMMITTEE. The Audit Committee's purposes are (a) to oversee the
accounting and financial reporting processes of the Fund and its internal
control over financial reporting and, as the Committee deems appropriate, to
inquire into the internal control over financial reporting of certain
third-party service providers; (b) to oversee the quality and integrity of the
Fund's financial statements and the independent audit thereof; (c) to oversee,
or, as appropriate, assist Board oversight of, the Fund's compliance with legal
and regulatory requirements that relate to the Fund's accounting and financial
reporting, internal control over financial reporting and independent audits; (d)
to approve prior to appointment the engagement of the Fund's independent
auditors and, in connection therewith, to review and evaluate the
qualifications, independence and performance of the Fund's independent auditors;
(e) to act as a liaison between the Fund's independent auditors and the full
Board; and (f) to prepare an audit committee report as required by Item 306 of
Regulation S-K to be included in proxy statements relating to the election of
directors/trustees. The charter of the Audit Committee was attached to the
Fund's proxy statement dated January 12, 2004. The Audit Committee of the Fund
has delegated the authority to grant pre-approval of permissible non-audit
services and all audit, review or attest engagements of the Fund's independent
auditors to the Chairman of the Audit Committee.

The Audit Committee of the Fund is composed entirely of Independent Fund
Directors who are also considered independent under the listing standards
applicable to the Fund. Its members are John Cannon, Cornelius T. Ryan
(Chairman), Tom D. Seip and Peter P. Trapp. Members of the Audit Committee
receive additional compensation for serving on this committee. The Report of the
Audit Committee relating to the audit of Fund financial statements for the
fiscal year ended October 31, 2004 is attached hereto as Appendix A. During the
fiscal year ended October 31, 2004, the Committee met seven times.

CODE OF ETHICS COMMITTEE. The Code of Ethics Committee oversees the
administration of the Fund's Code of Ethics, which restricts the personal
securities transactions of employees and officers of NB Management and Neuberger
Berman, and the Directors. Its members are Faith Colish, C. Anne Harvey, Robert
A. Kavesh (Chairman), Howard A. Mileaf and Edward I. O'Brien. All members except
for Mr. O'Brien are Independent Fund Directors. During the fiscal year ended
October 31, 2004, the Committee met once.

CONTRACT REVIEW COMMITTEE. The Contract Review Committee is responsible for
review and oversight of the Fund's principal contractual arrangements. Its
members are Faith Colish (Chairwoman), Barry Hirsch, Howard A. Mileaf, William
E. Rulon and Candace L. Straight. All members are Independent Fund Directors.
During the fiscal year ended October 31, 2004, the Committee met twice.

EXECUTIVE COMMITTEE. The Executive Committee is responsible for acting in
an emergency when the full board is not available. It has all the powers of the
Directors when the Directors are not in session, to the extent permitted by
Maryland law. Its members are John Cannon, Howard A. Mileaf, Edward I. O'Brien,
Jack L. Rivkin, William E. Rulon, Cornelius T. Ryan and Peter E. Sundman
(Chairman). All members except for Messrs. O'Brien, Rivkin and Sundman are
Independent Fund Directors. During the fiscal year ended October 31, 2004, the
Committee of the Fund did not meet.

NOMINATING COMMITTEE. The Nominating Committee is responsible for
nominating individuals to serve as Directors, including as Independent Fund
Directors, as members of committees, and as officers of the Fund. The Committee
met to discuss matters relating to the nomination of Class III Directors. Its
members are C. Anne Harvey (Chairwoman), Barry Hirsch, Robert A. Kavesh, Howard
A. Mileaf and Tom D. Seip. All members are Independent Fund Directors. During
the fiscal year ended October 31, 2004, the Committee met twice.

PORTFOLIO TRANSACTIONS COMMITTEE. The Portfolio Transactions Committee from
time to time reviews, among other things, data on the quality of execution of
portfolio trades, actual and potential uses of portfolio brokerage commissions,
agency cross-transactions, information relating to the commissions charged by
Neuberger Berman and Lehman Brothers Inc. ("Lehman Brothers") to the Fund, and
information concerning the prevailing level of commissions charged by other
brokers having comparable execution capability, reports prepared by third party
consultants regarding the execution of the Fund's trades and the consideration
given to alternative trading systems. The members of the Committee of the Fund
are Faith Colish, C. Anne Harvey, Cornelius T. Ryan, Candace L. Straight
(Chairwoman) and Peter P. Trapp. All members are Independent Fund Directors.
During the fiscal year ended October 31, 2004, the Committee met four times.

