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: 811-9631

Cohen & Steers Institutional Realty Shares, Inc.
(Exact name of registrant as specified in charter)

757 Third Avenue, New York, NY 10017
(Address of principal executive offices) (Zip code)

Robert H. Steers
Cohen & Steers Capital Management, Inc.
757 Third Avenue
New York, New York 10017
(Name and address of agent for service)

Registrant's telephone number, including area code: (212) 832-3232

Date of fiscal year end: December 31

Date of reporting period: June 30, 2004

Item 1. Reports to Stockholders.

The registrant's semi-annual report to shareholders, for the period ended June
30, 2004 is included herein.

Item 2. Code of Ethics.

Not applicable.

Item 3. Audit Committee Financial Expert.

Not applicable.

Item 4. Principal Accountant Fees and Services.

Not applicable.

Item 5. Audit Committee of Listed Registrants.

Not applicable.

Item 6. Schedule of Investments.

Not applicable.

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies.

Not applicable.

Item 8. Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers.

Not applicable.

Item 9. Submission of Matters to a Vote of Security Holders.

Not applicable.

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 are
sufficient to ensure that information required to be disclosed by the registrant
in this Form N-CSR was recorded, processed, summarized and reported within the
time periods specified in the Securities and Exchange

Commission's rules and forms, based upon such officers' evaluation of these
controls and procedures as of a date within 90 days of the filing date of this
report.

(b) There were no changes in the registrant's internal control over financial
reporting that occurred during the registrant's most recent fiscal half-year
(the registrant's second fiscal half-year in the case of an annual report) that
has materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.

Item 11. Exhibits.

(a) (2) Certifications of principal executive officer and principal financial
officer as required by Rule 30a-2(a) under the Investment Company Act of 1940.

(b) Certifications of chief executive officer and chief financial officer as
required by Rule 30a-2(b) under the Investment Company Act of 1940.

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.

COHEN & STEERS INSTITUTIONAL REALTY SHARES, INC.

By: /s/ Robert H. Steers
-------------------------------
Name: Robert H. Steers
Title: Chairman

Date: August 19, 2004

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/ Robert H. Steers By: /s/ Martin Cohen
------------------------------- -------------------------------
Name: Robert H. Steers Name: Martin Cohen
Title: Chairman, Secretary Title: President, Treasurer
and principal executive and principal financial
officer officer

Date: August 19, 2004

COHEN & STEERS INSTITUTIONAL REALTY SHARES, INC.

July 26, 2004

To Our Shareholders:

We are pleased to submit to you our report for the quarter and six months
ended June 30, 2004. The net asset value at that date was $39.22. In addition, a
regular quarterly dividend of $0.43 per share was declared for shareholders of
record on June 17, 2004 and was paid on June 18, 2004.

INVESTMENT REVIEW

For the quarter, Cohen & Steers Institutional Realty Shares had a total
return, based on income and change in net asset value, of -4.1%. This compares
to the NAREIT Equity REIT Index's(a) total return of -5.8%. For the six months,
the fund's total return was 7.3%, compared to NAREIT's 5.5%.

The second quarter of 2004 brought further evidence of a strengthening U.S.
economic recovery. The release of the March increase in the U.S. non-farm
payrolls report in early April forced many of the pessimistic, economic
naysayers to acknowledge that the recovery was, in fact, for real.

The second quarter began with a dramatic decline in REIT stock prices,
followed by a dramatic rebound and, most importantly, in our view a decisive
rotation in leadership within the REIT market. By way of review, the March jobs
report took the capital markets by surprise on April 2 and sent the bond market
reeling, resulting in the worst quarter for the bond market since the first
quarter of 1994. REITs dropped 18% from their highs at the end of March, before
bottoming on May 10. We characterized this decline as technical in nature,
driven by the valuation concerns of some investors, and one that we believed
presented an attractive investment opportunity. In our view, the very jobs
report that set off the decline in REIT share prices, was likely to contribute
to improving real estate fundamentals and greater cash flow for REITs.

We are pleased to report that since then REITs have rebounded significantly,
recording a 14% total return from May 10 through the end of June, and were one
of the best performing asset classes over this time period. The strong returns
of the last two months are certainly inconsistent with the notion put forward by
some pundits that REITs tipped into a bear market in the second quarter in
sympathy with the bond market. In fact, if the first half of 2004 is a proper
guide, we believe REITs are on pace to deliver the low- to mid-teens total
return profile that is consistent with the sector's long-term average.

While many observers focused on this uncharacteristic volatility in REIT
stock prices, the more interesting story in the second quarter was a powerful
rotation of leadership within the REIT market. The defensive and higher-yielding
issues, that led the REIT group since 2001, ceded their market leadership to the
more cyclically inclined companies that we believe will respond to the economic
recovery most quickly and most dramatically. If this trend continues, as we
believe it will, it will provide further evidence that investors are looking at
REITs again

- -------------------
(a) The NAREIT Equity REIT Index is an unmanaged, market capitalization weighted
index of all publicly traded REITs that invest predominantly in the equity
ownership of real estate. The index is designed to reflect the performance
of all publicly traded equity REITs as a whole.

