UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
[FEE REQUIRED]
For the fiscal year ended December 31, 1995
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from __________ to __________
Commission file number 33-92990
TIAA REAL ESTATE ACCOUNT
(Exact name of registrant as specified in its charter)
New York Not Applicable
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
c/o Teachers Insurance and Annuity Association of America
730 Third Avenue
New York, New York 10017-3206
(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code: (212) 490-9000
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO ____
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K: [X] -- Not Applicable
Aggregate market value of voting stock held by non-affiliates:
Not Applicable
Documents Incorporated by Reference: None
<PAGE>
PART I
ITEM 1. BUSINESS.
General. The TIAA Real Estate Account (the "Real Estate Account" or
the "Account") was established on February 22, 1995, as a separate investment
account of Teachers Insurance and Annuity Association of America ("TIAA"), a
nonprofit New York insurance company, by resolution of TIAA's Board of Trustees.
The Account, which invests mainly in real estate and real estate-related
investments, is a variable annuity investment option offered through individual,
group and tax-deferred annuity contracts available to employees of educational
and research institutions. The Account commenced operations on July 3, 1995,
when TIAA contributed $100 million of seed money to the Account, and
participating interests in the Account were first offered to eligible
participants on October 2, 1995.
Investment Practices. The investment objective of the Account is a
favorable rate of return over the long term, primarily through rental income and
capital appreciation from real estate investments owned by the Account. The
Account will also invest in publicly-traded securities and other instruments to
maintain liquidity needed for capital expenditures and expenses and to make
distributions.
Usually, between 70% and 80% of the Account's assets will be invested
directly in real estate or in real estate-related investments. We expect the
majority of the Account's real estate investments to be direct ownership
interests in income-producing real estate, such as office, industrial, retail,
and multi-family residential properties. The Account can also invest, to a
limited extent, in other real estate-related investments, such as conventional
mortgage loans, participating mortgage loans, and real estate partnerships. To a
limited extent, the Account can also invest in real estate investment trusts,
common or preferred stock of companies whose operations primarily involve real
estate, and collateralized mortgage obligations.
Normally, between 20% and 30% of the Account will be invested in
government and corporate debt securities, short-term money market instruments or
cash equivalents, and, to some extent, common or preferred stock of companies
that don't primarily own or manage real estate. In some circumstances, the
Account can increase temporarily the portion of its assets invested in debt
securities or money market instruments. This could happen because of a rapid
influx of participants' funds, lack of suitable real estate investments, or a
need for more liquidity.
In order not to be considered an "investment company" under the
Investment Company Act of 1940 (the "1940 Act"), the Account
2
<PAGE>
will limit its holdings of investment securities (as defined under the 1940 Act)
to less than 40% of its total assets (not including U.S. Government securities
and cash items). However, during its first year of operations, the Account may
keep a much larger part of its assets in short-term and other debt instruments
or in equity securities.
Net Assets and Portfolio Investments. As of December 31, 1995, the
Account's net assets totalled $120,258,345. Through December 31, 1995, the
Account had acquired a total of five real estate properties, including two
industrial properties, one neighborhood shopping center, and two apartment
complexes, for an aggregate purchase price of approximately $44 million. Since
that date, the Account has purchased an office property for a purchase price of
approximately $10 million. Most of the remainder of the Account's assets have
been invested in short-term instruments or is being held as cash. The Account is
continuing to seek suitable real estate-related investments for its portfolio.
Personnel and Management. The Real Estate Account does not directly
employ any persons nor does the Account have its own management or board of
directors. Rather, TIAA employees, under the direction and control of TIAA's
Board of Trustees and Mortgage Committee, manage the investment of the Account's
assets pursuant to investment management procedures adopted by TIAA for the
Account. TIAA and TIAA-CREF Individual & Institutional Services, Inc.
("Services"), a non-profit subsidiary of TIAA, also provide all portfolio
accounting, custodial, and related services for the Account at cost.
ITEM 2. PROPERTIES.
The properties the Account has purchased since it commenced operations
are described below.
MULTI-FAMILY RESIDENTIAL COMPLEXES
Brixworth Apartments -- Atlanta, Georgia
On December 28, 1995, the Account purchased the fee interest (i.e.,
ownership of the underlying land and all buildings and other improvements on the
land) in Brixworth Apartments, a first class garden apartment complex located in
Atlanta, Georgia, for a purchase price of approximately $15.6 million. The
property is not subject to a mortgage.
Brixworth Apartments was built in 1989 and is located on approximately
10.8 acres of land. The complex contains 271 one- and two-bedroom apartment
units in 11 three story buildings, with each unit containing such amenities as a
washer and dryer and a patio or balcony. Building exteriors are brick and wood.
3
<PAGE>
There are 420 parking spaces in the complex. Residents have use of an on-site
clubhouse, which includes a fitness center and swimming pool. Brixworth
Apartments is currently 97% occupied, and according to the Seller, has
experienced between 93% and 97% occupancy over the prior five year period.
Average monthly rents are $699 per unit. Rents are comparable with competitive
complexes and are not subject to rent regulation. The Account will be
responsible for the expenses of operating the property.
Brixworth Apartments is located in northeast Atlanta in DeKalb County,
near several shopping facilities and employment centers. Atlanta has experienced
positive population and employment growth over the last 15 years and serves as
the financial and administrative center for the southeastern United States.
The Greens at MetroWest Apartments -- Orlando, Florida
On December 15, 1995, the Account purchased the fee interest in The
Greens at MetroWest, a luxury garden apartment complex located in Orlando,
Florida, for a purchase price of approximately $12.5 million. The property is
not subject to a mortgage.
The Greens at MetroWest Apartments was built in 1990, and is located on
approximately 16.7 acres of land. The complex consists of 200 one- and
two-bedroom units in 27 two story buildings, with each unit containing such
amenities as a washer and dryer, a screened porch, and, in many of the units, a
fireplace and vaulted ceilings. Building exteriors are stucco with concrete
tiled roofs. There are 402 parking spaces in the complex. Residents have use of
an on-site clubhouse, which includes an exercise facility and swimming pool. The
complex is currently 93% occupied, with monthly rents averaging $778 per unit.
Rents are comparable with competitive complexes and are not subject to rent
regulation. The Account will be responsible for the expenses of operating the
property.
The complex is located in the 1,800 acre master planned development of
MetroWest which contains an 18 hole golf course. Its proximity to several major
highways gives residents easy access to Orlando's major employment centers.
