Investment Company Act file number

811-10481

Cohen & Steers Quality Income Realty Fund, Inc.

(Exact name of registrant as specified in charter)

280 Park Avenue
New York, NY

10017

(Address of principal executive offices)

(Zip code)

John E. McLean
280 Park Avenue
New York, NY 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:

March 31, 2006

Number
of Shares

Value

COMMON STOCK

114.6

%

DIVERSIFIED

13.9

%

Colonial Properties Trust

676,200

$

33,897,906

Entertainment Properties Trust

228,600

9,596,628

iStar Financial

430,500

16,479,540

Spirit Finance Corp.

1,030,300

12,569,660

Vornado Realty Trust

602,943

57,882,528

130,426,262

HEALTH CARE

19.1

%

Health Care Property Investors

1,113,500

31,623,400

Health Care REIT

969,625

36,942,712

Healthcare Realty Trust

354,800

13,262,424

Medical Properties Trust

202,800

2,190,240

Nationwide Health Properties

1,136,800

24,441,200

Senior Housing Properties Trust

639,600

11,576,760

Ventas

1,766,500

58,612,470

178,649,206

HOTEL

4.6

%

Ashford Hospitality Trust

398,900

4,946,360

DiamondRock Hospitality Co.

746,900

10,314,689

Hospitality Properties Trust

420,900

18,380,703

Strategic Hotels & Resorts

401,500

9,346,920

42,988,672

INDUSTRIAL

2.4

%

First Industrial Realty Trust

529,700

22,612,893

MORTGAGE

4.2

%

Gramercy Capital Corp.

785,000

19,570,050

Newcastle Investment Corp.

817,828

19,562,446

39,132,496

OFFICE

27.0

%

American Financial Realty Trust

699,000

8,143,350

Brandywine Realty Trust

1,805,922

57,356,083

CarrAmerica Realty Corp.

142,200

6,343,542

Equity Office Properties Trust

1,420,400

47,697,032

Highwoods Properties

415,300

14,008,069

HRPT Properties Trust

833,100

9,780,594

Mack-Cali Realty Corp.

1,073,800

51,542,400

Maguire Properties

604,800

22,075,200

Reckson Associates Realty Corp.

794,100

36,385,662

253,331,932

OFFICE/INDUSTRIAL

7.8

%

Duke Realty Corp.

596,700

22,644,765

Liberty Property Trust

1,065,200

50,234,832

72,879,597

RESIDENTIAL - APARTMENT

18.5

%

American Campus Communities

293,789

$

7,612,073

Apartment Investment & Management Co.

229,900

10,782,310

Archstone-Smith Trust

660,272

32,201,465

AvalonBay Communities

280,600

30,613,460

Camden Property Trust

366,600

26,413,530

Education Realty Trust

496,800

7,601,040

GMH Communities Trust

583,800

6,795,432

Home Properties

510,197

26,071,067

Mid-America Apartment Communities

309,400

16,939,650

United Dominion Realty Trust

310,600

8,864,524

173,894,551

SELF STORAGE

2.5

%

Extra Space Storage

448,600

7,711,434

Sovran Self Storage

107,500

5,934,000

U-Store-It Trust

498,100

10,036,715

23,682,149

SHOPPING CENTER

14.6

%

COMMUNITY CENTER

4.4

%

Cedar Shopping Centers

535,800

8,487,072

Heritage Property Investment Trust

449,100

17,779,869

Inland Real Estate Corp.

308,400

5,030,004

Urstadt Biddle Properties—Class A

544,000

9,792,000

41,088,945

REGIONAL MALL

10.2

%

Glimcher Realty Trust

688,200

19,544,880

Macerich Co.

781,757

57,810,930

Mills Corp.

636,400

17,819,200

95,175,010

TOTAL SHOPPING CENTER

136,263,955

TOTAL COMMON STOCK
(Identified cost—$709,536,742)

1,073,861,713

PREFERRED STOCK

26.8

%

DIVERSIFIED

5.7

%

Colonial Properties Trust, 8.125%, Series D

64,900

1,687,400

Colonial Properties Trust, 7.62%, Series E

80,900

2,028,163

Crescent Real Estate Equities Co., 6.75%, Series A (Convertible) (a)

1,671,000

36,060,180

Digital Realty Trust, 8.50%, Series A

122,000

3,087,820

Entertainment Properties Trust, 9.50%, Series A

50,000

1,272,000

Entertainment Properties Trust, 7.75%, Series B

128,000

3,123,200

iStar Financial, 7.80%, Series F

167,081

4,237,174

iStar Financial, 7.65%, Series G

90,400

2,271,752

53,767,689

HEALTH CARE

0.3

%

Health Care REIT, 7.625%, Series F

68,900

1,756,950

Omega Healthcare Investors, 8.375%, Series D

40,000

1,039,800

2,796,750

Number
of Shares

Value

HOTEL

4.3

%

FelCor Lodging Trust, 8.00%, Series C

104,300

$

2,609,586

Highland Hospitality Corp., 7.875%, Series A

75,000

1,824,750

Host Marriott Corp., 10.00%, Series C

30,700

773,640

Innkeepers USA Trust, 8.00%, Series C

91,300

2,263,327

LaSalle Hotel Properties, 10.25%, Series A

1,000,000

25,720,000

Strategic Hotels & Resorts, 8.50%, Series A

10,000

253,750

Strategic Hotels & Resorts, 8.50%, Series A, 144A(b)

