UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-07707
ALLIANCEBERNSTEIN REAL ESTATE INVESTMENT FUND, INC.
(Exact name of registrant as specified in charter)
1345 Avenue of the Americas, New York, New York 10105
(Address of principal executive offices) (Zip code)
Mark R. Manley
Alliance Capital Management L.P.
1345 Avenue of the Americas
New York, New York 10105
(Name and address of agent for service)
Registrant's telephone number, including area code: (800) 221-5672
Date of fiscal year end: November 30, 2004
Date of reporting period: November 30, 2004
ITEM 1. REPORTS TO STOCKHOLDERS.
[LOGO] ALLIANCEBERNSTEIN (SM)
Investment Research and Management
AllianceBernstein Real Estate
Investment Fund
Specialty Equity
Annual Report--November 30, 2004
Investment Products Offered
- -----------------------------
o Are Not FDIC Insured
o May Lose Value
o Are Not Bank Guaranteed
- -----------------------------
The investment return and principal value of an investment in the Fund will
fluctuate as the prices of the individual securities in which it invests
fluctuate, so that your shares, when redeemed, may be worth more or less than
their original cost. You should consider the investment objectives, risks,
charges and expenses of the Fund carefully before investing. For a free copy of
the Fund's prospectus, which contains this and other information, visit our web
site at www.alliancebernstein.com or call your financial advisor or
AllianceBernstein at (800) 227-4618. Please read the prospectus carefully
before you invest.
You may obtain performance information current to the most recent month-end by
visiting www.alliancebernstein.com.
This shareholder report must be preceded or accompanied by the Fund's
prospectus for individuals who are not current shareholders of the Fund.
You may obtain a description of the Fund's proxy voting policies and
procedures, and information regarding how the Fund voted proxies relating to
portfolio securities during the most recent 12-month period ended June 30,
without charge. Simply visit AllianceBernstein's web site at
www.alliancebernstein.com, or go to the Securities and Exchange Commission's
(the "Commission") web site at www.sec.gov, or call AllianceBernstein at (800)
227-4618.
The Fund files its complete schedule of portfolio holdings with the Commission
for the first and third quarters of each fiscal year on Form N-Q. The Fund's
Forms N-Q are available on the Commission's web site at www.sec.gov. The Fund's
Forms N-Q may also be reviewed and copied at the Commission's Public Reference
Room in Washington, DC; information on the operation of the Public Reference
Room may be obtained by calling (800) SEC-0330. AllianceBernstein publishes
full portfolio holdings for the Fund monthly at www.alliancebernstein.com.
AllianceBernstein Investment Research and Management, Inc. is an affiliate of
Alliance Capital Management L.P., the manager of the funds, and is a member of
the NASD.
December 23, 2004
Annual Report
This report provides management's discussion of fund performance for
AllianceBernstein Real Estate Investment Fund (the "Fund") for the annual
reporting period ended November 30, 2004.
Investment Objective and Policies
This open-end fund seeks total return on its assets from long-term growth of
capital and from income principally through investing in a portfolio of equity
securities of issuers that are primarily engaged in, or related to, the real
estate industry.
Investment Results
The following table provides the performance results for the Fund and its
benchmarks, the National Association of Real Estate Investment Trusts (NAREIT)
Equity Index and the Standard & Poor's (S&P) 500 Stock Index, for the six- and
12-month periods ended November 30, 2004.
During the 12-month period ended November 30, 2004, the Fund posted strong
absolute and relative returns, outperforming the NAREIT Equity Index and the
S&P 500 Stock Index. The Fund's positive performance during the reported period
was driven by stock selection in the industrial/office, lodging and retail
sectors, which more than offset a small negative impact from unfavorable stock
selection in the self storage sector. Stock selection was strong in the
industrial/office sector where the Fund's investments are concentrated in REITs
with exposure to those markets that are showing the best fundamental
improvement. Sector allocation negatively impacted relative returns, primarily
due to the Fund's overweighted position in office properties. A
slower-than-expected recovery in job creation has delayed the rebound in office
properties' fundamentals.
The Fund also outperformed its benchmarks, the NAREIT Equity Index and the S&P
500 Stock Index, for the six-month reporting period ended November 30, 2004.
Positive performance during the six-month period was driven by favorable stock
selection across most REIT sectors, except self storage and residential. Stock
selection was strongest in industrial/office; it was particularly favorable in
the industrial sector. The Fund also benefited from an investment in a lodging
operator that was acquired by a private equity group at an implied 25% premium
and in a mall owner which was also acquired for an attractive premium.
Residential stock selection detracted from relative performance due to an
overweight position in two apartment companies that completed acquisitions in
an environment of rich asset valuations. From a sector perspective, the Fund's
overweighted position in office properties had a negative impact on
performance, as office space demand has lagged expectations.
Market Review and Investment Strategy
REIT performance, as measured by the NAREIT Equity Index, outperformed the S&P
500 Stock Index during the 12-month period ended November 30, 2004, as real
estate fundamentals began to improve during the annual reporting period. The
U.S. economy strengthened and consumer spending continued to be robust for most
of the
- -------------------------------------------------------------------------------
ALLIANCEBERNSTEIN REAL ESTATE INVESTMENT FUND o 1
reporting period. All sectors of the NAREIT Equity Index contributed to
relative performance, with retail and specialty contributing the most.
Throughout most of the 12-month period, the Fund had overweighted positions in
the industrial/office, retail and lodging sectors and underweighted positions
in the residential, health care and self storage sectors.
During the six-month period ended November 30, 2004, REIT stocks had stellar
performance compared to the S&P 500 Stock Index. REIT performance during the
six-month period was underpinned by a benign interest rate environment and
positive progress in real estate fundamentals. Strong earnings during the
mid-year earnings season also helped to sustain the rally. All sectors
contributed to strong relative performance; however, retail stood out, due in
part, to an ongoing consolidation of mall owners and continued strong retail
fundamentals. Laggard sectors were industrial/office and self storage sectors
where recovery of fundamentals has been the slowest. During the six-month
reporting period, the Fund held overweighted positions in industrial/office,
retail and lodging properties and underweighted positions health care, self
storage and specialty REITs.
In Memory
It is with sadness that we announce the passing of Clifford L. Michel, a member
of the Board of Directors of AllianceBernstein Real Estate Investment Fund. Mr.
Michel served the interests of the Fund's shareholders for the last eight
years. His hard work, dedication and contributions to the Fund will be greatly
missed.
_______________________________________________________________________________
2 o ALLIANCEBERNSTEIN REAL ESTATE INVESTMENT FUND
HISTORICAL PERFORMANCE
An Important Note About the Value of Historical Performance
The performance shown on the following pages represents past performance and
does not guarantee future results. Current performance may be lower or higher
than the performance information shown. You may obtain performance information
current to the most recent month-end by visiting www.alliancebernstein.com.
The investment return and principal value of an investment in the Fund will
fluctuate, so that your shares, when redeemed, may be worth more or less than
their original cost. You should consider the investment objectives, risks,
charges and expenses of the Fund carefully before investing. For a free copy of
the Fund's prospectus, which contains this and other information, visit our web
site at www.alliancebernstein.com or call your financial advisor or
AllianceBernstein at (800) 227-4618. You should read the prospectus carefully
before you invest.
Returns are annualized for periods longer than one year. All fees and expenses
related to the operation of the Fund have been deducted. NAV returns do not
reflect sales charges; if sales charges were reflected, the Fund's quoted
performance would be lower. SEC returns reflect the applicable sales charges
for each share class: a 4.25% maximum front-end sales charge for Class A
shares; the applicable contingent deferred sales charge for Class B shares (4%
year 1, 3% year 2, 2% year 3, 1% year 4); a 1% 1 year contingent deferred sales
charge for Class C shares. Returns for Advisor Class shares will vary due to
different expenses associated with this class. Performance assumes reinvestment
of distributions and does not account for taxes.
Benchmark Disclosure
The unmanaged National Association of Real Estate Investment Trusts (NAREIT)
Equity Index and the unmanaged Standard & Poor's (S&P) 500 Stock Index do not
reflect fees and expenses associated with the active management of a mutual
fund portfolio. The NAREIT Equity Index is a market-value-weighted index based
upon the last closing price of the month for tax-qualified real estate
investment trusts (REITs) listed on the NYSE, AMEX and the NASDAQ. The S&P 500
Stock Index includes 500 U.S. stocks and is a common measure of the performance
of the overall U.S. stock market. An investor cannot invest directly in an
index, and its results are not indicative of any specific investment, including
the Fund.
A Word About Risk
While the Fund invests principally in the equity securities of real estate
investment trusts, in order to achieve its investment objectives, the Fund may
invest up to 20% of its total assets in mortgage-backed securities which
involve risks described in the prospectus. An investment in the Fund is subject
to certain risks associated with the direct ownership of real estate and with
the real estate industry in general, including declines in the value of real
estate, general and local economic conditions and interest rates. While the
Fund invests principally in common stocks and other equity securities, in order
to achieve its investment objectives, the Fund may at times use certain types
of investment derivatives, such as options, futures, forwards and swaps. These
instruments involve risks different from, and in certain cases, greater than,
the risks presented by more traditional investments. These risks are fully
discussed in the Fund's prospectus.
