Edgar Filing: AMERICAN STRATEGIC INCOME PORTFOLIO INC

asp_nq.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANAGEMENT INVESTMENT COMPANY

Investment Company Act file number (811-06404)

American Strategic Income Portfolio Inc.

(Exact name of registrant as specified in charter)

800 Nicollet Mall

Minneapolis, MN 55402

(Address of principal executive offices) (Zip code)

Charles D. Gariboldi, Jr.

800 Nicollet Mall Minneapolis, MN 55402

(Name and address of agent for service)

800-677-3863

Registrant's telephone number, including area code

Date of fiscal year end: 08/31/08

Date of reporting period: 05/31/08

Item 1. Schedule of Investments.

Schedule of INVESTMENTS (unaudited)

American Strategic Income Portfolio (ASP)

May 31, 2008

DESCRIPTION				DATE ACQUIRED				PAR		COST		VALUE (a)

(Percentages of each investment category relate to net assets)

U.S. Government Agency Mortgage-Backed Securities — 9.9%
	Fixed Rate — 9.9%
		Federal Home Loan Mortgage Corporation
			5.50%, 1/1/18, #E93231 (b)			$	573,075		$	586,882	$	582,228
			9.00%, 7/1/30, #C40149				77,574			79,396		86,197
		Federal National Mortgage Association
			6.00%, 10/1/16, #610761 (b)				307,524			311,980		316,587
			5.00%, 7/1/18, #724954 (b)				1,352,558			1,351,085		1,353,768
			6.50%, 6/1/29, #252497 (b)				157,237			156,301		163,737
			7.50%, 3/1/30, #495694				83,090			81,897		87,640
			7.50%, 5/1/30, #535289 (b)				31,301			30,371		33,700
			8.00%, 5/1/30, #538266 (b)				11,565			11,435		12,497
			6.00%, 5/1/31, #535909 (b)				299,608			301,111		306,283
			6.50%, 11/1/31, #613339 (b)				145,844			148,706		151,737
			5.50%, 7/1/33, #720735 (b)				1,938,955			1,918,269		1,932,471

			Total U.S. Government Agency Mortgage-Backed Securities							4,977,433		5,026,845

Corporate Note (c) (d)— 7.1%
	Fixed Rate — 7.1%
		Stratus Properties V, 6.92%, 12/31/11			6/1/07		3,500,000			3,500,000		3,570,000