COHEN & STEERS INSTITUTIONAL REALTY SHARES, INC.

not just for their dividend yield, but also for their total return potential.
Our quantitative analysis of second quarter trends found a very strong
relationship between the prospects for growth in REIT operating income at the
property level (the primary indicator of real estate fundamentals) and its total
return. Conversely, our analysis of the second quarter showed a very strong
opposite correlation between current dividend yield and second quarter total
return. It has almost universally been the case that REITs with the least
favorable growth prospects require a higher current yield to compensate
investors for lower future cash flow growth.

It is not surprising that the fund's portfolio did well in this second
quarter environment since our investment process emphasizes selecting stocks
that we view as offering attractive future cash flow growth prospects and strong
potential for rising real estate asset values. We positioned our portfolio some
time ago to capitalize on this expected rotation, believing that the U.S.
economy was on the verge of a sustainable and powerful economic recovery. In our
view, this secular shift would drive significant job growth, higher building
occupancies and rents, and significantly higher cash flow for REITs.
Accordingly, we overweighted the most cyclical property sectors, the apartment
and hotel sectors, for example, which led the way in the second quarter,
returning 2.2% and -2.6%, respectively. These property types are characterized
by short leases (approximately one year and one day, respectively) and more
variable demand patterns which enable the landlord to raise occupancies and
rents very quickly in an economic upturn.

Conversely, we underweighted more defensive and interest-rate-sensitive
sectors such as the health care and shopping center sectors, which
underperformed the overall REIT market, declining 13.4% and 7.5%, respectively.
These property types are characterized by very long lease terms and relatively
consistent demand profiles and as a result do not respond proportionately to
accelerating economic growth. The regional mall sector, which also had been a
leader for several quarters, became a laggard in the second quarter, declining
11.5%. The mall sector normally exhibits some cyclical characteristics, but in
addition has benefited from a secular consolidation of ownership, which has
driven this cyclical group throughout the economic downturn.

As a result of both our stock selection and property sector weights, the
fund outperformed its benchmark in the second quarter. Our stock selection in
the apartment, office and hotel sectors were the three largest drivers of our
portfolio outperformance as we sought out the geographic areas and companies
that we believe would best respond to the resurgent demand for real estate. Our
overweight in the apartment sector was also a major contributor. Several months
ago our fundamental research pointed to a view that greater job growth and
higher interest rates were going to stimulate a significant rebound in demand
for apartments, and our valuation model thus indicated that we should take our
apartment position from a significant underweight to an overweight. In the first
quarter, REIT investors came to appreciate this view more broadly and as a
result the apartment sector was one of the best performing sectors in the second
quarter. Our stock selection in the regional mall sector and our overweight in
the office category were the only two significant detractors from our relative
performance.

Punctuating what we view is a trend toward a new emphasis on growth for REIT
investors, Simon Property Group, the largest owner of regional malls in the
United States, announced it would acquire Chelsea Property Group. This outlet
center company has consistently had one of the highest cash flow growth rates in
our

COHEN & STEERS INSTITUTIONAL REALTY SHARES, INC.

investment universe. The $5 billion deal is notable because Simon is paying $66
per share, a 13% premium to Chelsea's pre-announcement price, which already
reflected a 25% premium to Wall Street's consensus opinion of the private market
value of Chelsea's assets. Because Chelsea has such unique growth prospects
Simon is willing to pay a very large premium to the generally recognized value
of the underlying assets and, in our opinion, can still generate a significant
beneficial impact to its own growth rate. Chelsea is a great example of a real
estate company that we believe is truly worth more than just the value of its
bricks and mortar. We would not be surprised if there was more acquisition
activity involving high growth companies.

INVESTMENT OUTLOOK

In the wake of the REIT stock price decline in the second quarter, many
investors have asked us whether REITs can continue to perform well in what many
are concerned (overly so, in our view) may be a period of rising interest rates.

Our view has always been and continues to be that real estate fundamentals
are the primary driver of REIT returns over the long run. Still, we regularly
examine the extent to which REITs are correlated with other asset classes. We
have found that over the long term REIT share price behavior has not been
statistically related in any material way to those of bonds or interest rates.
In other words, over time, the performance of the bond market has explained
virtually none of the performance of REITs.

Over the short term, REITs may appear to correlate with interest rates, as
we have seen recently. However, although we can say with certainty that rising
rates result in poor returns for bonds, the REIT return equation cannot be
solved using interest rates as the only input variable. Importantly, we have
also found that in the 12 months following periods of rising interest rates, as
the dampening effect of higher interest rates on security returns has subsided
and the acceleration of real estate fundamentals has kicked in, REIT performance
historically has been consistently very strong.

Nonetheless, we cannot ignore the fact that interest rates can have an
impact on REIT earnings and asset values. Higher interest rates will increase
the cost of REITs' debt capital over time, although the impact will be mitigated
by REITs' use of primarily long-term, fixed-rate debt. Higher interest rates may
also result in higher real estate capitalization rates, which would tend to
lower estimates of property values.

