Tiaa Real Estate Account S1 IPO registration

As filed with the Securities and Exchange Commission on March 22, 2007

Registration No. 333-

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM S-1
FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933

TIAA REAL ESTATE ACCOUNT
(Exact name of registrant as specified in its charter)


New York	(Not applicable)	(Not applicable)
(State or jurisdiction of	(Primary Standard Industrial	(I.R.S. Employer
incorporation or organization)	Classification Code Number)	Identification No.)

c/o Teachers Insurance and Annuity Association of America
730 Third Avenue
New York, New York 10017-3206
(212) 490-9000
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Keith F. Atkinson, Esquire
Teachers Insurance and Annuity Association of America
8500 Andrew Carnegie Blvd.
Charlotte, North Carolina 28226
(704) 988-1000
(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

Steven B. Boehm, Esquire
Sutherland Asbill & Brennan LLP
1275 Pennsylvania Avenue, N.W.
Washington, D.C. 20004-2415

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of the registration statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box: x

If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: o

If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: o

Pursuant to Rule 429 under the Securities Act, the prospectus contained herein also relates to and constitutes a post-effective amendment to Securities Act registration statements 33-92990, 333-13477, 333-22809, 333-59778, 333-83964, 333-113602, 333-121493 and 333-132580 (collectively, the “Prior Registration Statements”).

CALCULATION OF REGISTRATION FEE



Title of Each Class of Securities to be Registered	Amount to be Registered	Proposed Maximum Offering Price Per Unit	Proposed Maximum Aggregate Offering Price	Amount of Registration Fee

Accumulation units in TIAA Real Estate Account	*	*	$4,000,000,000**	$122,800**


*	The securities are not issued in predetermined amounts or units, and the maximum aggregate offering price is estimated solely for purposes of determining the registration fee pursuant to Rule 457(o) under the Securities Act.

**	In addition to the $4,000,000,000 of accumulation units registered hereunder, the registrant is carrying forward securities which remain unsold but which were previously registered under the Prior Registration Statements for which filing fees were previously paid.

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to Section 8(a), may determine.

SUBJECT TO COMPLETION, DATED MARCH 22, 2007

PROSPECTUS

______________, 2007

TIAA REAL ESTATE ACCOUNT

A Tax-Deferred Variable Annuity Option Offered by Teachers Insurance and Annuity Association of America

This prospectus tells you about the TIAA Real Estate Account, an investment option offered through individual and group variable annuity contracts issued by TIAA. Please read it carefully before investing and keep it for future reference.

The Real Estate Account, which we refer to sometimes as “the Account” in this prospectus, invests primarily in real estate and real estate-related investments. TIAA, one of the largest and most experienced mortgage and real estate investors in the nation, manages the Account’s assets.

The value of your investment in the Real Estate Account will go up or down depending on how the Account performs and you could lose money. The Account’s performance depends mainly on the value of the Account’s real estate and other real estate-related investments, and the income generated by those investments. The Account’s returns could go down if, for example, real estate values or rental and occupancy rates decrease due to general economic conditions or a weak market for real estate generally. Property operating costs and government regulations, such as zoning or environmental laws, could also affect a property’s profitability. TIAA does not guarantee the investment performance of the Account, and you will bear the entire investment risk. For a detailed discussion of the specific risks of investing in the Account, see “Risks,” page 8.

We take deductions daily from the Account’s net assets for the Account’s operating and investment management expenses. The Account also pays TIAA for bearing mortality and expense risks and for providing a liquidity guarantee. The current estimated annual expense deductions from the Account’s net assets total 0.630%.

The Real Estate Account is designed as an option for retirement and tax-deferred savings plans for employees of nonprofit institutions. TIAA offers the Real Estate Account under the following annuity contracts:


n	RA and GRAs (Retirement Annuities and Group Retirement Annuities)

n	SRAs (Supplemental Retirement Annuities)

n	GSRAs (Group Supplemental Retirement Annuities)

n	Retirement Choice and Retirement Choice Plus Annuity

n	GAs (Group Annuities) and Institutionally-Owned GSRAs

n	Classic and Roth IRAs (Individual Retirement Annuities) including SEP IRAs (Simplified Employee Pension Plans)

n	Keoghs

n	ATRAs (After-Tax Retirement Annuities)

Note that state regulatory approval may be pending for certain of these contracts and they may not currently be available in your state.

The Securities and Exchange Commission (SEC) has not approved or disapproved these securities or passed upon the adequacy of the information in this prospectus. Any representation to the contrary is a criminal offense.

An investment in the Real Estate Account is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.

FINANCIAL SERIVCES
FOR THE GREATER GOOD*

TABLE OF CONTENTS


Quantitative and Qualitative Disclosures About Market Risk		50
Valuing the Account’s Assets		52
Expense Deductions		55
The Contracts		57
How to Transfer and Withdraw Your Money		62
Receiving Annuity Income		66
Death Benefits		71
Taxes		72
General Matters		78
Distribution		80
State Regulation		80
Legal Matters		80
Experts		81
Additional Information		82
Financial Statements		83
Index to Financial Statements		84
Appendix A — Management of TIAA		206
Appendix B — Special Terms		208


	Please see Appendix B for definitions of certain special terms used in this prospectus.

	The Real Estate Account securities offered by this prospectus are only being offered in those jurisdictions where it is legal to do so. No person may make any representation to you or give you any information about the offering that is not in the prospectus. If anyone provides you with information about the offering that is not in the prospectus, you shouldn’t rely on it.

ABOUT THE REAL ESTATE ACCOUNT AND TIAA

The TIAA Real Estate Account was established in February 1995 as a separate account of Teachers Insurance and Annuity Association of America (TIAA). TIAA is a life insurance company founded in 1918 by the Carnegie Foundation for the Advancement of Teaching. Its home office is at 730 Third Avenue, New York, NY 10017-3206 and its telephone number is 212 490-9000. In addition to issuing variable annuities, whose returns depend upon the performance of certain specified investments, TIAA also offers traditional fixed annuities.

With its 60 years in the real estate business and interests in properties located across the U.S. and internationally, TIAA is one of the nation’s largest and most experienced investors in mortgages and real estate equity interests. As of December 31, 2006, TIAA’s general account had a mortgage and real property portfolio of approximately $25.2 billion.

TIAA is the companion organization of the College Retirement Equities Fund (CREF), the first company in the United States to issue a variable annuity. Together, TIAA and CREF form the principal retirement system for the nation’s education and research communities and one of the largest pension systems in the U.S., based on assets under management. TIAA-CREF serves approximately 3.2 million people and over 15,000 institutions. As of December 31, 2006, TIAA’s assets were approximately $184 billion; the combined assets for TIAA and CREF totaled approximately $406 billion.

THE ACCOUNT’S INVESTMENT OBJECTIVE AND STRATEGY

Investment Objective:The Real Estate Account seeks favorable long-term returns primarily through rental income and appreciation of real estate investments owned by the Account. The Account also will invest in publicly traded securities and other investments that are easily converted to cash to make redemptions, purchase or improve properties or cover other expenses.

Investment Strategy:The Account intends to invest between 75 percent and 90 percent of its assets directly in real estate or real estate-related investments. The Account’s principal strategy is to purchase 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 equity securities. 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 primarily own or manage real estate), and collateralized mortgage obligations, including commercial mortgage-backed securities and other similar investments. The Account may also make foreign investments, which are expected to comprise no more than 25 percent of the Account’s total assets.

The Account will invest the remaining portion of its assets in government and corporate debt securities, money market instruments and, at times, stock of companies that do not primarily own or manage real estate. In some circumstances, the Account can increase the portion of its assets invested in debt securities or money market instruments. This could happen if the Account receives a large inflow of money in a short period of time, there is a lack of attractive real estate investments available on the market, or the Account anticipates a need to have more cash available.

The amount the Account invests in real estate and real estate-related investments at a given time will vary depending on market conditions and real estate prospects, among other factors. As of December 31, 2006, the Account’s net assets totaled $14,132,692,512. At December 31, 2006, the Account held a total of 121 real estate properties (including its interests in 12 real estate-related joint ventures), representing 80.03% of the Account’s total investment portfolio (“Total Investments”). As of that date, the Account also held investments in a mortgage loan receivable, representing 0.48% of Total Investments, real estate equity securities, representing 3.99% of Total Investments, commercial mortgage backed securities (CMBSs), representing 0.55% of Total Investments, real estate limited partnerships, representing 1.80% of Total Investments, commercial paper representing 10.79% of Total Investments, and government bonds representing 2.36% of Total Investments.

Risks:An investment in the Account is subject to the risks associated with real estate investing, including, without limitation, mortgage loan investments, mortgage-backed securities, liquid investments and foreign real estate investments. These risks are described in “Risks” beginning on page 8. You may lose money by investing in this Account.

TIAA Real Estate AccountProspectus|1

PAST PERFORMANCE

The bar chart and performance table below helps illustrate some of the risks of investing in the Account, and how investment performance varies. The bar chart shows the Account’s total return over the last ten calendar years and the performance table shows the Account’s returns for the one-, three-, five- and ten-year periods through December 31, 2006. How the Account has performed in the past is not necessarily an indication of how it will perform in the future.

(BAR CHART)

Average Annual Total Return (as of December 31, 2006)


1 Year	3 Year		5 Year		10 Year

14.04%	13.53	%	10.22	%	9.43	%

SUMMARY OF ACCOUNT’S EXPENSE DEDUCTIONS


Type of Expense Deduction	Estimated Percent of Net Assets Annually	Services Performed


Investment Management	0.190%	For TIAA’s investment advice, portfolio accounting, custodial services, and similar services, including independent fiduciary and appraisal fees

Administration	0.275%	For administrative services performed by TIAA-CREF Individual & Institutional Services, LLC (“Services”), such as allocating premiums and paying annuity income

Distribution	0.080%	For Services’ expenses related to distributing the annuity contracts

Mortality and Expense Risk	0.050%	For TIAA’s bearing certain mortality and expense risks

Liquidity Guarantee	0.035%	For TIAA’s liquidity guarantee

Total Annual Expense Deduction^1,2	0.630%	For total services to the Account


¹	TIAA guarantees that the total annual expense deduction will not exceed an annual rate of 2.50% of average net assets.

²	TIAA currently does not impose a fee on transfers from the Account, but reserves the right to impose a fee on transfers from the Account in the future.

Please see “Selected Financial Data” on page 31 for additional information.

2|ProspectusTIAA Real Estate Account

Services are performed at cost by TIAA or subsidiaries of TIAA. Since expenses are charged at cost, the expenses described are estimates for the year based on projected expense and asset levels. Any differences between actual and estimated expenses are adjusted quarterly. For more detailed information, see “Expense Deductions” on page 54.

The following table shows you an example of the expenses you would incur on a hypothetical investment of $1,000 in the TIAA Real Estate Account over several periods. The table assumes a 5% annual return on assets. Remember that these figures do not represent actual expenses or investment performance, which may differ.


1 Year	$	6
3 Year	$	20
5 Years	$	35
10 Years	$	79

ABOUT THE ACCOUNT’S INVESTMENTS — IN GENERAL

DIRECT INVESTMENTS IN REAL ESTATE

Direct Purchase:The Account will generally buy direct ownership interests in existing or newly constructed income-producing properties, including office, industrial, retail, and multi-family residential properties. The Account will invest mainly in established properties with existing rent and expense schedules or in newly constructed properties with predictable cash flows or in which a seller agrees to provide certain minimum income levels. On occasion, the Account might invest in real estate development projects.

Purchase-Leaseback Transactions:Although it has not yet done so, the Account can enter into purchase-leaseback transactions (leasebacks) in which it typically will buy land and income-producing improvements on the land (such as buildings), and simultaneously lease the land and improvements to a third party (the lessee). Leasebacks are generally for very long terms. Usually, the lessee is responsible for operating the property and paying all operating costs, including taxes and mortgage debt. The Account can also give the lessee an option to buy the land and improvements.

In some leasebacks, the Account may purchase only the land under an income-producing building and lease the land to the building owner. In those cases, the Account will often seek to share (or “participate”) in any increase in property value from building improvements or in the lessee’s revenues from the building above a base amount. The Account can invest in leasebacks that are subordinated to other interests in the land, buildings, and improvements (e.g., first mortgages); in that case, the leaseback interest will be subject to greater risks.

TIAA Real Estate AccountProspectus|3

INVESTMENTS IN MORTGAGES

General:The Account can originate or acquire interests in mortgage loans, generally on the same types of properties it might otherwise buy. These mortgage loans may pay fixed or variable interest rates or have “participating” features (as described below). Normally the Account’s mortgage loans will be secured by properties that have income-producing potential. They usually will not be insured or guaranteed by the U.S. government, its agencies or anyone else. They usually will be non-recourse, which means they won’t be the borrower’s personal obligations. Most will be first mortgage loans on existing income-producing property, with first-priority liens on the property. These loans may be amortized (i.e., principal is paid over the course of the loan), or may provide for interest-only payments, with a balloon payment at maturity.

Participating Mortgage Loans:The Account may make mortgage loans which permit the Account to share (have a “participation”) in the income from or appreciation of the underlying property. These participations let the Account receive additional interest, usually calculated as a percentage of the income the borrower receives from operating, selling or refinancing the property. The Account may also have an option to buy an interest in the property securing the participating loan.

Managing Mortgage Loan Investments:TIAA can manage the Account’s mortgage loans in a variety of ways, including:


	•	renegotiating and restructuring the terms of a mortgage loan

	•	extending the maturity of any mortgage loan made by the Account

	•	consenting to a sale of the property subject to a mortgage loan

	•	financing the purchase of a property by making a new mortgage loan in connection with the sale

	•	selling the mortgage loans, or portions of them, before maturity.

OTHER REAL ESTATE-RELATED INVESTMENTS

Real Estate Investment Trusts:The Account may invest in real estate investment trusts (REITs), which are publicly owned entities that lease, manage, acquire, hold mortgages on, and develop real estate. Normally the Account will buy the common or preferred stock of a REIT, although at times it may purchase REIT debt securities. REITs seek to maximize share value and increase cash flows by acquiring and developing new real estate projects, upgrading existing properties or renegotiating existing arrangements to increase rental rates and occupancy levels. REITs must distribute at least 90% of their taxable income to shareholders in order to benefit from a special tax structure, which means they may pay high dividends. The value of a particular REIT can be affected by such factors as cash flow, the skill of its management team, and defaults by its lessees or borrowers.

Stock of Companies Involved in Real Estate Activities:The Account can invest in common or preferred stock of companies whose business involves real

4|ProspectusTIAA Real Estate Account

estate. These stocks may be listed on U.S. or foreign stock exchanges or traded over-the-counter in the U.S. or abroad.

Mortgage-Backed Securities:The Account can invest in mortgage-backed securities and other mortgage-related or asset-backed instruments, including commercial mortgage-backed securities (CMBSs), residential mortgage-backed securities, mortgage-backed securities issued or guaranteed by agencies or instrumentalities of the U.S. government, non-agency mortgage instruments, and collateralized mortgage obligations that are fully collateralized by a portfolio of mortgages or mortgage-related securities. Mortgage-backed securities are instruments that directly or indirectly represent a participation in, or are secured by and payable from, one or more mortgage loans secured by real estate. In most cases, mortgage-backed securities distribute principal and interest payments on the mortgages to investors. Interest rates on these instruments can be fixed or variable. Some classes of mortgage-backed securities may be entitled to receive mortgage prepayments before other classes do. Therefore, the prepayment risk for a particular instrument may be different than for other mortgage-related securities.

Investment Vehicles Involved in Real Estate Activities:The Account can hold interests in limited partnerships, funds, and other commingled investment vehicles involved in real estate-related activities, including owning, financing, managing, or developing real estate.

NON-REAL ESTATE-RELATED INVESTMENTS

The Account can also invest in:


	•	U.S. government or government agency securities

	•	Money market instruments and other cash equivalents. These will usually be high-quality short-term debt instruments, including U.S. government or government agency securities, commercial paper, certificates of deposit, bankers’ acceptances, repurchase agreements, interest-bearing time deposits, and corporate debt securities

	•	Corporate debt or asset-backed securities of U.S. or foreign entities, or debt securities of foreign governments or multi-national organizations, but only if they’re investment-grade and rated in the top four categories by a nationally recognized rating organization (or, if not rated, deemed by TIAA to be of equal quality)

	•	Common or preferred stock, or other ownership interests, of U.S. or foreign companies that aren’t involved in real estate, to a limited extent.

FOREIGN REAL ESTATE AND OTHER FOREIGN INVESTMENTS

The Account may invest in foreign real estate or real estate-related investments. It might also invest in securities or other instruments of foreign government or private issuers. While the percentage will vary, we expect that foreign investments will comprise no more than 25 percent of the Account’s total assets.

TIAA Real Estate AccountProspectus| 5

Depending on investment opportunities, the Account’s foreign investments could at times be concentrated in one or two foreign countries. We will consider the special risks involved in foreign investing before investing in foreign real estate and won’t invest unless our standards are met.

GENERAL INVESTMENT AND OPERATING POLICIES

STANDARDS FOR REAL ESTATE INVESTMENTS

General Criteria for Buying Real Estate or Making Mortgage Loans:Before the Account purchases real estate or makes a mortgage loan, TIAA will consider such factors as:


	•	the location, condition, and use of the underlying property

	•	its operating history, and its future income-producing capacity

	•	the quality, operating experience, and creditworthiness of the borrower

TIAA will analyze the fair market value of the underlying real estate, taking into account the property’s operating cash flow (based on the historical and projected levels of rental and occupancy rates and expenses), as well as the general economic conditions in the area where the property is located.

Diversification:We haven’t placed percentage limitations on the type and location of properties that the Account can buy. However, the Account seeks to diversify its investments by type of property and geographic location. How much the Account diversifies will depend upon whether suitable investments are available and how much the Account has available to invest.

Special Criteria for Making Mortgage Loans:Ordinarily, the Account will only make a mortgage loan if the loan, when added to any existing debt, will not exceed 85 percent of the appraised value of the mortgaged property when the loan is made, unless the Account is compensated for taking additional risk.

Selling Real Estate Investments:The Account doesn’t intend to buy and sell its real estate investments simply to make short-term profits. Rather, the Account’s general strategy in selling real estate investments is to dispose of those assets which have either maximized in value, underperformed or represent properties needing significant capital infusions in the future. The Account will reinvest any sale proceeds that it doesn’t need to pay operating expenses or to meet redemption requests (e.g., cash withdrawals or transfers).

OTHER REAL ESTATE-RELATED POLICIES

Appraisals:The Account will rely on TIAA’s own analysis to appraise a property when it first buys it. After that, the Account’s properties and mortgage loans will be appraised or valued once a year by an independent state-certified appraiser who is a member of a professional appraisal organization. In addition, TIAA’s appraisal staff will perform a valuation of each real estate property on a quarterly basis and on occasion, the Account will obtain independent apraisals on a quarterly basis. While the Account usually won’t receive an independent

6|ProspectusTIAA Real Estate Account

appraisal before it buys real estate, it will get an independent appraisal when it makes mortgage loans. See “Valuing the Account’s Assets” on page 51.

Borrowing:The Account may borrow money and assume or obtain a mortgage on a property —i.e., make leveraged real estate investments. In addition, to meet short-term cash needs, the Account may obtain a line of credit with terms requiring that the Account secure a loan with one or more of its properties. The Account’s total borrowings may not exceed 30% of the Account’s total net asset value at the time of incurrence. (In calculating the 30% limit, we will include only the Account’s actual percentage interest in any borrowings and not that of any joint venture partner.) The Account may only borrow up to 70% of the then current value of a property, although construction loans may be for 100% of costs incurred in developing the property. Except for construction loans, any mortgage loans on a property will be non-recourse, meaning that if the Account defaults on its loan, the lender will have recourse only to the property encumbered or the joint venture owning the property, and not to any other assets of the Account. When possible, the Account will seek to have loans mature at different times to limit the risks of borrowing.

The Account will not obtain mortgage financing from TIAA or any of its affiliates. However, the Account may place an intra-company mortgage on an Account property held by a subsidiary for tax planning or other purposes. This type of mortgage will not be subject to the general limitations on borrowing described above.

When the Account assumes or obtains a mortgage on a property, it will bear the expense of mortgage payments. It will also be exposed to certain additional risks, which are described in “Risks of Borrowing” on page 10.

Joint Investments:The Account can hold property jointly through general or limited partnerships, joint ventures, leaseholds, tenancies-in-common, or other legal arrangements. However, the Account will not hold real property jointly with TIAA or its affiliates.

Discretion to Evict or Foreclose:TIAA may, in its discretion, evict defaulting tenants or foreclose on defaulting borrowers to maintain the value of an investment, when it decides that it is in the Account’s best interests.

Property Management and Leasing Services:The Account usually will hire a local management company to perform the day-to-day management services for the Account’s properties, including supervising any on-site personnel, negotiating maintenance and service contracts, and providing advice on major repairs and capital improvements. The local manager will also recommend changes in rent schedules and create marketing and advertising programs to attain and maintain good occupancy rates by responsible tenants. The Account may also hire leasing companies to perform or coordinate leasing and marketing services to fill any vacancies. The fees paid to the local management company, along with any leasing commissions and expenses, will reduce the Account’s cash flow from a property.

Insurance:We will try to arrange for, or require proof of, comprehensive insurance, including liability, fire, and extended coverage, for the Account’s real

TIAA Real Estate AccountProspectus|7

property and properties securing mortgage loans or subject to purchase-leaseback transactions. The Account’s insurance policies on its properties currently include some coverage for earthquakes and terrorist acts, but we can’t assure you that it will be adequate to cover all losses. We also can’t assure you that we will be able to obtain coverage for earthquakes and terrorist acts at an acceptable cost, if at all, when the current policy expires.

OTHER POLICIES

Liquid Assets:At times, a significant percentage of the Account may be invested in liquid assets (which may or may not be real estate-related) while we look for suitable real property investments. The Account can temporarily increase the percentage of its liquid assets under some circumstances, including the rapid inflow of participants’ funds, lack of suitable real estate investments, or a need for greater liquidity.

Investment Company Act of 1940:We intend to operate the Account so that it will not have to register as an “investment company” under the Investment Company Act of 1940 (the 1940 Act). This will require monitoring the Account’s portfolio so that it won’t have more than 40 percent of total assets, other than U.S. government securities and cash items, in investment securities. As a result, the Account may be unable to make some potentially profitable investments, it may be unable to sell assets it would otherwise want to sell or it may be forced to sell investments in investment securities before it would otherwise want to do so.

Changing Operating Policies or Winding Down:TIAA can decide to change the operating policies of the Account or wind it down. If the Account is wound down, you may need to transfer your accumulations or annuity income to TIAA’s traditional annuity or any CREF account available under your employer’s plan. You will be notified in advance if we decide to change a significant policy or wind down the Account.

RISKS

The value of your investment in the Account will go up and down based on the value of the Account’s assets and the income the assets generate.The potential risk of investing in the Account is moderate. You can lose money by investing in the Account. The Account’s assets and income can be affected by many factors, and you should consider the specific risks presented below before investing in the Account. Please refer to the section entitled “Statements Regarding Forward-Looking Information,” which is contained in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

RISKS OF REAL ESTATE INVESTING

General Risks of Acquiring and Owning Real Property:The Account is subject to the risks inherent in acquiring and owning real property, including:

8 | ProspectusTIAA Real Estate Account


	•	Competition for real estate investments and any resulting delays in the acquisition of investments may increase the Account’s costs or otherwise adversely affect the Account’s investment results.

	•	The Account’s property values or rental and occupancy rates could go down due to general global economic conditions, a weak market for real estate generally or in specific locations, changing supply and demand for certain types of properties, natural disasters, terrorist attacks or other man-made events.

	•	A property may be unable to attract and retain tenants, which means that rental income would decline. This situation could be exacerbated if a concentration of lease expirations occurred during any one period.

	•	The Account could lose revenue if tenants do not pay rent, or if the Account is forced to terminate a lease for nonpayment. Any disputes with tenants could also involve costly litigation.

	•	A property’s profitability could go down if operating costs, such as property taxes, utilities, maintenance and insurance costs, not reimbursed by tenants, go up in relation to gross rental income, or if the property needs unanticipated repairs and renovations.

	•	The Account may experience periods in which its investments are geographically concentrated, either regionally or in certain markets with similar demographics. In this event, the Account’s income and performance may be adversely impacted disproportionately by economic conditions in those areas in which the Account’s investments are geographically concentrated.

General Risks of Selling Real Estate Investments:Among the risks of selling real estate investments are:


	•	The sale price of an Account property might differ from its estimated or appraised value, leading to losses or reduced profits to the Account.

	•	Because of the nature of real estate, the Account might not be able to sell a property at a particular time for its full value, particularly in a poor market. This might make it difficult to raise cash quickly and also could lead to Account losses.

	•	The Account may need to provide financing to a purchaser if no cash buyers are available.

Appraisal Risks:Real estate appraisals are only estimates of property values based on a professional’s opinion and may not be accurate predictors of the amount the Account would actually receive if it sold a property. If an appraisal is too high, the Account’s value could go down upon reappraisal or if the property is sold for a lower price than the appraisal. If appraisals are too low, those who redeem prior to an adjustment to the valuation or a property sale will have received less than their pro rata share of the value of the Account’s assets. Further, the Account generally obtains appraisals only on a quarterly basis, and there will be circumstances in the interim in which the true value of a property is not reflected in the Account’s daily net asset value calculation.

TIAA Real Estate AccountProspectus | 9

Risks of Borrowing:The Account may borrow, in the aggregate, either directly or through its joint venture investments, an amount up to 30% of the Account’s Total Net Assets, and the Account may borrow up to 70% of the then-current value of a particular property. Among the risks of borrowing money and investing in a property subject to a mortgage are:


	•	The Account may not be able to make its loan payments, which could result in a default on its loan. The lender then could foreclose on the underlying property and the Account would lose the value of its investment in the foreclosed property.

	•	If the Account obtains a mortgage loan that involves a balloon payment, there is a risk that the Account may not be able to make the lump sum principal payment due under the loan at the end of the loan term, or otherwise obtain adequate refinancing. The Account then may be forced to sell the property or other properties under unfavorable market conditions or default on its mortgage.

	•	If the Account takes out variable-rate loans, the Account’s returns may be volatile when interest rates are volatile. Further, to the extent that the Account takes out fixed-rate loans and interest rates subsequently decline, this may cause the Account to pay interest at above-market rates for a significant period of time.

	•	The market valuation of mortgage loans payable could have an adverse impact on the Account’s performance.

Regulatory Risks:Government regulation at the federal, state and local levels, including, without limitation, zoning laws, property taxes, and fiscal, accounting, environmental or other government policies, could operate or change in a way that hurts the Account and its properties. For example, these regulations could raise the cost of owning, improving or maintaining properties, present barriers to otherwise desirable investment opportunities or make it harder to sell, rent, finance, or refinance properties either on economically desirable terms, or at all, due to the increased costs associated with regulatory compliance.

Environmental Risks:The Account may be liable for damage to the environment caused by hazardous substances used or found on its properties. Under various environmental regulations, the Account may also be liable, as a current or previous property owner or mortgagee, for the cost of removing or cleaning up hazardous substances found on a property, even if it didn’t know of and wasn’t responsible for the hazardous substances. If any hazardous substances are present or the Account doesn’t properly clean up any hazardous substances, or if the Account fails to comply with regulations requiring it to actively monitor the business activities on its premises, the Account may have difficulty selling or renting a property or be liable for monetary penalties. The cost of any required cleanup and the Account’s potential liability for environmental damage, including performance under indemnification obligations to third parties, to a single real estate investment could exceed the value of the Account’s investment in a property, the property’s value, or in an extreme case, a significant portion of the Account’s assets.

10 | ProspectusTIAA Real Estate Account

Uninsurable Losses:Certain catastrophic losses (e.g., from earthquakes, wars, terrorist acts, nuclear accidents, floods, or environmental or industrial hazards or accidents) may be uninsurable or so expensive to insure against that it is economically disadvantageous to buy insurance for them. If a disaster that we haven’t insured against occurs, or if the insurance contains a high deductible, the Account could lose both its original investment and any future profits from the property affected. In addition, some leases may permit a tenant to terminate its obligations in certain situations, regardless of whether those events are fully covered by insurance. In that case, the Account would not receive rental income from the property while that tenant’s space is vacant.

Risks of Developing Real Estate or Buying Recently Constructed Properties:If the Account chooses to develop a property or buys a recently constructed property, it may face the following risks:


	•	In developing real estate, there may be delays or unexpected increases in the cost of property development and construction due to strikes, bad weather, material shortages, increases in material and labor costs, or other events.

	•	Because external factors may have changed from when the project was originally conceived (e.g., slower growth in local economy, higher interest rates, or overbuilding in the area), the property, if purchased when unleased, may not operate at the income and expense levels first projected or may not be developed in the way originally planned.

Risks of Joint Ownership:Investing in joint venture partnerships or other forms of joint property ownership may involve special risks.


	•	The co-venturer may have interests or goals inconsistent with those of the Account.

	•	If a co-venturer doesn’t follow the Account’s instructions or adhere to the Account’s policies, the jointly-owned properties, and consequently the Account, might be exposed to greater liabilities than expected.

	•	The Account may have limited rights pursuant to the terms of the joint venture, including the right to operate, manage or dispose of a property.

	•	A co-venturer can make it harder for the Account to transfer its property interest, particularly if the co-venturer has the right to decide whether and when to sell the property.

	•	The co-venturer may become insolvent or bankrupt, which could expose the Account to greater liabilities than expected.

Risks with Purchase-Leaseback Transactions:The major risk of purchase leaseback transactions is that the third party lessee will not be able to make required payments to the Account. If the leaseback interest is subordinate to other interests in the real property, such as a first mortgage or other lien, the risk to the Account increases because the lessee may have to pay the senior lienholder to prevent foreclosure before it pays the Account. If the lessee defaults or the leaseback is terminated prematurely, the Account might not recover its investment unless the property is sold or leased on favorable terms.

TIAA Real Estate AccountProspectus | 11

RISKS OF MAKING MORTGAGE LOAN INVESTMENTS

General Risks of Mortgage Loans:The Account will be subject to the risks inherent in making mortgage loans, including:


	•	The borrower may default, requiring that the Account foreclose on the underlying property to protect the value of its mortgage loan. Since its mortgage loans are usually non-recourse, the Account must rely solely on the value of a property for its security.

	•	The larger the mortgage loan compared to the value of the property securing it, the greater the loan’s risk. Upon default, the Account may not be able to sell the property for its estimated or appraised value. Also, certain liens on the property, such as mechanic’s or tax liens, may have priority over the Account’s security interest.

	•	A deterioration in the financial condition of tenants, or the bankruptcy or insolvency of a major tenant, may adversely affect the income of a property, which could increase the likelihood that the borrower will default under its obligations.

	•	The borrower may not be able to make a lump sum principal payment due under a mortgage loan at the end of the loan term, unless it can refinance the mortgage loan with another lender.

	•	If interest rates are volatile during the loan period, the Account’s variable-rate mortgage loans could have volatile yields. Further, to the extent the Account makes mortgage loans with fixed interest rates, it may receive lower yields if interest rates rise generally.

•	Prepayment Risks:The Account’s mortgage loan investments will usually be subject to the risk that the borrower repays a loan early. Also, we may be unable to reinvest the proceeds at as high an interest rate as the original mortgage loan rate.

•	Interest Limitations:The interest rate we charge on mortgage loans may inadvertently violate state usury laws that limit rates, if, for example, state law changes during the loan term. If this happens, we could incur penalties or may not be able to enforce payment of the loan.

•	Risks of Participations:Participating mortgages are subject to the following additional risks:

	•	The participation feature, in tying the Account’s returns to the performance of the underlying asset, might generate insufficient returns to make up for the higher interest rate the loan would have obtained without the participation feature.

	•	In very limited circumstances, a court could possibly characterize the Account’s participation interest as a partnership or joint venture with the borrower and the Account could lose the priority of its security interest, or be liable for the borrower’s debts.

12 | ProspectusTIAA Real Estate Account

RISKS OF INVESTING IN REAL ESTATE INVESTMENT TRUST (“REIT”) SECURITIES

Investments in REIT securities are subject to many of the same general risks associated with direct real property ownership. In particular, equity REITs may be affected by changes in the value of the underlying property owned by the trust, while mortgage REITs may be affected by the quality of any credit extended. In addition to these risks, because REIT investments are securities, they may be exposed to market risk, price volatility due to changing conditions in the financial markets and, in particular, changes in overall interest rates.

In addition, REITs are tax regulated entities established to invest in real estate-related assets. REITs do not pay federal income taxes if they distribute most of their earnings to their shareholders and meet other tax requirements. As a result, REITs are subject to tax risk in continuing to qualify as a REIT.

RISKS OF MORTGAGE-BACKED SECURITIES

Mortgage-backed securities are subject to many of the same general risks inherent in real estate investing, making mortgage loans and investing in debt securities. In particular, these types of investments may be subject to prepayment risk or extension risk (i.e., the risk that borrowers will repay the loans earlier or later than anticipated). If the underlying mortgage assets experience faster than anticipated prepayments of principal, the Account could fail to recoup some or all of its initial investment in these securities, since the original price paid by the Account was based in part on assumptions regarding the receipt of interest payments. If the underlying mortgage assets are repaid later than anticipated, the Account could lose the opportunity to reinvest the anticipated cash flows at a time when interest rates might be rising. The rate of prepayments depends on a variety of geographic, social and other functions, including prevailing market interest rates and general economic factors.

The market value of these securities is also highly sensitive to changes in interest rates. Note that the potential for appreciation, which could otherwise be expected to result from a decline in interest rates, may be limited by any increased prepayments. Further, these securities may be harder to sell than other securities.

RISKS OF LIQUID INVESTMENTS

The Account’s investments in marketable securities and mortgage loans receivable are subject to the following general risks:


	•	Financial Risk — The risk, for debt securities, that the issuer will not be able to pay principal and interest when due and, for common or preferred stock, that the issuer’s current earnings will fall or that its overall financial soundness will decline, reducing the security’s value.

	•	Market Risk — The risk that the Account’s investments will experience price volatility due to changing conditions in the financial markets and, particularly for debt securities, changes in overall interest rates.

	•	Interest Rate Volatility — The risk that interest rate volatility may affect the Account’s current income from an investment.

TIAA Real Estate AccountProspectus | 13

RISKS OF FOREIGN INVESTMENTS

In addition to other investment risks noted above, foreign investments present the following special risks:


	•	Foreign real estate markets may have different liquidity and volatility attributes than U.S. markets.