Whole Loans and Participation Mortgages (c) (e) — 94.9%
	Commercial Loans — 67.0%
		Advance Self Storage, Lincoln, NE, 6.13%, 1/1/11 (f)			12/30/05		1,455,174			1,455,174		1,447,129
		Buca Restaurant, Maple Grove, MN, 8.63%, 1/1/11			12/27/00		846,495			846,495		854,960
		Copper Junction, Copper Mountain, CO, 6.38%, 7/1/17 (f)			6/14/07		1,933,748			1,933,748		1,810,288
		Dependable Mini-Storage I, Plano, TX, 6.64%, 7/1/11 (d) (f)			6/27/06		2,800,000			2,800,000		2,814,805
		Dependable Mini-Storage II, Plano, TX, 11.88%, 7/1/11 (d)			6/27/06		300,000			300,000		307,001
		Hampden Medical Office, Englewood, CO, 7.38%, 10/1/12			9/9/02		1,596,167			1,596,167		1,425,284
		Integrity Plaza Shopping Center, Albuquerque, NM, 7.88%, 7/1/12 (f)			6/11/02		1,967,499			1,967,495		2,042,441
		La Costa Meadows Industrial Park I, San Marcos, CA, 6.78%, 7/1/17 (d)			6/28/07		1,250,000			1,250,000		1,197,109
		La Costa Meadows Industrial Park II, San Marcos, CA, 7.53%, 7/1/17 (d)			6/28/07		2,000,000			2,000,000		2,026,912
		Metro Center, Albuquerque, NM, 5.20%, 5/1/09 (f)			4/7/04		2,431,914			2,431,914		2,409,034
		Metro Center II, Albuquerque, NM, 7.88%, 5/1/09			3/20/06		146,119			146,119		132,898
		Minikahda Mini Storage IV, Minneapolis, MN, 7.15%, 3/1/11 (f)			2/28/06		1,593,806			1,593,806		1,623,163
		Naples Boat Club, Naples, 6.43%, 1/1/17 (f)			12/28/06		1,741,178			1,741,178		1,661,801
		Orchard Commons, Englewood, CO, 8.63%, 4/1/11			3/28/01		963,671			963,671		992,581
		Palace Court, Santa Fe, NM, 6.68%, 11/1/11 (d) (f)			10/2/06		1,900,000			1,900,000		1,900,504
		Par 3 Office Building, Bend, OR, 6.63%, 8/1/13 (d) (f)			8/3/06		1,900,000			1,900,000		1,851,843
		Perkins Restaurant, Maple Grove, MN, 6.38%, 1/1/11 (f)			12/23/05		1,380,467			1,380,467		1,380,229
		Rockwood Galleria, Gresham, OR, 7.25%, 2/1/11 (f)			1/6/03		1,516,732			1,516,732		1,541,175
		Stephens Center, Missoula, MT, 6.38%, 9/1/10 (f)			4/20/06		1,841,081			1,841,081		1,845,262
		The Storage Place, Marana, AZ, 6.65%, 1/1/13 (d)			12/20/07		3,200,000			3,200,000		3,160,707
		Voit Office Building, Orange, CA, 8.13%, 9/1/08 (f)			8/17/01		1,440,541			1,440,541		1,440,541

										34,204,588		33,865,667

	Multifamily Loans — 26.7%
		Forest Club Apartments, Dallas, TX, 11.88%, 8/1/09 (d)			4/19/06		1,720,000			1,720,000		1,646,330
		Franklin Woods Apartments, Franklin, NH, 5.88%, 3/1/10			2/24/95		795,948			795,948		787,567
		Hunt Club Apartments, Waco, TX, 5.64%, 7/1/11 (f)			6/3/04		1,178,014			1,178,014		1,142,501
		Park Hollywood, Portland, OR, 7.38%, 6/1/12			5/31/02		1,107,645			1,107,645		1,132,380
		Spring Creek Gardens, Plano, TX, 5.85%, 1/1/09 (d) (g)			12/22/05		2,050,000			2,050,000		1,827,005
		Steel Lake Apartments, Federal Way, WA, 5.37%, 6/1/09 (d) (g)			5/31/05		3,985,000			3,985,000		3,985,000
		Vanderbilt Condominiums, Austin, TX, 8.04%, 10/1/09			9/29/99		1,084,262			1,084,262		1,071,567
		Villa Bonita, Chez Royalle, Fitzhugh Apartments I, Dallas, TX, 7.25%, 3/1/09 (g)			2/21/03		830,153			830,153		830,153
		Villa Bonita, Chez Royalle, Fitzhugh Apartments II, Dallas, TX, 9.88%, 3/1/09			2/21/03		153,611			153,611		141,460
		Woodland Garden Apartments, Arlington, WA, 7.38%, 9/1/08			8/26/98		930,941			930,941		930,941

										13,835,574		13,494,904

2008 Quarterly Report 1 American Strategic Income Portfolio

Schedule of INVESTMENTS (unaudited)

American Strategic Income Portfolio (ASP) (continued)

DESCRIPTION				DATE ACQUIRED			PAR/ SHARES		COST		VALUE (a)