Higher interest rates can also have some beneficial effects on REITs. The
higher inflationary expectations, which are partially driving higher interest
rates, push up the price of building costs, especially inputs like steel,
concrete, lumber, labor and construction period interest. Thus the overall
replacement cost of real estate escalates, which flows through eventually in the
form of higher market rents. Already we are hearing reports that construction
costs have risen by as much as 25% over the past two years. If capitalization
rates were to rise, the return on assets that REITs could achieve on external
acquisitions of property should increase. Furthermore, higher debt costs will
tend to choke off development of new, competitive real estate. These higher debt
costs tend to have a greater impact on the private developers who typically
build the majority of new buildings and use a higher proportion of debt in their
capital structure.

COHEN & STEERS INSTITUTIONAL REALTY SHARES, INC.

Our conclusion is that, although changes in interest rates have a varied
impact on REITs, the positive and negative impacts have historically tended to
offset one another, such that the overall impact on REIT returns has not
generally been material, thus, the historical lack of correlation. What remains
material is the supply and demand for real estate and how that impacts building
occupancies and rents. The most important thing to recognize in our view about
the prospects for REIT returns is that the job growth that occurred in March of
this year was followed up with strong job growth reports for both April and May.
With this key economic driver in place, we believe the prospects for higher
building occupancies and rents, and thus for higher cash flows for REITs, are
excellent.

At this point, with the first dose of Fed tightening already under our belts
and a further rise in interest rates widely anticipated among economists and
investors alike, it is safe to say that whatever impact investors believe rising
interest rates may have on REITs has been well digested by the stock market, the
net effect having been to bring REIT valuations in line with historical norms.
In our view, the favorable prospects for accelerating cash flow growth over the
next couple of years in combination with these valuations give us confidence
that REITs can continue to generate attractive total returns.

Sincerely,

MARTIN COHEN ROBERT H. STEERS
MARTIN COHEN ROBERT H. STEERS
President Chairman

JAMES S. CORL
JAMES S. CORL
Portfolio Manager

COHEN & STEERS INSTITUTIONAL REALTY SHARES, INC.

Cohen & Steers is online at cohenandsteers.com
We have enhanced both the look and features of our Web site
to give you more information about our company, our funds
and the REIT market in general.

ONLINE ACCESS is available for shareholders of Cohen &
Steers funds whose accounts are held directly with Boston
Financial Data Services, the fund's transfer agent. After
registering, you will be able to manage your entire account
online including purchasing or redeeming shares, updating
account information, and checking your portfolio holdings.

Check out our interactive Asset Allocation Tool, which
allows you to hypothetically add REITs to any portfolio to
see how they impact expected total returns and risk. Or try
the Fund Performance Calculator and see how our funds have
performed versus the S&P 500 Index or Nasdaq composite. As
always, you can also get daily net asset values, fund fact
sheets, portfolio highlights, recent news articles and our
overall insights on the REIT market.

So visit us today at cohenandsteers.com

COHEN & STEERS INSTITUTIONAL REALTY SHARES, INC.

SCHEDULE OF INVESTMENTS
JUNE 30, 2004 (UNAUDITED)

<Table>
<Caption>
NUMBER VALUE
OF SHARES (NOTE 1)
--------- ------------

EQUITIES 98.60%(a)
DIVERSIFIED 5.98%
Crescent Real Estate Equities Co................. 200,300 $ 3,228,836
Vornado Realty Trust............................. 864,900 49,394,439
------------
52,623,275
------------
HEALTH CARE 1.74%
Ventas........................................... 654,900 15,291,915
------------
HOTEL 7.69%
Hilton Hotels Corp. ............................. 734,000 13,696,440
Host Marriott Corp.(b)........................... 2,548,400 31,498,224
Starwood Hotels & Resorts Worldwide.............. 501,800 22,505,730
------------
67,700,394
------------
INDUSTRIAL 9.94%
AMB Property Corp. .............................. 368,000 12,743,840
Catellus Development Corp. ...................... 889,374 21,923,069
ProLogis......................................... 1,603,500 52,787,220
------------
87,454,129
------------
OFFICE 21.34%
Arden Realty..................................... 382,200 11,240,502
Boston Properties................................ 1,038,200 51,993,056
Brookfield Properties Corp. ..................... 760,000 21,850,000
CarrAmerica Realty Corp. ........................ 430,600 13,017,038
Equity Office Properties Trust................... 810,100 22,034,720
Highwoods Properties............................. 22,000 517,000
Kilroy Realty Corp............................... 396,000 13,503,600
Mack-Cali Realty Corp............................ 301,100 12,459,518
Maguire Properties............................... 454,700 11,262,919
Prentiss Properties Trust........................ 277,400 9,298,448
SL Green Realty Corp. ........................... 440,500 20,615,400
------------
187,792,201
------------
</Table>

- -------------------
(a) Percentages indicated are based on the net assets of the fund.
(b) Nonincome producing security.

See accompanying notes to financial statements.

COHEN & STEERS INSTITUTIONAL REALTY SHARES, INC.