(Historical Performance continued on next page)
_______________________________________________________________________________
ALLIANCEBERNSTEIN REAL ESTATE INVESTMENT FUND o 3
HISTORICAL PERFORMANCE
(continued from previous page)
THE FUND VS. ITS BENCHMARK Returns
---------------------------
PERIODS ENDED NOVEMBER 30, 2004 6 Months 12 Months
- -------------------------------------------------------------------------------
AllianceBernstein Real Estate Investment Fund
Class A 23.69% 32.70%
Class B 23.30% 31.69%
Class C 23.26% 31.65%
Advisor Class 23.91% 33.07%
S&P 500 Stock Index 5.67% 12.85%
NAREIT Equity Index 22.42% 29.88%
GROWTH OF A $10,000 INVESTMENT IN THE FUND
9/30/96* TO 11/30/04
[THE FOLLOWING TABLE WAS DEPICTED BY A MOUNTAIN CHART IN THE PRINTED MATERIAL.]
AllianceBernstein
Real Estate
Investment Fund S&P 500 Stock Index NAREIT Equity Index
Class A
- --------------------------------------------------------------------------------------
9/30/96* $9575 $10000 $10000
11/30/96 $10274 $11052 $10766
11/30/97 $13872 $14202 $13963
11/30/98 $11529 $17565 $12096
11/30/99 $10071 $21234 $10901
11/30/00 $12693 $20336 $13277
11/30/01 $14263 $17853 $15807
11/30/02 $14955 $14905 $16687
11/30/03 $20173 $17153 $22274
11/30/04 $26753 $19375 $28930
*Since inception of the Fund's Class A shares on 9/30/96.
This chart illustrates the total value of an assumed $10,000 investment in
AllianceBernstein Real Estate Investment Fund Class A shares (from 9/30/96* to
11/30/04) as compared to the performance of its benchmarks, the NAREIT Equity
Index and the S&P 500 Stock Index. The chart reflects the deduction of the
maximum 4.25% sales charge from the initial $10,000 investment in the Fund and
assumes the reinvestment of dividends and capital gains.
See Historical Performance and Benchmark disclosures on previous page.
(Historical Performance continued on next page)
_______________________________________________________________________________
4 o ALLIANCEBERNSTEIN REAL ESTATE INVESTMENT FUND
HISTORICAL PERFORMANCE
(continued from previous page)
AVERAGE ANNUAL RETURNS AS OF NOVEMBER 30, 2004
NAV Returns SEC Returns
Class A Shares
1 Year 32.70% 27.00%
5 Year 21.58% 20.53%
Since Inception* 13.41% 12.81%
Class B Shares
1 Year 31.69% 27.69%
5 Year 20.74% 20.74%
Since Inception*(a) 12.64% 12.64%
Class C Shares
1 Year 31.65% 30.65%
5 Year 20.74% 20.74%
Since Inception* 12.63% 12.63%
Advisor Class Shares
1 Year 33.07%
5 Year 21.98%
Since Inception* 13.77%
SEC AVERAGE ANNUAL RETURNS (WITH SALES CHARGES)
AS OF THE MOST RECENT CALENDAR QUARTER-END (DECEMBER 31, 2004)
Class A Shares
1 Year 29.07%
5 Year 20.68%
Since Inception* 13.38%
Class B Shares
1 Year 29.76%
5 Year 20.89%
Since Inception*(a) 13.21%
Class C Shares
1 Year 32.87%
5 Year 20.89%
Since Inception* 13.20%
* Inception dates: 9/30/96 for Class A, B, C and Advisor Class shares.
(a) Assumes conversion of Class B shares into Class A shares after eight
years.
See Historical Performance disclosures on page 3.
_______________________________________________________________________________
ALLIANCEBERNSTEIN REAL ESTATE INVESTMENT FUND o 5
FUND EXPENSES
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including sales charges (loads) on purchase payments, contingent
deferred sales charges on redemptions and (2) ongoing costs, including
management fees; distribution (12b-1) fees; and other Fund expenses. This
example is intended to help you understand your ongoing costs (in dollars) of
investing in the Fund and to compare these costs with the ongoing costs of
investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of
the period and held for the entire period as indicated below.
Actual Expenses
The first line of the table below provides information about actual account
values and actual expenses. You may use the information in this line, together
with the amount you invested, to estimate the expenses that you paid over the
period. Simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
in the first line under the heading entitled "Expenses Paid During Period" to
estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio and an assumed annual rate of return of 5% before expenses, which is not
the Fund's actual return. The hypothetical account values and expenses may not
be used to estimate the actual ending account balance or expenses you paid for
the period. You may use this information to compare the ongoing costs of
investing in the Fund and other funds by comparing this 5% hypothetical example
with the 5% hypothetical examples that appear in the shareholder reports of
other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads), or contingent deferred sales charges on redemptions.
Therefore, the second line of the table is useful in comparing ongoing costs
only, and will not help you determine the relative total costs of owning
different funds. In addition, if these transactional costs were included, your
costs would have been higher.
Beginning Ending
Account Value Account Value Expenses Paid
June 1, 2004 November 30, 2004 During Period*
- -----------------------------------------------------------------------------------------
Class A
Actual $1,000 $1,236.85 $ 7.21
Hypothetical (5% return before expenses) $1,000 $1,018.55 $ 6.51
- -----------------------------------------------------------------------------------------
Class B
Actual $1,000 $1,232.95 $11.22
Hypothetical (5% return before expenses) $1,000 $1,014.95 $10.13
- -----------------------------------------------------------------------------------------
Class C
Actual $1,000 $1,232.63 $11.16
Hypothetical (5% return before expenses) $1,000 $1,015.00 $10.08
- -----------------------------------------------------------------------------------------
Advisor Class
Actual $1,000 $1,239.05 $ 5.54
Hypothetical (5% return before expenses) $1,000 $1,020.05 $ 5.00
- -----------------------------------------------------------------------------------------
* Expenses are equal to the classes' annualized expense ratios of 1.29%, 2.01%,
2.00% and 0.99%, respectively, multiplied by the average account value over the
period, multiplied by the number of days in the most recent fiscal
half-year/366 (to reflect the one-half year period).
_______________________________________________________________________________
6 o ALLIANCEBERNSTEIN REAL ESTATE INVESTMENT FUND
PORTFOLIO SUMMARY
November 30, 2004
PORTFOLIO STATISTICS
Net Assets ($mil): $412.0
SECTOR/INDUSTRY BREAKDOWN*
18.6% Office
15.7% Apartment
14.7% Regional Malls
13.1% Warehouse & Industrial
12.3% Shopping Centers [PIE CHART OMITTED]
9.4% Hotels & Restaurants
7.1% Diversified
4.4% Office - Industrial Mix
2.2% Storage
0.5% Healthcare
2.0% Short-Term
TEN LARGEST HOLDINGS
November 30, 2004
Percent of
Company U.S. $ Value Net Assets
- -------------------------------------------------------------------------------
ProLogis $28,185,138 6.8%
- -------------------------------------------------------------------------------
Simon Property Group, Inc. 28,128,448 6.8
- -------------------------------------------------------------------------------
Developers Diversified Realty Corp. 22,536,675 5.5
- -------------------------------------------------------------------------------
Host Marriott Corp. 20,492,676 5.0
- -------------------------------------------------------------------------------
General Growth Properties, Inc. 19,217,031 4.7
- -------------------------------------------------------------------------------
Equity Residential 18,591,065 4.5
- -------------------------------------------------------------------------------
Vornado Realty Trust 15,905,400 3.9
- -------------------------------------------------------------------------------
Archstone-Smith Trust 14,844,550 3.6
- -------------------------------------------------------------------------------
Alexandria Real Estate Equities, Inc. 14,625,660 3.5
- -------------------------------------------------------------------------------
Duke Realty Corp. 14,155,135 3.4
- -------------------------------------------------------------------------------
$196,681,778 47.7%
* The Fund's sector/industry breakdown is expressed as a percentage of total
investments and may vary over time.
_______________________________________________________________________________
ALLIANCEBERNSTEIN REAL ESTATE INVESTMENT FUND o 7
PORTFOLIO OF INVESTMENTS
November 30, 2004
Company Shares U.S. $ Value
- -------------------------------------------------------------------------------
COMMON STOCKS-98.3%
Real Estate Investment Trusts-94.8%
Apartment-15.7%
Archstone-Smith Trust 406,700 $14,844,550
Camden Property Trust 273,100 13,390,093
Equity Residential 551,500 18,591,065
Essex Property Trust, Inc. 74,100 5,967,273
United Dominion Realty Trust, Inc. 519,200 11,936,408
-------------
64,729,389
-------------
Diversified-7.1%
Cousins Properties, Inc. 70,350 2,307,480
iStar Financial, Inc. 253,300 11,119,870
Vornado Realty Trust 216,400 15,905,400
------------
29,332,750
------------
Healthcare-0.5%
Windrose Medical Properties Trust 146,700 2,119,815
Hotels & Restaurants-5.9%
Host Marriott Corp. 1,308,600 20,492,676
LaSalle Hotel Properties 123,900 3,803,730
-------------
24,296,406
-------------
Office-18.7%
Alexandria Real Estate Equities, Inc. 203,700 14,625,660
Boston Properties, Inc. 207,000 12,457,260
Corporate Office Properties Trust 437,600 12,156,528
Equity Office Properties Trust 361,400 9,920,430
Mack-Cali Realty Corp. 213,600 9,342,864
Prentiss Properties Trust 233,200 8,719,348
Reckson Associates Realty Corp. 62,500 2,023,750
SL Green Realty Corp. 132,400 7,630,212
-------------
76,876,052
-------------
Office-Industrial Mix-4.4%
Duke Realty Corp. 409,700 14,155,135
Glenborough Realty Trust, Inc. 187,900 4,103,736
-------------
18,258,871
-------------
Regional Malls-14.8%
General Growth Properties, Inc. 560,100 19,217,031
Mills Corp. 133,700 7,936,432
Simon Property Group, Inc. 453,100 28,128,448
The Macerich Co. 91,500 5,557,710
-------------
60,839,621
-------------
Shopping Centers-12.4%
Developers Diversified Realty Corp. 523,500 22,536,675
Equity One, Inc. 164,500 3,740,730
Kimco Realty Corp. 35,900 2,041,992
_______________________________________________________________________________
8 o ALLIANCEBERNSTEIN REAL ESTATE INVESTMENT FUND
Shares or
Principal
Amount
Company (000) U.S. $ Value
- ------------------------------------------------------------------------------
Pan Pacific Retail Properties, Inc. 128,500 $7,620,050
Regency Centers Corp. 170,200 8,850,400
Tanger Factory Outlet Centers, Inc. 121,500 6,088,365
-------------
50,878,212
-------------
Storage-2.2%
Shurgard Storage Centers, Inc. CI.A 222,500 9,207,050
Warehouse & Industrial-13.1%
AMB Property Corp. 264,400 10,562,780
Catellus Development Corp. 162,200 5,093,080
EastGroup Properties, Inc. 219,700 8,265,114
First Potomac Realty Trust 87,500 2,011,625
ProLogis 700,600 28,185,138
-------------
54,117,737
-------------
Total Real Estate Investment Trusts 390,655,903
Consumer Services-3.5%
Hotels & Restaurants-3.5%
Hilton Hotels Corp. 200,000 4,132,000
Starwood Hotels & Resorts Worldwide, Inc. 200,100 10,463,230
-------------
14,595,230
-------------
Total Common Stocks
(cost $258,540,121) 405,251,133
SHORT-TERM INVESTMENT-2.0%
Time Deposit-2.0%
Bank of New York
1.313%, 12/01/04
(cost $8,152,000) $ 8,152 8,152,000
-------------
Total Investments-100.3%
(cost $266,692,121) 413,403,133
Other assets less liabilities-(0.3%) (1,434,032)
-------------
Net Assets-100% $411,969,101
-------------
See notes to financial statements.