	Single Family Loans — 1.2%
		American Portfolio, 1 loan, California, 4.88%, 10/18/15			7/18/95	20,996		$	19,993	$	21,557
		Anivan, 1 loan, Maryland, 5.19%, 4/14/12			6/14/96	78,125			79,289		70,266
		Bank of New Mexico, 1 loan, New Mexico, 6.23%, 3/31/10			5/31/96	35,103			34,453		30,552
		Bluebonnet Savings and Loan, 6 loans, Texas, 6.66%, 8/31/10			5/22/92	131,751			120,572		121,211
		CLSI Allison Williams, 1 loan, Texas, 9.38%, 8/1/17			2/28/92	7,739			7,105		7,244
		Cross Roads Savings and Loan II, 1 loan, Oklahoma, 8.34%, 1/1/21 (h)			1/7/92	21,519			20,237		14,916
		Fairbanks, 1 loan, Utah, 5.50%, 9/23/15			5/21/92	19,313			16,377		19,892
		First Boston Mortgage Pool, 1 loan, Virginia, 9.04%, 7/1/08			6/23/92	2,309			2,309		2,307
		Knutson Mortgage Portfolio I, 2 loans, Maine and Montana, 9.37%, 8/1/17			2/26/92	137,240			130,947		138,750
		McClemore, Matrix Funding Corporation, 1 loan, North Carolina, 10.50%, 9/30/12			9/9/92	43,425			41,245		44,728
		Nomura III, 3 loans, midwestern United States, 8.20%, 4/29/17			9/29/95	73,309			66,194		75,435
		Rand Mortgage Corporation, 2 loans, Texas, 9.50%, 8/1/17			2/21/92	57,372			47,007		57,831

									585,728		604,689

			Total Whole Loans and Participation Mortgages						48,625,890		47,965,260

Preferred Stocks (b) — 7.8%
	Real Estate Investment Trusts — 7.8%
		AMB Property, Series L				14,500			359,755		324,075
		AMB Property, Series M				5,600			139,850		125,552
		Duke Realty, Series J				2,100			52,246		46,095
		Duke Realty, Series M				2,000			50,000		46,220
		Health Care Properties, Series E				5,400			141,419		126,900
		Health Care Properties, Series F				13,270			341,394		312,376
		HRPT Properties Trust, Series B				8,171			212,725		202,232
		Kimco Realty, Series F				19,400			500,619		434,560
		Kimco Realty, Series G				25,000			625,000		617,000
		Post Properties, Series B				17,800			468,112		373,800
		Prologis Trust, Series F				3,475			87,049		80,307
		Public Storage, Series A				6,000			144,291		133,380
		Public Storage, Series F				9,300			231,105		198,555
		Public Storage, Series X				11,500			282,309		239,315
		Public Storage, Series Z				3,000			74,330		64,170
		Realty Income, Series D				20,500			546,185		502,045
		Vornado Realty Trust, Series E				4,800			121,338		112,320

			Total Preferred Stocks						4,377,727		3,938,902

		Total Unaffiliated Investments							61,481,050		60,501,007

Short-Term Investment — 1.3%
		First American Prime Obligations Fund, Class Z (i)				661,417			661,417		661,417

2008 Quarterly Report 2 American Strategic Income Portfolio

Schedule of INVESTMENTS (unaudited)

American Strategic Income Portfolio (ASP) (continued)

		COST		VALUE (a)
Total Investments (j) — 121.0%	$	62,142,467	$	61,162,424

Other Assets and Liabilities, Net — (21.0)%				(10,602,424	)