SCHEDULE OF INVESTMENTS -- (CONTINUED)
JUNE 30, 2004 (UNAUDITED)

<Table>
<Caption>
NUMBER VALUE
OF SHARES (NOTE 1)
--------- ------------

OFFICE/INDUSTRIAL 1.95%
Liberty Property Trust........................... 105,900 $ 4,258,239
Reckson Associates Realty Corp................... 469,200 12,884,232
------------
17,142,471
------------
RESIDENTIAL 21.01%
APARTMENT 18.96%
Apartment Investment & Management Co............. 133,400 4,152,742
Archstone-Smith Trust............................ 1,162,200 34,087,326
AvalonBay Communities............................ 734,400 41,508,288
BRE Properties................................... 548,000 19,043,000
Equity Residential............................... 735,500 21,866,415
Essex Property Trust............................. 261,000 17,839,350
Post Properties.................................. 522,000 15,216,300
Summit Properties................................ 511,800 13,122,552
------------
166,835,973
------------
MANUFACTURED HOME 2.05%
Affordable Residential Communities............... 141,300 2,345,580
Sun Communities.................................. 416,000 15,662,400
------------
18,007,980
------------
TOTAL RESIDENTIAL................................ 184,843,953
------------
SELF STORAGE 4.80%
Public Storage................................... 558,500 25,696,585
Shurgard Storage Centers......................... 442,600 16,553,240
------------
42,249,825
------------
SHOPPING CENTER 24.15%
COMMUNITY CENTER 6.17%
Developers Diversified Realty Corp............... 492,600 17,423,262
Federal Realty Investment Trust.................. 492,000 20,462,280
Pan Pacific Retail Properties.................... 185,100 9,351,252
Regency Centers Corp............................. 165,600 7,104,240
------------
54,341,034
------------
</Table>

See accompanying notes to financial statements.

COHEN & STEERS INSTITUTIONAL REALTY SHARES, INC.

SCHEDULE OF INVESTMENTS -- (CONTINUED)
JUNE 30, 2004 (UNAUDITED)

<Table>
<Caption>
NUMBER VALUE
OF SHARES (NOTE 1)
--------- ------------

REGIONAL MALL 17.98%
CBL & Associates Properties...................... 231,100 $ 12,710,500
General Growth Properties........................ 371,400 10,982,298
Macerich Co...................................... 453,700 21,718,619
Mills Corp....................................... 568,900 26,567,630
Rouse Co......................................... 743,200 35,302,000
Simon Property Group............................. 676,500 34,785,630
Taubman Centers.................................. 704,500 16,126,005
------------
158,192,682
------------
TOTAL SHOPPING CENTER............................ 212,533,716
------------
TOTAL EQUITIES (Identified
cost -- $598,389,351)..................... 867,631,879
------------
</Table>

<Table>
<Caption>
PRINCIPAL
AMOUNT
----------

COMMERCIAL PAPER................................. 0.86%
State Street Corp., 1.10%, due
07/01/2004
(Identified cost -- $7,605,000)...... $7,605,000 7,605,000
------------
TOTAL INVESTMENTS (Identified
cost -- $605,994,351).......................... 99.46% 875,236,879
OTHER ASSETS IN EXCESS OF LIABILITIES............ 0.54% 4,713,979
------------
NET ASSETS (Equivalent to $39.22 per share based
on 22,434,467 shares of capital stock
outstanding)................................... 100.00% $879,950,858
------ ------------
------ ------------
</Table>

See accompanying notes to financial statements.

COHEN & STEERS INSTITUTIONAL REALTY SHARES, INC.

STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2004 (UNAUDITED)

<Table>

ASSETS:
Investments in securities, at value (Identified
cost -- $605,994,351) (Note 1)....................... $875,236,879
Cash.................................................... 338
Dividends receivable.................................... 4,681,212
Receivable for investment securities sold............... 3,846,768
Receivable for fund shares sold......................... 615,890
------------
Total Assets....................................... 884,381,087
------------
LIABILITIES:
Payable for investment securities purchased............. 3,842,041
Payable to manager...................................... 531,306
Payable for fund shares redeemed........................ 56,882
------------
Total Liabilities.................................. 4,430,229
------------
NET ASSETS applicable to 22,434,467 shares of $0.001 par
value common stock
outstanding (Note 5)...................................... $879,950,858
------------
------------
NET ASSET VALUE PER SHARE:
($879,950,858[div]22,434,467 shares outstanding)........ $ 39.22
------------
------------
NET ASSETS consist of:
Paid-in capital (Notes 1 and 5)......................... $590,506,871
Distributions in excess of net investment income........ (8,046,814)
Accumulated net realized gain on investments............ 28,248,273
Net unrealized appreciation on investments.............. 269,242,528
------------
$879,950,858
------------
------------
</Table>

See accompanying notes to financial statements.

COHEN & STEERS INSTITUTIONAL REALTY SHARES, INC.

STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2004 (UNAUDITED)

<Table>

Investment Income (Note 1):
Dividend income (net of $40,075 of foreign withholding
tax)................................................. $15,529,972
Interest income......................................... 207,658
-----------
Total Income....................................... 15,737,630
-----------
Expenses:
Management fees (Note 2)................................ 3,395,330
Registration and filing fees............................ 22,142
Line of credit fees and expenses (Note 6)............... 21,953
Directors' fees and expenses (Note 2)................... 18,490
-----------
Total Expenses..................................... 3,457,915
Reduction of Expenses (Note 2).......................... (62,585)
-----------
Net Expenses....................................... 3,395,330
-----------
Net Investment Income....................................... 12,342,300
-----------
Net Realized and Unrealized Gain on Investments:
Net realized gain on investments........................ 30,421,783
Net change in unrealized appreciation on investments.... 15,884,485
-----------
Net realized and unrealized gain on investments.... 46,306,268
-----------
Net Increase in Net Assets Resulting from Operations........ $58,648,568
-----------
-----------
</Table>

See accompanying notes to financial statements.

