Edgar Filing: NUVEEN REAL ESTATE INCOME FUND

SCHEDULE 14A

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )

Filed by the registrant [X]

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[ ] Preliminary proxy statement. [ ] Confidential, for use of the
Commission only (as permitted by
Rule 14a-6(e)(2)).

[X] Definitive proxy statement.

[ ] Definitive additional materials.

[ ] Soliciting material pursuant to Section 240.14a-12

NUVEEN REAL ESTATE INCOME FUND
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JANUARY 20, 2004

IMPORTANT NOTICE
TO FUND SHAREHOLDERS
Although we recommend that you read the complete Proxy Statement, for your
convenience, we have provided a brief overview of the issues to be voted on.

Q. WHY AM I RECEIVING THIS PROXY STATEMENT?

A. Nuveen Institutional Advisory Corp. ("NIAC") serves as the investment
adviser of the Nuveen Real Estate Income Fund (the "Fund"). NIAC has entered
into an Investment Sub-Advisory Agreement (the "Sub-Advisory Agreement") with
Security Capital Research & Management Incorporated (the "Sub-Adviser") for the
Fund pursuant to which the Sub-Adviser is retained to furnish investment
advisory services to the Fund. The Sub-Adviser is a wholly-owned subsidiary of
GECIA Capital Holdings, Inc. ("GECIA"). On November 24, 2003, GECIA sold all of
the capital stock of the Sub-Adviser to Banc One Investment Advisors Corporation
("Banc One") (the "Sale").

The Sub-Advisory Agreement has terminated as a result of the Sale. Currently, an
interim subadvisory agreement approved by the Fund's Board of Trustees allows
the Sub-Adviser to continue to serve as sub-adviser for the Fund for a limited
period of time. In order for the Sub-Adviser to continue to serve as sub-adviser
of the Fund after termination of the interim sub-advisory agreement, the Fund's
shareholders must approve a new sub-advisory agreement. The enclosed Proxy
Statement gives you additional information on Banc One, the interim sub-advisory
agreement and the proposed new sub-advisory agreement, as well as certain other
matters. The Trustees of the Fund, including those who are not affiliated with
NIAC or the Sub-Adviser, recommend that you vote FOR the approval of the new
sub-advisory agreement for the Fund.

In addition, closed-end investment companies listed on a stock exchange, such as
the Fund, are required to hold annual meetings to approve the election of Board
Members. The Fund is seeking shareholder approval to elect Board Members to
serve on the Board.

Please refer to the Proxy Statement for a detailed explanation of each item.

Q. WHY IS A VOTE ON THE PROPOSED NEW SUB-ADVISORY AGREEMENT REQUIRED?

A. The Investment Company Act of 1940, which regulates investment companies in
the United States such as the Fund, generally requires a shareholder vote to
approve a new investment management or sub-advisory agreement whenever there is
a "change in control" of a fund's investment adviser or sub-adviser. The Sale of
the Sub-Adviser to Banc One resulted in such a change in control. As a result,
shareholder approval of a new sub-advisory agreement is necessary to permit the
Sub-Adviser to continue to serve the Fund after termination of the interim
sub-advisory agreement.

Q. WHAT WILL HAPPEN IF SHAREHOLDERS DO NOT APPROVE THE NEW SUB-ADVISORY
AGREEMENT?

A. If the new sub-advisory agreement is not approved, the Fund's Board will
take such actions as it deems to be in the best interests of the Fund. This is
discussed in more detail in the Proxy Statement.

Q. HOW WILL THE SALE TO BANC ONE AFFECT ME AS A FUND SHAREHOLDER?

A. Your investment in the Fund did not change as a result of the Sale. You
still own the same shares in the Fund, and the value of your investment did not
change as a result of the Sale. The new sub-advisory agreement will still be
with the Sub-Adviser and the terms of the new sub-advisory agreement are
substantially identical to the terms of the original Sub-Advisory Agreement.

Q. WILL THE INVESTMENT MANAGEMENT AND SUB-ADVISORY FEE RATES BE THE SAME UPON
THE APPROVAL OF THE NEW SUB-ADVISORY AGREEMENT?

A. Yes, the investment management and sub-advisory fee rates will remain the
same.

Q. WILL THE FUND PAY FOR THE PROXY SOLICITATION AND LEGAL COSTS ASSOCIATED WITH
THE APPROVAL OF THE NEW SUB-ADVISORY AGREEMENT?

A. No, neither you nor your Fund will bear any costs associated with the
approval of the new sub-advisory agreement. The Sub-Adviser has agreed to bear
these costs.

Q. HOW DO THE TRUSTEES OF THE FUND SUGGEST THAT I VOTE IN CONNECTION WITH THE
NEW SUB-ADVISORY AGREEMENT?

A. After careful consideration, the Board of Trustees of the Fund recommends
that you vote "FOR" the approval of the new sub-advisory agreement.

Q. WHY ARE INDIVIDUALS RECOMMENDED FOR ELECTION TO THE BOARD OF THE FUND?

A. Currently, two separate board clusters oversee the funds in the Nuveen
family of funds. One board cluster comprised of the same board members oversees
the funds managed by NIAC, and another board cluster comprised of the same board
members oversees all of the funds managed by Nuveen Advisory Corp. Together with
the boards of other Nuveen funds, the Board of the Fund has proposed to
consolidate both board clusters into a single board cluster so that the same
individuals serve on the boards of the Nuveen funds.

The Board believes that the consolidation of board clusters will have the
following advantages:

- the consolidation will avoid the need to add new board members to each
board cluster at various later dates to maintain the current size and
structure of each board cluster;

- the consolidation ensures that each fund will gain new board members who
already are knowledgeable about Nuveen and investment companies in
general;

- the consolidation would reduce the duplication of board materials and
reports covering the same issues and would avoid the need for repeated
presentation of the same material by the same personnel at different
meetings;

- reducing such administrative burdens will allow the investment adviser
and its personnel to focus more on non-administrative matters; and

- a single board cluster overseeing most of the operations of the Nuveen
family of funds will have a better picture of all issues facing
shareholders.

Q. HOW DO THE BOARD MEMBERS OF THE FUND SUGGEST THAT I VOTE IN CONNECTION WITH
THE ELECTION OF BOARD MEMBERS?

A. After careful consideration, the trustees of the Fund unanimously recommend
that you vote "FOR" the nominees for the Board.

Q. WILL MY VOTE MAKE A DIFFERENCE?

A. Your vote is needed to ensure that the proposals can be acted upon.
Additionally, your immediate response will help save on the costs of any future
solicitations for a shareholder vote. We encourage all shareholders to
participate in the governance of the Fund.

Q. WHO DO I CALL IF I HAVE QUESTIONS?

A. If you need any assistance, or have any questions regarding the proposal or
how to vote your shares, please call your financial advisor or call Nuveen at
(800) 257-8787 weekdays from 8:00 a.m. to 6:00 p.m. Central time.

Q. HOW DO I VOTE MY SHARES?

A. You can vote your shares by completing and signing the enclosed proxy card,
and mailing it in the enclosed postage-paid envelope. Alternatively, you may
vote by telephone by calling the toll-free number on the proxy card or by
computer by going to the Internet address provided on the proxy card and follow
the instructions using your proxy card as a guide.

Q. WILL ANYONE CONTACT ME?

A. You may receive a call to verify that you received your proxy materials, to
answer any questions you may have about the proposals and to encourage you to
vote.

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS - JANUARY 20, 2004 333 West Wacker Drive
Chicago, Illinois 60606
(800) 257-8787

NUVEEN REAL ESTATE INCOME FUND (JRS)

DECEMBER 19, 2003

TO THE SHAREHOLDERS OF THE ABOVE FUND:

Notice is hereby given that the Annual Meeting of Shareholders (the "Annual
Meeting") of Nuveen Real Estate Income Fund (the "Fund"), a Massachusetts
business trust, will be held in the 31st floor conference room of Nuveen
Investments, Inc., 333 West Wacker Drive, Chicago, Illinois, on Tuesday, January
20, 2004, at 10:00 a.m., Chicago time, for the following purposes and to
transact such other business, if any, as may properly come before the Annual
Meeting:

MATTERS TO BE VOTED ON BY SHAREHOLDERS:

1. To approve or disapprove a new sub-advisory agreement between Security
Capital Research & Management Incorporated (the "Sub-Adviser") and Nuveen
Institutional Advisory Corp. ("NIAC"), the Fund's investment adviser, on behalf
of the Fund.

2. To elect twelve (12) Members to the Board of Trustees (the "Board," and
each Trustee a "Board Member") of the Fund to serve until the next annual
meeting of shareholders and until their successors shall have been duly elected
and qualified:

a. ten (10) Board Members to be elected by the holders of common shares
and FundPreferred shares, voting together as a single class; and

b. two (2) Board Members to be elected by the holders of FundPreferred
shares only, voting separately as a single class.

3. To transact such other business as may properly come before the Annual
Meeting.

Shareholders of record at the close of business on November 21, 2003 are
entitled to notice of and to vote at the Annual Meeting.

ALL SHAREHOLDERS ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING. IN ORDER TO
AVOID DELAY AND ADDITIONAL EXPENSE TO YOUR FUND, AND TO ASSURE THAT YOUR SHARES
ARE REPRESENTED, PLEASE VOTE AS PROMPTLY AS POSSIBLE, WHETHER OR NOT YOU PLAN TO
ATTEND THE ANNUAL MEETING. YOU MAY VOTE BY MAIL, TELEPHONE OR OVER THE INTERNET.
TO VOTE BY MAIL, PLEASE MARK, SIGN, DATE AND MAIL THE ENCLOSED PROXY CARD. NO
POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES. TO VOTE BY TELEPHONE, PLEASE
CALL THE TOLL-FREE NUMBER LOCATED ON YOUR PROXY CARD, AND FOLLOW THE RECORDED
INSTRUCTIONS, USING YOUR PROXY CARD AS A GUIDE. TO VOTE OVER THE INTERNET, GO TO
THE INTERNET ADDRESS PROVIDED ON YOUR PROXY CARD, AND FOLLOW THE INSTRUCTIONS,
USING YOUR PROXY CARD AS A GUIDE.

Jessica R. Droeger
Vice President and Secretary

PROXY STATEMENT 333 West Wacker Drive
DECEMBER 19, 2003 Chicago, Illinois 60606
(800) 257-8787

NUVEEN REAL ESTATE INCOME FUND (JRS)

GENERAL INFORMATION

This Proxy Statement is furnished in connection with the solicitation by the
Board of Trustees (the "Board," and each Trustee a "Board Member") of Nuveen
Real Estate Income Fund (the "Fund"), a Massachusetts business trust, of proxies
to be voted at the Annual Meeting of Shareholders of the Fund to be held on
Tuesday, January 20, 2004 (the "Annual Meeting"), and at any and all
adjournments thereof.

On the matters coming before the Annual Meeting as to which a choice has been
specified by shareholders on the proxy, the shares will be voted accordingly. If
no choice is so specified, the shares will be voted FOR the approval of the new
sub-advisory agreement and FOR the election of the nominees as listed in this
Proxy Statement. Shareholders who execute proxies may revoke them at any time
before they are voted by filing with the Fund a written notice of revocation, by
delivering a duly executed proxy bearing a later date or by attending the Annual
Meeting and voting in person.

This Proxy Statement is first being mailed to shareholders on or about December
19, 2003.

The following table indicates the matters on which shareholders are solicited:

MATTER
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1. To approve a new sub-advisory agreement for the Fund.
2.a Election of ten (10) Board Members by holders of common
shares and FundPreferred shares, voting together as a
single class.
2.b Election of two (2) Board Members by FundPreferred
shares, voting as a separate class.

A quorum of shareholders is required to take action at the Annual Meeting. A
majority of the shares entitled to vote at the Annual Meeting, represented in
person or by proxy, will constitute a quorum of shareholders at the Annual
Meeting, except that for the election of the two nominees to be elected by
holders of FundPreferred shares, 33 1/3% of the FundPreferred shares entitled to
vote and represented in person or by proxy will constitute a quorum. Votes cast
by proxy or in person at the Annual Meeting will be tabulated by the inspectors
of election appointed for the Annual Meeting. The inspectors of election will
determine whether or not a quorum is present at the Annual Meeting. The
inspectors of election will treat abstentions and "broker non-votes" (i.e.,
shares held by brokers or nominees, typically in "street name," as to which (i)
instructions have not been received from the beneficial owners or persons
entitled to vote and (ii) the broker or nominee does not have discretionary
voting power on a particular matter) as present for purposes of determining a
quorum.

For purposes of determining the approval of the new sub-advisory agreement,
abstentions and broker non-votes will be treated as shares voted against the
proposal. For purposes of determining the approval of the proposal to elect
nominees, abstentions and broker non-

votes will have no effect on the election of Board Members. The details of the
proposals to be voted on by the shareholders of the Fund and the vote required
for approval of the proposals are set forth under the description of the
proposals below.

