N-Q 1 d27901dnq.htm NUVEEN REAL ESTATE INCOME FUND Nuveen Real Estate Income Fund

 

 

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANAGEMENT INVESTMENT COMPANY

Investment Company Act file number 811-10491

Nuveen Real Estate Income Fund

(Exact name of registrant as specified in charter)

    333 West Wacker Drive, Chicago, Illinois 60606    

(Address of principal executive offices) (Zip code)

Kevin J. McCarthy—Vice President and Secretary

    333 West Wacker Drive, Chicago, Illinois 60606    

(Name and address of agent for service)

Registrant’s telephone number, including area code:     312-917-7700    

Date of fiscal year end:       December 31      

Date of reporting period:  September 30, 2015  

Form N-Q is to be used by management investment companies, other than small business investment companies registered on Form N-5 (§§ 239.24 and 274.5 of this chapter), to file reports with the Commission, not later than 60 days after the close of the first and third fiscal quarters, pursuant to rule 30b1-5 under the Investment Company Act of 1940 (17 CFR 270.30b1-5). The Commission may use the information provided on Form N-Q in its regulatory, disclosure review, inspection, and policymaking roles.

A registrant is required to disclose the information specified by Form N-Q, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-Q unless the Form displays a currently valid Office of Management and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to the Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.

 

 

 

 

 


Item 1. Schedule of Investments

 

 


JRS

 

Nuveen Real Estate Income Fund

  

Portfolio of Investments

   September 30, 2015 (Unaudited)

 

Shares     Description (1)                  Value  
 

LONG-TERM INVESTMENTS – 141.5% (96.7% of Total Investments)

       
 

REAL ESTATE INVESTMENT TRUST COMMON STOCKS – 93.4% (63.8% of Total Investments)

  

      Diversified – 2.6% (1.8% of Total Investments)                  
  279,756     

Duke Realty Corporation, (2)

        $ 5,329,352   
  95,350     

Liberty Property Trust

                3,004,479   
 

Total Diversified

                8,333,831   
      Health Care – 10.5% (7.2% of Total Investments)                  
  186,960     

HCP, Inc., (2)

          6,964,260   
  247,800     

Senior Housing Properties Trust

          4,014,360   
  156,990     

Ventas Inc.

          8,800,859   
  203,131     

Welltower Inc., (2)

                13,756,032   
 

Total Health Care

                33,535,511   
      Hotels, Restaurants & Leisure – 6.2% (4.2% of Total Investments)                  
  56,250     

Chesapeake Lodging Trust

          1,465,875   
  373,275     

Host Hotels & Resorts Inc.

          5,901,478   
  12,850     

Hyatt Hotels Corporation, Class A, (3)

          605,235   
  137,550     

LaSalle Hotel Properties

          3,905,044   
  82,650     

Pebblebrook Hotel Trust

          2,929,942   
  52,750     

RLJ Lodging Trust

          1,332,993   
  53,600     

Starwood Hotels & Resorts Worldwide, Inc.

                3,563,328   
 

Total Hotels, Restaurants & Leisure

                19,703,895   
      Industrial – 5.3% (3.6% of Total Investments)                  
  78,500     

DCT Industrial Trust Inc.

          2,642,310   
  366,553     

Prologis, Inc.

                14,258,912   
 

Total Industrial

                16,901,222   
      Office – 16.3% (11.2% of Total Investments)                  
  89,650     

Alexandria Real Estate Equities Inc.

          7,590,665   
  439,940     

BioMed Realty Trust Inc.

          8,790,001   
  67,500     

Boston Properties, Inc.

          7,992,000   
  108,400     

Columbia Property Trust Inc.

          2,514,880   
  216,300     

Douglas Emmett Inc.

          6,212,136   
  165,650     

Paramount Group Inc.

          2,782,920   
  154,150     

Piedmont Office Realty Trust

          2,757,744   
  49,900     

SL Green Realty Corporation

          5,397,184   
  87,360     

Vornado Realty Trust, (2)

                7,899,091   
 

Total Office

                51,936,621   
      Residential – 19.7% (13.4% of Total Investments)                  
  221,026     

Apartment Investment & Management Company, Class A, (2)

          8,182,383   
  82,138     

AvalonBay Communities, Inc.