PRICING COMMITTEE. The Pricing Committee oversees the procedures for
pricing the Fund's portfolio securities and, from time to time, may be called
upon to establish or ratify the fair value of portfolio securities for which
market prices are not readily available. Its members are John Cannon, Edward I.
O'Brien, Jack L. Rivkin (Vice Chairman), William E. Rulon and Tom D. Seip
(Chairman). All members except for Mr. Rivkin and Mr. O'Brien are Independent
Fund Directors. During the fiscal year ended October 31, 2004, the Committee met
twice.

INFORMATION REGARDING THE FUND'S PROCESS FOR NOMINATING DIRECTOR CANDIDATES

NOMINATING COMMITTEE CHARTER. The Fund's Nominating Committee is currently
reviewing a written charter.

STOCKHOLDER COMMUNICATIONS. The Fund's Nominating Committee will consider
nominees recommended by stockholders; stockholders may send resumes of
recommended persons to the attention of Claudia A. Brandon, Secretary, Neuberger
Berman Funds, 605 Third Avenue, 21st Floor, New York, NY, 10158-0180. No nominee
recommendation has been received from a stockholder within the past 120 days.

NOMINEE QUALIFICATIONS. While there is no formal list of qualifications,
the Nominating Committee considers, among other things, whether prospective
nominees have distinguished records in their primary careers, unimpeachable
integrity, and substantive knowledge in areas important to the Board's
operations, such as background or education in finance, auditing, securities
law, the workings of the securities markets, or investment advice. For
candidates to serve as independent directors, independence from the Fund's
investment adviser, its affiliates and other principal service providers is
critical, as is an independent and questioning mindset. The Committee also
considers whether the prospective candidates' workloads would allow them to
attend the vast majority of Board meetings, be available for service on Board
committees, and devote the additional time and effort necessary to keep up with
Board matters and the rapidly changing regulatory environment in which the Fund
operates. Different substantive areas may assume greater or lesser significance
at particular times, in light of the Board's present composition and the
Committee's (or the Board's) perceptions about future issues and needs.

IDENTIFYING NOMINEES. The Nominating Committee considers prospective
candidates from any reasonable source. The Committee initially evaluates
prospective candidates on the basis of their resumes, considered in light of the
criteria discussed above. Those prospective candidates that appear likely to be
able to fill a significant need of the Board would be contacted by a Committee
member by telephone to discuss the position; if there appeared to be sufficient
interest, an in-person meeting with one or more Committee members would be
arranged. If the Committee, based on the results of these contacts, believed it
had identified a viable candidate, it would air the matter with the full group
of independent Board members for input. Any request by management to meet with
the prospective candidate would be given appropriate consideration. The Fund has
not paid a fee to third parties to assist in finding nominees.

DIRECTOR ATTENDANCE AT ANNUAL MEETINGS

The Fund does not have a policy on Director attendance at the annual
meeting of stockholders. One Board member attended the 2004 annual meeting of
stockholders.

OWNERSHIP OF SECURITIES

Set forth below is the dollar range of equity securities owned by each
Director as of December 31, 2004.

AGGREGATE DOLLAR RANGE
OF EQUITY SECURITIES IN
ALL REGISTERED INVESTMENT
DOLLAR RANGE OF COMPANIES OVERSEEN BY
EQUITY SECURITIES DIRECTOR IN FAMILY
NAME OF DIRECTOR OWNED IN THE FUND* OF INVESTMENT COMPANIES*
- --------------------------------------------------------------------------
Independent Fund Directors
- --------------------------------------------------------------------------

John Cannon None $50,001 - $100,000
Faith Colish None Over $100,000
C. Anne Harvey None $50,001 - $100,000
Barry Hirsch None Over $100,000
Robert A. Kavesh None $ 10,001 - $50,000
Howard A. Mileaf None Over $100,000
William E. Rulon None $50,001 - $100,000
Cornelius T. Ryan None Over $100,000
Tom D. Seip None Over $100,000
Candace L. Straight None Over $100,000
Peter P. Trapp None $50,001 - $100,000
- --------------------------------------------------------------------------
Directors who are "Interested Persons"
- --------------------------------------------------------------------------
Edward I. O'Brien None Over $100,000
Jack L. Rivkin None $ 10,001 - $50,000
Peter E. Sundman None Over $100,000
- --------------------------------------------------------------------------

* Valuation as of December 31, 2004.