	•	The value of foreign investments or rental income can go up or down due to changes in currency rates, currency exchange control regulations, possible expropriation or confiscatory taxation, political, social, and economic developments, and foreign regulations.

	•	The Account may, but is not required to, seek to hedge its exposure to changes in currency rates, which could involve extra costs. Hedging might not be successful.

	•	It may be more difficult to obtain and collect a judgment on foreign investments than on domestic ones.

NO OPPORTUNITY FOR PRIOR REVIEW OF PURCHASE

Investors do not have the opportunity to evaluate the economic merit of the purchase of a property or other investment before the Account completes the purchase, so investors will need to rely solely on TIAA’s judgment and ability to select investments consistent with the Account’s investment objective and policies. Further, the Account may change its investment objective and pursue specific investments without the consent of the Account’s investors.

RISKS OF REGISTRATION UNDER THE INVESTMENT COMPANY ACT OF 1940

The Account has not registered, and management intends to continue to operate the Account so that it will not have to register, as an “investment company” under the Investment Company Act of 1940, as amended (the “Investment Company Act”). Generally, a company is an “investment company” and required to register under the Investment Company Act if, among other things, it holds itself out as being engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting or trading in securities, or it is engaged or proposes to engage in the business of investing, reinvesting, owning, holding or trading in securities and owns or proposes to acquire investment securities having a value exceeding 40% of the value of such company’s total assets (exclusive of government securities and cash items) on an unconsolidated basis.

If the Account were obligated to register as an investment company, the Account would have to comply with a variety of substantive requirements under the Investment Company Act that impose, among other things, limitations on capital structure, restrictions on certain investments, compliance with reporting, record keeping, voting and proxy disclosure requirements and other rules and regulations that could significantly increase its operating expenses and reduce its operating flexibility. To maintain compliance with the exemptions from the Investment Company Act, the Account may be unable to sell assets it would

14 |ProspectusTIAA Real Estate Account

otherwise want to sell and may be unable to purchase securities it would otherwise want to purchase, which might materially adversely impact the Account’s performance.

ESTABLISHING AND MANAGING THE ACCOUNT — THE ROLE OF TIAA

ESTABLISHING THE ACCOUNT

TIAA’s Board of Trustees established the Real Estate Account as a separate account of TIAA under New York law on February 22, 1995. The Account is regulated by the State of New York Insurance Department (NYID) and the insurance departments of some other jurisdictions in which the annuity contracts are offered. Although TIAA owns the assets of the Real Estate Account, and the Account’s obligations are obligations of TIAA, the Account’s income, investment gains, and investment losses are credited to or charged against the assets of the Account without regard to TIAA’s other income, gains, or losses. Under New York insurance law, we can’t charge the Account with liabilities incurred by any other TIAA business activities or any other TIAA separate account.

MANAGING THE ACCOUNT

TIAA employees, under the direction and control of TIAA’s Board of Trustees and its Investment Committee, manage the investment of the Account’s assets, following investment management procedures TIAA adopted for the Account. TIAA’s investment management responsibilities include:


	•	identifying, recommending and purchasing appropriate real estate-related and other investments

	•	providing all portfolio accounting, custodial, and related services for the Account

	•	arranging for others to provide certain advisory or other management services to the Account’s joint ventures or other investments

TIAA provides all services to the Account at cost. For more about the charge for investment management services, see “Expense Deductions” on page 54.

You don’t have the right to vote for TIAA Trustees directly. See “Voting Rights” on page 77. For information about the Trustees and principal executive officers of TIAA, see Appendix A of this prospectus.

TIAA’s ERISA Fiduciary Status. To the extent that assets of a plan subject to the Employee Retirement Income Security Act of 1974, as amended (ERISA) are allocated to the Account, TIAA will be acting as an “investment manager” and a fiduciary under ERISA with respect to those assets.

LIQUIDITY GUARANTEE

TIAA provides the Account with a liquidity guarantee —i.e., TIAA ensures that the Account has funds available to meet participant transfer or cash

TIAA Real Estate AccountProspectus| 15

withdrawal requests. If the Account can’t fund participant requests from the Account, TIAA’s general account will fund them by purchasing Account accumulation units (liquidity units). TIAA guarantees that you can redeem your accumulation units at their accumulation unit value next determined. Importantly, however, this liquidity guarantee is not a guarantee of the investment performance of the Account or a guarantee of the value of your units. Of course, you can make a cash withdrawal only if allowed by the terms of your plan. The Account pays TIAA for the liquidity guarantee through a daily deduction from net assets. See “Expense Deductions” on page 54.

An independent fiduciary (described below) monitors the Account to ensure, among other things, that TIAA does not own too much of the Account and may require TIAA to redeem some of its liquidity units, particularly when the Account has uninvested cash or liquid investments available. The independent fiduciary may also propose properties for the Account to sell so that TIAA can redeem liquidity units. TIAA does not currently own liquidity units.

CONFLICTS OF INTEREST

TIAA does not accept acquisition or placement fees for the services it provides to the Account. Employees of TIAA may also provide investment advice with respect to investments managed by Teachers Advisors, Inc. (“Advisors”), an indirect, wholly owned subsidiary of TIAA. In addition, TIAA and its affiliates may offer other investment products that are not managed under an “at cost” expense structure. Therefore, TIAA may at times face various conflicts of interest.

For example, TIAA’s general account and the TIAA-CREF Asset Management Core Property Fund L.P. (the “Core Property Fund”), which is managed by Advisors, may sometimes compete with the Real Estate Account in the purchase of investments. (Each of TIAA’s general accounts, the Real Estate Account and the Core Property Fund, together with any other real estate accounts or funds that may be established by TIAA in the future, are herein referred to as an “account.”) Generally, the portfiolio managers for each of the accounts will identify opportunities which conform to the investment strategy of the account. If more than one account expresses an interest and an informal resolution cannot be reached, a special TIAA Allocation Committee, consisting primarily of senior TIAA real estate professionals, will seek to resolve any conflict by considering a number of factors, including the investment strategy of the bidding account, the capital available for investment by each account, liquidity requirements, portfolio diversification, whether the property would be at a competitive disadvantage to properties owned by another account in the subject market and such other factors deemed relevant by the Allocation Committee. If this analysis does not determine, by a unanimous vote of the Allocation Committee, which account should participate in a transaction, a strict rotation system will be used whereby the interested account highest on the list will be allowed to participate in the transaction, and then such account will drop to the bottom of the list thereafter.

16 |ProspectusTIAA Real Estate Account

Conflicts could also arise because some properties in TIAA’s general account and the Core Property Fund may compete for tenants with the Real Estate Account’s properties. We will seek to resolve this conflict by determining the tenant’s preference between the two properties, how much the tenant is willing to pay for rent, and which property can best afford to pay any required costs associated with such leasing. Finally, conflicts could potentially arise when two TIAA accounts attempt to sell properties located in the same market or submarket, especially if there are a limited number of potential purchasers.

Many of the personnel of TIAA involved in performing services to the Real Estate Account will have competing demands on their time. The personnel will devote such time to the affairs of the Account as TIAA’s management determines, in its sole discretion exercising good faith, is necessary to properly service the Account. TIAA believes that it has sufficient personnel to discharge its responsibility to the Real Estate Account, the general account, and the Core Property Fund and to avoid conflicts of interest. TIAA or its affiliates may form other real estate investment vehicles in the future and we will take steps to assure that those vehicles are integrated into these conflict of interest policies.

INDEMNIFICATION

The Account has agreed to indemnify TIAA and its affiliates, including its officers and directors, against certain liabilities, including, to the extent permitted by law, liabilities under the Securities Act of 1933. The Account may make such indemnification out of its assets.

ROLE OF THE INDEPENDENT FIDUCIARY

Because TIAA’s ability to purchase and sell liquidity units raises certain technical issues under ERISA, TIAA applied for and received a prohibited transaction exemption from the U.S. Department of Labor (PTE 96-76). In connection with the exemption, TIAA has appointed an independent fiduciary for the Real Estate Account, with overall responsibility for reviewing Account transactions to determine whether they are in accordance with the Account’s investment guidelines.

Real Estate Research Corporation, a real estate consulting firm whose principal offices are located in Chicago, Illinois, currently serves as the Account’s independent fiduciary. The independent fiduciary’s responsibilities include:


	•	reviewing and approving the Account’s investment guidelines and monitoring whether the Account’s investments comply with those guidelines

	•	reviewing and approving valuation procedures for the Account’s properties

	•	approving adjustments to any property valuations that change the value of the property or the Account as a whole above or below certain prescribed levels, or that are made within three months of the annual independent appraisal

TIAA Real Estate AccountProspectus| 17


	•	reviewing and approving how the Account values accumulation and annuity units

	•	reviewing the purchase and sale of units by TIAA to ensure that the Account uses the correct unit values

	•	approving the appointment of all independent appraisers

	•	requiring appraisals besides those normally conducted, if the independent fiduciary believes that any of the properties have changed materially, or that an additional appraisal is necessary to assure the Account has correctly valued a property

The independent fiduciary also must monitor TIAA’s ownership in the Account and supervise any winding down of the Account’s operations. Its responsibilities include:


	•	calculating the percentage of total accumulation units that TIAA’s ownership shouldn’t exceed (the trigger point) and creating a method for changing the trigger point

	•	approving any adjustment of TIAA’s interest in the Account and requiring an adjustment if TIAA’s investment reaches the trigger point

	•	participating in any program to reduce TIAA’s ownership in the Account or to facilitate winding down the Account, including selecting properties for sale, providing sales guidelines, and approving those sales that, in the independent fiduciary’s opinion, are desirable

A special subcommittee of the Investment Committee of TIAA’s Board of Trustees appointed Real Estate Research Corporation as the independent fiduciary for a three-year term, starting March 1, 2006. This subcommittee may renew the independent fiduciary appointment, remove the independent fiduciary, or appoint its successor. The independent fiduciary can be removed for cause by the vote of a majority of subcommittee members and will not be reappointed if 40 percent of the subcommittee members disapprove the reappointment. It can resign after at least 180 days’ written notice.

TIAA pays the independent fiduciary directly. The investment management charge paid to TIAA includes TIAA’s costs for retaining the independent fiduciary. The independent fiduciary will receive less than 5 percent of its annual income (including payment for its services to the Account) from TIAA and its affiliates.

When you decide as a participant or plan fiduciary to invest in the Account, after TIAA has provided you with full and fair disclosure including the disclosure in this prospectus, you are also acknowledging that you approve and accept Real Estate Research Corporation or any successor to serve as the Account’s independent fiduciary.

18 |ProspectusTIAA Real Estate Account

DESCRIPTION OF PROPERTIES

THE PROPERTIES — IN GENERAL

In the table beginning on the next page you will find general information about each of the Account’s portfolio property investments as of December 31, 2006. The Account’s property investments includee both properties that are wholly-owned by the Account and properties owned by the Account’s joint venture investments. Certain property investments are comprised of a portfolio of properties.

TIAA Real Estate AccountProspectus| 19

Properties(continued)


Property Investment	Location	Year Built		Year Purchased	Rentable Area (Sq. ft.)	⁽¹⁾	Percent Leased		Annual Avg. Base Rent Per Leased Sq. Ft.		⁽²⁾	Market Value		⁽³⁾

OFFICE PROPERTY INVESTMENTS
1001 Pennsylvania Ave	Washington, DC	1987		2004	802,390		100	%	$	34.11		$	552,502,209	⁽⁴⁾
1 & 7 Westferry Circus	London, UK	1992, 1993		2005	395,784		81	%	$	63.96		$	428,574,628	⁽⁴⁾⁽⁵⁾
50 Fremont Street	San Francisco, CA	1983		2004	817,412		94	%	$	30.05		$	421,000,000	⁽⁴⁾
IDX Tower	Seattle, WA	2002		2004	845,533		98	%	$	28.07		$	398,990,017	⁽⁴⁾
The Newbry	Boston, MA	1940-1961	⁽⁶⁾	2006	607,685		100	%	$	39.72		$	370,745,525
Four Oaks Place	Houston, TX	1983		2004	1,754,366		96	%	$	17.55		$	306,200,984
780 Third Avenue	New York, NY	1984		1999	487,501		91	%	$	40.89		$	298,000,000
99 High Street	Boston, MA	1971		2005	731,204		90	%	$	32.30		$	291,806,564	⁽⁴⁾
Lincoln Centre	Dallas, TX	1984		2005	1,635,352		90	%	$	16.80		$	270,000,000	⁽⁴⁾
1900 K Street	Washington, DC	1996		2004	342,884		100	%	$	40.72		$	255,002,226
701 Brickell	Miami, FL	1986	⁽⁷⁾	2002	677,667		96	%	$	30.44		$	231,239,379
Embarcadero Center West	San Francisco, CA	1988		2005	472,261		87	%	$	30.16		$	231,000,000
1401 H Street NW	Washington, D.C.	1992		2006	348,629		96	%	$	38.39		$	207,806,286	⁽⁴⁾
Wilshire Rodeo Plaza	Beverly Hills, CA	1935, 1984		2006	261,932		98	%	$	48.32		$	204,084,734	⁽⁴⁾
161 North Clark Street⁽⁸⁾	Chicago, IL	1992		2003	1,010,520		94	%	$	15.10		$	189,183,793
Yahoo! Center⁽⁹⁾	Santa Monica, CA	1984		2004	1,082,952		99	%	$	32.13		$	187,766,625
Mellon Financial Center at One Boston Place⁽¹⁰⁾	Boston, MA	1970	⁽⁷⁾	2002	802,716		94	%	$	38.17		$	177,900,327
Ten & Twenty Westport Road	Wilton, CT	1974	⁽⁷⁾, 2001	2001	538,840		100	%	$	30.03		$	175,000,000
980 9th Street and 1010 8th Street⁽¹¹⁾	Sacramento, CA	1992		2005	481,885		94	%	$	21.58		$	168,000,000
Millennium Corporate Park	Redmond, VA	1999, 2000		2006	536,884		100	%	$	14.83		$	139,107,181
Urban Centre	Tampa, FL	1984, 1987		2005	549,375		96	%	$	19.49		$	121,000,000
Morris Corporate Center III	Parsippany, NJ	1990		2000	525,154		78	%	$	17.12		$	114,857,104
Inverness Center	Birmingham, AL	1980-1985		2005	903,857		99	%	$	12.00		$	112,256,914
Prominence in Buckhead⁽⁸⁾	Atlanta, GA	1999		2003	424,309		95	%	$	27.17		$	107,256,320
Treat Towers⁽⁸⁾	Walnut Creek, CA	1999		2003	367,313		78	%	$	24.63		$	94,023,131
88 Kearny Street	San Francisco, CA	1986		1999	228,470		99	%	$	43.53		$	90,310,024
The Ellipse at Ballston	Arlington, VA	1989		2006	195,743		97	%	$	31.61		$	85,439,350
Oak Brook Regency Towers	Oakbrook, IL	1977	⁽⁷⁾	2002	402,318		83	%	$	13.64		$	83,200,000
Sawgrass Office Portfolio	Sunrise, FL	1997-2000		1997, 1999-2000	344,009		97	%	$	13.81		$	72,000,000
Centerside I	San Diego, CA	1982		2004	205,137		79	%	$	21.25		$	67,000,000

20 | ProspectusTIAA Real Estate Account


OFFICE PROPERTY INVESTMENTS(continued)
The North 40 Office Complex	Boca Raton, FL	1983, 1984		2006	350,004	100	%	$ 10.91	$	63,500,000
8270 Greensboro Drive	McLean, VA	2000		2005	158,110	90	%	$ 31.68	$	62,000,000
West Lake North Business Park	Westlake Village, CA	2000		2004	198,558	100	%	$ 28.47	$	61,000,000
Parkview Plaza	Oakbrook, IL	1990		1997	263,912	86	%	$ 11.77	$	59,400,000
3 Hutton Centre	Santa Ana, CA	1985	⁽⁷⁾	2003	197,817	100	%	$ 25.38	$	59,011,323
Monument Place	Fairfax, VA	1990		1999	221,538	98	%	$ 20.90	$	58,600,000
One Virginia Square	Arlington, VA	1999		2004	116,077	100	%	$ 31.52	$	53,000,000
The Pointe on Tampa Bay	Tampa, FL	1982	⁽⁷⁾	2002	250,357	100	%	$ 23.69	$	50,573,824
Capitol Place	Sacramento, CA	1988	⁽⁷⁾	2003	151,803	96	%	$ 27.32	$	50,331,828
Wellpoint	Westlake Village, CA	1986, 1998		2006	208,000	100	%	$ 13.23	$	49,000,000
Park Place on Turtle Creek	Dallas, TX	1986		2006	177,169	98	%	$ 24.36	$	44,573,669
4200 West Cypress Street	Tampa, FL	1989		2003	220,579	99	%	$ 21.61	$	43,100,425
Tysons Executive Plaza II⁽¹²⁾	McLean, VA	1988		2000	259,614	97	%	$ 24.15	$	40,570,382
Creeksides at CenterPoint	Kent, WA	1985		2006	218,589	81	%	$ 12.36	$	40,508,139
10 Waterview Boulevard	Parsippany, NJ	1984		1999	208,601	58	%	$ 12.95	$	32,100,000
9 Hutton Centre	Santa Ana, CA	1990		2001	149,946	82	%	$ 16.40	$	29,000,000
Columbus Portfolio	Various, OH	1997-1998		1999, 2001	259,694	89	%	$ 10.00	$	24,600,000
Needham Corporate Center	Needham, MA	1987		2001	138,684	75	%	$ 13.20	$	22,712,550
Batterymarch Park II	Quincy, MA	1986		2001	104,718	53	%	$ 10.08	$	13,234,314

Office Property Investments						92	%		$	7,308,069,775

INDUSTRIAL PROPERTY INVESTMENTS
Ontario Industrial Portfolio⁽¹³⁾	Various, CA	1997-1998		1998, 2000, 2004	3,584,769	100	%	$ 3.31	$	270,000,000	⁽⁴⁾
Dallas Industrial Portfolio⁽¹⁴⁾	Dallas and Coppell, TX	1997-2001		2000-2002	3,886,541	90	%	$ 2.44	$	153,210,519
Southern California RA Industrial Portfolio	Los Angeles, CA	1982		2004	920,028	96	%	$ 5.31	$	97,558,473
Cabot Industrial Portfolio	Rancho Cucamonga, CA	2000-2002		2000, 2001,
				2002, 2004	1,214,475	100	%	$ 3.71	$	88,200,000
Chicago Industrial Portfolio⁽¹⁵⁾	Chicago and Joliet, IL	1997-2000		1998, 2000	1,577,606	90	%	$ 3.83	$	89,104,640
Atlanta Industrial Portfolio	Lawrenceville, GA	1996-1999		2000	1,945,693	95	%	$ 2.18	$	77,863,416
Shawnee Ridge Industrial Portfolio⁽¹⁶⁾	Atlanta, GA	2000-2005		2005	1,422,922	100	%	$ 3.05	$	76,117,193
Chicago Caleast Industrial Portfolio	Chicago, IL	1974-2005		2003	1,493,706	93	%	$ 2.52	$	74,999,590
Northern California RA Industrial Portfolio	Oakland, CA	1981		2004	741,456	93	%	$ 4.06	$	71,317,741
IDI National Portfolio⁽¹⁷⁾	Various, U.S.	1999-2004		2004	3,655,671	98	%	$ 3.30	$	70,348,753

TIAA Real Estate AccountProspectus | 21

Properties (continued)


Property Investment	Location	Year Built	Year Purchased	Rentable Area (Sq. ft.)	⁽¹⁾	Percent Leased		Annual Avg. Base Rent Per Leased Sq. Ft.	⁽²⁾	Market Value		⁽³⁾

INDUSTRIAL PROPERTY INVESTMENTS(continued)
Rainier Corporate Park	Fife, WA	1991-1997	2003	1,104,646		97	%	$ 4.03		$	69,362,219
IDI Kentucky Portfolio	Various, KY	1998-2000	1998, 2000, 2005	1,437,022		100	%	$ 3.24		$	66,552,034
Regal Logistics Campus	Seattle, WA	1999-2004	2005	968,535		100	%	$ 4.15		$	66,000,000
South River Road Industrial	Cranbury, NJ	1999	2001	858,957		100	%	$ 4.24		$	60,600,000
Memphis Caleast Industrial Portfolio	Memphis, TN	1996-1997	2003	1,600,232		100	%	$ 2.01		$	52,500,000
GE Appliance East Coast Distribution Facility	Perryville, MD	2003	2005	1,004,000		100	%	$ 2.82		$	48,000,000
Pinnacle Industrial/DFW Trade Center	Grapevine, TX	2003, 2004, 2006	2006	899,200		100	%	$ 3.49		$	45,874,807
New Jersey Caleast Industrial Portfolio	Cranbury, NJ	1982-1989	2003	807,773		50	%	$ 2.23		$	41,920,988
East North Central RA Industrial Portfolio	Chicago, IL	1978	2004	541,266		96	%	$ 4.65		$	37,503,284
Broadlands Business Park	Elkton, MD	2006	2006	756,690		100	%	$ 2.85		$	35,002,731
Centre Pointe and Valley View	Los Angeles County, CA	1965-1989	2004	307,685		100	%	$ 4.10		$	32,385,980
Northeast RA Industrial Portfolio	Boston, MA	2000	2004	384,000		100	%	$ 5.60		$	30,900,000
1900 South Burgundy Place	Ontario, CA	1988-1999	2006	397,125		100	%	$ 3.69		$	28,045,226
Summit Distribution Center	Memphis, TN	2002	2003	708,532		100	%	$ 2.52		$	26,300,000
Eastgate Distribution Center	San Diego, CA	1996	1997	200,000		100	%	$ 7.02		$	25,558,962
Airways Distribution Center	Memphis, TN	2005	2006	556,600		100	%	$ 3.20		$	24,857,278
Konica Photo Imaging Headquarters	Mahwah, NJ	1999	1999	168,000		100	%	$ 11.25		$	23,100,000
Weber Distribution	Rancho Cucamonga, CA	1988	2006	275,760		100	%	$ 4.04		$	20,800,000
Northwest RA Industrial Portfolio	Seattle, WA	1996	2004	312,321		100	%	$ 3.51		$	20,684,499
Landmark at Salt Lake City (Building #4)	Salt Lake City, UT	2000	2000	328,508		85	%	$ 2.77		$	16,509,871
Mideast RA Industrial Portfolio	Wilmington, DE	1989	2004	266,141		90	%	$ 3.22		$	16,014,758
UPS Distribution Facility	Fernley, NV	1998	1998	256,000		100	%	$ 4.07		$	15,000,000
FEDEX Distribution Facility	Crofton, MD	1998	1998	110,842		100	%	$ 7.18		$	8,500,000
Mountain RA Industrial Portfolio	Phoenix, AZ	1989	2004	136,704		100	%	$ 2.14		$	6,605,429
Butterfield Industrial Park⁽¹⁸⁾	El Paso, TX	1980-1981	1995	183,510		100	%	$ 2.39		$	5,100,000

Industrial Property Investments						96	%			$	1,892,398,391

22 | ProspectusTIAA Real Estate Account


RETAIL PROPERTY INVESTMENTS
Florida Retail Portfolio⁽¹⁹⁾	Various, FL	1974-2005		2006	1,259,554		100	%	$ 15.94	$	265,396,677
The Florida Mall⁽²⁰⁾	Orlando, FL	1986	⁽⁷⁾	2002	921,370	⁽²¹⁾	99	%	$ 37.71	$	237,919,775
West Town Mall⁽²⁰⁾	Knoxville, TN	1972	⁽⁷⁾	2002	761,357	⁽²¹⁾	97	%	$ 19.18	$	126,214,963
Miami International Mall⁽²⁰⁾	Miami, FL	1982	⁽⁷⁾	2002	290,299	⁽²¹⁾	97	%	$ 37.03	$	97,300,131
Marketfair	West Windsor, NJ	1987		2006	235,144		99	%	$ 20.74	$	94,058,427
Westwood Marketplace	Los Angeles, CA	1950	⁽⁷⁾	2002	202,201		100	%	$ 29.95	$	91,467,954
Mazza Gallerie	Washington, DC	1975		2004	293,935		98	%	$ 18.46	$	86,350,179
Publix at Weston Commons	Weston, FL	2005		2006	126,922		97	%	$ 22.04	$	54,411,436	⁽⁴⁾
Plainsboro Plaza	Plainsboro, NJ	1987		2005	218,653		90	%	$ 11.55	$	50,900,000
South Frisco Village	Frisco, TX	2002		2006	227,175		99	%	$ 13.47	$	47,014,065	⁽⁴⁾
The Market at Southpark	Littleton, CO	1988		2004	190,080		96	%	$ 12.03	$	35,800,000
Suncrest Village	Orlando, FL	1987		2005	93,358		100	%	$ 9.48	$	17,009,378
Plantation Grove	Ocoee, FL	1995		1995	73,655		100	%	$ 12.31	$	15,010,406

							98	%		$	1,218,853,391
Retail Property Investments

OTHER COMMERCIAL PROPERTY INVESTMENTS
Storage Portfolio I⁽²²⁾	Various, U.S.	1972-1990		2003	2,226,549		83	%	$ 9.64	$	74,864,074

Commercial Property Investments							94	%		$	10,494,185,631

RESIDENTIAL PROPERTY INVESTMENTS⁽²³⁾
Houston Apartment Portfolio⁽²⁴⁾	Houston, TX	1984-2004		2006	NA		93	%	NA	$	306,042,523
Kierland Apartment Portfolio⁽²⁵⁾	Scottsdale, AZ	1996-2000		2006	NA		96	%	NA	$	206,100,000
Palomino Park Apartments	Denver, CO	1996-2001		2005	NA		92	%	NA	$	184,000,000
Phoenix Apartment Portfolio⁽²⁶⁾	Greater Phoenix Area, AZ	1995-1998		2006	NA		94	%	NA	$	182,900,000
The Legacy at Westwood Apartments	Los Angeles, CA	2001		2002	NA		94	%	NA	$	110,231,593
The Colorado	New York, NY	1987		1999	NA		99	%	NA	$	100,000,000
Larkspur Courts	Larkspur, CA	1991		1999	NA		93	%	NA	$	93,043,346
Ashford Meadows Apartments	Herndon, VA	1998		2000	NA		92	%	NA	$	89,091,341
1050 Lenox Park	Atlanta, GA	2001		2005	NA		97	%	NA	$	79,470,836
Regents Court Apartments	San Diego, CA	2001		2002	NA		92	%	NA	$	67,800,000
South Florida Apartment Portfolio	Boca Raton and Plantation, FL	1986		2001	NA		96	%	NA	$	65,099,785
The Caruth	Dallas, TX	1999		2005	NA		96	%	NA	$	60,007,237
The Reserve at Sugarloaf	Duluth, GA	2000		2005	NA		99	%	NA	$	49,500,000	⁽⁴⁾
Glenridge Walk	Atlanta, GA	1996, 2001		2005	NA		97	%	NA	$	48,710,574
The Lodge at Willow Creek	Denver, CO	1997		1997	NA		96	%	NA	$	39,501,399
The Maroneal	Houston, TX	1998		2005	NA		95	%	NA	$	39,113,694

TIAA Real Estate AccountProspectus| 23

Properties (continued)


Property Investment	Location	Year Built	Year Purchased	Rentable Area (Sq. ft.)	⁽¹⁾	Percent Leased		Annual Avg. Base Rent Per Leased Sq. Ft.	⁽²⁾	Market Value		⁽³⁾

RESIDENTIAL PROPERTY INVESTMENTS⁽²³⁾(continued)
Lincoln Woods Apartments	Lafayette Hill, PA	1991	1997	NA		93	%	NA		$	37,781,555
Westcreek Apartments	Westlake Village, CA	1988	1997	NA		95	%	NA		$	35,300,000
The Legends at Chase Oaks	Plano, TX	1997	1998	NA		98	%	NA		$	29,025,236
The Fairways of Carolina	Margate, FL	1993	2001	NA		96	%	NA		$	25,309,965
Royal St. George	W. Palm Beach, FL	1995	1996	NA		97	%	NA		$	25,000,000
Quiet Water at Coquina Lakes	Deerfield Beach, FL	1995	2001	NA		95	%	NA		$	24,006,100
The Greens at Metrowest Apartments	Orlando, FL	1990	1995	NA		91	%	NA		$	21,011,825

Residential Property Investments						95	%			$	1,918,047,009

Total—All Property Investments										$	12,412,232,640


(1)	The square footage is an approximate measure and is subject to periodic remeasurement.

(2)	Based on total contractual rent on leases existing as of December 31, 2006. For those properties purchased in the fourth quarter of 2006, the rent is based on the existing leases as of the date of purchase. The contractual rent can either be on a gross or a net basis, depending on the terms of the individual leases.

(3)	Market value reflects the value determined in accordance with the procedures described in the Account’s prospectus and as stated in the Statement of Investments (contained in “Financial Statements”).

(4)	Market value shown represents the Account’s interest gross of debt.

(5)	This property is located in London, the United Kingdom, and the market value is converted from British pounds to U.S. dollars at the exchange rate as of December 31, 2006.

(6)	This property was renovated in 2004 and 2006.

(7)	Undergone extensive renovations since original construction.

(8)	The property is held in a 75%/25% joint venture with Equity Office Properties Trust. Market value shown reflects the value of the Account’s interest in the joint venture.

(9)	Formerly known as “Colorado Center”, this property is held in a 50%/50% joint venture with Equity Office Properties Trust. Market value shown reflects the value of the Account’s interest in the joint venture, net of debt.

(10)	The Account purchased a 50.25% interest in a private REIT, which owns this property. A 49.70% interest is owned by Societe Immobiler Trans-Quebec, and .05% is owned by 100 individuals. Market value shown reflects the value of the Account’s interest in the joint venture.

(11)	Formerly known as “U.S. Bank Plaza.”

(12)	The property is held in a 50%/50% joint venture with Tennessee Consolidated Retirement System. Market value shown reflects the value of the Account’s interest in the joint venture.

24 | ProspectusTIAA Real Estate Account


(13)	The Ontario Industrial Portfolio contains six investment properties, including one portfolio which consists of 1.1million square feet located in Mira Loma, California.

(14)	The Dallas Industrial Portfolio contains 11 warehouse distribution properties located in Dallas and Copell, Texas.

(15)	On October 5, 2006, the Account purchased Prairie Point Corporate Park, an industrial building in Bolingbrook, IL. This property was consolidated into the existing Chicago Industrial Portfolio.

(16)	On October 5, 2006, the Account purchased Hamilton Mill Business Center, an industrial building in Buford, GA. This property was consolidated into the existing Shawnee Ridge Industrial Portfolio.

(17)	The property is held in a 60%/40% joint venture with Industrial Development International. Market value shown reflects the value of the Account’s interest in the joint venture, net of debt.

(18)	Leasehold Interest Only.

(19)	This property investment is held in a 80%/20% joint venture with Weingarten Realty Investors. Market value shown reflects the value of the Account’s interest in the joint venture. This portfolio contains seven neighborhood and/or community shopping centers located in the Ft. Lauderdale, Miami, Orlando and Tampa, Florida areas.

(20)	Each property is held in a 50%/50% joint venture with the Simon Property Group. Market value shown reflects the value of the Account’s interest in the joint venture, net of debt.

(21)	Reflects the square footage owned by the joint venture.

(22)	The property is held in a 75%/25% joint venture with Storage USA. Market value shown reflects the value of the Account’s interest in the joint venture, net of debt.

(23)	For the average unit size and annual average rent per unit for each residential property, see “Residential Properties” below.

(24)	The Houston Apartment Portfolio contains 11 properties that are a mix of two and three-story luxury garden style apartments and are located in Houston, Texas.

(25)	The Kierland Apartment Portfolio contains three properties that are a mix of two and three-story luxury garden style apartments and are located in Scottsdale, Arizona.

(26)	The Phoenix Apartment Portfolio contains four properties that are a mix of two and three-story luxury garden style apartments and are located in the greater Phoenix area in Arizona.

TIAA Real Estate AccountProspectus | 25

COMMERCIAL (NON-RESIDENTIAL) PROPERTIES

At December 31, 2006, the Account held 98 commercial (non-residential) property investments in its portfolio, including a portfolio of storage facilities located throughout the United States. Twelve of these properties were held through joint ventures, and 18 were subject to mortgages. Although the terms vary under each lease, certain expenses, such as real estate taxes and other operating expenses, are paid or reimbursed in whole or in part by the tenants.

Management believes that the Account’s portfolio is well diversified by both property type and geographic location. The portfolio consists of: 49 office properties containing approximately 23 million square feet located in 13 states, the District of Columbia and the United Kingdom; 35 industrial properties containing 35 million square feet located in 14 states, including a 60% interest in a portfolio of industrial properties located throughout the United States; and 13 retail properties containing approximately five million square feet located in six states and the District of Columbia. In addition, the Account has a 75% interest in a portfolio of storage facilities located throughout the United States containing approximately 2.2 million square feet.

As of December 31, 2006, the average overall occupancy rate of the Account’s commercial real estate portfolio was 94%. On an average basis, the Account’s office properties were 92% leased, industrial properties were 96% leased, retail properties were 98% leased and the storage portfolio was 83% leased.

Major Tenants:The following table lists the Account’s major commercial tenants based on the total space they occupied as of December 31, 2006, in the Account’s properties.

			Percentage of
		Percentage of	Total Rentable
		Total Rentable	Area of Account’s
	Occupied	Area of Account’s	Non-Residential
	Square Feet	Industrial Properties	Properties

MAJOR INDUSTRIAL TENANTS
Walmart	1,099,112	3.4%	1.9%
Gap	1,045,000	3.2%	1.8%
General Electric	1,004,000	3.1%	1.7%
Priority Fulfillment Services	993,120	3.0%	1.7%
Regal West	968,535	3.0%	1.7%
Tyco Healthcare	800,000	2.4%	1.4%
TNT	756,600	2.3%	1.3%
Hewlett Packard	708,532	2.2%	1.2%
Kaz	700,000	2.1%	1.2%
Del Monte	689,660	2.1%	1.2%

26|ProspectusTIAA Real Estate Account

			Percentage of
		Percentage of	Total Rentable
		Total Rentable	Area of Account’s
	Occupied	Area of Account’s	Non-Residential
	Square Feet	Office Properties	Properties

MAJOR OFFICE TENANTS
Deloitte & Touche	517,705	2.5%	0.9%
Yahoo!	476,740	2.3%	0.8%
Southern Company Services, Inc	448,004	2.1%	0.8%
Mellon (Boston Co)	361,623	1.7%	0.6%
Microsoft	361,528	1.7%	0.6%
Crowell & Moring	320,539	1.5%	0.5%
BHP Petroleum	316,638	1.5%	0.5%
Accenture	302,730	1.5%	0.5%
Met Life Insurance	289,433	1.4%	0.5%
IDX Systems	284,631	1.4%	0.5%


			Percentage of
		Percentage of	Total Rentable
		Total Rentable	Area of Account’s
	Occupied	Area of Account’s	Non-Residential
	Square Feet	Retail Properties	Properties

MAJOR RETAIL TENANTS
Publix	313,859	6.6%	0.5%
JC Penney	196,931	4.1%	0.3%
Belk	162,501	3.4%	0.3%
Parisian	143,278	3.0%	0.2%
Saks & Co.	127,727	2.7%	0.2%
Neiman Marcus	124,314	2.6%	0.2%
Bed Bath & Beyond	101,100	2.1%	0.2%
Expo Design	98,350	2.1%	0.2%
Old Navy	82,075	1.7%	0.1%
Regal Cinema	76,580	1.6%	0.1%

TIAA Real Estate AccountProspectus | 27

The following table lists the rentable area subject to expiring leases during the next five years, and an aggregate figure for expirations in 2012 and thereafter, in the Account’s properties.