          14,359,365   
  40,900     

Camden Property Trust

          3,022,510   
  70,750     

Equity Lifestyles Properties Inc.

          4,143,827   
  224,820     

Equity Residential

          16,888,478   
  23,538     

Essex Property Trust Inc.

          5,258,860   
  50,900     

Post Properties, Inc.

          2,966,961   
  225,680     

UDR Inc.

                7,781,446   
 

Total Residential

                62,603,830   
      Retail – 24.5% (16.7% of Total Investments)                  
  223,300     

Brixmor Property Group Inc.

          5,243,084   
  429,950     

Developers Diversified Realty Corporation

          6,612,631   
  264,299     

General Growth Properties Inc.

          6,863,845   

 

Nuveen Investments     1   


JRS    Nuveen Real Estate Income Fund   
   Portfolio of Investments (continued)    September 30, 2015 (Unaudited)

 

Shares     Description (1)                      Value  
      Retail (continued)                      
  214,750     

Kimco Realty Corporation

        $ 5,246,343   
  166,750     

Kite Realty Group Trust

          3,970,318   
  146,027     

Macerich Company

          11,217,794   
  83,360     

Regency Centers Corporation

          5,180,824   
  180,150     

Retail Opportunity Investments Corporation

          2,979,681   
  150,499     

Simon Property Group, Inc., (2)

          27,649,676   
  42,350     

Taubman Centers Inc.

                        2,925,538   
 

Total Retail

                        77,889,734   
      Specialized – 8.3% (5.7% of Total Investments)                      
  289,850     

CubeSmart

          7,886,819   
  47,700     

Extra Space Storage Inc.

          3,680,532   
  69,537     

Public Storage, Inc.

                        14,716,115   
 

Total Specialized

                        26,283,466   
 

Total Real Estate Investment Trust Common Stocks (cost $223,965,918)

                        297,188,110   
Shares     Description (1)   Coupon          Ratings (4)     Value  
 

REAL ESTATE INVESTMENT TRUST PREFERRED STOCKS – 48.1% (32.9% of Total Investments)

  

      Diversified – 1.1% (0.8% of Total Investments)                      
  3,550     

PS Business Parks, Inc.

    6.875%          BBB      $ 88,892   
  135,100     

PS Business Parks, Inc.

    6.450%            BBB        3,427,487   
 

Total Diversified

                        3,516,379   
      Health Care – 4.8% (3.3% of Total Investments)                      
  114,800     

Sabra Health Care Real Estate Investment Trust

    7.125%          BB–        2,935,436   
  494,250     

Welltower Inc.

    6.500%            Baa3        12,529,237   
 

Total Health Care

                        15,464,673   
      Hotels, Restaurants & Leisure – 3.8% (2.6% of Total Investments)                      
  100,000     

Ashford Hospitality Trust Inc.

    8.450%          N/R        2,551,000   
  70,800     

Hospitality Properties Trust

    7.125%          Baa3        1,825,932   
  43,650     

Pebblebrook Hotel Trust

    7.875%          N/R        1,108,274   
  11,800     

Summit Hotel Properties Inc.

    9.250%          N/R        312,110   
  247,950     

Sunstone Hotel Investors Inc.

    8.000%            N/R        6,322,725   
 

Total Hotels, Restaurants & Leisure

                        12,120,041   
      Industrial – 0.9% (0.6% of Total Investments)                      
  114,700     

Terreno Realty Corporation

    7.750%            BB        2,947,790   
      Office – 13.4% (9.1% of Total Investments)                      
  253,200     

Alexandria Real Estate Equities Inc., Series B

    6.450%          Baa3        6,375,576   
  152,400     

Equity Commonwealth

    7.250%          Ba1        3,883,152   
  12,359     

Highwoods Properties, Inc., Series A, (5)

    8.625%          Baa3        15,066,393   
  339,450     

Hudson Pacific Properties Inc.