COHEN & STEERS INSTITUTIONAL REALTY SHARES, INC.

STATEMENT OF CHANGES IN NET ASSETS (UNAUDITED)

<Table>
<Caption>
FOR THE SIX FOR THE
MONTHS ENDED YEAR ENDED
JUNE 30, 2004 DECEMBER 31, 2003
---------------- -----------------

Change in Net Assets:
From Operations:
Net investment income.................... $ 12,342,300 $ 23,743,503
Net realized gain on investments......... 30,421,783 35,036,056
Net change in unrealized appreciation on
investments........................... 15,884,485 182,973,999
------------ ------------
Net increase in net assets resulting
from operations................... 58,648,568 241,753,558
------------ ------------
Dividends and Distributions to Shareholders
from (Notes 1 and 4):
Net investment income.................... (20,389,114) (23,743,503)
Net realized gain on investments......... -- (35,286,955)
Tax return of capital.................... -- (7,175,248)
------------ ------------
Total dividends and distributions to
shareholders...................... (20,389,114) (66,205,706)
------------ ------------
Capital Stock Transactions (Note 5):
Increase/(decrease) in net assets from
fund share transactions............... (46,960,236) 97,414,252
------------ ------------
Total increase/(decrease) in net
assets............................ (8,700,782) 272,962,104
Net Assets:
Beginning of period...................... 888,651,640 615,689,536
------------ ------------
End of period(a)......................... $879,950,858 $888,651,640
------------ ------------
------------ ------------
</Table>

- -------------------
(a) Includes distributions in excess of net investment income of $8,046,814 and
$0 at June 30, 2004 and December 31, 2003, respectively.

See accompanying notes to financial statements.

COHEN & STEERS INSTITUTIONAL REALTY SHARES, INC.

FINANCIAL HIGHLIGHTS (UNAUDITED)

The following table includes selected data for a share outstanding
throughout each period and other performance information derived from the
financial statements. It should be read in conjunction with the financial
statements and notes thereto.

<Table>
<Caption>
FOR THE YEAR ENDED FOR THE PERIOD
FOR THE SIX DECEMBER 31, FEBRUARY 14, 2000(a)
MONTHS ENDED ------------------------------ THROUGH
PER SHARE OPERATING PERFORMANCE: JUNE 30, 2004 2003 2002 2001 DECEMBER 31, 2000
- -------------------------------- ---------------- ------ ------ ------ --------------------

Net asset value, beginning of period.............. $37.34 $29.41 $30.97 $30.89 $25.00
------ ------ ------ ------ ------
Income from investment operations:
Net investment income.......................... 0.50 1.10 1.28 1.35 1.20
Net realized and unrealized gain/(loss) on
investments.................................. 2.24 9.78 (0.28) 0.43 6.08
------ ------ ------ ------ ------
Total income from investment operations.... 2.74 10.88 1.00 1.78 7.28
------ ------ ------ ------ ------
Less dividends and distributions to shareholders
from:
Net investment income.......................... (0.86) (1.10) (1.29) (1.33) (1.21)
Net realized gain on investments............... -- (1.53) (1.23) (0.26) (0.12)
Tax return of capital.......................... -- (0.32) (0.04) (0.11) (0.06)
------ ------ ------ ------ ------
Total dividends and distributions to
shareholders............................. (0.86) (2.95) (2.56) (1.70) (1.39)
------ ------ ------ ------ ------
Net increase/(decrease) in net asset
value.................................... 1.88 7.93 (1.56) 0.08 5.89
------ ------ ------ ------ ------
Net asset value, end of period.................... $39.22 $37.34 $29.41 $30.97 $30.89
------ ------ ------ ------ ------
------ ------ ------ ------ ------
Total investment return........................... 7.33%(b) 38.04% 3.06% 6.02% 29.64%(b)
------ ------ ------ ------ ------
------ ------ ------ ------ ------

RATIOS/SUPPLEMENTAL DATA:
- -------------------------
Net assets, end of period (in millions). 880.0 888.7 615.7 594.2 615.6
------ ------ ------ ------ ------
------ ------ ------ ------ ------
Ratio of expenses to average daily net assets
(before expense reduction)....................... 0.76%(c) 0.77% 0.76% 0.77% 0.79%(c)
------ ------ ------ ------ ------
------ ------ ------ ------ ------
Ratio of expenses to average daily net assets
(net of expense reduction)....................... 0.75%(c) 0.75% 0.75% 0.75% 0.75%(c)
------ ------ ------ ------ ------
------ ------ ------ ------ ------
Ratio of net investment income to average daily
net assets
(before expense reduction)....................... 2.71%(c) 3.24% 4.06% 4.30% 5.09%(c)
------ ------ ------ ------ ------
------ ------ ------ ------ ------
Ratio of net investment income to average daily
net assets
(net of expense reduction)....................... 2.73%(c) 3.26% 4.07% 4.33% 5.13%(c)
------ ------ ------ ------ ------
------ ------ ------ ------ ------
Portfolio turnover rate........................... 16.86%(b) 35.45% 37.88% 40.71% 20.16%(b)
------ ------ ------ ------ ------
------ ------ ------ ------ ------
</Table>

- -------------------
(a) Commencement of operations.
(b) Not annualized.
(c) Annualized.