INDEPENDENT FUND DIRECTORS' OWNERSHIP OF SECURITIES

As of December 31, 2004, no Independent Fund Director (or his/her immediate
family members) owned securities of NB Management or securities in an entity
controlling, controlled by or under common control with NB Management (not
including registered investment companies).

OFFICERS OF THE FUND

The following table sets forth certain information regarding the officers
of the Fund. Except as otherwise noted, each individual has held the positions
shown in the table below for at least the last five years. The business address
of each listed person is 605 Third Avenue, New York, New York 10158. Officers of
the Fund are appointed by the Directors and serve at the pleasure of the Board.

- --------------------------------------------------------------------------------------
POSITION AND LENGTH
NAME AND AGE OF TIME SERVED PRINCIPAL OCCUPATION(S)
- --------------------------------------------------------------------------------------

Claudia A. Brandon (48) Secretary since Vice President-Mutual Fund Board
Inception* Relations, NB Management since
2000; Vice President, Neuberger
Berman since 2002 and employee
since 1999; formerly, Vice President,
NB Management from 1986 to
1999; Secretary, fourteen registered
investment companies for which
NB Management acts as investment
manager and administrator (four
since 2002, three since 2003 and
four since 2004).
- --------------------------------------------------------------------------------------
Philip R. Carroll (70) Chief Vice President, Neuberger Berman
Compliance since 2002; Associate General
Officer Counsel, Neuberger Berman since
since 2004 2001; Director-Mutual Fund
Compliance, NB Management since
1995; Chief Legal Officer, fourteen
registered investment companies
for which NB Management acts as
investment manager and administrator
(ten since 2003, four since 2004);
Chief Compliance Officer, fourteen
registered investment companies
for which NB Management acts as
investment manager and administrator
(fourteen since 2004) and Lehman
Brothers/First Trust Income
Opportunity Fund.
- --------------------------------------------------------------------------------------

Robert Conti (48) Vice President Senior Vice President, Neuberger
since Inception* Berman since 2003; formerly, Vice
President, Neuberger Berman from
1999 to 2003; Senior Vice President,
NB Management since 2000;
formerly, Controller, NB Management
until 1996; formerly, Treasurer,
NB Management from 1996 to 1999;
Vice President, fourteen registered
investment companies for which
NB Management acts as investment
manager and administrator (three
since 2000, four since 2002, three
since 2003 and four since 2004).
- --------------------------------------------------------------------------------------
Brian J. Gaffney (51) Vice President Managing Director, Neuberger
since Inception* Berman since 1999; Senior Vice
President, NB Management since
2000; formerly, Vice President, NB
Management from 1997 until 1999;
Vice President, fourteen registered
investment companies for which
NB Management acts as investment
manager and administrator (three
since 2000, four since 2002, three
since 2003 and four since 2004).
- --------------------------------------------------------------------------------------
Sheila R. James (39) Assistant Employee, Neuberger Berman since
Secretary since 1999; formerly, Employee, NB
Inception* Management from 1991 to 1999;
Assistant Secretary, fourteen registered
investment companies for which
NB Management acts as investment
manager and administrator (seven
since 2002, three since 2003 and
four since 2004).
- --------------------------------------------------------------------------------------

POSITION AND LENGTH
NAME AND AGE OF TIME SERVED PRINCIPAL OCCUPATION(S)
- --------------------------------------------------------------------------------------

Kevin Lyons (49) Assistant Employee, Neuberger Berman since
Secretary since 1999; formerly, Employee, NB
2003 Management from 1993 to 1999;
Assistant Secretary, fourteen registered
investment companies for which
NB Management acts as investment
manager and administrator (ten since
2003 and four since 2004).
- --------------------------------------------------------------------------------------
John M. McGovern (34) Assistant Vice President, Neuberger Berman
Treasurer since since January 2004; Employee, NB
Inception* Management since 1993; Assistant
Treasurer, fourteen registered
investment companies for which
NB Management acts as investment
manager and administrator (seven
since 2002, three since 2003 and
four since 2004).
- --------------------------------------------------------------------------------------
Barbara Muinos (46) Treasurer and Vice President, Neuberger Berman
Principal since 1999; formerly, Assistant Vice
Financial and President, NB Management from 1993
Accounting to 1999; Treasurer and Principal
Officer since Financial and Accounting Officer,
Inception* fourteen registered investment
companies for which NB Management
acts as investment manager and
administrator (seven since 2002, three
since 2003 and four since 2004);
formerly, Assistant Treasurer of three
registered investment companies for
which NB Management acts as
investment manager and administrator
from 1996 to 2002.
- --------------------------------------------------------------------------------------