Orlando has experienced strong population and employment growth during the last
decade. While tourism and entertainment account for 40% of local jobs, the
region's economy is diversifying by attracting "high-tech" industries and is
growing in importance as a warehouse and distribution location.
4
<PAGE>
OFFICE BUILDINGS
Southbank Business Park -- Phoenix, Arizona
On February 27, 1996, the Account purchased the fee interest in a
122,609 square foot office/service building in Phoenix, Arizona, for a purchase
price of approximately $10.05 million. The property is not subject to a
mortgage.
The building, completed in 1995, is located on approximately 9.9 acres
of land with 638 parking spaces. It is currently 100% occupied by four tenants
in the service industry, with rents averaging $8.77 per square foot. None of the
leases expire until the year 2000, when leases on 65% of the space expire; those
leases together represent total annual rent payments of approximately $684,907.
Although the terms vary under each lease, most of the expenses for operating the
property are either borne or reimbursed by the tenants.
The building is located within the Southbank Business Park adjacent to
the Phoenix Airport and is easily accessible from either side of the Phoenix
metropolitan area. Phoenix has experienced positive population and employment
growth over the last 15 years. Over 29% of its employment base is comprised of
employees in the service industry.
NEIGHBORHOOD SHOPPING CENTERS
Plantation Grove Shopping Center -- Ocoee, Florida
On December 28, 1995, the Account purchased the fee interest in
Plantation Grove Shopping Center, a 73,655 square foot neighborhood shopping
center located near Orlando, Florida, for a purchase price of approximately $7.3
million. The property is not subject to a mortgage.
The center, built in 1995, is located on approximately 14 acres of land
with space for 401 cars. It is currently 88% occupied and is anchored by a
47,955 square foot Publix supermarket, a regional supermarket chain. Rents,
including a rent guarantee from the seller for the 12% of vacant space, average
$10.00 per square foot. Although the terms vary under each lease, most of the
expenses for operating the property are either borne or reimbursed by the
tenants. Over the next five years, leases on 16% of the center's space expire;
those leases together represent total annual rent payments of $162,900 in the
year of their expiration. The Publix lease expires in the year 2015.
The Orlando, Florida area is discussed in the description of The Greens
at MetroWest Apartments set forth above.
5
<PAGE>
INDUSTRIAL PROPERTIES
On November 22, 1995, the Account purchased the fee interest in a
warehouse property located near Minneapolis, Minnesota for a purchase price of
approximately $4.1 million. Rents on the property, including a rent guarantee
from the seller for the 20% of vacant space, average $3.80 per square foot. On
December 22, 1995, the Account purchased leasehold interests (i.e., interests in
the leases on the underlying land and ownership of the buildings and other
improvements on the land) in two warehouse properties located in El Paso, Texas
for an aggregate purchase price of approximately $4.4 million dollars. Rents on
the properties average $2.71 per square foot, after payment of the ground rent.
Although the terms vary under each lease, most of the expenses for operating
each of the properties are either borne or reimbursed by the tenants. None of
the properties are subject to a mortgage.
Set forth below are further details relating to each facility:
<TABLE>
<CAPTION>
Building Lease
Size Year Current Major Expira-
Property (sq. ft.) Built Occupancy Tenants tion Date
<S> <C> <C> <C> <C> <C>
Fridley,
Minnesota
Industrial Blvd. 100,584 1995 80% Packaging 2005
Materials,
Inc.
El Paso, Texas
Butterfield warehouse 80,000 1980 100% Rockwell 2000
Zane Gray warehouse 103,600 1981 100% D.J. Inc. 2003
</TABLE>
ITEM 3. LEGAL PROCEEDINGS.
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S SECURITIES AND RELATED STOCKHOLDER MATTERS.
(a) Market Information. There is no established public trading market
for participating interests in the TIAA Real Estate Account. Accumulation units
in the Account are sold to eligible participants at the Account's current
accumulation unit
6
<PAGE>
value, which is based on the Account's then current net asset value. For the
period from October 2, 1995 (the Account effective date) to December 31, 1995,
the high and low accumulation unit values for the Account were $102.57 and
$101.23, respectively.
(b) Approximate Number of Holders. The number of contractowners at
February 29, 1996 was 2,309.
(c) Dividends. Not applicable.
ITEM 6. SELECTED FINANCIAL DATA.
The following selected financial data should be considered in
conjunction with the financial statements and notes thereto for the Account
provided herein.
<TABLE>
<CAPTION>
July 3, 1995
(commencement of
operations) to
December 31, 1995
-----------------
<S> <C>
Investment income:
Real estate income, net:
Rental income............................................................................ $ 165,762
Real estate property level ------------
expenses and taxes:
Operating....................................................................... 29,173
Real estate taxes............................................................... 14,659
Total real estate property ------------
level expenses and taxes 43,832
------------
Real estate income, net 121,930
Dividends and interest....................................................................... $ 2,828,900
------------
Total investment income $ 2,950,830
============
Net realized and unrealized
gain on investments...................................................................... $35,603
=======
Net increase in net assets
resulting from operations................................................................ $ 2,676,000
============
Net increase in net assets
resulting from participant transactions.................................................. $117,582,345
============
Net increase in net assets .................................................................... $120,258,345
============
December 31, 1995
-----------------
Total assets................................................................................... $143,177,421
============
Total liabilities.............................................................................. $ 22,919,076
============
Total net assets............................................................................... $120,258,345
============
Accumulation units outstanding................................................................. 1,172,498
============
Accumulation unit value........................................................................ $102.57
=======
</TABLE>
7
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
The Account began operating on July 3, 1995 and interests in the
Account began being offered to participants on October 2, 1995.
The Account's first real estate acquisition closed on November 22,
1995. Through December 31, 1995, the Account acquired a total of five real
estate properties, including two industrial properties, one neighborhood
shopping center, and two apartment complexes. Since December 31, 1995, the
Account has purchased an office property. The Account is in various stages of
negotiations with a number of prospective sellers for additional real estate
purchases.
Results of Operations
From July 3 to December 31, 1995, the Account's net investment income,
after deduction of all expenses, was $2,640,397. In addition, the Account had
net realized and unrealized gains on investments of $35,603. This resulted in a
cumulative total return of 2.57% for that six month period. Much of the
Account's investment income received during 1995 was generated by short-term
investments. However, as the Account approaches its objective of being
approximately 70% to 80% invested in real estate, the Account's future
investment income will be affected to a greater degree by its real estate
holdings. Assuming little change in underlying economic conditions, this
increase in real estate holdings should have a positive impact on the Account's
total return.
