<Page>
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: 811-8059
Cohen & Steers Realty Focus Fund, 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: December 31, 2004
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Item 1. Reports to Stockholders.
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COHEN & STEERS REALTY FOCUS FUND, INC.
February 21, 2005
To Our Shareholders:
We are pleased to submit to you our report for the quarter and year ended
December 31, 2004. The net asset values per share at that date were $52.96,
$52.92, and $52.93 for Class A, Class B, and Class C shares, respectively.
Class I shares had a net asset value of $53.00. In addition, semiannual
dividends were declared for shareholders of record on December 22, 2004 and paid
on December 23, 2004 in the amounts per share for Class A, B, C and I shares of
$0.61, $0.57, $0.57, and $0.63, respectively.(a)
INVESTMENT REVIEW
For the quarter, Cohen & Steers Realty Focus Fund had a total return, based
on income and change in net asset value, of 16.9% for Class A shares. Class B
and C shares both returned 16.8% for the quarter. Class I shares returned 17.1%.
This compares to the NAREIT Equity REIT Index'sb total return of 15.2%. The
Class I shares of the fund had a total return for the year of 41.0%, which
compares to the NAREIT Equity REIT Index's total return of 31.6%.
One year ago, in our year-end review, we shared our belief that REITs would
experience 'a continuation of strong performance' as a result of strong expected
economic fundamentals. We predicted that GDP would increase by at least 4% in
2004, creating 1.5 to 2.0 million jobs and leading to improving real estate
fundamentals and accelerating cash flow growth rates for REITs. We are pleased
to report that all of these predictions have been realized. In our view, the
portfolio was well positioned to benefit from these factors. As a result, we
experienced one of our best years ever in terms of both absolute and relative
performance, outperforming our benchmark by a substantial margin.
The major theme within the portfolio all year, and in our view the primary
driver of REIT stock price appreciation, was the resurgence in growth, both cash
flow growth and dividend growth. This has been the guiding force in our stock
selection, where we added value in essentially all the property types in our
investment universe. Contrary to many pundits who suggested that the directional
change in interest rates would dominate REIT stock price performance, we
continued to believe that changing interest rates have an indeterminate effect
on REIT prices over the longer term (i.e. the correlation between the two is
low). In our view, performance this year amply demonstrated that real estate
fundamentals are what matter the most. REIT cash flow growth rates had been
decelerating since the last peak in REIT stock prices in early 1998. REIT
earnings growth finally bottomed in the
- -------------------
(a) Please note that distributions paid by the fund to shareholders are subject
to recharacterization for tax purposes. The final tax treatment of these
distributions is reported to shareholders after the close of each fiscal
year.
(b) 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.
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1
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COHEN & STEERS REALTY FOCUS FUND, INC.
first quarter of 2004, after falling for six years, and then re-accelerated
briskly in the second and third quarters, sparking a substantial REIT rally.
Additionally, we believe that investors of all types -- individual and
institutional, in the United States and abroad -- continued to gravitate toward
REITs in recognition of their historical investment characteristics, including a
secure and growing dividend stream, diversification away from the broader stock
and bond markets, and competitive total returns. In addition, as more investors
came to appreciate the investment characteristics of real estate, REIT merger
activity heated up. The prices paid for real estate companies over the course of
2004 continued to validate the higher asset values associated with high quality
U.S. commercial real estate assets.
Regional mall companies continued to lead the REIT industry in performance.
Benefiting from strong sales growth, rapid consolidation of ownership (resulting
in greater leverage with retailers), strong demand for space by retailers, and a
relatively fixed supply of franchise assets, regional malls returned 45.0%. Our
stock selection and overweight in this sector was the greatest single
contributor to the portfolio's performance. Shopping centers benefited from some
of the same trends in retailing and returned 36.3%.
The apartment and industrial sectors, both cyclical in nature, benefited
from a strong economy and generated 34.7% and 34.1% total returns respectively.
Our stock selection and overweight in the apartment sector were, in combination,
the second greatest contributor to our performance this year. Manufactured
housing was the worst performing sector, returning only 6.4% as lower apartment
rents and affordable for-sale housing continued to disadvantage this low-priced
housing alternative.
Office companies also trailed the index on average by a wide margin,
returning 23.3% as a group. Office fundamentals, however, varied widely across
the United States. Several office companies in tightening markets generated
total returns in excess of 30%, while many in markets with a more substantial
vacancy overhang were virtually flat. By owning more of the former and less of
the latter, we were able to add substantial value in this sector as well.
Finally, a review of 2004 would be incomplete without considering an
important milestone in the REIT sector. In late 2001, the broader stock market
implicitly recognized the successful evolution of the U.S. REIT structure when
REITs were included in the S&P 500 Index. In 2004, the rest of the world came to
the same realization. The U.S. REIT had officially gone global. A growing
handful of the most successful U.S. real estate companies began to successfully
export their planning, construction, leasing, re-development and capital
allocation skills to Europe and Asia. Their participation globally is no longer
anecdotal. Their successes have been undeniable and notable for their investment
discipline, product innovation and execution skills. This global expansion has
significantly boosted the growth potential of these companies in our view.
Foreigners, who, with a few notable exceptions have traditionally invested
in U.S. real estate through direct ownership, are now investing in U.S. REITs in
a significant way. Liquidity, income potential and access to local management
talent top the list of reasons given for foreign investment in REITs.
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2
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COHEN & STEERS REALTY FOCUS FUND, INC.
Many foreign countries are paying the greatest possible compliment to the
U.S. REIT structure by attempting to emulate its success in their own country.
Following the adoption of the REIT structure by France and others, Germany, the
U.K., Italy and Spain are notable examples of the many governments that have a
U.S.-style REIT structure on their legislative agendas. We believe there may be
significant IPO and securitization activity in these and other countries as
property investors avail themselves of the benefits of the public REIT format.
Over time we anticipate that an increasing amount of the world's income
producing property will find its way into REIT-like vehicles, providing
investors with truly global real estate investment opportunities.
INVESTMENT OUTLOOK
Our superior investment results in 2004 began with getting the big picture
right. Starting with the right macroeconomic assumptions was instrumental in
anticipating how the REIT sector would behave and we believe this will be
equally important in 2005. Quite simply, we anticipate that economic
fundamentals in 2005 will be substantially similar to 2004 and in a few ways
even better. We believe that GDP growth will be in the 3.5% range this year with
job growth of about 2 million. In our view, barring any large, exogenous
economic shocks, this will result in continuing improvement in the unemployment
rate and real wage gains. In short, we believe the economic recovery should
become self-sustaining and somewhat steadier.
This should provide a continued positive backdrop for real estate
fundamentals, characterized by higher occupancies, rents and cash flows for most
property types and in most regions of the country. As a result, our estimates
indicate that REIT cash flows and dividends will continue their re-acceleration
through 2005 and 2006.
CASH FLOW, DIVIDENDS AND TOTAL RETURNS IN THE MODERN REIT ERA
[PERFORMANCE GRAPH]
<Table>
<Caption>
8.6% Annual 5.7% Annual
Cash Flow Dividend
Growth Rate Growth Rate
----------- -----------
1993.....$1.00 1993.....$0.86
1994.....$1.16 1994.....$0.91
1995.....$1.28 1995.....$0.97
1996.....$1.41 1996.....$1.02
1997.....$1.59 1997.....$1.10
1998.....$1.86 1998.....$1.18
1999.....$2.05 1999.....$1.27
2000.....$2.24 2000.....$1.36
2001.....$2.33 2001.....$1.41
2002.....$2.36 2002.....$1.44
2003.....$2.39 2003.....$1.51
2004E....$2.46 2004E....$1.57
2005E....$2.68 2005E....$1.66
2006E....$2.94 2006E....$1.76
</Table>
<Table>
Cash Flow Growth 15.5% 10.8% 10.4% 12.4% 16.8% 10.4% 9.3% 3.8% 1.7% 1.3% 2.6% 9.2% 9.5%
Dividend Growth 6.0% 6.8% 4.9% 7.4% 8.0% 7.7% 6.8% 3.8% 1.9% 5.2% 3.6% 6.0% 6.2%
Payout Ratio 86% 78% 76% 72% 69% 63% 62% 61% 60% 61% 63% 64% 62% 60%
NAREIT Returns 19.7% 3.2% 15.3% 35.3% 20.3% -17.5% -4.6% 26.4% 13.9% 3.8% 37.1% 31.6% -- --
</Table>
Source: NAREIT; Cohen & Steers estimates for 2004, 2005 and 2006.
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3
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COHEN & STEERS REALTY FOCUS FUND, INC.