Frederic B. Soule (58) Vice President Senior Vice President, Neuberger
since Inception* Berman since 2003; formerly, Vice
President, Neuberger Berman from
1999 to 2003; formerly, Vice
President, NB Management from
1995 to 1999; Vice President, fourteen
registered investment companies
for which NB Management acts as
investment manager and administrator
(three since 2000, four since 2002,
three since 2003 and four since 2004).
- --------------------------------------------------------------------------------------

* Neuberger Berman Real Estate Income Fund Inc. commenced operations in 2002.

COMPENSATION OF DIRECTORS

The following table sets forth information concerning the compensation of
the Fund's Directors. The Fund does not have any retirement plan for its
Directors. For the fiscal year ended October 31, 2004, the Directors received
the amounts set forth in the following table from the Fund. For the calendar
year ended December 31, 2004, the Directors received the compensation set forth
in the following table for serving as Trustees or Directors of investment
companies in the "Fund Complex." Each officer and Director who is a director,
officer or employee of NB Management, Neuberger Berman or any entity
controlling, controlled by or under common control with NB Management or
Neuberger Berman serves as a Fund Director and/or officer without any
compensation from the Fund.

TABLE OF COMPENSATION

TOTAL COMPENSATION
FROM REGISTERED
ACTUAL INVESTMENT COMPANIES IN THE
COMPENSATION NEUBERGER BERMAN FUND
FOR FISCAL COMPLEX PAID TO DIRECTORS
NAME AND POSITION YEAR ENDING FOR CALENDAR YEAR ENDED
WITH EACH FUND 10/31/04 12/31/04
- ----------------------------------------------------------------------
Independent Fund Directors
- ----------------------------------------------------------------------

John Cannon
Director $ 9,766 $91,000
Faith Colish
Director $17,498 $92,500
C. Anne Harvey
Director $17,498 $92,500
Barry Hirsch
Director $ 9,800 $85,000

Robert A. Kavesh
Director $17,300 $ 85,000
Howard A. Mileaf
Director $ 9,800 $ 85,000
William E. Rulon
Director $ 1,906 $ 70,000
Cornelius T. Ryan
Director $17,762 $103,500
Tom D. Seip
Director $ 9,936 $ 91,000
Candace L. Straight
Director $17,498 $ 92,500
Peter P. Trapp
Director $17,661 $ 98,500
- -----------------------------------------------------------------------------
Directors who are "Interested Persons"
- -----------------------------------------------------------------------------
Edward I. O'Brien
Director $17,498 $ 92,500
Jack L. Rivkin
Director and President $ 0 $ 0
Peter E. Sundman
Director, Chairman of
the Board and Chief
Executive Officer $ 0 $ 0

VOTE REQUIRED

Robert A. Kavesh, William E. Rulon, Candace L. Straight, and Edward I.
O'Brien must be elected by the holders of a plurality of the Common Shares and
Preferred Shares voted at the meeting, voting together. Howard A. Mileaf must be
elected by the holders of a plurality of the Preferred Shares voted at the
Meeting, voting separately from the holders of the Common Shares.

THE BOARD OF DIRECTORS OF THE FUND UNANIMOUSLY RECOMMENDS
THAT YOU VOTE "FOR" EACH NOMINEE.

INFORMATION ON THE FUND'S
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Ernst & Young LLP ("Ernst & Young") audited the Fund's financial statements
for the fiscal year ended October 31, 2004. Ernst & Young, 200 Clarendon Street,
Boston, MA 02116, serves as independent registered public accounting firm for
the Fund and provides audit services, tax compliance services and assistance and
consultation in connection with the review of the Fund's filings with the SEC.
In the opinion of the Audit Committee, the services provided by Ernst & Young
are compatible with maintaining the independence of the Fund's independent
registered public accounting firm. The Fund's Board of Directors has selected
Ernst & Young as the independent registered public accounting firm for the Fund
for the fiscal year ending October 31, 2005. Ernst & Young has served as the
Fund's independent auditors since the Fund's inception. Ernst & Young has
informed the Fund that it has no material direct or indirect financial interest
in the Fund.