Shares of FundPreferred held in "street name" as to which voting instructions
have not been received from the beneficial owners or persons entitled to vote as
of one business day before the Annual Meeting, or, if adjourned, one business
day before the day to which the Annual Meeting is adjourned, and that would
otherwise be treated as "broker non-votes" may, pursuant to Rule 452 of the New
York Stock Exchange, be voted by the broker on the proposal in the same
proportion as the votes cast by all FundPreferred shareholders as a class who
have voted on the proposal or in the same proportion as the votes cast by all
FundPreferred shareholders of the Fund who have voted on that item. Rule 452
permits proportionate voting of FundPreferred with respect to a particular item
if, among other things, (i) a minimum of 30% of the shares of FundPreferred or
shares of a series of FundPreferred outstanding has been voted by the holders of
such shares with respect to such item and (ii) less than 10% of the shares of
FundPreferred or shares of a series of FundPreferred outstanding has been voted
by the holders of such shares against such item. For the purpose of meeting the
30% test, abstentions will be treated as shares "voted" and, for the purpose of
meeting the 10% test, abstentions will not be treated as shares "voted" against
the item.

Those persons who were shareholders of record at the close of business on
November 21, 2003 will be entitled to one vote for each share held. As of
November 21, 2003, the Fund had 28,136,413 common shares of beneficial interest
issued and outstanding and 1,720 issued and outstanding FundPreferred shares, of
each Series M, Series T, Series W and Series F. The common shares of the Fund
are listed on the American Stock Exchange.

1. APPROVAL OR DISAPPROVAL OF THE NEW SUB-ADVISORY AGREEMENT

BACKGROUND

Nuveen Institutional Advisory Corp ("NIAC" or the "Adviser") is the Fund's
investment adviser. NIAC entered into an Investment Sub-Advisory Agreement dated
July 24, 2002 and continued on August 1, 2003 with respect to the Fund (the
"Original Sub-Advisory Agreement"), with Security Capital Research & Management
Incorporated (the "Sub-Adviser") pursuant to which the Sub-Adviser was retained
to furnish investment advisory services to the Fund. Until November 24, 2003,
the Sub-Adviser was a wholly-owned subsidiary of GECIA Holdings, Inc. ("GECIA").
All of the outstanding common stock of GECIA is owned by General Electric
Capital Services, Inc.

The Original Sub-Advisory Agreement, as required by Section 15 of the Investment
Company Act of 1940, as amended (the "1940 Act"), provided for its automatic
termination in the event of its assignment. Any change in control of the
Sub-Adviser is deemed to be an assignment. On November 24, 2003, GECIA sold all
of the capital stock of the Sub-Adviser to Banc One Investment Advisors
Corporation ("Banc One") (the "Sale"). The consummation of the Sale caused the
Sub-Adviser to undergo a change in control and caused the automatic termination
of the Original Sub-Advisory Agreement, as required by the 1940 Act.

Investment advisory services to the Fund are provided by the Portfolio
Management Committee of the Sub-Adviser. The Sale did not result in any change
in the Portfolio

Management Committee of the Sub-Adviser. Banc One, a registered investment
adviser under the Investment Advisers Act of 1940, as amended, provides asset
management to a broad spectrum of institutional and individual clients including
public entities, foundations, endowments, corporate retirement plans and
Taft-Hartley plans, as well as to One Group Mutual Funds(R). Banc One is an
indirect wholly-owned subsidiary of Bank One Corporation ("Bank One Corp.") 1
Bank One Plaza, Chicago, Illinois 60670. Banc One provides portfolio management,
research and trading functions for asset management clients throughout the
entire Banc One affiliate network. Banc One had over $175 billion in assets
under management as of November 21, 2003 and is headquartered at 1111 Polaris
Parkway, Columbus, Ohio 43271.

On September 3, 2003, the Attorney General of the State of New York filed and
simultaneously settled a complaint (the "Complaint") against a hedge fund. The
Complaint alleged, among other things, that Banc One permitted the hedge fund to
engage in inappropriate market timing transactions with certain mutual funds
managed by Banc One. Since the filing of the Complaint, numerous class action
lawsuits have been filed in various jurisdictions alleging, among other things,
that Banc One violated various provisions of the federal securities laws, the
Investment Advisers Act of 1940 and the Racketeer Influenced and Corrupt
Organizations Act. Plaintiffs in these suits are seeking, among other things,
injunctive and declaratory relief, compensatory and punitive damages,
disgorgement of profits and payment of attorneys' and experts' fees. Additional
lawsuits presenting allegations and requests for relief arising out of or in
connection with the foregoing matters, in addition to possible actions by
federal regulators and state officials, may be filed against Banc One and
related parties in the future. As a result of the Sale, the Sub-Adviser is
currently an affiliate of Banc One.

On July 29, 2003, the Board approved NIAC entering into a new sub-advisory
agreement with the Sub-Adviser (the "New Sub-Advisory Agreement") with respect
to the Fund, subject to the consummation of the Sale and approval of the New
Sub-Advisory Agreement by the shareholders of the Fund. The New Sub-Advisory
Agreement is substantially identical to the Original Sub-Advisory Agreement. The
1940 Act requires that the New Sub-Advisory Agreement be approved by the Fund's
shareholders in order for it to become effective. As more fully explained below,
a majority of the Board Members of the Fund, including a majority of the Board
Members who are not parties to the Fund's investment management agreement with
NIAC, the Original Sub-Advisory Agreement or the New Sub-Advisory Agreement, or
who are not interested persons of the Fund, NIAC or the Sub-Adviser (the
"Independent Trustees"), recommends that the shareholders of the Fund approve
the New Sub-Advisory Agreement between the Sub-Adviser and NIAC. The Sub-Adviser
does not anticipate that the Sale will have any adverse effect on the
performance of its obligations under the New Sub-Advisory Agreement. If
shareholders of the Fund approve the New Sub-Advisory Agreement, the New
Sub-Advisory Agreement will become effective on or about the date of the Annual
Meeting.

Approval of New Sub-Advisory Agreement. The Board met in person for the purpose
of considering whether it would be in the best interests of the Fund and its
shareholders to approve the New Sub-Advisory Agreement between the Sub-Adviser
and NIAC. At its meeting and for reasons discussed below (see "The Board's
Considerations" below), the Board, including the Independent Trustees,
unanimously approved the New Sub-Advisory Agreement and recommended its approval
by shareholders, in order to assure continuity of

investment advisory services to the Fund after the Sale. The form of the New
Sub-Advisory Agreement is attached hereto as Appendix A.

The terms of the New Sub-Advisory Agreement, including fees payable to the
Sub-Adviser by NIAC thereunder, are substantially identical to those of the
Original Sub-Advisory Agreement, except for the date of effectiveness. There is
no change in the fee rate payable by NIAC to the Sub-Adviser, nor is there a
change in fee rate payable by the Fund to NIAC under its investment management
agreement with NIAC. Certain of the terms of the Original Sub-Advisory Agreement
are described below. If approved by shareholders of the Fund, the New
Sub-Advisory Agreement will expire on August 1, 2004, unless continued. The New
Sub-Advisory Agreement will continue in effect from year to year thereafter if
such continuance is approved for the Fund at least annually in the manner
required by the 1940 Act and the rules and regulations thereunder. In the event
that the shareholders of the Fund do not approve the New Sub-Advisory Agreement,
the Interim Sub-Advisory Agreement (as described below) will remain in effect
until expiration or termination and the Board will take such action as it deems
to be in the best interests of the Fund and its shareholders.

The Original Sub-Advisory Agreement. The Original Sub-Advisory Agreement was
approved by the shareholders of the Fund on July 24, 2002. The Original
Sub-Advisory Agreement provided that, subject always to the supervision of the
Fund's Board and NIAC, the Sub-Adviser would furnish an investment program in
respect of, make investment decisions for, and place all orders for the purchase
and sale of securities for the Fund, all on behalf of the Fund. In the
performance of its duties, the Sub-Adviser was required to satisfy its fiduciary
duties to the Fund, monitor the Fund's investments, and comply with the
provisions of the Fund's Declaration of Trust and By-laws, as amended from time
to time, and the stated investment objectives, policies and restrictions of the
Fund. The Sub-Adviser was also required to report to the Board and to NIAC with
respect to the implementation of such program, prepare necessary books and
records and make persons available to communicate with the Board and NIAC. In
addition, the Sub-Adviser was authorized to select the brokers or dealers that
executed the purchases and sales of portfolio securities for the Fund.

Expenses Paid by the Sub-Adviser. The Original Sub-Advisory Agreement also
provided that the Sub-Adviser would pay all expenses incurred by it in
connection with its activities under the Original Sub-Advisory Agreement other
than the cost of securities (including brokerage commissions, if any) purchased
for the Fund.

Compensation. Pursuant to the investment management agreement between NIAC and
the Fund, the Fund has agreed to pay an annual management fee, payable on a
monthly basis, for the services and facilities provided by NIAC according to the
following schedule:

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AVERAGE DAILY MANAGED ASSETS(*) MANAGEMENT FEE
-----------------------------------------------------------

Up to $500 million 0.900%
$500 million to $1 billion 0.875%
$1 billion to $1.5 billion 0.850%
$1.5 billion to $2 billion 0.825%
$2 billion and over 0.800%
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(*) Net assets including assets attributable to FundPreferred shares and
the principal amount of borrowings.

The Original Sub-Advisory Agreement provided that the Sub-Adviser would receive
from NIAC a percentage of the management fee (net of the reimbursements
described below) that accrued daily and was paid monthly according to the
following schedule:

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PERCENTAGE OF NET
DAILY NET ASSETS MANAGEMENT FEE
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Up to $125 million 50.0%
$125 million to $150 million 47.5%
$150 million to $175 million 45.0%
$175 million to $200 million 42.5%
$200 million and over 40.0%
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NIAC has contractually agreed to reimburse the Fund for fees and expenses in the
amounts, and for the time periods, set forth below. NIAC has not agreed to
reimburse the Fund for any portion of its fees and expenses beyond November 31,
2011.

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AMOUNT REIMBURSED
YEAR ENDING (AS A PERCENTAGE OF
NOVEMBER 30 AVERAGE DAILY MANAGED ASSETS)(*)
------------------------------------------------------------------

2001(**) 0.30%
2002 0.30%
2003 0.30%
2004 0.30%
2005 0.30%
2006 0.30%
2007 0.25%
2008 0.20%
2009 0.15%
2010 0.10%
2011 0.05%
------------------------------------------------------------------

(*) Net assets including assets attributable to FundPreferred shares and
the principal amount of borrowings.

(**) From the commencement of operations.

For the most recently completed fiscal year of the Fund, NIAC received
$3,516,753.10 in advisory fees from the Fund (net of reimbursements), of which
it paid $1,509,044.69 in sub-advisory fees to the Sub-Adviser.

The Sub-Adviser acts as investment adviser or subadviser to other investment
companies with investment objectives similar to the Fund. Information on these
similar investment companies, including advisory fee rates, net assets and
aggregate advisory fees paid for each fund, is set forth in Appendix C to this
Proxy Statement.

Limitation on Liability. The Original Sub-Advisory Agreement also provided that
NIAC would not take any action against the Sub-Adviser to hold the Sub-Adviser
liable for any error of judgment or mistake of law or for any loss suffered by
the Fund in connection with the performance of the Sub-Adviser's duties under
the Original Sub-Advisory Agreement, except

for a loss resulting from the Sub-Adviser's willful misfeasance, bad faith or
gross negligence in the performance of its duties or by reason of its reckless
disregard of its obligations and duties under the Original Sub-Advisory
Agreement.

Termination. The Original Sub-Advisory Agreement provided that it may be
terminated at any time without the payment of any penalty by NIAC on sixty (60)
days' written notice to the Sub-Adviser. The Original Sub-Advisory Agreement
also was terminable by the Sub-Adviser as of July 31 of any year after 2003
without payment of any penalty upon sixty (60) days' prior written notice to
NIAC. In addition, the Original Sub-Advisory Agreement may have been terminated
by the Fund by action of the Board or by a vote of a majority of the outstanding
voting securities (as defined in the 1940 Act) of the Fund on sixty (60) days'
written notice to the Sub-Adviser by the Fund.

The Original Sub-Advisory Agreement also was terminable at any time without the
payment of any penalty, by NIAC, by the Board or by vote of a majority of the
outstanding voting securities of the Fund (as defined in the 1940 Act) in the
event that it was established by a court of competent jurisdiction that the
Sub-Adviser or any officer or director of the Sub-Adviser had taken any action
which resulted in a breach of the covenants of the Sub-Adviser set forth in the
Original Sub-Advisory Agreement. The Original Sub-Advisory Agreement became
effective on July 24, 2002.