    8.375%          BB        8,581,296   
  15,500     

Kilroy Realty Corporation

    6.375%          Baa3        386,260   
  99,000     

SL Green Realty Corporation

    6.500%          Ba1        2,451,240   
  134,500     

Vornado Realty Trust

    6.625%          BBB–        3,363,845   
  100,100     

Vornado Realty Trust

    5.700%            BBB–        2,416,414   
 

Total Office

                        42,524,176   
      Residential – 3.0% (2.1% of Total Investments)                      
  36,100     

Apartment Investment & Management Company

    7.000%          BB        913,691   
  234,450     

Apartment Investment & Management Company

    6.875%          BB        6,224,647   
  89,100     

Campus Crest Communities

    8.000%          N/R        2,167,803   
  10,000     

Equity Lifestyle Properties Inc.

    6.750%            N/R        262,000   
 

Total Residential

                        9,568,141   

 

  2      Nuveen Investments


Shares     Description (1)   Coupon            Ratings (4)     Value  
      Retail – 17.2% (11.7% of Total Investments)                        
  224,500     

CBL & Associates Properties Inc.

    7.375%          BB      $ 5,619,235   
  452,500     

General Growth Properties

    6.375%          N/R        10,977,650   
  158,000     

Inland Real Estate Corporation

    8.125%          N/R        4,029,000   
  204,050     

Inland Real Estate Corporation

    6.950%          N/R        5,111,453   
  2,350     

Kite Realty Group Trust

    8.250%          N/R        59,596   
  304,250     

Saul Centers, Inc.

    6.875%          N/R        7,834,437   
  3,169     

Simon Property Group, Inc.

    8.375%          BBB+        221,513   
  148,650     

Taubman Centers Incorporated, Series J

    6.500%          N/R        3,717,737   
  414,000     

Taubman Centers Incorporated, Series K

    6.250%          N/R        10,292,040   
  43,600     

Urstadt Biddle Properties

    7.125%          N/R        1,137,960   
  127,900     

Urstadt Biddle Properties

    6.750%          N/R        3,261,450   
  95,000     

WP GLIMCHER, Inc.

    6.875%                Baa3        2,361,700   
 

Total Retail

                            54,623,771   
      Specialized – 3.9% (2.7% of Total Investments)                        
  4,850     

CubeSmart

    7.750%          Baa3        127,555   
  186,000     

Public Storage, Inc., Series Y

    6.375%          A3        4,847,160   
  126,150     

Public Storage, Inc., Series R

    6.350%          A3        3,233,225   
  167,000     

Public Storage, Inc., Series S

    5.900%                A3        4,215,080   
 

Total Specialized

                            12,423,020   
 

Total Real Estate Investment Trust Preferred Stocks (cost $148,311,467)

                            153,187,991   
 

Total Long-Term Investments (cost $372,277,385)

                            450,376,101   
Principal
Amount (000)
    Description (1)   Coupon     Maturity            Value  
 

SHORT-TERM INVESTMENTS – 4.8% (3.3% of Total Investments)

  

      REPURCHASE AGREEMENTS – 4.8% (3.3% of Total Investments)  
$ 15,367     

Repurchase Agreement with Fixed Income Clearing Corporation, dated 9/30/15, repurchase price $15,366,712, collateralized by $14,985,000 U.S. Treasury Notes, 2.500%, due 8/15/23, value $15,678,056

    0.000%        10/01/15              $ 15,366,712   
 

Total Short-Term Investments (cost $15,366,712)

                            15,366,712   
 

Total Investments (cost $387,644,097) – 146.3%

                            465,742,813   
 

Borrowings – (44.0)% (6), (7)

                            (140,000,000
 

Other Assets Less Liabilities – (2.3)% (8)

                            (7,406,967
 

Net Assets Applicable to Common Shares – 100%

                          $ 318,335,846   

Investments in Derivatives as of September 30, 2015

Interest Rate Swaps outstanding

 