Total Net Assets — 100.0%			$	50,560,000

Notes to Schedule of Investments:
(a)		Security valuations for the fund’s investments (other than whole loans, participation mortgages, and mortgage servicing rights) are furnished by an independent pricing service that has been approved by the fund’s board of directors. Investments in equity securities that are traded on a national securities exchange (or reported on the Nasdaq national market system) are stated at the last quoted sales price if readily available for such securities on each business day. For securities traded on the Nasdaq national market system, the fund utilizes the Nasdaq Official Closing Price which compares the last trade to the bid/ask price of a security. If the last trade falls within the bid/ask range, then that price will be the closing price. If the last trade is outside the bid/ask range, and falls above the ask, the ask price will be the closing price. If the last trade is below the bid, the bid will be the closing price. Other equity securities traded in the over the-counter market and listed equity securities for which no sale was reported on that date are stated at the last quoted bid price. Investments in open-end mutual funds are valued at their respective net asset values on the valuation date. Debt obligations exceeding 60 days to maturity are valued by an independent pricing service. The pricing service may employ methodologies that utilize actual market transactions, broker-dealer supplied valuations, or other formula-driven valuation techniques. These techniques generally consider such factors as yields or prices of bonds of comparable quality, type of issue, coupon, maturity, ratings, and general market conditions. Securities for which prices are not available from an independent pricing service but where an active market exists are valued using market quotations obtained from one or more dealers that make markets in the securities or from a widely-used quotation system. Debt obligations with 60 days or less remaining until maturity may be valued at their amortized cost which approximates market value. The following investment vehicles, when held by the fund, are priced as follows: Exchange listed futures and options on futures are priced at their last sale price on the exchange on which they are principally traded, as determined by FAF Advisors, Inc. (“FAF Advisors”), on the day the valuation is made. If there were no sales on that day, futures and options on futures will be valued at the last reported bid price. Options on securities, indices, and currencies traded on Nasdaq or listed on a stock exchange, whether domestic or foreign, are valued at the last sale price on Nasdaq or on any exchange on the day the valuation is made. If there were no sales on that day, the options will be valued at the last sale price on the previous valuation date. Last sale prices are obtained from an independent pricing service. When market quotations are not readily available, securities are valued at fair value as determined in good faith by procedures established and approved by the fund’s board of directors. Some of the factors which may be considered in determining fair value are fundamental analytical data relating to the investment; the nature and duration of any restrictions on disposition; trading in similar securities of the same issuer or comparable companies; information from broker-dealers; and an evaluation of the forces that influence the market in which the security is purchased or sold. If events occur that materially affect the value of securities (including non-U.S. securities) between the close of trading in those securities and the close of regular trading on the New York Stock Exchange, the securities will be valued at fair value. The fund’s investments in whole loans (single family, multifamily, and commercial), participation mortgages, and mortgage servicing rights are generally not traded in any organized market and therefore, market quotations are not readily available. These investments are valued at fair value according to procedures adopted by the fund’s board of directors. Pursuant to these procedures, whole loan investments are initially valued at cost and their values are subsequently monitored and adjusted using a FAF Advisors pricing model designed to incorporate, among other things, the present value of the projected stream of cash flows on such investments. The pricing model takes into account a number of relevant factors including the projected rate of prepayments, the delinquency profile, the historical payment record, the expected yield at purchase, changes in prevailing interest rates, and changes in the real or perceived liquidity of whole loans, participation mortgages, and mortgage servicing rights as the case may be. The results of the pricing model may be further subject to price ceilings due to the illiquid nature of the loans. Changes in prevailing interest rates, real or perceived liquidity, yield spreads, and creditworthiness are factored into the pricing model each week. Certain mortgage loan information is received once a month. This information includes, but is not limited to, the projected rate of prepayments, projected rate and severity of defaults, the delinquency profile, and the historical payment record. Valuations of whole loans, participation mortgages, and mortgage servicing rights are determined no less frequently than weekly. Although FAF Advisors believes the pricing model to be reasonable and appropriate, the actual values that may be realized upon the sale of whole loans, participation mortgages, and mortgage servicing rights can only be determined in negotiations between the fund and third parties. In accordance with the valuation procedures adopted by the fund’s board of directors, real estate acquired through foreclosure is valued at estimated market value, as determined by independent third party appraisals, less estimated selling costs. As material capital improvements are made to the property, new market value appraisals are obtained. As of May 31, 2008, the fund held fair valued securities with a value of $51,535,260 or 102% of total net assets.