Interest income on the Account's short-term investments totaled
$2,820,229 and its dividend income totaled $8,671 through December 31, 1995.
Gross real estate income through this same date was $165,762. Total
property-level expenses through December 31, 1995 were $43,832 and were
comprised of real estate taxes and other operating expenses. Through December
31, 1995, the Account also incurred expenses of $228,136 for investment
management services provided by TIAA, $66,320 for administrative and
distribution services provided by Services, and $16,582 for the mortality and
expense risks and liquidity guarantee provided by TIAA. Because the Account
began accepting contributions from participants on October 2, 1995, the charges
for administrative and distribution services, as well as for mortality and
expense risks and the liquidity guarantee only began as of that date.
Liquidity and Capital Resources
In addition to TIAA's initial $100 million seed money investment, the
Account has received over $17.5 million in premiums and net participant
transfers from accumulations in other TIAA and
8
<PAGE>
College Retirement Equities Fund ("CREF") accounts and has earned $2,640,397 in
net investment income. Real estate properties totaling $43,989,665 were
purchased during November and December 1995. At December 31, 1995, the Account's
liquid assets (cash and short-term investments) were $73,948,731. Much of this
amount will be used by the Account to purchase additional suitable real estate
properties. The remaining assets will continue to be invested in short-term
instruments to meet expense needs and redemption requests (e.g., cash
withdrawals or transfers).
If the Account's cash flow from operations (e.g., premiums and
investment income) and from available liquid assets is not enough to meet its
cash needs including redemption requests, the Account will fund redemptions by
having TIAA's general account purchase liquidity units, in accordance with the
liquidity guarantee.
TIAA will begin redeeming the accumulation units related to its seed
money investment on October 2, 1997, or the date the Account's assets first
reach $200 million, whichever comes first. After that, TIAA will redeem a
portion of the accumulation units related to its seed money investment monthly,
according to a five-year repayment schedule approved by the New York Insurance
Department.
No major capital expenditures for any of the five properties purchased
during 1995 were made in 1995 or are expected to be made in 1996. There are no
leases expiring in the industrial properties or in the neighborhood shopping
center in 1996, so we do not expect to incur any construction costs or leasing
commissions in order to re-lease space. For the apartment complexes, we expect
to incur only routine recurring costs to re-lease apartments that become vacant,
i.e. painting and carpet cleaning or replacement.
Effects of Inflation
In recent years, inflation has been modest. To the extent that
inflation may increase property operating expenses in the future, such increases
can generally be billed to tenants either through contractual lease provisions
in office, industrial, and retail properties or through rent increases in
apartment complexes. However, to the extent there is unrented space in a
property, the Account may not be able to recover the full amount of such
increases in operating expenses.
9
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
INDEX TO FINANCIAL STATEMENTS
TIAA REAL ESTATE ACCOUNT
Page
Report of Management Responsibility ..........................................11
Report of Independent Auditors ...............................................12
Audited Financial Statements
Statement of Assets and Liabilities - December 31, 1995 .....................13
Statement of Operations (For Period
from July 3, 1995 (commencement of operations)
to December 31, 1995) ......................................................14
Statement of Changes in Net Assets (For Period
from July 3, 1995 (commencement of operations)
to December 31, 1995) ......................................................15
Statement of Cash Flows (For Period
from July 3, 1995 (commencement of operations)
to December 31, 1995) ......................................................16
Notes to Financial Statements ................................................17
Statement of Investments -- December 31, 1995 ................................23
Financial Statement Schedules
Schedule III -- Real Estate Owned ............................................25
10
<PAGE>
REPORT OF MANAGEMENT RESPONSIBILITY
To the Participants of the
TIAA Real Estate Account:
The accompanying financial statements of the TIAA Real Estate Account
("Account") of Teachers Insurance and Annuity Association of America ("TIAA")
are the responsibility of TIAA's management. They have been prepared in
accordance with generally accepted accounting principles and have been presented
fairly and objectively in accordance with such principles.
TIAA has established and maintains a strong system of internal controls designed
to provide reasonable assurance that assets are properly safeguarded and
transactions are properly executed in accordance with management's
authorization, and to carry out the ongoing responsibilities of management for
reliable financial statements. In addition, TIAA's internal audit personnel
provide a continuing review of the internal controls and operations of TIAA,
including its separate account operations. The internal Auditor regularly
reports to the Audit Committee of the TIAA Board of Trustees.
The accompanying financial statements have been audited by the independent
auditing firm of Deloitte & Touche LLP. The independent auditors' report, which
appears on the following page, expresses an independent opinion on the fairness
of presentation of these financial statements.
The Audit Committee of the TIAA Board of Trustees, consisting of trustees who
are not officers of TIAA, meets regularly with management, representatives of
Deloitte & Touche LLP and internal auditing personnel to review matters relating
to financial reporting, internal controls and auditing.
/s/ John H. Biggs
----------------------------
Chairman and
Chief Executive Officer
/s/ Thomas W. Jones
----------------------------
Vice Chairman, President and
Chief Operating Officer
/s/ Richard L. Gibbs
----------------------------
Executive Vice President and
Principal Accounting Officer
11
<PAGE>
REPORT OF INDEPENDENT AUDITORS
To the Participants of the TIAA Real Estate Account and the Board of Trustees of
Teachers Insurance and Annuity Association of America:
We have audited the accompanying statement of assets and liabilities of the TIAA
Real Estate Account ("Account") of Teachers Insurance and Annuity Association of
America ("TIAA"), including the statement of investments, as of December 31,
1995, and the related statements of operations, changes in net assets and cash
flows for the period July 3, 1995 (commencement of operations) to December 31,
1995. Our audit also included the financial statement schedule Schedule III,
Real Estate Owned. These financial statements and financial statement schedule
are the responsibility of TIAA's management. Our responsibility is to express an
opinion on the financial statements and financial statement schedule based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
confirmation of securities owned at December 31, 1995, by correspondence with
the custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Account as of December 31, 1995, the
results of its operations, the changes in its net assets and its cash flows for
the above-stated period, in conformity with generally accepted accounting
principles. Also, in our opinion, such financial statement schedule, when
considered in relation to the basic financial statements taken as a whole,
presents fairly in all material respects the information set forth therein.