_______________________________________________________________________________
ALLIANCEBERNSTEIN REAL ESTATE INVESTMENT FUND o 9
STATEMENT OF ASSETS & LIABILITIES
November 30, 2004
ASSETS
Investments in securities, at value (cost $266,692,121) $413,403,133
Cash 360
Receivable for investment securities sold 2,380,258
Receivable for capital stock sold 2,140,631
Dividends and interest receivable 204,825
------------
Total assets 418,129,207
------------
LIABILITIES
Payable for investment securities purchased 3,519,917
Payable for capital stock redeemed 2,034,750
Advisory fee payable 181,454
Distribution fee payable 154,661
Transfer agent fee payable 59,741
Administrative fee payable 14,303
Accrued expenses 195,280
------------
Total liabilities 6,160,106
------------
Net Assets $411,969,101
------------
COMPOSITION OF NET ASSETS
Capital stock, at par $216,216
Additional paid-in capital 321,484,701
Accumulated net realized loss on investment transactions (56,442,828)
Net unrealized appreciation of investments 146,711,012
------------
$411,969,101
------------
CALCULATION OF MAXIMUM OFFERING PRICE
CLASS A SHARES
Net asset value and redemption price per share
($88,161,881/4,604,768 shares of capital
stock issued and outstanding) $19.15
Sales charge--4.25% of public offering price .85
------
Maximum offering price $20.00
------
CLASS B SHARES
Net asset value and offering price per share
($107,942,507/5,677,624 shares of capital
stock issued and outstanding) $19.01
------
CLASS C SHARES
Net asset value and offering price per share
($56,543,441/2,970,690 shares of capital stock
issued and outstanding) $19.03
------
ADVISOR CLASS SHARES
Net asset value, redemption and offering price
per share
($159,321,272/8,368,472 shares of capital
stock issued and outstanding) $19.04
------
See notes to financial statements.
_______________________________________________________________________________
10 o ALLIANCEBERNSTEIN REAL ESTATE INVESTMENT FUND
STATEMENT OF OPERATIONS
Year Ended November 30, 2004
INVESTMENT INCOME
Dividends $10,668,080
Interest 44,020 $10,712,100
------------
EXPENSES
Advisory fee 2,817,620
Distribution fee--Class A 202,533
Distribution fee--Class B 1,048,295
Distribution fee--Class C 498,203
Transfer agency 1,023,974
Custodian 132,960
Administrative 88,601
Registration 80,440
Audit 67,590
Printing 63,626
Legal 51,052
Directors' fees 28,934
Miscellaneous 19,458
------------
Total expenses 6,123,286
Less: expenses waived by the Adviser and
the Transfer Agent (see Note B) (843,816)
Less: expense offset arrangement
(see Note B) (40)
------------
Net expenses 5,279,430
------------
Net investment income 5,432,670
------------
REALIZED AND UNREALIZED GAIN
ON INVESTMENT TRANSACTIONS
Net realized gain on investment
transactions 31,396,460
Net change in unrealized
appreciation/depreciation
of investments 62,617,474
------------
Net gain on investment transactions 94,013,934
------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $99,446,604
------------
See notes to financial statements.
_______________________________________________________________________________
ALLIANCEBERNSTEIN REAL ESTATE INVESTMENT FUND o 11
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
November 30, November 30,
2004 2003
============= =============
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment income $5,432,670 $7,056,142
Net realized gain on investment
transactions 31,396,460 2,161,179
Net change in unrealized
appreciation/depreciation
of investments 62,617,474 70,676,081
------------- -------------
Net increase in net assets from
operations 99,446,604 79,893,402
DIVIDENDS TO SHAREHOLDERS FROM
Net investment income
Class A (2,123,448) (1,825,360)
Class B (2,938,088) (3,493,592)
Class C (1,379,809) (1,402,889)
Advisor Class (4,403,629) (3,448,085)
CAPITAL STOCK TRANSACTIONS
Net increase 9,686,489 13,657,461
------------- -------------
Total increase 98,288,119 83,380,937
NET ASSETS
Beginning of period 313,680,982 230,300,045
------------- -------------
End of period (including distributions in
excess of net investment income and
undistributed net investment income
of $0 and $0, respectively) $411,969,101 $313,680,982
============= =============
See notes to financial statements.
_______________________________________________________________________________
12 o ALLIANCEBERNSTEIN REAL ESTATE INVESTMENT FUND
NOTES TO FINANCIAL STATEMENTS
November 30, 2004
NOTE A
Significant Accounting Policies
AllianceBernstein Real Estate Investment Fund, Inc. (the "Fund") was
incorporated in the state of Maryland on July 15, 1996 as a diversified,
open-end management investment company. The Fund offers Class A, Class B, Class
C and Advisor Class shares. Class A shares are sold with a front-end sales
charge of up to 4.25% for purchases not exceeding $1,000,000. With respect to
purchases of $1,000,000 or more, Class A shares redeemed within one year of
purchase may be subject to a contingent deferred sales charge of 1%. Class B
shares are currently sold with a contingent deferred sales charge which
declines from 4% to zero depending on the period of time the shares are held.
Class B shares will automatically convert to Class A shares eight years after
the end of the calendar month of purchase. Class C shares are subject to a
contingent deferred sales charge of 1% on redemptions made within the first
year after purchase. Advisor Class shares are sold without an initial or
contingent deferred sales charge and are not subject to ongoing distribution
expenses. Advisor Class shares are offered to investors participating in fee
based programs and to certain retirement plan accounts. All four classes of
shares have identical voting, dividend, liquidation and other rights, except
that each class bears different distribution expenses and has exclusive voting
rights with respect to its distribution plan. The financial statements have
been prepared in conformity with U.S. generally accepted accounting principals,
which require management to make certain estimates and assumptions that affect
the reported amounts of assets and liabilities in the financial statements and
amounts of income and expenses during the period. Actual results could differ
from those estimates. Additional information about some of the items discussed
in these Notes to Financial Statements is contained in the Fund's Statement of
Additional Information, which is available upon request. The following is a
summary of significant accounting policies followed by the Fund.
1. Security Valuation
Portfolio securities are valued at their current market value determined on the
basis of market quotations or, if market quotations are not readily available
or are deemed unreliable, at "fair value" as determined in accordance with
procedures established by and under the general supervision of the Fund's Board
of Directors.
In general, the market value of securities which are readily available and
deemed reliable are determined as follows. Securities listed on a national
securities exchange or on a foreign securities exchange are valued at the last
sale price at the close of the exchange or foreign securities exchange. If
there has been no sale on such day, the securities are valued at the mean of
the closing bid and asked prices on such day. Securities listed on more than
one exchange are valued by reference to the principal exchange on which the
securities are traded; securities not listed on an exchange but traded on The
NASDAQ Stock Market, Inc. ("NASDAQ") are valued in accordance with the NASDAQ
Official Closing Price; listed put or
_______________________________________________________________________________
ALLIANCEBERNSTEIN REAL ESTATE INVESTMENT FUND o 13
call options are valued at the last sale price. If there has been no sale on
that day, such securities will be valued at the closing bid prices on that day;
open futures contracts and options thereon are valued using the closing
settlement price or, in the absence of such a price, the most recent quoted bid
price. If there are no quotations available for the day of valuation, the last
available closing settlement price is used; securities traded in the
over-the-counter market, ("OTC") (but excluding securities traded on NASDAQ)
are valued at the mean of the current bid and asked prices as reported by the
National Quotation Bureau or other comparable sources; U.S. Government
securities and other debt instruments having 60 days or less remaining until
maturity are valued at amortized cost if their original maturity was 60 days or
less; or by amortizing their fair value as of the 61st day prior to maturity if
their original term to maturity exceeded 60 days; fixed-income securities,
including mortgage backed and asset backed securities, may be valued on the
basis of prices provided by a pricing service or at a price obtained from one
or more of the major broker/dealers. In cases where broker/dealer quotes are
obtained, Alliance Capital Management, L.P. (the "Adviser") may establish
procedures whereby changes in market yields or spreads are used to adjust, on a
daily basis, a recently obtained quoted price on a security; and OTC and other
derivatives are valued on the basis of a quoted bid price or spread from a
major broker/dealer in such security.
