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SUPPLEMENT NO. 3
DATED JANUARY 9, 2001
TO THE PROSPECTUS DATED MAY 1, 2000
FOR THE TIAA REAL ESTATE ACCOUNT
THE FOLLOWING DESCRIBES RECENT PROPERTY TRANSACTIONS BY THE TIAA REAL ESTATE
ACCOUNT (THE "ACCOUNT"). IT SUPPLEMENTS THE INFORMATION IN THE "DESCRIPTION OF
PROPERTIES" SECTION OF THE PROSPECTUS. NONE OF THE PROPERTIES DESCRIBED BELOW
ARE SUBJECT TO A MORTGAGE. FURTHER, EXCEPT AS OTHERWISE NOTED, MOST OF THE
EXPENSES FOR OPERATING THE PROPERTIES ARE EITHER BORNE OR REIMBURSED BY THE
PROPERTY TENANTS, ALTHOUGH THE TERMS VARY UNDER EACH LEASE.
PURCHASES
OFFICE PROPERTIES
MAITLAND PROMENADE ONE - MAITLAND, FL
On December 14, 2000, the Account purchased a five-story, Class A office
building in Maitland, Florida for approximately $36.5 million. Maitland
Promenade One, built in 1999, contains approximately 227,814 rentable square
feet and is 95% leased. The two largest tenants are: Discover Brokerage Direct,
Inc. (46,792 square feet) and Allstate Insurance Company (31,395 square feet).
Rental rates average $23.11 per square foot, which compare favorably to the
current market rates for comparable properties. The property is in the Maitland
Center office submarket of Orlando, which is comprised of approximately 5
million square feet with a vacancy rate of 8.3%.
SAWGRASS PORTFOLIO - INTERNATIONAL PLACE I - SUNRISE, FL
On November 30, 2000, the Account purchased a four-story, Class A office
building in Sunrise, Florida for approximately $15.6 million. International
Place I, completed in late 2000, is in the Sawgrass International Corporate
Park, a master planned business park outside of Fort Lauderdale, Florida. The
Account previously purchased three office buildings in Sawgrass International
Corporate Park, and its total holdings now consist of approximately 344,047
rentable square feet, which are 100% leased. The property contains approximately
93,730 rentable square feet and is currently 100% leased by seven tenants. The
two largest tenants are Marsh & McLennan (32,278 square feet) and REGUS (24,469
square feet). Rental rates at the property average $15.29 per square foot, which
compares favorably to current average market rents in comparable properties. The
property is in the Broward County office market which contains 21.6 million
square feet with a vacancy rate of 9.1%.
INDUSTRIAL PROPERTIES
PARKWEST CENTER I AND II - COPPELL, TX
On December 20, 2000, the Account purchased two industrial buildings in the
Parkwest Center Business Park in Coppell, Texas for approximately $28.3 million.
Parkwest Center I and II, developed in 1997, contain approximately 735,150
rentable square feet and are currently 92% leased by eight tenants. The two
largest tenants are: Briggs Weaver, Inc. (142,797 square feet) and Square D
Company (147,174 square feet). Rental rates at the property average $3.81 per
square foot, which compares favorably to the market rental rates at comparable
properties. The property is in the Dallas/Fort Worth Airport industrial
submarket which is comprised of 17 million square feet with a vacancy rate of
11.2%.
PARK WEST INTERNATIONAL - BUILDINGS E AND J - HEBRON, KY
On December 19, 2000, the Account purchased two industrial buildings in Hebron,
Kentucky for approximately $28,400,000. Buildings E and J, built in 2000,
contain approximately 207,222 and 525,000 rentable square feet, respectively.
They are in the Park West International industrial park in which the Account
owns two other buildings. Buildings E and J are 100% leased to three tenants:
StoreImage Programs, Inc. (40,822 square feet), UPS Worldwide Logistics, Inc.
(166,400 square feet) and Gap, Inc. (525,000 square feet). The average rental
rate for the property is $3.47 per square foot, which is slightly below the
current market rate for comparable properties in the market. The property is in
the Airport Industrial market which is comprised of 12.1 million square feet
with a vacancy rate of 9.4%.
WINEVILLE CENTER POINTE BUILDING I AND II - MIRA LOMA, CA
On December 7, 2000, the Account purchased two industrial buildings in Mira
Loma, California for approximately $44.7 million. Building I and II, built in
1999, are in Wineville Center Pointe and contain approximately 650,451 and
448,661 rentable square feet, respectively. The buildings are 100% leased to
Wal-Mart Stores East, Inc. Rental rates for the property, which average $3.41
per square foot, compare favorably to the current market rates. The properties
are in the Inland Empire West Industrial submarket which contains 124 million
rentable square feet with a vacancy rate of 9.7%.