Year of Lease Expiration	Rentable Area Subject to Expiring Leases (sq. ft.)	Percentage of Total Rentable Area of Account’s Office Properties Represented by Expiring Leases

OFFICE PROPERTIES
2007	[To come]
2008
2009
2010
2011
2012 and thereafter

Total		%


Year of Lease Expiration	Rentable Area Subject to Expiring Leases (sq. ft.)	Percentage of Total Rentable Area of Account’s Industrial Properties Represented by Expiring Leases

INDUSTRIAL PROPERTIES
2007	[To come]
2008
2009
2010
2011
2012 and thereafter

Total		%


Year of Lease Expiration	Rentable Area Subject to Expiring Leases (sq. ft.)	Percentage of Total Rentable Area of Account’s Retail Properties Represented by Expiring Leases

RETAIL PROPERTIES
2007	[To come]
2008
2009
2010
2011
2012 and thereafter

Total		%

28|Prospectus TIAA Real Estate Account

RESIDENTIAL PROPERTIES

The Account’s residential property portfolio currently consists of 23 property investments comprised of first class or luxury multi-family, garden, midrise, and high-rise apartment buildings. The portfolio contains approximately 11,106 units located in nine states and has a 95% average occupancy rate. One of the residential properties in the portfolio is subject to a mortgage. The complexes generally contain one- to three-bedroom apartment units with a range of amenities, such as patios or balconies, washers and dryers, and central air conditioning. Many of these apartment communities have on-site fitness facilities, including some with swimming pools. Rents on each of the properties tend to be comparable with competitive communities and are not subject to rent regulation. The Account is responsible for the expenses of operating its residential properties.

The table below contains detailed information regarding the apartment complexes in the Account’s portfolio as of December 31, 2006.


Property	Location	Number of Units	Average Unit Size (Square Feet)	Avg. Rent Per Unit/ Per Month

The Greens at Metrowest	Orlando, FL	200	920	$	940
The Royal St. George Apts	West Palm Beach, FL	224	870	$	1,056
Westcreek Apartments	Westlake Village, CA	126	951	$	1,819
Lincoln Woods Apartments	Lafayette Hill, PA	216	774	$	1,272
Lodge at Willow Creek	Denver, CO	316	996	$	1,008
Legends at Chase Oaks	Plano, TX	346	972	$	1,082
The Colorado	New York, NY	256	622	$	2,703
Larkspur Courts	Larkspur, CA	248	1,001	$	2,086
Ashford Meadows	Herndon, VA	440	1,050	$	1,435
South Florida Apartment Portfolio	Boca Raton, Plantation, FL	550	889	$	1,105
Fairways of Carolina	Margate, FL	208	1,026	$	1,160
Quiet Waters Apartments	Deerfield Beach, FL	200	1,048	$	1,250
Legacy at Westwood	Los Angeles, CA	187	1,181	$	4,223
Regents Court	San Diego, CA	251	884	$	1,717
The Reserve at Sugarloaf	Duluth, GA	333	1,220	$	1,149
The Maroneal	Houston, TX	309	928	$	1,207
Glenridge Walk	Atlanta, GA	296	1,142	$	1,337
1050 Lenox Park	Atlanta, GA	407	1,023	$	1,386
Caruth at Lincoln Park	Dallas, TX	338	1,168	$	1,680
Palomino Park	Highlands Ranch, CO	1,184	1,095	$	1,520
Houston Apartment Portfolio	Houston, TX	2,295	1,062	$	1,332
Phoenix Apartment Portfolio	Greater Phoenix, AZ	1,176	996	$	1,084
Kierland Apartment Portfolio	Scottsdale, AZ	1,000	1,049	$	1,166

RECENT TRANSACTIONS

The following describes property transactions by the Account since February 1, 2007, the date of the last supplement to the Account prospectus describing property purchases. Except as noted, the expenses for operating the properties purchased are either borne or reimbursed, in whole or in part, by the property tenants, although the terms vary under each lease. The Account is responsible for operating expenses not reimbursed under the terms of a lease. All rental rates are quoted on an annual basis unless otherwise noted.

TIAA Real Estate AccountProspectus | 29

PURCHASES

Retail Properties

Joint Venture with Developers Diversified Realty Corporation

On February 27, 2007, DDR/TC Core Retail Fund, LLC, a Delaware limited liability company (Company) and a joint venture between a wholly owned subsidiary of TIAA, for the benefit of the Account, and a wholly owned subsidiary of Developers Diversified Realty Corporation (DDR), acquired an aggregate of 66 community center properties located predominantly the southeastern United States for approximately $3.0 billion of total asset value (collectively, the “Portfolio”). Prior to this acquisition, the Properties were owned by Inland Retail Real Estate Trust, Inc. The Account contributed 85% of the equity in the Company (approximately $1.04 billion) and DDR TC contributed 15% of the equity in the Company (approximately $170 million). The Portfolio consists of approximately 17.0 million square feet of owned gross leasable area (over 18 million square feet including “shadow” anchors) and has an average occupancy of approximately 96.0%. The properties are located in 13 states, with 42 properties, representing approximately 60.7% of the Portfolio’s valuation, located in Georgia, North Carolina and Florida. The largest asset accounts for 6.3% of the total value and the largest state concentration is in Georgia with 18 properties which account for 34.6% of the Portfolio’s total value. The majority of the Portfolio is anchored by well-known, high-quality retailers including Wal-Mart (6%), Kohl’s (5%), Ross Dress for Less (3%), Goody’s Family Clothing (3%), and Linens ‘N Things (2%).

The Portfolio is subject to an aggregate of approximately $1.8 billion in indebtedness and consists of assumed indebtedness and three separate pools of financing, each provided by a different lender. Solely for purposes of the financing, the lenders have divided the Portfolio into 70 individual properties. The material components of the three pools of financing are as follows:


	•	One lender has provided 25 individual non-recourse loans, to subsidiaries of Company, with customary recourse carve-outs, in the aggregate amount of $736,558,611. The loans bear interest at a fixed rate of 5.4475%. Each loan is a separate, individual loan secured by an individual community retail center and each loan is not cross-collateralized or cross-defaulted with any of the other loans or other community retail centers.

	•	One lender has provided a non-recourse loan, to subsidiaries of Company, with customary recourse carve-outs, in the aggregate amount of $559,533,762. The loan bears interest at a fixed rate of 5.48%. This loan is secured by 17 community retail centers. The loan is cross-defaulted and cross-collateralized on a Portfolio basis, but Company will be permitted to transfer any or all of the 17 individual properties upon compliance with certain conditions, including the requirement that either the transferee expressly assumes the loan or Company reduces the loan amount allocated to the transferred property by an amount in excess of the loan value.

	•	One lender has provided a $250,000,000 5-year (a base 3-year term with two 1-year options) revolving credit recourse loan to Company at an interest rate calculated as the London Interbank Offered Rate (LIBOR) plus 65 basis

30|ProspectusTIAA Real Estate Account


		points (0.65%), calculated on a Actual/ 360-day year basis. The facility also provides for assets within the collateral to be released or substituted. This facility is initially secured by 13 community retail centers.

Finally, Company assumed indebtedness on a total of 15 properties with an aggregate loan balance amount of approximately $285 million. These individual loans mature between June 2009 and June 2018, and all but one loan matures on or before August 2012.

Printemps De L’Homme - Paris, FR

On March 8, 2007, the Account purchased a retail center in Paris, France for approximately $263.7 million. The property consists of a nine-story retail building with three basement levels, was built in the 1930’s, and underwent major renovations in 1999. The retail center contains 142,365 square feet and is 100% leased to France Printemps SA for their Printemps De L’Homme (Men’s Store). Rental rates average 637 Euros per square meter (at the time of underwriting, equivalent to $78.12 per square foot), which is below the current average market rent for comparable properties. The property is located in the Paris City Centre and Shopping Centre market, which consists of 4.2 million square meters (45.21 million square feet) and had a vacancy rate of 3% at the time of purchase.

SALES

Residential Properties

The Greens at MetroWest - Orlando, FL

On February 14, 2007, the Account sold an apartment complex in Orlando, Florida for net sales proceeds of approximately $21.7 million. The Account purchased the property on December 15, 1995 for an original investment of $12.5 million. At the time of sale, the property had a market value of $21.5 million and a cost to date of $15.0 million in the records of the Account.

TIAA Real Estate AccountProspectus |31

SELECTED FINANCIAL DATA

The following selected financial data should be considered in conjunction with the Account’s financial statements and notes provided in this prospectus.


	Year Ended Dec. 31, 2006		Year Ended Dec. 31, 2005		Year Ended Dec. 31, 2004		Year Ended Dec. 31, 2003		Year Ended Dec. 31, 2002

Investment income:
Real estate income, net	$	444,782,843	$	340,089,550	$	239,429,500	$	224,938,080	$	198,998,685
Income from real estate joint ventures and limited partnerships		84,671,528		71,826,443		71,390,397		31,989,569		17,077,072
Dividends and interest		135,407,210		70,999,212		27,508,560		19,461,931		26,437,901

Total investment income		664,861,581		482,915,205		338,328,457		276,389,580		242,513,658
Expenses		83,448,664		56,100,197		36,728,425		31,654,065		23,304,336

Investment income, net		581,412,917		426,815,008		301,600,032		244,735,515		219,209,322
Net realized and unrealized gain (loss) on investments and mortgage notes payable		1,032,787,765		765,970,272		414,580,303		58,837,371		(102,967,284	)

Net increase in net assets resulting from operations		1,614,200,682		1,192,785,280		716,180,335		303,572,886		116,242,038
Participant transactions		1,969,780,728		2,110,375,836		1,735,947,490		813,860,715		346,079,345

Net increase in net assets	$	3,583,981,410	$	3,303,161,116	$	2,452,127,825	$	1,117,433,601	$	462,321,383


	December 31,

		2006		2005		2004		2003		2002

Total assets	$	15,759,961,333	$	11,685,426,413	$	7,843,979,924	$	4,867,089,727	$	3,731,503,245
Total liabilities		1,627,268,821		1,136,715,311		598,429,938		73,667,566		55,514,685

Total net assets	$	14,132,692,512	$	10,548,711,102	$	7,245,549,986	$	4,793,422,161	$	3,675,988,560

Accumulation units outstanding		50,142,688		42,623,491		33,337,597		24,724,183		20,346,696

Accumulation unit value	$	273.65	$	239.95	$	210.44	$	186.94	$	173.90

Mortgage notes payable	$	1,437,149,148	$	973,502,186	$	499,479,256		—		—

32|ProspectusTIAA Real Estate Account

QUARTERLY SELECTED FINANCIAL INFORMATION

The following selected unaudited financial data for each full quarter of 2006 and 2005 are derived from the financial statements of the Account for the years ended December 31, 2006 and 2005.


	2006 For the Three Months Ended

	March 31			June 30			September 30			December 31

Investment income, net	$	117,280,069		$	135,154,810		$	173,662,421		$	155,315,617
Net realized and unrealized gain on investments and mortgage loans payable		229,766,395			411,609,818			266,396,224			125,015,328

Net increase in net assets resulting from operations	$	347,046,464		$	546,764,628		$	440,058,645		$	280,330,945


Total return		3.21	%		4.69	%		3.43	%		2.04	%


	2005 For the Three Months Ended

	March 31			June 30			September 30			December 31

Investment income, net	$	93,301,077		$	98,805,190		$	114,048,282		$	120,660,459
Net realized and unrealized gain on investments and mortgage loans payable		21,210,579			263,101,053			267,884,516			213,774,124

Net increase in net assets resulting from operations	$	114,511,656		$	361,906,243		$	381,932,798		$	334,434,583

Total return		1.52	%		4.38	%		4.13	%		3.33	%

TIAA Real Estate AccountProspectus|33

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read together with our financial statements and notes contained in this prospectus and with consideration to the sub-section entitled “Forward-Looking Statements,” which begins on page 48, and the section entitled “Risk Factors,” which begins on page 8. The past performance of the Account is not indicative of future results.

2006 OVERVIEW

The TIAA Real Estate Account (the “Account”) invests primarily in commercial real estate in order to meet its investment objective of obtaining favorable long-term returns through rental income and the appreciation of its real estate holdings. Commerical real estate enjoyed another strong year of performance in 2006. The continued positive performance of commercial real estate markets is a reflection of positive economic indicators and improved real estate market fundamentals, as discussed in the following section. While economic growth was relatively strong throughout the year, the Federal Reserve Board reported in its January 2007 “Beige Book,” which summarizes economic conditions in the 12 Federal Reserve Districts, that economic activity had moderated in several Districts since its November 2006 report. However, the Federal Reserve Board also stated that commercial real estate markets remained very active throughout the country: “…in contrast to the housing sector, commercial real estate markets continued to see strong activity in most Districts.”

Investor demand for commercial real estate in 2006 was fueled by the solid performance of the U.S. economy, healthy market fundamentals, a dip in interest rates in the second half of 2006, and relatively attractive returns when compared to other asset classes. Unlike the single family housing market, which experienced softening in demand and prices, commercial real estate prices and investment activity increased in 2006. According to Real Capital Analytics, one of the primary industry sources of commercial real estate transaction data, commercial real estate transactional volume in 2006 totaled approximately $307 billion, an 11% increase over 2005. A number of REIT privatization transactions and the $5 billion purchase price paid for a single property (Peter Cooper Village/Stuyvesant Town in New York City) were responsible for a sizeable share of the 2006 increase, which may make it difficult for the commercial real estate market to sustain this pace in 2007.

While management believes that economic and real estate market fundamentals should remain stable to positive in the near term, commercial real estate markets are cyclical over the longer term and, therefore, are subject to change. Geopolitical and economic risks, changes in interest rates or monetary policy, industry or sector slowdowns, the dynamics of supply and demand for commercial real estate and changing demographics are but a few of the factors which can affect commercial real estate values and, consequently, the

34 | ProspectusTIAA Real Estate Account

performance of the Account. While management cannot predict the exact nature or timing of such changes or the magnitude of their impact, our experience has demonstrated that market fluctuations can and will take place without advance notice, and any significant changes could have a direct and meaningful impact on the returns of the Account. Please refer to the section entitled “Risk Factors,” which begins on page 8, for a more detailed description of the risks associated with an investment in the Account.

It is also important to note that, while the single family residential real estate market has slowed to varying degrees in particular markets throughout the country, the Account does not directly invest in single family residential real estate. Historically, there has not been a strong link between commercial real estate and single family housing because different market fundamentals drive the performance of each. The volatility in interest rates had an immediate negative impact on the affordability of single family housing while not affecting commercial real estate values in the short term. During this same period, the commercial real estate market has been experiencing improved market conditions (improving occupancies and increases in rental rates) and moderate levels of new construction.

INVESTMENTS AS OF DECEMBER 31, 2006

As of December 31, 2006, the Account had total net assets in the amount of $14,132,692,512, a 4% increase from the end of the third quarter of 2006 and a 34% increase from year-end 2005. The growth in net assets was due to the strong inflow of premiums and net transfers into the Account, combined with a healthy increase in net investment income and capital appreciation on the Account’s investment portfolio during the year ended December 31, 2006, as compared to 2005.

As of December 31, 2006, the Account owned a total of 121 real estate property investments (109 of which were wholly-owned and 12 of which were held in joint ventures) representing 80.03% of the Account’s total investment portfolio. The real estate portfolio included 49 office properties (six of which were held in joint ventures and one located in London, UK), 35 industrial properties (including one held in a joint venture), 23 apartment complexes, 13 retail properties (including four held in joint ventures), and a 75% joint venture interest in a portfolio of storage facilities. Of the 121 real estate property investments, only 18 were subject to debt. Total debt on the Account’s wholly-owned real estate portfolio as of December 31, 2006 was $1,437,149,148, representing 10.17% of Total Net Assets. The Account’s share of joint venture debt is netted out in determining the joint venture values shown in the Statement of Investments, but, when that debt is also considered, total debt on the Account’s portfolio as of December 31, 2006 was $1,909,316,373, representing 13.51% of Total Net Assets.

Management believes the Account’s real estate and real estate-related transactional activity in the year ended December 31, 2006 was strong. The Account purchased 23 property investments, including a joint venture interest, for

TIAA Real Estate AccountProspectus | 35

a total net equity investment of $2.3 billion. These purchases were diversified by both location (12 states and Washington, D.C.) and sector. The Account purchased an 80% joint venture interest in four retail centers, and purchased nine office properties, seven industrial properties, three retail properties and three apartment properties. Two of the seven industrial properties were consolidated into existing portfolios. The Account also sold nine property investments (four apartment and five office properties), for approximately $381.9 million. These properties had either maximized in value, under-performed, or represented properties needing significant capital infusions in the future, which could have had a negative impact on the Account’s overall performance. The properties sold had a total net realized gain of $76.1 million. In addition, the Account made a $75 million mortgage loan receivable investment secured by an apartment complex in Washington, D.C.

Management believes that the Account’s real estate portfolio is diversified by location and property type and, at December 31, 2006, no single property investment represented more than 3.56% of its total investments or more than 4.45% of its total real estate investments, based on the values of such assets. The following charts reflect the diversification of the Account’s real estate assets by region and property type, list its ten largest holdings, and list its top five overall market exposures by metropolitan statistical area. All information is based on the values of the properties as stated in the financial statements as of December 31, 2006.

REAL ESTATE PROPERTY INVESTMENT DIVERSIFICATION BY MARKET VALUE


	East (32)			West (40)			South (39)			Midwest (7)			Other* (2)			Foreign** (1)			TOTAL (121)

Office (49)		22.6	%		18.4	%		11.5	%		2.9	%		0.0	%		3.5	%		58.9	%
Apartment (23)		1.9	%		7.4	%		6.2	%		0.0	%		0.0	%		0.0	%		15.5	%
Industrial (35)		2.6	%		6.6	%		3.8	%		1.6	%		0.6	%		0.0	%		15.2	%
Retail (13)		1.9	%		1.0	%		6.9	%		0.0	%		0.0	%		0.0	%		9.8	%
Other (1)		0.0	%		0.0	%		0.0	%		0.0	%		0.6	%		0.0	%		0.6	%

TOTAL (121)		29.0	%		33.4	%		28.4	%		4.5	%		1.2	%		3.5	%		100.0	%


( )		Number of property investments in parentheses.

*		Represents a portfolio of storage facilities and a portfolio of industrial properties located in various regions across the U.S.

**		Represents a United Kingdom real estate investment.

36 | ProspectusTIAA Real Estate Account

TOP TEN REAL ESTATE PROPERTY INVESTMENTS


Property Name	City		State/ County		Property Type		Market Value ($M)(a)				% of Total Real Estate Portfolio			% of Total Investments

1001 Pennsylvania Ave		Washington		DC		Office		$	552.5	(b)		4.45	%		3.56	%
1 & 7 Westferry Circus		London		UK		Office		$	428.6	(c)		3.45	%		2.76	%
50 Fremont Street		San Francisco		CA		Office		$	421.0	(d)		3.39	%		2.71	%
IDX Tower		Seattle		WA		Office		$	399.0	(e)		3.21	%		2.57	%
The Newbry		Boston		MA		Office		$	370.7			2.99	%		2.39	%
Four Oaks Place		Houston		TX		Office		$	306.2			2.47	%		1.97	%
Houston Apartment Portfolio		Houston		TX		Apartment		$	306.0			2.47	%		1.97	%
780 Third Avenue		New York City		NY		Office		$	298.0			2.40	%		1.92	%
99 High Street		Boston		MA		Office		$	291.8	(f)		2.35	%		1.88	%
Ontario Industrial Portfolio		Ontario		CA		Industrial		$	270.0	(g)		2.18	%		1.74	%


(a)	Value as reported in the 12/31/06 Statement of Investments, unless otherwise indicated. Investments owned 100% by TIAA are reported based on market value. Investments in joint ventures are reported based on the Account’s ownership percentage in the joint ventures.

(b)	This property is shown gross of debt. The value of the Account’s interest less leverage is $332.4M.

(c)	This property is shown gross of debt. The value of the Account’s interest less leverage is $168.3M. The market value has been converted to U.S dollars from British pounds at the exchange rate as of December 31, 2006.

(d)	This property is shown gross of debt. The value of the Account’s interest less leverage is $278.6M.

(e)	This property is shown gross of debt. The value of the Account’s interest less leverage is $246.0M.

(f)	This property is shown gross of debt. The value of the Account’s interest less leverage is $106.8M.

(g)	This property is shown gross of debt. The value of the Account’s interest less leverage is $260.1M.

TOP FIVE OVERALL MARKET EXPOSURE


Metropolitan Statistical Area	% Leased			# of Investments		% Total Investments

Washington-Arlington-Alexandria		96.8	%		10		9.61	%
Boston-Quincy		85.3	%		6		5.85	%
San Francisco-San Mateo-Redwood City		93.3	%		4		5.39	%
Los Angeles-Long Beach-Glendale		98.4	%		8		5.37	%
Seattle-Bellevue-Everett		95.8	%		5		4.29	%

As of December 31, 2006, the Account also held investments in real estate limited partnerships, representing 1.80% of Total Investments, real estate equity securities, representing 3.99% of Total Investments, commercial mortgage-backed securities (CMBSs), representing 0.55% of Total Investments, a mortgage loan receivable representing 0.48% of Total Investments, commercial paper representing 10.79% of Total Investments, and government bonds, representing 2.36% of Total Investments.

TIAA Real Estate AccountProspectus | 37

Real Estate Market Outlook—In General

(Commercial real estate market statistics discussed in this section are obtained by the Account from sources that management considers reliable, but the data is preliminary for the year ended December 31, 2006 and may be subsequently revised. Prior period data may have been adjusted to reflect updated calculations. Investors should not rely exclusively on the data presented below in forming a judgment regarding the current or prospective performance of the commercial real estate market generally.)

The United States commercial real estate markets and the national economy continued to experience improvements throughout 2006. Commercial real estate market fundamentals improved while the national economy moved ahead, albeit more slowly in the second half of 2006. Despite the slower economic growth, capital inflow from investors to commercial real estate assets remained strong in 2006, continuing to support commercial real estate values, while moderating investment returns. Management believes it is important to remember that real estate values can be affected by prospective changes in economic and capital market conditions, as well as by changes in supply and demand at the local level.

Economic activity expanded throughout the nation in 2006. The United States economy added a total of 2.24 million new jobs over the course of 2006 and 2.54 million new jobs in 2005. The unemployment rate dropped to 4.5% as of December 2006, from 4.9% in December 2005. Economic gains were broadly based, both geographically and across industries. While the economy did grow throughout 2006, the Federal Reserve Board reported in its January 2007 “Beige Book” that economic activity had moderated in several Districts during December. The Federal Reserve also noted, however, that “...in contrast to the housing sector, commercial real estate markets continued to see strong activity in most Districts.”

Payroll employment growth in the Account’s primary metropolitan areas remained positive in 2006. Of the Account’s five top markets (Washington, D.C., Boston, San Francisco, Los Angeles and Seattle), based on the net equity value of the Account’s property investments, employment growth was strongest in the Seattle metropolitan area, where payroll employment grew 3.9% in 2006. Employment growth was also strong in the Washington, D.C. metropolitan area, where payroll employment grew 2.5% over the course of 2006. Employment growth was more modest in the Boston (+0.9%), San Francisco (+1.5%) and Los Angeles (+1.2%) metropolitan areas. By comparison, payroll employment grew 1.4% in the United States as a whole in 2006.

Growth in payroll employment is highly correlated with tenant demand for commercial real estate; however, growth in employment may not immediately result in demand for space. Space demand can lag growth in employment due to the nature of the leasing cycle. Alternatively, absorption can be a leading indicator as companies lease space to accommodate anticipated hiring. The “financial activities” and “professional and business services” sectors are the primary office users, and growth in these sectors is correlated with office space demand over the long term. These two sectors added 179,000 and 442,000 jobs, respectively, over the course of 2006, and office space demand responded in kind. According to Torto Wheaton

38|ProspectusTIAA Real Estate Account

Research, an independent subsidiary of CB Richard Ellis and a widely-used source of real estate market data, office absorption in the United States, which is the net change in occupied space and a fundamental indicator of demand, totaled a healthy 75 million square feet in 2006. Gains in net absorption during 2006 lowered office vacancy rates throughout much of the country. Torto Wheaton Research reported that office market vacancies averaged 12.5% at year-end 2006, as compared with 13.6% at the end of 2005. In comparison, at year-end 2006, the vacancy rate of the Account’s office portfolio was 8%, well below the national average.

Real estate conditions in the Account’s top office markets were solid in 2006. For example, in the Washington D.C. metropolitan area, where the largest concentration of the Account’s real estate investments are located, office vacancies were well below the national average at 9.1% as of year-end 2006, down from 9.3% at year-end 2005. In comparison, the average vacancy rate of the Account’s office portfolio in the Washington, D.C. metropolitan area was significantly better and stood at 3.0% at the end of 2006. Office vacancy rates in the Boston, Los Angeles, San Francisco, and Seattle metropolitan areas, which were the Account’s other top office markets, experienced steady declines over the past year, and the average office vacancy rates in those three markets at year-end 2006 were 11.9%, 10.0%, 10.8% and 9.4%, respectively. In comparison, the Account’s office portfolios in Los Angeles, San Francisco, Seattle and Boston had an average vacancy rate at year-end 2006 of 1%, 7%, 7% and 18%, respectively. It is important to note that three of the five property investments owned by the Account in the Boston metropolitan area are located within the city of Boston and had an average vacancy rate of 5%. The remaining two property investments are located in suburban areas and had an average vacancy rate of 36% due to a slower leasing pace.

Industrial space demand is related to a number of factors, including the national business cycle, national industrial production, international trade volumes, changes in corporate logistics and distribution systems, and employment growth in the manufacturing, wholesale trade and transportation & warehousing industries. Most of these factors have experienced sustained growth over the last several years. For example, U.S. gross domestic product (GDP), a basic indicator of the national business cycle, grew an estimated 3.3% in 2006, after growing 3.2% in 2005 and 3.9% in 2004. Similarly, national industrial production grew at a 4.4% rate in 2006, following growth of 3.2% in 2005 and 2.5% in 2004. While GDP growth and growth in industrial production slowed during the second half of the year due primarily to a slowdown in domestic auto production and weakness in the single-family housing market, those factors continued to grow at relatively healthy rates. According to Torto Wheaton Research, industrial space absorption in major U.S. metropolitan areas totaled 188 million square feet in 2006, which is a reflection of U.S. economic growth, and, as a result of the healthy absorption, industrial vacancies dipped lower in 2006. According to Torto Wheaton Research, industrial vacancies averaged 9.4% at year-end 2006 compared with 9.9% at the end of 2005. In comparison, at year-end 2006, the vacancy rate of the Account’s industrial portfolio was 4%, well below the national average.

TIAA Real Estate AccountProspectus |39

Industrial market vacancies in the Riverside, California metropolitan area, where the largest concentration of the Account’s industrial properties are located, averaged 7.9% at year-end 2006, which was below the national average, but up from 6.1% at year-end 2005. Still, the Riverside industrial market remained the most active industrial market in the country with over 21 million square feet of absorption in 2006, which was 30% greater than that in the next most active market. In Los Angeles, another of the Account’s top industrial markets, vacancies were also well below the national average at 4.5% at year-end 2006. The industrial market vacancy rates in the Chicago (11.4%), Dallas (11.7%), and Atlanta (13.0%) metropolitan areas were above the national average, but vacancies in these markets declined over the course of 2006. In comparison, at December 31, 2006, the Account’s industrial portfolio in Riverside was 100% occupied, and, in Los Angeles and Dallas, the Account’s industrial market vacancy rates were 2% and 5%, respectively. In the Account’s remaining top two industrial markets, Chicago and Atlanta, average vacancy rates at year-end 2006 were 7% and 2%, respectively.

The apartment market remained healthy throughout 2006, with the slow-down in the single-family housing market producing mostly positive effects for the apartment market. While the growth of single-family housing prices slowed in 2006, past price increases had pushed housing affordability to its lowest level since 2001. The supply of rental units was significantly reduced in a number of markets by developers who removed units from the rental stock as they pursued condominium conversion plans. The pace of condo conversions and conversion-driven acquisitions slowed significantly in the second half of 2006, but the reduction in rental supply during 2005 and the first half of 2006 was sufficient to keep apartment vacancies relatively low. According to Torto Wheaton Research, apartment vacancies increased to 5.1% at year-end 2006, as compared with 5.0% at the end of 2005. In addition, apartment rents increased in a number of markets for the first time in several years, and rental concessions such as free rent were reduced or eliminated in many markets. The average vacancy rate for the Account’s apartment portfolio was 5% at the end of 2006.

Market vacancy rates in the Phoenix metropolitan area, the Account’s top apartment market, averaged 5.3% at year-end 2006. In the Account’s other top apartment markets, market vacancy rates were higher: Houston (7.6%), Denver (5.8%), Atlanta (5.9%), and Los Angeles (2.8%). In comparison, at December 31, 2006, the Account’s apartments located in Atlanta had an average vacancy rate of 2%, Phoenix had a vacancy rate of 5%, and in Denver, Houston and Los Angeles, average vacancy rates were 6%.

Retail markets remained healthy in 2006. Preliminary data from the U.S. Department of Commerce indicated that retail and food service sales (excluding autos and auto parts) increased 7.3% in 2006, a significant gain given the elevated prices of oil and gasoline during much of the year. According to Torto Wheaton Research, vacancies in neighborhood and community centers increased to 8.7% at the end of 2006, versus 7.7% at year-end 2005. In comparison, the average vacancy rate at the end of 2006 for the Account’s entire retail portfolio, as well as, for its neighborhood and community centers, was 3%.

40|ProspectusTIAA Real Estate Account

Overall, Torto Wheaton Research believes that commercial real estate construction remains at appropriate levels to maintain the favorable real estate supply/demand conditions that existed in 2006 over the near term. Space demand is expected to track closely with construction for most property types over the next several years. According to Torto Wheaton Research, office construction nationally should total 87 million square feet over the 2007-2008 period and absorption should total 91 million square feet. Construction of industrial space is projected to total 340 million square feet over the 2007-2008 period, as compared with absorption of 304 million square feet. While industrial vacancies are expected to increase modestly to 9.8% at year-end 2008, rents are projected to grow 4.3% per year. Apartment construction is expected to total almost 425,000 units over the 2007-2008 period, and absorption is projected to total approximately 350,000 units. While apartment vacancies are expected to increase modestly in 2007-2008, they will remain low by historical standards. Further, apartment rents are projected to grow 3.2% in 2007 and 3.0% in 2008. Torto Wheaton Research expects construction of neighborhood and community centers to total 41.6 million square feet over the 2007-2008 period and absorption to total 40.8 million square feet. With construction and absorption closely aligned, retail rents are projected to grow 4.4% in 2007 and 3.3% in 2008.

Economic Outlook for 2007

On balance, management believes that prospects for U.S. commercial real estate markets remain promising given current economic and property market conditions. Several years into recovery, the national economy shows signs of a modest slowdown in economic activity primarily due to high energy prices and a weakened single-family housing market; however, many economists believe that the economy is in the midst of a “soft landing” and that economic activity should remain healthy throughout 2007. Nationally, employment is growing at a solid pace, as is employment in key office-using industries. In addition to promising fundamentals, domestic and foreign investor demand for commercial real estate shows little sign of abating. Strong inflows should provide support to current values but are also likely to continue to exert continued pressure on property prices and future returns. The Account will seek to balance the promising market fundamentals against pricing pressures when executing its investment strategy. However, market conditions affecting real estate investments at any given time cannot be predicted, and an unexpected, sudden economic downturn in one or a number of the markets in which the Account invests could significantly and adversely impact the Account’s returns.

RESULTS OF OPERATIONS

Year Ended December 31, 2006 Compared to Year Ended December 31, 2005

Performance

The Account’s total return was 14.04% for the year ended December 31, 2006, two basis points higher than the 2005 annual return of 14.02%. The Account’s

TIAA Real Estate AccountProspectus|41

overall performance on a year-to-year basis reflects the continued strong performance of the Account’s real estate property investments and an increase in interest rates on its marketable securities.

Commercial real estate has been experiencing historically high pricing for the past several years as capital has continued to flow into the asset class. While this increase in property pricing has positively impacted the Account’s net realized and unrealized gains on its real estate assets and joint venture holdings, the underlying property values are subject to decline prospectively, if capital or real estate market conditions experience adverse changes. Real estate as an investment should be considered from a long-term perspective. The Account’s total return (after expenses) over the past three, five and 10 years ended December 31, 2006 was 13.53%, 10.22% and 9.43%, respectively.

The Account’s total net assets grew 34.0% from December 31, 2005 to December 31, 2006. The primary drivers of this growth were significant net participant transactions, the Account’s net investment income from its investment portfolio and the Account’s realized and unrealized gains on its investments over the last twelve months. Management believes that the net participant transfers into the Account are due to its positive historical performance and its low return volatility relative to other available investment options.

Income and Expenses

The Account’s net investment income, after deduction of all expenses, was 36.2% higher for the year ended December 31, 2006, as compared to 2005. This increase was related to the increase in total net assets, which included a 35.1% increase in the Account’s real estate properties, joint venture holdings and limited partnerships.

The Account’s real estate holdings, including real estate joint ventures and limited partnerships, generated approximately 79.6% and 85.3% of the Account’s total investment income (before deducting Account level expenses) during 2006 and 2005, respectively. The remaining portion of the Account’s total investment income was generated by investments in marketable securities, including real estate equity securities, commercial paper, government bonds, and an investment in a commercial mortgage loan receivable. The decline in the percentage of the Account’s total investment income derived from its real estate holdings was primarily due to an increase in the Account’s interest income from its marketable securities and mortgage loan receivable.