Securities for which market quotations are not readily available (including
restricted securities) or are deemed unreliable are valued at fair value.
Factors considered in making this determination may include, but are not
limited to, information obtained by contacting the issuer, analysts, analysis
of the issuer's financial statements or other available documents. In addition,
the Fund may use fair value pricing for securities primarily traded in non-U.S.
markets because, most foreign markets close well before the Fund values its
securities at 4:00 p.m., Eastern Time. The earlier close of these foreign
markets gives rise to the possibility that significant events, including broad
market moves, may have occurred in the interim and may materially affect the
value of those securities. To account for this, the Fund may frequently value
many of its foreign equity securities using fair value prices based on third
party vendor modeling tools to the extent available.
2. Currency Translation
Assets and liabilities denominated in foreign currencies and commitments under
forward exchange currency contracts are translated into U.S. dollars at the
mean of the quoted bid and asked prices of such currencies against the U.S.
dollar. Purchases and sales of portfolio securities are translated into U.S.
dollars at the rates of exchange prevailing when such securities were acquired
or sold. Income and expenses are translated into U.S. dollars at rates of
exchange prevailing when accrued.
Net realized gain or loss on foreign currency transactions represents foreign
exchange gains and losses from sales and maturities of foreign fixed income
investments, foreign currency exchange contracts, holding of foreign
currencies,
_______________________________________________________________________________
14 o ALLIANCEBERNSTEIN REAL ESTATE INVESTMENT FUND
currency gains or losses realized between the trade and settlement dates on
foreign investment transactions, and the difference between the amounts of
dividends, interest and foreign withholding taxes recorded on the Fund's books
and the U.S. dollar equivalent amounts actually received or paid. Net
unrealized currency gains and losses from valuing foreign currency denominated
assets and liabilities at period end exchange rates are reflected as a
component of net unrealized appreciation and depreciation of investments and
foreign currency denominated assets and liabilities.
3. Taxes
It is the Fund's policy to meet the requirements of the Internal Revenue Code
applicable to regulated investment companies and to distribute all of its
investment company taxable income and net realized gains, if any, to
shareholders. Therefore, no provisions for federal income or excise taxes are
required. The Fund may be subject to taxes imposed by countries in which it
invests. Such taxes are generally based on income and/or capital gains earned
or repatriated. Taxes are accrued and applied to net investment income, net
realized gains and net unrealized appreciation/depreciation as such income
and/or gains are earned.
4. Investment Income and Investment Transactions
Dividend income is recorded on the ex-dividend date or as soon as the Fund is
informed of the dividend. Interest income is accrued daily. Investment
transactions are accounted for on the date securities are purchased or sold.
Investment gains and losses are determined on the identified cost basis. The
Fund accretes discounts as adjustments to interest income.
5. Income and Expenses
All income earned and expenses incurred by the Fund are borne on a pro-rata
basis by each outstanding class of shares, based on the proportionate interest
in the Fund represented by the shares of such class, except that the Fund's
Class B and Class C shares bear higher distribution and transfer agent fees
than Class A and Advisor Class shares. Advisor Class shares have no
distribution fee.
6. Dividends and Distributions
Dividends and distributions to shareholders, if any, are recorded on the
ex-dividend date. Income and capital gains distributions are determined in
accordance with federal tax regulations and may differ from those determined in
accordance with U.S. generally accepted accounting principles. To the extent
these differences are permanent, such amounts are reclassified within the
capital accounts based on their federal tax basis treatment; temporary
differences do not require such reclassification.
_____________________________________________________________________________
ALLIANCEBERNSTEIN REAL ESTATE INVESTMENT FUND o 15
NOTE B
Advisory Fee and Other Transactions with Affiliates
Until September 6, 2004, under the terms of an investment advisory agreement,
the Fund paid the Adviser an advisory fee at an annual rate of .90% of the
Fund's average daily net assets. Effective September 7, 2004, the terms of the
investment advisory agreement were amended so that the advisory fee was reduced
to an annual rate of .55% of the first $2.5 billion, .45% of the next $2.5
billion and .40% in excess of $5 billion, of the Fund's average daily net
assets. The fee is accrued daily and paid monthly.
Effective January 1, 2004 through September 6, 2004, in contemplation of the
final agreement with the Office of New York Attorney General ("NYAG"), the
Adviser began waiving a portion of its advisory fee so as to charge the Fund at
the reduced annual rate discussed above. Through September 6, 2004, such waiver
amounted to $809,161. For a more complete discussion of the Adviser's
settlement with the NYAG, please see "Legal Proceedings" below.
Pursuant to the advisory agreement, the Adviser provides certain legal and
accounting services to the Fund. For the year ended November 30, 2004, such
fees amounted to $88,601.
The Fund compensates Alliance Global Investor Services, Inc. (AGIS), a
wholly-owned subsidiary of the Adviser, under a Transfer Agency Agreement for
providing personnel and facilities to perform transfer agency services for the
Fund. Such compensation amounted to $646,313 for the year ended November 30,
2004. During the period, AGIS voluntarily agreed to waive a portion of its fees
for such services. Such waiver amounted to $34,655.
For the year ended November 30, 2004, the Fund's expenses were reduced by $40
under an expense offset arrangement with AGIS.
AllianceBernstein Investment Research and Management, Inc., (the
"Distributor"), formerly Alliance Fund Distributors, Inc., a wholly-owned
subsidiary of the Adviser, serves as the distributor of the Fund's shares. The
Distributor has advised the Fund that it has retained front-end sales charges
of $9,117 from the sale of Class A shares and received $1,676, $91,336 and
$4,499 in contingent deferred sales charges imposed upon redemptions by
shareholders of Class A, Class B and Class C shares, respectively, for the year
ended November 30, 2004.
Brokerage commissions paid on investment transactions for the year ended
November 30, 2004, amounted to $376,355, of which $94,482 was paid to Sanford
C. Bernstein Co., LLC, an affiliate of the Adviser.
______________________________________________________________________________
16 o ALLIANCEBERNSTEIN REAL ESTATE INVESTMENT FUND
NOTE C
Distribution Services Agreement
The Fund has adopted a Distribution Services Agreement (the "Agreement")
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the
Agreement, the Fund pays distribution and servicing fees to the Distributor at
an annual rate of up to .30% of the Fund's average daily net assets
attributable to Class A shares and 1% of the Fund's average daily net assets
attributable to both Class B and Class C shares. There are no distribution and
servicing fees on the Advisor Class shares. The fees are accrued daily and paid
monthly. The Agreement provides that the Distributor will use such payments in
their entirety for distribution assistance and promotional activities. The
Distributor has advised the Fund that it has incurred expenses in excess of the
distribution costs reimbursed by the Fund in the amount of $10,386,879 and
$1,625,077, for Class B and C shares, respectively; such costs may be recovered
from the Fund in future periods so long as the Agreement is in effect. In
accordance with the Agreement, there is no provision for recovery of
unreimbursed distribution costs incurred by the Distributor beyond the current
fiscal year for Class A shares. The Agreement also provides that the Adviser
may use its own resources to finance the distribution of the Fund's shares.
NOTE D
Investment Transactions
Purchases and sales of investment securities (excluding short-term investments)
for the year ended November 30, 2004 were as follows:
Purchases Sales
============= =============
Investment securities (excluding
U.S. government securities) $140,065,915 $134,448,328
U.S. government securities -0- -0-
The cost of investments for federal income tax purposes, gross unrealized
appreciation and unrealized depreciation are as follows:
Cost $267,798,839
Gross unrealized appreciation $145,604,294
Gross unrealized depreciation -0-
-------------
Net unrealized appreciation $145,604,294
_______________________________________________________________________________
ALLIANCEBERNSTEIN REAL ESTATE INVESTMENT FUND o 17
NOTE E
Capital Stock
There are 12,000,000,000 shares of $0.01 par value capital stock authorized,
divided into four classes, designated Class A, Class B, Class C and Advisor
Class shares. Each consists of 3,000,000,000 authorized shares. Transactions in
capital stock were as follows:
Shares Amount
---------------------------------------------------------------
Year Ended Year Ended Year Ended Year Ended
November 30, November 30, November 30, November 30,
2004 2003 2004 2003
---------------------------------------------------------------
Class A
Shares sold 2,172,366 5,286,964 $35,850,337 $65,564,174
Shares issued in
reinvestment of
dividends 99,633 108,173 1,622,179 1,338,541
Shares converted
from Class B 238,690 639,290 4,167,049 7,791,481
Shares redeemed (1,777,561) (5,255,265) (28,604,884) (65,402,372)
Net increase 733,128 779,162 $13,034,681 $9,291,824
Class B
Shares sold 1,025,340 1,172,711 $16,838,111 $14,980,278
Shares issued in
reinvestment of
dividends 130,155 190,600 2,100,563 2,340,218
Shares converted
to Class A (240,057) (641,342) (4,167,049) (7,791,481)
Shares redeemed (2,388,992) (2,227,699) (38,357,397) (27,793,997)
Net decrease (1,473,554) (1,505,730) $(23,585,772) $(18,264,982)
Class C
Shares sold 663,469 762,170 $10,815,929 $9,913,486
Shares issued in
reinvestment of
dividends 45,712 57,775 739,088 713,481
Shares redeemed (949,142) (728,585) (15,201,528) (9,422,193)
Net increase
(decrease) (239,961) 91,360 $(3,646,511) $1,204,774
_______________________________________________________________________________
18 o ALLIANCEBERNSTEIN REAL ESTATE INVESTMENT FUND
Shares Amount
---------------------------------------------------------------
Year Ended Year Ended Year Ended Year Ended
November 30, November 30, November 30, November 30,
2004 2003 2004 2003
---------------------------------------------------------------
Advisor Class
Shares sold 1,341,210 1,571,498 $21,592,616 $19,754,370
Shares issued in
reinvestment of
dividends 270,363 276,848 4,371,116 3,420,318
Shares redeemed (128,977) (141,581) (2,079,641) (1,748,843)
Net increase 1,482,596 1,706,765 $23,884,091 $21,425,845
NOTE F
Risks Involved in Investing in the Fund
Concentration of Risk--Although the Fund does not invest directly in real
estate, it invests primarily in Real Estate Equity Securities and has a policy
of concentration of its investments in the real estate industry. Therefore, an
investment in the Fund is subject to certain risks associated with the direct
ownership of real estate and with the real estate industry in general. To the
extent that assets underlying the Fund's investments are concentrated
geographically, by property type or in certain other respects, the Fund may be
subject to additional risks.