Interim Sub-Advisory Agreement. To enable the Sub-Adviser to continue to
provide sub-advisory services to the Fund prior to the Annual Meeting, on July
29, 2003, by a majority vote, at a meeting held in person, the Board of the
Fund, including the Independent Trustees, approved NIAC's entering into an
interim sub-advisory agreement with the Sub-Adviser (the "Interim Sub-Advisory
Agreement") with respect to the Fund. The Interim Sub-Advisory Agreement was
effective on November 24, 2003, the date of the Sale. Pursuant to Rule 15a-4
under the 1940 Act, the Board of the Fund, including the Independent Trustees,
determined that the scope and quality of services to be provided to the Fund
under the Interim Sub-Advisory Agreement would be at least equivalent to the
scope and quality of services provided under the Original Sub-Advisory
Agreement. The Interim Sub-Advisory Agreement contains substantially the same
terms and conditions as the Original Sub-Advisory Agreement, including the fee
rate payable to the Sub-Adviser, but also includes special provisions required
by Rule 15a-4, including:

- a maximum term of 150 days;

- a provision that the Board or holders of a majority of the Fund's outstanding
voting securities (as defined in the 1940 Act) may terminate the agreement at
any time without penalty on not more than 10 days' written notice to the
Sub-Adviser; and

- a provision that the compensation earned by the Sub-Adviser under the
agreement is to be held in an interest-bearing escrow account until
shareholder approval of the New Sub-Advisory Agreement is obtained, after
which the amount in the escrow account (together with any interest) would be
paid to the Sub-Adviser.

If the Fund has not received the requisite shareholder approval for the New
Sub-Advisory Agreement within 150 days after consummation of the Sale, the
Sub-Advisor will be paid, out of the escrow account, the lesser of (i) any costs
incurred in performing the Interim Sub-Advisory Agreement (plus interest earned
on that amount while in escrow) or (ii) the total

amount in the escrow account (plus interest earned) and the Board will take such
actions as it deems to be in the best interest of the Fund.

The Board's Considerations. In determining whether to approve the Interim
Sub-Advisory Agreement and New Sub-Advisory Agreement, the Board evaluated the
implications of the Sale for the Sub-Adviser and the Sub-Adviser's ability to
continue to provide services of substantially the same scope and quality as are
currently provided. In particular, the Board inquired as to the impact of the
Sale on the Sub-Adviser's personnel, facilities and financial capabilities. The
Board received assurances from representatives of the Sub-Adviser that there
were no current plans to make any material personnel changes that would affect
the investment advisory services provided to the Fund. The Board Members also
received assurances from the Sub-Adviser that the Sale would not adversely
affect the Sub-Adviser's ability to fulfill its obligations to the Fund or to
operate its business in a manner consistent with past practices.

The Board further considered: (i) the quality of the operations and services
which have been provided to the Fund by the Sub-Adviser and which are expected
to continue to be provided after the Sale, with no change in fee rates, (ii) the
overall experience and reputation of the Sub-Adviser in providing such services
to investment companies, and the likelihood of its continued financial
stability, (iii) the reputation and capitalization of Banc One and its
affiliates, and (iv) the benefits of continuity in the services to be provided
under the Interim Sub-Advisory Agreement and New Sub-Advisory Agreement. Based
upon its review, the Board has determined that continuity and efficiency of
portfolio management services after the Sale can best be assured by approving
the New Sub-Advisory Agreement. The Board believes that the New Sub-Advisory
Agreement will enable the Fund to continue to obtain investment advisory
services of high quality at costs which it deems appropriate and reasonable
under the circumstances, and that approval of the New Sub-Advisory Agreement is
in the best interests of the Fund and its shareholders. Accordingly, the Board
approved the New Sub-Advisory Agreement and recommends that shareholders approve
the New Sub-Advisory Agreement.

Furthermore, the Board recognized that NIAC and the Sub-Adviser have each
assured the Board Members that they intend to comply with Section 15(f) of the
1940 Act. Section 15(f) provides a non-exclusive safe harbor for an investment
adviser (or sub-adviser) to an investment company or any affiliated persons to
receive any amount or benefit in connection with a change in control of the
investment adviser (or sub-adviser) to an investment company as long as two
conditions are satisfied.

First, an "unfair burden" must not be imposed on investment company clients of
the adviser as a result of the transaction, or any express or implied terms,
conditions or understandings applicable to the transaction. The term "unfair
burden" (as defined in the 1940 Act) includes any arrangement during the
two-year period after the transaction whereby the investment adviser or
sub-adviser (or predecessor or successor adviser or sub-adviser), or any
"interested person" (as defined in the 1940 Act) (an "Interested Person") of any
such adviser or sub-adviser, receives or is entitled to receive any
compensation, directly or indirectly, from such an investment company or its
security holders (other than fees for bona fide investment advisory or other
services) or from any other person in connection with the purchase or sale of
securities or other property to, from or on behalf of such investment company.
The Board has been advised that neither the Sub-Adviser nor Banc One is aware of
any circumstances arising from the Sale that might result in an unfair burden
being imposed on the Fund.

Second, for a period of three years after the change in control, at least 75% of
the board members of the investment company must be persons who are not
Interested Persons of the predecessor or successor investment adviser or
sub-adviser.

The Sub-Adviser has undertaken to pay the costs of preparing and distributing
proxy materials to the Fund's shareholders with respect to this proposal, as
well as other fees and expenses in connection with the Sale, including the fees
and expenses of legal counsel and consultants to the Fund and the Board Members
relating to their review of the Sale.

The principal executive officers and directors of the Sub-Adviser and their
principal occupations are respectively as follows: Anthony R. Manno Jr.,
President, Director and Managing Director; Kenneth D. Statz, Managing Director;
Kevin W. Bedell, Senior Vice President; David E. Rosenbaum, Senior Vice
President; and Michael J. Heller, Secretary, Treasurer and Controller. The
business address of the Sub-Adviser and each of the foregoing individuals is 11
South LaSalle Street, 2nd Floor, Chicago, Illinois 60603.

Shareholder Approval. To become effective, the New Sub-Advisory Agreement must
be approved by a vote of a majority of the outstanding voting securities of the
Fund, with the common and FundPreferred shareholders voting together as a single
class. The "vote of a majority of the outstanding voting securities" is defined
in the 1940 Act as the lesser of the vote of (i) 67% or more of the shares of
the Fund entitled to vote thereon present at the meeting if the holders of more
than 50% of such outstanding shares are present in person or represented by
proxy; or (ii) more than 50% of such outstanding shares of the Fund entitled to
vote thereon. The Interim Sub-Advisory Agreement and the New Sub-Advisory
Agreement were approved by the Board after consideration of all factors which it
determined to be relevant to its deliberations, including those discussed above.
The Board also determined to submit the New Sub-Advisory Agreement for
consideration by the shareholders of the Fund.

THE BOARD RECOMMENDS THAT SHAREHOLDERS OF THE FUND VOTE FOR APPROVAL OF THE NEW
SUB-ADVISORY AGREEMENT.

2. ELECTION OF BOARD MEMBERS

GENERAL

Currently, two separate board clusters oversee the funds in the Nuveen family of
funds. One board cluster comprised of the same board members oversees the funds
managed by NIAC and another board cluster comprised of the same board members
oversees all of the funds managed by Nuveen Advisory Corp. ("NAC"). The NIAC
board cluster and NAC board cluster currently have a total of five and seven
board members, respectively, who are not "interested persons" (as that term is
defined in the 1940 Act) and who are not affiliated with Nuveen or a fund's
investment adviser (the "Independent Board Members") and one board member who is
an "interested person."

Together with the boards of other Nuveen funds, the Board has proposed to
consolidate both board clusters into a single board cluster so that the same
individuals serve on the boards of the Nuveen funds. All individuals serving on
both board clusters are nominated to serve on the combined board. Once the
consolidation is complete, the single Board will oversee 142 Nuveen Funds.

The following is a list of Board Members under the proposal who are continuing
Board Members currently serving on the NIAC board cluster and Board Member
nominees who are currently serving on the NAC board cluster:

CONTINUING BOARD MEMBERS (NIAC BOARD CLUSTER):
----------------------------------------------

Timothy R. Schwertfeger*
William E. Bennett**
Jack B. Evans
William L. Kissick
Thomas E. Leafstrand
Sheila W. Wellington

NEW BOARD MEMBER NOMINEES (NAC BOARD CLUSTER):
----------------------------------------------

Robert P. Bremner
Lawrence H. Brown
Anne E. Impellizzeri
Peter R. Sawers
William J. Schneider
Judith M. Stockdale

---------------
* Interested person. Mr. Schwertfeger currently serves on both board clusters.

** Mr. Bennett, currently a member of the NIAC board cluster, was appointed to
the NAC board cluster on July 29, 2003.

In part, the proposal to create a single board is being recommended because of
the large number of retirements that will occur over the next few years. Within
two years, the aggregate number of Independent Board Members that serve on both
board clusters (currently 11) is expected to fall to six, due to a number of
retirements because of age and/or tenure limitations for board membership.
Continuing Board Members Leafstrand and Wellington will retire effective July 1,
2004 pursuant to the Fund's board mandated retirement policy. Combining the
boards will avoid the need to add new board members to each board cluster at
various later dates to maintain the current size and structure of each board
cluster. In addition, combining the boards ensures that each fund will gain new
board members who already are knowledgeable about Nuveen and investment
companies in general.

Historically, the two separate board clusters have had separate meetings but
often have reviewed similar policy issues, contractual arrangements and other
matters. Among other potential efficiencies, the Board believes that
consolidating the board clusters into one board would reduce the duplication of
board materials and reports covering the same issues and would avoid the need
for repeated presentation of the same material by the same personnel at
different meetings. This would permit the Adviser and its personnel to focus
more on non-administrative matters. In addition, a single board overseeing most
of the operations of the Nuveen family of funds will have a better picture of
all issues facing shareholders.

At its May 15, 2003 meeting, each board cluster reviewed the compensation paid
to Independent Board Members and determined that compensation should be
increased because of the expanded responsibilities of the Board Members due to
(a) the increase in the number and types of investment companies overseen by the
Board Members and (b) recent

additional legal and regulatory requirements. Effective July 1, 2003, for all
Nuveen funds overseen, Independent Board Members receive a $65,000 annual
retainer plus (a) a fee of $2,000 per day for attendance in person or by
telephone at a regularly scheduled meeting of the Board; (b) a fee of $1,000 per
day for attendance in person where such in-person attendance is required and
$500 per day for attendance by telephone or in person where in-person attendance
is not required at a special, non-regularly scheduled, board meeting; (c) a fee
of $1,000 per day for attendance in person at an audit committee meeting where
in-person attendance is required and $500 per day for attendance by telephone or
in person where in-person attendance is not required; (d) a fee of $500 per day
for attendance in person or by telephone for a meeting of the dividend
committee; and (e) a fee of $500 per day for attendance in person at all other
committee meetings on a day on which no regularly scheduled board meeting is
held in which in-person attendance is required and $250 per day for attendance
by telephone or in person at such meetings where in-person attendance is not
required, plus, in each case, expenses incurred in attending such meetings.
Compensation to the Independent Board Members is allocated among the Nuveen
family of funds based on assets per fund. The Board does not anticipate any
further change in the compensation schedule as a result of the board
consolidation.

Prior to July 1, 2003, for all Nuveen funds overseen, the continuing Independent
Board Members received a $60,000 annual retainer for serving as a board member
and a $1,750 fee per day for attendance in person or by telephone at all
meetings (including any committee meetings) held on a day on which a regularly
scheduled board meeting was held, a $1,000 fee per day for attendance in person
or a $500 fee per day for attendance by telephone at all meetings (including any
committee meetings) held on a day on which no regular board meeting was held,
and a $500 fee per day for attendance in person or $250 if by telephone at a
meeting of any committee, plus in each case, expenses incurred in attending such
meetings.

Twelve (12) Board Members are nominated to be elected to serve until the next
annual meeting of shareholders or until their successors shall have been duly
elected and qualified. Under the terms of the Fund's organizational documents,
under normal circumstances holders of FundPreferred are entitled to elect two
(2) Board Members, and the remaining Board Members are to be elected by holders
of common shares and FundPreferred, voting together as a single class.

a. Ten (10) Board Members are to be elected by holders of common
shares and FundPreferred shares, voting together as a single class. Board
Members Bennett, Bremner, Brown, Evans, Impellizzeri, Kissick, Leafstrand,
Sawers, Stockdale and Wellington are nominees for election by all
shareholders.

b. Holders of FundPreferred shares, each series voting together as a
single class, are entitled to elect two (2) of the Board Members. Board
Members Schneider and Schwertfeger are nominees for election by holders of
FundPreferred.

The affirmative vote of a plurality of the shares present and entitled to vote
at the Annual Meeting will be required to elect the Board Members .