Gross real estate rental income increased approximately 34.9% in the year ended December 31, 2006, as compared to 2005. This increase was primarily due to the increased number and size of the Account’s wholly-owned property investments (98 at December 31, 2005 compared to 109 at December 31, 2006). Income from real estate joint ventures and limited partnerships was $84,671,528 for the year ended December 31, 2006, as compared with $71,826,443 for the year ended December 31, 2005. This 17.9% increase was due to an increase in gross rental income from the properties owned in joint ventures, as well as increased

42|ProspectusTIAA Real Estate Account

income from limited partnerships. Investment income on the Account’s investments in marketable securities increased by 90.7%, from $70,999,212 in 2005 to $135,407,210 in 2006. This increase was due to an increase in the related investments and higher interest rates in 2006.

Total property level expenses for wholly-owned property investments for the years ended December 31, 2006 and 2005 were $389,672,945 and $278,544,030, respectively. In 2006, operating expenses and real estate taxes represented 53% and 28% of the total property level expenses, respectively, with the remaining 19% representing interest payments on mortgages. In comparison, operating expenses, real estate taxes, and interest expense represented 54%, 32% and 14% of total property level expenses, respectively, in 2005. Overall, property level expenses increased by 40% from 2005 to 2006. The majority of this increase (71%) was due to increases in operating expenses and real estate taxes associated with the Account’s larger portfolio of wholly-owned property investments. The increase in the interest expense paid on properties subject to a mortgage accounted for 29% of the overall increase. As of year-end 2006, there were 12 wholly-owned properties subject to debt, as compared to seven leveraged properties at year-end 2005.

The Account also incurred expenses for the years ended December 31, 2006 and 2005 for investment advisory services ($26,899,307 and $19,603,225, respectively), administrative and distribution services ($45,712,473 and $27,130,406, respectively), and mortality, expense risk and liquidity guarantee charges ($10,836,884 and $9,366,566 respectively). The total 49% increase in these expenses was a result of the larger net asset base in the Account, on which the fees are calculated, and the increased costs associated with managing and administering the Account.

Net Realized and Unrealized Gains and Losses on Investments and Mortgage Loans Payable

The Account had net realized and unrealized gains on investments and mortgage loans payable of $1,032,787,765 for the year ended December 31, 2006, as compared with net realized and unrealized gains on investments and mortgage loans payable of $765,970,272 for the year ended December 31, 2005. The overall increase was partially driven by the increase in net realized and unrealized gains on the Account’s real estate properties to $735,507,509 for the year ended December 31, 2006 from $619,333,773 for 2005. The Account also posted substantial net realized and unrealized gains on its marketable securities of $130,710,746 for the year ended 2006, as compared to $8,770,726 in 2005. In addition, the Account had unrealized gains on its real estate joint ventures and limited partnership holdings of $193,477,741 for the year ended December 31, 2006, as compared to unrealized gains of $167,019,921 for 2005. The increase in net realized and unrealized gains on the Account’s property investments, including those held in joint ventures, was due to the positive effect of the strong inflow of capital into the real estate market from investors, combined with improved real estate market fundamentals, which had the effect of increasing the value of the

TIAA Real Estate AccountProspectus|43

Account’s existing real estate assets. This trend, which has continued for several years, was also evidenced by the net realized gains on the properties sold in 2006. During the year ended December 31, 2006, the Account sold nine properties for total net proceeds, after selling expenses, of $381.9 million, for a cumulative net gain of $76.1 million, based on the properties’ capitalized costs. The unrealized gains on the Account’s marketable securities in 2006 were primarily associated with the Account’s investments in real estate equity securities.

Year Ended December 31, 2005 Compared to Year Ended December 31, 2004

Performance

The Account’s total return was 14.02% for the year ended December 31, 2005, 145 basis points higher than the 2004 total return of 12.57%. The substantial increase in the Account’s overall performance on a year-to-year basis reflected the strong performance of the Account’s real estate properties. The market value of the Account’s real estate portfolio increased substantially in 2005 due to capital appreciation of these assets as a result of the sustained growth in capital investment in the real estate market from institutional investors as well as foreign investors.

Income and Expenses

The Account’s net investment income, after deduction of all expenses, was 41.5% higher for the year ended December 31, 2005, as compared to 2004. This increase is related to a 45.6% growth in Total Net Assets from year-end 2004 to year-end 2005. The growth in Total Net Assets was driven by a year-to-year 84.8% increase in net realized and unrealized gains on its investments and a 24.8% increase in net transfers and premiums into the Account.

The Account’s real estate holdings, including real estate joint ventures and limited partnerships, generated approximately 85.3% and 91.9% of the Account’s total investment income (before deducting Account level expenses) during 2005 and 2004, respectively. The remaining portion of the Account’s total investment income was generated by investments in marketable securities. The decline in the real estate component was due to the growth in the non-real estate assets owned by the Account as a percentage of Total Net Assets. As of year-end 2005, the Account held 89.1% of its Total Net Assets in real estate, joint ventures and limited partnership holdings, as compared to 92.2% in 2004.

Gross real estate rental income increased approximately 55.7% in the year ended December 31, 2005 as compared to 2004. This increase was primarily due to the increased number and size of properties owned by the Account. Income from the real estate joint ventures and limited partnerships was $71,826,443 for the year ended December 31, 2005 as compared with $71,390,397 for the year ended December 31, 2004. Interest and dividend income on the Account’s marketable securities increased from $27,508,560 in 2004 to $70,999,212 in 2005 due to the increase in the amount of non-real estate assets held by the Account, as well as an increase in short term rates from 2004 to 2005.

44|ProspectusTIAA Real Estate Account

Total property level expenses for the years ended December 31, 2005 and 2004 were $278,544,030 and $157,768,776, respectively. In 2005, operating expenses and real estate taxes represented 54.0% and 31.6% of the total property level expenses, respectively, with the remaining 14.4% due to interest payments on mortgages. In comparison, operating expenses, real estate taxes, and interest expense represented 64.0%, 35.5% and 0.5% of the total property level expenses, respectively in 2004. Overall, property level expenses increased by 76.6% from 2004 to 2005, with approximately one-third of this increase attributable to interest expense in 2005. The interest expense incurred by the Account was $830,361 and $40,028,630, respectively, in 2004 and 2005. The factors influencing these year-to-year increases were an increase in the number of wholly-owned properties subject to debt, which increased from four in 2004 (all acquired in the fourth quarter of 2004) to seven in 2005, and the purchase of additional properties in 2005.

The Account also incurred expenses for the years ended December 31, 2005 and 2004 for investment advisory services ($19,603,225 and $14,393,388, respectively), administrative and distribution services ($27,130,406 and $16,372,446, respectively) and mortality, expense risk and liquidity guarantee charges ($9,366,566 and $5,962,591, respectively). The overall 52.7% increase in expenses was a result of the larger net asset base in the Account and the increased costs associated with managing and administering the Account.

Net Realized and Unrealized Gains and Losses on Investments and Mortgage Loans Payable

The Account had net realized and unrealized gains on investments and mortgage loans payable of $765,970,272 for the year ended December 31, 2005, as compared to $414,580,303 for the year ended December 31, 2004. This positive variance was primarily due to a substantial increase in net realized and unrealized gain on the Account’s real estate properties to $619,333,773 for the year ended December 31, 2005, as compared to $186,313,976 for the year ended December 31, 2004. The increase was due to the capital appreciation of real estate assets attributable to the continued inflow of capital into the real estate market from institutional and other investors, which had the effect of increasing the value of real estate. This trend, which began in 2004 and increased in 2005, is further evidenced by the net realized gain of $84.8 million on the properties sold in 2005. The net proceeds of these sales were $511.5 million. The Account also had unrealized gains on its real estate joint ventures and limited partnership holdings of $167,019,921 for the year ended December 31, 2005, as compared to $162,245,601 in 2004. The Account’s marketable securities had net realized and unrealized gains totaling $8,770,726 for the year ended December 31, 2005, as compared to $67,803,292 for the year ended December 31, 2004. The primary factor in the decline was the net effect on the Account’s real estate equity securities of the relatively weak performance of the REIT market in 2005, as compared to the strong performance of this market in 2004.

TIAA Real Estate AccountProspectus|45

LIQUIDITY AND CAPITAL RESOURCES

At year-end 2006 and 2005, the Account’s liquid assets (i.e., cash and marketable securities) had a value of $2,747,445,678 and $2,090,768,483, respectively. The increase in the Account’s liquid assets was primarily due to an increase in its net investment income and the continued net positive inflow from participant transfers and premiums into the Account, which management believes was in response to the continued strong relative performance of the Account.

In 2006, the Account received $1,085,057,614 in premiums and $1,354,697,847 in net participant transfers from TIAA, CREF Accounts and affiliated mutual funds, while, for 2005, the Account received $968,189,436 in premiums and $1,435,432,984 in net participant transfers. The Account’s net investment income increased from $426,815,008 for the year ended December 31, 2005 to $581,412,917 for the year ended December 31, 2006.

The Account’s liquid assets continue to be available to purchase additional suitable real estate properties and to meet the Account’s expense needs and participant redemption requests (i.e., cash withdrawals, benefits, or transfers). In the unlikely event that the Account’s liquid assets and its cash flow from operating activities and participant transactions are not sufficient to meet participant transfer or cash withdrawal requests, TIAA’s general account will purchase liquidity units in accordance with TIAA’s liquidity guarantee to the Account.

The Account, under certain conditions more fully described in the Account’s prospectus (as supplemented from time to time), may borrow money and assume or obtain a mortgage on a property (i.e., to make leveraged real estate investments). Also, to meet any short-term cash needs, the Account may obtain a line of credit whose terms may require that the Account secure the loan with one or more of its properties. The Account’s total borrowings may not exceed 30% of the Account’s Total Net Assets. In calculating this limit, only the Account’s actual percentage interest in any borrowings is included, and not that of any joint venture partner. Further, the Account may only borrow up to 70% of the then-current value of a property, although construction loans may be for 100% of costs incurred in developing a property.

EFFECTS OF INFLATION AND INCREASING OPERATING EXPENSES

Inflation, along with increased insurance, taxes, utilities and security costs, may increase property operating expenses in the future. These increases in operating expenses are generally billed to tenants either through contractual lease provisions in office, industrial, and retail properties or through rent increases in apartment complexes. The Account remains responsible for the expenses for unleased space in a property as well as expenses which may not be reimbursed under the terms of an existing lease.

CRITICAL ACCOUNTING POLICIES

The financial statements of the Account are prepared in conformity with accounting principles generally accepted in the United States of America.

46|ProspectusTIAA Real Estate Account

In preparing the Account’s financial statements, management is required to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. Management bases its estimates on historical experience and assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

Management believes that the following policies related to the valuation of the Account’s assets reflected in the Account’s financial statements affect the significant judgments, estimates and assumptions used in preparing its financial statements:

Valuation of Real Estate Properties: Investments in real estate properties are stated at fair value, as determined in accordance with procedures approved by the Investment Committee of the TIAA 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 judgment 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, the properties are valued on a quarterly cycle, and independent appraisers value each real estate property at least once a year. TIAA’s appraisal staff performs the other quarterly valuations of each real estate property and updates the property value if it believes that the value of a property has changed since the previous valuation or appraisal. The appraisals are performed in accordance with Uniform Standards of Professional Appraisal Practices (USPAP), the real estate appraisal industry standards created by The Appraisal Foundation. Real estate appraisals are estimates of property values based on a professional’s opinion. Real estate properties subject to a mortgage are generally valued as described; the mortgage is valued independently of the property, and its fair value is reported separately.

Valuation of Real Estate Joint Ventures and Limited Partnerships: Real estate joint ventures and limited partnerships are stated at the Account’s equity in the net assets of the underlying entities, adjusted, for the joint ventures, to value their real estate holdings and mortgage notes payable at fair value.

Valuation of Marketable Securities: Equity securities listed or traded on any national market or exchange are valued at the last sale 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 on such exchange. Debt securities, other than money market instruments, are valued at the most recent bid price or the equivalent quoted yield for such securities (or those of comparable maturity, quality and type). Money market instruments, with maturities of one year or less, are valued in the same manner as debt securities or derived from a

TIAA Real Estate AccountProspectus|47

pricing matrix that has various types of money market instruments along one axis and various maturities along the other. Portfolio securities and limited partnership interests for which market quotations are not readily available are valued at fair value as determined in good faith under the direction of the Investment Committee of the TIAA Board of Trustees and in accordance with the responsibilities of the Board as a whole.

Mortgage Loans Receivable:Mortgage loans receivable are stated at fair value and are initially valued at the face amount of the mortgage loan funding. Subsequently, mortgage loans receivable are valued quarterly based on market factors, such as market interest rates and spreads for comparable loans, and the performance of the underlying collateral.

Mortgage Loans Payable:Estimated market values of mortgage loans payable are based on the amount at which the liability could be settled (either transferred or paid back) in a current transaction exclusive of direct transaction costs. Different assumptions or changes in future market conditions could significantly affect estimated market value. At times, the Account may assume debt in connection with the purchase of real estate. For debt assumed, the Account allocates a portion of the purchase price to the below- or above-market debt and amortizes the premium or discount over the remaining life of the debt.

Foreign currency transactions and translation:Portfolio investments and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars at the exchange rates prevailing at the end of the period. Purchases and sales of securities, income receipts and expense payments made in foreign currencies are translated into U.S. dollars at the exchange rates prevailing on the respective dates of the transactions. The effects of changes in foreign currency exchange rates on portfolio investments and mortgage loans payable are included in the net realized and unrealized gains and losses on investments and mortgage loans payable. Net realized gains and losses on foreign currency transactions include maturities of forward foreign currency contracts, disposition of foreign currencies, and currency gains and losses between the accrual and receipt dates of portfolio investment income and between the trade and settlement dates of portfolio investment transactions.

Accumulation and Annuity Fund:The Accumulation Fund represents the net assets attributable to participants in the accumulation phase of their investment. The Annuity Fund represents the net assets attributable to the participants currently receiving annuity payments. The net increase or decrease in net assets from investment operations is apportioned between the accounts based upon their relative daily net asset values. Once an Account participant begins receiving lifetime annuity income benefits, monthly payment levels cannot be reduced as a result of the Account’s adverse mortality experience. In addition, the contracts are required to stipulate the maximum expense charge that can be assessed, which is equal to 2.50% of average net assets per year. Accordingly, a small risk charge is paid by the Account to TIAA to assume these risks.

48 | ProspectusTIAA Real Estate Account

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). The Account recognizes a gain to the extent that the contract sales price exceeds the cost-to-date of the property being sold. A loss occurs when the cost-to-date exceeds the sales price. As the Account is fair valued and all properties are appraised quarterly, any accumulated unrealized gains and losses are reversed in the calculation of realized gains and losses. 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 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.

The Account has limited ownership interests in various real estate funds (limited partnerships and one limited liability corporation) and a private REIT (collectively, the “limited partnerships”). The Account records its contributions as increases to the investments, and distributions from the investments are treated as either income or return of capital, as determined by the management of the limited partnerships. Unrealized gains and losses are calculated and recorded quarterly when the Account’s accounting records are compared to the financial statements of the limited partnerships.

Income from joint ventures is recorded based on the Account’s proportional interest in the income earned by the joint venture.

Securities transactions are accounted for as of the date the securities are purchased or sold (trade date). Interest income is recorded as earned and includes accrual of discount and amortization of premium. Dividend income is recorded on the ex-dividend date or as soon as the Account is informed of the dividend. Realized gains and losses on securities transactions are accounted for on the specific identification method.

FORWARD-LOOKING STATEMENTS

Some statements in this prospectus which are not historical facts may be “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements about our expectations, beliefs, intentions or strategies for the future, and include the assumptions underlying these forward-looking statements. Forward-looking statements appear in this prospectus, among other places, in “Management’s Discussion and Analysis of Financial Conditions and Results of Operations.” Forward-looking statements involve risks and uncertainties, some of which are referenced in the sections of

TIAA Real Estate AccountProspectus | 49

this prospectus entitled “Risk Factors” and below in “Quantitative and Qualitative Disclosures About Market Risk,” that could cause actual results to differ materially from historical experience or management’s present expectations.

Caution should be taken not to place undue reliance on management’s forward-looking statements, which represent management’s views only as of the date of this prospectus. Neither management nor the Account undertake any obligation to update publicly or revise any forward-looking statement, whether as a result of new information, changed assumptions, future events or otherwise.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Account’s real estate holdings, including real estate joint ventures and limited partnerships, which, as of December 31, 2006 represented 81.8% of the Account’s total investments, expose the Account to a variety of risks. These risks include, but are not limited to:


	•	General Real Estate Risk — The risk that the Account’s property values or rental and occupancy rates could go down due to general economic conditions, a weak market for real estate generally, or changing supply and demand for certain types of properties;

	•	Appraisal Risk — The risk that the sale price of an Account property (i.e., the value that would be determined by negotiations between independent parties) might differ substantially from its estimated or appraised value, leading to losses or reduced profits to the Account upon sale;

	•	Risk Relating to Property Sales — The risk that the Account might not be able to sell a property at a particular time for its full value, particularly in a poor market. This might make it difficult to raise cash quickly and also could lead to Account losses;

	•	Risks of Borrowing — The risk that interest rate changes may impact Account returns if the Account takes out a mortgage on a property or buys a property subject to a mortgage; and

	•	Foreign Currency Risk — The risk that the value of the Account’s foreign investments, related debt or rental income could increase or decrease due to changes in foreign currency exchange rates or foreign currency exchange control regulations, and hedging against such changes, if undertaken by the Account, may entail additional costs and be unsuccessful.

As of December 31, 2006, 18.2% of the Account’s total investments were in market risk sensitive instruments, comprised of marketable securities and an adjustable rate mortgage loan receivable. Marketable securities include real estate equity securities, commercial mortgage-backed securities (CMBS), and high-quality short-term debt instruments (i.e., commercial paper and government agency bonds). The Statement of Investments for the Account sets forth the general financial terms of these instruments, along with their fair values, as

50 | ProspectusTIAA Real Estate Account

determined in accordance with procedures described in Note 1 to the Account’s financial statements. Note that the Account does not currently invest in derivative financial instruments.

The Account’s investments in marketable securities and mortgage loans receivable are subject to the following general risks:


	•	Financial Risk — The risk, for debt securities, that the issuer will not be able to pay principal and interest when due and, for common or preferred stock, that the issuer’s current earnings will fall or that its overall financial soundness will decline, reducing the security’s value.

	•	Market Risk — The risk that the Account’s investments will experience price volatility due to changing conditions in the financial markets and, particularly for debt securities, changes in overall interest rates.

	•	Interest Rate Volatility — The risk that interest rate volatility may affect the Account’s current income from an investment.

In addition, mortgage-backed securities are subject to prepayment risk or extension risk (i.e., the risk that borrowers will repay the loans earlier or later than anticipated). If the underlying mortgage assets experience faster than anticipated repayments of principal, the Account could fail to recoup some or all of its initial investment in these securities, since the original price paid by the Account was based in part on assumptions regarding the receipt of interest payments. If the underlying mortgage assets are repaid later than anticipated, the Account could lose the opportunity to reinvest the anticipated cash flows at a time when interest rates might be rising. The rate of prepayment depends on a variety of geographic, social and other functions, including prevailing market interest rates and general economic factors. The market value of these securities is also highly sensitive to changes in interest rates. Note that the potential for appreciation, which could otherwise be expected to result from a decline in interest rates, may be limited by any increased prepayments. These securities may be harder to sell than other securities.

In addition to these risks, real estate equity securities and mortgage-backed securities are subject to many of the same general risks inherent in real estate investing, making mortgage loans and investing in debt securities. For more information on the risks associated with all of the Account’s investments, see the Account’s most recent prospectus.

TIAA Real Estate AccountProspectus | 51

VALUING THE ACCOUNT’S ASSETS

We value the Account’s assets as of the close of each valuation day by taking the sum of:


	•	the value of the Account’s cash, cash equivalents, and short-term and other debt instruments

	•	the value of the Account’s other securities investments and other assets

	•	the value of the individual real properties and other real estate-related investments owned by the Account

	•	an estimate of the net operating income accrued by the Account from its properties and other real estate-related investments and then reducing it by the Account’s liabilities, including the daily investment management fee and certain other expenses attributable to operating the Account. See “Expense Deductions” on page 54.

VALUING REAL ESTATE INVESTMENTS

Valuing Real Property:Individual real properties will be valued initially at their purchase prices. Prices include all expenses related to purchase, such as acquisition fees, legal fees and expenses, and other closing costs. We could use a different value in appropriate circumstances.

After this initial valuation, an independent appraiser, approved by the independent fiduciary, will value properties at least once a year. The independent fiduciary can require additional appraisals if it believes that a property has changed materially or otherwise to assure that the Account is valued correctly.

Quarterly, we will conduct an internal review of each of the Account’s properties. We’ll adjust a valuation if we believe that the value of the property has changed since the previous valuation. We’ll continue to use the revised value to calculate the Account’s net asset value until the next review or appraisal. However, we can adjust the value of a property in the interim to reflect what we believe are actual changes in property value.

The Account’s net asset value will include the current value of any note receivable (an amount that someone else owes the Account) from selling a real estate-related investment. We’ll estimate the value of the note by applying a discount rate appropriate to then-current market conditions.

Development properties initially will be valued at the Account’s cost, and the value will be adjusted as additional development costs are incurred. Once a property receives a certificate of occupancy, within one year from the initial funding by the Account, or the property is substantially leased, whichever is earlier, the property will be appraised by an independent appraiser, approved by the independent fiduciary. We may also have the properties independently appraised earlier if circumstances warrant.

The Account may, at times, value properties purchased together as a portfolio as a single asset, to the extent we believe that the property will likely be sold as

52 | ProspectusTIAA Real Estate Account

one portfolio. The value assigned to the portfolio as a whole may be more or less than the valuation of each property individually.

Because of the nature of real estate assets, the Account’s net asset value won’t necessarily reflect the true or realizable value of its real estate assets (i.e., what the Account would receive if it sold them).

Valuing Real Property Encumbered by Debt:In general, when we value an Account property subject to a mortgage, the Account’s net asset value will include the value of the Account’s interest in the property (with the property valued as described above). The value of the mortgage will be recorded as a liability based on a valuation performed independently of the property.

Valuing Conventional Mortgages:Individual mortgage loans made by the Account will be valued initially at their face amount. Thereafter, quarterly, we’ll value the Account’s fixed interest mortgage loans by discounting payments of principal and interest to their present value (using a rate at which commercial lenders would make similar mortgage loans). We’ll also use this method for foreign mortgages with conventional terms. We can adjust the mortgage value more frequently if circumstances require it. Floating variable rate mortgages will generally be valued at their face amount, although we may adjust these values as market conditions dictate.

Valuing Participating Mortgages:Individual mortgages will initially be valued at their face amount. Thereafter, quarterly, we’ll estimate the values of the participating mortgages by making various assumptions about occupancy rates, rental rates, expense levels, and other things. We’ll use these assumptions to project the cash flow and anticipated sale proceeds from each investment over the term of the loan, or sometimes over a shorter period. To calculate sale proceeds, we’ll assume that the real property underlying each investment will be sold at the end of the period used in the valuation at a price based on market assumptions for the time of the projected sale. We’ll then discount the estimated cash flows and sale proceeds to their present value (using rates appropriate to then-current market conditions).

Net Operating Income:The Account usually receives operating income from its investments intermittently, not daily. In fairness to participants, we estimate the Account’s net operating income rather than applying it when we actually receive it, and assume that the Account has earned (accrued) a proportionate amount of that estimated amount daily. You bear the risk that, until we adjust the estimates when we receive actual income reports, the Account could be under- or over-valued.

Every year, we prepare a month-by-month estimate of the revenues and expenses (estimated net operating income) for each of the Account’s properties. Each day, we add the appropriate fraction of the estimated net operating income for the month to the Account’s net asset value.

Every month, the Account receives a report of the actual operating results for the prior month for each property (actual net operating income). We then recognize the actual net operating income on the accounting records of the

TIAA Real Estate AccountProspectus | 53

Account and adjust the outstanding daily accrued receivable accordingly. As the Account actually receives cash from a property, we’ll adjust the daily accrued receivable and other accounts appropriately.

Adjustments:We can adjust the value of an investment if we believe events or market conditions (such as a borrower’s or tenant’s default) have affected how much the Account could receive if it sold the investment. We may not always be aware of each event that might require a valuation adjustment, and because our evaluation is based on subjective factors, we may not in all cases make adjustments where changing conditions could affect the value of an investment.

The independent fiduciary will need to approve adjustments to any valuation of one or more properties that


	•	is made within three months of the annual independent appraisal or

	•	results in an increase or decrease of:

	•	more than 6 percent of the value of any of the Account’s properties since the last independent annual appraisal

	•	more than 2 percent in the value of the Account since the prior month or

	•	more than 4 percent in the value of the Account within any quarter.

Right to Change Valuation Methods:If we decide that a different valuation method would reflect the value of a real estate-related investment more accurately, we may use that method if the independent fiduciary consents. Changes in TIAA’s valuation methods could change the Account’s net asset value and change the values at which participants purchase or redeem Account interests.

VALUING OTHER INVESTMENTS (INCLUDING CERTAIN REAL ESTATE-RELATED INVESTMENTS)

Debt Securities and Money Market Instruments:We value debt securities (excluding money market instruments) for which market quotations are readily available based on the most recent bid price or the equivalent quoted yield for such securities (or those of comparable maturity, quality and type). We derive these values utilizing an independent pricing service, except when we believe the prices do not accurately reflect the security’s fair value. We value money market instruments with maturities of one year or less in the same manner as debt securities, or derive them from a pricing matrix that has various types of money market instruments along one axis and various maturities along the other. All debt securities may also be valued at fair value as determined in good faith by the Investment Committee of the TIAA Board of Trustees.

Equity Securities:We value equity securities (including REITs) listed or traded on the New York Stock Exchange or the American Stock Exchange at their last sale price on the valuation day. If no sale is reported that day, we use the mean of the closing bid and asked prices. Equity securities listed or traded on any other exchange are valued in a comparable manner on the principal exchange where traded.

We value equity securities traded on the NASDAQ Stock Markets at the Nasdaq Official Closing Price on the valuation day. If no sale is reported that day,

54 | ProspectusTIAA Real Estate Account

we use the mean of the closing bid and asked prices. Other U.S. over-the-counter equity securities are valued at the mean of the closing bid and asked prices.

Mortgage-Backed Securities:We value mortgage-backed securities in the same manner in which we value debt securities, as described above.

Foreign Securities:To value investments traded on a foreign exchange or in foreign markets, we use their closing values under the generally accepted valuation method in the country where traded, as of the valuation date. We convert this to U.S. dollars at the exchange rate in effect on the valuation day.

Investments Lacking Current Market Quotations:We value securities or other assets for which current market quotations are not readily available at fair value as determined in good faith under the direction of the Investment Committee of TIAA’s Board of Trustees and in accordance with the responsibilities of TIAA’s Board as a whole. In evaluating fair value for the Account’s interest in certain commingled investment vehicles, the Account will generally look to the value periodically assigned to interests by the issuer. When possible, the Account will seek to have input in formulating the issuer’s valuation methodology.

EXPENSE DEDUCTIONS

Deductions are made each valuation day from the net assets of the Account for various services required to manage investments, administer the Account and the contracts, and to cover certain risks borne by TIAA. Services are performed at cost by TIAA and TIAA-CREF Individual & Institutional Services, LLC (“Services”), a wholly owned subsidiary of TIAA. Because services are provided at cost, we expect that expense deductions will be relatively low. TIAA guarantees that in the aggregate, the expense charges will never be more than 2.50% of average net assets per year.

The current annual estimated expense deductions are:


Type of Expense Deduction	Estimated Percent of Net Assets Annually		Services Performed

Investment Management		0.190%	For TIAA’s investment advice, portfolio accounting, custodial services, and similar services, including independent fiduciary and appraisal fees

Administration		0.275%	For Services’ administrative services, such as allocating premiums and paying annuity income

Distribution		0.080%	For Services’ expenses related to distributing the annuity contracts

Mortality and Expense Risk		0.050%	For TIAA’s bearing certain mortality and expense risks

Liquidity Guarantee		0.035%	For TIAA’s liquidity guarantee

Total Annual Expense Deduction		0.630%	For total services to the Account

TIAA Real Estate Account Prospectus | 55

After the end of every quarter, we reconcile how much we deducted as discussed above with the expenses the Account actually incurred. If there is a difference, we add it to or deduct it from the Account in equal daily installments over the remaining days in the following quarter. Since our at-cost deductions are based on projections of Account assets and overall expenses, the size of any adjusting payments will be directly affected by how different our projections are from the Account’s actual assets or expenses. While our projections of Account asset size (and resulting expense fees) are based on our best estimates, the size of the Account’s assets can be affected by many factors, including premium growth, participant transfers into or out of the Account, and any changes in the value of portfolio holdings. Historically, the adjusting payments have resulted in both upward and downward adjustments to the Account’s expense deductions for the following quarter.

TIAA’s Board of Trustees can revise the deduction rates from time to time to keep deductions as close as possible to actual expenses.

Currently there are no deductions from premiums or withdrawals, but we might change this in the future. Property expenses, brokers’ commissions, transfer taxes, and other portfolio expenses are charged directly to the Account.

EMPLOYER PLAN FEE WITHDRAWALS

Your employer may, in accordance with the terms of your plan, and with TIAA’s approval, withdraw amounts from your Real Estate Account accumulation under your Retirement Choice or Retirement Choice Plus contract, and, on a limited basis, under your GA, GSRA, GA or Keogh contract, to pay fees associated with the administration of the plan. These fees are separate from the expense deductions of the Account, and are not included for purposes of TIAA’s guarantee that the total annual expense deduction of the Account will not exceed the rate 2.50% of average net assets per year.

The amount and the effective date of an employer plan fee withdrawal will be in accordance with the terms of your plan. TIAA will determine all values as of the end of the effective date. An employer plan fee withdrawal cannot be revoked after its effective date. Each employer plan fee withdrawal will be made on a pro-rata basis from all your available TIAA and CREF accounts. An employer plan fee withdrawal reduces the accumulation from which it is paid by the amount withdrawn.

If allowed by your contract, your employer may also charge a fee on your account to pay fees associated with administering the plan.

CERTAIN RELATIONSHIPS WITH TIAA

As noted elsewhere in this prospectus, TIAA’s general account plays a significant role in operating the Real Estate Account, including providing a liquidity guarantee, and investment advisory and other services. In addition,

56 | Prospectus TIAA Real Estate Account

Services, a wholly-owned subsidiary of TIAA, provides administration and distribution services for the Account.

Liquidity Guarantee.As noted above under “Establishing and Managing the Account — The Role of TIAA — Liquidity Guarantee,” if the Account’s liquid assets and its cash flow from operating activities and participant transactions are insufficient to fund redemption requests, TIAA’s general account has agreed to purchase liquidity units. TIAA thereby guarantees that a participant can redeem accumulation units at their then-current daily net asset value. For the years ended December 31, 2006, December 31, 2005 and December 31, 2004, the Account expensed $3,905,051, $3,170,017 and $1,868,733, respectively, for this liquidity guarantee from TIAA through a daily deduction from the net assets of the Account.

Investment Advisory and Administrative Services/Certain Risks Borne by TIAA.As noted above under “Expense Deductions,” 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. These services are performed at cost by TIAA and Services. Deductions are also made each valuation day to cover mortality and expense risks borne by TIAA.

For the years ended December 31, 2006, December 31, 2005 and December 31, 2004, the Account expensed $26,899,307, $19,603,225 and $14,393,388, respectively, for investment management services and $6,931,833, $6,196,549 and $4,093,858, respectively, for mortality and expense risks provided/borne by TIAA. For the same period, the Account expensed $45,712,473, $27,130,406 and $16,372,446, respectively, for administrative and distribution services provided by Services.

THE CONTRACTS

TIAA offers the Real Estate Account as a variable option for the annuity contracts described below. Some employer plans may not offer the Real Estate Account as an option for RA, GRA, GSRA, Retirement Choice, Retirement Choice Plus, or Keogh contracts. The College Retirement Equities Fund (CREF) is a companion organization to TIAA. A companion CREF contract may have been issued to you when you received the TIAA contract offering the Account. For more information about the CREF annuity contracts, the TIAA traditional annuity, the TIAA Access variable annuity accounts, other TIAA separate accounts offered from time to time and particular mutual funds and investment options offered under the terms of your plan, please see the applicable contracts and respective prospectuses for those investment options.

Importantly, neither TIAA nor CREF guarantee the investment performance of the Account nor do they guarantee the value of your units at any time.

RA (RETIREMENT ANNUITY) AND GRA (GROUP RETIREMENT ANNUITY)

RA and GRA contracts are used mainly for employee retirement plans. RA contracts are issued directly to you. GRA contracts, which are group contracts, are issued through an agreement between your employer and TIAA.

TIAA Real Estate Account Prospectus | 57

Depending on the terms of your plan, RA and GRA premiums can be paid by your employer, you, or both. If you’re paying some of or the entire periodic premium, your contributions can be in either pre-tax dollars by salary reduction or after-tax dollars by payroll deduction. Your employer may offer you the option of making contributions in the form of after-tax Roth-style contributions, though you won’t be able to take tax deductions for these contributions. You can also transfer funds from another investment choice under your employer’s plan to your contract. Ask your employer for more information about these contracts.

SRA (SUPPLEMENTAL RETIREMENT ANNUITY) AND GSRA (GROUP SUPPLEMENTAL RETIREMENT ANNUITY)

These are for voluntary tax-deferred annuity (TDA) plans and 401(k) plans. SRA contracts are issued directly to you. GSRA contracts, which are group contracts, are issued through an agreement between your employer and TIAA. Generally, your employer pays premiums in pre-tax dollars through salary reduction. Your employer may offer you the option of making contributions in the form of after-tax Roth-style contributions, though you won’t be able to take tax deductions for these contributions. Although you can’t pay premiums directly, you can transfer amounts from other TDA plans.

RETIREMENT CHOICE/RETIREMENT CHOICE PLUS ANNUITIES

These are very similar in operation to the GRAs and GSRAs, respectively, except that they are issued directly to your employer or your plan’s trustee. Among other rights, the employer retains the right to transfer accumulations under these contracts to alternate funding vehicles.