In addition, investing in Real Estate Investment Trusts ("REITs") involves
certain unique risks in addition to those risks associated with investing in
the real estate industry in general. REITs are dependent upon management
skills, are not diversified, and are subject to heavy cash flow dependency,
default by borrowers and self-liquidation. REITs are also subject to the
possibilities of failing to qualify for tax-free pass-through of income under
the Code and failing to maintain their exemptions from registration under the
1940 Act. REITs (especially mortgage REITs) also are subject to interest rate
risks.
Indemnification Risk--In the ordinary course of business, the Fund enters into
contracts that contain a variety of indemnifications.The Fund's maximum
exposure under these arrangements is unknown. However, the Fund has not had
prior claims or losses pursuant to these indemnification provisions and expects
the risk of loss thereunder to be remote.
NOTE G
Joint Credit Facility
A number of open-end mutual funds managed by the Adviser, including the Fund,
participate in a $500 million revolving credit facility (the "Facility")
intended to provide short-term financing if necessary, subject to certain
restrictions in connection with abnormal redemption activity. Commitment fees
related to the Facility are paid by the participating funds and are included in
_______________________________________________________________________________
ALLIANCEBERNSTEIN REAL ESTATE INVESTMENT FUND o 19
miscellaneous expenses in the statement of operations. The Fund did not utilize
the Facility during the year ended November 30, 2004.
NOTE H
Distributions to Shareholders
The tax character of distributions paid during the fiscal years ended November
30, 2004 and November 30, 2003 were as follows:
2004 2003
----------- -----------
Distributions paid from:
Ordinary income $10,844,974 $10,169,926
----------- -----------
Total taxable distributions 10,844,974 10,169,926
----------- -----------
Total distributions paid $10,844,974 $10,169,926
----------- -----------
As of November 30, 2004, the components of accumulated earnings/(deficit)
on a tax basis were as follows:
Accumulated capital and other losses $(55,336,110)(a)
Unrealized appreciation/(depreciation) 145,604,294(b)
-----------------
Total accumulated earnings/(deficit) $90,268,184
-----------------
(a) On November 30, 2004, the Fund had a net capital loss carryforward of
$55,336,110, of which $15,393,240 expires in the year 2007 and $39,942,870
expires in 2008. To the extent future capital gains are offset by capital loss
carryforward, such gains will not be distributed. During the fiscal year, the
Fund utilized loss carryforward of $31,294,128.
(b) The difference between book-basis and tax-basis unrealized
appreciation/(depreciation) is attributable primarily to the tax deferral of
losses on wash sales.
During the current fiscal year, permanent differences, primarily due to
distributions in excess of net investment income, resulted in a net decrease in
distribution in excess of net investment income and a corresponding decrease in
additional paid in capital. This reclassification had no effect on net assets.
NOTE I
Legal Proceedings
As has been previously reported, the staff of the U.S. Securities and Exchange
Commission ("SEC") and the NYAG have been investigating practices in the mutual
fund industry identified as "market timing" and "late trading" of mutual fund
shares. Certain other regulatory authorities have also been conducting
investigations into these practices within the industry and have requested that
the Adviser provide information to them. The Adviser has been cooperating and
will continue to cooperate with all of these authorities.
On December 18, 2003, the Adviser confirmed that it had reached terms with the
SEC and the NYAG for the resolution of regulatory claims relating to the
practice of "market timing" mutual fund shares in some of the AllianceBernstein
Mutual Funds. The agreement with the SEC is reflected in an Order of the
_______________________________________________________________________________
20 o ALLIANCEBERNSTEIN REAL ESTATE INVESTMENT FUND
Commission ("SEC Order"). The agreement with the NYAG is memorialized in an
Assurrance of Discontinuance dated September 1, 2004 ("NYAG Order"). Among the
key provisions of these agreements are the following:
(i) The Adviser agreed to establish a $250 million fund (the "Reimbursement
Fund") to compensate mutual fund shareholders for the adverse effects of market
timing attributable to market timing relationships described in the SEC Order.
According to the SEC Order, the Reimbursement Fund is to be paid, in order of
priority, to fund investors based on (i) their aliquot share of losses suffered
by the fund due to market timing, and (ii) a proportionate share of advisory
fees paid by such fund during the period of such market timing;
(ii) The Adviser agreed to reduce the advisory fees it receives from some of
the AllianceBernstein long-term, open-end retail funds until December 31, 2008;
and
(iii) The Adviser agreed to implement changes to its governance and compliance
procedures. Additionally, the SEC Order and the NYAG Order contemplate that the
Adviser's registered investment company clients, including the Fund, will
introduce governance and compliance changes.
In anticipation of final, definitive documentation of the NYAG Order and
effective January 1, 2004, the Adviser began waiving a portion of its advisory
fee. On September 7, 2004, the Fund's investment advisory agreement was amended
to reflect the reduced advisory fee. For more information on this waiver and
amendment to the Fund's investment advisory agreement, please see "Advisory Fee
and Other Transactions with Affiliates" above.
A special committee of the Adviser's Board of Directors, comprised of the
members of the Adviser's Audit Committee and the other independent member of
the Adviser's Board, is continuing to direct and oversee an internal
investigation and a comprehensive review of the facts and circumstances
relevant to the SEC's and the NYAG's investigations.
In addition, the Independent Directors of the Fund ("the Independent
Directors") have initiated an investigation of the above-mentioned matters with
the advice of an independent economic consultant and independent counsel. The
Independent Directors have formed a special committee to supervise the
investigation.
On October 2, 2003, a putative class action complaint entitled Hindo et al. v.
AllianceBernstein Growth & Income Fund et al. (the "Hindo Complaint") was filed
against the Adviser; Alliance Capital Management Holding L.P.; Alliance Capital
Management Corporation; AXA Financial, Inc.; certain of the
_______________________________________________________________________________
ALLIANCEBERNSTEIN REAL ESTATE INVESTMENT FUND o 21
AllianceBernstein Mutual Funds, including the Fund; Gerald Malone; Charles
Schaffran (collectively, the "Alliance Capital defendants"); and certain other
defendants not affiliated with the Adviser. The Hindo Complaint was filed in
the United States District Court for the Southern District of New York by
alleged shareholders of two of the AllianceBernstein Mutual Funds. The Hindo
Complaint alleges that certain of the Alliance Capital defendants failed to
disclose that they improperly allowed certain hedge funds and other
unidentified parties to engage in late trading and market timing of
AllianceBernstein Fund securities, violating Sections 11 and 15 of the
Securities Act, Sections 10(b) and 20(a) of the Exchange Act, and Sections 206
and 215 of the Advisers Act. Plaintiffs seek an unspecified amount of
compensatory damages and rescission of their contracts with the Adviser,
including recovery of all fees paid to the Adviser pursuant to such contracts.
Since October 2, 2003, numerous additional lawsuits making factual allegations
similar to those in the Hindo Complaint were filed against the Adviser and
certain other defendants, some of which name the Fund as a defendant. All of
these lawsuits seek an unspecified amount of damages. The lawsuits are now
pending in the United States District Court for the District of Maryland
pursuant to a ruling by the Judicial Panel on Multidistrict Litigation
transferring and centralizing all of the mutual fund cases involving market and
late trading in the District of Maryland.
As a result of the matters discussed above, investors in the AllianceBernstein
Mutual Funds may choose to redeem their investments. This may require the
AllianceBernstein Mutual Funds to sell investments held by those funds to
provide for sufficient liquidity and could also have an adverse effect on the
investment performance of the AllianceBernstein Mutual Funds.
The Adviser and approximately twelve other investment management firms were
publicly mentioned in connection with the settlement by the SEC of charges that
an unaffiliated broker/dealer violated federal securities laws relating to its
receipt of compensation for selling specific mutual funds and the disclosure of
such compensation. The SEC has indicated publicly that, among other things, it
is considering enforcement action in connection with mutual funds' disclosure
of such arrangements and in connection with the practice of considering mutual
fund sales in the direction of brokerage commissions from fund portfolio
transactions. The SEC has issued subpoenas to the Adviser in connection with
this matter and the Adviser has provided documents and other information to the
SEC and is cooperating fully with its investigation.
On June 22, 2004, a purported class action complaint entitled Aucoin, et al. v.