See accompanying notes to financial statements.

COHEN & STEERS INSTITUTIONAL REALTY SHARES, INC.

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1. SIGNIFICANT ACCOUNTING POLICIES

Cohen & Steers Institutional Realty Shares, Inc. (the fund) was incorporated
under the laws of the State of Maryland on October 13, 1999 and is registered
under the Investment Company Act of 1940, as amended, as an open-end,
nondiversified management investment company.

The following is a summary of significant accounting policies consistently
followed by the fund in the preparation of its financial statements. The
policies are in conformity with accounting principles generally accepted in the
United States of America. The preparation of the financial statements in
accordance with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
income and expenses during the reporting period. Actual results could differ
from those estimates.

Portfolio Valuation: Investments in securities that are listed on the New
York Stock Exchange are valued, except as indicated below, at the last sale
price reflected at the close of the New York Stock Exchange on the business day
as of which such value is being determined. If there has been no sale on such
day, the securities are valued at the mean of the closing bid and asked prices
for the day.

Securities not listed on the New York Stock Exchange but listed on other
domestic or foreign securities exchanges or admitted to trading on the National
Association of Securities Dealers Automated Quotations, Inc. (Nasdaq) national
market system are valued in a similar manner. Securities traded on more than one
securities exchange are valued at the last sale price on the business day as of
which such value is being determined as reflected on the tape at the close of
the exchange representing the principal market for such securities.

Readily marketable securities traded in the over-the-counter market,
including listed securities whose primary market is believed by Cohen & Steers
Capital Management, Inc. to be over-the-counter, but excluding securities
admitted to trading on the Nasdaq national list, are valued at the official
closing prices as reported by Nasdaq, the National Quotation Bureau, or such
other comparable sources as the board of directors deems appropriate to reflect
their fair market value. Where securities are traded on more than one exchange
and also over-the-counter, the securities will generally be valued using the
quotations the board of directors believes reflect most closely the value of
such securities.

Unrealized gains and losses on securities that result from changes in
foreign exchange rates, as well as changes in market prices of securities, are
included in unrealized appreciation/(depreciation) on investments.

Short-term debt securities, which have a maturity value of 60 days or less,
are valued at amortized cost, which approximates value.

Security Transactions and Investment Income: Security transactions are
recorded on trade date. Realized gains and losses on investments sold are
recorded on the basis of identified cost. Interest income is recorded on the
accrual basis. Dividend income is recorded on the ex-dividend date. The fund
records distributions received in

COHEN & STEERS INSTITUTIONAL REALTY SHARES, INC.

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)

excess of income from underlying investments as a reduction of cost of
investments and/or realized gain. Such amounts are based on estimates if actual
amounts are not available, and actual amounts of income, realized gain and
return of capital may differ from the estimated amounts. The fund adjusts the
estimated amounts of the components of distributions (and consequently its net
investment income) as an increase to unrealized appreciation/(depreciation) on
investments as necessary once the issuers provide information about the actual
composition of the distributions.

Dividends and Distributions to Shareholders: Dividends from net investment
income are declared and paid quarterly. Distributions to shareholders are
recorded on the ex-dividend date. Dividends will automatically be reinvested in
full and fractional shares of the fund based on the net asset value per share at
the close of business on the ex-dividend date unless the shareholder has elected
to have them paid in cash.

A portion of the fund's dividend may consist of amounts in excess of net
investment income derived from nontaxable components of the dividends from the
fund's portfolio investments. Net realized capital gains, unless offset by any
available capital loss carryforward, are distributed to shareholders annually.

Dividends from net income and capital gain distributions are determined in
accordance with U.S. federal income tax regulations which may differ from
generally accepted accounting principles.

Federal Income Taxes: It is the policy of the fund to qualify as a regulated
investment company, if such qualification is in the best interest of the
shareholders, by complying with the requirements of Subchapter M of the Internal
Revenue Code applicable to regulated investment companies, and by distributing
substantially all of its taxable earnings to its shareholders. Accordingly, no
provision for federal income or excise tax is necessary.

NOTE 2. INVESTMENT MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES

Investment Management Fees: Pursuant to a management agreement (the
management agreement), Cohen & Steers Capital Management, Inc. (the manager)
serves as the fund's investment manager. Under the terms of the management
agreement, the manager provides the fund with a continuous investment program,
makes the day-to-day investment decisions, executes the purchase and sale orders
for the portfolio transactions of the fund and generally manages the fund's
investments in accordance with the stated policies of the fund, subject to the
supervision of the fund's board of directors. For the services provided to the
fund, the manager receives a monthly fee in an amount equal to 1/12th of 0.75%
of the average daily net assets of the fund. For the six months ended June 30,
2004, the fund incurred $3,395,330 in management fees.