CLASSIC IRA AND ROTH IRA

Classic IRAs are individual contracts issued directly to you. You and your spouse can each open a Classic IRA with an annual contribution of up to $4,000 or by rolling over funds from another IRA or retirement plan, if you meet our eligibility requirements. If you are age 50 or older, you may contribute up to $5,000. The combined limit for your contributions to a Classic IRA and a Roth IRA for a single year is $4,000, or $5,000 if you are age 50 or older, excluding rollovers. (The dollar limits listed are for 2007; different dollar limits may apply in future years.) We can’t issue you a joint contract.

Roth IRAs are also individual contracts issued directly to you. You or your spouse can each open a Roth IRA with an annual contribution up to $4,000 or with a rollover from another IRA or a Classic IRA issued by TIAA if you meet our eligibility requirements. If you are age 50 or older you may contribute up to $5,000. The combined limit for your contributions to a Classic IRA and a Roth IRA for a single year is $4,000, or $5,000 if you are age 50 or older, excluding rollovers. (The dollar limits listed are for 2007; different dollar limits may apply in future years.) We can’t issue you a joint contract.

58 | Prospectus TIAA Real Estate Account

Your employer may offer SEP IRAs (Simplified Employee Retirement Plans), which are subject to different rules.

Classic and Roth IRAs may together be referred to as “IRAs” in this prospectus.

GA (GROUP ANNUITY) AND INSTITUTIONALLY OWNED GSRA

These are used exclusively for employee retirement plans and are issued directly to your employer or your plan’s trustee. Your employer pays premiums directly to TIAA (you can’t pay the premiums directly to TIAA) and your employer or the plan’s trustee may control the allocation of contributions and transfers to and from these contracts including withdrawing completely from the Account. If a GA or GSRA contract is issued pursuant to your plan, the rules relating to transferring and withdrawing your money, receiving any annuity income or death benefits, and the timing of payments may be different, and are determined by your plan. Ask your employer or plan administrator for more information.

KEOGHS

TIAA also offers contracts for Keogh plans. If you are a self-employed individual who owns an unincorporated business, you can use our Keogh contracts for a Keogh plan, and cover common law employees, subject to our eligibility requirements.

ATRA (AFTER-TAX RETIREMENT ANNUITY)

The after-tax retirement annuities (ATRA) are individual non-qualified deferred annuity contracts, issued to participants who are eligible and would like to remit personal premiums under the contractual provisions of their RA contract. To be eligible, you must have an active and premium-paying or paid up RA contract.

Note that the tax rules governing these non-qualified contracts differ significantly from the treatment of qualified contracts. See “Taxes,” on page 71 for more information.

IRA AND KEOGH ELIGIBILITY

You or your spouse can set up a TIAA Classic or Roth IRA or a Keogh if you’re a current or retired employee or trustee of an eligible institution, or if you own a TIAA or CREF annuity or a TIAA individual insurance contract. To be considered a retired employee for this purpose, an individual must be at least 55 years old and have completed at least three years of service at an eligible institution. In the case of partnerships, at least half the partners must be eligible individuals and the partnership itself must be primarily engaged in education or research. Eligibility may be restricted by certain income limits on opening Roth IRA contracts.

TIAA Real Estate Account Prospectus | 59

STATE REGULATORY APPROVAL

State regulatory approval may be pending for certain of these contracts and they may not currently be available in your state.

STARTING OUT

Generally, we’ll issue you a TIAA contract when we receive your completed application or enrollment form. Your premiums will be credited to the Real Estate Account as of the business day we receive them.

If we receive premiums from your employer before your application or enrollment form, we’ll generally invest the money in the CREF Money Market Account until we receive your form. (Some employer plans may require that we send such premiums back to the employer or have a different default.) We’ll transfer the appropriate amount from the CREF Money Market Account and credit it to the Real Estate Account as of end of the business day we receive your completed form.

If the allocation instructions on your application or enrollment form are incomplete, violate plan restrictions, or total more than 100 percent, we’ll invest your premiums in the CREF Money Market Account (Some employer plans may have a different default). After we receive a complete and correct application, we’ll follow your allocation instructions for future premiums. However, any amounts that we credited to the CREF Money Market Account before we received correct instructions will be transferred to the Real Estate Account only on request, and will be credited as of the business day we receive that request.

TIAA generally doesn’t currently restrict the amount or frequency of premiums to your contract, although we may in the future. Your employer’s retirement plan may limit your premium amounts, while the Internal Revenue Code limits the total annual premiums you may invest in plans qualified for favorable tax treatment.

If you want to directly contribute personal premiums under the contractual provisions of your RA contract, you will be issued an ATRA contract. Premiums and any earnings on the ATRA contract will not subject to your employer’s retirement plan.

In most cases (subject to any restriction we may impose, as described in this prospectus), TIAA will accept premiums to a contract at any time during your accumulation period. Once your first premium has been paid, your TIAA contract can’t lapse or be forfeited for nonpayment of premiums. TIAA can stop accepting premiums to contracts at any time.

Note that we cannot accept money orders or travelers checks. In addition, we will not accept a third-party check where the relationship of the payor to the account owner cannot be identified from the face of the check.

We will not be deemed to have received any premiums sent to the addresses designated for remitting premiums until the third-party service that administers

60 | Prospectus TIAA Real Estate Account

the receipt of mail through those addresses has processed the payment on our behalf.

Important Information About Procedures for Opening a New Account

To help the U.S. government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions, including us, to obtain, verify and record information that identifies each person who opens an account.

What this means for you: When you open an account, we will ask for your name, address, date of birth, social security number and other information that will allow us to identify you, such as your home telephone number. Until you provide us with the information we need, we may not be able to open an account or effect any transactions for you.

CHOOSING AMONG INVESTMENT ACCOUNTS

You can allocate all or part of your premiums to the Real Estate Account, unless your employer’s plan precludes that choice. You can also allocate premiums to TIAA’s traditional annuity, the CREF variable investment accounts, the TIAA Access variable annuity accounts, other TIAA separate accounts offered from time to time (if available under the terms of your employer’s plan) and, in some cases, certain mutual funds if the account or fund is available under your employer’s plan.

You can change your allocation choices for future premiums


	•	by writing to our home office

	•	using the TIAA-CREF Web Center’s account access feature at www.tiaa-cref.org or

	•	calling our Automated Telephone Service (24 hours a day) at 800 842-2252

THE RIGHT TO CANCEL YOUR CONTRACT

You can generally cancel any RA, SRA or GSRA contract up to 30 days after you first receive it, unless we have begun making annuity payments from it. If you already had a TIAA contract prior to investing in the Real Estate Account, you have no 30-day right to cancel the contract. To cancel, mail or deliver the contract with a signed Notice of Cancellation (available by contacting TIAA) to our home office. We’ll cancel the contract, then send the entire current accumulation to whomever sent the premiums. You bear the investment risk during this period (although some states require us to send back your entire premium without accounting for investment results).

DETERMINING THE VALUE OF YOUR INTEREST IN THE ACCOUNT — ACCUMULATION UNITS

When you pay premiums or make transfers to the Real Estate Account, you buy accumulation units. When you take a cash withdrawal, transfer from the Account, or apply funds to begin annuity income, the number of your

TIAA Real Estate Account Prospectus | 61

accumulation units decrease. We calculate how many accumulation units to credit your account with by dividing the amount you applied to the Account by its accumulation unit value at the end of the business day when we received your premium or transfer. To determine how many accumulation units to subtract for cash withdrawals and transfers, we use the accumulation unit value for the end of the business day when we receive your transaction request and all required information and documents (unless you ask for a later date). A business day ends at 4:00 p.m. Eastern time or when trading closes on the NYSE, if earlier.

The accumulation unit value reflects the Account’s investment experience (i.e., the real estate net operating income accrued, as well as dividends, interest and other income accrued), realized and unrealized capital gains and losses, as well as Account expense charges.

Calculating Accumulation Unit Values: We calculate the Account’s accumulation unit value at the end of each valuation day. To do that, we multiply the previous day’s value by the net investment factor for the Account. The net investment factor is calculated asA divided byB, whereA andB are defined as:


	A.	The value of the Account’s net assets at the end of the current valuation period, less premiums received during the current valuation period.

	B.	The value of the Account’s net assets at the end of the previous valuation period, plus the net effect of transactions made at the start of the current valuation period.

HOW TO TRANSFER AND WITHDRAW YOUR MONEY

Generally, TIAA allows you to move your money to or from the Real Estate Account in the following ways:


	•	from the Real Estate Account to a CREF investment account, a TIAA Access variable account (if available) or TIAA’s traditional annuity

	•	to the Real Estate Account from a CREF investment account, a TIAA Access variable account (if available) or TIAA’s traditional annuity (transfers from TIAA’s traditional annuity under RA, GRA or Retirement Choice contracts are subject to restrictions)

	•	from the Real Estate Account to other companies

	•	to the Real Estate Account from other companies/plans

	•	by withdrawing cash

	•	by setting up a program of automatic withdrawals or transfers

For more information regarding the transfer policies of CREF, TIAA Access or another investment option listed above, please see the respective contract, prospectus or other governing instrument.

These transactions generally must be for at least $1,000 at a time (or your entire Account accumulation, if less). These options may be limited by the terms of your

62 | Prospectus TIAA Real Estate Account

employer’s plan, by current tax law, or by the terms of your contract, as set forth below. Transfers and cash withdrawals are currently free. TIAA can place restrictions on transfers or charge fees for transfers and/or withdrawals in the future.

Transfers and cash withdrawals are effective at the end of the business day we receive your request and all required documentation. You can also choose to have transfers and withdrawals take effect at the close of any future business day. For any transfers to TIAA’s traditional annuity, the crediting rate will be the rate in effect at the close of business of the first day that you participate in TIAA’s traditional annuity, which is the next business day after the effective date of the transfer.

To request a transfer or to withdraw cash:


	•	write to TIAA’s home office at 730 Third Avenue, New York, NY 10017-3206

	•	call us at 800 842-2252 or

	•	for internal transfers, using the TIAA-CREF Web Center’s account access feature at www.tiaa-cref.org

You may be required to complete and return certain forms to effect these transactions. We can suspend or terminate your ability to transact by telephone, over the Internet, or by fax at any time, for any reason.

Before you transfer or withdraw cash, make sure you understand the possible federal and other income tax consequences. See “Taxes” on page 71.

TRANSFERS TO AND FROM OTHER TIAA-CREF ACCOUNTS

Once every calendar quarter you can transfer some or all of your accumulation in the Real Estate Account to TIAA’s traditional annuity, to another TIAA annuity offered by your employer’s plan, to one of the CREF accounts, to a TIAA Access variable annuity account or to mutual funds offered under the terms of your plan. Transfers to CREF accounts or to certain other options may be restricted by your employer’s plan.

You can also transfer some or all of your accumulation in TIAA’s traditional annuity, in your CREF accounts, TIAA Access variable annuity accounts or in the mutual funds or TIAA annuities offered under the terms of your plan to the Real Estate Account, if your employer’s plan offers the Account. Transfers from TIAA’s traditional annuity to the Real Estate Account under RA, GRA or Retirement Choice contracts can only be effected over a period of time (up to ten years) and may be subject to other limitations, as specified in your contract. Amounts held under an ATRA contract cannot be transferred to or from any retirement plan contract.

Because excessive transfer activity can hurt Account performance and other participants, we may further limit how often you transfer or otherwise modify the transfer privilege.

TRANSFERS TO OTHER COMPANIES

Generally you may transfer funds from the Real Estate Account to a company other than TIAA or CREF, subject to certain tax restrictions. This right may be limited by your employer’s plan. If your employer participates in our special

TIAA Real Estate AccountProspectus |63

transfer services program, we can make automatic monthly transfers from your RA or GRA contract to another company, and the $1,000 minimum will not apply to these transfers. Roth amounts in a 403(b) or 401(a) plan can only be rolled over to another Roth account under such plan or to a Roth IRA, as permitted by applicable law and the terms of the plans.

Under the Retirement Choice and Retirement Choice Plus contracts, your employer could transfer monies from an Account and apply it to another Account or investment option, subject to the terms of your plan, and without your consent.

TRANSFERS FROM OTHER COMPANIES/PLANS

Subject to your employer’s plan, you can usually transfer or rollover money from another 403(b), 401(a)/403(a) or governmental 457(b) retirement plan to your qualified TIAA contract. You may also rollover before-tax amounts in a Classic IRA to 403(b) plans, 401(a)/403(a) plans or eligible governmental 457(b) plans, provided such employer plans agree to accept the rollover. Similarly, you may be able to rollover funds from 401(a), 403(a), 403(b) and governmental 457(b) plans to a TIAA Classic IRA. Roth amounts in a 403(b) or 401(a) plan can only be rolled over to another Roth account under such plan or to a Roth IRA, as permitted by applicable law and the terms of the plans. Funds in a private 457(b) plan can be transferred to another private 457(b) plan only. Accumulations in private 457(b) plans may not be rolled over to a qualified plan (e.g., a 401(a) plan), a 403(b) plan, a governmental 457(b) plan or an IRA.

WITHDRAWING CASH

You may withdraw cash from your SRA, GSRA, IRA, or Keogh Real Estate Account accumulation at any time during the accumulation period, provided federal tax law permits it (see below). Real Estate Account cash withdrawals from your RA, GRA, Retirement Choice or Retirement Choice Plus accumulation may be limited by the terms of your employer’s plan and federal tax law. Normally, you can’t withdraw money from a contract if you’ve already applied that money to begin receiving lifetime annuity income. Current federal tax law restricts your ability to make cash withdrawals from your accumulation under most voluntary salary reduction agreements. Withdrawals are generally available only if you reach age 59½, leave your job, become disabled, or die, or if your employer terminates its retirement plan. If your employer’s plan permits, you may also be able to withdraw money if you encounter hardship, as defined by the IRS, but hardship withdrawals can be from contributions only, not investment earnings. You may be subject to a 10 percent penalty tax if you make a withdrawal before you reach age 59½, unless an exception applies to your situation.

Under current federal tax law, you are not permitted to withdraw from 457(b) plans earlier than the calendar year in which you reach age 70½ or leave your job or are faced with an unforeseeable emergency (as defined by law). There are generally no early withdrawal tax penalties if you withdraw under any of these circumstances (i.e., no 10% tax on distributions prior to age 59½).

64|Prospectus TIAA Real Estate Account

Special rules and restrictions apply to Classic and Roth IRAs.

SYSTEMATIC WITHDRAWALS AND TRANSFERS

If your employer’s plan allows, you can set up a program to make cash withdrawals or transfers automatically by specifying that we withdraw or transfer from your Real Estate Account accumulation any fixed number of accumulation units, dollar amount, or percentage of accumulation until you tell us to stop or until your accumulation is exhausted. Currently, the program must be set up so that at least $100 is automatically withdrawn or transferred at a time.

WITHDRAWALS TO PAY ADVISORY FEES

You can set up a program to have monies withdrawn directly from your retirement plan or IRA accumulations to pay your financial advisor, if your employer’s plan allows. You will be required to complete and return certain forms to effect these withdrawals, including how and from which accounts you want these monies to be withdrawn. Before you set up this program, make sure you understand the possible tax consequences of these withdrawals. See the discussion under “Taxes” below.

POSSIBLE RESTRICTIONS ON PREMIUMS AND TRANSFERS TO THE ACCOUNT

From time to time we may stop accepting premiums for and/or transfers into the Account. We might do so if, for example, we can’t find enough appropriate real estate-related investment opportunities at a particular time. Whenever reasonably possible, we will notify you before we decide to restrict premiums and/or transfers. However, because we may need to respond quickly to changing market conditions, we reserve the right to stop accepting premiums and/or transfers at any time without prior notice.

If we decide to stop accepting premiums into the Account, amounts that would otherwise be allocated to the Account will be allocated to the CREF Money Market Account (or to a different default account under the terms of your employer’s plan) instead, unless you give us other allocation instructions. We will not transfer these amounts out of the CREF Money Market Account (or such different default account) when the restriction period is over, unless you request that we do so. However, we will resume allocating premiums to the Account on the date we remove the restrictions.

ADDITIONAL LIMITATIONS

Federal law requires us to obtain, verify and record information that identifies each person who opens an account. Until we receive the information we need, we may not be able to effect transactions for you. Furthermore, if we are unable to verify your identity, or that of another person authorized to act on your behalf, or if we believe that we have identified potentially criminal activity, we reserve the right to take such action as we deem appropriate, which may include closing your account.

TIAA Real Estate AccountProspectus |65

MARKET TIMING POLICY

There are participants who may try to profit from transferring money back and forth among the CREF accounts, the Real Estate Account, the TIAA Access variable accounts and mutual funds available under the terms of your plan, in an effort to “time” the market. As money is shifted in and out of these accounts, the accounts or funds incur transaction costs, including, among other things, expenses for buying and selling securities. These costs are borne by all participants, including long-term investors who do not generate the costs. In addition, market timing can interfere with efficient portfolio management and cause dilution, if timers are able to take advantage of pricing inefficiencies. To discourage market-timing activity, transfers from the Account to a CREF or TIAA account are limited to once every calendar quarter. In addition, participants who make more than three transfers out of any TIAA or CREF account or any of the TIAA-CREF mutual funds available under your plan (other than the CREF Money Market Account) in a calendar month will be advised that if this transfer frequency continues, we will suspend their ability to make telephone, fax and Internet transfers.

We have the right to modify our policy at any time without advance notice.

RECEIVING ANNUITY INCOME

THE ANNUITY PERIOD IN GENERAL

You can receive an income stream from all or part of your Real Estate Account accumulation. Unless you opt for a lifetime annuity, generally you must be at least age 59½ to begin receiving annuity income payments from your annuity contract free of a 10 percent early distribution penalty tax. Your employer’s plan may also restrict when you can begin income payments. Under the minimum distribution rules of the Internal Revenue Code, you generally must begin receiving some payments from your contract shortly after you reach the later of age 70½ or you retire. For more information, see “Minimum Distribution Requirements,” on page 73. Also, you can’t begin a one-life annuity after you reach age 90, nor may you begin a two-life annuity after either you or your annuity partner reach age 90.

Your income payments may be paid out from the Real Estate Account through a variety of income options. You can pick a different income option for different portions of your accumulation, but once you’ve started payments you usually can’t change your income option or annuity partner for that payment stream.

Usually income payments are monthly. You can choose quarterly, semi-annual, and annual payments as well. (TIAA has the right to not make payments at any interval that would cause the initial payment to be less than $100.) We’ll send your payments by mail to your home address or, on your request, by mail or electronic funds transfer to your bank.

Your initial income payments are based on the value of your accumulation on the last valuation day before the annuity starting date. Your payments change

66 | Prospectus TIAA Real Estate Account

after the initial payment based on the Account’s investment experience and the income change method you choose.

There are two income change methods for annuity payments: annual and monthly. Under the annual income change method, payments from the Account change each May 1, based on the net investment results during the prior year (April 1 through March 31). Under the monthly income change method, payments from the Account change every month, based on the net investment results during the previous month. For the formulas used to calculate the amount of annuity payments, see page 69. The total value of your annuity payments may be more or less than your total premiums.

ANNUITY STARTING DATE

Ordinarily, annuity payments begin on the date you designate as your annuity starting date, provided we have received all documentation necessary for the income option you’ve picked. If something’s missing, we’ll defer your annuity starting date until we receive it. Your first annuity check may be delayed while we process your choice of income options and calculate the amount of your initial payment. Any premiums received within 70 days after payments begin may be used to provide additional annuity income. Premiums received after 70 days will remain in your accumulating annuity contract until you give us further instructions. Ordinarily, your first annuity payment can be made on any business day between the first and twentieth of any month.

INCOME OPTIONS

Both the number of annuity units you purchase and the amount of your income payments will depend on which income option you pick. Your employer’s plan, tax law and ERISA may limit which income options you can use to receive income from an RA or GRA, GSRA, Retirement Choice, Retirement Choice Plus or Keogh contract. Ordinarily you’ll choose your income options shortly before you want payments to begin, but you can make or change your choice any time before your annuity starting date.

All Real Estate Account income options provide variable payments, and the amount of income you receive depends in part on the investment experience of the Account. The current options are:


	•	One-Life Annuity with or without Guaranteed Period: Pays income as long as you live. If you opt for a guaranteed period (10, 15 or 20 years) and you die before it’s over, income payments will continue to your beneficiary until the end of the period. If you don’t opt for a guaranteed period, all payments end at your death — so that it’s possible for you to receive only one payment if you die less than a month after payments start. (The 15-year guaranteed period is not available under all contracts.)

	•	Annuity for a Fixed Period: Pays income for any period you choose from 5 to 30 years (2 to 30 years for RAs, SRAs and GRAs). (This option is not available under all contracts.)

TIAA Real Estate Account Prospectus | 67


	•	Two-Life Annuities: Pays income to you as long as you live, then continues at either the same or a reduced level for the life of your annuity partner. There are three types of two-life annuity options, all available with or without a guaranteed period — Full Benefit to Survivor, Two-Thirds Benefit to Survivor, and a Half-Benefit to Annuity Partner. Under the Two-Thirds Benefit to Survivor option, payments to you will be reduced upon the death of your annuity partner.

	•	Minimum Distribution Option (MDO) Annuity: Generally available only if you must begin annuity payments under the Internal Revenue Code minimum distribution requirements. (Some employer plans allow you to elect this option earlier — contact TIAA for more information.) The option pays an amount designed to fulfill the distribution requirements under federal tax law. (The option is not available under all contracts.)

You must apply your entire accumulation under a contract if you want to use the MDO annuity. It is possible that income under the MDO annuity will cease during your lifetime. Prior to age 90, and subject to applicable plan and legal restrictions, you can apply any remaining part of an accumulation applied to the MDO annuity to any other income option for which you’re eligible. Using an MDO won’t affect your right to take a cash withdrawal of any accumulation not yet distributed. This pay-out annuity is not available under the Retirement Choice or Retirement Choice Plus contracts. Instead, required minimum distributions will be paid directly from these contracts pursuant to the terms of your employer’s plan.

For any of the income options described above, current federal tax law says that your guaranteed period can’t exceed the joint life expectancy of you and your beneficiary or annuity partner. Other income options may become available in the future, subject to the terms of your retirement plan and relevant federal and state laws. For more information about any annuity option, please contact us.

Receiving Lump Sum Payments (Retirement Transition Benefit):If your employer’s plan allows, you may be able to receive a single sum payment of up to 10 percent of the value of any part of an accumulation being converted to annuity income on the annuity starting date. (This does not apply to IRAs.) Of course, if your employer’s plan allows cash withdrawals, you can take a larger amount (up to 100 percent) of your Real Estate Account accumulation as a cash payment. The retirement transition benefit will be subject to current federal income tax requirements and possible early distribution penalties. See “Taxes” on page 71.

If you haven’t picked an income option when the annuity starting date arrives for your contract, TIAA usually will assume you want theone-life annuity with 10-year guaranteed periodif you’re unmarried, subject to the terms of your plan, paid from TIAA’s traditional annuity. If you’re married, we may assume for youa survivor annuity with half-benefit to annuity partner with a 10-Year guaranteed period,with your spouse as your annuity partner, paid from TIAA’s traditional annuity. If you haven’t picked an income option when the annuity starting date arrives for your IRA, we may assume you want the minimum distribution option annuity.

68 | Prospectus TIAA Real Estate Account

TRANSFERS DURING THE ANNUITY PERIOD

After you begin receiving annuity income, you can transfer all or part of the future annuity income payable once each calendar quarter (i) from the Real Estate Account into a “comparable annuity” payable from a CREF or TIAA account or TIAA’s traditional annuity, or (ii) from a CREF account into a comparable annuity payable from the Real Estate Account. Comparable annuities are those which are payable under the same income option, and have the same first and second annuitant, and remaining guaranteed period.

We’ll process your transfer on the business day we receive your request. You can also choose to have a transfer take effect at the close of any future business day. Transfers under the annual income payment method will affect your annuity payments beginning on the May 1 following the March 31 which is on or after the effective date of the transfer. Transfers under the monthly income payment method and all transfers into TIAA’s traditional annuity will affect your annuity payments beginning with the first payment due after the monthly payment valuation day that is on or after the transfer date. You can switch between the annual and monthly income change methods, and the switch will go into effect on the following March 31.

ANNUITY PAYMENTS

The amount of annuity payments we pay you or your beneficiary (annuitant) will depend upon the number and value of the annuity units payable. The number of annuity units is first determined on the day before the annuity starting date. The amount of the annuity payments will change according to the income change method chosen.

Under the annual income change method, the value of an annuity unit for payments is redetermined on March 31 of each year — the payment valuation day. Annuity payments change beginning May 1. The change reflects the net investment experience of the Real Estate Account. The net investment experience for the twelve months following each March 31 revaluation will be reflected in the following year’s value.

Under the monthly income change method, the value of an annuity unit for payments is determined on the payment valuation day, which is the 20th day of the month preceding the payment due date or, if the 20th is not a business day, the preceding business day. The monthly changes in the value of an annuity unit reflect the net investment experience of the Real Estate Account. The formulas for calculating the number and value of annuity units payable are described below.

Calculating the Number of Annuity Units Payable:When a participant or a beneficiary converts the value of all or a portion of his or her accumulation into an income-paying contract, the number of annuity units payable from the Real Estate Account under an income change method is determined by dividing the value of the Account accumulation to be applied to provide the annuity payments by the product of the annuity unit value for that income change method and an annuity factor. The annuity factor as of the annuity starting date is the value of an annuity

TIAA Real Estate Account Prospectus | 69

in the amount of $1.00 per month beginning on the first day such annuity units are payable, and continuing for as long as such annuity units are payable.

The annuity factor will reflect interest assumed at the effective annual rate of 4 percent, and the mortality assumptions for the person(s) on whose life (lives) the annuity payments will be based. Mortality assumptions will be based on the then-current settlement mortality schedules for this Account. Annuitants bear no mortality risk under their contracts — actual mortality experience will not reduce annuity payments after they have started. TIAA may change the mortality assumptions used to determine the number of annuity units payable for any future accumulations converted to provide annuity payments.

The number of annuity units payable under an income change method under your contract will be reduced by the number of annuity units you transfer out of that income change method under your contract. The number of annuity units payable will be increased by any internal transfers you make to that income change method under your contract.

Value of Annuity Units:The Real Estate Account’s annuity unit value is calculated separately for each income change method for each business day and for the last calendar day of each month. The annuity unit value for each income change method is determined by updating the annuity unit value from the previous valuation day to reflect the net investment performance of the Account for the current valuation period relative to the 4 percent assumed investment return. In general, your payments will increase if the performance of the Account is greater than 4 percent and decrease if the value is less than 4 percent. The value is further adjusted to take into account any changes expected to occur in the future at revaluation either once a year or once a month, assuming the Account will earn the 4 percent assumed investment return in the future.

The initial value of the annuity unit for a new annuitant is the value determined as of the day before annuity payments start.

For participants under the annual income change method, the value of the annuity unit for payment remains level until the following May 1. For those who have already begun receiving annuity income as of March 31, the value of the annuity unit for payments due on and after the next succeeding May 1 is equal to the annuity unit value determined as of such March 31.

For participants under the monthly income change method, the value of the annuity unit for payments changes on the payment valuation day of each month for the payment due on the first of the following month.

TIAA reserves the right, subject to approval by the Board of Trustees, to modify the manner in which the number and/or value of annuity units is calculated in the future.

70 | Prospectus TIAA Real Estate Account

DEATH BENEFITS

AVAILABILITY; CHOOSING BENEFICIARIES

TIAA may pay death benefits if you or your annuity partner dies, which may be subject to the terms of your employer’s plan. When you purchase your annuity contract, you name one or more beneficiaries to receive the death benefit if you die. You can change your beneficiaries anytime before you die, and, unless you instruct otherwise, your annuity partner can do the same after your death.

YOUR SPOUSE’S RIGHTS

Your choice of beneficiary for death benefits may, in some cases, be subject to the consent of your spouse. Similarly, if you are married at the time of your death, federal law may require a portion of the death benefit be paid to your spouse even if you have named someone else as beneficiary. If you die without having named any beneficiary, any portion of your death benefit not payable to your spouse will go to your estate.

AMOUNT OF DEATH BENEFIT

If you die during the accumulation period, the death benefit is the amount of your accumulation. If you and your annuity partner die during the annuity period while payments are still due under a fixed-period annuity or for the remainder of a guaranteed period, the death benefit is the value of the remaining guaranteed payments.

PAYMENT OF DEATH BENEFIT

To authorize payment and pay a death benefit, we must have received all necessary forms and documentation, including proof of death and the selection of the method of payment.

METHODS OF PAYMENT OF DEATH BENEFITS

Generally, you can choose for your beneficiary the method we’ll use to pay the death benefit, but few participants do this. If you choose a payment method, you can also block your beneficiaries from changing it. Most people leave the choice to their beneficiaries. We can block any choice if its initial payment is less than $25. If death occurs while your contract is in the accumulation stage, in most cases we can pay the death benefit using the TIAA-CREF Savings & Investment Plan. We won’t do this if you preselected another option or if the beneficiary elects another option. Some beneficiaries aren’t eligible for the TIAA-CREF Savings & Investment Plan. If your beneficiary isn’t eligible and doesn’t specifically tell us to start paying death benefits within a year of your death, we can start making payments to them over five years using the fixed-period annuity method of payment.

Payments During the Accumulation Period:Currently, the available methods of payment for death benefits from funds in the accumulation period are:

TIAA Real Estate Account Prospectus | 71


	•	Single-Sum Payment,in which the entire death benefit is paid to your beneficiary at once;

	•	One-Life Annuity with or without Guaranteed Period,in which the death benefit is paid monthly for the life of the beneficiary or through the guaranteed period;

	•	Annuity for a Fixed Period of 5 to 30 years (not available under Retirement Choice or Retirement Choice Plus),in which the death benefit is paid for a fixed period;

	•	Accumulation-Unit Deposit Option,which pays a lump sum at the end of a fixed period, ordinarily two to five years, during which period the accumulation units deposited participate in the Account’s investment experience (generally the death benefit value must be at least $5,000); (This option is not available under all contracts) and

	•	Minimum Distribution Option,which automatically pays income according to the Internal Revenue Code’s minimum distribution requirements (not available under Retirement Choice or Retirement Choice Plus). It operates in much the same way as the MDO annuity income option. It’s possible, under this method, that your beneficiary won’t receive income for life.

Death benefits are usually paid monthly (unless you chose a single-sum method of payment), but your beneficiary can switch them to quarterly, semi-annual, or annual payments.

Payments During the Annuity Period:If you and your annuity partner die during the annuity period, your beneficiary can choose to receive any remaining guaranteed periodic payments due under your contract. Alternatively, your beneficiary can choose to receive the commuted value of those payments in a single sum unless you have indicated otherwise. The amount of the commuted value will be different than the total of the periodic payments that would otherwise be paid.

Ordinarily, death benefits are subject to federal estate tax. Generally, if taken as a lump sum, death benefits would be taxed like complete withdrawals. If taken as annuity benefits, death benefits would be taxed like annuity payments. For more information on death benefits, see the discussion under “Taxes” below, or for further detail, contact TIAA.

TAXES

This section offers general information concerning federal taxes. It doesn’t cover every situation. Tax treatment varies depending on the circumstances, and state and local taxes may also be involved. For complete information on your personal tax situation, check with a qualified tax advisor.

72 | Prospectus TIAA Real Estate Account

HOW THE REAL ESTATE ACCOUNT IS TREATED FOR TAX PURPOSES

The Account is not a separate taxpayer for purposes of the Internal Revenue Code — its earnings are taxed as part of TIAA’s operations. Although TIAA is not expected to owe any federal income taxes on the Account’s earnings, if TIAA does incur taxes attributable to the Account, it may make a corresponding charge against the Account.

TAXES IN GENERAL

During the accumulation period, Real Estate Account premiums paid in before-tax dollars, employer contributions and earnings attributable to these amounts are not taxed until they’re withdrawn. Annuity payments, single-sum withdrawals, systematic withdrawals, and death benefits are usually taxed as ordinary income. Premiums paid in after-tax dollars aren’t taxable when withdrawn, but earnings attributable to these amounts are taxable unless those amounts are contributed as Roth contributions to a 401(a) or 403(b) plan and certain criteria are met before the amounts (and the income on the amounts) are withdrawn. Death benefits are usually also subject to federal estate and state estate or inheritance taxation. Generally, transfers between qualified retirement plans are not taxed. Generally, contributions you can make under an employer’s plan are limited by federal tax law. Employee voluntary salary reduction contributions and Roth after-tax contributions to 403(b) and 401(k) plans are limited in the aggregate to $15,500 per year ($20,500 per year if you are age 50 or older). Certain long-term employees may be able to defer up to $18,500 per year in a 403(b) plan ($23,500 per year if you are age 50 or older). Contributions to Classic and Roth IRAs, other than rollover contributions, cannot generally exceed $4,000 per year ($5,000 per year for taxpayers age 50 or older).

The maximum contribution limit to a 457(b) non-qualified deferred compensation plan for employees of state and local governments is $15,500 ($20,500 if you are age 50 or older). Special catch-up rules may permit a higher contribution in one or more of the last three years prior to an individual’s normal retirement age under the plan.

Note that the dollar limits listed above are for 2007; different dollar limits may apply in future years.

EARLY DISTRIBUTIONS

If you want to withdraw funds or begin receiving income from any 401(a), 403(a), or 403(b) retirement plan or an IRA before you reach age 59½, you may have to pay a 10 percent early distribution tax on the taxable amount. Distributions from a Roth IRA generally are not taxed, except that, once aggregate distributions exceed contributions to the Roth IRA, income tax and a 10% penalty tax may apply to distributions made (1) before age 59½ (subject to certain exceptions) or (2) during the five taxable years starting with the year in which the first contribution is made to any Roth IRA. A 10 percent penalty tax may apply to amounts attributable to a conversion from an IRA if they are

TIAA Real Estate Account Prospectus | 73

distributed during the five taxable years beginning with the year in which the conversion was made. You won’t have to pay this tax in certain circumstances. Early distributions from 457(b) plans are not subject to a 10% penalty tax unless, in the case of a governmental 457(b) plan, the distribution includes amounts rolled over to the plan from an IRA, 401(a)/403(a), or 403(b) plan. Consult your tax advisor for more information.

MINIMUM DISTRIBUTION REQUIREMENTS

In most cases, payments from qualified contracts must begin by April 1 of the year after the year you reach age 70½, or if later, by retirement. For Classic IRAs, and with respect to 5 percent or more owners of the business covered by a Keogh plan, payments must begin by April 1 of the year after you reach age 70½. Under the terms of certain retirement plans, the plan administrator may direct us to make the minimum distributions required by law even if you do not elect to receive them. In addition, if you don’t begin distributions on time, you may be subject to a 50 percent excise tax on the amount you should have received but did not. Roth IRAs are generally not subject to these rules requiring minimum distributions during your lifetime. You are responsible for requesting distributions that comply with the minimum distribution rules.