It is the intention of the persons named in the enclosed proxy to vote the
shares represented thereby for the election of the nominees listed below unless
the proxy is marked otherwise. Each of the nominees has agreed to serve as a
Board Member of the Fund if elected.

However, should any nominee become unable or unwilling to accept nomination for
election, the proxies will be voted for substitute nominees, if any, designated
by the Fund's present Board.

All of the continuing Board Member nominees were last elected to the Fund's
Board at the 2002 annual meeting of shareholders.

Other than Mr. Schwertfeger, none of the Board Member nominees has ever been a
director or an employee of Nuveen Investments, Inc. ("Nuveen") or any affiliate.

THE BOARD UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE ELECTION OF THE
NOMINEES NAMED BELOW.

BOARD NOMINEES

-----------------------------------------------------------------------------------------------------------------------------------
NUMBER OF
PORTFOLIOS IN OTHER
FUND COMPLEX DIRECTOR-
TERM OF OFFICE OVERSEEN SHIPS HELD BY
NAME, ADDRESS POSITION(S) HELD AND LENGTH OF PRINCIPAL OCCUPATION(S) BY BOARD BOARD
AND BIRTH DATE WITH FUND TIME SERVED** DURING PAST 5 YEARS MEMBER MEMBER
-----------------------------------------------------------------------------------------------------------------------------------

NOMINEES WHO ARE NOT
INTERESTED PERSONS OF THE
FUND
Continuing Board Members
William E. Bennett Board Member Term: Annual Private Investor; previously 142 N/A
333 West Wacker Drive Length of Service: President and C.E.O., Draper &
Chicago, IL 60606 Since 2001 Kramer, Inc. (1995-1998). Prior
(10/16/46) thereto, Executive Vice
President and Chief Credit
Officer of First Chicago
Corporation and its principal
subsidiary, The First National
Bank of Chicago.
Jack B. Evans Board Member Term: Annual President, The Hall-Perrine 132 See
333 West Wacker Drive Length of Service: Foundation (a private Principal
Chicago, IL 60606 Since 1999 philanthropic corporation); Occupation
(10/22/48) Director, Alliant Energy; Description
Director and Vice Chairman,
United Fire & Casualty Company;
Director, Federal Reserve Bank
of Chicago; previously President
and Chief Operating Officer, SCI
Financial Group, Inc. (a
regional financial services
firm).

William L. Kissick Board Member Term: Annual Professor Emeritus, School of 132 N/A
333 West Wacker Drive Length of Service: Medicine and The Wharton School
Chicago, IL 60606 Since 1992 of Management and former
(7/29/32) Chairman, Leonard Davis
Institute of Health Economics,
University of Pennsylvania;
Adjunct Professor, Health Policy
and Management, Yale University.
Thomas E. Leafstrand Board Member Term: Annual Retired; previously, Vice 132 N/A
333 West Wacker Drive Length of Service: President in charge of Municipal
Chicago, IL 60606 Since 1992 Underwriting, Trading, and
(11/11/31) Dealer Sales at The Northern
Trust Company.
Sheila W. Wellington Board Member Term: Annual President of Catalyst (a 132 N/A
333 West Wacker Drive Length of Service: not-for-profit organization
Chicago, IL 60606 Since 1994 focusing on women's leadership
(2/24/32) development in business and the
professions).

-------------------------------------------------------------------------------------------------------------------------
NUMBER OF
PORTFOLIOS IN
TERM OF OFFICE FUND COMPLEX
POSITION(S) AND LENGTH OF OVERSEEN
NAME, ADDRESS HELD TIME SERVED ON PRINCIPAL OCCUPATION(S) BY BOARD
AND BIRTH DATE WITH FUND FUNDS IN FUND COMPLEX*** DURING PAST 5 YEARS MEMBER
-------------------------------------------------------------------------------------------------------------------------

New Board Members
Robert P. Bremner Nominee Term: Annual Private Investor and Management 141
333 West Wacker Drive Length of Service: Consultant.
Chicago, IL 60606 Since 1996
(8/22/40)
Lawrence H. Brown Nominee Term: Annual Retired (August 1989) as Senior Vice 141
333 West Wacker Drive Length of Service: President of The Northern Trust
Chicago, IL 60606 Since 1993 Company; Director of the United Way of
(7/29/34) Highland Park-Highwood (since 2002).
Anne E. Impellizzeri Nominee Term: Annual Retired; formerly, Executive Director 141
333 West Wacker Drive Length of Service: (1998-2001) of Manitoga/The Russel
Chicago, IL 60606 Since 1994 Wright Design Center; prior thereto,
(1/26/33) President and Chief Executive Officer
of Blanton-Peale Institute; prior
thereto, Vice President, Metropolitan
Life Insurance Co.
Peter R. Sawers Nominee Term: Annual Adjunct Professor of Business and 141
333 West Wacker Drive Length of Service: Economics, University of Dubuque,
Chicago, IL 60606 Since 1991 Iowa; formerly (1991-2000) Adjunct
(4/3/33) Professor, Lake Forest Graduate School
of Management, Lake Forest, Illinois;
Director, Executive Service Corps of
Chicago; prior thereto, Executive
Director, Towers Perrin Australia, a
management consulting firm; Chartered
Financial Analyst; Certified
Management Consultant.

------------------------- ------------
OTHER
DIRECTOR-
SHIPS
HELD BY
NAME, ADDRESS BOARD
AND BIRTH DATE MEMBER
------------------------- ------------

New Board Members
Robert P. Bremner N/A
333 West Wacker Drive
Chicago, IL 60606
(8/22/40)
Lawrence H. Brown See
333 West Wacker Drive Principal
Chicago, IL 60606 Occupation
(7/29/34) Description
Anne E. Impellizzeri N/A
333 West Wacker Drive
Chicago, IL 60606
(1/26/33)
Peter R. Sawers See
333 West Wacker Drive Principal
Chicago, IL 60606 Occupation
(4/3/33) Description

William J. Schneider Nominee Term: Annual Senior Partner and Chief Operating 141
333 West Wacker Drive Length of Service: Officer, Miller- Valentine Group; Vice
Chicago, IL 60606 Since 1996 President, Miller-Valentine Realty, a
(9/24/44) construction company; Chair, Miami
Valley Hospital; Chair, Dayton
Development Coalition; formerly,
Member, Community Advisory Board,
National City Bank, Dayton, Ohio; and
Business Advisory Council, Cleveland
Federal Reserve Bank.
Judith M. Stockdale Nominee Term: Annual Executive Director, Gaylord and 141
333 West Wacker Drive Length of Service: Dorothy Donnelley Foundation (since
Chicago, IL 60606 Since 1997 1994); prior thereto, Executive
(12/29/47) Director, Great Lakes Protection Fund
(from 1990 to 1994).

------------------------- ------------
OTHER
DIRECTOR-
SHIPS
HELD BY
NAME, ADDRESS BOARD
AND BIRTH DATE MEMBER
------------------------- ------------

William J. Schneider N/A
333 West Wacker Drive
Chicago, IL 60606
(9/24/44)
Judith M. Stockdale N/A
333 West Wacker Drive
Chicago, IL 60606
(12/29/47)

---------------------------------------------------------------------------------------------------------------------------
NUMBER OF
PORTFOLIOS IN
FUND COMPLEX
POSITION(S) TERM OF OFFICE OVERSEEN
NAME, ADDRESS HELD AND LENGTH OF PRINCIPAL OCCUPATION(S) BY BOARD
AND BIRTH DATE WITH FUND TIME SERVED** DURING PAST 5 YEARS MEMBER
---------------------------------------------------------------------------------------------------------------------------

NOMINEE WHO IS AN
INTERESTED PERSON OF THE
FUND
Continuing Board Member
*Timothy R. Schwertfeger Chairman of Term: Annual Chairman and Director (since 1996) of 142
333 West Wacker Drive the Board and Length of Service: Nuveen Investments, Inc. and Nuveen
Chicago, IL 60606 Board Member Since 1996 Investments, LLC; Director (since 1992)
(3/28/49) and Chairman (since 1996) of Nuveen
Advisory Corp. and Nuveen Institutional
Advisory Corp.; Chairman and Director
(since 1997) of Nuveen Asset Management,
Inc.; Director (since 1996) of
Institutional Capital Corporation;
Chairman and Director (since 1999) of
Rittenhouse Asset Management, Inc.;
Chairman of Nuveen Investments Advisers,
Inc. (since 2002).
---------------------------------------------------------------------------------------------------------------------------

------------------------- ------------
OTHER
DIRECTOR-
SHIPS
HELD BY
NAME, ADDRESS BOARD
AND BIRTH DATE MEMBER
------------------------- ------------

NOMINEE WHO IS AN
INTERESTED PERSON OF THE
FUND
Continuing Board Member
*Timothy R. Schwertfeger See
333 West Wacker Drive Principal
Chicago, IL 60606 Occupation
(3/28/49) Description
-------------------------

* "Interested person" as defined in the 1940 Act, by reason of being an officer
and director of the Fund's Adviser.

** Length of Service indicates the year in which the individual became a
Trustee or Director of a fund in the NIAC board cluster.

*** Length of Service indicates the year in which the individual became a
Trustee or Director of a fund in the NAC board cluster.

BENEFICIAL OWNERSHIP

The following table lists the dollar range and number of common shares
beneficially owned by each Board Member nominee in the Fund and in all Nuveen
funds overseen by the Board Member nominees as of August 31, 2003:

DOLLAR RANGE AND NUMBER OF COMMON SHARES
----------------------------------------------------------------------------------
AGGREGATE DOLLAR RANGE OF EQUITY
SECURITIES IN ALL REGISTERED INVESTMENT
COMPANIES OVERSEEN BY BOARD MEMBER
NOMINEES IN FAMILY OF INVESTMENT
BOARD MEMBER NOMINEES FUND COMPANIES(1)
----------------------------------------------------------------------------------

William E. Bennett.... 0 $50,001 - $100,000
4,629 shares
Jack B. Evans......... 0 Over $100,000
15,186 shares
William L. Kissick.... 0 Over $100,000
10,953 shares
Thomas E.
Leafstrand.......... $50,001-$100,000 Over $100,000
3,000 shares 38,132 shares
Sheila W.
Wellington.......... 0 Over $100,000
18,030 shares
Timothy R.
Schwertfeger........ 0 Over $100,000
499,212 shares
Robert P. Bremner..... 0 $10,001 - $50,000
1,889 shares
Lawrence H. Brown..... 0 Over $100,000
15,741 shares
Anne E.
Impellizzeri........ 0 Over $100,000
16,260 shares
Peter R. Sawers....... 0 Over $100,000
26,979 shares
William J.
Schneider........... 0 Over $100,000
59,621 shares
Judith M. Stockdale... 0 $50,001 - $100,000
4,983 shares
----------------------------------------------------------------------------------

(1) The amounts reflect the aggregate dollar range of equity securities and the
number of shares beneficially owned by the Board Member in the Fund and in
all Nuveen funds overseen by each Board Member.

As of August 31, 2003, the Board Member nominees and the Board Member nominees
and officers as a group, beneficially owned 6,660 shares of the Fund. The
information as to beneficial ownership is based on statements furnished by each
Board Member nominee and Fund officer.

On August 31, 2003, the continuing Board Members and executive officers as a
group beneficially owned 754,264 common shares of all funds managed by NAC and
NIAC (includes deferred units in connection with the Deferred Compensation Plan,
as described below, and shares held by the executive officers in Nuveen's
401(k)/profit sharing plan). Each continuing Board Member's individual
beneficial shareholdings of the Fund constitute less than 1% of the outstanding
shares of the Fund. As of November 21, 2003, the continuing Board Members and
executive officers as a group beneficially owned less than 1% of the outstanding
common shares of the Fund. As of November 21, 2003, the Board Member nominees
and executive officers of the Fund did not own any shares of FundPreferred. As
of November 21, 2003, no shareholder beneficially owned more than 5% of any
class of shares of the Fund.

COMPENSATION

The Board Member affiliated with Nuveen and the Adviser serves without any
compensation from the Fund. The Independent Board Members are paid an annual
retainer and fees and expenses for Board meetings and committee meetings as
described above. The annual retainer, fees and expenses are allocated among the
funds managed by the Adviser on the basis of relative net asset sizes although
fund management may, in its discretion, establish a minimum amount to be
allocated to each fund. The boards of certain Nuveen funds (the "Participating
Funds") established a Deferred Compensation Plan for Independent Board Members
("Deferred Compensation Plan"). Under the Deferred Compensation Plan,
Independent Board Members of the Participating Funds may defer receipt of all,
or a portion, of the compensation they earn for their services to the
Participating Funds, in lieu of receiving current payments of such compensation.
Any deferred amount is treated as though an equivalent dollar amount had been
invested in shares of one or more eligible Nuveen funds. Each Independent Board
Member, other than Mr. Brown, has elected to defer at least a portion of his or
her fees. The Fund is a Participating Fund.

