SUPPLEMENT NO. 1
dated January 15, 1997
to the Prospectus
dated October 21, 1996
for the TIAA Real Estate Account
The following replaces the third paragraph under the heading
"Investment Practices of the Account -- General" on page 10 of the Prospectus:
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 in other real estate or real estate-related investments, through
joint ventures, real estate partnerships or real estate investment trusts
("REITs"). To a limited extent, the Account can also invest in conventional
mortgage loans, participating mortgage loans, common or preferred stock of
companies whose operations involve real estate (i.e., that own or manage real
estate primarily), and collateralized mortgage obligations.
The following supplements the information set forth in Appendix A of
the Prospectus:
MULTI-FAMILY RESIDENTIAL COMPLEXES
Royal St. George Apartments - West Palm Beach, Florida
On December 20, 1996, the Account purchased the fee interest in Royal
St. George Apartments, a first class garden apartment complex located in West
Palm Beach, Florida, for a purchase price of approximately $15.9 million. The
property is not subject to a mortgage.
Royal St. George Apartments was built in 1995 and is located on 10.4
acres of land. The complex contains 224 one-, two- and three-bedroom units in 8
two- and three-story buildings, with each unit containing such amenities as a
washer and dryer, patio or solarium, and a security system. Upper level units
contain vaulted ceilings. Building exteriors are stucco with tile roofs. There
are 388 parking spaces plus 64 detached garages. Residents have use of an
on-site clubhouse, a fully equipped exercise center, swimming pool and two
lighted tennis courts. The complex is currently 94% occupied with monthly rents
averaging $834 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.
Royal St. George Apartments is located three miles south of the West
Palm Beach central business district. The West Palm Beach metropolitan area,
with a current population of almost one
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million persons, has experienced population growth over the past five years that
is more than twice the national rate. This growth is expected to continue.
Westcreek Apartments - Westlake Village, California
On January 2, 1997, the Account purchased the fee interest in Westcreek
Apartments, a luxury garden apartment complex located in Westlake Village,
California, for a purchase price of approximately $13.0 million. The property is
not subject to a mortgage.
Westcreek Apartments was built in 1988 and is located on approximately
10.4 acres of land. The complex contains 126 one-and two-bedroom units in 11
two-story buildings, with each unit containing such amenities as a microwave
oven, fireplace, washer and dryer and nine foot ceilings. Building exteriors are
stucco with tile roofs. There are 128 covered parking spaces plus 76 uncovered
parking spaces. Residents have use of an on-site clubhouse with a fully equipped
weight room and a swimming pool. The complex is currently 94% occupied with
monthly rents averaging $1,090 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.
Westlake Village is located approximately 38 miles northwest of
downtown Los Angeles in Ventura County. Ventura County has enjoyed above-average
population growth during the last five years and this growth is expected to
continue into the foreseeable future.
INDUSTRIAL PROPERTIES
Arapahoe Park East - Boulder, Colorado
On October 31, 1996, the Account purchased the fee interest in five
research and development buildings located in Boulder, Colorado, for a purchase
price of approximately $9.9 million. Rents on the buildings, which together have
129,425 square feet of rentable space, average $8.83 per square foot. The
buildings are not subject to a mortgage.
The buildings, built between 1979 and 1982, are located on
approximately 6.46 acres of land with space for 332 cars. Ball Aerospace Corp.,
a leading aerospace and telecommunications equipment manufacturer, leases 100%
of the five buildings under leases which expire over the three year period from
1998 to 2000.
Boulder is located 25 miles northwest of Denver, the largest city in
the seven-state Rocky Mountain region and the capital of Colorado. The
population of the Denver metropolitan area, which includes Boulder, has grown
steadily during the past ten years
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and is expected to continue to expand into the near future. Boulder's economy
has been strengthened in recent years by the establishment of several high tech
firms in the area, which have attracted a highly-educated and skilled labor
force.
Interstate Crossing - Eagan, Minnesota
On December 31, 1996, the Account purchased the fee interest in two
industrial buildings located in Eagan, Minnesota, for a purchase price of
approximately $6.4 million. Rents on the buildings, which together have 131,380
square feet of rentable space, average $5.10 per square foot. The buildings are
not subject to a mortgage.
The buildings, built in 1995, are located on approximately 10.6 acres
of land with space for 288 parking spaces. The buildings are presently 100%
leased to 10 tenants, with the majority of leases expiring in 2000 and 2001.
The subject property is located 10 miles southeast of downtown
Minneapolis and 7 miles south of downtown St. Paul. The twin cities of
Minneapolis -- St. Paul currently have a population of 2.7 million people and
enjoy a strong and diverse economy.
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