The manager also is responsible, under the management agreement, for the
performance of certain administration services for the fund. During the six
months ended June 30, 2004, the manager incurred expenses in connection with
such administration services pursuant to this commitment. These expenses include
administration and custody fees, transfer agent fees, professional fees, and
reports to shareholders.

COHEN & STEERS INSTITUTIONAL REALTY SHARES, INC.

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)

The manager has contractually agreed to reimburse the fund so that its total
annual operating expenses do not exceed 0.75% of average daily net assets. This
commitment will remain in place for the life of the fund. For the six months
ended June 30, 2004, the manager paid $62,585 in expenses on behalf of the fund.

Directors' Fees: Certain directors and officers of the fund are also
directors, officers, and/or employees of the manager. None of the directors and
officers so affiliated received compensation from the fund for their services as
directors and officers of the fund. For the six months ended June 30, 2004, the
manager paid $18,490 for directors' fees and related expenses on behalf of the
fund.

Other: At June 30, 2004, there was one institutional investor owning 17% of
the fund's outstanding shares. Investment activities of this shareholder could
have a significant impact on the fund.

NOTE 3. PURCHASES AND SALES OF SECURITIES

Purchases and sales of securities, excluding short-term investments, for the
six months ended June 30, 2004 totaled $151,054,564 and $201,242,646,
respectively.

NOTE 4. INCOME TAXES

At June 30, 2004, the cost of investments and net unrealized
appreciation/(depreciation), for federal income tax purposes were as follows:

<Table>

Aggregate cost.................................... $605,994,351
------------
------------
Gross unrealized appreciation..................... $269,404,408
Gross unrealized depreciation..................... $ (161,880)
------------
Net unrealized appreciation....................... $269,242,528
------------
------------
</Table>

NOTE 5. CAPITAL STOCK

The fund is authorized to issue 100 million shares of capital stock at a par
value of $0.001 per share. The board of directors of the fund is authorized to
reclassify and issue any unissued shares of the fund without shareholder
approval. Transactions in fund shares were as follows:

<Table>
<Caption>
FOR THE SIX FOR THE
MONTHS ENDED YEAR ENDED
JUNE 30, 2004 DECEMBER 31, 2003
-------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------- ---------- -------------

Sold........................ 2,543,559 $ 98,236,897 5,805,880 $ 193,319,371
Issued as reinvestment of
dividends................. 281,572 11,134,677 1,258,323 44,503,491
Redeemed.................... (4,190,003) (156,331,810) (4,199,795) (140,408,610)
---------- ------------- ---------- -------------
Net increase/(decrease)..... (1,364,872) $ (46,960,236) 2,864,408 $ 97,414,252
---------- ------------- ---------- -------------
---------- ------------- ---------- -------------
</Table>

COHEN & STEERS INSTITUTIONAL REALTY SHARES, INC.

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)

NOTE 6. BORROWINGS

The fund, in conjunction with Cohen & Steers Realty Shares, Inc., Cohen &
Steers Special Equity Fund, Inc., Cohen & Steers Equity Income Fund, Inc., Cohen
& Steers Utility Fund Inc., and Cohen & Steers Total Return Realty Fund, Inc.,
has entered into a $200,000,000 credit agreement (the credit agreement) with
Fleet National Bank, as administrative agent, State Street Bank and Trust
Company, as operations agent, and the lenders identified in the credit
agreement.

During the six months ended June 30, 2004, the fund did not utilize the line
of credit. For the the six months ended June 30, 2004, the manager paid
commitment fees and other expenses associated with the line of credit of $21,953
on behalf of the fund.

COHEN & STEERS INSTITUTIONAL REALTY SHARES, INC.

AVERAGE ANNUAL TOTAL RETURNS
(PERIODS ENDED JUNE 30, 2004) (UNAUDITED)

<Table>
<Caption>
ONE YEAR SINCE INCEPTION (2/14/00)
-------- -------------------------

29.98% 18.46%
</Table>

The performance data quoted represents past performance. Past performance is no
guarantee of future results. The rate of return will vary and the principal
value of an investment will fluctuate and shares, if redeemed, may be worth more
or less than their original cost. Current performance may be lower or higher
than the performance data quoted. Total returns of the fund as of the most
recent month-end can be obtained by visiting our Web site at cohenandsteers.com.

A description of the policies and procedures that the fund
uses to determine how to vote proxies relating to portfolio
securities is available (i) without charge, upon request, by
calling 1-800-330-7348, (ii) on our Web site at
cohenandsteers.com or (iii) on the Securities and Exchange
Commission's Web site at http://www.sec.gov.