WITHHOLDING ON DISTRIBUTIONS

If we pay an “eligible rollover” distribution directly to you, federal law requires us to withhold 20 percent from the taxable portion. On the other hand, if we roll over such a distribution directly to an IRA or employer plan, we do not withhold any federal income tax. The 20 percent withholding also does not apply to certain types of distributions that are not considered eligible rollovers such as payments from IRAs, hardship withdrawals, lifetime annuity payments, substantially equal periodic payments over your life expectancy or over 10 or more years, or minimum distribution payments.

For the taxable portion of non-eligible rollover distributions, we will usually withhold federal income taxes unless you tell us not to and you are eligible to avoid withholding. However, if you tell us not to withhold but we don’t have your taxpayer identification number on file, we still are required to deduct taxes. These rules also apply to distributions from governmental 457(b) plans. In general, all amounts received under a private 457(b) plan are taxable and are subject to federal income tax withholding as wages. Nonresident aliens who pay U.S. taxes are subject to different withholding rules.

SPECIAL RULES FOR AFTER-TAX RETIREMENT ANNUITIES

If you paid premiums directly to an RA and the premiums are not subject to your employer’s retirement plan, or if you have been issued an ATRA contract, the following general discussion describes our understanding of current federal income tax law that applies to these accumulations. This discussion does not apply to premiums paid on your

74 | Prospectus TIAA Real Estate Account

behalf under the terms of your employer’s retirement plan. It also does not cover every situation and does not address all possible circumstances.

In General.These annuities are generally not taxed until distributions occur. When distributions occur, they are taxed as follows:


	•	Withdrawals, including withdrawals of the entire accumulation under the contract, are generally taxed as ordinary income to the extent that the contract’s value is more than your investment in the contract (i.e.,what you have paid into it).

	•	Annuity payments are generally treated in part as taxable ordinary income and in part as non-taxable recovery of your investment in the contract until you recover all of your investment in the contract. After that, annuity payments are taxable in full as ordinary income.

Required Distributions.In general, if you die after you start your annuity payments but before the entire interest in the annuity contract has been distributed, the remaining portion must be distributed at least as quickly as under the method in effect on the date of your death. If you die before your annuity payments begin, the entire interest in your annuity contract generally must be distributed within five years after your death, or be used to provide payments that begin within one year of your death and that will be made for the life of your designated beneficiary or for a period not extending beyond the life expectancy of your designated beneficiary. The “designated beneficiary” refers to a natural person you designate and to whom ownership of the contract passes because of your death. However, if the designated beneficiary is your surviving spouse, your surviving spouse can continue the annuity contract as the new owner.

Death Benefit Proceeds.Death benefit proceeds are taxed like withdrawals of the entire accumulation in the contract if distributed in a single sum and are taxed like annuity payments if distributed as annuity payments. Your beneficiary may be required to take death benefit proceeds within a certain time period.

Penalty Tax on Certain Distributions.You may have to pay a penalty tax (10 percent of the amount treated as taxable income) on distributions you take prior to age 59½. There are some exceptions to this rule, however. You should consult a tax advisor for information about those exceptions.

Withholding.Annuity distributions are generally subject to federal income tax withholding but most recipients can usually choose not to have the tax withheld.

Certain Designations or Exchanges.Designating an annuitant, payee or other beneficiary, or exchanging a contract may have tax consequences that should be discussed with a tax advisor before you engage in any of these transactions.

Multiple Contracts.All non-qualified deferred annuity contracts issued by us and certain of our affiliates to the same owner during a calendar year must generally be treated as a single contract in determining when and how much income is taxable and how much income is subject to the 10 percent penalty tax (see above).

TIAA Real Estate Account Prospectus | 75

Diversification Requirements.The investments of the Real Estate Account must be “adequately diversified” in order for the ATRA Contracts to be treated as annuity contracts for Federal income tax purposes. It is intended that Real Estate Account will satisfy these diversification requirements.

Owner Control.In certain circumstances, owners of non-qualified variable annuity contracts have been considered for Federal income tax purposes to be the owners of the assets of the separate account supporting their contracts due to their ability to exercise investment control over those assets. When this is the case, the contract owners have been currently taxed on income and gains attributable to the variable account assets. While we believe that the ATRA Contracts do not give you investment control over assets in the Real Estate Account or any other separate account underlying your ATRA Contract, we reserve the right to modify the ATRA Contracts as necessary to prevent you from being treated as an owner of the assets in the Real Estate Account.

FEDERAL ESTATE TAXES

While no attempt is being made to discuss the Federal estate tax implications of the Contract, you should keep in mind that the value of an annuity contract owned by a decedent and payable to a beneficiary by virtue of surviving the decedent is included in the decedent’s gross estate. Depending on the terms of the annuity contract, the value of the annuity included in the gross estate may be the value of the lump sum payment payable to the designated beneficiary or the actuarial value of the payments to be received by the beneficiary. Consult an estate planning advisor for more information.

GENERATION-SKIPPING TRANSFER TAX

Under certain circumstances, the Code may impose a “generation skipping transfer tax” when all or part of an annuity contract is transferred to, or a death benefit is paid to, an individual two or more generations younger than the Owner. Regulations issued under the Code may require us to deduct the tax from your Contract, or from any applicable payment, and pay it directly to the IRS.

ANNUITY PURCHASES BY RESIDENTS OF PUERTO RICO

The Internal Revenue Service has announced that income received by residents of Puerto Rico under annuity contracts issued by a Puerto Rico branch of a United States life insurance company is U.S.-source income that is generally subject to United States Federal income tax.

ANNUITY PURCHASES BY NONRESIDENT ALIENS

The discussion above provides general information regarding U.S. federal income tax consequences to annuity purchasers that are U.S. citizens or residents. Purchasers that are not U.S. citizens or residents will generally be subject to U.S. federal withholding tax on taxable distributions from annuity contracts at a 30% rate, unless a lower treaty rate applies. In addition, purchasers may be subject to

76 | Prospectus TIAA Real Estate Account

state and/or municipal taxes and taxes that may be imposed by the purchaser’s country of citizenship or residence. Prospective purchasers who are nonresident aliens are advised to consult with a qualified tax adviser regarding U.S. state, and foreign taxation with respect to an annuity contract purchase.

SPECIAL RULES FOR WITHDRAWALS TO PAY ADVISORY FEES

If you have arranged for us to pay advisory fees to your financial advisor from your accumulations, those partial withdrawals generally will not be treated as taxable distributions as long as:


	•	the payment is for expenses that are ordinary and necessary;

	•	the payment is made from a Section 401 or 403 retirement plan or an IRA;

	•	your financial advisor’s payment is only made from the accumulations in your retirement plan or IRA, as applicable, and not directly by you or anyone else, under the agreement with your financial advisor; and

	•	once advisory fees begin to be paid from your retirement plan or IRA, as applicable, you continue to pay those fees solely from your plan or IRA, as applicable, and not from any other source.

However, withdrawals to pay advisory fees to your financial advisor from your accumulations under an ATRA contract will be treated as taxable distributions.

FOREIGN TAX CREDIT

The Account may be subject to foreign taxes on investments in other countries, including capital gains tax on any appreciation in value when a real estate investment in a foreign jurisdiction is eventually sold. Any potential tax impact will not be reflected in the valuation of the foreign investment and may not be fully reflected in a tax accrual by the Account. Upon payment of any foreign tax by the Account, TIAA will receive a foreign tax credit, which may be available to reduce its U.S. tax burden. The Account is a segregated asset account of TIAA and incurs no material federal income tax attributable to the investment performance of the Account under the Internal Revenue Code. As a result, the Account will not realize any tax benefit from any foreign tax credit that may be available to TIAA; however, to the extent that TIAA can utilize the foreign tax credit in its consolidated tax return, TIAA will reimburse the Account for that benefit at that time. The extent to which TIAA is able to utilize the credits when the Account incurs a foreign tax will determine the amount and timing of reimbursement from TIAA to the Account for the resulting foreign tax credit. The Account’s unit values may be adversely impacted in the future if a foreign tax is paid, and TIAA is not able to utilize (and therefore does not reimburse the Account for), either immediately or in the future, the foreign tax credit earned as a result of the foreign tax paid by the Account.

POSSIBLE TAX LAW CHANGES

Although the likelihood of legislative changes is uncertain, there is always the possibility that the tax treatment of your contract could change by legislation or

TIAA Real Estate Account Prospectus | 77

otherwise. Consult a tax advisor with respect to legislative developments and their effect on your contract.

We have the right to modify the contract in response to legislative changes that could otherwise diminish the favorable tax treatment that annuity contract owners currently receive. We make no guarantee regarding the tax status of any contract and do not intend the above discussion as tax advice.

GENERAL MATTERS

MAKING CHOICES AND CHANGES

You may have to make certain choices or changes (e.g., changing your income option, making a cash withdrawal) by written notice satisfactory to us and received at our home office or at some other location that we have specifically designated for that purpose. When we receive a notice of a change in beneficiary or other person named to receive payments, we’ll execute the change as of the date it was signed, even if the signer has died in the meantime. We execute all other changes as of the date received.

TELEPHONE AND INTERNET TRANSACTIONS

You can use our Automated Telephone Service (ATS) or the TIAA-CREF Web Center’s account access feature to check your account balances, transfer to TIAA’s traditional annuity, TIAA Access variable annuity accounts or CREF, and/or allocate future premiums among the accounts and funds available to you through TIAA-CREF. You will be asked to enter your Personal Identification Number (PIN) and social security number for both systems. (You can establish a PIN by calling us.) Both will lead you through the transaction process and will use reasonable procedures to confirm that instructions given are genuine. If we use such procedures, we are not responsible for incorrect or fraudulent transactions. All transactions made over the ATS and Internet are electronically recorded.

To use the ATS, you need a touch-tone phone. The toll free number for the ATS is 800 842-2252. To use the Internet, go to the account access feature of the TIAA-CREF Web Center at http://www.tiaa-cref.org. We can suspend or terminate your ability to transact by telephone, over the Internet, or by fax at any time, for any reason.

VOTING RIGHTS

You don’t have the right to vote on the management and operation of the Account directly; however, you may send ballots to advise the TIAA Board of Overseers about voting for nominees for the TIAA Board of Trustees.

ELECTRONIC PROSPECTUS

If you received this prospectus electronically and would like a paper copy, please call 877 518-9161 and we will send it to you. Under certain circumstances

78 | ProspectusTIAA Real Estate Account

where we are legally required to deliver a prospectus to you, we cannot send you a prospectus electronically unless you’ve consented.

HOUSEHOLDING

To lower costs and eliminate duplicate documents sent to your home, we may begin mailing only one copy of the Account’s prospectus, prospectus supplements or any other required documents to your household, even if more than one participant lives there. If you would prefer to continue receiving your own copy of any of these documents, you may call us toll-free at 877 518-9161, or write us.

MISCELLANEOUS POLICIES

Amending the Contracts:The contract may be amended by agreement of TIAA and the contractholder without the consent of any other person, provided that such change does not reduce any benefit purchased under the contract up to that time. Any endorsement or amendment of this contract, waiver of any of its provisions, or change in rate schedule will be valid only if in writing and signed by an executive officer of TIAA.

If You’re Married:If you’re married, you may be required by law or your employer’s plan to get advance written consent from your spouse before we make certain transactions for you. If you’re married at your annuity starting date, you may also be required by law or your employer’s plan to choose an income option that provides survivor annuity income to your spouse, unless he or she waives that right in writing. There are limited exceptions to the waiver requirement.

Texas Optional Retirement Program Restrictions:If you’re in the Texas Optional Retirement Program, you or your beneficiary can redeem some or all of your accumulation only if you retire, die, or leave your job in the state’s public institutions of higher education.

Assigning Your Contract:Generally, neither you nor your beneficiaries can assign your ownership of a TIAA retirement contract to anyone else.

Overpayment of Premiums:If your employer mistakenly sends more premiums on your behalf than you’re entitled to under your employer’s retirement plan or the Internal Revenue Code, we’ll refund them to your employer as long as we’re requested to do so (in writing) before you start receiving annuity income. Any time there’s a question about premium refunds, TIAA will rely on information from your employer. If you’ve withdrawn or transferred the amounts involved from your accumulation, we won’t refund them.

Errors or Omissions:We reserve the right to correct any errors or omissions on any form, report, or statement that we send you.

Payment to an Estate, Guardian, Trustee, etc.:We reserve the right to pay in one sum the commuted value of any benefits due an estate, corporation, partnership, trustee, or other entity not a natural person. Neither TIAA nor the Account will be responsible for the conduct of any executor, trustee, guardian, or other third party to whom payment is made.

TIAA Real Estate Account Prospectus | 79

Benefits Based on Incorrect Information:If the amounts of benefits provided under a contract were based on information that is incorrect, benefits will be recalculated on the basis of the correct data. If the Account has overpaid or underpaid, appropriate adjustments will be made.

Proof of Survival:We reserve the right to require satisfactory proof that anyone named to receive benefits under a contract is living on the date payment is due. If we have not received this proof after we request it in writing, the Account will have the right to make reduced payments or to withhold payments entirely until such proof is received.

DISTRIBUTION

The annuity contracts are offered continuously by TIAA-CREF Individual & Institutional Services, LLC (Services), which is registered with the SEC as a broker-dealer and a registered investment adviser and is a member of the National Association of Securities Dealers, Inc. (NASD). Teachers Personal Investors Services, Inc. (TPIS), which is also registered with the SEC and is a member of the NASD, may participate in the distribution of the contracts on a limited basis. Services and TPIS are direct or indirect wholly owned subsidiaries of TIAA. Their addresses are at 730 Third Avenue, New York, NY 10017-3206. No commissions are paid for distributing the contracts.

STATE REGULATION

TIAA, the Real Estate Account, and the contracts are subject to regulation by the New York Insurance Department (NYID) as well as by the insurance regulatory authorities of certain other states and jurisdictions.

TIAA and the Real Estate Account must file with the NYID both quarterly and annual statements. The Account’s books and assets are subject to review and examination by the NYID at all times, and a full examination into the affairs of the Account is made at least every five years. In addition, a full examination of the Real Estate Account operations is usually conducted periodically by some other states.

LEGAL MATTERS

All matters involving state law and relating to the contracts, including TIAA’s right to issue the contracts, have been passed upon by George W. Madison, Executive Vice President and General Counsel of TIAA. Sutherland Asbill & Brennan LLP, Washington, D.C., have passed upon legal matters relating to the federal securities laws.

80 | Prospectus TIAA Real Estate Account

EXPERTS

The financial statements as of December 31, 2006 and December 31, 2005 and for each of the two years in the period ended December 31, 2006 included in this Prospectus have been so included in reliance on the report of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting. Ernst & Young LLP, independent registered public accounting firm, has audited the Account’s financial statements at December 31, 2004, and for the year then ended, as set forth in their report.

Friedman LLP, independent registered public accounting firm, has audited the statement of revenues and certain expenses of the following properties:


(i)	The North 40 Office Complex for the year ended December 31, 2005;

(ii)	Publix at Weston Commons for the year ended December 31, 2005;

(iii)	City Center for the year ended December 31, 2005;

(iv)	WellPoint Office Campus for the year ended December 31, 2005;

(v)	DLF Multi Family Portfolio for the year ended December 31, 2005;

(vi)	The Creeksides at CenterPoint for the year ended December 31, 2005;

(vii)	Park Place on Turtle Creek for the year ended December 31, 2005;

(viii)	MarketFair for the year ended December 31, 2005;

(ix)	South Frisco Village for the year ended December 31, 2005;

(x)	IDI National Industrial Portfolio for the year ended December 31, 2005;

(xi)	Millennium Corporate Park for the year ended December 31, 2005;

(xii)	The following properties comprising the Florida Retail Portfolio, a joint venture with Weingarten Realty Investors (“WRI”), in which the Account owns an 80% equity interest in the Florida Retail JV and WRI owns the remaining 20% equity interest:

	(1)	East Lake Woodlands for the period August 5, 2005 to December 31, 2005;

	(2)	Palm Lakes Plaza for the year ended December 31, 2005;

	(3)	The Marketplace at Dr. Phillips for the year ended December 31, 2005;

	(4)	International Drive Value Center for the period January 18, 2005 to December 31, 2005;

	(5)	Alfaya Square for the year ended December 31, 2005;

	(6)	Kendall Corners for the year ended December 31, 2005;

	(7)	South Dade Shopping Center for the year ended December 31, 2005;

(xiii)	The Ellipse at Ballston for the year ended December 31, 2005;

(xiv)	The properties comprising the Account’s joint venture with Developers Diversified Realty Corporation (“DDR”), in which the Account has an

TIAA Real Estate Account Prospectus | 81

		85% equity intereast and DDR has a 15% equity interest, for the year ended December 31, 2005;


	(xv)	Printemps de l’Homme for the year ended December 31, 2005;

	(xvi)	1900 South Burgundy for the year ended December 31, 2005; and

	(xvii)	Wilshire Rodeo Plaza for the nine months ended September 30, 2005.

Berdon LLP, independent registered public accounting firm, has audited the statement of revenues and certain expenses of the following properties: (i) 501 Boylston Street (The Newbry) for the year ended December 31, 2005 and (ii) 9345 Santa Anita Avenue (Weber Distribution) for the year ended December 31, 2005.

Aarons Grant & Habif, LLC, independent registered public accounting firm, has audited the statement of revenues and certain expenses for the Camelback Center property for the year ended December 31, 2005.

After reasonable inquiry, the Account is not aware of any material factors relating to the specific properties audited by any of Friedman LLP, Berdon LLP, or Aarons Grant & Habif, LLC, other than as specifically set forth elsewhere in this prospectus that would cause the reported financial information indicated in such financial statements not to be necessarily indicative of future operating results.

We have included these financial statements in the prospectus and elsewhere in the registration statement in reliance on the auditing firms’ respective reports, given on the authority of such firms as experts in accounting and auditing.

ADDITIONAL INFORMATION

INFORMATION AVAILABLE AT THE SEC

The Account has filed with the SEC a registration statement under the Securities Act of 1933, which contains this prospectus and additional information related to the offering described in this prospectus. The Account also files annual, quarterly, and current reports, along with other information, with the SEC, as required by the Securities Exchange Act of 1934. You may read and copy the full registration statement, and any reports and information filed with the SEC for the Account, at the SEC’s public reference room at 100 F Street, N.E., Washington, DC 20549. This information can also be obtained through the SEC’s website on the Internet (http://www.sec.gov).

OTHER REPORTS TO PARTICIPANTS

TIAA will mail to each participant in the Real Estate Account periodic reports providing information relating to their accumulations in the Account, including premiums paid, number and value of accumulations, and withdrawals or transfers during the period, as well as such other information as may be required by applicable law or regulations. Further information may be obtained from TIAA at 730 Third Avenue, New York, New York 10017-3206.

82 | Prospectus TIAA Real Estate Account

CUSTOMER COMPLAINTS

Customer complaints may be directed to our Participant Relations Unit, P. O. Box 1259, Charlotte, North Carolina 28201-1259, telephone 800 842-2776.

FINANCIAL STATEMENTS

The financial statements of the TIAA Real Estate Account, financial statements of certain properties purchased by the Account and condensed unaudited statutory-basis financial statements of TIAA follow. The full audited statutory-basis financial statements of TIAA, which are incorporated into this prospectus by reference, are available upon request by calling 877 518-9161.

The financial statements of TIAA should be distinguished from the financial statements of the Account and should be considered only as bearing on the ability of TIAA to meet its obligations under the contracts. They should not be considered as bearing upon the assets held in the Account.

TIAA Real Estate Account Prospectus | 83

INDEX TO FINANCIAL STATEMENTS

TIAA REAL ESTATE ACCOUNT


Audited Financial Statements:
TIAA Real Estate Account
85	Report of Management Responsibility
86	Report of the Audit Committee

Audited Financial Statements:
88	Statements of Assets and Liabilities
89	Statements of Operations
90	Statements of Changes in Net Assets
91	Statements of Cash Flows
92	Notes to Financial Statements
101	Statements of Investments
117	Report of Independent Registered Public Accounting Firm
118	Report of Independent Registered Public Accounting Firm

Proforma Condensed Financial Statements:
119	Proforma Condensed Statement of Assets and Liabilities
120	Proforma Condensed Statement of Operations
121	Notes to Proforma Condensed Financial Statements

Property Financial Statements:
123	The North 40 Office Complex
127	Publix at Weston Commons
130	City Center
133	WellPoint Office Campus
136	DLF Multifamily Portfolio
139	The Creeksides at CenterPoint
142	Park Place on Turtle Creek
145	Marketfair
149	South Frisco Village
152	IDI National Industrial Portfolio
155	Millennium Corporate Park
159	Alafaya Square
162	East Lake Woodlands
165	Kendall Corners
168	International Drive Value Center
171	The Marketplace at Dr. Phillips
174	Palm Lakes Plaza
177	South Dade Shopping Center
180	The Ellipse at Ballston
183	Developers Diversified Realty Corporation Joint Venture Portfolio
187	Printemps de L’Homme
190	501 Boylston Street
193	Camelback Center
196	9345 Santa Anita Avenue
199	1900 South Burgundy
202	Wilshire Rodeo Plaza

TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA
[Note: Will be filed via amendment.]

84 | Prospectus TIAA Real Estate Account

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 accounting principles generally accepted in the United States of America and have been presented fairly and objectively in accordance with such principles.

TIAA has established and maintains a sound system of internal controls and disclosure 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 the Account, and the chief audit executive regularly reports to the TIAA Audit Committee.

The accompanying financial statements have been audited by an independent registered public accounting firm. To maintain auditor independence and avoid any conflict of interest, it continues to be the Account’s policy that any management advisory or consulting services be obtained from a firm other than the independent registered public accounting firm. The reports of the independent registered public accounting firms, which follow the statements of investments, express independent opinions on the fairness of presentation of these financial statements.

The Audit Committee of the TIAA Board of Trustees, consisting entirely of trustees who are not officers of TIAA, meets regularly with management, representatives of PricewaterhouseCoopers LLP and the internal audit group to review matters relating to financial reporting, internal controls and auditing. In addition to the annual audit of the Account’s financial statements by the independent registered public accounting firm, the New York State Insurance Department and other state insurance departments perform periodic examinations of the Account’s operations.

March 15, 2007


Herbert M. Allison, Jr.	Georganne C. Proctor
Chairman, President and Chief Executive Officer	Executive Vice President and Chief Financial Officer

TIAA Real Estate Account Prospectus | 85

Report of the Audit committee

To the Participants of the TIAA Real Estate Account:

The TIAA Audit Committee (“Committee”) oversees the financial reporting process of the TIAA Real Estate Account (“Account”) on behalf of TIAA’s Board of Trustees. The Committee operates in accordance with a formal written charter (copies of which are available upon request) which describes the Audit Committee’s responsibilities. All members of the Committee are independent, as defined under the listing standards of the New York Stock Exchange.

Management has the primary responsibility for the Account’s financial statements, development and maintenance of a strong system of internal controls and disclosure controls, and compliance with applicable laws and regulations. In fulfilling its oversight responsibilities, the Committee reviewed and approved the audit plans of the internal audit group and the independent registered public accounting firm in connection with their respective audits of the Account. The Committee also meets regularly with the internal audit group and the independent registered public accounting firm, both with and without management present, to discuss the results of their examinations, their evaluation of internal controls, and the overall quality of financial reporting. As required by its charter, the Committee will evaluate rotation of the independent registered public accounting firm whenever circumstances warrant, but in no event will the evaluation be later than between their fifth and tenth years of service.

The Committee reviewed and discussed the accompanying audited financial statements with management, including a discussion of the quality and appropriateness of the accounting principles and financial reporting practices followed, the reasonableness of significant judgments, and the clarity and completeness of disclosures in the financial statements. The Committee has also discussed the audited financial statements with PricewaterhouseCoopers LLP, the independent registered public accounting firm responsible for expressing an opinion on the conformity of these audited financial statements with accounting principles generally accepted in the United States of America.

The discussion with PricewaterhouseCoopers LLP focused on their judgments concerning the quality and appropriateness of the accounting principles and financial reporting practices followed by the Account, the clarity and completeness of the financial statements and related disclosures, and other significant matters, such as any significant changes in accounting policies, internal controls, management judgments and estimates, and the nature of any uncertainties or unusual transactions. In addition, the Committee discussed with PricewaterhouseCoopers LLP the auditors’ independence from management and the Account, and has received a written disclosure regarding such independence, as required by the Securities and Exchange Commission.

86 | Prospectus TIAA Real Estate Account


Report of the Audit committee	concluded

Based on the review and discussions referred to above, the Committee has approved the release of the accompanying audited financial statements for publication and filing with appropriate regulatory authorities.

Rosalie J. Wolf, Audit Committee Chair
Donald K. Peterson, Audit Committee Member
Leonard S. Simon, Audit Committee Member
Paul R. Tregurtha, Audit Committee Member

March 15, 2007

TIAA Real Estate Account Prospectus | 87


Statements of assets and liabilities	TIAA Real Estate Account


December 31,	2006		2005

ASSETS
Investments, at value:
Real estate properties (cost: $9,462,471,032 and $7,355,833,152)	$	10,743,487,689	$	7,977,600,751
Real estate joint ventures and limited partnerships (cost: $1,413,322,924 and $1,086,041,287)		1,948,028,002		1,418,583,542
Marketable securities:
Real estate-related (cost: $569,326,795 and $433,482,015)		704,922,323		448,662,598
Other (cost: $2,038,681,194 and $1,640,676,190)		2,038,938,210		1,640,894,515
Mortgage loan receivable (cost: $75,000,000)		74,660,626		—

Total investments (cost: $13,558,801,945 and $10,516,032,644)		15,510,036,850		11,485,741,406

Cash		3,585,145		1,211,370
Due from investment advisor		8,461,793		7,717,256
Other		237,877,545		190,756,381

TOTAL ASSETS		15,759,961,333		11,685,426,413

LIABILITIES
Mortgage loans payable—Note 5 (principal outstanding:$1,384,920,990 and $943,291,236)		1,437,149,148		973,502,186
Payable for securities transactions		1,219,323		993,809
Accrued real estate property level expenses		169,657,402		145,789,277
Security deposits held		19,242,948		16,430,039

TOTAL LIABILITIES		1,627,268,821		1,136,715,311

NET ASSETS
Accumulation Fund		13,722,700,176		10,227,655,797
Annuity Fund		409,992,336		321,055,305

TOTAL NET ASSETS	$	14,132,692,512	$	10,548,711,102

NUMBER OF ACCUMULATION UNITSOUTSTANDING—Notes 6 and 7		50,146,354		42,623,491

NET ASSET VALUE, PER ACCUMULATION UNIT—Note 6	$	273.65	$	239.95


88 \| Prospectus TIAA Real Estate Account	SEE NOTES TO FINANCIAL STATEMENTS


Statements of operations	TIAA Real Estate Account


Years Ended December 31,	2006			2005			2004

INVESTMENT INCOME
Real estate income, net:
Rental income	$	834,455,788		$	618,633,580		$	397,198,276

Real estate property level expenses and taxes:
Operating expenses		207,452,982			150,501,136			100,991,997
Real estate taxes		110,059,852			88,014,264			55,946,418
Interest expense		72,160,111			40,028,630			830,361

Total real estate property level expenses and taxes		389,672,945			278,544,030			157,768,776

Real estate income, net		444,782,843			340,089,550			239,429,500
Income from real estate joint ventures and limited partnerships		84,671,528			71,826,443			71,390,397
Interest		118,621,441			54,114,448			15,055,451
Dividends		16,785,769			16,884,764			12,453,109

TOTAL INCOME		664,861,581			482,915,205			338,328,457

EXPENSES—NOTE 2:
Investment advisory charges		26,899,307			19,603,225			14,393,388
Administrative and distribution charges		45,712,473			27,130,406			16,372,446
Mortality and expense risk charges		6,931,833			6,196,549			4,093,858
Liquidity guarantee charges		3,905,051			3,170,017			1,868,733

TOTAL EXPENSES		83,448,664			56,100,197			36,728,425

INVESTMENT INCOME—NET		581,412,917			426,815,008			301,600,032

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND MORTGAGE LOANS PAYABLE
Net realized gain (loss) on:
Real estate properties		76,137,064			84,764,142			13,827,432
Marketable securities		10,257,108			36,871,417			46,714,767

Total realized gain on investments		86,394,172			121,635,559			60,542,199

Net change in unrealized appreciation (depreciation) on:
Real estate properties		659,370,445			534,569,631			172,486,544
Real estate joint ventures and limited partnerships		193,477,741			167,019,921			162,245,601
Marketable securities		120,453,638			(28,100,691	)		21,088,525
Mortgage loan receivable.		(339,374	)		—			—
Mortgage loans payable		(26,568,857	)		(29,154,148	)		(1,782,566	)

Net change in unrealized appreciation on investments and mortgage loans payable		946,393,593			644,334,713			354,038,104

NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND MORTGAGE LOANS PAYABLE		1,032,787,765			765,970,272			414,580,303

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	1,614,200,682		$	1,192,785,280		$	716,180,335


SEE NOTES TO FINANCIAL STATEMENTS	TIAA Real Estate Account Prospectus \| 89


Statements of changes in net assets	TIAA Real Estate Account


Years Ended December 31,	2006			2005			2004

FROM OPERATIONS
Investment income, net	$	581,412,917		$	426,815,008		$	301,600,032
Net realized gain on investments		86,394,172			121,635,559			60,542,199
Net change in unrealized appreciation on investments and mortgage loans payable		946,393,593			644,334,713			354,038,104

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS		1,614,200,682			1,192,785,280			716,180,335

FROM PARTICIPANT TRANSACTIONS
Premiums		1,085,057,614			968,189,436			738,048,183
Net transfers from TIAA		215,893,898			172,305,147			147,340,801
Net transfers from CREF Accounts		1,154,122,836			1,238,160,587			1,045,910,051
Net transfers from (to) TIAA-CREF Institutional Mutual Funds		(15,318,887	)		24,967,250			(4,785,649	)
Annuity and other periodic payments		(65,192,000	)		(44,487,142	)		(30,761,316	)
Withdrawals and death benefits		(404,782,733	)		(248,759,442	)		(159,804,580	)

NET INCREASE IN NET ASSETS RESULTING FROM PARTICIPANT TRANSACTIONS		1,969,780,728			2,110,375,836			1,735,947,490

NET INCREASE IN NET ASSETS		3,583,981,410			3,303,161,116			2,452,127,825
NET ASSETS
Beginning of year		10,548,711,102			7,245,549,986			4,793,422,161

End of year	$	14,132,692,512		$	10,548,711,102		$	7,245,549,986


90 \| Prospectus TIAA Real Estate Account	SEE NOTES TO FINANCIAL STATEMENTS


Statements of cash flows	TIAA Real Estate Account


Years Ended December 31,	2006			2005			2004

CASH FLOWS FROM OPERATING ACTIVITIES
Net increase in net assets resulting from operations	$	1,614,200,682		$	1,192,785,280		$	716,180,335
Adjustments to reconcile net increase in net assets resulting from operations to net cash used in operating activities:
Purchase of real estate properties		(2,016,229,061	)		(1,864,646,776	)		(1,690,454,136	)
Capital improvements on real estate properties		(117,041,456	)		(83,150,771	)		(37,770,043	)
Proceeds from sale of real estate properties		387,290,000			511,500,399			113,765,000
Increase in other investments		(859,898,769	)		(1,313,788,390	)		(418,058,889	)
Increase in mortgage loan receivable		(74,660,626	)		—			—
Increase in other assets		(47,865,701	)		(80,412,203	)		(30,270,749	)
Decrease in amounts due to bank		—			(231,476	)		(783,869	)
Increase in accrued real estate property level expenses and taxes		23,868,125			60,829,395			25,445,331
Increase in security deposits held		2,812,909			2,670,715			621,654
Increase (decrease) in other liabilities		225,514			(1,162,347	)		—
Net realized gain on investments		(86,394,172	)		(121,635,559	)		(60,542,199	)
Unrealized gain on investments and mortgage loans payable		(946,393,593	)		(644,334,713	)		(354,038,104	)

NET CASH USED IN OPERATING ACTIVITIES		(2,120,086,148	)		(2,341,576,446	)		(1,735,905,669	)

CASH FLOWS FROM FINANCING ACTIVITIES
Mortgage loans payable acquired		153,000,000			232,585,341			—
Principal payments on mortgage loans payable		(320,805	)		(173,361	)		(41,821	)
Premiums		1,085,057,614			968,189,436			738,048,183
Net transfers from TIAA		215,893,898			172,305,147			147,340,801
Net transfers from CREF Accounts		1,154,122,836			1,238,160,587			1,045,910,051
Net transfers from (to) TIAA-CREF Institutional Mutual Funds		(15,318,887	)		24,967,250			(4,785,649	)
Annuity and other periodic payments		(65,192,000	)		(44,487,142	)		(30,761,316	)
Withdrawals and death benefits		(404,782,733	)		(248,759,442	)		(159,804,580	)

NET CASH PROVIDED BY FINANCING ACTIVITIES		2,122,459,923			2,342,787,816			1,735,905,669

NET INCREASE IN CASH		2,373,775			1,211,370			—
CASH
Beginning of year		1,211,370			—			—

End of year	$	3,585,145		$	1,211,370		$	—

Supplemental disclosure: Cash paid for interest	$	68,034,179		$	38,267,618		$	121,408

Debt assumed upon acquisition of properties	$	288,950,559		$	211,400,000		$	499,521,077


SEE NOTES TO FINANCIAL STATEMENTS	TIAA Real Estate Account Prospectus \| 91


Notes to financial statements	TIAA Real Estate Account

Note 1—Organization and Significant Accounting Policies

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 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 holds real estate properties directly and through wholly-owned subsidiaries. The Account also holds interests in limited partnerships and real estate joint ventures in which the Account does not hold a controlling interest. Such joint ventures are not consolidated for financial statement purposes. The Account also invests in publicly-traded securities and other instruments to maintain adequate liquidity for operating expenses, capital expenditures and to make benefit payments. The Account also invests in mortgage loans receivable collateralized by commercial real estate properties. The financial statements were prepared in accordance with accounting principles generally accepted in the United States of America which may require the use of estimates made by management. Actual results may vary from those estimates. The following is a summary of the significant accounting policies of the Account.