Alliance Capital Management L.P., et al. ("Aucoin Complaint") was filed against
the Adviser, Alliance Capital Management Holding L.P., Alliance Capital
Management Corporation, AXA Financial, Inc., AllianceBernstein Investment
______________________________________________________________________________
22 o ALLIANCEBERNSTEIN REAL ESTATE INVESTMENT FUND
Research & Management, Inc., certain current and former directors of the
AllianceBernstein Mutual Funds, and unnamed Doe defendants. The Aucoin
Complaint names certain of the AllianceBernstein mutual funds as nominal
defendants. The Aucoin Complaint was filed in the United States District Court
for the Southern District of New York by an alleged shareholder of an
AllianceBernstein mutual fund. The Aucoin Complaint alleges, among other
things, (i) that certain of the defendants improperly authorized the payment of
excessive commissions and other fees from fund assets to broker-dealers in
exchange for preferential marketing services, (ii) that certain of the
defendants misrepresented and omitted from registration statements and other
reports material facts concerning such payments, and (iii) that certain
defendants caused such conduct as control persons of other defendants. The
Aucoin Complaint asserts claims for violation of Sections 34(b), 36(b) and
48(a) of the Investment Company Act, Sections 206 and 215 of the Advisers Act,
breach of common law fiduciary duties, and aiding and abetting breaches of
common law fiduciary duties. Plaintiffs seek an unspecified amount of
compensatory damages and punitive damages, rescission of their contracts with
the Adviser, including recovery of all fees paid to the Adviser pursuant to
such contracts, an accounting of all fund-related fees, commissions and soft
dollar payments, and restitution of all unlawfully or discriminatorily obtained
fees and expenses.
Since June 22, 2004, numerous additional lawsuits making factual allegations
substantially similar to those in the Aucoin Complaint were filed against the
Adviser and certain other defendants, and others may be filed.
It is possible that these matters and/or other developments resulting from
these matters could result in increased redemptions of the Fund's shares or
other adverse consequences to the Fund. However, the Adviser believes that
these matters are not likely to have a material adverse effect on its ability
to perform advisory services relating to the Fund.
_______________________________________________________________________________
ALLIANCEBERNSTEIN REAL ESTATE INVESTMENT FUND o 23
FINANCIAL HIGHLIGHTS
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class A
---------------------------------------------------------------------------
September 1, Year
2000 to Ended
Year Ended November 30, November August
----------------------------------------------- 30, 31,
2004 2003 2002 2001 2000* 2000
---------------------------------------------------------------------------
Net asset value,
beginning of period $14.90 $11.52 $11.47 $10.70 $10.85 $10.19
Income From
Investment Operations
Net investment income(a) .27(b) .37 .34 .32 .13 .37
Net realized and unrealized
gain (loss) on investment
transactions 4.50 3.53 .23 .97 (.13) .89
Net increase in net asset value
from operations 4.77 3.90 .57 1.29 -0- 1.26
Less: Dividends and
Distributions
Dividends from
net investment income (.52) (.52) (.32) (.32) (.10) (.42)
Tax return of capital -0- -0- (.20) (.20) (.05) (.18)
Total dividends
and distributions (.52) (.52) (.52) (.52) (.15) (.60)
Net asset value, end
of period $19.15 $14.90 $11.52 $11.47 $10.70 $10.85
Total Return
Total investment return based on
net asset value(c) 32.70% 34.89% 4.85% 12.33% (.05)% 13.46%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $88,162 $57,701 $35,626 $22,422 $20,942 $22,221
Ratio to average net assets of:
Expenses, net of
waivers/reimbursements 1.31% 1.74% 1.75% 1.78% 1.87%(d) 1.71%
Expenses, before
waivers/reimbursements 1.55% 1.74% 1.75% 1.78% 1.87%(d) 1.71%
Net investment income 1.67% 2.84% 2.87% 2.84% 4.98%(d) 3.81%
Portfolio turnover rate 39% 30% 37% 40% 6% 26%
See footnote summary on page 27.
_______________________________________________________________________________
24 o ALLIANCEBERNSTEIN REAL ESTATE INVESTMENT FUND
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class B
---------------------------------------------------------------------------
September 1, Year
2000 to Ended
Year Ended November 30, November August
----------------------------------------------- 30, 31,
2004 2003 2002 2001 2000* 2000
---------------------------------------------------------------------------
Net asset value,
beginning of period $14.84 $11.48 $11.44 $10.68 $10.84 $10.17
Income From
Investment Operations
Net investment income(a) .20(b) .30 .28 .28 .11 .30
Net realized and unrealized
gain (loss) on investment
transactions 4.42 3.51 .21 .93 (.14) .89
Net increase (decrease) in net asset
value from operations 4.62 3.81 .49 1.21 (.03) 1.19
Less: Dividends and
Distributions
Dividends from
net investment income (.45) (.45) (.28) (.28) (.09) (.36)
Tax return of capital -0- -0- (.17) (.17) (.04) (.16)
Total dividends
and distributions (.45) (.45) (.45) (.45) (.13) (.52)
Net asset value, end
of period $19.01 $14.84 $11.48 $11.44 $10.68 $10.84
Total Return
Total investment return based on
net asset value(c) 31.69% 34.05% 4.15% 11.53% (.31)% 12.68%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $107,943 $106,147 $99,370 $98,014 $108,711 $113,542
Ratio to average net assets of:
Expenses, net of
waivers/reimbursements 2.03% 2.47% 2.47% 2.50% 2.57%(d) 2.41%
Expenses, before
waivers/reimbursements 2.27% 2.47% 2.47% 2.50% 2.57%(d) 2.41%
Net investment income 1.22% 2.40% 2.35% 2.53% 4.22%(d) 3.13%
Portfolio turnover rate 39% 30% 37% 40% 6% 26%
See footnote summary on page 27.
_______________________________________________________________________________
ALLIANCEBERNSTEIN REAL ESTATE INVESTMENT FUND o 25
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class C
---------------------------------------------------------------------------
September 1, Year
2000 to Ended
Year Ended November 30, November August
----------------------------------------------- 30, 31,
2004 2003 2002 2001 2000* 2000
---------------------------------------------------------------------------
Net asset value,
beginning of period $14.86 $11.49 $11.46 $10.69 $10.85 $10.17
Income From
Investment Operations
Net investment income(a) .18(b) .29 .28 .28 .11 .29
Net realized and unrealized
gain (loss) on investment
transactions 4.44 3.53 .20 .94 (.14) .91
Net increase (decrease) in net asset
value from operations 4.62 3.82 .48 1.22 (.03) 1.20
Less: Dividends and
Distributions
Dividends from
net investment income (.45) (.45) (.28) (.28) (.09) (.36)
Tax return of capital -0- -0- (.17) (.17) (.04) (.16)
Total dividends
and distributions (.45) (.45) (.45) (.45) (.13) (.52)
Net asset value, end
of period $19.03 $14.86 $11.49 $11.46 $10.69 $10.85
Total Return
Total investment return based on
net asset value(c) 31.65% 34.10% 4.06% 11.62% (.31)% 12.78%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $56,543 $47,698 $35,845 $34,699 $33,463 $34,217
Ratio to average net assets of:
Expenses, net of
waivers/reimbursements 2.02% 2.46% 2.46% 2.49% 2.58%(d) 2.40%
Expenses, before
waivers/reimbursements 2.26% 2.46% 2.46% 2.49% 2.58%(d) 2.40%
Net investment income 1.11% 2.31% 2.35% 2.50% 4.21%(d) 3.02%
Portfolio turnover rate 39% 30% 37% 40% 6% 26%
See footnote summary on page 27.
_______________________________________________________________________________
26 o ALLIANCEBERNSTEIN REAL ESTATE INVESTMENT FUND
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Advisor Class
---------------------------------------------------------------------------
September 1, Year
2000 to Ended
Year Ended November 30, November August
----------------------------------------------- 30, 31,
2004 2003 2002 2001 2000* 2000
---------------------------------------------------------------------------
Net asset value,
beginning of period $14.83 $11.48 $11.46 $10.71 $10.87 $10.20
Income From
Investment Operations
Net investment income(a) .32(b) .40 .21 .37 .14 .38
Net realized and unrealized
gain (loss) on investment
transactions 4.47 3.53 .39 .96 (.14) .92
Net increase in net asset value
from operations 4.79 3.93 .60 1.33 -0- 1.30
Less: Dividends and
Distributions
Dividends from
net investment income (.58) (.58) (.36) (.37) (.11) (.44)
Tax return of capital -0- -0- (.22) (.21) (.05) (.19)
Total dividends
and distributions (.58) (.58) (.58) (.58) (.16) (.63)
Net asset value, end
of period $19.04 $14.83 $11.48 $11.46 $10.71 $10.87
Total Return
Total investment return based on
net asset value(c) 33.07% 35.40% 5.12% 12.74% (.07)% 13.94%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $159,321 $102,135 $59,459 $1,831 $1,925 $1,943
Ratio to average net assets of:
Expenses, net of
waivers/reimbursements 1.00% 1.44% 1.51% 1.48% 1.58%(d) 1.40%
Expenses, before
waivers/reimbursements 1.25% 1.44% 1.51% 1.48% 1.58%(d) 1.40%
Net investment income 1.97% 3.17% 1.73% 3.27% 5.21%(d) 3.83%
Portfolio turnover rate 39% 30% 37% 40% 6% 26%
(a) Based on average shares outstanding.
(b) Net of expenses waived by the Adviser and Transfer Agent.
(c) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period. Initial sales charge or contingent
deferred sales charge is not reflected in the calculation of total investment
return. Total return does not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares. Total
investment return calculated for a period of less than one year is not
annualized.
(d) Annualized.
* During the year 2000, the Fund changed its fiscal year end from August 31 to
November 30.
_______________________________________________________________________________
ALLIANCEBERNSTEIN REAL ESTATE INVESTMENT FUND o 27
REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
To the Shareholders and Board of Directors of
AllianceBernstein Real Estate Investment Fund, Inc.