Although past performance is no guarantee of future results, history has
shown that accelerating cash flow and dividend growth rates, which we anticipate
for at least the next two years, can have a salutary effect on stock prices. For
REITs as with other stocks, it has generally been when growth rates peaked and
began declining that stock prices also peaked and began declining. Not
coincidentally, when REIT cash flow growth rates last peaked in early 1998, the
REIT index peaked as well, and total returns turned negative. By 1998, real
estate in the United States had been in recovery for several years and growth
rates had been accelerating. But with rents having escalated dramatically in
1996 and 1997, an explosion of new construction in 1998 began to attenuate the
dramatic market rental rate increases that commercial landlords had been
experiencing. In short, real estate had fully recovered and even though demand
from the economy was chugging along nicely, supply had risen up to meet that
demand, causing earnings growth rates to peak.
Accordingly, if the current real estate cycle continues to improve and
economic growth remains steady in the 2.5% to 4% range, we believe that real
estate stocks can continue to perform well, until such time as market rents rise
to the level where developers are induced to build new buildings and rental
increases are stifled by new competitive product. We believe that this
eventuality is still a couple of years away. Rents, though rising in most
markets, are generally nowhere near levels that would justify new construction
and will not be for some time in our view. In most instances, we believe it will
be several years before new construction makes sense, given that the price of
building a building has also escalated dramatically in accordance with the price
of steel, concrete, lumber and labor.
In summary, we anticipate that a steadily growing economy will support
demand for real estate and muted new construction will constrain the supply of
real estate in many markets. With respect to REITs we believe that cash flow
growth will accelerate along with dividend growth. We further believe that
correctly anticipating these changing growth rates will be the key to REIT stock
price performance again in 2005. Valuations, though above historical averages,
are partially reflecting some of these positives in our view. However,
valuations are also not at levels that indicate to us a peak in stock prices. As
a result, we believe REITs may deliver attractive total returns in
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4
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COHEN & STEERS REALTY FOCUS FUND, INC.
2005; and that our focused strategy of crafting a portfolio of the most
attractively valued companies will continue to add value.
Sincerely,
<Table>
MARTIN COHEN ROBERT H. STEERS
MARTIN COHEN ROBERT H. STEERS
President Chairman
JOSEPH M. HARVEY JAMES S. CORL
JOSEPH M. HARVEY JAMES S. CORL
Portfolio Manager Portfolio Manager
</Table>
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VISIT COHEN & STEERS ONLINE AT COHENANDSTEERS.COM
For more information about any of our funds, visit
cohenandsteers.com, where you'll find daily net asset
values, fund fact sheets and portfolio highlights. You can
also access newsletters, education tools and market updates
covering the REIT, utility and preferred securities sectors.
In addition, our Web site contains comprehensive information
about our firm, including our most recent press releases,
profiles of our senior investment professionals, and an
overview of our investment approach.
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5
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COHEN & STEERS REALTY FOCUS FUND, INC.
PERFORMANCE REVIEW
The investment objective of Cohen & Steers Realty Focus Fund, Inc. is
maximum capital appreciation over the long term through investment in real
estate securities. The fund pursues its investment objectives by seeking
investments in a limited number of REITs and other real estate companies.
Securities in the portfolio are selected by the adviser based on the outlook for
various property types and regions of the country, as well as fundamental
research on the individual companies. Among the investment criteria applied to
individual companies are organizational structure, management depth, track
record of profitability, balance sheet strength, growth potential, and
valuation. Investments are selected for capital appreciation; current income is
incidental to the fund's investment objective.
For the period September 30, 2004 (commencement of share offering) through
December 31, 2004, Class A, B, C and I shares total return was 16.93%, 16.77%,
and 16.77%, respectively, compared to 15.23% for the NAREIT Equity REIT Index
and 9.23% for the S&P 500 for the same period. In 2004, the fund's Class I
shares total return was 40.98%. This compared to 31.6% for the NAREIT Equity
REIT Index and 10.9% for the S&P 500. We experienced one of our best years ever
in terms of both absolute and relative performance, outperforming our benchmark
by a substantial margin. The major theme within the portfolio all year, and in
our view the primary driver of REIT stock price appreciation, was the resurgence
in growth, both cash flow growth and dividend growth. This has been the guiding
force in our stock selection, where we added value in essentially all the
property types in our investment universe. Our stock selection and overweight in
the mall sector was the greatest single contributor to the fund's performance.
Our stock selection and overweight in the apartment sector were, in combination,
the second greatest contributor to our performance this year. We were able to
add substantial value in the office sector as well. Manufactured housing was the
worst performing sector, as lower apartment rents and affordable for-sale
housing continued to disadvantage this low-priced housing alternative.
COHEN & STEERS REALTY FOCUS FUND -- CLASS A
<Table>
<Caption>
TOTAL RETURNS
FOR PERIOD ENDED DEC. 31, 2004
SINCE INCEPTION (9/30/04)
- --------------------------------------------------
Fund 11.66%(b)
NAREIT Equity(a) 15.23%
S&P 500(a) 9.23%
</Table>
GROWTH OF A $10,000 INVESTMENT SINCE INCEPTION
Reflects $9,550 investment made on September 30, 2004
<Table>
<Caption>
Cohen and Steers Realty NAREIT Equity
Focus Fund - Class A REIT Index S&P 500
---------------------- ------------ -------
9/30/04 9550 10000 10000
10/31/04 10075 10535 10153
11/30/04 10525 10988 10564
12/31/04 11166 11522 10923
</Table>
COHEN & STEERS REALTY FOCUS FUND -- CLASS B
<Table>
<Caption>
TOTAL RETURNS
FOR PERIOD ENDED DEC. 31, 2004
SINCE INCEPTION (9/30/04)
- -----------------------------------------------
Fund 10.93%(c)
NAREIT Equity(a) 15.23%
S&P 500(a) 9.23%
</Table>
GROWTH OF A $10,000 INVESTMENT SINCE INCEPTION
<Table>
<Caption>
Cohen and Steers Realty NAREIT Equity
Focus Fund - Class A REIT Index S&P 500
----------------------- ------------- -------
9/30/04e 9550 10000 10000
10/31/04 10075 10535 10153
11/30/04 10525 10988 10564
12/31/04 11093 11522 10923
</Table>
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6
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COHEN & STEERS REALTY FOCUS FUND, INC.
PERFORMANCE REVIEW -- (CONTINUED)
COHEN & STEERS REALTY FOCUS FUND -- CLASS C
COHEN & STEERS REALTY FOCUS FUND -- CLASS C
<Table>
<Caption>
TOTAL RETURNS
FOR PERIOD ENDED DEC. 31, 2004
SINCE INCEPTION (9/30/04)
- ---------------------------------------------------
Fund 15.60%(d)
NAREIT Equity(a) 15.23%
S&P 500(a) 9.23%
</Table>
GROWTH OF A $10,000 INVESTMENT SINCE INCEPTION
<Table>
<Caption>
Cohen & Steers Realty NAREIT Equity
Focus Fund Class C REIT Index S&P 500
--------------------- ------------- -------
9/30/04(e) 10000 10000 10000
10/31/04 10546 10535 10153
11/30/04 11552 10988 10564
12/31/04 11560 11522 10923
</Table>
COHEN & STEERS REALTY FOCUS FUND -- CLASS I
<Table>
<Caption>
AVERAGE ANNUAL TOTAL RETURNS
FOR PERIOD ENDED DEC. 31, 2004
SINCE INCEPTION
1 YEAR 5 YEARS (5/8/97)
- --------------------------------------------------------------
Fund 40.98% 19.20% 14.97%
NAREIT Equity(a) 31.58% 21.94% 13.30%
S&P 500(a) 10.88% -2.29% 6.84%
</Table>
GROWTH OF A $10,000 INVESTMENT SINCE INCEPTION
<Table>
<Caption>
Cohen & Steers Realty NAREIT Equity
FocusFund Class I REIT Index S&P 500
--------------------- ------------- -------
5/8/97(f) 100000 100000 100000
109170 107940 108240
6/30/97 136266 120699 116347
141689 122811 119686
12/31/97 137425 122234 136383
128272 116623 140883
6/30/98 96602 104354 126865
93752 101307 153888
12/31/98 88811 96424 161551
103856 106144 172941
6/30/99 93366 97610 162132
120723 96624 186257
12/31/99 113238 98933 190522
104666 109351 185454
6/30/00 119602 117716 183656
124804 122095 169294
12/31/00 129547 122571 149215
135869 136066 157945
6/30/01 125774 132502 134758
130289 139100 149164
12/31/01 145168 150576 149582
153559 158120 129538
6/30/02 138141 143810 107154
140283 144400 116187
12/31/02 140689 145381 112527
167378 164441 129867
6/30/03 186459 180096 133309
206056 198033 149546
12/31/03 231772 221837 152073
228713 208948 154689
6/30/04 248156 226140 151792
12/31/04 290487 260573 165806
</Table>
THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE. PAST PERFORMANCE IS NO
GUARANTEE OF FUTURE RESULTS. THE INVESTMENT RETURN 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. MONTH-END PERFORMANCE INFORMATION CAN BE OBTAINED BY
VISITING OUR WEBSITE AT COHENANDSTEERS.COM. THE PERFORMANCE TABLE AND GRAPH DO
NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD PAY ON FUND
DISTRIBUTIONS ON THE REDEMPTION OF FUND SHARES. THROUGH DECEMBER 31, 2005, THE
ADVISOR HAS CONTRACTUALLY AGREED TO WAIVE ITS FEE AND/OR REIMBURSE THE FUND FOR
EXPENSES INCURRED TO THE EXTENT NECESSARY TO MAINTAIN THE FUND'S OPERATING
EXPENSES AT 1.65% FOR THE CLASS A SHARES, 2.30% FOR THE CLASS B SHARES AND
CLASS C SHARES AND 1.30% FOR THE CLASS I SHARES. WITHOUT THIS ARRANGEMENT FUND
RETURNS WOULD HAVE BEEN LOWER.