Investments in real estate properties are stated at fair value at December 31,
1995, as discussed in Note 2 to the financial statements. Determination of fair
value involves subjective judgment because the actual market value of real
estate can be determined only by negotiation between the parties in a sales
transaction.
DELOITTE & TOUCHE LLP
New York, New York
March 8, 1996
12
<PAGE>
TIAA REAL ESTATE ACCOUNT
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1995
<TABLE>
<S> <C>
ASSETS
Investments, at value:
Real estate properties (Cost: $43,989,665)...................................................... $ 43,989,665
Marketable securities
(Amortized cost: $73,972,831)................................................................... 73,992,569
Cash.............................................................................................. 396,787
Receivable from securities transactions........................................................... 23,150,000
Other............................................................................................ 1,648,400
------------
TOTAL ASSETS 143,177,421
------------
LIABILITIES
Payable for securities transactions............................................................... 22,788,035
Other............................................................................................. 131,041
------------
TOTAL LIABILITIES 22,919,076
------------
NET ASSETS - Accumulation Fund..................................................................... $120,258,345
============
NUMBER OF ACCUMULATION UNITS
OUTSTANDING--Notes 6 and 7.......................................................................... 1,172,498
=========
NET ASSET VALUE, PER ACCUMULATION UNIT--Note 6....................................................... $102.57
=======
</TABLE>
See notes to financial statements.
13
<PAGE>
TIAA REAL ESTATE ACCOUNT
STATEMENT OF OPERATIONS
FOR THE PERIOD JULY 3, 1995 (COMMENCEMENT OF OPERATIONS)
TO DECEMBER 31, 1995
<TABLE>
<S> <C>
INVESTMENT INCOME
Income:
Real estate income, net:
Rental income...................................................................................... $ 165,762
----------
Real estate property level expenses and taxes:
Operating........................................................................................ 29,173
Real estate taxes................................................................................ 14,659
----------
Total real estate property level expenses and taxes 43,832
----------
Real estate income, net 121,930
Interest............................................................................................. 2,820,229
Dividends............................................................................................ 8,671
----------
TOTAL INCOME 2,950,830
----------
Expenses--Note 3:
Investment advisory.................................................................................. 228,136
Administrative....................................................................................... 66,320
Mortality and expense risk charges................................................................... 8,291
Liquidity guarantee charges.......................................................................... 8,291
----------
TOTAL EXPENSES 311,038
Fees paid indirectly................................................................................. (605)
----------
NET EXPENSES 310,433
----------
INVESTMENT INCOME, NET 2,640,397
----------
REALIZED AND UNREALIZED
GAIN ON INVESTMENTS
Net realized gain on investments..................................................................... 15,865
Net change in unrealized appreciation
on investments .................................................................................... 19,738
----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS 35,603
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $2,676,000
==========
</TABLE>
See notes to financial statements.
14
<PAGE>
TIAA REAL ESTATE ACCOUNT
STATEMENT OF CHANGES IN NET ASSETS
FOR THE PERIOD JULY 3, 1995 (COMMENCEMENT OF OPERATIONS)
TO DECEMBER 31, 1995
<TABLE>
<S> <C>
FROM OPERATIONS
Investment income, net................................................................................. $ 2,640,397
Net realized gain on investments....................................................................... 15,865
Net change in unrealized appreciation
on investments....................................................................................... 19,738
------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS 2,676,000
------------
FROM PARTICIPANT TRANSACTIONS
TIAA seed money contributed--Note 1.................................................................... 100,000,000
Premiums............................................................................................... 500,421
Disbursements and transfers:
Net transfers from TIAA.............................................................................. 2,901,675
Net transfers from CREF Accounts..................................................................... 14,204,597
Annuity and other periodic payments.................................................................. (718)
Withdrawals.......................................................................................... (23,630)
------------
INCREASE IN NET ASSETS RESULTING
FROM PARTICIPANT TRANSACTIONS 117,582,345
------------
NET INCREASE IN NET ASSETS 120,258,345
NET ASSETS
Beginning of period.................................................................................... -
------------
End of period.......................................................................................... $120,258,345
============
</TABLE>
See notes to financial statements.
15
<PAGE>
TIAA REAL ESTATE ACCOUNT
STATEMENT OF CASH FLOWS
FOR THE PERIOD JULY 3, 1995 (COMMENCEMENT OF OPERATIONS)
TO DECEMBER 31, 1995
<TABLE>
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net increase in net assets
resulting from operations............................................................................ $ 2,676,000
Adjustments to reconcile net increase
in net assets resulting from operations
to net cash used in operating activities:
Increase in investments............................................................................ (117,982,234)
Increase in receivable from securities transactions................................................ (23,150,000)
Increase in other assets........................................................................... (1,648,400)
Increase in payable for securities transactions.................................................... 22,788,035
Increase in other liabilities...................................................................... 131,041
------------
NET CASH USED IN OPERATING ACTIVITIES (117,185,558)
------------
CASH FLOWS FROM PARTICIPANT TRANSACTIONS
TIAA seed money contributed............................................................................ 100,000,000
Premiums............................................................................................... 500,421
Disbursements and transfers:
Net transfers from TIAA.............................................................................. 2,901,675
Net transfers from CREF Accounts..................................................................... 14,204,597
Annuity and other periodic payments.................................................................. (718)
Withdrawals.......................................................................................... (23,630)
------------
NET CASH PROVIDED BY PARTICIPANT TRANSACTIONS 117,582,345
------------
NET INCREASE IN CASH 396,787
CASH
Beginning of period..................................................................................... -
------------
End of period........................................................................................... $ 396,787
============
</TABLE>
See notes to financial statements.
16
<PAGE>
TIAA REAL ESTATE ACCOUNT
NOTES TO FINANCIAL STATEMENTS
Note 1--Organization
The TIAA Real Estate Account ("Account") is a segregated investment account of
Teachers Insurance and Annuity Association of America ("TIAA") and was
established by resolution of TIAA's Board of Trustees on February 22, 1995 under
the insurance laws of the State of New York for the purpose of funding variable
annuity contracts issued by TIAA.
The Account commenced operations on July 3, 1995 with a $100,000,000 seed money
investment by TIAA. TIAA purchased 1,000,000 Accumulation Units in the Account
and such Units share in the pro rata investment experience of the Account and
are subject to the same valuation procedures and expense deductions as all other
Accumulation Units of the Account. The initial registration statement of the
Account filed by TIAA with the Securities and Exchange Commission ("Commission")
under the Securities Act of 1933 became effective on October 2, 1995. The
Account began to offer Accumulation Units and Annuity Units to participants
other than TIAA starting October 2, and November 1, 1995, respectively. At
December 31, 1995, amounts retained by TIAA in the Account remained at 1,000,000
units with a total value of $102,565,900.