The table below shows, for each continuing Board Member who is not affiliated
with Nuveen or the Adviser, the aggregate compensation (i) paid by the Fund to
each continuing Board Member for its last fiscal year and (ii) paid (including
deferred fees) for service on the boards of the Nuveen open-end and closed-end
funds managed by NAC ("NAC Funds") and NIAC ("NIAC Funds") for the calendar year
ended 2002. Mr. Schwertfeger, a Board Member who is an interested person of the
Fund, does not receive any compensation from the Fund or any Nuveen funds.

AGGREGATE COMPENSATION FROM THE FUNDS
--------------------------------------------------------------------------------------
TOTAL COMPENSATION
FROM NUVEEN FUNDS
PAID TO BOARD
CONTINUING BOARD MEMBERS FUND(1) MEMBERS
--------------------------------------------------------------------------------------

James E. Bacon(2) $3,473 $48,800
William E. Bennett 4,482 53,050
Jack B. Evans 4,009 49,100
William L. Kissick 3,975 49,000
Thomas E. Leafstrand 4,192 52,300
Sheila W. Wellington 3,189 47,600
--------------------------------------------------------------------------------------

(1) Includes deferred fees. Pursuant to the Deferred Compensation Plan for the
Fund, deferred amounts are treated as though an equivalent dollar amount has
been invested in shares of one or more Participating Funds. Total deferred
fees for the Fund (including the return from the assumed investment in the
Participating Funds) payable are:

DEFERRED FEES
------------------------------------------------------------------------------------
CONTINUING BOARD MEMBERS
------------------------------------------------------------------------------------
JAMES E. WILLIAM E. JACK B. WILLIAM L. THOMAS E. SHEILA W.
BACON(2) BENNETT EVANS KISSICK LEAFSTRAND WELLINGTON

$2,415 $2,855 $702 $1,206 $2,161 $1,880
------------------------------------------------------------------------------------

(2) Mr. Bacon retired effective July 1, 2003.

COMMITTEES

The Board has five standing committees: the executive committee, the audit
committee, the nominating and governance committee, the dividend committee and
the valuation committee.

William L. Kissick and Timothy R. Schwertfeger currently serve as members of the
executive committee of the Board. The executive committee, which meets between
regular meetings of the Board, is authorized to exercise all of the powers of
the Board; provided that the scope of the powers of the executive committee,
unless otherwise specifically authorized by the full Board, are limited to: (i)
emergency matters where assembly of the full Board is impracticable (in which
case management will take all reasonable steps to quickly notify each individual
Board Member of the actions taken by the executive committee) and (ii) matters
of an administrative or ministerial nature. The executive committee did not hold
any meetings during the Fund's last fiscal year.

William E. Bennett, Thomas E. Leafstrand and Timothy R. Schwertfeger are current
members of the dividend committee. The dividend committee is authorized to
declare distributions on the Fund's shares including, but not limited to,
regular and special dividends, capital gains and ordinary income distributions.
The dividend committee held two (2) meetings during the Fund's last fiscal year.

William E. Bennett and Thomas E. Leafstrand are current members of the valuation
committee for the Board. The valuation committee oversees the Fund's Pricing
Procedures including, but not limited to, the review and approval of fair value
pricing determinations

made by Nuveen's Valuation Group. The valuation committee held one meeting
during the Fund's last fiscal year.

The Fund's Board has an audit committee, established in accordance with Section
3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (the "1934 Act"),
composed of Independent Board Members who are "independent" as that term is
defined in Section 121(a) of the American Stock Exchange's listing standards.
The audit committee monitors the accounting and reporting policies and practices
of the Fund, the quality and integrity of the financial statements of the Fund,
compliance by the Fund with legal and regulatory requirements and the
independence and performance of the external and internal auditors. The audit
committee reviews the work and any recommendations of the Fund's independent
auditors. Based on such review, it is authorized to make recommendations to the
Board. A copy of the Audit Committee Charter is attached to the proxy statement
as Appendix B. The audit committee held three (3) meetings during the Fund's
last fiscal year.

Nomination of those Board Members who are not "interested persons" of the Fund
is committed to a nominating and governance committee composed of all Board
Members who are not "interested persons" of the Fund. It identifies and
recommends individuals to be nominated for election as non-interested Board
Members. The committee also reviews matters relating to (1) the composition,
duties, recruitment, independence and tenure of Board Members, (2) the selection
and review of committee assignments, and (3) Board Member education, Board
meetings and Board performance. The nominating and governance committee held
three (3) meetings during the Fund's last fiscal year. In the event of a vacancy
on the Board, the nominating and governance committee receives suggestions from
various sources as to suitable candidates. Suggestions should be sent in writing
to Lorna Ferguson, Vice President for Board Relations, Nuveen Investments, Inc.,
333 West Wacker Drive, Chicago, IL 60606. The nominating and governance
committee sets appropriate standards and requirements for nominations for new
Board Members and reserves the right to interview all candidates and to make the
final selection regarding the nomination of any new Board Member.

The Board of the Fund held four (4) regular quarterly meetings during the Fund's
last fiscal year. During the last fiscal year, each Board Member attended 75% or
more of the Fund's Board meetings and the committee meetings (if a member
thereof).

THE OFFICERS

The following table sets forth information as of November 21, 2003 with respect
to each officer other than Mr. Schwertfeger (who is a Board Member and is
included in the table relating to nominees for the Board). Officers receive no
compensation from the Fund. The officers of the Fund are elected by the Board on
an annual basis to serve until successors are elected and qualified.

---------------------------------------------------------------------------------------------------------------------------------
NUMBER OF
PORTFOLIOS IN
POSITION(S) TERM OF OFFICE FUND COMPLEX
NAME, ADDRESS HELD AND LENGTH OF PRINCIPAL OCCUPATION(S) SERVED BY
AND BIRTHDATE WITH FUND TIME SERVED DURING PAST 5 YEARS OFFICER
---------------------------------------------------------------------------------------------------------------------------------

Gifford R. Zimmerman Chief Term: Annual Managing Director (since 2002), Assistant Secretary 142
333 West Wacker Drive Administrative Length of and Associate General Counsel, formerly, Vice
Chicago, IL 60606 Officer Service: President of Nuveen Investments, LLC; Managing
(9/9/56) Since 1988 Director (since 2002), General Counsel and Assistant
Secretary, formerly, Vice President of Nuveen
Advisory Corp. and Nuveen Institutional Advisory
Corp.; Managing Director (since 2002) and Assistant
Secretary and Associate General Counsel, formerly
Vice President (since 2000) of Nuveen Asset
Management, Inc.; Assistant Secretary of Nuveen
Investments, Inc. (since 1994); Assistant Secretary
of NWQ Investment Management Company, LLC (since
2002); Vice President and Assistant Secretary of
Nuveen Investments Advisers Inc. (since 2002);
Managing Director, Associate General Counsel and
Assistant Secretary of Rittenhouse Asset Management,
Inc. (since May 2003); Chartered Financial Analyst.
Michael T. Atkinson Vice President Term: Annual Vice President (since 2002), formerly Assistant Vice 142
333 West Wacker Drive and Assistant Length of President (from 2000), previously, Associate of
Chicago, IL 60606 Secretary Service: Nuveen Investments, LLC.
(2/3/66) Since 2002
Peter H. D'Arrigo Vice President Term: Annual Vice President of Nuveen Investments, LLC (since 142
333 West Wacker Drive and Treasurer Length of 1999); prior thereto, Assistant Vice President (from
Chicago, IL 60606 Service: 1997); Vice President and Treasurer (since 1999) of
(11/28/67) Since 1999 Nuveen Investments, Inc.; Vice President and
Treasurer (since 1999) of Nuveen Advisory Corp. and
Nuveen Institutional Advisory Corp.; Vice President
and Treasurer of Nuveen Asset Management, Inc. (since
2002) and of Nuveen Investments Advisers Inc. (since
2002); Assistant Treasurer of NWQ Investments
Management Company, LLC. (since 2002); Vice President
and Treasurer of Nuveen Rittenhouse Asset Management,
Inc. (since May 2003); Chartered Financial Analyst.

Susan M. DeSanto Vice President Term: Annual Vice President of Nuveen Advisory Corp. (since 2001); 142
333 West Wacker Drive Length of previously, Vice President of Van Kampen Investment
Chicago, IL 60606 Service: Advisory Corp. (from 1998).
(9/8/54) Since 2001
Jessica R. Droeger Vice President Term: Annual Vice President (since 2002) and Assistant General 142
333 West Wacker Drive and Secretary Length of Counsel (since 1998), formerly Assistant Vice
Chicago, IL 60606 Service: President (from 1998) of Nuveen Investments, LLC;
(9/24/64) Since 1998 Vice President (since 2002) and Assistant Secretary
(from 1998), formerly Assistant Vice President of
Nuveen Advisory Corp. and Nuveen Institutional
Advisory Corp.
Lorna C. Ferguson Vice President Term: Annual Vice President of Nuveen Investments, LLC (since 142
333 West Wacker Drive Length of 1998); Vice President (since 1998) of Nuveen Advisory
Chicago, IL 60606 Service: Corp. and Nuveen Institutional Advisory Corp.
(10/24/45) Since 1998
William M. Fitzgerald Vice President Term: Annual Managing Director (since 2001), formerly Vice 142
333 West Wacker Drive Length of President (since 1995) of Nuveen Advisory Corp. and
Chicago, IL 60606 Service: Nuveen Institutional Advisory Corp.; Managing
(3/2/64) Since 1995 Director of Nuveen Asset Management, Inc. (since
2001); Vice President of Nuveen Investments Advisers
Inc. (since 2002); Chartered Financial Analyst.
Stephen D. Foy Vice President Term: Annual Vice President (since 1993) and Funds Controller 142
333 West Wacker Drive and Controller Length of (since 1998) of Nuveen Investment, LLC; Vice
Chicago, IL 60606 Service: President and Funds Controller (since 1998) of Nuveen
(5/31/54) Since 1993 Investments, Inc.; Certified Public Accountant.
David J. Lamb Vice President Term: Annual Vice President of Nuveen Investments, LLC (since 142
333 West Wacker Drive Length of 2000); prior thereto, Assistant Vice President (from
Chicago, IL 60606 Service: 1999); formerly Associate of Nuveen Investments, LLC;
(3/22/63) Since 2000 Certified Public Accountant.

Tina M. Lazar Vice President Term: Annual Vice President of Nuveen Investments, LLC (since 142
333 West Wacker Drive Length of 1999); prior thereto, Assistant Vice President (since
Chicago, IL 60606 Service: 1993) of Nuveen Investments, LLC.
(8/27/61) Since 2002
Larry W. Martin Vice President Term: Annual Vice President, Assistant Secretary and Assistant 142
333 West Wacker Drive and Assistant Length of General Counsel of Nuveen Investments, LLC; Vice
Chicago, IL 60606 Secretary Service: President and Assistant Secretary of Nuveen Advisory
(7/27/51) Since 1988 Corp. and Nuveen Institutional Advisory Corp.;
Assistant Secretary of Nuveen Investments, Inc.;
Assistant Secretary of Nuveen Asset Management, Inc.
(since 1997); Vice President (since 2000), Assistant
Secretary and Assistant General Counsel (since 1998)
of Rittenhouse Asset Management, Inc.; Vice President
and Assistant Secretary of Nuveen Investments
Advisers Inc. (since 2002); Assistant Secretary of
NWQ Investment Management Company, LLC (since 2002).
Edward F. Neild, IV Vice President Term: Annual Managing Director (since 2002), formerly, Vice 142
333 West Wacker Drive Length of President (from 1996) of Nuveen Institutional
Chicago, IL 60606 Service: Advisory Corp. and Nuveen Advisory Corp.; Managing
(7/7/65) Since 1996 Director of Nuveen Asset Management, Inc. (since
1999); Chartered Financial Analyst.
---------------------------------------------------------------------------------------------------------------------------------

* Length of Time Served indicates the year the individual became an officer of a
fund in the Nuveen fund complex.

AUDIT COMMITTEE REPORT

The audit committee of the Board is responsible for assisting the Board in
monitoring (1) the accounting and reporting policies and procedures of the Fund,
(2) the quality and integrity of the Fund's financial statements, (3) the Fund's
compliance with regulatory requirements, and (4) the independence and
performance of the Fund's independent and internal auditors. Among other
responsibilities, the committee reviews, in its oversight capacity, the Fund's
annual financial statements with both management and the independent auditors
and the committee meets periodically with the independent and internal auditors
to consider their evaluation of the Fund's financial and internal controls. The
committee also selects, retains, evaluates and may replace the Fund's
independent auditors and determines their compensation, subject to ratification
of the Board, if required. The committee is currently composed of four Board
Members and operates under a written charter adopted and approved by the Board,
a copy of which is attached as Appendix B. Each committee member is independent
as defined by American Stock Exchange listing standards.