(a) The comparative indexes are not adjusted to reflect expenses or other fees
that the SEC requires to be reflected in the fund's performance. The fund's
performance assumes the reinvestment of all dividends and distributions. 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 REITs as a whole. Prior to January 4, 1999, the
NAREIT Equity REIT Index was published monthly. Total returns and cumulative
values of a $10,000 investment are calculated from the date nearest each
class's inception for which comparable performance data exist. The S&P 500
Index is an unmanaged index of common stocks that is frequently used as a
general measure of stock market performance. For more information, including
charges and expenses, please read the prospectus carefully before you
invest.
(b) Returns reflect the imposition of a front end sales load of 4.50%. Without
the sales load, the returns would have been 16.93% for the period
September 30, 2004 through December 31, 2004.
(c) Return includes a deferred sales charge of 5%. Without the deferred sales
charge, the total return would have been 16.77%.
(d) Return includes a deferred sales charge of 1%. Without the deferred sales
charge, the total return would have been 16.77%.
(e) Initial offering of shares.
(f) Commencement of operations.
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COHEN & STEERS REALTY FOCUS FUND, INC.
EXPENSE EXAMPLE
As a shareholder of the fund, you incur two types of costs: (1) transaction
costs, including sales charges (loads) on purchase payments and redemption fees;
and (2) ongoing costs, including management fees; distribution and/or service
(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 (July 1, 2004 to December 31, 2004).
ACTUAL EXPENSES
The first line of the table below provides information about actual account
values and 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 rate of return of 5% per year 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 cost of
investing in the fund and other funds. To do so, compare this 5% hypothetical
example with the 5% hypothetical examples that appear in the shareholder reports
of the other funds.
Please note that the expenses shown in the table on page 9 are meant to
highlight your ongoing costs only and do not reflect any transactional costs,
such as sales charges (loads), or redemption fees. 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.
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8
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COHEN & STEERS REALTY FOCUS FUND, INC.
EXPENSES AND VALUE OF A $1,000 INVESTMENT
FOR THE SIX MONTHS ENDED DECEMBER 31, 2004
<Table>
<Caption>
ACTUAL FUND RETURN CLASS A CLASS B CLASS C CLASS I
------------------ ------- ------- ------- -------
Beginning Account Value July 1, 2004(a)..... $1,000.00 $1,000.00 $1,000.00 $1,000.00
Ending Account Value December 31, 2004...... $1,169.30 $1,167.70 $1,167.70 $1,270.10
Expenses Paid per $1,000(b)................. $ 4.50 $ 6.26 $ 6.27 $ 7.87
</Table>
<Table>
<Caption>
HYPOTHETICAL 5% FUND RETURN CLASS A CLASS B CLASS C CLASS I
--------------------------- ------- ------- ------- -------
Beginning Account Value July 1, 2004........ $1,000.00 $1,000.00 $1,000.00 $1,000.00
Ending Account Value December 31, 2004...... $1,008.40 $1,006.75 $1,006.75 $1,018.12
Expenses Paid per $1,000(b)................. $ 4.17 $ 5.81 $ 5.82 $ 7.02
</Table>
<Table>
<Caption>
ANNUALIZED EXPENSE RATIO CLASS A CLASS B CLASS C CLASS I
------------------------ ------- ------- ------- -------
Cohen & Steers Realty Focus Fund............ 1.65% 2.30% 2.30% 1.38%
</Table>
- -------------------
(a) Class A, Class B, and Class C initial offering of shares was September 30,
2004.
(b) Expenses are equal to the fund's annualized expense ratio (net of waiver)
for each share class, multiplied by the average account value over the
period, multiplied by 92 days for Classes A, B, and C or by 184 days for
Class I, then divided by 366.
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9
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COHEN & STEERS REALTY FOCUS FUND, INC.
DECEMBER 31, 2004
TOP TEN HOLDINGS
(UNAUDITED)
<Table>
<Caption>
MARKET % OF
SECURITY VALUE NET ASSETS
-------- ---------- ----------
1. Boston Properties........................................ $5,477,549 7.10%
2. Shurgard Storage Centers................................. 4,308,579 5.59
3. Taubman Centers.......................................... 3,704,815 4.81
4. Maguire Properties....................................... 3,509,388 4.55
5. Mills Corp. ............................................. 3,481,296 4.52
6. Sun Communities.......................................... 3,244,150 4.21
7. BRE Properties........................................... 3,115,963 4.04
8. Macerich Co. ............................................ 3,077,200 3.99
9. Forest City Enterprises.................................. 3,044,395 3.95
10. Starwood Hotels & Resorts Worldwide...................... 2,984,240 3.87
</Table>
SECTOR BREAKDOWN
(Based on Net Assets)
(Unaudited)
[PIE CHART]
Office/Industrial................ 31.19%
Residential...................... 23.49%
Shopping Center.................. 18.99%
Hotel............................ 10.91%
Self Storage..................... 7.52%
Cash & Other Assets
in Excess of Liabilities....... 3.33%
Health Care...................... 2.93%
Diversified...................... 1.64%
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10
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COHEN & STEERS REALTY FOCUS FUND, INC.
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2004
<Table>
<Caption>
NUMBER VALUE
OF SHARES (NOTE 1)
--------- -----------
EQUITIES 96.67%(a)
DIVERSIFIED 1.64%
Alexander's(b).................................... 5,900 $ 1,268,500
-----------
HEALTH CARE 2.93%
Ventas............................................ 82,400 2,258,584
-----------
HOTEL 10.91%
Hilton Hotels Corp. .............................. 108,300 2,462,742
Host Marriott Corp. .............................. 171,400 2,965,220
Starwood Hotels & Resorts Worldwide............... 51,100 2,984,240
-----------
8,412,202
-----------
INDUSTRIAL 3.36%
ProLogis.......................................... 59,700 2,586,801
-----------
OFFICE 27.83%
Boston Properties................................. 84,700 5,477,549
Brookfield Properties Corp. ...................... 68,700 2,569,380
CarrAmerica Realty Corp. ......................... 52,000 1,716,000
Forest City Enterprises........................... 52,900 3,044,395
Kilroy Realty Corp. .............................. 18,300 782,325
Maguire Properties................................ 127,800 3,509,388
SL Green Realty Corp. ............................ 48,900 2,960,895
Thomas Properties Group(b)........................ 109,300 1,392,482
-----------
21,452,414
-----------
RESIDENTIAL 23.49%
APARTMENT 16.45%
American Campus Communities....................... 79,500 1,787,955
AvalonBay Communities............................. 30,100 2,266,530
BRE Properties.................................... 77,300 3,115,963
Essex Property Trust.............................. 8,800 737,440
GMH Communities Trust............................. 95,700 1,349,370
Gables Residential Trust.......................... 20,300 726,537
Post Properties................................... 56,100 1,957,890
Summit Properties................................. 22,800 742,368
-----------
12,684,053
-----------
</Table>
- -------------------
(a) Percentages indicated are based on the net assets of the fund.
(b) Nonincome producing security.
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
11
<Page>
- --------------------------------------------------------------------------------
COHEN & STEERS REALTY FOCUS FUND, INC.
