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SUPPLEMENT NO. 1
DATED JUNE 5, 2000
TO THE PROSPECTUS DATED MAY 1, 2000
FOR THE TIAA REAL ESTATE ACCOUNT
THE FOLLOWING DESCRIBES A RECENT PROPERTY PURCHASE BY THE REAL ESTATE ACCOUNT
AND SUPPLEMENTS THE INFORMATION SET FORTH IN THE "DESCRIPTION OF PROPERTIES"
SECTION OF THE PROSPECTUS.
On May 15, 2000, the TIAA Real Estate Account purchased a 12-story
office building in the central business district of Washington, D.C. for a
purchase price of approximately $140.5 million. The property is not subject to a
mortgage.
1801 K Street, N.W. was built in 1971 and has undergone extensive
renovations over the past three years. It contains 561,686 net rentable square
feet, and is currently 96% occupied by over twenty tenants. The three largest
tenants are Arter & Hadden LLP (77,309 square feet), Bank of America (54,845
square feet) and Young & Rubicam (61,048 square feet). Rents average $32.50 per
square foot, as compared with the average $38 per square foot rent for office
space in Washington D.C.'s central business district. Although the terms vary
under each lease, most of the expenses for operating the property are either
borne or reimbursed by the tenants. The central business district submarket of
Washington, D.C. contains 35.6 million square feet with an overall vacancy rate
of 4.8%.
As of the date of this supplement, the acquisition represented
approximately 7.4% of the Account's total net assets and 9.5% of its real estate
assets.