The committee, in discharging its duties, has met with and held discussions with
management and the Fund's independent and internal auditors. The committee has
reviewed and discussed the audited financial statements with management.
Management has represented to the independent auditors that the Fund's financial
statements were prepared in accordance with generally accepted accounting
principles. The committee has also discussed with the independent auditors the
matters required to be discussed by Statement on Auditing Standards No. 61
(Communications with Audit Committees). The Fund's independent auditors provided
to the committee the written disclosure required by Independent Standards Board
Standard No. 1 (Independent Discussions with Audit Committees), and the
committee discussed with representatives of the independent auditors their
firm's independence. As provided in the Audit Committee Charter, it is not the
committee's responsibility to determine, and the considerations and discussions
referenced above do not ensure, that the Fund's financial statements are
complete and accurate and presented in accordance with generally accepted
accounting principles.

Based on the committee's review and discussions with management and the
independent auditors, the representations of management and the report of the
independent auditors to the committee, the committee has recommended that the
Board include the audited financial statements in the Fund's Annual Report.

The members of the committee are:

William E. Bennett
Jack B. Evans
William L. Kissick
Thomas E. Leafstrand

AUDIT AND RELATED FEES

Audit Fees. The aggregate fees billed by Ernst & Young LLP for professional
services for the audit of the Fund's financial statements for its most recently
completed fiscal year were as follows:

----------------------------------------------------------------
FINANCIAL INFORMATION
AUDIT SYSTEMS DESIGN AND
FEES IMPLEMENTATION FEES ALL OTHER FEES
----------------------------------------------------------------

$15,677 $0 $12,475
----------------------------------------------------------------

All Non-Audit Fees. The audit committee has generally considered whether the
receipt of non-audit fees by Ernst & Young LLP from the Fund is compatible with
maintaining Ernst & Young LLP's independence.

APPOINTMENT OF INDEPENDENT AUDITORS

The Fund has appointed Ernst & Young LLP, independent public accountants, as
independent auditors to audit the books and records of the Fund for its fiscal
year. A representative of Ernst & Young LLP will be present at the meeting to
make a statement, if such representative so desires, and to respond to
shareholders' questions. Ernst & Young LLP has informed the Fund that it has no
direct or indirect material financial interest in the Fund, Nuveen, the Adviser
or any other investment company sponsored by Nuveen.

SECTION 16(A) BENEFICIAL INTEREST REPORTING COMPLIANCE

Section 30(h) of the 1940 Act and Section 16(a) of the 1934 Act require Board
Members and officers, the investment adviser, affiliated persons of the
investment adviser and persons who own more than 10% of a registered class of
the Fund's equity securities to file forms reporting their affiliation with the
Fund and reports of ownership and changes in ownership of the Fund's shares with
the Securities and Exchange Commission (the "SEC") and the American Stock
Exchange. These persons and entities are required by SEC regulation to furnish
the Fund with copies of all Section 16(a) forms they file. Based on a review of
these forms furnished to the Fund, the Fund believes that its Board Members and
officers, investment adviser and affiliated persons of the investment adviser
have complied with all applicable Section 16(a) filing requirements during its
last fiscal year except that a late filing was made on Form 3 on behalf of NIAC.
To the knowledge of management of the Fund, no shareholder of the Fund owns more
than 10% of a registered class of the Fund's equity securities.

INFORMATION ABOUT THE ADVISER

The Adviser, located at 333 West Wacker Drive, Chicago, Illinois 60606, serves
as investment adviser and manager for the Fund. The Adviser is a wholly owned
subsidiary of Nuveen Investments, Inc., 333 West Wacker Drive, Chicago, Illinois
60606. Nuveen Investments, Inc., is approximately 79% owned by The St. Paul
Companies, Inc. ("St. Paul"). St. Paul is located at 385 Washington Street, St.
Paul, Minnesota 55102, and is principally engaged in providing
property-liability insurance through subsidiaries. On November 17, 2003, St.
Paul and Travelers Property Casualty Corp. ("Travelers") announced that they
have signed a definitive

merger agreement, under which holders of Travelers common stock will each
receive common shares of St. Paul in exchange for their Travelers shares. The
transaction is subject to customary closing conditions, including approval by
the shareholders of both companies as well as certain regulatory approvals.

SHAREHOLDER PROPOSALS

To be considered for presentation at the annual meeting of shareholders of the
Fund to be held in 2004, a shareholder proposal submitted pursuant to Rule 14a-8
of the 1934 Act must be received at the offices of the Fund, 333 West Wacker
Drive, Chicago, Illinois 60606, not later than August 20, 2004. A shareholder
wishing to provide notice in the manner prescribed by Rule 14a-4(c)(1) of a
proposal submitted outside of the process of Rule 14a-8 must submit such written
notice to the Fund not later than November 4, 2004. Timely submission of a
proposal does not mean that such proposal will be included in a proxy statement.

EXPENSES OF PROXY SOLICITATION

All costs incurred in connection with approval of the New Sub-Advisory Agreement
will be paid by the Sub-Adviser and the remainder of the costs of preparing,
printing and mailing the enclosed proxy, accompanying notice and proxy statement
and all other costs in connection with the solicitation of proxies will be paid
by the Fund. Additional solicitation may be made by letter, telephone or
telegraph by officers or employees of Nuveen or the Adviser, or by dealers and
their representatives.

FISCAL YEAR

The last fiscal year end for the Fund was October 31, 2003.

ANNUAL REPORT DELIVERY

Annual reports will be sent to shareholders of record of the Fund following the
Fund's fiscal year end. The Fund will furnish, without charge, a copy of its
annual report and/or semi-annual report as available upon request. Such written
or oral requests should be directed to the Fund at 333 West Wacker Drive,
Chicago, Illinois 60606 or by calling 1-800-257-8787.

Please note that only one annual report or proxy statement may be delivered to
two or more shareholders of the Fund who share an address, unless the Fund has
received instructions to the contrary. To request a separate copy of an annual
report or proxy statement, or for instructions as to how to request a separate
copy of such documents or as to how to request a single copy if multiple copies
of such documents are received, shareholders should contact the Fund at the
address and phone number set forth above.

GENERAL

Management does not intend to present and does not have reason to believe that
any other items of business will be presented at the Annual Meeting. However, if
other matters are properly presented to the Annual Meeting for a vote, the
proxies will be voted by the persons acting under the proxies upon such matters
in accordance with their judgment of the best interests of the Fund.

A list of shareholders entitled to be present and to vote at the Annual Meeting
will be available at the offices of the Fund, 333 West Wacker Drive, Chicago,
Illinois, for inspection by any shareholder during regular business hours
beginning ten days prior to the date of the Annual Meeting.

Failure of a quorum to be present at the Annual Meeting will necessitate
adjournment and will subject the Fund to additional expense. The persons named
in the enclosed proxy may also move for an adjournment of the Annual Meeting to
permit further solicitation of proxies with respect to the proposal if they
determine that adjournment and further solicitation is reasonable and in the
best interests of the shareholders. Under the Fund's By-Laws, an adjournment of
a meeting requires the affirmative vote of a majority of the shares present in
person or represented by proxy at the meeting.

IF YOU CANNOT BE PRESENT AT THE MEETING, YOU ARE REQUESTED TO FILL IN, SIGN AND
RETURN THE ENCLOSED PROXY PROMPTLY. NO POSTAGE IS REQUIRED IF MAILED IN THE
UNITED STATES.

Jessica R. Droeger
Vice President and Secretary

December 19, 2003

APPENDIX A

INVESTMENT SUB-ADVISORY AGREEMENT

AGREEMENT MADE THIS day of , 2004 by and between Nuveen
Institutional Advisory Corp., a Delaware corporation and a registered investment
adviser ("Manager"), and Security Capital Research & Management Incorporated, a
Delaware corporation and a registered investment adviser ("Sub-Adviser").

WHEREAS, Manager serves as the investment manager for the Nuveen Real Estate
Income Fund (the "Fund"), a closed-end management investment company registered
under the Investment Company Act of 1940, as amended (the "1940 Act") pursuant
to an Investment Management Agreement between Manager and the Fund (as such
agreement may be modified from time to time, the "Management Agreement"); and

WHEREAS, Manager desires to retain Sub-Adviser as its agent to furnish
investment advisory services for the Fund, upon the terms and conditions
hereafter set forth;

NOW, THEREFORE, in consideration of the mutual covenants herein contained, the
parties hereto agree as follows:

1. Appointment. Manager hereby appoints Sub-Adviser to provide certain
sub-investment advisory services to the Fund for the period and on the
terms set forth in this Agreement. Sub-Adviser accepts such appointments
and agrees to furnish the services herein set forth for the compensation
herein provided.

2. Services to be Performed. Subject always to the supervision of Fund's
Board of Trustees and the Manager, Sub-Adviser will furnish an investment
program in respect of, make investment decisions for, and place all orders
for the purchase and sale of securities for the Fund, all on behalf of the
Fund. In the performance of its duties, Sub-Adviser will satisfy its
fiduciary duties to the Fund, will monitor the Fund's investments, and will
comply with the provisions of Fund's Declaration of Trust and By-laws, as
amended from time to time, and the stated investment objectives, policies
and restrictions of the Fund. Manager will provide Sub-Adviser with current
copies of the Fund's Declaration of Trust, By-laws, prospectus and any
amendments thereto, and any objectives, policies or limitations not
appearing therein as they may be relevant to Sub-Adviser's performance
under this Agreement. Sub-Adviser and Manager will each make its officers
and employees available to the other from time to time at reasonable times
to review investment policies of the Fund and to consult with each other
regarding the investment affairs of the Fund. Sub-Adviser will report to
the Board of Trustees and to Manager with respect to the implementation of
such program.

Sub-Adviser is authorized to select the brokers or dealers that will execute the
purchases and sales of portfolio securities for the Fund, and is directed to use
its best efforts to obtain best execution, which includes most favorable net
results and execution of the Fund's orders, taking into account all appropriate
factors, including price, dealer spread or commission, size and difficulty of
the transaction and research or other services provided. It is understood that
the Sub-Adviser will not be deemed to have acted unlawfully, or to have breached
a fiduciary duty to the Fund, or be in breach of any obligation owing to the
Fund under this Agreement, or otherwise, solely by reason of its having caused
the Fund to pay a member of a securities

A-1

exchange, a broker or a dealer a commission for effecting a securities
transaction for the Fund in excess of the amount of commission another member of
an exchange, broker or dealer would have charged if the Sub-Adviser determined
in good faith that the commission paid was reasonable in relation to the
brokerage or research services provided by such member, broker or dealer, viewed
in terms of that particular transaction or the Sub-Adviser's overall
responsibilities with respect to its accounts, including the Fund, as to which
it exercises investment discretion. In addition, if in the judgment of the
Sub-Adviser, the Fund would be benefited by supplemental services, the
Sub-Adviser is authorized to pay spreads or commissions to brokers or dealers
furnishing such services in excess of spreads or commissions which another
broker or dealer may charge for the same transaction, provided that the
Sub-Adviser determined in good faith that the commission or spread paid was
reasonable in relation to the services provided. The Sub-Adviser will properly
communicate to the officers and trustees of the Fund such information relating
to transactions for the Fund as they may reasonably request. In no instance will
portfolio securities be purchased from or sold to the Manager, Sub-Adviser or
any affiliated person of either the Fund, Manager, or Sub-Adviser, except as may
be permitted under the 1940 Act;

Sub-Adviser further agrees that it:

(a) will use the same degree of skill and care in providing such
services as it uses in providing services to fiduciary accounts for which
it has investment responsibilities;

(b) will conform to all applicable Rules and Regulations of the
Securities and Exchange Commission in all material respects and in addition
will conduct its activities under this Agreement in accordance with any
applicable regulations of any governmental authority pertaining to its
investment advisory activities;

(c) will report regularly to Manager and to the Board of Trustees of
the Fund and will make appropriate persons available for the purpose of
reviewing with representatives of Manager and the Board of Trustees on a
regular basis at reasonable times the management of the Fund, including,
without limitation, review of the general investment strategies of the
Fund, the performance of the Fund in relation to standard industry indices
and general conditions affecting the marketplace and will provide various
other reports from time to time as reasonably requested by Manager; and

(d) will prepare such books and records with respect to the Fund's
securities transactions as requested by the Manager and will furnish
Manager and Fund's Board of Trustees such periodic and special reports as
the Board or Manager may reasonably request.

3. Expenses. During the term of this Agreement, Sub-Adviser will pay all
expenses incurred by it in connection with its activities under this
Agreement other than the cost of securities (including brokerage
commission, if any) purchased for the Fund.