We have audited the accompanying statement of assets and liabilities of
AllianceBernstein Real Estate Investment Fund, Inc. (the "Fund"), including the
portfolio of investments, as of November 30, 2004, and the related statement of
operations for the year then ended, the statement of changes in net assets for
each of the two years in the period then ended, and the financial highlights
for each of the periods indicated therein. These financial statements and
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assur-ance about whether the
financial statements and financial highlights are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements and financial
highlights. Our procedures included confirmation of securities owned as of
November 30, 2004, by correspondence with the custodian and others. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
AllianceBernstein Real Estate Investment Fund, Inc. at November 30, 2004, and
the results of its operations for the year then ended, the changes in its net
assets for each of the two years in the period then ended, and the financial
highlights for each of the indicated periods, in conformity with U.S. generally
accepted accounting principles.
/s/ Ernst & Young LLP
New York, New York
January 10, 2005
_______________________________________________________________________________
28 o ALLIANCEBERNSTEIN REAL ESTATE INVESTMENT FUND
BOARD OF DIRECTORS
William H. Foulk, Jr.(1), Chairman
Marc O. Mayer, President
Ruth Block(1)
David H. Dievler(1)
John H. Dobkin(1)
Michael J. Downey
Howard E. Hassler(1)
OFFICERS(2)
Philip L. Kirstein, Senior Vice President and Independent Compliance Officer
Teresa Marziano, Senior Vice President
Joseph G. Paul, Senior Vice President
Thomas Bardong, Vice President
Mark R. Manley, Secretary
Mark D. Gersten, Treasurer and Chief Financial Officer
Vincent S. Noto, Controller
Custodian
The Bank of New York
One Wall Street
New York, NY 10286
Principal Underwriter
AllianceBernstein Investment Research and Management, Inc.
1345 Avenue of the Americas
New York, NY 10105
Legal Counsel
Seward & Kissel LLP
One Battery Park Plaza
New York, NY 10004
Independent Registered Public
Accounting Firm
Ernst & Young LLP
5 Times Square
New York, NY 10036
Transfer Agent
Alliance Global Investor Services, Inc.
P.O. Box 786003
San Antonio, TX 78278-6003
Toll-free (800) 221-5672
(1) Member of the Audit Committee and Governance and Nominating Committee.
(2) The day-to-day management of and investment decisions for the Fund's
portfolio are made by the REIT Investment Policy Group, comprised of senior
members of the Adviser's Value Team. No one person is principally responsible
for making recommendations for the Fund's portfolio.
_______________________________________________________________________________
ALLIANCEBERNSTEIN REAL ESTATE INVESTMENT FUND o 29
MANAGEMENT OF THE FUND
Board of Directors Information
The business and affairs of the Fund are managed under the direction of the
Board of Directors. Certain information concerning the Fund's Directors is set
forth below.
PORTFOLIOS
IN FUND OTHER
NAME, ADDRESS, PRINCIPAL COMPLEX DIRECTORSHIPS
DATE OF BIRTH, OCCUPATION(S) OVERSEEN BY HELD BY
(YEAR ELECTED*) DURING PAST 5 YEARS DIRECTOR DIRECTOR
- ---------------------------------------------------------------------------------------------------------------
DISINTERESTED DIRECTORS
William H. Foulk, Jr., # Investment Adviser and an 113 None
Suite 100 independent consultant. He
2 Sound View Drive was formerly Senior Manager
Greenwich, CT 06830 of Barrett Associates, Inc., a
Chairman of the Board registered investment adviser,
9/7/32 with which he had been associated
(1997) since prior to 2000. He was
formerly Deputy Comptroller and
Chief Investment Officer of the
State of New York and, prior
thereto, Chief Investment Officer
of the New York Bank for Savings.
Ruth Block, #+ Formerly Executive Vice President 94 None
500 S.E. Mizner Blvd. and Chief Insurance Officer of
Boca Raton, FL 33432 The Equitable Life Assurance
11/11/30 Society of the United States;
(1997) Chairman and Chief Executive
Officer of Evlico; Director of Avon,
BP (oil and gas), Ecolab Incorporated
(specialty chemicals), Tandem Financial
Group and Donaldson, Lufkin &
Jenrette Securities Corporation; former
Governor at Large, National
Association of Securities Dealers, Inc.
David H. Dievler, # Independent consultant. Until 98 None
P.O. Box 167 December 1994 he was Senior
Spring Lake, NJ 07762 Vice President of Alliance Capital
10/23/29 Management Corporation ("ACMC")
(1997) responsible for mutual fund
administration. Prior to joining ACMC
in 1984, he was Chief Financial Officer
of Eberstadt Asset Management since
1968. Prior to that, he was a Senior
Manager at Price Waterhouse &
Co. Member of American Institute
of Certified Public Accountants
since 1953.
John H. Dobkin, # Consultant. Formerly President 96 None
P.O. Box 12 of Save Venice, Inc. (preservation
Annandale, NY 12504 organization) from 2001-2002;
2/19/42 Senior Advisor from June 1999 -
(1997) June 2000 and President of Historic
Hudson Valley (historic preservation)
from December 1989 - May 1999.
Previously, Director of the National
Academy of Design and during 1988-
1992, Director and Chairman of the
Audit Committee of ACMC.
_______________________________________________________________________________
30 o ALLIANCEBERNSTEIN REAL ESTATE INVESTMENT FUND
PORTFOLIOS
IN FUND OTHER
NAME, ADDRESS, PRINCIPAL COMPLEX DIRECTORSHIPS
DATE OF BIRTH, OCCUPATION(S) OVERSEEN BY HELD BY
(YEAR ELECTED*) DURING PAST 5 YEARS DIRECTOR DIRECTOR
- ---------------------------------------------------------------------------------------------------------------
DISINTERESTED DIRECTORS
(continued)
Micheal J. Downey Consultant since January 2004. 66 Asia
c/o Alliance Capital Formerly managing partner of Pacific
Management L.P. Lexington Capital, LLC (investment Fund, Inc.,
1345 Avenue of the advisory firm) from 1997 until and The
Americas December 2003. Prior thereto, Merger
New York, NY 10105 Chairman and CEO of Prudential Fund
1/26/44 Mutual Fund Management
(2005) (1987-1993).
Howard E. Hassler,# Currently a consultant specializing 1 None
25 Sutton Place South in retailing, finance and real estate.
New York, NY 10022 Formerly he was Chairman and
6/9/29 Chief Executive Officer of Brooks
(1997) Fashion Stores, Inc. (specialty clothing
stores); Chairman, President and Chief
Operating Officer of Allied Stores
Corporation (department and specialty stores),
Executive Vice President, Chief Financial
and Accounting Officer and Director, Allied
Stores Corporation.
INTERESTED DIRECTORS
Marc O. Mayer,** Executive Vice President of ACMC 66 None
1345 Avenue of the since 2001; prior thereto, Chief
Americas Executive Officer of Sanford C.
New York, NY 10105 Bernstein & Co., LLC and its
10/2/57 predecessor since prior to
(2003) 2000.
* There is no stated term of office for the Fund's Directors.
** Mr. Mayer is an "interested person," as defined in the 1940 Act, due to his
position as an Executive Vice President of ACMC.
# Member of the Audit Committee and Governance and Nominating Committee.
+ Ms. Block was an "interested person", as defined in the 1940 Act, until
October 21, 2004 by reason of her ownership of 116 American Depositary Shares
of AXA having a value of approximately $2,396. AXA is a controlling person of
ACMC. Ms. Block received shares of The Equitable Companies Incorporated as part
of the demutualization of The Equitable Life Assurance Society of the United
States, which were subsequently converted through a corporate action into 116
American Depositary Shares of AXA.
_______________________________________________________________________________
ALLIANCEBERNSTEIN REAL ESTATE INVESTMENT FUND o 31
Officer Information
Certain information concerning the Fund's officers is set forth below.
NAME, ADDRESS* POSITION(S) HELD PRINCIPAL OCCUPATION
AND DATE OF BIRTH WITH FUND DURING PAST 5 YEARS
- --------------------------------------------------------------------------------------------------------------
Marc O. Mayer President See biography above.
10/2/57
Philip L. Kirstein Senior Vice President Senior Vice President and Independent
5/29/45 and Independent Compliance Officer--Mutual Funds
Compliance of ACMC** with which he has been associated
since October 2004. Prior thereto, he was
Of Counsel to Kirkpatrick & Lockhart, LLP
from October 2003 to October 2004, and
General Counsel and First Vice President of
Merrill Lynch Investment Managers, L.P.
since prior to 2000 until March 2003.
Teresa Marziano Senior Vice President Senior Vice President of ACMC** since
9/1/54 October 2000 and co-Chief Investment
Officer of Real Estate Investments since
July 2004. Prior thereto, she was a Senior
Analyst of investment research at Sanford
C. Bernstein & Co., Inc. ("SCB & Co.")**
since prior to 2000.
Joseph G. Paul Senior Vice President Senior Vice President of ACMC**, co-
2/8/60 Chief Investment Officer of Real Estate
Investments since July 2004; and Chief
Investment Officer of Small and Mid
Capitalization Value Equities since
2002. He is also Chief Investment Officer
of Advanced Value at ACMC since October
2000, and held the same position at SCB &
Co.** since prior to 2000.
Thomas J. Bardong Vice President Senior Vice President of ACMC,** with which
4/28/45 he has been associated since prior to 2000.
Mark R. Manley Secretary Senior Vice President, Deputy General
10/23/62 Counsel and Chief Compliance Officer of
ACMC,** with which he has been associated
since prior to 2000.