132,200

3,354,575

Strategic Hotels & Resorts, 8.25%, Series B

45,000

1,131,750

Sunstone Hotel Investors, 8.00%, Series A

111,000

2,809,965

40,741,343

INDUSTRIAL

0.3

%

First Industrial Realty Trust, 7.25%, Series J

100,000

2,595,000

MORTGAGE

0.2

%

Newcastle Investment Corp., 9.75%, Series B

56,000

1,458,800

OFFICE

3.0

%

Brandywine Realty Trust, 7.375%, Series D

38,300

956,543

Cousins Properties, 7.50%, Series B

200,000

5,076,000

Highwoods Properties, 8.625%, Series A

13,195

14,514,500

HRPT Properties Trust, 8.75%, Series B

120,000

3,152,400

Kilroy Realty Corp., 7.50%, Series F

55,500

1,380,285

Maguire Properties, 7.625%, Series A

124,600

3,128,706

28,208,434

OFFICE/INDUSTRIAL

0.0

%

PS Business Parks, 7.60%, Series L

5,400

136,080

RESIDENTIAL

3.4

%

APARTMENT

3.3

%

Apartment Investment & Management Co., 10.00%, Series R

820,000

20,852,600

Associated Estates Realty Corp., 8.70%, Series B

80,800

2,060,400

Home Properties, 9.00%, Series F

196,000

5,037,200

Mid-America Apartment Communities, 8.30%, Series H

138,100

3,493,930

31,444,130

MANUFACTURED HOME

0.1

%

American Land Lease, 7.75%, Series A

22,000

543,400

TOTAL RESIDENTIAL

31,987,530

SHOPPING CENTER

9.6

%

COMMUNITY CENTER

4.5

%

Cedar Shopping Centers, 8.875%, Series A

61,000

1,635,715

Developers Diversified Realty Corp., 8.60%, Series F

1,039,400

26,504,700

Federal Realty Investment Trust, 8.50%, Series B

276,300

7,125,777

Urstadt Biddle Properties, 8.50%, Series C

24,000

2,616,000

Urstadt Biddle Properties, 7.50%, Series D

156,300

3,927,038

41,809,230

FREE STANDING

0.1

%

Commercial Net Lease Realty, 9.00%, Series A

25,000

$

642,500

REGIONAL MALL

5.0

%

CBL & Associates Properties, 8.75%, Series B

430,000

21,891,300

CBL & Associates Properties, 7.375%, Series D

297,000

7,543,800

Glimcher Realty Trust, 8.75%, Series F

35,000

892,500

Glimcher Realty Trust, 8.125%, Series G

40,000

1,012,000

Mills Corp., 9.00%, Series B

53,300

1,223,235

Mills Corp., 9.00%, Series C

158,600

3,624,010

Mills Corp., 8.75%, Series E

84,000

1,894,200

Mills Corp., 7.875%, Series G

275,600

5,870,280

Simon Property Group, 8.75%, Series F

20,000

506,400

Simon Property Group, 8.375%, Series J

14,000

903,000

Taubman Centers, 8.30%, Series A

72,094

1,810,280

47,171,005

TOTAL SHOPPING CENTER

89,622,735

TOTAL PREFERRED STOCK
(Identified cost—$241,864,481)

251,314,361

Principal
Amount

Value

COMMERCIAL PAPER

3.8

%

San Paolo U.S. Finance Co., 3.69%, due 4/3/06
(Identified cost—$35,458,729)

$

35,466,000

35,458,729

TOTAL INVESTMENTS (Identified cost—$986,859,952)

145.2

%

1,360,634,803

OTHER ASSETS IN EXCESS OF LIABILITIES

1.1

%

10,077,308

LIQUIDATION VALUE OF PREFERRED SHARES

(46.3

)%

(434,000,000

)

NET ASSETS APPLICABLE TO COMMON SHARES (Equivalent to $24.11 per share based on 38,856,074 shares of common stock outstanding)

100.0

%

$

936,712,111

REIT

Real Estate Investment Trust

Unrealized

Notional

Fixed

Floating Rate(a)

Termination

Appreciation/

Counterparty

Amount

Rate

(reset monthly)

Date

(Depreciation)

Fleet Global Markets

$

14,000,000

3.2120

%

4.633

%

October 2, 2008

$

656,679

Merrill Lynch Derivative Products

$

46,000,000

5.2100

%

4.660

%

April 5, 2007

(4,708

)

Merrill Lynch Derivative Products

$

46,000,000

5.5800

%

4.660

%

April 5, 2009

(488,825

)

Royal Bank of Canada

$

26,000,000

4.1370

%

4.818

%

May 26, 2010

998,601

Royal Bank of Canada

$

14,000,000

3.6800

%

4.793

%

October 22, 2008

497,007

Royal Bank of Canada

$

44,000,000

4.2580

%

4.691

%

March 10, 2009

1,418,327

UBS AG

$

24,000,000

5.1200

%

4.748

%

April 15, 2007

25,140

UBS AG

$

24,000,000

5.4950

%

4.748

%

April 15, 2009

(187,335

)

$

2,914,886

(a)

The registrant’s principal executive officer and principal financial officer have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) are effective based on their evaluation of these disclosure controls and procedures required by Rule 30a-3(b) under the Investment Company Act of 1940 and Rule 13a-15(b) or 15d-15(b) under the Securities Exchange Act as of a date within 90 days of the filing of this report.

(b)

During the last fiscal quarter, there were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

(a)

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

By:

/s/ Adam M. Derechin

Name: Adam M. Derechin

Title: President

Date: May 26, 2006

By:

/s/ Adam M. Derechin

By:

/s/ Jay J. Chen

Name: Adam M. Derechin

Name: Jay J. Chen

Title: President and principal

Title: Treasurer and principal

executive officer

financial officer

Date: May 26, 2006