Wall Street Watch

Approximately $240.0 Million of Preferred Securities Affected.

New York, October 16, 2002 -- Moody's Investors today assigned ratings of Aaa to $240 million of 7-day Series M, T, and F and 28-day Series TH taxable auction market preferred shares (AMPS) issued by the Cohen & Steers Premium Income Realty Fund, Inc, a closed-end investment company trading publicly on the New York Stock Exchange (NYSE-RPF). Each of the issues, which pay weekly or monthly dividends via a Dutch Auction process, is comprised of 2,400 shares and has a liquidation preference of $25,000 per share. The Aaa ratings reflect Moody's assessment that the preferred shares issued by this closed-end fund constitute top quality investments given the good asset protection and low risk of dividend impairment. The expected loss profile of the preferred stock is consistent with Aaa rated fixed-income obligations.

The primary investment objective of this recently launched, non-diversified, closed-end investment company is high current income through investment in real estate securities with a secondary investment objective of capital appreciation. Under normal market conditions, the Fund will invest at least 90% of total assets in common stocks, preferred stocks and other equity securities issued by real estate companies, such as real estate investment trusts (REITs). At least 80% of total assets will be invested in income producing equity securities issued by REITs and up to 10% of total assets may be invested in debt securities issued or guaranteed by real estate companies. Additionally, the Fund may invest up to 25% of its total assets in non-investment grade preferred stock or debt securities.

The rating represents an assessment that the market value of the underlying assets of the Fund's portfolio is sufficient to provide good asset protection to investors in the preferred stock. In addition to satisfying regulatory requirements, Moody's rating guidelines, in general, require that funds support preferred stock issues with eligible assets in amounts that are sufficient to withstand a severe loss in value. To meet the Aaa preferred stock rating guidelines, funds adhere to stricter diversification standards that seek to reduce underlying obligor concentrations. These rating agency guidelines supplement regulatory requirements which mandate asset coverage ratios of 200% to cover a fund's liabilities pursuant to the Investment Company Act of 1940.

In addition to coverage provided by the market value of the underlying assets, the Aaa rating reflects the low risk of dividend impairment and the fact that the vast majority of portfolio holdings are comprised of publicly listed REIT common shares, REIT preferred shares, debt securities of real estate companies and cash. In addition to the portfolio's diversification on both an industry sector and geographic basis, Moody's cites the impact of fixed leases in the real estate sector as being a mitigant to asset class price volatility.

At the time of their issuance, the preferred shares constitute approximately 35% of the total capital of the Cohen & Steers Premium Income Realty Fund. Moody's notes that under current market conditions the new fund seeks to take advantage of an opportunity to increase earnings per common share by issuing preferred obligations and investing the net proceeds of such issuance securities eligible for investment in accordance with the Fund's investment policies.

Cohen & Steers Capital Management Inc., which was founded in 1986, serves as the Fund's advisor. The firm specializes in the management of real estate securities portfolios and currently manages approximately billion in assets.

New York
Henry Shilling
Senior Vice President
Financial Institutions Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

New York
Martin Duffy
VP - Senior Credit Officer
Structured Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Copyright 2002 by Moody's Investors Service
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