SCHEDULE OF INVESTMENTS -- (CONTINUED)
DECEMBER 31, 2004
<Table>
<Caption>
NUMBER VALUE
OF SHARES (NOTE 1)
--------- -----------
MANUFACTURED HOME 7.04%
Affordable Residential Communities................ 152,100 $ 2,182,635
Sun Communities................................... 80,600 3,244,150
-----------
5,426,785
-----------
TOTAL RESIDENTIAL................................. 18,110,838
-----------
SELF STORAGE 7.52%
Extra Space Storage............................... 111,700 1,488,961
Shurgard Storage Centers.......................... 97,900 4,308,579
-----------
5,797,540
-----------
SHOPPING CENTER -- REGIONAL MALL 18.99%
CBL & Associates Properties....................... 18,600 1,420,110
Macerich Co. ..................................... 49,000 3,077,200
Mills Corp. ...................................... 54,600 3,481,296
Simon Property Group.............................. 45,700 2,955,419
Taubman Centers................................... 123,700 3,704,815
-----------
14,638,840
-----------
TOTAL EQUITIES (Identified
cost -- $62,788,006)....................... 74,525,719
</Table>
<Table>
<Caption>
PRINCIPAL
AMOUNT
----------
COMMERCIAL PAPER 3.44%
State Street Corp., 1.70%, due 01/03/2005
(Identified cost -- $2,655,749).................. $2,656,000 2,655,749
-----------
TOTAL INVESTMENTS (Identified
cost -- $65,443,755)............................ 100.11% 77,181,468
LIABILITIES IN EXCESS OF OTHER ASSETS............. (0.11)% (85,677)
------ -----------
NET ASSETS........................................ 100.00% $77,095,791
------ -----------
------ -----------
</Table>
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
12
<Page>
- --------------------------------------------------------------------------------
COHEN & STEERS REALTY FOCUS FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 2004
<Table>
ASSETS:
Investments in securities, at value (Identified
cost -- $65,443,755) (Note 1)........................ $77,181,468
Receivable for fund shares sold......................... 628,622
Dividends receivable.................................... 387,592
Receivable due from advisor............................. 108,464
Other assets............................................ 767
-----------
Total Assets....................................... 78,306,913
-----------
LIABILITIES:
Payable for investment securities purchased............. 995,429
Payable for fund shares redeemed........................ 106,139
Payable to investment advisor........................... 54,581
Payable for reports to shareholders..................... 16,749
Payable for professional fees........................... 14,365
Payable for distribution fees........................... 3,590
Payable for directors fees.............................. 2,647
Payable to administrator................................ 1,710
Payable for shareholder servicing fees.................. 1,252
Payable to custodian bank............................... 1,027
Other liabilities....................................... 13,633
-----------
Total Liabilities.................................. 1,211,122
-----------
NET ASSETS.................................................. $77,095,791
-----------
-----------
NET ASSETS consist of:
Paid-in capital (Notes 1 and 5)......................... $79,467,403
Accumulated net realized loss on investments............ (14,109,325)
Net unrealized appreciation on investments.............. 11,737,713
-----------
$77,095,791
-----------
-----------
</Table>
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
13
<Page>
- --------------------------------------------------------------------------------
COHEN & STEERS REALTY FOCUS FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES -- (CONTINUED)
DECEMBER 31, 2004
<Table>
CLASS A SHARES:
NET ASSETS.............................................. $ 3,114,572
Shares issued and outstanding ($0.001 par value common
stock outstanding) (Note 5).......................... 58,807
-----------
Net asset value and redemption price per share.......... $ 52.96
-----------
-----------
Maximum offering price per share ($52.96 [div] 0.955)(a) $ 55.46
-----------
-----------
CLASS B SHARES:
NET ASSETS.............................................. $ 741,018
Shares issued and outstanding ($0.001 par value common
stock outstanding) (Note 5).......................... 14,003
-----------
Net asset value and offering price per share(b)......... $ 52.92
-----------
-----------
CLASS C SHARES:
NET ASSETS.............................................. $ 3,034,411
Shares issued and outstanding ($0.001 par value common
stock outstanding) (Note 5).......................... 57,330
-----------
Net asset value and offering price per share(b)......... $ 52.93
-----------
-----------
CLASS I SHARES:
NET ASSETS.............................................. $70,205,790
Shares issued and outstanding ($0.001 par value common
stock outstanding) (Note 5).......................... 1,324,628
-----------
Net asset value, offering and redemption value
per share............................................ $ 53.00
-----------
-----------
</Table>
- -------------------
(a) On investments of $100,000 or more, the offering price is reduced.
(b) Redemption price per share is equal to the net asset value per share
less any applicable deferred sales charge which varies with the length
of time shares are held.
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
14
<Page>
- --------------------------------------------------------------------------------
COHEN & STEERS REALTY FOCUS FUND, INC.
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2004
<Table>
Investment Income (Note 1):
Dividend income (net of $2,000 of foreign withholding
tax)................................................. $ 956,296
Interest income......................................... 22,543
-----------
Total Income....................................... 978,839
-----------
Expenses:
Investment advisory fees (Note 2)....................... 372,918
Distribution fees -- Class A (Note 2)................... 832
Distribution fees -- Class B (Note 2)................... 449
Distribution fees -- Class C (Note 2)................... 2,308
Shareholder servicing fees -- Class A (Note 2).......... 333
Shareholder servicing fees -- Class B (Note 2).......... 150
Shareholder servicing fees -- Class C (Note 2).......... 769
Reports to shareholders................................. 130,563
Professional fees....................................... 123,674
Directors' fees and expenses (Note 2)................... 46,919
Registration and filing fees............................ 31,226
Administration and transfer agent fees (Note 2)......... 42,569
Custodian fees and expenses............................. 31,325
Line of credit fees and expenses (Note 6)............... 1,476
Miscellaneous........................................... 9,674
-----------
Total Expenses..................................... 795,185
Reduction of Expenses (Note 2).......................... (200,673)
-----------
Net Expenses....................................... 594,512
-----------
Net Investment Income....................................... 384,327
-----------
Net Realized and Unrealized Gain on Investments:
Net realized gain on investments........................ 8,559,168
Net change in unrealized appreciation on investments.... 7,139,307
-----------
Net realized and unrealized gain on investments.... 15,698,475
-----------
Net Increase in Net Assets Resulting from Operations........ $16,082,802
-----------
-----------
</Table>
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
15
<Page>
- --------------------------------------------------------------------------------
COHEN & STEERS REALTY FOCUS FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
<Table>
<Caption>
FOR THE FOR THE
YEAR ENDED YEAR ENDED
DECEMBER 31, 2004 DECEMBER 31, 2003
----------------- -----------------
Change in Net Assets:
From Operations:
Net investment income................... $ 384,327 $ 384,184
Net realized gain on investments........ 8,559,168 4,148,622
Net change in unrealized appreciation on
investments.......................... 7,139,307 3,710,763
----------- -----------
Net increase in net assets
resulting from operations........ 16,082,802 8,243,569
----------- -----------
Dividends and Distributions to Shareholders
from (Note 1):
Net investment income:
Class A............................ (33,632) --
Class B............................ (7,384) --
Class C............................ (29,646) --
Class I............................ (1,236,072) (1,143,611)
----------- -----------
Total dividends and
distributions to shareholders (1,306,734) (1,143,611)
----------- -----------
Capital Stock Transactions (Note 5):
Increase in net assets from fund share
transactions......................... 33,844,916 3,169,414
----------- -----------
Total increase in net assets....... 48,620,984 10,269,372
Net Assets:
Beginning of year....................... 28,474,807 18,205,435
----------- -----------
End of year............................. $77,095,791 $28,474,807
----------- -----------
----------- -----------
</Table>
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
16
<Page>
- --------------------------------------------------------------------------------
COHEN & STEERS REALTY FOCUS FUND, INC.