Representatives of Ernst & Young are not expected to be present at the
Meeting but have been given the opportunity to make a statement if they so
desire and will be available should any matter arise requiring their presence.

AUDIT FEES

The aggregate fees billed by Ernst & Young for the audit of the Fund's
annual financial statements and for the review of the financial statements
included in the Fund's regulatory filings for the fiscal period ended October
31, 2003 and the fiscal year ended October 31, 2004 were $66,925 and $46,250,
respectively.

AUDIT-RELATED FEES

The aggregate audit-related fees billed by Ernst & Young for the fiscal
period ended October 31, 2003 and the fiscal year ended October 31, 2004, for
performing agreed-upon procedures for the Preferred Shares of the Fund were $0
and $5,000, respectively.

TAX FEES

The aggregate fees billed by Ernst & Young for the fiscal period ended
October 31, 2003 and the fiscal year ended October 31, 2004, for tax compliance,
tax advice, and tax planning were $8,000 and $8,700, respectively.

ALL OTHER FEES

Aggregate fees billed by Ernst & Young during the fiscal period ended
October 31, 2003 and the fiscal year ended October 31, 2004 for other services
provided to the Fund were $0 and $0, respectively. The aggregate fees billed for
non-audit work performed for the Fund, NB Management and Neuberger Berman were
$241,037 and $269,750, respectively, for the fiscal period ended October 31,
2003 and for the fiscal year October 31, 2004. The Audit Committee has
considered these fees and the nature of the services rendered, and has concluded
that they are compatible with maintaining the independence of Ernst & Young.

The Audit Committee did not approve any of the services described above
pursuant to the "de minimis exceptions" set forth in Rule 2-01(c)(7)(i)(C) and
Rule 2-01(c)(7)(ii) of Regulation S-X. Ernst & Young did not provide any
audit-related services, tax services or other non-audit services to NB
Management or Neuberger Berman that the Audit Committee was required to approve
pursuant to Rule 2-01(c)(7)(ii) of Regulation S-X.

OTHER MATTERS

No business, other than as set forth above, is expected to come before the
Meeting. Should any other matters requiring a vote of stockholders properly come
before the Meeting, the persons named in the enclosed proxy will vote thereon in
accordance with their best judgment in the interests of the Fund.

STOCKHOLDER PROPOSALS

The Fund's Bylaws require stockholders wishing to nominate Directors or
make proposals to be voted on at the Fund's annual meeting to provide notice of
the nominations or proposals in writing delivered or mailed by first class
United States mail, postage prepaid, to the Secretary of the Fund. The Secretary
must receive the nomination or proposal not less than 90 days in advance of the
anniversary of the date of the Fund's proxy statement released to stockholders
in connection with the previous year's annual meeting. In order to be considered
at the Fund's 2006 annual meeting, stockholder nominations and proposals must be
received by the Fund no later than November 6, 2005 and must satisfy the other
requirements of the federal securities laws. The chairperson of the Meeting may
refuse to acknowledge a nomination or other proposal by a stockholder that is
not made in the manner described above.

NOTICE TO BANKS, BROKER-DEALERS AND VOTING
TRUSTEES AND THEIR NOMINEES

Please advise the Fund, at 605 Third Avenue New York, New York 10158,
whether other persons are beneficial owners of shares for which proxies are
being solicited and, if so, the number of copies of the Proxy Statement you wish
to receive in order to supply copies to such beneficial owners of shares.

By order of the Board of Directors,

/s/ Claudia A. Brandon
Secretary

Dated: February 4, 2005

This page is intentionally left blank.