TIAA will redeem a portion of its seed money Accumulation Units monthly (at the
net asset value at the time of redemption), according to a five year repayment
schedule approved by the State of New York Insurance Department. This schedule
requires TIAA to begin redeeming the seed money Accumulation Units on October 2,
1997, or on the date the Account's assets first reach $200 million, whichever
comes first.
The investment objective of the Account is a favorable long-term rate of return
primarily through rental income and capital appreciation from real estate
investments owned by the Account. The Account will also invest in
publicly-traded securities and other instruments to maintain adequate liquidity
for operating expenses and capital expenditures and to make benefit payments.
TIAA employees, under the direction of TIAA's Board of Trustees and its Mortgage
Committee, manage the investment of the Account's assets pursuant to investment
management procedures adopted by TIAA for the Account. TIAA's investment
management decisions for the Account are subject to review by the Account's
independent fiduciary, Institutional Property Consultants, Inc. TIAA also
provides all portfolio accounting and related services for the Account.
TIAA-CREF Individual & Institutional Services, Inc. ("Services"), a subsidiary
of TIAA which is registered with the Commission as a broker-dealer and is a
member of the National
17
<PAGE>
Association of Securities Dealers, Inc., provides administrative and
distribution services pursuant to a Distribution and Administrative Services
Agreement with the Account.
Note 2--Significant Accounting Policies
The following is a summary of the significant accounting policies followed by
the Account, which are in conformity with generally accepted accounting
principles.
Valuation of Real Estate Properties: Investments in real estate properties are
stated at fair value, as determined in accordance with procedures approved by
the Mortgage Committee of the Board of Trustees and in accordance with the
responsibilities of the Board as a whole; accordingly, the Account does not
record depreciation. Fair value for real estate properties is defined as the
most probable price for which a property will sell in a competitive market under
all conditions requisite to a fair sale. Determination of fair value involves
subjective judgement because the actual market value of real estate can be
determined only by negotiation between the parties in a sales transaction. Real
estate properties owned by the Account are initially valued at their respective
purchase prices (including acquisition costs). Subsequently, independent
appraisers will value each real estate property at least once a year. The
independent fiduciary must approve all independent appraisers that the Account
uses. The independent fiduciary can also require additional appraisals if it
believes that a property's value has changed materially or otherwise to assure
that the Account is valued correctly. TIAA will perform a valuation review of
each real estate property on a quarterly basis and will update the property
value if it believes that the value of the property has changed since the
previous valuation review or appraisal. The independent fiduciary will review
and approve any such valuation adjustments which exceed certain prescribed
limits. TIAA will continue to use the revised value to calculate the Account's
net asset value until the next valuation review or appraisal.
Valuation of Marketable Securities: Equity securities listed or traded on any
United States national securities exchange are valued at the last sales price as
of the close of the principal securities exchange on which such securities are
traded or, if there is no sale, at the mean of the last bid and asked prices.
Short-term money market instruments are stated at market value. Portfolio
securities for which market quotations are not readily available are valued at
fair value as determined in good faith under the direction of the Mortgage
Committee of the Board of Trustees and in accordance with the responsibilities
of the Board as a whole.
18
<PAGE>
Accounting for Investments: Real estate transactions are accounted for as of the
date on which the purchase or sale transactions for the real estate properties
close (settlement date). Rent from real estate properties consists of all
amounts earned under tenant operating leases, including base rent, recoveries of
real estate taxes and other expenses and charges for miscellaneous services
provided to tenants. Rental income is recognized in accordance with the billing
terms of the lease agreements. The Account bears the direct expenses of the real
estate properties owned. These expenses include, but are not limited to, fees
paid to local property management companies, property taxes, utilities,
maintenance, repairs, insurance and other operating and administrative costs. An
estimate of the net operating income earned from each real estate property is
accrued by the Account on a daily basis and such estimates are adjusted as soon
as actual operating results are determined. Realized gains and losses on real
estate transactions are accounted for under the specific identification method.
Securities transactions are accounted for as of the date the securities are
purchased or sold (trade date). Interest income is recorded as earned and, for
short-term money market instruments, includes accrual of discount and
amortization of premium. Dividend income is recorded on the ex-dividend date.
Realized gains and losses on security transactions are accounted for on the
average cost basis.
Federal Income Taxes: Based on provisions of the Internal Revenue Code, no
federal income taxes are attributable to the net investment experience of the
Account.
Note 3--Management Agreements
All services necessary for the operation of the Account are provided, at cost,
by TIAA and Services. TIAA provides investment management services for the
Account, while distribution and administrative services are provided by Services
in accordance with a Distribution and Administrative Services Agreement between
the Account and Services. TIAA also provides a liquidity guarantee to the
Account, for a fee, to ensure that funds are available to meet participant
transfer and cash withdrawal requests in the event that the Account's cash flows
and liquid investments are insufficient to fund such requests. TIAA also
receives a fee for assuming certain mortality and expense risks.
Fee payments are made from the Account on a daily basis to TIAA and Services
according to formulas established each year with the objective of keeping the
fees as close as possible to the Account's actual expenses. Any differences
between actual expenses and daily charges are adjusted quarterly.
19
<PAGE>
TIAA and Services generally pay directly for all third-party services provided
for the benefit of the Account. "Soft-dollar" arrangements for brokerage and
other services are generally not utilized by the Account. However, certain
custodial fees are reduced based on the level of average cash balances on
deposit with a custodian bank during the period. The amount by which custodial
fees were reduced under these expense offset agreements is reflected in the
accompanying Statement of Operations as "Fees paid indirectly".
Note 4--Real Estate Properties
Had the Account's real estate properties been acquired at the beginning of the
current period (July 3, 1995), rental income and real estate property level
expenses and taxes would have increased by approximately $2,538,000 and
$889,000, respectively. In addition, interest income would have decreased by
approximately $1,082,000. Accordingly, the total pro forma effect on the
Account's net investment income would have been an increase of approximately
$567,000, if the real estate properties had been acquired at the beginning of
the period.