FINANCIAL HIGHLIGHTS
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>
CLASS A CLASS B CLASS C
---------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE: FOR THE PERIOD SEPTEMBER 30, 2004(a) THROUGH DECEMBER 31, 2004
- -------------------------------- ---------------------------------------------------------------
Net asset value, beginning of year.................... $45.82 $45.82 $45.82
------ ------ ------
Income from investment operations:
Net investment income.............................. 0.22(b) 0.20(b) 0.15(b)
Net realized and unrealized gain/(loss) on
investments...................................... 7.53 7.47 7.53
------ ------ ------
Total income from investment operations........ 7.75 7.67 7.68
------ ------ ------
Less dividends and distributions to shareholders from:
Net investment income.............................. (0.61) (0.57) (0.57)
Tax return of capital.............................. -- -- --
------ ------ ------
Total dividends and distributions to
shareholders................................. (0.61) (0.57) (0.57)
------ ------ ------
Net increase/(decrease) in net assets................. 7.14 7.10 7.11
------ ------ ------
Net asset value, end of year.......................... $52.96 $52.92 $52.93
------ ------ ------
------ ------ ------
- -----------------------------------------------------------------------------------------------------------------------
Total investment return(c)............................ 16.93% 16.77% 16.77%
------ ------ ------
------ ------ ------
- -----------------------------------------------------------------------------------------------------------------------
<Caption>
RATIOS/SUPPLEMENTAL DATA:
- -------------------------
Net assets, end of year (in millions)................. $ 3.1 $ 0.7 $ 3.0
------ ------ ------
------ ------ ------
Ratio of expenses to average daily net assets (before
expense reduction)(d)................................ 3.07% 4.07% 3.78%
------ ------ ------
------ ------ ------
Ratio of expenses to average daily net assets (net of
expense reduction)(d)................................ 1.65% 2.30% 2.30%
------ ------ ------
------ ------ ------
Ratio of net investment income to average daily net
assets (before expense reduction)(d)................. 0.31% (.19)% (0.31)%
------ ------ ------
------ ------ ------
Ratio of net investment income to average daily net
assets (net of expense reduction)(d)................. 1.73% 1.58% 1.17%
------ ------ ------
------ ------ ------
Portfolio turnover rate(c)............................ 179.95% 179.95% 179.95%
------ ------ ------
------ ------ ------
</Table>
- -------------------
(a) Initial offering of shares.
(b) Calculated based on the average shares outstanding during the period.
(c) Not annualized.
(d) Annualized.
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
17
<Page>
- --------------------------------------------------------------------------------
COHEN & STEERS REALTY FOCUS FUND, INC.
FINANCIAL HIGHLIGHTS -- (CONTINUED)
<Table>
<Caption>
CLASS I
------------------------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31,
------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE: 2004 2003 2002 2001 2000
- -------------------------------- ------------ ------------ ------------ ------------ ------------
Net asset value, beginning of year.... $38.55 $27.50 $26.63 $26.60 $26.76
------ ------ ------ ------ ------
Income from investment operations:
Net investment income.............. 0.41(a) 0.64 0.73 0.69 0.85
Net realized and unrealized
gain/(loss) on investments....... 15.16 12.06 1.29 0.49 0.01
------ ------ ------ ------ ------
Total income from investment
operations................... 15.57 12.70 2.02 1.18 0.86
------ ------ ------ ------ ------
Less dividends and distributions to
shareholders from:
Net investment income.............. (1.18) (1.67) (1.21) (0.52) (1.02)
Tax return of capital.............. -- -- -- (0.63) --
------ ------ ------ ------ ------
Total dividends and
distributions to
shareholders................. (1.18) (1.67) (1.21) (1.15) (1.02)
------ ------ ------ ------ ------
Redemption fees retained by the fund.. 0.06 0.02 0.06 -- --
------ ------ ------ ------ ------
Net increase/(decrease) in net
assets........................... 14.45 11.05 0.87 0.03 (0.16)
------ ------ ------ ------ ------
Net asset value, end of year.......... $53.00 $38.55 $27.50 $26.63 $26.60
------ ------ ------ ------ ------
------ ------ ------ ------ ------
- ----------------------------------------------------------------------------------------------------------------
Total investment return............... 40.98% 46.89% 7.67% 4.39% 3.38%
------ ------ ------ ------ ------
------ ------ ------ ------ ------
- ----------------------------------------------------------------------------------------------------------------
<Caption>
RATIOS/SUPPLEMENTAL DATA:
- -------------------------
Net assets, end of year (in millions).. $ 70.2 $ 28.5 $ 18.2 $ 20.2 $ 33.5
------ ------ ------ ------ ------
------ ------ ------ ------ ------
Ratio of expenses to average daily net
assets (before expense reduction).... 1.89% 1.99% 2.09% 1.83% 2.40%
------ ------ ------ ------ ------
------ ------ ------ ------ ------
Ratio of expenses to average daily net
assets (net of expense reduction).... 1.43% 1.50% 1.50% 1.83% 2.37%
------ ------ ------ ------ ------
------ ------ ------ ------ ------
Ratio of net investment income to
average daily net assets (before
expense reduction)................... 0.45% 1.33% 1.96% 2.16% 3.07%
------ ------ ------ ------ ------
------ ------ ------ ------ ------
Ratio of net investment income to
average daily net assets (net of
expense reduction)................... 0.92% 1.82% 2.55% 2.16% 3.10%
------ ------ ------ ------ ------
------ ------ ------ ------ ------
Portfolio turnover rate............... 179.95% 181.13% 179.19% 107.68% 58.99%
------ ------ ------ ------ ------
------ ------ ------ ------ ------
</Table>
- -------------------
(a) Calculated based on the average shares outstanding during the period.
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
18
<Page>
- --------------------------------------------------------------------------------
COHEN & STEERS REALTY FOCUS FUND, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1. SIGNIFICANT ACCOUNTING POLICIES
Cohen & Steers Realty Focus Fund, Inc. (the fund) was incorporated under the
laws of the State of Maryland on February 14, 1997 and is registered under the
Investment Company Act of 1940, as amended, as an open-end, nondiversified
management investment company. The fund, formerly known as Cohen & Steers
Special Equity Fund, Inc, changed its name to Cohen & Steers Realty Focus Fund,
Inc. on September 30, 2004. The authorized shares of the fund are divided into
four classes designated Class A, B, C, and I shares. Each of the fund's shares
has equal dividend, liquidation and voting rights (except for matters relating
to distributions and shareholder servicing of such shares).
The following is a summary of significant accounting policies 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 (GAAP). The preparation of the financial statements in accordance with
GAAP 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 reported
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 or, if no asked price is available, at the bid price.
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. 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 or, if no
asked price is available, at the bid price. 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.
- --------------------------------------------------------------------------------
19
<Page>
- --------------------------------------------------------------------------------
COHEN & STEERS REALTY FOCUS FUND, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
Any securities for which market quotations are not readily available shall
be valued in accordance with the procedures approved by the board of directors.
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 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/(deprecation) and realized gain/(loss) on investment as
necessary once the issuers provide information about the actual composition of
the distributions. Income, expenses (other than expenses attributable to a
specific class), and realized and unrealized gains or losses on investments are
allocated to each class of shares based on its relative net assets. Class B
shares automatically convert to Class A shares at the end of the month which
precedes the eighth anniversary of the purchase date.
Dividends and Distributions to Shareholders: Dividends from net investment
income are declared and paid semiannually. Distributions to shareholders are
recorded on the ex-dividend date. Dividends are automatically 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 investment income and capital gain distributions are
determined in accordance with U.S. federal income tax regulations, which may
differ from GAAP.
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 ADVISORY AND ADMINISTRATION FEES AND OTHER TRANSACTIONS WITH
AFFILIATES
Investment Advisory Fees: Cohen & Steers Capital Management, Inc. (the
advisor) serves as the fund's investment advisor pursuant to an investment
advisory agreement (the advisory agreement). Under the terms of the
- --------------------------------------------------------------------------------
20
<Page>
- --------------------------------------------------------------------------------
COHEN & STEERS REALTY FOCUS FUND, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
advisory agreement, the advisor provides the fund with the day-to-day investment
decisions 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 advisor receives a monthly
fee in an amount equal to 1/12th of 0.90% of the average daily net assets of the
fund. For the year ended December 31, 2004, the fund incurred $372,918 in
advisory fees.
For the period January 1, 2004 through September 29, 2004, the fund's
advisor contractually agreed to waive its investment advisory fee and/or
reimburse the fund for expenses incurred to the extent necessary to maintain
the total annual operating expenses of 1.50% for Class I shares. Effective
September 30, 2004 and through December 31, 2005, the fund's advisor has
contractually agreed to waive its investment advisory fee and/or reimburse the
fund for expenses incurred to the extent necessary to maintain the total annual
operating expenses of 1.65% for Class A shares, 2.30% for Class B and Class C
shares, and 1.30% for Class I shares. The expense waiver excludes interest,
taxes, brokerage, and extraordinary expenses. As long as this expense cap
continues, it may lower the fund's expenses and increase its total return. After
December 31, 2005, the expense limitation may be terminated or revised at any
time, at which time the fund's expenses may increase and its total return
may be reduced depending on the total assets of the fund. For the year ended
December 31, 2004, the investment advisor waived investment advisory fees of
$200,673.
Administration Fees: The fund has entered into an administration agreement
with the advisor under which the advisor performs certain administrative
functions for the fund and receives a monthly fee in an amount equal to
1/12th of 0.02% of the fund's average daily net assets. For the year ended
December 31, 2004, the fund paid the advisor $8,287 in fees under this
administration agreement.