APPENDIX A

AUDIT COMMITTEE REPORT

NEUBERGER BERMAN DIVIDEND ADVANTAGE FUND INC.
NEUBERGER BERMAN INCOME OPPORTUNITY FUND INC.
NEUBERGER BERMAN INTERMEDIATE MUNICIPAL FUND INC.
NEUBERGER BERMAN CALIFORNIA INTERMEDIATE MUNICIPAL FUND INC.
NEUBERGER BERMAN NEW YORK INTERMEDIATE MUNICIPAL FUND INC.
NEUBERGER BERMAN REAL ESTATE INCOME FUND INC.
NEUBERGER BERMAN REAL ESTATE SECURITIES INCOME FUND INC.
NEUBERGER BERMAN REALTY INCOME FUND INC.
(COLLECTIVELY, THE "FUNDS")

The Audit Committees of the Boards of Directors of the Funds operate
pursuant to a Charter, which sets forth the role of the Audit Committee in each
Fund's financial reporting process. Pursuant to the Charter, the role of the
Audit Committee is to oversee the Funds' accounting and financial reporting
processes and the quality and objectivity of the Funds' financial statements and
the independent audit of those financial statements. The Committee is
responsible for, among other things, selection of the auditors and reviewing the
scope and results of each Fund's annual audit with the Fund's independent
auditors. Fund management is responsible for the preparation, presentation and
integrity of the Funds' financial statements and for the procedures designed to
assure compliance with accounting standards and applicable laws and regulations.
The independent auditors for the Fund are responsible for planning and carrying
out proper audits and reviews.

The Audit Committee met on December 14, 2004 to review each Fund's audited
financial statements for the fiscal period ended October 31, 2004. In performing
this oversight function, the Audit Committee has reviewed and discussed the
audited financial statements with the Funds' management and their independent
auditors, Ernst & Young, LLP ("E&Y"). The Audit Committee has discussed with E&Y
the matters required to be discussed by Statement on Auditing Standards No. 61,
and has received the written disclosures and the letter from E&Y required by
Independence Standards Board Standard No. 1. The Audit Committee also has
discussed with E&Y its independence.

The members of the Audit Committee are not experts in the fields of
auditing or accounting and are not employed by the Funds for accounting,
financial management or internal control purposes. Members of the Audit
Committee rely without independent verification on the information provided and
the representations made to them by management and E&Y.

Based upon this review and related discussions, and subject to the
limitation on the role and responsibilities of the Audit Committee set forth
above and in the Charter, the Audit Committee recommended to the Board of
Directors that the audited financial statements be included in each Fund's
Annual Report to Stockholders for the fiscal period ended October 31, 2004, for
filing with the Securities and Exchange Commission.

A-1

The members of the Audit Committee are listed below. Each has been
determined to be independent pursuant to American Stock Exchange Rule 121B(b)(1)
and New York Stock Exchange Rule 303.01.

John Cannon
Walter G. Ehlers*
Cornelius T. Ryan (Chairman)
Tom D. Seip
Peter P. Trapp

December 14, 2004

- ----------------
* Retired from the Boards of Directors of all Funds, effective December 31,
2004.

A-2

This page is intentionally left blank.

[NEUBERGER BERMAN]
A Lehman Brothers Company

Neuberger Berman Management Inc.
605 Third Avenue 2nd floor
New York, New York 10158-0180

www.nb.com P06602
F0042 02/05

PLEASE DETACH PROXY CARD HERE

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

/X/ PLEASE FILL IN BOX AS SHOWN USING
BLACK OR BLUE INK OR NUMBER 2 PENCIL.
PLEASE DO NOT USE FINE POINT PENS.

YOUR VOTE IS IMPORTANT NO MATTER HOW MANY SHARES OF STOCK YOU OWN. PLEASE SIGN
AND DATE THIS PROXY CARD BELOW AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE.

1. To elect four Class
III Directors to serve
until the annual meeting
of stockholders in 2008,
or until their successors FOR WITHHOLD FOR ALL
are elected and qualified: ALL ALL EXCEPT*

(01) Robert A. Kavesh / / / / / / *TO WITHHOLD AUTHORITY
(02) Edward I. O'Brien TO VOTE FOR ANY
(03) William E. Rulon NOMINEE(S), MARK THE
(04) Candace L. Straight BOX "FOR ALL EXCEPT"
AND WRITE ON THE LINE
BELOW THE NUMBER(S) OF
THE NOMINEE(S) FOR WHOM
YOU DO NOT WANT TO
VOTE.

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

Date:__________________________ , 2005

______________________________________
Signature

Please sign exactly as name appears
hereon. If shares are held in the name of
two or more persons, any may sign.
Attorneys-in-fact, executors,
administrators, etc. should so indicate.
If the stockholder is a corporation or
partnership, please sign in full
corporate or partnership name by
authorized person.