4. Compensation. For the services provided and the expenses assumed pursuant
to this Agreement, Manager will pay the Sub-Adviser, and the Sub-Adviser
agrees to accept as full compensation therefor, a portfolio management fee
equal to the portion specified below of the investment management fee
payable by the Fund to the Manager based on average daily net assets which
includes net assets attributable to Fund Preferred Shares and the principal
amount of borrowings pursuant to the Management Agreement, as the net
amount of such fee is reduced by the obligation of

A-2

Manager to reimburse certain fees and expenses to the Fund pursuant to an
Expense Reimbursement Agreement of even date herewith by and between the
Fund and the Manager, as such agreement may be modified from time to time:

-------------------------------------------------------------
PERCENTAGE OF NET
DAILY NET ASSETS MANAGEMENT FEE
-------------------------------------------------------------

The portfolio management fee shall accrue on each calendar day, and shall be
payable monthly on the first business day of the next succeeding calendar month.
The daily fee accrual shall be computed by multiplying the fraction of one
divided by the number of days in the calendar year by the applicable annual rate
of fee, and multiplying this product by the net assets of the Fund, determined
in the manner established by the Fund's Board of Trustees, as of the close of
business on the last preceding business day on which the Fund's net asset value
was determined.

For the month and year in which this Agreement becomes effective or terminates,
there shall be an appropriate proration on the basis of the number of days that
the Agreement is in effect during the month and year, respectively.

5. Services to Others. Manager understands, and has advised Fund's Board of
Trustees, that Sub-Adviser now acts, or may in the future act, as an
investment adviser to fiduciary and other managed accounts, and as
investment adviser or sub-investment adviser to one other investment
company that is not a series of the Fund, provided that whenever the Fund
and one or more other investment advisory clients of Sub-Adviser have
available funds for investment, investments suitable and appropriate for
each will be allocated in a manner believed by Sub-Adviser to be equitable
to each. Manager recognizes, and has advised Fund's Board of Trustees, that
in some cases this procedure may adversely affect the size of the position
that the Fund may obtain in a particular security. It is further agreed
that, on occasions when the Sub-Adviser deems the purchase or sale of a
security to be in the best interests of the Fund as well as other accounts,
it may, to the extent permitted by applicable law, but will not be
obligated to, aggregate the securities to be so sold or purchased for the
Fund with those to be sold or purchased for other accounts in order to
obtain favorable execution and lower brokerage commissions. In addition,
Manager understands, and has advised Fund's Board of Trustees, that the
persons employed by Sub-Adviser to assist in Sub-Adviser's duties under
this Agreement will not devote their full such efforts and service to the
Fund. It is also agreed that the Sub-Adviser may use any supplemental
research obtained for the benefit of the Fund in providing investment
advice to its other investment advisory accounts or for managing its own
accounts.

6. Limitation of Liability. Manager will not take any action against
Sub-Adviser to hold Sub-Adviser liable for any error of judgment or mistake
of law or for any loss suffered by the Fund in connection with the
performance of Sub-Adviser's duties under this

A-3

Agreement, except for a loss resulting from Sub-Adviser's willful
misfeasance, bad faith, or gross negligence in the performance of its
duties or by reason of its reckless disregard of its obligations and duties
under this Agreement.

7. Term; Termination; Amendment. This Agreement shall become effective with
respect to the Fund on the same date as the Management Agreement between
the Fund and the Manager becomes effective, provided that it has been
approved by a vote of a majority of the outstanding voting securities of
the Fund in accordance with the requirements of the 1940 Act, and shall
remain in full force until August 1, 2004 unless sooner terminated as
hereinafter provided. This Agreement shall continue in force from year to
year thereafter with respect to the Fund, but only as long as such
continuance is specifically approved for the Fund at least annually in the
manner required by the 1940 Act and the rules and regulations thereunder;
provided, however, that if the continuation of this Agreement is not
approved for the Fund, the Sub-Adviser may continue to serve in such
capacity for the Fund in the manner and to the extent permitted by the 1940
Act and the rules and regulations thereunder.

This Agreement shall automatically terminate in the event of its assignment and
may be terminated at any time without the payment of any penalty by the Manager
on sixty (60) days' written notice to the Sub-Adviser. This Agreement may be
terminated by the Sub-Adviser as of July 31 of any year after 2003 without
payment of any penalty upon sixty (60) days' prior written notice to the
Manager. This Agreement may also be terminated by the Fund with respect to the
Fund by action of the Board of Trustees or by a vote of a majority of the
outstanding voting securities of such Fund on sixty (60) days' written notice to
the Sub-Adviser by the Fund.

This Agreement may be terminated with respect to the Fund at any time without
the payment of any penalty by the Manager, the Board of Trustees or by vote of a
majority of the outstanding voting securities of the Fund in the event that it
shall have been established by a court of competent jurisdiction that the
Sub-Adviser or any officer or director of the Sub-Adviser has taken any action
which results in a breach of the covenants of the Sub-Adviser set forth herein.

The terms "assignment" and "vote of a majority of the outstanding voting
securities" shall have the meanings set forth in the 1940 Act and the rules and
regulations thereunder.

Termination of this Agreement shall not affect the right of the Sub-Adviser to
receive payments on any unpaid balance of the compensation described in Section
4 earned prior to such termination. This Agreement shall automatically terminate
in the event the Investment Management Agreement between the Manager and the
Fund is terminated, assigned or not renewed.

A-4

8. Notice. Any notice under this Agreement shall be in writing, addressed and
delivered or mailed, postage prepaid, to the other party

If to the Manager: If to the Sub-Adviser:
Nuveen Institutional Advisory Corp. Security Capital Group Inc.
333 West Wacker Drive 11 South LaSalle Street
Chicago, Illinois 60606 Chicago, Illinois 60603
Attention: Gifford R. Zimmerman Attention: Anthony R. Manno, Jr.

With a copy to: With a copy to:
Nuveen Investments
333 West Wacker Drive
Chicago, Illinois 60606
Attention: General Counsel

or such address as such party may designate for the receipt of such notice.

9. Limitations on Liability. All parties hereto are expressly put on notice
of the Fund's Agreement and Declaration of Trust and all amendments
thereto, a copy of which is on file with the Secretary of the Commonwealth
of Massachusetts, and the limitation of shareholder and trustee liability
contained therein. The obligations of the Fund entered in the name or on
behalf thereof by any of the Trustees, representatives or agents are made
not individually but only in such capacities and are not binding upon any
of the Trustees, officers, or shareholders of the Fund individually but are
binding upon only the assets and property of the Fund, and persons dealing
with the Fund must look solely to the assets of the Fund and those assets
belonging to the subject Fund, for the enforcement of any claims.

10. Miscellaneous. The captions in this Agreement are included for convenience
of reference only and in no way define or delimit any of the provisions
hereof or otherwise affect their construction or effect. If any provision
of this Agreement is held or made invalid by a court decision, statute,
rule or otherwise, the remainder of this Agreement will not be affected
thereby. This Agreement will be binding upon and shall inure to the benefit
of the parties hereto and their respective successors.

11. Applicable Law. This Agreement shall be construed in accordance with
applicable federal law and (except as to Section 10 hereof which shall be
construed in accordance with the laws of Massachusetts) the laws of the
State of Illinois.

IN WITNESS WHEREOF, the Manager and the Sub-Adviser have caused this Agreement
to be executed as of the day and year first above written.

NUVEEN INSTITUTIONAL ADVISORY CORP., a SECURITY CAPITAL RESEARCH & MANAGEMENT
Delaware corporation INCORPORATED,
a Delaware corporation

By: By:
------------------------------------- -------------------------------------
Title: Vice President Title:
------------------------------------

A-5

APPENDIX B

NUVEEN MANAGEMENT INVESTMENT COMPANIES

AUDIT COMMITTEES CHARTER

REVISED MAY, 2003

ORGANIZATION AND MEMBERSHIP

There shall be a committee of each Board of Directors/Trustees of the Nuveen
Management Investment Companies (the "Funds") to be known as the Audit
Committee. The Audit Committee shall be composed of at least three
Directors/Trustees. Audit Committee members shall be independent of the Funds
and free of any relationship that, in the opinion of the Directors/Trustees,
would interfere with their exercise of independent judgment as a Committee
member. In particular, each member must meet the independence and experience
requirements of the New York Stock Exchange, Section 10A of the Securities
Exchange Act of 1934 (the "Exchange Act"), and the rules and regulations of the
Securities and Exchange Commission (the "Commission"). Each such member of the
Audit Committee shall have a basic understanding of finance and accounting and
be able to read and understand fundamental financial statements. At least one
such member shall have accounting or related financial management expertise, in
each case as determined by the Directors/Trustees, exercising their business
judgment (this person may also be the Committee's "financial expert"). The Board
shall appoint the members of the Audit Committee, on the recommendation of the
Governance Committee.

STATEMENT OF POLICY

The Audit Committee shall assist the Board in monitoring (1) the accounting and
reporting policies and practices of the Management Investment Companies
(hereafter referred to as "Funds" or individually "Fund"), (2) the quality and
integrity of the financial statements of the Funds, (3) the Funds' compliance
with legal and regulatory requirements and (4) the independent auditors'
qualifications and independence, and the performance of the internal audit
function and independent auditors. In doing so, the Audit Committee shall seek
to maintain free and open means of communication among the Directors/Trustees,
the independent auditors, the internal auditors and the management of Nuveen.
The Audit Committee shall meet periodically with Nuveen management, the Funds'
internal auditor, and the Funds' independent auditors, in separate executive
sessions.

The Audit Committee shall have the authority and resources in its discretion to
retain special legal, accounting or other consultants to advise the Committee.
The Audit Committee may request any officer or employee of Nuveen Investments,
Inc. (or its affiliates) or the Funds' independent auditors or outside counsel
to attend a meeting of the Committee or to meet with any members of, or
consultants to, the Committee. The Funds' independent auditors and internal
auditors shall have unrestricted accessibility at any time to Committee members.

B-1

RESPONSIBILITIES

Fund management has the primary responsibility to establish and maintain systems
for accounting, reporting and internal control.

The independent auditors have the primary responsibility to plan and implement
an audit, with proper consideration given to the accounting, reporting and
internal controls. The independent auditors are ultimately accountable to the
Board and Audit Committee. It is the ultimate responsibility of the Audit
Committee to select, retain, evaluate and replace the independent auditors and
to determine their compensation, subject to ratification of the Board, if
required.

In carrying out its responsibilities the Audit Committee believes its policies
and procedures should remain flexible, in order to react to changing conditions
and requirements applicable to the Funds.

The Audit Committee is responsible for the following:

Fund Financial Statements:

1. Reviewing the annual audited financial statements with Fund management and
the independent auditors including major issues regarding accounting and
auditing principles and practices, and the Funds' disclosures in its
periodic reports under "Management's Discussion and Analysis."

2. Requiring the independent auditors to deliver to the Chairman of the
Committee a timely report on any issues relating to the significant
accounting policies, management judgments and accounting estimates or other
matters that would need to be communicated under Statement on Auditing
Standards (SAS) No. 90, Audit Committee Communications (which amended SAS
No. 61, Communication with Audit Committees), that arise during the
auditors' review of the Funds' financial statements, which information the
Chairman shall further communicate to the other members of the Committee, as
deemed necessary or appropriate in the Chairman's judgment.

3. Discussing with management the Funds' press releases regarding dividends, as
well as financial information and guidance provided to analysts and rating
agencies. This discussion may be done generally, consisting of discussing
the types of information to be disclosed and the types of presentations to
be made. The Chairman of the Audit Committee shall be authorized to have
these discussions with management on behalf of the Audit Committee.

4. Discussing with management and the independent auditors significant
financial reporting issues and judgments made in connection with the
preparation of the Funds' financial statements, including any significant
changes in the Funds' selection or application of accounting principles and
any major issues as to the adequacy of the Funds' internal controls and any
special audit steps adopted in light of control deficiencies.

5. Discussing with management and the independent auditors the effect of
regulatory and accounting initiatives on the Funds' financial statements.

6. Reviewing and discussing reports from the independent auditors regarding (a)
all critical accounting policies and practices to be used; (b) all
alternative treatments of financial information within generally accepted
accounting principles that have been discussed

B-2

with management, ramifications of the use of such alternative treatments and
disclosures, and the treatment preferred by the independent auditors; and
(c) other material written communications between the independent auditors
and management, such as any management letter or schedule of unadjusted
differences.

7. Discussing with management the Funds' major financial risk exposures and the
steps management has taken to monitor and control these exposures, including
the Funds' risk assessment and risk management policies.

8. Reviewing disclosures made to the Audit Committee by the Funds' principal
executive officer and principal financial officer during their certification
process for the Funds' periodic reports about any significant deficiencies
in the design or operation of internal controls or material weaknesses
therein and any fraud involving management or other employees who have a
significant role in the Funds' internal controls.