Distribution Fees: Cohen & Steers Securities, LLC (the distributor), an
affiliated entity of Cohen & Steers Capital Management, Inc., distributes the
shares of the fund. The fund has adopted a distribution plan (the plan) on
behalf of the fund pursuant to Rule 12b-1 under the Investment Company Act of
1940. Under the plan, the fund may not incur distribution fees which exceed an
annual rate of 0.25% of the average daily net assets attributable to the
Class A shares and 0.75% of the average daily net assets attributable to the
Class B and Class C shares For the year ended December 31, 2004, the fund paid
$3,589 in fees under the plan.
For the year ended December 31, 2004, the fund has been advised that the
distributor received $1,871 in sales commissions from the sale of Class A shares
and that the distributor also received $30 and $0 of contingent deferred sales
charges relating to redemptions of Class B and Class C shares, respectively. The
distributor has advised the fund that proceeds from the contingent deferred
sales charge on the Class B and C shares are paid to the distributor and are
used by the distributor to defray its expenses related to providing
distribution-related services to the fund in connection with the sale of the
Class B and C shares, including payments to dealers and other financial
intermediaries for selling Class B and C shares and interest and other financing
costs associated with Class B and C shares.
- --------------------------------------------------------------------------------
21
<Page>
- --------------------------------------------------------------------------------
COHEN & STEERS REALTY FOCUS FUND, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
Shareholder Servicing Fees: The fund has adopted a shareholder services plan
which provides that the fund may obtain the services of qualified financial
institutions to act as shareholder servicing agents for their customers. For
these services, the fund may pay the shareholder servicing agent a fee at an
annual rate of up to 0.10% of the average daily net asset value of the fund's
Class A shares and up to 0.25% of the average daily net asset value of the
fund's Class B and C shares. For the year ended December 31, 2004, the fund paid
$1,252 under the shareholder servicing plan.
Directors' Fees: Certain directors and officers of the fund are also
directors, officers, and/or employees of the advisor. None of the directors and
officers so affiliated received compensation from the fund for their services.
For the year ended December 31, 2004, fees and related expenses accrued for
nonaffiliated directors totaled $46,919.
Other: During the period, the fund may have purchased securities in which an
affiliate of the investment manager served as placement agent for the issuer.
NOTE 3. PURCHASES AND SALES OF SECURITIES
Purchases and sales of securities, excluding short-term investments, for the
year ended December 31, 2004 totaled $105,010,145 and $73,406,051, respectively.
NOTE 4. INCOME TAXES
The fund had no return of capital for the year ended December 31, 2004.
Short-term capital gains are reflected in the financial statements as realized
gains on investments but are typically treated as ordinary income for tax
purposes.
The dividends and distributions to shareholders are characterized for tax
purposes as follows:
<Table>
<Caption>
FOR THE YEAR ENDED
DECEMBER 31,
-----------------------
2004 2003
---------- ----------
Ordinary income:
Class A....................................... $ 33,632 $ --
Class B....................................... 7,384 --
Class C....................................... 29,646 --
Class I....................................... 1,236,072 1,143,611
---------- ----------
Total dividends and distributions to
shareholders.......................... $1,306,734 $1,143,611
---------- ----------
---------- ----------
</Table>
- --------------------------------------------------------------------------------
22
<Page>
- --------------------------------------------------------------------------------
COHEN & STEERS REALTY FOCUS FUND, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
At December 31, 2004, the cost of investments and net unrealized
appreciation for federal income tax purposes were as follows:
<Table>
Aggregate cost..................................... $65,670,304
-----------
-----------
Gross unrealized appreciation...................... $11,663,977
Gross unrealized depreciation...................... $ (152,813)
-----------
Net unrealized appreciation........................ $11,511,164
-----------
-----------
</Table>
Differences between book and tax basis unrealized appreciation are primarily
due to wash sales on portfolio transactions.
Net investment income and net realized gains differ for financial statement
and tax purposes primarily due to taxable overdistribution of income and wash
sales on portfolio securities. To the extent such differences are permanent in
nature, such amounts are reclassified within the capital accounts. During the
year ended December 31, 2004, the fund increased undistributed net investment
income by $922,407 and decreased paid-in capital by $922,407, related primarily
to taxable overdistribution of income in the current year. For the year ended
December 31, 2004, the Fund did not have any undistributed ordinary income or
capital gains.
At December 31, 2004, the fund had tax basis capital losses, which may be
carried over to offset future capital gains, as follows:
Capital loss carryovers expiring in:
<Table>
2006............................................... $ 6,266,404
2007............................................... 6,065,253
2008............................................... 1,314,704
2009............................................... 236,415
-----------
$13,882,776
-----------
-----------
</Table>
For the year ended December 31, 2004, the fund utilized capital loss
carryovers of $8,575,326.
- --------------------------------------------------------------------------------
23
<Page>
- --------------------------------------------------------------------------------
COHEN & STEERS REALTY FOCUS FUND, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
NOTE 5. CAPITAL STOCK
The fund is authorized to issue 50 million shares of capital stock, par
value $0.001 per share. At December 31, 2004, Cohen & Steers Capital Management,
Inc. owned 22 shares of Class A, Class B, and Class C shares and 5,480 shares of
Class I shares. The board of directors of the fund may increase or decrease the
aggregate number of shares of common stock that the fund has authority to issue.
Transactions in fund shares were as follows:
<Table>
<Caption>
FOR THE PERIOD
SEPTEMBER 30, 2004
THROUGH
DECEMBER 31, 2004
-------------------
SHARES AMOUNT
------ ----------
CLASS A:
Sold............................................. 58,596 $2,932,895
Issued as reinvestment of dividends.............. 329 17,301
Redeemed......................................... (118) (5,626)
------ ----------
Net increase..................................... 58,807 $2,944,570
------ ----------
------ ----------
CLASS B:
Sold............................................. 14,004 $ 710,245
Issued as reinvestment of dividends.............. 61 3,215
Redeemed......................................... (62) (3,136)
------ ----------
Net increase/(decrease).......................... 14,003 $ 710,324
------ ----------
------ ----------
CLASS C:
Sold............................................. 57,767 $2,898,809
Issued as reinvestment of dividends.............. 298 15,631
Redeemed......................................... (735) (36,759)
------ ----------
Net increase..................................... 57,330 $2,877,681
------ ----------
------ ----------
</Table>
- --------------------------------------------------------------------------------
24
<Page>
- --------------------------------------------------------------------------------
COHEN & STEERS REALTY FOCUS FUND, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
<Table>
<Caption>
FOR THE FOR THE
YEAR ENDED YEAR ENDED
DECEMBER 31, 2004 DECEMBER 31, 2003
----------------------- ----------------------
SHARES AMOUNT SHARES AMOUNT
-------- ------------ -------- -----------
CLASS I:
Sold......................... 858,501 $ 39,387,863 166,537 $ 5,988,858
Issued as reinvestment of
dividends.................. 22,056 1,059,712 29,602 1,049,429
Redeemed..................... (294,496) (13,210,352) (119,543) (3,884,204)
Redemption fees retained by
the fund(a)................ -- 75,118 -- 15,331
-------- ------------ -------- -----------
Net increase................. 586,061 $ 27,312,341 76,596 $ 3,169,414
-------- ------------ -------- -----------
-------- ------------ -------- -----------
</Table>
NOTE 6. BORROWINGS
The fund, in conjunction with Cohen & Steers Institutional Realty Shares,
Inc., Cohen & Steers Realty Shares, Inc., Cohen & Steers Realty Income Fund,
Inc., and Cohen & Steers Utility Fund, Inc. is a party to a $150,000,000
syndicated credit agreement (the credit agreement) with State Street Bank and
Trust Company, as administrative agent and operations agent, and the lenders
identified in the credit agreement.
At December 31, 2004, the fund had no loans outstanding. During the year
ended December 31, 2004, the fund did not have any loans outstanding. For the
year ended December 31, 2004, the fund paid commitment fees and other expenses
of $1,476.
- -------------------
(a) The fund charges a 1% redemption fee on shares sold within six months of
the time of purchase.
- --------------------------------------------------------------------------------
25
<Page>
- --------------------------------------------------------------------------------
COHEN & STEERS REALTY FOCUS FUND, INC.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders of
Cohen & Steers Realty Focus Fund, Inc.
In our opinion, the accompanying statement of assets and liabilities,
including the schedule of investments, and the related statements of operations
and of changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Cohen & Steers Realty Focus Fund,
Inc. (the 'Fund', formerly Cohen & Steers Special Equity Fund, Inc.) at
December 31, 2004, 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 periods presented, in conformity with
accounting principles generally accepted in the United States of America. These
financial statements and financial highlights (hereafter referred to as
'financial statements') are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with the standards of the Public Company Accounting Oversight Board (United
States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at December 31, 2004 by
correspondence with the custodian and brokers, provide a reasonable basis for
our opinion.