ABS BUILDING AND CDC BUILDING - RANCHO CUCAMONGA, CA
(PROPERTIES UNDER DEVELOPMENT)
On November 17, 2000, the Account entered into a joint venture with Cabot
Industrial Trust to develop and own two industrial buildings in Rancho
Cucamonga, California. This is the first property the Account is developing
since its inception. The Account owns 80% of the joint venture and will be
responsible for funding up to $17,558,000 for its share of total estimated
development costs.
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The ABS and CDC Buildings are scheduled to be completed in the first quarter of
2001. The buildings will contain approximately 240,249 and 401,226 rentable
square feet, respectively. The ABS Building is currently 100% pre-leased to
American Building Supply and the CDC Building is in lease negotiations with a
single tenant. We expect that rental rates at the properties will average $3.45
per square foot, which is slightly below the current market rates for comparable
properties in the market. The properties are in the Inland Empire West
Industrial submarket which contains 124 million rentable square feet with a
vacancy rate of 9.6%.
Initially, the properties will be valued at the Account's cost, and the value
will be adjusted as additional development costs are incurred. Once the
properties receive certificates of occupancy, or within one year from the
purchase date, whichever is earlier, the properties will be appraised by an
independent appraiser. We may also have the properties independently appraised
earlier if circumstances warrant.
ATLANTA INDUSTRIAL PORTFOLIO - LAWRENCEVILLE, GA
On November 15, 2000, the Account purchased three industrial buildings in
Lawrenceville, Georgia for approximately $20,450,000. The Atlanta Industrial
Portfolio, built over a period from 1996 to 1997, contains a total of 650,251
rentable square feet and is currently 86% leased to six tenants. The two largest
tenants are: Standard Corporation (256,172 square feet) and Anicon, Inc. (93,088
square feet). Rental rates at the property average $2.70 per square foot which
is below market rental rates of comparable properties. The property is in the
Northeast/I-85 industrial submarket of Atlanta which is comprised of
181.7 million square feet with a vacancy rate of 8.1%.
ROCK RUN BUSINESS PARK - MACK TRUCK BUILDING - JOLIET, ILLINOIS
On November 3, 2000, the Account purchased an industrial building in Joliet,
Illinois for approximately $10,150,000. The Mack Truck Building, completed in
2000, is in the Rock Run Business Park, an industrial park in which the Account
owns one other building. The property contains approximately 248,014 rentable
square feet and is 100% leased to Mack Truck, Inc. The current rental rate at
the property is $3.33 per square foot, which is slightly below market rental
rates of comparable properties in the submarket. The property is in the Will
County industrial submarket (approximately 40 miles southwest of Chicago) which
is comprised of 44.5 million square feet with a vacancy rate of 10.6%.
LANDMARK AT SALT LAKE CITY BUILDING #4 - SALT LAKE CITY, UTAH
On November 3, 2000, the Account purchased an industrial building in the
Landmark at Salt Lake City Business Park in Salt Lake City, Utah for
approximately $14,400,000. Landmark at Salt Lake City Building #4, completed in
2000, contains 328,508 rental square feet and is 100% leased to two tenants:
Gateway Companies, Inc. (240,004 square feet) and Martin Brower Company (88,504
square feet). Rental rates at the property average $3.98 per square foot, which
is slightly below market rental rates of comparable properties. The property is
in the Salt Lake City industrial market, which consists of 101 million square
feet with a vacancy rate of 4.6%.
RESIDENTIAL PROPERTIES
ASHFORD MEADOWS APARTMENTS - HERNDON, VA
On September 28, 2000, the Account purchased a luxury multi-family garden
apartment complex in Herndon, Virginia for approximately $64,200,000. Ashford
Meadows Apartments, built in 1998, contains 440 one, two and three bedroom units
in 10 four-story buildings, and its amenities include a clubhouse, outdoor
swimming pool, business center and exercise facilities. There are a total of 818
parking spaces -- 100 garage spaces and 718 open parking spaces. The property is
currently 97% leased at an average monthly rental rate of $1,263. The Account is
responsible for the expenses of operating the property. The Ashford Meadows
Apartments are in the Reston/Herndon apartment market of Northern Virginia,
which has a current vacancy rate of less than 2%.
SALES
OFFICE PROPERTIES
TWO NEWTON PLACE - NEWTON, MA
On December 13, 2000, the Account sold a four-story, Class A office building in
Newton, Massachusetts for approximately $25.9 million. The Account purchased the
property in 1997 through Light Street Partners, L.P., a partnership in which it
currently holds a 100% interest.
RESIDENTIAL PROPERTIES
THE CREST AT SHADOW MOUNTAIN- EL PASO, TEXAS
On December 22, 2000, the Account sold this 232 unit, multi-family garden
apartment complex in El Paso, Texas for approximately $9.6 million. The Account
purchased the property in 1997.