PROXY RESULTS

During the six months ended June 30, 2004, Cohen & Steers Institutional
Realty Shares, Inc. shareholders voted on the following proposal at the
shareholder meeting held on May 25, 2004. The description of the proposal and
number of shares voted are as follows:

<Table>
<Caption>
- ----------------------------------------------------------------------------------------
SHARES VOTED AUTHORITY
FOR WITHHELD

1. To elect Directors
Gregory C. Clark......................................... 2,132,281 7,898
Bonnie Cohen............................................. 2,132,281 7,898
Martin Cohen............................................. 2,132,281 7,898
George Grossman.......................................... 2,132,281 7,898
Richard J. Norman........................................ 2,132,281 7,898
Frank K. Ross............................................ 2,132,281 7,898
Willard H. Smith......................................... 2,132,281 7,898
Robert H. Steers......................................... 2,132,281 7,898
</Table>

COHEN & STEERS INSTITUTIONAL REALTY SHARES, INC.

MEET THE COHEN & STEERS FAMILY OF OPEN-END FUNDS:

<Table>

[COHEN & STEERS [COHEN & STEERS
EQUITY INCOME FUND LOGO] REALTY SHARES LOGO]

IDEAL FOR INVESTORS SEEKING A HIGH DIVIDEND IDEAL FOR INVESTORS SEEKING MAXIMUM TOTAL
YIELD AND CAPITAL APPRECIATION, INVESTING RETURN THROUGH BOTH CURRENT INCOME AND
PRIMARILY IN REITS CAPITAL APPRECIATION, INVESTING PRIMARILY
IN REITS
A, B, C AND I SHARES AVAILABLE
SYMBOL: CSRSX
SYMBOLS: CSEIX, CSBIX, CSCIX, CSDIX
ALSO AVAILABLE: COHEN & STEERS INSTITUTIONAL
REALTY SHARES (CSRIX) REQUIRES A HIGHER
MINIMUM PURCHASE, BUT OFFERS A LOWER TOTAL
EXPENSE RATIO

[COHEN & STEERS [COHEN & STEERS
UTILITY FUND LOGO] SPECIAL EQUITY FUND LOGO]

IDEAL FOR INVESTORS SEEKING MAXIMUM TOTAL IDEAL FOR INVESTORS SEEKING MAXIMUM CAPITAL
RETURN THROUGH BOTH CURRENT INCOME AND APPRECIATION, INVESTING IN A LIMITED NUMBER
CAPITAL APPRECIATION, INVESTING PRIMARILY IN OF REITS AND OTHER REAL ESTATE COMPANIES
UTILITIES
CONCENTRATED, HIGHLY FOCUSED PORTFOLIO
SYMBOLS: CSUAX, CSUBX, CSUCX, CSUIX
SYMBOL: CSSPX

</Table>

FOR MORE INFORMATION ABOUT ANY COHEN & STEERS FUND
OR TO OBTAIN A PROSPECTUS PLEASE CONTACT US AT:
1-800-330-7348, OR VISIT OUR WEB SITE AT cohenandsteers.com

PLEASE CONSIDER THE INVESTMENT OBJECTIVES, RISKS, CHARGES AND EXPENSES OF THE
FUND CAREFULLY BEFORE INVESTING. A PROSPECTUS CONTAINING THIS AND OTHER
INFORMATION ABOUT THE FUND MAY BE OBTAINED BY FOLLOWING THE INSTRUCTIONS ABOVE.
PLEASE READ THE PROSPECTUS CAREFULLY BEFORE INVESTING.

COHEN & STEERS INSTITUTIONAL REALTY SHARES, INC.

<Table>

OFFICERS AND DIRECTORS KEY INFORMATION

Robert H. Steers INVESTMENT MANAGER
Director and chairman Cohen & Steers Capital Management, Inc.
757 Third Avenue
Martin Cohen New York, NY 10017
Director and president (212) 832-3232

Bonnie Cohen FUND SUBADMINISTRATOR AND CUSTODIAN
Director State Street Bank and Trust Company
225 Franklin Street
George Grossman Boston, MA 02110
Director
TRANSFER AGENT
Richard J. Norman Boston Financial Data Services, Inc.
Director 66 Brooks Drive
Braintree, MA 02184
Frank K. Ross (800) 437-9912
Director
LEGAL COUNSEL
Willard H. Smith Jr. Simpson Thacher & Bartlett LLP
Director 425 Lexington Avenue
New York, NY 10017
Adam Derechin
Vice president and assistant DISTRIBUTOR
treasurer Cohen & Steers Securities, LLC
757 Third Avenue
Joseph M. Harvey New York, NY 10017
Vice president
Nasdaq Symbol: CSRIX
Lawrence B. Stoller
Assistant secretary Web site: cohenandsteers.com

Net asset value (NAV) can be found in
the daily mutual fund listings in the
financial section of most major
newspapers under Cohen & Steers.

This report is authorized for delivery
only to shareholders of Cohen & Steers
Institutional Realty Shares, Inc.
unless accompanied or preceded by the
delivery of a currently effective
prospectus setting forth details of
the fund. Past performance, of course,
is no guarantee of future results and
your investment may be worth more or
less at the time you sell.
</Table>

<Page>

COHEN & STEERS
INSTITUTIONAL REALTY SHARES
757 THIRD AVENUE
NEW YORK, NY 10017

COHEN & STEERS
INSTITUTIONAL REALTY SHARES

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

SEMIANNUAL REPORT
JUNE 30, 2004

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

The division sign shall be expressed as................................. [div]
The section symbol shall be expressed as ............................... 'SS'