Counterparty   Notional
Amount
    Fund
Pay/Receive
Floating Rate
    Floating Rate Index     Fixed Rate
(Annualized)
    Fixed Rate
Payment
Frequency
    Effective
Date (9)
    Termination
Date
    Unrealized
Appreciation
(Depreciation)
 

JPMorgan

  $ 35,761,000        Receive        1-Month USD-LIBOR-ICE        1.462     Monthly        12/01/15        12/01/20      $ (826,589

JPMorgan

    35,761,000        Receive        1-Month USD-LIBOR-ICE        1.842        Monthly        12/01/15        12/01/22        (1,254,864
    $ 71,522,000                                                      $ (2,081,453

Fair Value Measurements

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

 

Nuveen Investments     3   


JRS    Nuveen Real Estate Income Fund   
   Portfolio of Investments (continued)    September 30, 2015 (Unaudited)

 

use in pricing the asset or liability. Unobservable inputs are based on the best information available in the circumstances. The following is a summary of the three-tiered hierarchy of valuation input levels.

 

Level 1 –   Inputs are unadjusted and prices are determined using quoted prices in active markets for identical securities.
Level 2 –  

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

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

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

 

      Level 1      Level 2      Level 3      Total  

Long-Term Investments:

           

Real Estate Investment Trust Common Stocks

   $ 297,188,110       $       $     —       $ 297,188,110   

Real Estate Investment Trust Preferred Stocks

     138,121,598         15,066,393                 153,187,991   

Short-Term Investments:

                

Repurchase Agreements

             15,366,712                 15,366,712   

Investment in Derivatives:

           

Interest Rate Swaps*

             (2,081,453              (2,081,453

Total

   $ 435,309,708       $ 28,351,652       $       $ 463,661,360   
* Represents net unrealized appreciation (depreciation).

Income Tax Information

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

As of September 30, 2015, the cost of investments (excluding investments in derivatives) was $391,323,852.

Gross unrealized appreciation and gross unrealized depreciation of investments (excluding investments in derivatives) as of September 30, 2015, were as follows:

 

Gross unrealized:

       

Appreciation

  $ 84,723,317   

Depreciation

    (10,304,356

Net unrealized appreciation (depreciation) of investments

  $ 74,418,961   

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

 

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

 

(2) Investment, or portion of investment, is out on loan. The total value of investments out on loan as of the end of the reporting period was $28,298,490.

 

(3) Non-income producing; issuer has not declared a dividend within the past twelve months.

 

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

 

(5) For fair value measurement disclosure purposes, investment classified as Level 2.

 

(6) Borrowings as a percentage of Total Investments is 30.1%.

 

(7) The Fund may pledge up to 100% of its eligible investments (excluding any investments separately pledged as collateral for specific investments in derivatives, when applicable) in the Portfolio of Investments as collateral for borrowings. As of the end of the reporting period, investments with a value of $292,682,494 have been pledged as collateral for borrowings.

 

(8) Other assets less liabilities includes the unrealized appreciation (depreciation) of certain over-the-counter derivatives as well as the exchange-cleared and exchange-traded derivatives, when applicable.

 

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

 

USD-LIBOR-ICE United States Dollar – London Inter-Bank Offered Rate – Intercontinental Exchange

 

  4      Nuveen Investments


Item 2. Controls and Procedures.

 

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

 

  b. There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d)) that occurred during the registrant’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

Item 3. Exhibits.

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

 

 


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

(Registrant)   

Nuveen Real Estate Income Fund

  
By (Signature and Title)    /s/ Kevin J. McCarthy                                                               
   Kevin J. McCarthy   
   Vice President and Secretary   

Date: November 27, 2015

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

By (Signature and Title)    /s/ Gifford R. Zimmerman                                                        
   Gifford R. Zimmerman   
   Chief Administrative Officer (principal executive officer)   
Date: November 27, 2015      
By (Signature and Title)    /s/ Stephen D. Foy                                                                    
   Stephen D. Foy   
   Vice President and Controller (principal financial officer)   
Date: November 27, 2015