With respect to the independent auditors:

1. Appointing or replacing the independent auditors, subject, if applicable,
only to Board and shareholder ratification; and compensating and overseeing
the work of the independent auditor (including the resolution of
disagreements between management and the independent auditor regarding
financial reporting), who shall report directly to the Audit Committee, for
the purpose of preparing or issuing an audit report or related work.

2. Meeting with the independent auditors and Fund management to review the
scope, fees, audit plans and staffing for the audit, for the current year.
At the conclusion of the audit, reviewing such audit results, including the
independent auditors' evaluation of the Funds' financial and internal
controls, any comments or recommendations of the independent auditors, any
audit problems or difficulties and management's response, any significant
changes required from the originally planned audit programs and any
adjustments to such statements recommended by the auditors.

3. Pre-approving all audit services and permitted non-audit services (including
the fees and terms thereof) to be performed for the Funds by their
independent auditors, subject to the de minimis exceptions for non-audit
services described in Section 10A of the Exchange Act that the Audit
Committee approves prior to the completion of the audit. The Chairman of the
Audit Committee shall be authorized to give pre-approvals of such non-audit
services on behalf of the Audit Committee.

4. Obtaining and reviewing a report from the independent auditors at least
annually (including a formal written statement delineating all relationships
between the auditors and the Funds) regarding (a) the independent auditor's
internal quality-control procedures; (b) any material issues raised by the
most recent internal quality-control review, or peer review, of the firm, or
by an inquiry or investigation by governmental or professional authorities
within the preceding five years, respecting one or more independent audits
carried out by the firm; (c) any steps taken to deal with any such issues;
and (d) all relationships between the independent auditor and the Funds and
their affiliates; and evaluating the qualifications, performance and
independence of the independent auditor, including their membership in the
SEC practice section of the AICPA and their compliance with all applicable
requirements for independence and peer review, and a review and evaluation
of the lead partner, taking into account the opinions

B-3

of management and the internal auditors, and discussing such reports with
the independent auditors. The Audit Committee shall present its conclusions
with respect to the independent auditor to the Board.

5. Reviewing any reports from the independent auditors mandated by Section
10A(b) of the Exchange Act regarding any illegal act detected by the
independent auditor (whether or not perceived to have a material effect on
the Funds' financial statements) and obtaining from the independent auditors
any information about illegal acts in accordance with Section 10A(b).

6. Ensuring the rotation of the lead (or coordinating) audit partner having
primary responsibility for the audit and the audit partner responsible for
reviewing the audit as required by law, and further considering the rotation
of the independent auditor firm itself.

7. Recommending to the Board of Directors policies for the Funds' or the
Adviser's hiring of employees or former employees of the independent auditor
who participated in the audit of the Funds.

With respect to any internal auditor:

1. Reviewing the internal audit function as it relates to the Funds including
the proposed programs for the coming year. It is not the obligation or
responsibility of the Audit Committee to confirm the independence of any
Nuveen internal auditors performing services relating to the Funds or to
approve any termination or replacement of the Nuveen Manager of Internal
Audit.

2. Receiving a summary of findings from any completed internal audits
pertaining to the Funds and a progress report on the proposed internal audit
plan for the Funds, with explanations for significant deviations from the
original plan.

Other responsibilities:

1. Reviewing with the Funds' and the Adviser's counsel legal matters that may
have a material impact on the Fund's financial statements or compliance
policies.

2. Receiving and reviewing periodic or special reports issued on
exposure/controls, irregularities and control failures related to the Funds.

3. Reviewing with the independent auditors, with any internal auditor and with
Fund management, the adequacy and effectiveness of the accounting and
financial controls of the Funds, and eliciting any recommendations for the
improvement of internal control procedures or particular areas where new or
more detailed controls or procedures are desirable. Particular emphasis
should be given to the adequacy of such internal controls to expose
payments, transactions or procedures that might be deemed illegal or
otherwise improper.

4. Reviewing the reports of examinations by regulatory authorities.

5. Discussing with management and the independent auditor any correspondence
with regulators or governmental agencies that raises material issues
regarding the Funds' financial statements or accounting policies.

B-4

6. Obtaining reports from management with respect to the Funds' policies and
procedures regarding compliance with applicable laws and regulations.

7. Reporting to the Directors/Trustees on the results of the activities of the
Committee.

8. Performing any special reviews, investigations or oversight responsibilities
requested by the Directors/Trustees.

9. Preparing any report required by the rules of the SEC to be included in a
proxy statement for a fund.

10. Reviewing and reassessing annually the adequacy of this charter and
recommending to the Board of Directors/Trustees approval of any proposed
changes deemed necessary or advisable by the Committee.

Although the Audit Committee shall have the authority and responsibilities set
forth in this Charter, it is not the responsibility of the Audit Committee to
plan or conduct audits or to determine that the Funds' financial statements are
complete and accurate and are in accordance with generally accepted accounting
principles. That is the responsibility of management and the independent
auditors. Nor is it the duty of the Audit Committee to conduct investigations,
to resolve disagreements, if any, between management and the independent
auditors or to ensure compliance with laws and regulations.

B-5

APPENDIX C

INFORMATION FOR OTHER
FUNDS WITH SIMILAR OBJECTIVES

FUNDS ADVISED BY SECURITY CAPITAL RESEARCH
AND MANAGEMENT INCORPORATED

NET ASSETS AS
FUND OBJECTIVE FEE RATE OF 9/30/03
------------------------------------------------------------------------------------------------------------------------------

Nuveen Diversified Dividend and High Current Income and Percentage of Nuveen $67.2 million*
Income Fund (Real Estate Total Return Daily Net Assets Management Fee
Securities Allocation)
Up to $200 million 55.0%
$200 million to $300 million 52.5%
$300 million and over 50.0%
------------------------------------------------------------------------------------------------------------------------------
An institutional small cap fund Capital Appreciation Monthly Average $75.0 million*
(Real Estate Securities Net Assets Fee Rate
Allocation)
Under $200 million 0.45%
$200 million to $225 million $900,000
Over $225 million 0.40%
------------------------------------------------------------------------------------------------------------------------------
Security Capital U.S. Real Above Average Total 0.60% of the average daily net asset value $268.0 million
Estate Shares Returns, Including
Current Income and
Capital Appreciation,
Primarily Through
Investments in Real
Estate Securities in the
United States
------------------------------------------------------------------------------------------------------------------------------

* Security Capital Research and Management Incorporated ("Security Capital")
provides subadvisory services for only one segment of this fund. Fund net
asset figures identify only the portion of total net assets for which
Security Capital provides subadvisory services.

C-1

[NUVEEN INVESTMENTS LOGO]

Nuveen Investments
333 West Wacker Drive
Chicago, IL 60606-1286

(800) 257-8787

www.nuveen.com JRS104

(NUVEEN LOGO)

NUVEEN INVESTMENTS

Nuveen Investments
333 West Wacker Dr.
Chicago
www.nuveen.com

NIAC Closed-End Funds
NUVEEN REAL ESTATE INCOME FUND
Common Shares

3 EASY WAYS TO VOTE YOUR PROXY

1. Automated Touch Tone Voting: Call toll-free 1-800-690-6903 and use the
control number shown.

2. On the internet at www.proxyweb.com, enter the control number shown and
follow the simple instructions.

3. Sign, Date and Return this proxy card using the enclosed postage-paid
envelope, to Proxy Tabulator, PO Box 9122, Hingham, MA 02043.

**** CONTROL NUMBER: 999 999 999 999 98 ****

THIS PROXY IS SOLICITED BY THE BOARD OF
NUVEEN REAL ESTATE INCOME FUND
FOR AN ANNUAL MEETING OF SHAREHOLDERS, JANUARY 20, 2004.

The Annual Meeting of shareholders will be held Tuesday, January 20, 2004 at
10:00 a.m. Central Time, in the 31st floor conference room of Nuveen
Investments, Inc., 333 West Wacker Drive, Chicago, Illinois. At this meeting,
you will be asked to vote on the proposal described in the proxy statement
attached. The undersigned hereby appoints Timothy R. Schwertfeger, Jessica R.
Droeger and Gifford R. Zimmerman, and each of them, with full power of
substitution, proxies for the undersigned, to represent and vote the shares of
the undersigned at the Annual Meeting of shareholders to be held on January 20,
2004 or any adjournment or adjournments thereof.

WHETHER OR NOT YOU PLAN TO JOIN US AT THE MEETING, PLEASE COMPLETE, DATE AND
SIGN YOUR PROXY CARD AND RETURN IT IN THE ENCLOSED ENVELOPE SO THAT YOUR VOTE
WILL BE COUNTED. AS AN ALTERNATIVE, PLEASE CONSIDER VOTING BY TELEPHONE (800)
690-6903 OR OVER THE INTERNET (www.proxyweb.com).

Date:
---------------------------------
SIGN HERE EXACTLY AS NAME(S) APPEAR(S)
ON LEFT. (Please sign in Box)

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

NOTE: PLEASE SIGN YOUR NAME EXACTLY AS
IT APPEARS ON THIS PROXY. IF SHARES ARE
HELD JOINTLY, EACH HOLDER MUST SIGN THE
PROXY, IF YOU ARE SIGNING ON BEHALF OF
AN ESTATE, TRUST OR CORPORATION, PLEASE
STATE YOUR TITLE OR CAPACITY.

In their discretion, the proxies are authorized to vote upon such other business
as may properly come before the Annual Meeting.

PROPERLY EXECUTED PROXIES WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS
MADE, SUCH SHARES WILL BE VOTED "FOR" THE ELECTION OF NOMINEES TO THE BOARD.

Please fill in box(es) as shown using black or blue ink or number 2 pencil. [X]

PLEASE DO NOT USE FINE POINT PENS.

1. Approval or Disapproval of the New Sub-Advisory Agreement

[ ] FOR [ ] AGAINST [ ] ABSTAIN

2. Election of Board Members:

(01) William E. Bennett (06) William L. Kissick FOR NOMINEES WITHHOLD
(02) Robert P. Bremner (07) Thomas E. Leafstrand listed at left AUTHORITY
(03) Lawrence H. Brown (08) Peter R. Sawers (except as marked to vote for all
(04) Jack B. Evans (09) Judith M. Stockdale to the contrary) nominees listed
(05) Anne E. Impellizzeri (10) Sheila W. Wellington [ ] at left
[ ]

(INSTRUCTION: To withhold authority to vote for any
individual Nominee(s), write the number(s) of the nominee(s) on
the line provided below.)
-------------------------------------------------------------------

(NUVEEN LOGO)

NUVEEN INVESTMENTS

Nuveen Investments
333 West Wacker Dr.
Chicago
www.nuveen.com

NIAC Closed-End Funds
Nuveen Real Estate Income Fund
FundPreferred Shares

3 EASY WAYS TO VOTE YOUR PROXY

1. Automated Touch Tone Voting: Call toll-free 1-800-690-6903 and use the
control number shown.

2. On the internet at www.proxyweb.com, enter the control number shown and
follow the simple instructions.

3. Sign, Date and Return this proxy card using the enclosed postage-paid
envelope, to Proxy Tabulator, PO Box 9122, Hingham, MA 02043.

**** CONTROL NUMBER: 999 999 999 999 98 ****

THIS PROXY IS SOLICITED BY THE BOARD OF
NUVEEN REAL ESTATE INCOME FUND
FOR AN ANNUAL MEETING OF SHAREHOLDERS, JANUARY 20, 2004.

Date:
----------------------------------
SIGN HERE EXACTLY AS NAME(S) APPEAR(S)
ON LEFT. (Please sign in Box)

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

In their discretion, the proxies are authorized to vote upon such other business
as may properly come before the Annual Meeting.

PROPERLY EXECUTED PROXIES WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS
MADE, SUCH SHARES WILL BE VOTED "FOR" THE ELECTION OF NOMINEES TO THE BOARD.

Please fill in box(es) as shown using black or blue ink or number 2 pencil. [X]

PLEASE DO NOT USE FINE POINT PENS.

1. Approval or Disapproval of the New Sub-Advisory Agreement

[ ] FOR [ ] AGAINST [ ] ABSTAIN

2. Election of Board Members:

(01) Timothy R. Schwertfeger (07) Judith M. Stockdale FOR NOMINEES WITHHOLD
(02) William J. Schneider (08) William E. Bennett listed at left AUTHORITY
(03) Robert P. Bremner (09) Jack B. Evans (except as marked to vote for all
(04) Lawrence H. Brown (10) William L. Kissick to the contrary) nominees listed
(05) Anne E. Impellizzeri (11) Thomas E. Leafstrand [ ] at left
(06) Peter R. Sawers (12) Sheila W. Wellington [ ]

(INSTRUCTION: To withhold authority to vote for any
individual Nominee(s), write the number(s) of the nominee(s) on
the line provided below.)

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