Note 5--Leases
The Account's real estate properties are leased to tenants under operating lease
agreements which expire on various dates through 2015. Aggregate minimum annual
rentals for the properties owned, excluding short-term residential leases, are
as follows:
Years Ending
December 31,
------------
1996 $ 1,653,336
1997 1,653,336
1998 1,638,541
1999 1,513,600
2000 1,461,217
Thereafter 7,673,670
-----------
Total $15,593,700
===========
Certain leases provide for additional rental amounts based upon the recovery of
actual operating expenses in excess of specified base amounts.
20
<PAGE>
Note 6--Condensed Financial Information
Selected condensed financial information for an Accumulation Unit of the Account
is presented below.
<TABLE>
<CAPTION>
July 3, 1995
(Commencement
of Operations) to
December 31, 1995
------------------
<S> <C>
Per Accumulation Unit Data:
Rental income....................................................................................... $ 0.159
Real estate property level expenses and taxes....................................................... 0.042
--------
Real estate income, net 0.117
Dividends and interest.............................................................................. 2.716
--------
Total income 2.833
Expense charges (1)................................................................................. 0.298
--------
Investment income, net 2.535
Net realized and unrealized gain on investments..................................................... 0.031
--------
Net increase in Accumulation Unit Value............................................................... 2.566
Accumulation Unit Value:
Beginning of period.................................................................................. 100.000
--------
End of period........................................................................................ $102.566
========
Cumulative total return................................................................................ 2.57%
Ratios to Average Net Assets:
Expenses (1)......................................................................................... 0.30%
Investment income, net............................................................................... 2.51%
Portfolio turnover rate............................................................................... 0%
Thousands of Accumulation Units outstanding
at end of period..................................................................................... 1,172
</TABLE>
(1) Expense charges per Accumulation Unit and the expense ratio to Average Net
Assets exclude real estate property level operating expenses and taxes. If
included, the expense charge per Accumulation Unit would be $0.340 and the
expense ratio to Average Net Assets would be 0.34%.
21
<PAGE>
Note 7--Accumulation Units
Changes in the number of Accumulation Units outstanding were as follows:
July 3, 1995
(Commencement
of Operations) to
December 31, 1995
-----------------
Accumulation Units:
Credited for premiums and TIAA seed money investment......... 1,004,905
Credited for net transfers and disbursements................. 167,593
Outstanding:
Beginning of period.......................................... -
---------
End of period................................................ 1,172,498
=========
Note 8--Commitments
During the normal course of business, the Account enters into discussions and
agreements to purchase or sell real estate properties. As of December 31, 1995,
the Account had outstanding commitments to purchase real estate properties
(subject to various closing conditions) of $23,550,000. Of that amount, a
purchase of real estate property totalling $10,050,000 was closed on February
27, 1996.
22
<PAGE>
TIAA REAL ESTATE ACCOUNT
STATEMENT OF INVESTMENTS
DECEMBER 31, 1995
REAL ESTATE PROPERTIES--37.28%
Location Description Value
- -------- ----------- -----------
Fridley, Minnesota(1) Industrial building......................... $ 4,166,787
Orlando, Florida(1) Apartments.................................. 12,490,895
El Paso, Texas(2) Industrial building......................... 4,431,166
Atlanta, Georgia(1) Apartments.................................. 15,574,647
Ocoee, Florida(1) Shopping center............................. 7,326,170
-----------
TOTAL REAL ESTATE PROPERTIES
(Cost $43,989,665)........................................ 43,989,665
----------
(1) Fee interest
(2) Leasehold interest
MARKETABLE SECURITIES--62.72%
Shares Issuer Value
- ------ ------ --------
REAL ESTATE INVESTMENT TRUST--.37%:
15,000 Reckson Associates Realty................................ 440,625
--------
TOTAL REAL ESTATE INVESTMENT TRUST
(Cost $402,000).......................................... 440,625
--------
See notes to financial statements.
23
<PAGE>
Par Value Issuer Value
- --------- ------ ------------
COMMERCIAL PAPER--18.17%:
14,360,000 AT&T Capital Corporation
5.64% 02/01/96................................... $ 14,285,025
7,150,000 Corporate Asset Funding Company, Inc.
5.80% 01/02/96................................... 7,148,022
------------
TOTAL COMMERCIAL PAPER
(Amortized cost $21,439,106)........................... 21,433,047
------------
GOVERNMENT AGENCIES--44.18%:
5,930,000 Federal Home Loan Bank
5.60% 01/08/96....................................... 5,922,505
15,700,000 Federal Home Loan Bank
5.48% 01/22/96....................................... 15,645,015
5,000,000 Federal Home Loan Bank
5.38% 02/22/96....................................... 4,958,793
25,670,000 Federal National Mortgage Association
5.67% 01/19/96....................................... 25,592,584
----------
TOTAL GOVERNMENT AGENCIES
(Amortized cost $52,131,725)........................... 52,118,897
----------
TOTAL MARKETABLE SECURITIES
(Amortized cost $73,972,831).................................... 73,992,569
------------
TOTAL INVESTMENTS
(Amortized cost $117,962,496)................................... $117,982,234
============
See notes to financial statements.
24
<PAGE>
TIAA REAL ESTATE ACCOUNT
Schedule III - Real Estate Owned
December 31, 1995
<TABLE>
<CAPTION>
Costs
Initial Cost Capitalized Value at Year
Encum- to Acquire Subsequent December 31, Construction Dated
Description brances Property to Acquisition 1995 Completed Acquired
- ----------- ------- ---------- -------------- ----------- ------------ --------
<S> <C> <C> <C> <C> <C> <C>
River Road Distribution Center $-0- $ 4,166,787 $-0- $ 4,166,787 1995 11/22/95
Industrial Building
Fridley, Minnesota (1)
The Greens At Metrowest -0- 12,490,895 -0- 12,490,895 1990 12/15/95
Apartments
Orlando, Florida (1)
Butterfield Industrial Park -0- 4,431,166 -0- 4,431,166 1980 12/22/95
Industrial Building
El Paso, Texas (2)
Brixworth Apartments -0- 15,574,647 -0- 15,574,647 1989 12/28/95
Apartments
Atlanta, Georgia (1)
Plantation Grove Shopping Center -0- 7,326,170 -0- 7,326,170 1995 12/28/95
Shopping Center
Ocoee, Florida (1)
----- ------------ ----- ------------
$ -0- $ 43,989,665 $ -0- $ 43,989,665
===== ============ ===== ============
</TABLE>
(1) Fee interest
(2) Leasehold interest
Reconciliation of investment property owned:
Balance at beginning of period ...................... $ -
Acquisitions 43,989,665
Capital improvements and carrying costs -
------------
Balance at end of period $43,989,665
============
25
<PAGE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.