2008 Quarterly Report 3 American Strategic Income Portfolio

Schedule of INVESTMENTS (unaudited)

American Strategic Income Portfolio (ASP) (continued)

(b)

Securities pledged as collateral for outstanding reverse repurchase agreements. On May 31, 2008, securities valued at $8,680,610 were pledged as collateral for the following outstanding reverse repurchase agreements:

Amount	Acquisition Date	Rate*	Due	Accrued Interest	Name of Broker and Description of Collateral
$4,740,000	5/9/08	2.50%	6/9/08	$ 7,571	(1)
2,158,000	5/7/08	3.40%	6/6/08	28,517	(2)
$6,898,000				$36,088

*	Interest rate as of May 31, 2008. Rate is based on the London InterBank Offered Rate (“LIBOR”) plus a spread and reset monthly.

Name of broker and description of collateral:
(1)	Goldman Sachs:
	Federal Home Loan Mortgage Corporation, 5.50%, 1/1/18, $573,075 par
	Federal National Mortgage Association, 6.00%, 10/1/16, $307,524 par
	Federal National Mortgage Association, 5.00%, 7/1/18, $1,352,558 par
	Federal National Mortgage Association, 6.50%, 6/1/29, $157,237 par
	Federal National Mortgage Association, 7.50%, 5/1/30, $31,301 par
	Federal National Mortgage Association, 8.00%, 5/1/30, $11,565 par
	Federal National Mortgage Association, 6.00%, 5/1/31, $299,608 par
	Federal National Mortgage Association, 6.50%, 11/1/31, $145,844 par
	Federal National Mortgage Association, 5.50%, 7/1/33, $1,938,955 par
(2)	Dresdner Bank:
	AMB Property, Series L, 14,500 shares
	AMB Property, Series M, 5,600 shares
	Duke Realty, Series J, 2,100 shares
	Duke Realty, Series M, 2,000 shares
	Health Care Properties, Series E, 5,400 shares
	Health Care Properties, Series F, 13,270 shares
	HRPT Properties Trust, Series B, 8,171 shares
	Kimco Realty, Series F, 19,400 shares
	Kimco Realty, Series G, 25,000 shares
	Post Properties, Series B, 12,500 shares
	Prologis Trust, Series F, 3,475 shares
	Public Storage, Series A, 6,000 shares
	Public Storage, Series F, 9,300 shares
	Public Storage, Series X, 11,500 shares
	Public Storage, Series Z, 3,000 shares
	Realty Income, Series D, 20,500 shares
	Vornado Realty Trust, Series E, 4,800 shares

	The fund has entered into a lending commitment with Dresdner Bank. The agreement permits the fund to enter into reverse repurchase agreements up to $6,500,000 using preferred stock as collateral. The fund pays a fee of 0.25% to Dresdner Bank on any unused portion of the $6,500,000 lending commitment.

2008 Quarterly Report 4 American Strategic Income Portfolio

Schedule of INVESTMENTS (unaudited)

American Strategic Income Portfolio (ASP) (concluded)

(c)		Securities purchased as part of a private placement which have not been registered with the Securities and Exchange Commission under the Securities Act of 1933 and which are considered to be illiquid. These securities are fair valued in accordance with the board approved valuation procedures. See note (a) above.

(d)		Interest only - Represents securities that entitle holders to receive only interest payments on the mortgage. Principal balance of the loan is due at maturity. The interest rate disclosed represents the net coupon rate in effect as of May 31, 2008.

(e)		Interest rates on commercial and multifamily loans are the net coupon rates in effect (after reducing the coupon rate by any mortgage servicing fees paid to mortgage services) on May 31, 2008. Interest rates and maturity dates disclosed on single family loans represent the weighted average coupon and weighted average maturity for the underlying mortgage loans as of May 31, 2008.

(f)		Securities pledged as collateral for outstanding borrowings under a loan agreement. On May 31, 2008, securities valued at $24,910,716 were pledged as collateral for the following outstanding borrowings:

Amount	Rate*	Accrued Interest	Name of Broker and Description of Collateral
$3,000,000	5.72%	$4,770	(1)
2,000,000	5.72%	954	(1)
$5,000,000		$5,724

*	Interest rate as of May 31, 2008. Rate is based on the London InterBank Offered Rate (“LIBOR”) plus a spread and reset monthly.