Mark D. Gersten Treasurer and Chief Senior Vice President of Alliance Global
10/4/50 Financial Officer Investor Services, Inc. ("AGIS")** and
Vice President of AllianceBernstein
Investment Research and Management, Inc.
("ABIRM"),** with which he has been
associated since prior to 2000.
Vincent S. Noto Controller Vice President of AGIS,** with which he
12/14/64 has been associated since prior to 2000.
* The address for each of the Fund's Officers is 1345 Avenue of the Americas,
New York, NY 10105.
** ACMC, ABIRM and AGIS are affiliates of the Fund.
The Fund's Statement of Additional Information ("SAI") has additional
information about the Fund's Directors and Officers and is available without
charge upon request. Contact your financial representative or Alliance Capital
at (800) 227-4618 for a free prospectus or SAI.
_______________________________________________________________________________
32 o ALLIANCEBERNSTEIN REAL ESTATE INVESTMENT FUND
ALLIANCEBERNSTEIN FAMILY OF FUNDS
- --------------------------------------------
Wealth Strategies Funds
- --------------------------------------------
Balanced Wealth Strategy
Wealth Appreciation Strategy
Wealth Preservation Strategy
Tax-Managed Balanced Wealth Strategy
Tax-Managed Wealth Appreciation Strategy
Tax-Managed Wealth Preservation Strategy
- --------------------------------------------
Blended Style Funds
- --------------------------------------------
U.S. Large Cap Portfolio
International Portfolio
Tax-Managed International Portfolio
- --------------------------------------------
Growth Funds
- --------------------------------------------
Domestic
Growth Fund
Mid-Cap Growth Fund
Large Cap Growth Fund*
Small Cap Growth Fund
Global & International
All-Asia Investment Fund
Global Health Care Fund*
Global Research Growth Fund
Global Technology Fund*
Greater China '97 Fund
International Premier Growth Fund
New Europe Fund
Worldwide Privatization Fund
- --------------------------------------------
Value Funds
- --------------------------------------------
Domestic
Balanced Shares
Focused Growth & Income Fund*
Growth & Income Fund
Real Estate Investment Fund
Small Cap Value Fund**
Utility Income Fund
Value Fund
Global & International
Global Value Fund
International Value Fund
- --------------------------------------------
Taxable Bond Funds
- --------------------------------------------
Americas Government Income Trust
Corporate Bond Portfolio
Emerging Market Debt Fund
Global Strategic Income Trust
High Yield Fund
Multi-Market Strategy Trust
Quality Bond Portfolio
Short Duration Portfolio
U.S. Government Portfolio
- --------------------------------------------
Municipal Bond Funds
- --------------------------------------------
National
Insured National
Arizona
California
Insured California
Florida
Massachusetts
Michigan
Minnesota
New Jersey
New York
Ohio
Pennsylvania
Virginia
- --------------------------------------------
Intermediate Municipal Bond Funds
- --------------------------------------------
Intermediate California
Intermediate Diversified
Intermediate New York
- --------------------------------------------
Closed-End Funds
- --------------------------------------------
All-Market Advantage Fund
ACM Income Fund
ACM Government Opportunity Fund
ACM Managed Dollar Income Fund
ACM Managed Income Fund
ACM Municipal Securities Income Fund
California Municipal Income Fund
National Municipal Income Fund
New York Municipal Income Fund
The Spain Fund
World Dollar Government Fund
World Dollar Government Fund II
We also offer Exchange Reserves,*** which serves as the money market fund
exchange vehicle for the AllianceBernstein mutual funds.
For more complete information on any AllianceBernstein mutual fund, including
investment objectives and policies, sales charges, expenses, risks and other
matters of importance to prospective investors, visit our web site at
www.alliancebernstein.com or call us at (800) 227-4618 for a current
prospectus. You should read the prospectus carefully before you invest.
* Prior to December 15, 2004, these Funds were named as follows: Global Health
Care Fund was Health Care Fund; Large Cap Growth Fund was Premier Growth Fund;
Global Technology Fund was Technology Fund; and Focused Growth & Income Fund
was Disciplined Value Fund.
** Effective February 1, 2005, Small Cap Value Fund will be renamed
Small/Mid-Cap Value Fund.
*** An investment in the Fund is not a deposit in a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. Although the Fund seeks to preserve the value of your investment at
$1.00 per share, it is possible to lose money by investing in the Fund.
_______________________________________________________________________________
ALLIANCEBERNSTEIN REAL ESTATE INVESTMENT FUND o 33
ALLIANCEBERNSTEIN REAL ESTATE INVESTMENT FUND
1345 Avenue of the Americas
New York, NY 10105
(800) 221-5672
[LOGO] ALLIANCEBERNSTEIN (SM)
Investment Research and Management
(SM) This service mark used under license from
the owner, Alliance Capital Management L.P.
ABREIFAR1104
ITEM 2. CODE OF ETHICS.
(a) The registrant has adopted a code of ethics that applies to its principal
executive officer, principal financial officer and principal accounting officer.
A copy of the registrant's code of ethics is filed herewith as Exhibit 11(a)(1).
(b) During the period covered by this report, no material amendments were made
to the provisions of the code of ethics adopted in 2(a) above.
(c) During the period covered by this report, no implicit or explicit waivers to
the provisions of the code of ethics adopted in 2(a) above were granted.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The registrant's Board of Directors has determined that independent directors
David H. Dievler and William H. Foulk, Jr. qualify as audit committee financial
experts.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) - (c) The following table sets forth the aggregate fees billed by the
independent registered public accounting firm Ernst & Young LLP, for the Fund's
last two fiscal years for professional services rendered for: (i) the audit of
the Fund's annual financial statements included in the Fund's annual report to
stockholders; (ii) assurance and related services that are reasonably related to
the performance of the audit of the Fund's financial statements and are not
reported under (i), which include multi-class distribution testing, advice and
education on accounting and auditing issues, and consent letters; and (iii) tax
compliance, tax advice and tax return preparation.
Audit-Related
Audit Fees Fees Tax Fees
- ----------------------------------------------------------------------------------------------------
AllianceBernstein Real Estate Investment 2003 $45,000 $2,527 $16,022
Fund, Inc..
2004 $48,000 $3,080 $15,531
(d) Not applicable.
(e) (1) Beginning with audit and non-audit service contracts entered into on or
after May 6, 2003, the Fund's Audit Committee policies and procedures require
the pre-approval of all audit and non-audit services provided to the Fund by the
Fund's independent registered public accounting firm. The Fund's Audit Committee
policies and procedures also require pre-approval of all audit and non-audit
services provided to the Adviser and Service Affiliates to the extent that these
services are directly related to the operations or financial reporting of the
Fund.
(e) (2) All of the amounts for Audit Fees, Audit-Related Fees and Tax Fees in
the table under Item 4 (a) - (c) are for services pre-approved by the Fund's
Audit Committee.
(f) Not applicable.
(g) The following table sets forth the aggregate non-audit services provided to
the Fund, the Fund's Adviser and entities that control, are controlled by or
under common control with the Adviser that provide ongoing services to the Fund,
which include conducting an annual internal control report pursuant to Statement
on Auditing Standards No. 70 ("Service Affiliates"):
Total Amount of
Foregoing Column
Pre-approved by the
Audit Committee
All Fees for (Portion Comprised of
Non-Audit Services Audit Related Fees)
Provided to the (Portion Comprised of
Portfolio, the Adviser Tax Fees)
and Service Affiliates
- -----------------------------------------------------------------------------------------------------------------
AllianceBernstein Real Estate Investment 2003 $670,214 [ $305,549 ]
Fund, Inc. ( $289,527 )
( $ 16,022 )
2004 $1,156,711 [ $168,611 ]
( $153,080 )
( $ 15,531 )
(h) The Audit Committee of the Fund has considered whether the provision of any
non-audit services not pre-approved by the Audit Committee provided by the
Fund's independent registered public accounting firm to the Adviser and Service
Affiliates is compatible with maintaining the auditor's independence.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable to the registrant.
ITEM 6. SCHEDULE OF INVESTMENTS.
Please see Schedule of Investments contained in the Report to Shareholders
included under Item 1 of this Form N-CSR.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable to the registrant.
ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable to the registrant.
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have been no material changes to the procedures by which shareholders may
recommend nominees to the Fund's Board of Directors since the Fund last provided
disclosure in response to this item.
ITEM 10. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive officer and principal financial officer
have concluded that the registrant's disclosure controls and procedures (as
defined in Rule 30a-2(c) under the Investment Company Act of 1940, as amended)
are effective at the reasonable assurance level based on their evaluation of
these controls and procedures as of a date within 90 days of the filing date of
this document.
(b) There were no significant changes in the registrant's internal controls over
financial reporting that could significantly affect these controls subsequent to
the date of their evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
ITEM 11. EXHIBITS.
The following exhibits are attached to this Form N-CSR:
EXHIBIT NO. DESCRIPTION OF EXHIBIT
----------- ----------------------
11 (a) (1) Code of ethics that is subject to the disclosure
of Item 2 hereof
11 (b) (1) Certification of Principal Executive Officer Pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002
11 (b) (2) Certification of Principal Financial Officer Pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002
11 (c) Certification of Principal Executive Officer and
Principal Financial Officer Pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002
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): AllianceBernstein Real Estate Investment Fund, Inc.
By: /s/ Marc O. Mayer
-----------------
Marc O. Mayer
President
Date: January 27, 2005
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/ Marc O. Mayer
-----------------
Marc O. Mayer
President
Date: January 27, 2005
By: /s/ Mark D. Gersten
-------------------
Mark D. Gersten
Treasurer and Chief Financial Officer
Date: January 27, 2005