THIS PROXY CARD IS VALID ONLY WHEN SIGNED
AND DATED.

PLEASE DETACH PROXY CARD HERE

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

NEUBERGER BERMAN REAL ESTATE INCOME FUND INC.

PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS ON MARCH 8, 2005

The undersigned appoints as proxies Robert Conti, Frederic B. Soule and
Claudia A. Brandon, and each of them (with power of substitution), to vote all
the undersigned's shares of common stock in Neuberger Berman Real Estate Income
Fund Inc. (the "Fund") at the Annual Meeting of Stockholders to be held on March
8, 2005, at 11:00 a.m. Eastern Time at the offices of Neuberger Berman, LLC, 605
Third Avenue, 41st Floor, New York, New York 10158-3698, and any adjournments
thereof ("Meeting"), with all the power the undersigned would have if personally
present.

Receipt of the Notice of Annual Meeting of Stockholders and Proxy
Statement is acknowledged by your execution of this proxy. THIS PROXY IS BEING
SOLICITED ON BEHALF OF THE FUND'S BOARD OF DIRECTORS.

The shares of common stock represented by this proxy will be voted as
instructed. UNLESS INDICATED TO THE CONTRARY, THIS PROXY SHALL BE DEEMED TO
GRANT AUTHORITY TO VOTE "FOR" THE NOMINEES WHOSE NAMES ARE SET FORTH ON THE
REVERSE SIDE OF THIS PROXY CARD. THIS PROXY ALSO GRANTS DISCRETIONARY POWER TO
VOTE UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING. YOUR VOTE
IS IMPORTANT NO MATTER HOW MANY SHARES YOU OWN. PLEASE SIGN AND DATE THIS PROXY
BELOW AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE.

IF YOU PLAN TO ATTEND THE MEETING, PLEASE CALL 1-877-461-1899.

PLEASE SIGN ON THE REVERSE SIDE.

PLEASE DETACH PROXY CARD HERE

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

/X/ PLEASE FILL IN BOX AS SHOWN USING
BLACK OR BLUE INK OR NUMBER 2 PENCIL.
PLEASE DO NOT USE FINE POINT PENS.

YOUR VOTE IS IMPORTANT NO MATTER HOW MANY SHARES OF STOCK YOU OWN. PLEASE SIGN
AND DATE THIS PROXY CARD BELOW AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE.

1. To elect five Class
III Directors to serve
until the annual meeting
of stockholders in 2008,
or until their successors FOR WITHHOLD FOR ALL
are elected and qualified: ALL ALL EXCEPT*

(01) Robert A. Kavesh / / / / / / *TO WITHHOLD AUTHORITY
(02) Howard A. Mileaf TO VOTE FOR ANY
(03) Edward I. O'Brien NOMINEE(S), MARK THE BOX
(04) William E. Rulon "FOR ALL EXCEPT" AND
(05) Candace L. Straight WRITE ON THE LINE BELOW
THE NUMBER(S) OF THE
NOMINEE(S) FOR WHOM YOU
DO NOT WANT TO VOTE.

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

Date:__________________________ , 2005

______________________________________
Signature

THIS PROXY CARD IS VALID ONLY WHEN SIGNED
AND DATED.

PLEASE DETACH PROXY CARD HERE

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

NEUBERGER BERMAN REAL ESTATE INCOME FUND INC.

PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS ON MARCH 8, 2005

The undersigned appoints as proxies Robert Conti, Frederic B. Soule and
Claudia A. Brandon, and each of them (with power of substitution), to vote all
the undersigned's shares of preferred stock in Neuberger Berman Real Estate
Income Fund Inc. (the "Fund") at the Annual Meeting of Stockholders to be held
on March 8, 2005, at 11:00 a.m. Eastern Time at the offices of Neuberger Berman,
LLC, 605 Third Avenue, 41st Floor, New York, New York 10158-3698, and any
adjournments thereof ("Meeting"), with all the power the undersigned would have
if personally present.

Receipt of the Notice of Annual Meeting of Stockholders and Proxy
Statement is acknowledged by your execution of this proxy. THIS PROXY IS BEING
SOLICITED ON BEHALF OF THE FUND'S BOARD OF DIRECTORS.

IF YOU PLAN TO ATTEND THE MEETING, PLEASE CALL 1-877-461-1899.

PLEASE SIGN ON THE REVERSE SIDE.