Not applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The Account has no officers or directors. The Trustees and principal
executive officers of TIAA, and their principal occupations during the last five
years, are as follows:
Trustees
David Alexander, 63.
American Secretary, Rhodes Scholarship Trust, and Trustees' Professor, Pomona
College. Formerly, President, Pomona College, until 1991.
Marcus Alexis, 64.
Board of Trustees, Professor of Economics and Professor of Management and
Strategy, Northwestern University.
A. Howard Amon, Jr., 68.
Retired Vice President and Director of Real Estate, J. C. Penney,
Inc.
Jenne K. Britell, 53.
Executive Vice President, since June 1995, and Chief Lending Officer and General
Manager, Mortgage Banking, The Dime Savings Bank of New York, FSB, since 1993.
Formerly, Chairman and Chief Executive Officer, HomePower, Inc., from 1990 until
1993, and Chairman of the Management Board, Polish-American Mortgage Bank, Inc.
(Warsaw), from June 1992 until April 1993.
Willard T. Carleton, 61.
Karl L. Eller Professor of Finance, College of Business and Public Administra-
tion, University of Arizona.
Robert C. Clark, 52.
Dean and Royall Professor of Law, Harvard Law School, Harvard University.
Flora Mancuso Edwards, 51.
Professor of English as a Second Language, Middlesex County College, since
October 1995. Formerly, President, Middlesex County College until October 1995.
26
<PAGE>
Estelle A. Fishbein, 61.
General Counsel of The Johns Hopkins University since 1975.
Elected Vice President and General Counsel of the University,
April 1991.
Frederick R. Ford, 60.
Executive Vice President and Treasurer, Purdue University.
Ruth Simms Hamilton, 58.
Professor, Department of Sociology and Urban Affairs Programs, and Director,
African Diaspora Research Project, Michigan State University.
Dorothy Ann Kelly, O.S.U., 66.
President, College of New Rochelle.
Robert M. O'Neil, 61.
Professor of Law, University of Virginia and Director, The Thomas Jefferson
Center for the Protection of Free Expression.
Leonard S. Simon, 59.
Chairman, President and Chief Executive Officer, RCSB Financial, Inc., since
September 1995. Formerly, Chairman and Chief Executive Officer, The Rochester
Community Savings Bank, from 1984 until September 1995.
Ronald L. Thompson, 46.
Chairman of the Board and Chief Executive Officer, Midwest Stamping Co.
Formerly, Chairman of the Board and President, The GR Group, until 1993.
Paul R. Tregurtha, 60.
Chairman, Chief Executive, and Director, Mormac Marine Group, Inc.; Vice
Chairman and Director, The Interlake Steamship Company; Chairman and Director,
Moran Transportation Company; and Chairman, MAC Acquisitions, Inc.
Charles J. Urstadt, 67.
Chairman and President, HRE Properties (a real estate investment trust).
William H. Waltrip, 58.
Interim Chairman and Chief Executive Officer, Bausch & Lomb Inc., since January
1996. Chairman and Chief Executive Officer, Technology Solutions Company, since
1993. Formerly, Chairman and Chief Executive Officer, Biggers Brothers, Inc.,
and Vice Chairman, Unifax, from 1991 until 1993.
27
<PAGE>
Officer-Trustees
John H. Biggs, 59.
Chairman and Chief Executive Officer, TIAA and CREF, since 1993. Formerly,
President and Chief Operating Officer, TIAA and CREF.
Thomas W. Jones, 46.
Vice Chairman, TIAA and CREF, since 1995. President and Chief Operating Officer,
TIAA and CREF, since 1993. Formerly, Executive Vice President, Finance and
Planning, TIAA and CREF.
Martin L. Leibowitz, 59.
Vice Chairman and Chief Investment Officer, TIAA and CREF, since 1995. Formerly,
Managing Director -- Director of Research and member of the Executive Committee,
Salomon Brothers, Inc.
Other Officers
Richard L. Gibbs, 49.
Executive Vice President, TIAA and CREF, since 1993, and Vice President,
TIAA-CREF Investment Management, Inc. ("Investment Management") and Services,
since 1992; Executive Vice President, Teachers Advisors, ("Advisors") since
1995. Formerly, Vice President, Finance, TIAA and CREF.
Albert J. Wilson, 63.
Vice President and Chief Counsel, Corporate Secretary, TIAA and CREF, since
1991. Formerly, Vice President, Secretary, and Associate General Counsel, TIAA
and CREF.
Richard J. Adamski, 53.
Vice President and Treasurer, TIAA and CREF, since March 1991; Vice President
and Treasurer, Investment Management and Services, since 1992; Vice President
and Treasurer, Teachers Personal Investors Services, Inc. and Advisors, since
1994. Formerly, Treasurer, TIAA and CREF.
ITEM 11. EXECUTIVE COMPENSATION.
Not applicable.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
On July 3, 1995, the Account issued 1,000,000 accumulation units to
TIAA, at $100 per unit, in consideration of TIAA's $100 million seed money
investment. As of December 31, 1995, TIAA held accumulation units representing
85.3% of the Account's total net assets.
28
<PAGE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
TIAA's general account plays a significant role in operating the Real
Estate Account, including providing seed money, a liquidity guarantee, and
investment management and other services.
Seed Money. On July 3, 1995, TIAA supplied the Account's initial $100
million seed money investment in exchange for one million accumulation units, at
$100 per unit. TIAA will redeem a portion of its seed money investment monthly,
commencing on the earlier of (1) October 2, 1997, or (2) the date the Account's
assets first reach $200 million. TIAA's accumulation units will be redeemed at
net asset value at the time of redemption.
Liquidity Guarantee. If the Account's cash flow is insufficient to
fund redemption requests, TIAA's general account has agreed to fund them by
purchasing accumulation units, subject to Department of Labor approval. TIAA
thereby guarantees that a participant can redeem accumulation units at their
then current daily net asset value. For the year ended December 31, 1995, the
Account paid TIAA $8,291 for this liquidity guarantee through a daily deduction
from the net assets of the Account.
Investment Management and Administrative Services/Certain Risks Borne
by TIAA. Deductions are made each valuation day from the net assets of the
Account for various services required to manage investments, administer the
Account and distribute the contracts, and to cover mortality and expense risks
borne by TIAA. These services are performed at cost by TIAA and Services.