Basis of Presentation:The accompanying financial statements include the Account and those subsidiaries wholly-owned by TIAA for the benefit of the Account. All significant intercompany accounts and transactions have been eliminated in consolidation.

Valuation of Real Estate Properties:Investments in real estate properties are stated at fair value, as determined in accordance with procedures approved by the Investment Committee of the TIAA 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 judgment 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, the properties are valued on a quarterly cycle, and independent appraisers value each real estate property at least once a year. An independent fiduciary, Real Estate Research Corporation, has been appointed by a special subcommittee of TIAA’s Board of Trustees. The independent fiduciary must approve all independent appraisers used by the Account. TIAA’s appraisal staff performs the other quarterly valuation reviews of each real estate property on a quarterly basis and updates the property value if it believes that the value of a property has changed since the previous valuation review or appraisal. The appraisals are performed in accordance with Uniform Standards of Professional Appraisal Practices (USPAP), the real estate appraisal industry standards created by The Appraisal Foundation. Real estate appraisals are estimates of property values based on a professional’s opinion. The independent fiduciary can also require additional appraisals if it believes that a

92 | Prospectus TIAA Real Estate Account


Notes to financial statements	continued

property’s value has changed materially and that such change is not reflected in the quarterly valuation review, or otherwise to ensure that the Account is valued correctly. The independent fiduciary must also approve an appraisal where a property’s value changed by 6% or more from the most recent annual appraisal. Real estate properties subject to a mortgage are generally valued as described; the mortgage is valued independently of the property, and its fair value is reported separately. The independent fiduciary reviews and approves any such mortgage valuation adjustments which exceed certain prescribed limits before such adjustments are recorded by the Account. The Account continues to use the revised value for each real estate property and mortgage loan payable to calculate the Account’s daily net asset value until the next valuation review or appraisal.

Valuation of Real Estate Joint Ventures and Limited Partnerships:Real estate joint ventures and limited partnerships are stated at the Account’s equity in the net assets of the underlying entities, adjusted, for the joint ventures, to value their real estate holdings and mortgage notes payable at fair value.

Debt securities, other than money market instruments, are valued at the most recent bid price or the equivalent quoted yield for such securities (or those of comparable maturity, quality and type). Money market instruments, with maturities of one year or less, are valued in the same manner as debt securities or derived from a pricing matrix that has various types of money market instruments along one axis and various maturities along the other. Portfolio securities and limited partnership interests for which market quotations are not readily available are valued at fair value as determined in good faith under the direction of the Investment Committee of the TIAA Board of Trustees and in accordance with the responsibilities of the Board as a whole.

TIAA Real Estate Account Prospectus | 93


Notes to financial statements	continued

of securities, income receipts and expense payments made in foreign currencies are translated into U.S. dollars at the exchange rates prevailing on the respective dates of the transactions. The effect of changes in foreign currency exchange rates on portfolio investments and mortgage loans payable is included in the net realized and unrealized gains and losses on investments and mortgage loans payable. Net realized gains and losses on foreign currency transactions include maturities of forward foreign currency contracts, disposition of foreign currencies, and currency gains and losses between the accrual and receipt dates of portfolio investment income and between the trade and settlement dates of portfolio investment transactions.

Accumulation and Annuity Funds:The Accumulation Fund represents the net assets attributable to participants in the accumulation phase of their investment. The Annuity Fund represents the net assets attributable to the participants currently receiving annuity payments. The net increase or decrease in net assets from investment operations is apportioned between the accounts based upon their relative daily net asset values. Once an Account participant begins receiving lifetime annuity income benefits, monthly payment levels cannot be reduced as a result of the Account’s adverse mortality experience. In addition, the contracts are required to stipulate the maximum expense charge that can be assessed, which is equal to 2.50% of average net assets per year. The Account pays a fee to TIAA to assume these mortality and expense risks.

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). The Account recognizes a gain to the extent that the contract sales price exceeds the cost-to-date of the property being sold. A loss occurs when the cost-to-date exceeds the sales price. As the Account is fair valued and all properties are appraised quarterly, any accumulated unrealized gains and losses are reversed in the calculation of realized gains and losses. 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 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.

94 | Prospectus TIAA Real Estate Account


Notes to financial statements	continued

Income from real estate joint ventures is recorded based on the Account’s proportional interest in the income earned by the joint venture.

Securities transactions are accounted for as of the date the securities are purchased or sold (trade date). Interest income is recorded as earned and includes accrual of discount and amortization of premium. Dividend income is recorded on the
ex-dividend date or as soon as the Account is informed of the dividend. Realized gains and losses on securities transactions are accounted for on the specific identification method.

Federal Income Taxes:Based on provisions of the Internal Revenue Code, Section 817, the Account is taxed as a segregated asset account of TIAA. The Account should incur no material federal income tax attributable to the net investment experience of the Account.

Reclassifications:Certain prior period amounts have been reclassified to conform to the current presentation. These reclassifications did not affect the total assets, total net assets or net increase in net assets previously reported.

Note 2—Management Agreements

Investment advisory services for the Account are provided by TIAA employees, under the direction of TIAA’s Board of Trustees and its Investment Committee, pursuant to investment management procedures adopted by TIAA for the Account. TIAA’s investment management decisions for the Account are also subject to review by the Account’s independent fiduciary, Real Estate Research Corporation. TIAA also provides all portfolio accounting and related services for the Account.

Administrative and distribution services for the Account are provided by TIAA-CREF Individual & Institutional Services, LLC (“Services”) pursuant to a Distribution and Administrative Services Agreement with the Account. Services, a wholly-owned subsidiary of TIAA, is a registered broker-dealer and member of the National Association of Securities Dealers, Inc.

TIAA and Services provide their services at cost. TIAA and Services receive payments from the Account on a daily basis according to formulas established each year with the objective of keeping the payments as close as possible to the Account’s actual expenses. Any differences between actual expenses and the amounts paid are adjusted quarterly.

TIAA also provides a liquidity guarantee to the Account, for a fee, to ensure that sufficient 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.

The expenses for the services noted above that are provided to the Account by TIAA and other related parties are identified in the accompanying Statements of Operations.

TIAA Real Estate Account Prospectus | 95


Notes to financial statements	continued

Note 3—Leases

The Account’s real estate properties are leased to tenants under operating lease agreements which expire on various dates through 2035. Aggregate minimum annual rentals for the properties owned, excluding short-term residential and storage facility leases, are as follows:


Years Ending December 31,

2007	$	795,495,322
2008		728,447,351
2009		654,178,920
2010		557,829,144
2011		443,396,596
2012–2035		1,527,743,118

Total	$	4,707,090,451

Certain leases provide for additional rental amounts based upon the recovery of actual operating expenses in excess of specified base amounts.

Note 4—Investment in Joint Ventures and Limited Partnerships

The Account owns interests in several real estate properties through joint ventures and receives distributions and allocations of profits and losses from the joint ventures based on the Account’s ownership interest percentages. Several of these joint ventures have mortgage notes payable on the properties owned. At December 31, 2006, the Account held 12 joint venture investments with ownership interest percentages that ranged from 50% to 80%. The Account’s allocated portion of the mortgage notes payable was $472,167,225 and $468,664,313 at December 31, 2006 and December 31, 2005, respectively. The Account’s equity in the joint ventures at December 31, 2006 and December 31, 2005 was $1,668,744,951 and $1,222,036,564, respectively. A condensed summary of the financial position and results of operations of the joint ventures is shown below.


	December 31, 2006		December 31, 2005

Assets
Real estate properties, at value	$	3,650,902,513	$	2,989,209,293
Other assets		101,949,855		80,768,265

Total assets	$	3,752,852,368	$	3,069,977,558

Liabilities and Equity
Mortgage loans payable, at value	$	875,560,195	$	865,828,626
Other liabilities		74,287,727		70,471,251

Total liabilities		949,847,922		936,299,877
Equity		2,803,004,446		2,133,677,681

Total liabilities and equity	$	3,752,852,368	$	3,069,977,558

96 | Prospectus TIAA Real Estate Account


Notes to financial statements	continued


	Year Ended December 31, 2006		Year Ended December 31, 2005		Year Ended December 31, 2004

Operating Revenues and Expenses
Revenues	$	299,078,956	$	270,519,206	$	250,697,181
Expenses		157,686,944		142,782,169		122,017,640

Excess of revenues over expenses	$	141,392,012	$	127,737,037	$	128,679,541

The account invests in limited partnerships that own real estate properties and receives distributions from the limited partnerships based on the Account’s ownership interest percentages. At December 31, 2006, the Account held six limited partnership investments with ownership interest percentages that ranged from 5.27% to 19.75%. The Account’s investment in limited partnerships was $279,283,051 and $196,546,978 at December 31, 2006 and December 31, 2005, respectively.

Note 5—Mortgage Loans Payable

At December 31, 2006, the Account had outstanding mortgage loans payable on the following properties:


Property	Interest Rate Percentage		Amount December 31, 2006			Due

50 Fremont	6.40 paid monthly		$	135,000,000		August 21, 2013
Ontario Industrial Portfolio	7.42 paid monthly			9,119,033		May 1, 2011
IDX Tower	6.40 paid monthly			145,000,000		August 21, 2013
1001 Pennsylvania Ave	6.40 paid monthly			210,000,000		August 21, 2013
99 High Street	5.5245 paid monthly			185,000,000		November 11, 2015
Reserve at Sugarloaf	5.49 paid monthly			26,266,057		June 1, 2013
Westferry Circus	5.4003 paid quarterly	^(a)		232,585,341		November 15, 2012
Lincoln Centre	5.51 paid monthly			153,000,000		February 1, 2016
Wilshire Rodeo Plaza	5.28 paid monthly			112,700,000		April 11, 2014
1401 H Street	5.97 paid monthly			115,000,000		December 7, 2014
South Frisco Village	5.85 paid monthly			26,250,559		June 1, 2013
Publix at Weston Commons	5.08 paid monthly			35,000,000		January 1, 2036

Total principal outstanding			$	1,384,920,990
Unamortized discount				(5,277,414	)

Amortized cost				1,379,643,576
Fair value adjustment				57,505,572

Total mortgage loans payable			$	1,437,149,148


(a)	The mortgage is denominated in British pounds, converted to U.S. dollars at the exchange rate as of the funding date, and is interest only with a balloon payment at maturity. The interest rate is fixed.

	Principal on mortgage loans payable is due as follows:


		Amount

2007	$	576,135
2008		575,921
2009		619,325
2010		659,550
2011		8,647,276
Thereafter		1,373,842,783

Total maturities		1,384,920,990

TIAA Real Estate Account Prospectus | 97


Notes to financial statements	continued

Note 6—Condensed Financial Information

Selected condensed financial information for an Accumulation Unit of the Account is presented below.


	Years Ended December 31,

	2006			2005			2004			2003			2002


Per Accumulation Unit data:

Rental income	$	16.717		$	15.604		$	13.422		$	15.584		$	14.225
Real estate property level expenses and taxes		7.807			7.026			5.331			5.890			4.819

Real estate income, net		8.910			8.578			8.091			9.694			9.406
Other income		4.409			3.602			3.341			2.218			2.056

Total income		13.319			12.180			11.432			11.912			11.462
Expense charges⁽¹⁾		1.671			1.415			1.241			1.365			1.101

Investment income, net		11.648			10.765			10.191			10.547			10.361
Net realized and unrealized gain (loss) on investments and mortgage loans payable		22.052			18.744			13.314			2.492			(4.621	)

Net increase in Accumulation Unit Value		33.700			29.509			23.505			13.039			5.740
Accumulation Unit Value:
Beginning of year		239.953			210.444			186.939			173.900			168.160


End of year	$	273.653		$	239.953		$	210.444		$	186.939		$	173.900

Total return		14.04	%		14.02	%		12.57	%		7.50	%		3.41	%

Ratios to Average Net Assets:
Expenses⁽¹⁾		0.67	%		0.63	%		0.63	%		0.76	%		0.67	%
Investment income, net		4.68	%		4.82	%		5.17	%		5.87	%		5.65	%
Portfolio turnover rate:
Real estate properties		3.62	%		6.72	%		2.32	%		5.12	%		0.93	%
Marketable securities		51.05	%		77.63	%		143.47	%		71.83	%		52.08	%
Accumulation Units outstanding at end of year (in thousands)		50,146			42,623			33,338			24,724			20,347
Net assets end of year (in thousands)	$	14,132,693		$	10,548,711		$	7,245,550		$	4,793,422		$	3,675,989

(1)

Expense charges per Accumulation Unit and the Ratio of Expenses to Average Net Assets exclude real estate property level expenses. If the real estate property level expenses were included, the expense charge per Accumulation Unit for the year ended December 31, 2006 would be $9.478 ($8.441, $6.572, $7.255, and $5.920 for the years ended December 31, 2005, 2004, 2003, and 2002, respectively), and the Ratio of Expenses to Average Net Assets for the year ended December 31, 2006 would be 3.81% (3.78%, 3.33%, 4.04%, and 3.61% for the years ended December 31, 2005, 2004, 2003, and 2002, respectively).

98 | Prospectus TIAA Real Estate Account


Notes to financial statements	continued

Note 7—Accumulation Units

Changes in the number of Accumulation Units outstanding were as follows:


	For the Years Ended December 31,

	2006		2005		2004

Credited for premiums		4,056,196		4,335,121		3,746,093
Net units credited for transfers, net disbursements and amounts applied to the Annuity Fund		3,466,667		4,950,773		4,867,321
Outstanding:
Beginning of year		42,623,491		33,337,597		24,724,183

End of year		50,146,354		42,623,491		33,337,597

Note 8—Commitments and Subsequent Events

During the normal course of business, the Account enters into discussions and agreements to purchase or sell real estate property investments. As of December 31, 2006, the Account had outstanding commitments in the total gross amount of approximately $2.8 billion to purchase two property investments: i) a portfolio of existing retail properties, which are located predominately in the Southeastern United States, for approximately $2.5 billion, subject to approximately $1.5 billion in debt, and ii) a retail property located in France for approximately $263.7 million. The retail portfolio will be acquired through the Account’s investment in a newly-formed joint venture. The amounts disclosed above represent the Account’s share of the retail portfolio and the related debt, and the Account’s share of the joint venture will be a non-controlling 85% interest. The acquisition of the retail portfolio and the French property closed in February and March of 2007, respectively.

In addition, the Account had outstanding commitments to purchase interests in six limited partnerships, which totaled approximately $366.7 million in the aggregate. As of December 31, 2006, approximately $43.9 million remains to be funded under these commitments.

Other than lawsuits in the ordinary course of business that are expected to have no material impact, there are no lawsuits to which the Account is a party.

Note 9—New Accounting Pronouncements

In June 2006, the Financial Accounting Standards Board (“FASB”) issued FASB Interpretation (“FIN”) 48, an interpretation of FASB Statement No. 109, “Accounting for Income Taxes.” FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and is effective for fiscal years beginning after December 31, 2006. The Account does not expect FIN 48 to have a significant impact on the Account’s financial position or results of operations.

In September 2006, FASB issued Statement No. 157, “Fair Value Measurements.” This Statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and requires additional disclosures

TIAA Real Estate Account Prospectus | 99


Notes to consolidated financial statements	concluded

about fair value measurements. This Statement does not require any new fair value measurements, but the application of this Statement could change current practices in determining fair value. The Account plans to adopt this guidance effective January 1, 2008. The Account is currently assessing the impact of Statement No. 157 but does not expect it to have a significant impact on the Account’s financial position or results of operations when implemented.

In February 2007, FASB issued Statement No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities.” This Statement permits entities to choose to measure many financial instruments and certain other items at fair value and is expected to expand the use of fair value measurement. The Statement is effective for fiscal years beginning after November 15, 2007. The Account is currently assessing the impact of Statement No. 159 on the Account’s financial position and results of operations.

100 | Prospectus TIAA Real Estate Account


Statement of investments	TIAA Real Estate Account December 31, 2006 and 2005


	VALUE

LOCATION/DESCRIPTION	2006			2005


REAL ESTATE PROPERTIES—69.27% AND 69.46%
ALABAMA:
Inverness Center—Office building	$	112,256,914		$	98,090,987
ARIZONA:
Kierland Apartment Portfolio—Apartments		206,100,000			—
Mountain RA Industrial Portfolio—Industrial building		6,605,429			5,754,652
Phoenix Apartment Portfolio—Apartments		182,900,000			—
CALIFORNIA:
3 Hutton Centre Drive—Office building		59,011,323			48,349,580
9 Hutton Centre—Office building		29,000,000			26,746,837
50 Fremont—Office building		421,000,000	⁽¹⁾		373,010,003	⁽¹⁾
88 Kearny Street—Office building		90,310,024			81,567,474
980 9th Street and 1010 8th Street—Office building		168,000,000			159,000,000
1900 South Burgundy Place —Industrial building		28,045,226			—
Cabot Industrial Portfolio—Industrial building		88,200,000			77,000,000
Capitol Place—Office building		50,331,828			48,000,000
Centerside I—Office building		67,000,000			66,000,000
Centre Pointe and Valley View—Industrial building		32,385,980			28,000,000
Eastgate Distribution Center —Industrial building		25,558,962			22,000,000
Embarcadero Center West—Office building		231,000,000			205,965,261
Kenwood Mews—Apartments		—			30,000,000
Larkspur Courts—Apartments		93,043,346			86,000,000
Northern CA RA Industrial Portfolio—Industrial building		71,317,741			62,325,024
Ontario Industrial Portfolio—Industrial building		270,000,000	⁽¹⁾		230,000,000	⁽¹⁾
Regents Court—Apartments		67,800,000			62,500,000
Southern CA RA Industrial Portfolio—Industrial building		97,558,473			89,017,793
The Legacy at Westwood—Apartments		110,231,593			100,000,000
Weber Distribution—Industrial building		20,800,000			—
Wellpoint—Office building		49,000,000			—
Westcreek—Apartments		35,300,000			30,939,671
West Lake North Business Park—Office building		61,000,000			57,600,000
Westwood Marketplace—Shopping center		91,467,954			86,000,000
Wilshire Rodeo Plaza—Office building		204,084,734	⁽¹⁾		—
COLORADO:
Monte Vista—Apartments		—			24,647,901
Palomino Park—Apartments		184,000,000			176,232,394
The Lodge at Willow Creek—Apartments		39,501,399			34,600,000
The Market at Southpark—Shopping center		35,800,000			34,001,746
CONNECTICUT:
Ten & Twenty Westport Road—Office building		175,000,000			157,000,000
DELAWARE:
Mideast RA Industrial Portfolio—Industrial building		16,014,758			14,258,555
FLORIDA:
701 Brickell—Office building		231,239,379			201,173,724
4200 West Cypress Street—Office building		43,100,425			36,691,519
Golfview—Apartments		—			30,835,506
Maitland Promenade One—Office building		—			37,817,891
Plantation Grove—Shopping center		15,010,406			13,800,000
Pointe on Tampa Bay—Office building		50,573,824			44,711,876

TIAA Real Estate Account Prospectus | 101


Statement of investments	TIAA Real Estate Account December 31, 2006 and 2005	continued


	VALUE

LOCATION/DESCRIPTION	2006			2005


Publix at Weston Commons—Shopping center	$	54,411,436	⁽¹⁾	$	—
Quiet Waters at Coquina Lakes—Apartments		24,006,100			20,912,293
Royal St. George—Apartments		25,000,000			21,400,000
Sawgrass Office Portfolio—Office building		72,000,000			59,700,000
South Florida Apartment Portfolio—Apartments		65,099,785			56,400,000
Suncrest Village—Shopping center		17,009,378			16,400,000
The Fairways of Carolina—Apartments		25,309,965			21,100,000
The Greens at Metrowest—Apartments		21,011,825			18,200,000
The North 40 Office Complex—Office building		63,500,000			—
Urban Centre—Office building		121,000,000			106,007,400
GEORGIA:
1050 Lenox Park—Apartments		79,470,836			71,000,000
Alexan Buckhead—Apartments		—			34,800,000
Atlanta Industrial Portfolio—Industrial building		77,863,416			73,825,000
Glenridge Walk—Apartments		48,710,574			45,300,000
Reserve at Sugarloaf—Apartments		49,500,000	⁽¹⁾		44,800,000	⁽¹⁾
Shawnee Ridge Industrial Portfolio—Industrial building		76,117,193			44,418,860
ILLINOIS:
Chicago Caleast Industrial Portfolio—Industrial building		74,999,590			74,622,731
Chicago Industrial Portfolio—Industrial building		89,104,640			72,000,000
Columbia Centre III—Office building		—			28,700,000
East North Central RA Industrial Portfolio—Industrial building		37,503,284			37,717,159
Oak Brook Regency Towers—Office building		83,200,000			73,400,000
Parkview Plaza—Office building		59,400,000			54,500,000
KENTUCKY:
IDI Kentucky Portfolio—Industrial building		66,552,034			58,500,000
MARYLAND:
Broadlands Business Park—Industrial building		35,002,731			—
FEDEX Distribution Facility—Industrial building		8,500,000			8,500,000
GE Appliance East Coast Distribution Facility—Industrial building		48,000,000			46,470,475
MASSACHUSETTS:
99 High Street—Office building		291,806,564	⁽¹⁾		276,266,900	⁽¹⁾
Batterymarch Park II—Office building		13,234,314			11,472,283
Needham Corporate Center—Office building		22,712,550			17,143,612
Northeast RA Industrial Portfolio—Industrial building		30,900,000			29,000,000
The Newbry—Office building		370,745,525			—
NEVADA:
UPS Distribution Facility—Industrial building		15,000,000			15,000,000
NEW JERSEY:
10 Waterview Boulevard—Office building		32,100,000			27,500,000
371 Hoes Lane—Office building		—			11,700,000
Konica Photo Imaging Headquarters—Industrial building		23,100,000			25,300,000
Marketfair—Shopping center		94,058,427			—
Morris Corporate Center III—Office building		114,857,104			97,400,000
NJ Caleast Industrial Portfolio—Industrial building		41,920,988			42,000,000
Plainsboro Plaza—Shopping center		50,900,000			50,745,252
South River Road Industrial—Industrial building		60,600,000			55,000,000

102 | Prospectus TIAA Real Estate Account


Statement of investments	TIAA Real Estate Account December 31, 2006 and 2005	continued


	VALUE

LOCATION/DESCRIPTION	2006			2005


NEW YORK:
780 Third Avenue—Office building	$	298,000,000		$	230,000,000
The Colorado—Apartments		100,000,000			85,048,163
OHIO:
Columbus Portfolio—Office building		24,600,000			23,000,000
PENNSYLVANIA:
Lincoln Woods—Apartments		37,781,555			35,528,316
TENNESSEE:
Airways Distribution Center—Industrial building		24,857,278			—
Memphis Caleast Industrial Portfolio—Industrial building		52,500,000			54,000,000
Summit Distribution Center—Industrial building		26,300,000			25,900,000
TEXAS:
Butterfield Industrial Park—Industrial building		5,100,000	⁽²⁾		4,618,955	⁽²⁾
Dallas Industrial Portfolio—Industrial building		153,210,519			146,000,000
Four Oaks Place—Office building		306,200,984			295,239,109
Houston Apartment Portfolio—Apartments		306,042,523			—
Lincoln Centre—Office building		270,000,000	⁽¹⁾		255,311,299
Park Place on Turtle Creek—Office building		44,573,669			—
Pinnacle Industrial /DFW Trade Center—Industrial building		45,874,807			—
South Frisco Village—Shopping center		47,014,065	⁽¹⁾		—
The Caruth—Apartments		60,007,237			61,200,000
The Legends at Chase Oaks—Apartments		29,025,236			28,499,971
The Maroneal—Apartments		39,113,694			35,000,000
UNITED KINGDOM:
1& 7 Westferry Circus—Office building		428,574,628	⁽¹⁾		373,116,817	⁽¹⁾
UTAH:
Landmark at Salt Lake City (Building #4)—Industrial building		16,509,871			14,700,000
VIRGINIA:
8270 Greensboro Drive—Office building		62,000,000			60,200,000
Ashford Meadows—Apartments		89,091,341			78,904,526
Fairgate at Ballston—Office building		—			35,300,000
Monument Place—Office building		58,600,000			53,000,000
One Virginia Square—Office building		53,000,000			47,000,000
The Ellipse at Ballston—Office building		85,439,350			—
WASHINGTON:
Creeksides at Centerpoint—Office building		40,508,139			—
IDX Tower—Office building		398,990,017	⁽¹⁾		370,000,000	⁽¹⁾
Millennium Corporate Park—Office building		139,107,181			—
Northwest RA Industrial Portfolio—Industrial building		20,684,499			19,700,000
Rainier Corporate Park—Industrial building		69,362,219			64,273,372
Regal Logistics Campus—Industrial building		66,000,000			63,103,879
WASHINGTON DC:
1001 Pennsylvania Avenue—Office building		552,502,209	⁽¹⁾		502,993,710	⁽¹⁾
1015 15th Street—Office building		—			73,121,166
1401 H Street, NW—Office building		207,806,286	⁽¹⁾		—
1900 K Street—Office building		255,002,226			230,000,000
Mazza Gallerie—Shopping center		86,350,179			86,001,109

TOTAL REAL ESTATE PROPERTIES
(Cost $9,462,471,032 and $7,355,833,152)		10,743,487,689			7,977,600,751

TIAA Real Estate Account Prospectus | 103


Statement of investments	TIAA Real Estate Account December 31, 2006 and 2005	continued


	VALUE

LOCATION/DESCRIPTION	2006			2005


REAL ESTATE JOINT VENTURES AND
LIMITED PARTNERSHIPS—12.56% AND 12.35%

REAL ESTATE JOINT VENTURES—10.76% AND 10.64%
CA—Colorado Center LP
Yahoo Center (50% Account Interest)	$	187,766,625	⁽⁴⁾	$	138,531,366	⁽⁴⁾
CA—Treat Towers LP
Treat Towers (75% Account Interest)		94,023,131			93,964,192
GA—Buckhead LLC
Prominence in Buckhead (75% Account Interest)		107,256,320			97,142,406
Florida Mall Associates, Ltd.
The Florida Mall (50% Account Interest)		237,919,775	⁽⁴⁾		208,013,192	⁽⁴⁾
IL—161 Clark Street LLC
161 North Clark Street (75% Account Interest)		189,183,793			175,578,714
One Boston Place REIT
One Boston Place (50.25% Account Interest)		177,900,327			149,723,498
Storage Portfolio I, LLC
Storage Portfolio(3) (75% Account Interest)		74,864,074	⁽⁴⁾		63,237,298	⁽⁴⁾
Strategic Ind Portfolio I, LLC
IDI Nationwide Industrial Portfolio(3) (60% Account Interest)		70,348,753	⁽⁴⁾		66,871,766	⁽⁴⁾
Teachers REA IV, LLC
Tyson’s Executive Plaza II (50% Account Interest)		40,570,382			34,032,806
TREA Florida Retail, LLC
Florida Retail Portfolio (80% Account Interest)		265,396,677			—
West Dade Associates
Miami International Mall (50% Account Interest)		97,300,131	⁽⁴⁾		82,290,482	⁽⁴⁾
West Town Mall, LLC
West Town Mall (50% Account Interest)		126,214,963	⁽⁴⁾		112,650,844	⁽⁴⁾

TOTAL REAL ESTATE JOINT VENTURES
(Cost $1,168,027,179 and $888,034,873)		1,668,744,951			1,222,036,564


LIMITED PARTNERSHIPS—1.80% AND 1.71%
Cobalt Industrial Reit (11.0131% Account Interest)		26,506,381			8,352,409
Colony Realty Partners Lp (5.27% Account Interest)		26,382,659			13,481,704
Essex Property Trust, Inc. (10% Account Interest)		—			487,306
Heitman Value Partners Fund (8.43% Account Interest)		24,578,388			8,106,810
Lion Gables Apartment Fund (18.45% Account Interest)		179,013,211			150,000,000
Mezz Fund (19.75% Account Interest)		454,319			1,975,927
Mony/Transwestern Mezz RP (16.67% Account Interest)		22,348,093			14,142,822

TOTAL LIMITED PARTNERSHIPS
(Cost $245,295,745 and $198,006,414)		279,283,051			196,546,978

TOTAL REAL ESTATE JOINT VENTURES AND LIMITED PARTNERSHIPS
(Cost $1,413,322,924 and $1,086,041,287)		1,948,028,002			1,418,583,542

104|ProspectusTIAA Real Estate Account


Statement of investments	TIAA Real Estate Account December 31, 2006 and 2005	continued


SHARES					VALUE

2006		2005		ISSUER	2006		2005


MARKETABLE SECURITIES—17.69% AND 18.19%

REAL ESTATE-RELATED MARKETABLE SECURITIES—4.54% AND 3.91%

REAL ESTATE EQUITY SECURITIES—3.99% AND 3.72%

	—		75,000	Aames Investment Corp.	$	—	$	484,500
	53,300		—	Acadia Realty Trust		1,333,566		—
	68,700		550,000	Affordable Residential Communities LP		800,355		5,241,500
	68,700		—	Affordable Residential Communities LP
				share rights (expiring 1/23/07)		16,488		—
	—		303,820	Alesco Financial Inc.		—		2,576,394
	3,800		—	Alexander’s Inc.		1,594,670		—
	54,400		—	Alexandria Real Estate Equities Inc.		5,461,760		—
	166,985		36,685	AMB Property Corp.		9,786,991		1,803,801
	42,500		40,000	American Campus Communities Inc.		1,209,975		992,000
	244,900		919,000	American Financial Realty Trust		2,801,656		11,028,000
	181,500		—	Apartment Investment & Management Co.		10,167,630		—
	408,900		450,000	Archstone—Smith Trust		23,802,069		18,850,500
	118,500		150,000	Ashford Hospitality Trust Inc.		1,475,325		1,573,500
	33,300		—	Associated Estates Realty Corp.		457,542		—
	138,900		40,000	AvalonBay Communities Inc.		18,063,945		3,570,000
	—		150,000	Bimini Mortgage Management Inc.		—		1,357,500
	122,400		—	BioMed Realty Trust Inc.		3,500,640		—
	217,200		—	Boston Properties Inc.		24,300,336		—
	171,500		—	Brandywine Realty Trust		5,702,375		—
	94,200		30,000	BRE Properties Inc.		6,124,884		1,364,400
	220,300		270,000	Brookfield Properties Corp.		8,664,399		7,943,400
	105,200		—	Camden Property Trust		7,769,020		—
	—		194,000	Carramerica Realty Corp.		—		6,718,220
	121,500		—	CBL & Associates Properties Inc.		5,267,025		—
	74,900		424,000	Cedar Shopping Centers Inc.		1,191,659		5,965,680
	—		50,000	Centerpoint Properties Corp.		—		2,474,000
	—		280,000	Cogdell Spencer Inc.		—		4,729,200
	87,600		—	Colonial Properties Trust		4,106,688		—
	80,600		—	Corporate Office Properties Trust		4,067,882		—
	75,500		—	Cousins Properties Inc.		2,662,885		—
	179,000		—	Crescent Real Estate Equities Company		3,535,250		—
	—		976,000	Deerfield Triarc Capital Corp.		—		13,371,200
	204,000		380,000	Developers Diversified Realty Corp.		12,841,800		17,867,600
	125,500		—	DiamondRock Hospitality Co.		2,260,255		—
	84,100		—	Digital Realty Trust Inc.		2,878,743		—
	123,500		—	Douglas Emmett Inc.		3,283,865		—
	252,100		193,400	Duke Realty Corp.		10,310,890		6,459,560
	42,900		—	EastGroup Properties Inc.		2,297,724		—
	—		1,087,000	ECC Capital Corp.		—		2,456,620
	49,900		600,000	Education Realty Trust Inc.		737,023		7,734,000
	103,400		—	Equity Inns Inc.		1,650,264		—
	38,800		—	Equity Lifestyle Properties Inc.		2,111,884		—
	654,500		—	Equity Office Properties Trust		31,527,265		—

TIAA Real Estate AccountProspectus |105


Statement of investments	TIAA Real Estate Account December 31, 2006 and 2005	continued


SHARES					VALUE

2006		2005		ISSUER	2006		2005


	69,900		—	Equity One Inc.	$	1,863,534	$	—
	544,300		180,000	Equity Residential		27,623,225		7,041,600
	43,600		—	Essex Property Trust Inc.		5,635,300		—
	120,200		580,577	Extra Space Storage Inc.		2,194,852		8,940,886
	103,200		—	Federal Realty Investment Trust		8,772,000		—
	115,300		—	FelCor Lodging Trust Inc.		2,518,152		—
	—		1,367,000	Feldman Mall Properties Inc.		—		16,417,670
	84,300		—	First Industrial Realty Trust Inc.		3,952,827		—
	41,600		111,600	First Potomac Realty Trust		1,210,976		2,968,560
	423,600		110,000	General Growth Properties Inc.		22,124,628		5,168,900
	69,600		—	Glimcher Realty Trust		1,859,016		—
	73,800		404,800	GMH Communities Trust		749,070		6,278,448
	—		348,700	Gramercy Capital Corp./New York		—		7,943,386
	—		300,000	Great Wolf Resorts Inc.		—		3,093,000
	59,500		562,000	Hersha Hospitality Trust		674,730		5,063,620
	107,500		150,000	Highland Hospitality Corp.		1,531,875		1,657,500
	101,700		—	Highwoods Properties Inc.		4,145,292		—
	—		60,000	Hilton Hotels Corp.		—		1,446,600
	64,000		80,000	Home Properties Inc.		3,793,280		3,264,000
	—		450,000	HomeBanc Corp./Atlanta GA		—		3,366,000
	147,900		—	Hospitality Properties Trust		7,029,687		—
	973,570		300,000	Host Hotels & Resorts Inc.		23,901,143		5,685,000
	396,700		—	HRPT Properties Trust		4,899,245		—
	116,700		—	Inland Real Estate Corp.		2,184,624		—
	84,800		—	Innkeepers USA Trust		1,314,400		—
	—		300,000	Interstate Hotels & Resorts Inc.		—		1,311,000
	—		80,000	Istar Financial Inc.		—		2,852,000
	—		1,958,000	Jameson Inns Inc.		—		4,209,700
	—		100,000	JER Investors Trust Inc.		—		1,695,000
	59,400		—	Kilroy Realty Corp.		4,633,200		—
	409,521		108,000	Kimco Realty Corp.		18,407,969		3,464,640
	55,300		426,000	Kite Realty Group Trust		1,029,686		6,590,220
	—		300,000	KKR Financial Corp.		—		7,197,000
	75,000		200,000	LaSalle Hotel Properties		3,438,750		7,344,000
	—		120,000	Lexington Realty Trust		—		2,556,000
	167,000		—	Liberty Property Trust		8,206,380		—
	—		1,266,660	Lodgian Inc.		—		13,591,262
	—		200,000	LTC Properties Inc.		—		4,206,000
	135,900		75,000	Macerich Co./The		11,764,863		5,035,500
	118,700		400,000	Mack—Cali Realty Corp.		6,053,700		17,280,000
	81,000		—	Maguire Properties Inc.		3,240,000		—
	—		200,000	Medical Properties Trust Inc.		—		1,956,000
	44,000		—	Mid—America Apartment Communities		2,518,560		—
	100,200		40,000	Mills Corp./The		2,004,000		1,677,600
	—		100,000	Mission West Properties		—		974,000
	—		331,200	Monmouth Reit		—		2,656,224
	—		300,000	Mortgage IT Holdings Inc.		—		4,098,000