New York, New York
February 21, 2005
- --------------------------------------------------------------------------------
26
<Page>
- --------------------------------------------------------------------------------
COHEN & STEERS REALTY FOCUS FUND, INC.
TAX INFORMATION -- 2004 (UNAUDITED)
Pursuant to the Jobs and Growth Tax Relief Reconcilation Act of 2003, the
fund designates qualified dividend income of $28,718. Additionally, the fund had
no long term capital gain distributions.
Shareholders are advised to consult with their own tax advisors as to the
federal, state, and local tax status of income received.
OTHER INFORMATION
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 (SEC)
Web site at http://www.sec.gov. In addition, the fund's proxy voting record for
the most recent 12-month period ended June 30 is available (i) without charge
upon request, by calling 1-800-330-7348 or (ii) on the SEC's Web site at
http://www.sec.gov.
The fund files its complete schedule of portfolio holdings with the SEC for
the first and third quarters of each fiscal year on Form N-Q. The fund's Forms
N-Q are available (i) without charge, upon request by calling 1-800-330-7348, or
(ii) on the SEC's website at http://www.sec.gov. In addition, the Forms N-Q may
be reviewed and copied at the SEC's Public Reference Room in Washington, DC.
Information on the operation of the Public Reference Room may be obtained by
calling 1-800-SEC-0330.
Please note that the distributions paid by the fund to shareholders are
subject to recharacterization for tax purposes. The final tax treatment of these
distributions is reported to shareholders on their 1099-DIV forms, which are
mailed to shareholders after the close of each fiscal year.
- --------------------------------------------------------------------------------
27
<Page>
- --------------------------------------------------------------------------------
COHEN & STEERS REALTY FOCUS FUND, INC.
MANAGEMENT OF THE FUND
The business and affairs of the fund are managed under the direction of the
board of directors. The board of directors approves all significant agreements
between the fund and persons or companies furnishing services to it, including
the Fund's agreements with its advisor, administrator, custodian and transfer
agent. The management of the fund's day-to-day operations is delegated to its
officers, the advisor and the fund's administrator, subject always to the
investment objective and policies of the fund and to the general supervision of
the board of directors.
The directors and officers of the fund and their principal occupations
during the past five years are set forth below. The statement of additional
information (SAI) includes additional information about fund directors and is
available, without charge, upon request by calling 1-800-330-7348.
<Table>
<Caption>
PRINCIPAL OCCUPATION NUMBER OF FUNDS
DURING PAST 5 YEARS WITHIN FUND COMPLEX LENGTH
POSITION(S) HELD TERM OF (INCLUDING OTHER OVERSEEN BY DIRECTOR OF TIME
NAME, ADDRESS AND AGE(a) WITH FUND OFFICE DIRECTORSHIPS HELD) (INCLUDING THE FUND) SERVED
- ---------------------- --------- ------ ------------------- -------------------- ------
Interested Directors(b)
Robert H. Steers ..... Director, chairman Until next Co-chairman and co-chief 14 Since
Age: 51 of the board, election of executive officer of the inception
and secretary directors advisor since 2003 and
prior to that, chairman
of the advisor. President
of Cohen & Steers
Securities, LLC, the
fund's distributor.
Martin Cohen ......... Director, Until next Co-chairman and co-chief 14 Since
Age: 55 president and election of executive officer of the inception
treasurer directors advisor since 2003 and
prior to that, president
of the advisor. Vice
president of Cohen &
Steers Securities, LLC,
the fund's distributor.
Disinterested Directors
Bonnie Cohen(c)....... Director Until next Consultant. Prior 14 2001 to
Age: 61 election of thereto, Undersecretary present
directors of State, United States
Department of State.
Director of Wellsford
Real Properties, Inc.
George Grossman ...... Director Until next Attorney-at-law. 14 Since
Age: 50 election of inception
directors
(table continued on next page)
</Table>
- -------------------
(a) The address for all directors is 757 Third Avenue, New York, NY 10017.
(b) 'Interested person,' as defined in the 1940 Act, of the fund because of
affiliation with Cohen & Steers Capital Management, Inc., the fund's
advisor.
(c) Martin Cohen and Bonnie Cohen are unrelated.
- --------------------------------------------------------------------------------
28
<Page>
- --------------------------------------------------------------------------------
COHEN & STEERS REALTY FOCUS FUND, INC.
(table continued from preceding page)
<Table>
<Caption>
PRINCIPAL OCCUPATION NUMBER OF FUNDS
DURING PAST 5 YEARS WITHIN FUND COMPLEX LENGTH
POSITION(S) HELD TERM OF (INCLUDING OTHER OVERSEEN BY DIRECTOR OF TIME
NAME, ADDRESS AND AGE(a) WITH FUND OFFICE DIRECTORSHIPS HELD) (INCLUDING THE FUND) SERVED
- ------------------------ --------- ------ ------------------- -------------------- ------
Richard E. Kroon ..... Director Until next Board member of Finlay 14 2004 to
Age: 62 election of Enterprises, Inc. present
directors (operator of department
store fine jewelry leased
departments), and several
private companies; member
of Investment
Subcommittee, Monmouth
University, retired
Chairman and Managing
Partner of Sprout Group
venture capital funds,
then an affiliate of
Donaldson, Lufkin and
Jenrette Securities
Corporation; and former
chairman of the National
Venture Capital
Association.
Richard J. Norman .... Director Until next Private investor. 14 2001 to
Age: 61 election of President of the Board of present
directors Directors of Maryland
Public Television and
board member of The
Salvation Army. Prior
thereto, investment
representative of Morgan
Stanley Dean Witter.
Frank K. Ross ........ Director Until next Board member of NCRIC 14 2004 to
Age: 61 election of Group, Inc. (insurance) present
directors and Pepco Holdings, Inc.
(electric utility).
Formerly, Midatlantic
Area Managing Partner for
Audit and Risk Advisory
Services at KPMG LLP and
Managing Partner of its
Washington, DC office.
Willard H. Smith, Jr.. Director Until next Board member of Essex 14 1996 to
Age: 68 election of Property Trust, Inc., present
directors Highwoods Properties,
Inc., Realty Income
Corporation and Crest Net
Lease, Inc. Managing
Director at Merrill Lynch
& Co., Equity Capital
Markets Division from
1983 to 1995.
C. Edward Ward, Jr.... Director Until next Member of the board of 14 2004 to
Age: 58 election of trustees of Manhattan present
directors College, Riverdale, New
York. Formerly head of
closed-end fund listings
for the New York Stock
Exchange.
</Table>
- -------------------
(a) The address of all directors is 757 Third Avenue, New York, NY 10017.
- --------------------------------------------------------------------------------
29
<Page>
- --------------------------------------------------------------------------------
COHEN & STEERS REALTY FOCUS FUND, INC.
The officers of the fund (other than Messrs. Cohen and Steers, whose
biographies are provided above), their addresses, their ages, and their
principal occupations for at least the past five years are set forth below.
<Table>
<Caption>
POSITION(S) HELD
NAME, ADDRESS AND AGE* WITH FUND PRINCIPAL OCCUPATION DURING PAST 5 YEARS
- ---------------------- --------- ----------------------------------------
Joseph M. Harvey ...... Vice president President of the advisor since 2003 and, prior
Age: 40 to that, senior vice president and director of
investment research of the advisor.
Adam M. Derechin ...... Vice president and Chief operating officer of the advisor since
Age: 40 assistant treasurer 2003 and prior to that, senior vice president
of the advisor.
James S. Corl ......... Vice president Executive vice president and chief investment
Age: 38 officer for real estate securities investments
of the advisor since 2004, and prior to that,
senior vice president of the advisor.
Lawrence B. Stoller ... Assistant secretary Executive vice president and general counsel
Age: 41 of the advisor, since 2004; Chief legal
officer of Cohen & Steers Securities, LLC.
Prior to that, senior vice president and
general counsel of the advisor, associate
general Counsel, Neuberger Berman Management,
Inc. (money manager); and assistant general
counsel, The Dreyfus Corporation (money
manager).
John E. McLean ........ Chief compliance Vice president and associate general counsel
Age: 34 officer of Cohen & Steers Capital Management since
September 2003. Prior to that, vice president,
Law & Regulation, J. & W. Seligman & Co.
Incorporated (money manager); and associate,
Battle Fowler LLP (law firm).