Name of broker and description of collateral:
(1)		Morgan Stanley:
		Advance Self Storage, 6.13%, 1/1/11, $1,455,174 par
		Copper Junction, 6.38%, 7/1/17, $1,933,748 par
		Dependable Mini-Storage I, 6.64%, 7/1/11, $2,800,000 par
		Hunt Club Apartments, 5.64%, 7/1/11, $1,178,014 par
		Integrity Plaza Shopping Center, 7.88%, 7/1/12, $1,967,499 par
		Metro Center, 5.20%, 5/1/09, $2,431,914 par
		Minikahda Mini Storage IV, 7.15%, 3/1/11, $1,593,806 par
		Naples Boat Club, 6.43%, 1/1/17, $1,741,178 par
		Palace Court, 6.68%, 11/1/11, $1,900,000 par
		Par 3 Office Building, 6.63%, 8/1/13, $1,900,000 par
		Perkins Restaurant, 6.38%, 1/1/11 $1,380,467 par
		Rockwood Galleria, 7.25%, 2/1/11, $1,516,732 par
		Stephens Center, 6.38%, 9/1/10, $1,841,081 par
		Voit Office Building, 8.13%, 9/1/08 $1,440,541 par

		At May 31, 2008, the fund was a party to a loan agreement with Morgan Stanley Mortgage Capital Holdings LLC (“Morgan Stanley”) under which loans were collateralized by whole loans in the fund’s portfolio. This agreement expired and the outstanding loan amount was refinanced on July 11, 2008 using advances made under a new loan agreement with Massachusetts Mutual Life Insurance Company (“MMLIC”). Under this new loan agreement, MMLIC made a term loan to the fund of $8,600,000 which matures on July 31, 2011, and agreed to make revolving loans to the fund of up to $2,400,000. Loans made under the loan agreement are secured by whole loans in the fund’s portfolio and bear interest at the one-month London Interbank Offered Rate plus 2.625%. In addition, the fund pays an annual fee of 1.28% on any unused portion of the fund’s revolving loan commitment.

(g)		Variable Rate Security - The rate shown is the net coupon rate in effect as of May 31, 2008.

(h)		Loan or a portion of this loan not current on interest and/or principal payments.

(i)		Investment in affiliated security. This money market fund is advised by FAF Advisors, Inc., which also serves as advisor for the fund.

(j)		On May 31, 2008, the cost of investments was $62,142,467. The aggregate gross unrealized appreciation and depreciation of investments, based on this cost, were as follows:

Gross unrealized appreciation	$	460,284
Gross unrealized depreciation		(1,440,327	)
Net unrealized depreciation	$	(980,043	)

2008 Quarterly Report 5 American Strategic Income Portfolio

Item 2. Controls and Procedures.

(a)

The Registrant’s President/Chief Executive Officer and Treasurer/Chief Financial Officer have concluded that the Registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “1940 Act”)) are effective as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and Rule 15d-15(b) under the Securities Exchange Act of 1934, as amended.

(b)

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

Item 3. Exhibits.

Separate certifications for each principal executive officer and principal financial officer of the Registrant as required by Rule 30a-2(a) under the 1940 Act (17 CFR 270.30a-2(a)). Filed herewith.

SIGNATURES

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

American Strategic Income Portfolio Inc.

By: /s/Thomas S. Schreier, Jr.

Thomas S. Schreier, Jr., President

Date: July 28, 2008

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

By: /s/Thomas S. Schreier, Jr.

Thomas S. Schreier, Jr., President

Date: July 28, 2008

By: /s/Charles D. Gariboldi, Jr.

Charles D. Gariboldi, Jr., Treasurer

Date: July 28, 2008