For the year ended December 31, 1995, the Account paid TIAA $228,136
for investment management services and $8,291 for mortality and expense risks.
For the same period, the Account paid Services $66,320 for its administrative
and distribution services.
29
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS
ON FORM 8-K.
(a) 1. Financial Statements. See Item 8 for required financial
statements.
(a) 2. Financial Statement Schedules. See Item 8 for required
financial statement schedules.
(a) 3. Exhibits.
(1) Form of Distribution and Administrative Services Agreement by
and between TIAA and TIAA-CREF Individual & Institutional
Services, Inc. *
(3) (A) Charter of TIAA (as amended) **
(B) Bylaws of TIAA (as amended) **
(4) (A) Forms of RA, GRA, GSRA, SRA, and IRA Real Estate
Account Endorsements *
(B) Forms of Income-Paying Contracts *
(10) (A) Independent Fiduciary Agreement by and among TIAA, the
Registrant, and Institutional Property
Consultants, Inc. *
(B) Custodial Services Agreement by and between TIAA and
Morgan Guaranty Trust Company of New York with
respect to the Real Estate Account *
(27) (A) Financial Data Schedule of the Account's Financial
Statements for the period ended December 31, 1995
(b) Reports on 8-K. The Account filed reports on Form 8-K on January
3, 1996 and on March 1, 1996 under Item 5 of the form with respect to the
acquisition of properties for its portfolio.
- --------------------
* Incorporated herein by reference to Pre-Effective Amendment
No. 1 to the Account's Registration Statement on Form S-1 filed
September 19, 1995 (File No. 33-92990).
** Incorporated herein by reference to the Account's Registration Statement on
Form S-1 filed June 1, 1995 (File No. 33-92990).
30
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this Report to be signed on its behalf by
the undersigned, thereunto duly authorized.
TIAA REAL ESTATE ACCOUNT
By: TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA
By: /s/ Peter C. Clapman
------------------------------
Peter C. Clapman
Senior Vice President and
Chief Counsel, Investments
March 20, 1996
------------------------------
Date
Pursuant to the requirements of the Securities Exchange Act of
1934, this Report has been signed by the following persons, trustees and
officers of Teachers Insurance and Annuity Association of America, in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
/s/ John H. Biggs Chairman of the Board March 20, 1996
- ------------------------ and Chief Executive
John H. Biggs Officer (Principal
Executive Officer)
and Trustee
/s/ Thomas W. Jones Vice Chairman, March 20, 1996
- ------------------------ President and Chief
Thomas W. Jones Operating Officer
(Principal Financial
Officer) and Trustee
/s/ Richard L. Gibbs Executive Vice President
- ------------------------ (Principal Accounting Officer) March 20, 1996
Richard L. Gibbs
<PAGE>
Signature of Trustee Date Signature of Trustee Date
- -------------------- ---- -------------------- ----
/s/ Martin L. Leibowitz 3/20/96 /s/ Frederick R. Ford 3/20/96
- ------------------------ ---------------------
Martin L. Leibowitz Frederick R. Ford
/s/ David Alexander 3/20/96 /s/ Ruth Simms Hamilton 3/20/96
- ------------------------ ---------------------
David Alexander Ruth Simms Hamilton
/s/ Marcus Alexis 3/20/96 /s/ Dorothy Ann Kelly 3/20/96
- ------------------------ ---------------------
Marcus Alexis Dorothy Ann Kelly, O.S.U.
/s/ A. Howard Amon, Jr. 3/20/96 /s/ Ronald L. Thompson 3/20/96
- ------------------------ ---------------------
A. Howard Amon, Jr. Ronald L. Thompson
/s/ Jenne K. Britell 3/20/96 /s/ Robert M. O'Neil 3/20/96
- ------------------------ ---------------------
Jenne K. Britell Robert M. O'Neil
/s/ Willard T. Carleton 3/20/96 /s/ Leonard S. Simon 3/20/96
- ------------------------ ---------------------
Willard T. Carleton Leonard S. Simon
/s/ Robert C. Clark 3/20/96 /s/ Paul R. Tregurtha 3/20/96
- ------------------------ ---------------------
Robert C. Clark Paul R. Tregurtha
/s/ Flora Mancuso Edwards 3/20/96 /s/ Charles J. Urstadt 3/20/96
- ------------------------ ---------------------
Flora Mancuso Edwards Charles J. Urstadt
/s/ Estelle A. Fishbein 3/20/96 /s/ William H. Waltrip 3/20/96
- ------------------------ ---------------------
Estelle A. Fishbein William H. Waltrip
<PAGE>
SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED
PURSUANT TO SECTION 15(D) OF THE ACT BY REGISTRANTS WHICH HAVE
NOT REGISTERED SECURITIES PURSUANT TO SECTION 12 OF THE ACT
Because the Registrant has no voting securities, nor its own management
or board of directors, no annual report or proxy materials will be sent to
contractowners holding interests in the Account.
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
- ------- ----------------------
27(A) Financial Data Schedule of the Account's Financial Statements
for the period ended December 31, 1995
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE AUDITED
FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000946155
<NAME> TIAA REAL ESTATE ACCOUNT
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JUL-03-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 117,962,496
<INVESTMENTS-AT-VALUE> 117,982,234
<RECEIVABLES> 23,150,000
<ASSETS-OTHER> 1,648,400
<OTHER-ITEMS-ASSETS> 396,787
<TOTAL-ASSETS> 143,177,421
<PAYABLE-FOR-SECURITIES> 22,788,035
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 131,041
<TOTAL-LIABILITIES> 22,919,076
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 1,172,498
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 120,258,345
<DIVIDEND-INCOME> 8,671
<INTEREST-INCOME> 2,820,229
<OTHER-INCOME> 121,930
<EXPENSES-NET> 310,433
<NET-INVESTMENT-INCOME> 2,640,397
<REALIZED-GAINS-CURRENT> 15,865
<APPREC-INCREASE-CURRENT> 19,738
<NET-CHANGE-FROM-OPS> 2,676,000
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,172,498
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 120,258,345
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 228,136
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 311,038
<AVERAGE-NET-ASSETS> 105,219,935
<PER-SHARE-NAV-BEGIN> 100.000
<PER-SHARE-NII> 2.535
<PER-SHARE-GAIN-APPREC> 0.031
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 102.566
<EXPENSE-RATIO> .003
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