</Table>
- -------------------
* The address of each officer is 757 Third Avenue, New York, NY 10017.
- --------------------------------------------------------------------------------
30
<Page>
- --------------------------------------------------------------------------------
COHEN & STEERS REALTY FOCUS FUND, INC.
MEET THE COHEN & STEERS FAMILY OF OPEN-END FUNDS:
<Table>
FOR HIGH CURRENT INCOME: FOR TOTAL RETURN:
COHEN & STEERS COHEN & STEERS
REALTY INCOME FUND REALTY SHARES
DESIGNED FOR INVESTORS SEEKING A HIGH DESIGNED FOR INVESTORS SEEKING MAXIMUM
DIVIDEND YIELD AND CAPITAL APPRECIATION, TOTAL RETURN THROUGH BOTH CURRENT INCOME
INVESTING PRIMARILY IN REITS AND CAPITAL APPRECIATION, INVESTING
A, B, C AND I SHARES AVAILABLE PRIMARILY IN REITS
SYMBOLS: CSEIX, CSBIX, CSCIX, CSDIX SYMBOL: CSRSX
ALSO AVAILABLE: COHEN & STEERS
INSTITUTIONAL REALTY SHARES (CSRIX)
REQUIRES A HIGHER MINIMUM PURCHASE, BUT
OFFERS A LOWER TOTAL EXPENSE RATIO
FOR TOTAL RETURN: FOR CAPITAL APPRECIATION:
COHEN & STEERS COHEN & STEERS
UTILITY FUND REALTY FOCUS FUND
DESIGNED FOR INVESTORS SEEKING MAXIMUM DESIGNED FOR INVESTORS SEEKING MAXIMUM
TOTAL RETURN THROUGH BOTH CURRENT INCOME CAPITAL APPRECIATION, INVESTING IN A
AND CAPITAL APPRECIATION, INVESTING LIMITED NUMBER OF REITS AND OTHER REAL
PRIMARILY IN UTILITIES ESTATE COMPANIES
A, B, C AND I SHARES AVAILABLE CONCENTRATED, HIGHLY FOCUSED PORTFOLIO
SYMBOLS: CSUAX, CSUBX, CSUCX, CSUIX A, B, C AND I SHARES AVAILABLE
SYMBOLS: CSFAX, CSFBX, CSFCX, 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. THE PROSPECTUS
CONTAINS THIS AND OTHER INFORMATION ABOUT THE FUND.
PLEASE READ THE PROSPECTUS CAREFULLY BEFORE INVESTING.
- --------------------------------------------------------------------------------
31
<Page>
- --------------------------------------------------------------------------------
COHEN & STEERS REALTY FOCUS FUND, INC.
<Table>
OFFICERS AND DIRECTORS KEY INFORMATION
Robert H. Steers INVESTMENT ADVISOR
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 E. Kroon Boston Financial Data Services, Inc.
Director 66 Brooks Drive
Braintree, MA 02184
Richard J. Norman (800) 437-9912
Director
LEGAL COUNSEL
Frank K. Ross Simpson Thacher & Bartlett LLP
Director 425 Lexington Avenue
New York, NY 10017
Willard H. Smith Jr.
Director DISTRIBUTOR
Cohen & Steers Securities, LLC
C. Edward Ward, Jr. 757 Third Avenue
Director New York, NY 10017
James S. Corl Nasdaq Symbol: Class A -- CSFAX
Vice president B -- CSFBX
C -- CSFCX
Adam Derechin I -- CSSPX
Vice president and assistant treasurer
Web site: cohenandsteers.com
Joseph M. Harvey
Vice president This report is authorized for delivery
only to shareholders of Cohen & Steers
Lawrence B. Stoller Realty Focus Fund, Inc. unless
Assistant secretary 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>
- --------------------------------------------------------------------------------
32
<Page>
COHEN & STEERS
REALTY FOCUS FUND
-----------------
ANNUAL REPORT
DECEMBER 31, 2004
COHEN & STEERS
REALTY FOCUS FUND
757 THIRD AVENUE
NEW YORK, NY 10017
<Page>
Item 2. Code of Ethics.
The registrant has adopted a Code of Ethics that applies to its Principal
Executive Officer and Principal Financial Officer. The registrant undertakes to
provide to any person without charge, upon request, a copy of the Code of
Ethics. Such request can be made by calling 800-330-7348 or writing to the
Secretary of the registrant, 757 Third Avenue, New York, NY 10017.
Item 3. Audit Committee Financial Expert.
The registrant's Board has determined that Frank K. Ross, a member of the
registrant's Audit Committee, is an "audit committee financial expert" and
"independent," as such terms are defined in this Item.
Item 4. Principal Accountant Fees and Services.
(a) - (d) Aggregate fees billed to the registrant for the last two fiscal years
for professional services rendered by the registrant's principal accountant were
as follows:
2004 2003
------- -------
Audit Fees $52,500 $40,000
Audit-Related Fees 6,000 6,000
Tax Fees 12,600 9,800
All Other Fees -- --
Audit-related fees were billed in connection with agreed upon procedures
performed by the registrant's principal accountant relating to after-tax return
calculations. Tax fees were billed in connection with the preparation of tax
returns, calculation and designation of dividends and other miscellaneous tax
services.
Aggregate fees billed by the registrant's principal accountant for the last two
fiscal years for non-audit services provided to the registrant's investment
adviser (not including a sub-adviser whose role is primarily portfolio
management and is subcontracted or overseen by another investment adviser) and
any entity controlling, controlled by, or under common control with the
investment adviser that provides ongoing services to the registered investment
company, where the engagement relates directly to the operations and financial
reporting of the registrant, were as follows:
2004 2003
------- -------
Audit-Related Fees -- --
Tax Fees -- --
<Page>
All Other Fees $62,500 $49,500
These other fees were billed in connection with internal control reviews and
AIMR performance reviews.
(e)(1) The Audit Committee is required to pre-approve audit and non-audit
services performed for the registrant by the principal accountant. The Audit
Committee also is required to pre-approve non-audit services performed by the
registrant's principal accountant for the registrant's investment adviser and
any sub-adviser (not including any sub-adviser whose role is primarily portfolio
management and is subcontracted with or overseen by another investment adviser)
and any entity controlling, controlled by or under common control with the
registrant's investment adviser that provides ongoing services to the
registrant, if the engagement for services relates directly to the operations
and financial reporting of the registrant.
The audit committee may delegate pre-approval authority to one or more of its
members who are independent members of the board of directors of the registrant.
The member or members to whom such authority is delegated shall report any
pre-approval decisions to the Audit Committee at its next scheduled meeting. The
Audit Committee may not delegate its responsibility to pre-approve services to
be performed by the registrant's principal accountant for the investment
adviser.
(e) (2) No services included in (b) - (d) above were approved by the Audit
Committee pursuant to paragraphs (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(f) Not applicable.
(g) For the fiscal years ended December 31, 2004 and December 31, 2003, the
aggregate fees billed by the registrant's principal accountant for non-audit
services rendered to the registrant and for non-audit services rendered to the
registrant's investment adviser (not including any sub-adviser whose role is
primarily portfolio management and is subcontracted with or overseen by another
investment adviser) and any entity controlling, controlled by or under
common control with the registrant's investment adviser that provides ongoing
services to the registrant were $86,600 and $65,300, respectively.
(h) The registrant's audit committee considered whether the provision of
non-audit services that were rendered to the registrant's investment adviser
(not including any sub-adviser whose role is primarily portfolio management and
is subcontracted with or overseen by another investment adviser) and any
entity controlling, controlled by or under common control with the registrant's
investment adviser that provides ongoing services to the registrant that were
not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X
was compatible with maintaining the principal accountant's independence.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
<Page>
Item 6. Schedule of Investments.
Included in Item 1 above.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies.
Not applicable.
Item 8. Portfolio Managers of Closed-End Investment Companies.
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers.
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
Not applicable.
Item 11. 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 second fiscal quarter of the period covered
by this report that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial reporting.
Item 12. Exhibits.
(a)(1) Not applicable.
(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.
<Page>
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 REALTY FOCUS FUND, INC.
By: /s/ Robert H. Steers
-----------------------------------
Name: Robert H. Steers
Title: Chairman
Date: March 8, 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/ Robert H. Steers By: /s/ Martin Cohen
----------------------------------- ----------------------------------
Name: Robert H. Steers Name: Martin Cohen
Title: Chairman, Secretary and Title: President, Treasurer and
principal executive principal financial
officer officer
Date: March 8, 2005
STATEMENT OF DIFFERENCES
------------------------
The section symbol shall be expressed as................................ 'SS'
The division sign shall be expressed as................................. [div]