106|ProspectusTIAA Real Estate Account


Statement of investments	TIAA Real Estate Account December 31, 2006 and 2005	continued


SHARES					VALUE

2006		2005		ISSUER, CURRENT RATE AND MATURITY DATE	2006		2005


	198,000		—	New Plan Excel Realty Trust	$	5,441,040	$	—
	—		130,000	Newcastle Investment Corp.		—		3,230,500
	—		100,000	Novastar Financial Inc.		—		2,811,000
	—		525,000	Origen Financial Inc.		—		3,738,000
	25,100		328,100	Parkway Properties Inc./Md		1,280,351		13,169,934
	69,500		—	Pennsylvania Real Estate Investment Trust		2,736,910		—
	79,300		—	Post Properties Inc.		3,624,010		—
	462,500		400,000	Prologis		28,106,125		18,688,000
	30,200		—	PS Business Parks Inc.		2,135,442		—
	241,114		30,000	Public Storage Inc.		23,508,615		2,031,600
	—		100,000	RAIT Financial Trust		—		2,592,000
	28,500		—	Ramco—Gershenson Properties		1,086,990		—
	157,000		—	Reckson Associates Realty Corp.		7,159,200		—
	129,300		236,000	Regency Centers Corp.		10,107,381		13,912,200
	—		384,000	Republic Property Trust		—		4,608,000
	20,600		—	Saul Centers Inc.		1,136,914		—
	412,821		305,721	Simon Property Group Inc.		41,814,639		23,427,400
	86,300		—	SL Green Realty Corp.		11,458,914		—
	33,500		—	Sovran Self Storage Inc.		1,918,880		—
	—		350,000	Starwood Hotels & Resorts Worldwide		—		22,351,000
	134,700		—	Strategic Hotels & Resorts Inc.		2,935,113		—
	30,900		—	Sun Communities Inc.		999,924		—
	109,400		—	Sunstone Hotel Investors Inc.		2,924,262		—
	58,300		—	Tanger Factory Outlet Centers		2,278,364		—
	98,400		—	Taubman Centers Inc.		5,004,624		—
	—		111,200	Thomas Properties Group Inc.		—		1,391,112
	—		50,000	Trizec Properties Inc.		—		1,146,000
	250,400		100,000	United Dominion Realty Trust Inc.		7,960,216		2,344,000
	95,400		—	U-Store-It Trust		1,960,470		—
	—		95,000	Ventas Inc.		—		3,041,900
	245,800		200,000	Vornado Realty Trust		29,864,700		16,694,000
	85,500		—	Washington Real Estate Investment Trust		3,420,000		—
	148,500		—	Weingarten Realty Investors		6,847,335		—
	—		944	Windrose Medical Properties Trust		—		14,028
	44,700		—	Winston Hotels Inc.		592,275		—

TOTAL REAL ESTATE EQUITY SECURITIES
(Cost $484,071,757 and $411,877,936)						619,342,386		426,781,565

TIAA Real Estate AccountProspectus |107


Statement of investments	TIAA Real Estate Account December 31, 2006 and 2005	continued


PRINCIPAL					VALUE

2006		2005		ISSUER, CURRENT RATE AND MATURITY DATE	2006		2005


COMMERCIAL MORTGAGE-BACKED SECURITIES—0.55% AND 0.19%

$	10,000,000	$	—	Commercial Mortgage Pass 5.450% 12/15/20	$	10,000,000	$	—
	3,389,773		—	Credit Suisse Mortgage Company 5.470% 4/15/21		3,390,255		—
	10,000,000		10,000,000	GS Mortgage Securities Co 5.682% 5/3/18		10,186,930		10,217,650
	8,780,566		—	GS Mortgage Securities Co 5.420% 6/6/20		8,782,059		—
	9,996,970		—	JP Morgan Chase Commercial 5.440% 11/15/18		9,996,970		—
	9,298,609		—	Lehman Brothers Floating 5.430% 9/15/21		9,298,971		—
	9,143,864		—	Morgan Stanley Capital 5.440% 7/15/19		9,144,605		—
	10,000,000		10,000,000	Morgan Stanley Dean Witter 5.712% 2/3/16		10,137,150		10,061,730
	—		1,601,634	TrizecHahn Office Property 5.700% 3/15/13		—		1,601,653
	14,642,368		—	Wachovia Bank Commercial 5.440% 9/15/21		14,642,997		—

TOTAL COMMERCIAL MORTGAGE-BACKED SECURITIES
(Cost $85,255,038 and $21,604,079)						85,579,937		21,881,033

TOTAL REAL ESTATE-RELATED MARKETABLE SECURITIES
(Cost $569,326,795 and $433,482,015)						704,922,323		448,662,598


OTHER MARKETABLE SECURITIES—13.15% AND 14.28%

COMMERCIAL PAPER—10.79% AND 11.67%

	—		25,000,000	Abbey National North America LLC 4.330% 1/5/06		—		24,994,000
	25,000,000		—	Abbey National North America LLC 5.260% 1/17/07		24,945,207		—
	—		25,000,000	Abbey National Plc 4.280% 1/17/06		—		24,999,500
	—		10,000,000	Alabama Power Co 4.250% 1/12/06		—		9,989,100
	10,000,000		—	American Express Bank, FSB 5.565% 1/8/07		10,000,235		—
	1,500,000		—	American Express Bank, FSB 5.290% 1/12/07		1,499,996		—
	24,000,000		—	American Express Bank, FSB 5.280% 1/18/07		23,999,578		—
	20,000,000		—	American Express Centurion Bank 5.290% 1/9/07		19,999,954		—
	19,165,000		—	American Express Centurion Bank 5.290% 1/8/07		19,164,962		—

108|ProspectusTIAA Real Estate Account


Statement of investments	TIAA Real Estate Account December 31, 2006 and 2005	continued


PRINCIPAL					VALUE

2006		2005		ISSUER, CURRENT RATE AND MATURITY DATE	2006		2005


$	—	$	25,000,000	American Express Centurion Bank 4.310% 1/19/06	$	—	$	25,000,000
	25,000,000		—	American Express Centurion Bank 5.290% 1/3/07		24,999,988		—
	—		2,430,000	American Honda Finance, Corp 4.240% 1/9/06		—		2,428,250
	50,000,000		—	American Honda Finance, Corp 5.260% 1/22/07		49,853,055		—
	17,475,000		—	American Honda Finance, Corp 5.210% 2/9/07		17,377,605		—
	10,000,000		—	Anheuser — Busch Co. 5.240% 1/19/07		9,975,019		—
	—		25,000,000	Atlantis One Funding Corp. 4.205% 2/8/06		—		24,890,750
	—		10,000,000	Atlantis One Funding Corp. 4.380% 2/24/06		—		9,936,500
	—		25,000,000	Bank Of Montreal 4.285% 1/26/06		—		24,999,500
	—		30,000,000	Barclays Bank, PLC 4.420% 3/14/06		—		29,998,200
	—		15,000,000	Barclays Bank, PLC 4.329% 8/30/06		—		14,999,400
	25,000,000		—	Barclay’s U.S. Funding Corp 5.240% 1/26/07		24,912,383		—
	—		18,040,000	Becton Dickinson & Co 4.210% 1/24/06		—		17,994,720
	—		13,100,000	Beta Finance, Inc 4.140% 1/12/06		—		13,085,590
	—		11,000,000	Beta Finance, Inc 4.070% 1/17/06		—		10,981,190
	20,000,000		—	BMW US Capital Corp 5.250% 2/7/07		19,894,400		—
	23,050,000		—	BMW US Capital Corp 5.210% 2/9/07		22,921,533		—
	—		20,000,000	Calyon 4.100% 1/19/06		—		19,997,800
	—		10,000,000	Canadian Wheat Board (The) 1.870% 2/6/06		—		9,959,500
	—		14,000,000	CC (USA), Inc 3.830% 1/13/06		—		13,982,920
	—		40,000,000	Ciesco LP 4.280% 1/23/06		—		39,903,200
	—		10,000,000	Ciesco LP 4.370% 2/24/06		—		9,936,500
	25,000,000		—	Ciesco LP 5.260% 1/9/07		24,973,942		—
	14,000,000		—	Ciesco LP 5.260% 1/25/07		13,952,299		—

TIAA Real Estate AccountProspectus |109


Statement of investments	TIAA Real Estate Account December 31, 2006 and 2005	continued


PRINCIPAL					VALUE

2006		2005		ISSUER, CURRENT RATE AND MATURITY DATE	2006		2005


$	—	$	37,000,000	Citigroup Funding Inc. 4.220% 1/20/06	$	—	$	36,925,260
	—		13,000,000	Citigroup Funding Inc. 4.350% 2/21/06		—		12,923,560
	50,000,000		—	Citigroup Funding Inc. 5.250% 1/11/07		49,934,060		—
	35,825,000		—	Citigroup Funding Inc. 5.250% 2/5/07		35,647,365		—
	—		24,150,000	Colgate-Palmolive Co 4.250% 1/6/06		—		24,141,306
	—		15,000,000	Corporate Asset Funding Corp, Inc 4.150% 1/13/06		—		14,981,700
	—		5,035,000	Corporate Asset Funding Corp, Inc 4.200% 1/23/06		—		5,022,815
	—		16,000,000	Corporate Asset Funding Corp, Inc 4.210% 1/25/06		—		15,957,440
	—		5,905,000	Corporate Asset Funding Corp, Inc 4.290% 1/31/06		—		5,884,982
	—		2,020,000	Corporate Asset Funding Corp, Inc 4.340% 2/17/06		—		2,008,930
	6,000,000		—	Corporate Asset Funding Corp, Inc 5.240% 1/22/07		5,982,193		—
	8,760,000		—	Corporate Asset Funding Corp, Inc 5.260% 1/29/07		8,725,048		—
	25,000,000		—	Corporate Asset Funding Corp, Inc 5.250% 2/7/07		24,867,250		—
	54,000,000		—	Corporate Asset Funding Corp, Inc 5.250% 2/8/07		53,705,295		—
	—		25,000,000	Deutsche Bank 4.270% 2/14/06		—		24,997,000
	3,000,000		—	Deutsche Bank 5.290% 1/9/07		2,999,962		—
	30,000,000		—	Deutsche Bank 5.300% 1/22/07		29,999,154		—
	—		50,000,000	Dexia Bank 4.280% 1/30/06		—		49,998,000
	—		8,000,000	Dorada Finance Inc. 3.900% 1/23/06		—		7,980,640
	—		21,500,000	Dorada Finance Inc. 4.250% 2/16/06		—		21,384,975
	—		20,000,000	Dorada Finance Inc. 4.300% 2/27/06		—		19,865,600
	7,000,000		—	Dorada Finance Inc. 5.250% 1/9/07		6,992,704		—
	—		13,000,000	Edison Asset Securitization, LLC 4.190% 1/17/06		—		12,977,770

110|ProspectusTIAA Real Estate Account


Statement of investments	TIAA Real Estate Account December 31, 2006 and 2005	continued


PRINCIPAL					VALUE

2006		2005		ISSUER, CURRENT RATE AND MATURITY DATE	2006		2005

$	—	$	20,000,000	Edison Asset Securitization, LLC
				1.720% 2/22/06	$	—	$	19,877,800
	—		7,248,000	Edison Asset Securitization, LLC
				4.390% 4/7/06		—		7,162,981
	24,000,000		—	Edison Asset Securitization, LLC
				5.230% 1/19/07		23,939,287		—
	10,000,000		—	Edison Asset Securitization, LLC
				5.240% 2/1/07		9,955,666		—
	32,900,000		—	Fairway Finance Company, LLC
				5.240% 1/17/07		32,826,521		—
	—		20,000,000	FCAR Owner Trust I
				4.340% 2/7/06		—		19,915,000
	—		17,000,000	First Tennessee National Bank
				4.330% 2/6/06		—		16,999,660
	—		21,590,000	General Electric Capital Corp
				4.440% 4/28/06		—		21,282,343
	—		25,000,000	General Electric Capital Corp
				4.520% 6/28/06		—		24,435,000
	23,760,000		—	General Electric Capital Corp
				5.250% 1/18/07		23,704,454		—
	13,155,000		—	General Electric Capital Corp
				5.240% 2/8/07		13,084,017		—
	30,000,000		—	General Electric Capital Corp
				5.250% 2/15/07		29,807,499		—
	—		35,000,000	Goldman Sachs Group, LP
				4.280% 2/3/06		—		34,870,150
	—		29,140,000	Govco Incorporated
				4.020% 1/9/06		—		29,118,436
	—		10,000,000	Govco Incorporated
				2.280% 1/18/06		—		9,981,700
	—		9,000,000	Govco Incorporated
				4.390% 3/14/06		—		8,922,420
	50,000,000		—	Govco Incorporated
				5.240% 1/5/07		49,977,665		—
	25,700,000		—	Govco Incorporated
				5.260% 3/8/07		25,454,668		—
	—		5,015,000	Grampian Funding LLC
				4.320% 1/23/06		—		5,002,814
	—		20,000,000	Grampian Funding LLC
				4.040% 2/1/06		—		19,929,600
	—		10,000,000	Greyhawk Funding LLC
				4.000% 1/6/06		—		9,996,300
	33,000,000		—	Greyhawk Funding LLC
				5.230% 2/6/07		32,829,314		—
	—		25,000,000	Harrier Finance Funding (US) LLC
				3.810% 1/25/06		—		24,933,500

TIAA Real Estate Account Prospectus |111


Statement of investments	TIAA Real Estate Account December 31, 2006 and 2005	continued


PRINCIPAL					VALUE

2006		2005		ISSUER, CURRENT RATE AND MATURITY DATE	2006		2005

$	—	$	10,085,000	HBOS Treasury Srvcs Plc
				4.200% 2/15/06	$	—	$	10,033,163
	8,415,000		—	HBOS Treasury Srvcs Plc
				5.260% 3/21/07		8,319,680		—
	40,000,000		—	HSBC Finance Corporation
				5.250% 1/26/07		39,859,012		—
	19,000,000		—	IBM (International Business Machine Corp)
				5.240% 1/10/07		18,966,750		—
	22,200,000		—	IBM Capital Inc.
				5.250% 3/16/07		21,963,166		—
	25,000,000		—	ING (US) Finance
				5.230% 3/27/07		24,695,265		—
	24,000,000		—	Johnson & Johnson
				5.200% 1/2/07		24,000,000		—
	25,000,000		—	Johnson & Johnson
				5.250% 1/18/07		24,941,555		—
	20,259,000		—	Kimberly—Clark Worldwide, Inc.
				5.265% 1/29/07		20,179,184		—
	—		31,740,000	Kitty Hawk Funding Corp.
				4.295% 1/12/06		—		31,705,086
	—		10,000,000	Kitty Hawk Funding Corp.
				1.680% 2/15/06		—		9,947,600
	—		25,000,000	Links Finance L.L.C.
				4.270% 2/10/06		—		24,884,750
	—		25,000,000	Links Finance L.L.C.
				4.380% 3/13/06		—		24,787,750
	10,000,000		—	Links Finance L.L.C.
				5.230% 1/16/07		9,979,190		—
	30,000,000		—	Morgan Stanley Dean Witter
				5.255% 2/12/07		29,819,598		—
	—		10,000,000	Paccar Financial Corp
				4.020% 1/12/06		—		9,989,200
	—		13,655,000	Paccar Financial Corp
				4.360% 3/3/06		—		13,557,913
	—		10,000,000	Park Avenue Receivables Corp
				2.150% 1/4/06		—		9,998,800
	—		20,080,000	Park Avenue Receivables Corp
				4.270% 1/27/06		—		20,021,166
	11,601,000		—	Pitney Bowes Inc
				5.240% 1/4/07		11,597,578		—
	—		10,000,000	Preferred Receivables Funding Corp
				4.130% 1/6/06		—		9,996,300
	—		19,150,000	Private Export Funding Corporation
				4.170% 2/7/06		—		19,070,145
	—		15,000,000	Private Export Funding Corporation
				4.080% 2/13/06		—		14,926,500

112|Prospectus TIAA Real Estate Account


Statement of investments	TIAA Real Estate Account December 31, 2006 and 2005	continued


PRINCIPAL					VALUE

2006		2005		ISSUER, CURRENT RATE AND MATURITY DATE	2006		2005


$	—	$	9,000,000	Private Export Funding Corporation
				4.300% 3/9/06	$	—	$	8,929,260
	—		5,000,000	Private Export Funding Corporation
				4.335% 4/4/06		—		4,944,250
	20,500,000		—	Private Export Funding Corporation
				5.220% 1/3/07		20,496,976		—
	1,845,000		—	Private Export Funding Corporation
				5.300% 1/11/07		1,842,553		—
	23,000,000		—	Private Export Funding Corporation
				5.260% 1/18/07		22,945,922		—
	6,000,000		—	Private Export Funding Corporation
				5.230% 1/23/07		5,981,485		—
	15,000,000		—	Private Export Funding Corporation
				5.220% 2/15/07		14,903,199		—
	14,120,000		—	Private Export Funding Corporation
				5.230% 3/6/07		13,989,828		—
	—		20,000,000	Procter & Gamble
				4.025% 1/10/06		—		19,983,200
	—		3,500,000	Procter & Gamble
				4.090% 1/26/06		—		3,490,445
	25,000,000		—	Procter & Gamble
				5.225% 1/12/07		24,963,380		—
	25,000,000		—	Procter & Gamble International S.C
				5.250% 2/1/07		24,890,625		—
	50,000,000		—	Procter & Gamble International S.C
				5.230% 2/14/07		49,686,455		—
	—		50,000,000	Ranger Funding Company LLC
				4.075% 1/17/06		—		49,914,500
	10,000,000		—	Ranger Funding Company LLC
				5.250% 1/24/07		9,967,385		—
	20,000,000		—	Ranger Funding Company LLC
				5.260% 1/25/07		19,931,856		—
	23,760,000		—	Ranger Funding Company LLC
				5.260% 2/12/07		23,616,311		—
	—		17,000,000	Regions Bank (Alabama)
				4.180% 1/30/06		—		16,998,130
	10,000,000		—	Scaldis Capital LLC
				5.300% 1/10/07		9,988,068		—
	25,000,000		—	Sheffield Receivables Corporation
				5.250% 1/12/07		24,962,735		—
	35,750,000		—	Sheffield Receivables Corporation
				5.240% 1/17/07		35,670,156		—
	—		540,000	Sherwin—Williams Co
				4.080% 2/7/06		—		537,732
	—		14,390,000	Sigma Finance Inc
				3.890% 1/12/06		—		14,374,171

TIAA Real Estate Account Prospectus |113


Statement of investments	TIAA Real Estate Account December 31, 2006 and 2005	continued


PRINCIPAL					VALUE

2006		2005		ISSUER, CURRENT RATE AND MATURITY DATE	2006		2005


$	—	$	17,000,000	Sigma Finance Inc
				4.230% 1/31/06	$	—	$	16,942,370
	—		5,575,000	Sigma Finance Inc
				4.340% 2/27/06		—		5,537,536
	—		5,000,000	Sigma Finance Inc
				3.940% 3/1/06		—		4,965,150
	—		8,000,000	Sigma Finance Inc
				4.390% 3/8/06		—		7,937,120
	7,850,000		—	Societe Generale North America, Inc
				5.255% 1/10/07		7,836,262		—
	25,000,000		—	Societe Generale North America, Inc
				5.250% 1/19/07		24,937,902		—
	—		6,030,000	Societe Generale North America, Inc
				4.390% 3/20/06		—		5,974,281
	20,000,000		—	SunTrust Banks, Inc.
				5.245% 5/1/07		20,001,700		—
	—		27,600,000	Swedish Export Credit Corp
				4.260% 1/18/06		—		27,550,596
	14,675,000		—	Swedish Export Credit Corp
				5.319% 1/10/07		14,657,788		—
	33,895,000		—	Swedish Export Credit Corp
				5.250% 1/16/07		33,825,624		—
	30,000,000		—	Swedish Export Credit Corp
				5.240% 2/13/07		29,816,250		—
	5,800,000		—	The Concentrate Manufacturing Company of
				Ireland 5.260% 1/9/07		5,790,695		—
	50,000,000		—	Toyota Motor Credit Corp
				5.235% 1/23/07		49,846,580		—
	30,000,000		—	Toyota Motor Credit Corp
				5.230% 1/25/07		29,899,221		—
	—		15,000,000	Toyota Motor Credit Corp
				4.300% 10/10/06		—		15,000,900
	19,000,000		—	U.S. Bancorp
				5.245% 12/5/07		18,998,765		—
	—		24,000,000	UBS Finance, (Delaware) Inc
				4.310% 2/10/06		—		23,891,280
	—		3,120,000	UBS Finance, (Delaware) Inc
				1.760% 4/19/06		—		3,079,190
	17,500,000		—	UBS Finance, (Delaware) Inc
				5.230% 2/20/07		17,375,018		—

	34,530,000		—	Variable Funding Capital Corporation
				5.320% 2/2/07		34,371,217		—
	30,000,000		—	Variable Funding Capital Corporation
				5.250% 2/5/07		29,848,698		—
	25,000,000		—	Variable Funding Capital Corporation
				5.250% 2/6/07		24,870,208		—

114|Prospectus TIAA Real Estate Account


Statement of investments	TIAA Real Estate Account December 31, 2006 and 2005	continued


PRINCIPAL					VALUE

2006		2005		ISSUER, CURRENT RATE AND MATURITY DATE	2006		2005

$	—	$	25,000,000	Variable Funding Capital Corporation
				4.000% 1/5/06	$	—	$	24,993,750
	—		5,010,000	Washington Gas Light Co
				4.330% 1/9/06		—		5,006,393
	—		20,000,000	Wells Fargo
				4.320% 2/9/06		—		19,999,600
	—		19,460,000	Yorktown Capital, LLC
				4.190% 1/4/06		—		19,457,665
	—		4,066,000	Yorktown Capital, LLC
				4.275% 1/6/06		—		4,064,496
	—		2,625,000	Yorktown Capital, LLC
				4.280% 2/10/06		—		2,611,893
	23,415,000		—	Yorktown Capital, LLC
				1.340% 1/4/07		23,408,027		—

TOTAL COMMERCIAL PAPER (Cost $1,672,398,634 and $1,340,511,661)						1,672,544,145		1,340,656,583


GOVERNMENT AGENCY BONDS—2.36% AND 2.61%

	17,700,000		—	Federal Home Loan Banks
				5.135% 1/5/07		17,694,938		—
	19,745,000		—	Federal Home Loan Banks
				5.190% 1/12/07		19,719,628		—
	39,969,000		—	Federal Home Loan Banks
				5.130% 1/19/07		39,877,711		—
	23,753,000		—	Federal Home Loan Banks
				2.330% 2/28/07		23,563,451		—
	—		7,030,000	Federal Home Loan Banks
				1.750% 1/3/06		—		7,027,383
	—		50,000,000	Federal Home Loan Mortgage Corporation
				4.150% 1/31/06		—		49,839,500
	13,654,000		—	Federal Home Loan Mortgage Corporation
				2.190% 1/2/07		13,654,000		—
	22,250,000		—	Federal Home Loan Mortgage Corporation
				1.250% 1/16/07		22,208,704		—
	43,400,000		—	Federal Home Loan Mortgage Corporation
				5.151% 1/24/07		43,269,887		—
	50,000,000		—	Federal Home Loan Mortgage Corporation
				1.240% 1/30/07		49,807,250		—
	33,675,000		—	Federal Home Loan Mortgage Corporation
				5.150% 1/31/07		33,540,367		—
	—		30,000,000	Federal Home Loan Mortgage Corporation
				2.380% 1/3/06		—		30,000,000
	—		3,840,000	Federal Home Loan Mortgage Corporation
				1.780% 1/9/06		—		3,837,350
	—		18,000,000	Federal Home Loan Mortgage Corporation
				4.210% 2/9/06		—		17,922,240

TIAA Real Estate Account Prospectus |115


Statement of investments	TIAA Real Estate Account December 31, 2006 and 2005	concluded


PRINCIPAL					VALUE

2006		2005		ISSUER, CURRENT RATE AND MATURITY DATE	2006		2005


$	—	$	46,555,000	Federal National Mortgage
				4.350% 1/11/06	$	—	$	46,512,169
	30,000,000		—	Federal National Mortgage Association
				1.260% 2/6/07		29,854,650		—
	23,768,000		—	Federal National Mortgage Association
				1.740% 1/8/07		23,751,029		—
	50,000,000		—	Federal National Mortgage Association
				1.240% 3/21/07		49,452,450		—
	—		37,615,000	Federal National Mortgage Association
				2.290% 1/10/06		—		37,584,908
	—		3,015,000	Federal National Mortgage Association
				1.830% 2/1/06		—		3,004,809
	—		29,320,000	Federal National Mortgage Association
				4.200% 2/2/06		—		29,217,380
	—		1,766,000	Federal National Mortgage Association
				1.740% 2/15/06		—		1,757,135
	—		50,000,000	Federal National Mortgage Association
				4.240% 2/17/06		—		49,737,500
	—		23,940,000	Federal National Mortgage Association
				4.240% 2/23/06		—		23,797,558

TOTAL GOVERNMENT AGENCY BONDS (Cost $366,282,560 and $300,164,529)						366,394,065		300,237,932

TOTAL OTHER MARKETABLE SECURITIES (Cost $2,038,681,194 and $1,640,676,190)						2,038,938,210		1,640,894,515

TOTAL MARKETABLE SECURITIES (Cost $2,608,007,989 and $2,074,158,205)						2,743,860,533		2,089,557,113

MORTGAGE LOAN RECEIVABLE—0.48% AND 0.00%


PRINCIPAL					VALUE

2006		2005		BORROWER, CURRENT RATE AND MATURITY DATE	2006		2005

	75,000,000		—	Klingle Corporation
				6.17% 07/10/11		74,660,626		—

TOTAL MORTGAGE LOAN RECEIVABLE (Cost $75,000,000)						74,660,626		—

TOTAL INVESTMENTS (Cost $13,558,801,945 and $10,516,032,644)					$	15,510,036,850	$	11,485,741,406


(1)	The investment has a mortgage loan payable outstanding, as indicated in Note 5.

(2)	Leasehold interest only.

(3)	Located throughout the U.S.

(4)	The market value reflects the Account’s interest in the joint venture, net of any debt.

116|Prospectus TIAA Real Estate Account

Report of Independent Registered Public Accounting Firm

To the Participants of the TIAA Real Estate Account and the
Board of Trustees of Teachers Insurance and Annuity Association of America:

In our opinion, the accompanying statements of assets and liabilities, including the statement of investments, and the related statements of operations, changes in net assets and cash flows, present fairly, in all material respects, the financial position of the TIAA Real Estate Account (the “Account”) at December 31, 2005 and 2006, the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Account’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). 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, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

/s/ PricewaterhouseCoopers LLP
New York, New York
March 15, 2007

TIAA Real Estate AccountProspectus |117

Report of Independent Registered Public Accounting Firm

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 statements of operations, changes in net assets and cash flows of the TIAA Real Estate Account (“Account”) of Teachers Insurance and Annuity Association of America (“TIAA”) for the year ended December 31, 2004. These financial statements are the responsibility of TIAA’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). 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. 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, the financial statements referred to above present fairly, in all material respects, the results of operations, changes in net assets and cash flows of the Account for the year ended December 31, 2004, in conformity with U.S. generally accepted accounting principles.

/s/ Ernst & Young LLP

New York, New York
April 14, 2005

118|ProspectusTIAA Real Estate Account

Proforma Condensed Statement of Assets and Liabilities (Unaudited)

TIAA Real Estate Account

As of December 31, 2006
		Historical		Adjustments			Proforma

ASSETS
Real estate and other
real estate-related investments	$	12,691,515,691	$	2,889,456,503	(a)	$	15,580,972,194
Marketable securities		2,743,860,533		—			2,743,860,533
Other		324,585,109		—			324,585,109
TOTAL ASSETS		15,759,961,333		2,889,456,503			18,649,417,836
Mortgage notes payable		1,437,149,148		2,889,456,503	(a)		4,326,605,651
Payable for securities transactions		1,219,323		—			1,219,323
Accrued real estate property level
expenses and taxes		169,657,402		—			169,657,402
Security deposits held		19,242,948		—			19,242,948
TOTAL LIABILITIES		1,627,268,821		2,889,456,503			4,516,725,324
NET ASSETS	$	14,132,692,512	$	—		$	14,132,692,512

TIAA Real Estate AccountProspectus |119

Proforma Condensed Statement of Operations (Unaudited)

TIAA Real Estate Account

For the Year Ended December 31, 2006
		Historical		Adjustments			Proforma
Rental income	$	834,455,788	$	110,540,084	(b)	$	944,995,872
Operating expenses		207,452,982		31,567,152	(b)		239,020,134
Real estate taxes		110,059,852		14,143,847	(b)		124,203,699
Interest expense		72,160,111		82,609,148	(b)		154,769,259
Total real estate property
expenses and taxes		389,672,945		128,320,147			517,993,092
Real estate income, net		444,782,843		(17,780,063	)		427,002,780
Income from real estate joint ventures
and limited partnerships		84,671,528		48,440,533	(c)		133,112,061
Interest and dividends		135,407,210		—			135,407,210
TOTAL INCOME, NET		664,861,581		30,660,470			695,522,051
EXPENSES		83,448,664		11,695,465	(d)		95,144,129
INVESTMENT INCOME, NET		581,412,917		18,965,005			600,377,922
REALIZED AND UNREALIZED GAINS		1,032,787,765		—			1,032,787,765
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS	$	1,614,200,682	$	18,965,005		$	1,633,165,687

120|ProspectusTIAA Real Estate Account

Notes to Proforma Condensed Financial Statements (Unaudited)

TIAA Real Estate Account

Note 1—Purpose and Assumptions
As required by the Securities and Exchange Commission under Regulation S-X Article 11-01(5), these proforma condensed financial statements of the TIAA Real Estate Account (“Account”) have been prepared because the Account has made significant purchases of real estate property investments during the period from January 1, 2006 through the date of this prospectus. During 2006, the Account purchased 23 property investments: nine office properties, seven industrial properties, three apartment properties, three retail properties and an 85% interest in a joint venture that owns four retail centers. During the period from January 1, 2007 through the date of this prospectus, the Account purchased one office property, one retail property in Paris, France and an 85% interest in a joint venture that owns 66 retail centers. Information regarding some of these properties is included under “Recent Transactions” on page 29.

Various assumptions have been made in order to prepare these proforma condensed financial statements. The proforma condensed statement of assets and liabilities has been prepared assuming the real estate property investments purchased during the period from January 1, 2007 through the date of this prospectus were purchased as of December 31, 2006. The proforma condensed statement of operations for the year ended December 31, 2006 has been prepared assuming real estate property investments purchased during the period from January 1, 2006 through the date of this prospectus were purchased as of January 1, 2006.

Note 2—Proforma Adjustments
The following proforma adjustments were made in preparing the proforma condensed financial statements to reflect the purpose described in Note 1.

	*Proforma Condensed Statement of Assets and Liabilities:*

	(a)	To record the cost of the real estate property investments purchased during the period from January 1, 2007 through the date of this prospectus, assuming such investments were purchased with a short-term loan on December 31, 2006.

	*Proforma Condensed Statement of Operations:*
	(b)	To record the rental income and real estate property level expenses of the real estate properties purchased during the period from January 1, 2006 through the date of this prospectus, assuming such properties were owned for the entire year ended December 31, 2006 and were purchased with a short-term loan.

TIAA Real Estate AccountProspectus |121

	(c)	To record the real estate joint venture income of the joint ventures purchased during the period from January 1, 2006 through the date of this prospectus, assuming the joint venture interests were owned for the entire year ended December 31, 2006 and were purchased with a short-term loan.

	(d)	To record additional investment advisory expense charges which would have been incurred during the year ended December 31, 2006, based on the gross investment amounts involved and assuming the real estate property investments purchased during the period from January 1, 2006 through the date of this prospectus had been purchased as of January 1, 2006.

122|ProspectusTIAA Real Estate Account

The North 40 Office Complex, Boca Raton, Florida

INDEPENDENT AUDITORS’ REPORT

To the Management of Teachers Insurance and Annuity Association

We have audited the accompanying statement of revenues and certain expenses of the property known as The North 40 Office Complex, located in Boca Raton, Florida (the “Property”), as described in Note 1, for the year ended December 31, 2005. This financial statement is the responsibility of the Property’s management. Our responsibility is to express an opinion on this financial statement based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Property’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement, 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.

The accompanying statement of revenues and certain expenses was prepared for the purpose of complying with Rule 3-14 of Securities and Exchange Commission Regulation S-X and, as described in Note 1, is not intended to be a complete presentation of the Property’s revenues and expenses.

In our opinion, the financial statement referred to above presents fairly, in all material respects, the revenues and certain expenses of the Property for the year ended December 31, 2005, in conformity with accounting principles generally accepted in the United States of America.

April 28, 2006

TIAA Real Estate AccountProspectus |123

The North 40 Office Complex, Boca Raton, Florida

STATEMENTS OF REVENUES AND CERTAIN EXPENSES

	Year Ended			Three Months Ended
	December 31, 2005			March 31, 2006
	(Audited)			(Unaudited)

REVENUES
Base rent		$	3,683,032		$	964,882
FASB Statement No. 13 accrual			181,557			33,404
Other income			2,743,829			736,252
			6,608,418			1,734,538
CERTAIN EXPENSES
Utilities			747,905			206,362
Real estate taxes			562,585			140,646
Management fees			260,519			68,944
Salaries			246,698			64,766
Insurance			240,030			47,342
Janitorial			231,922			57,572
Hurricane costs			199,040			74,316
Repairs and maintenance			175,998			26,056
Landscaping			128,192			29,817
Security			47,573			13,646
Professional fees			10,076			2,050
Administrative			7,767			3,708
Other			11,138			2,531
			2,869,443			737,756
Excess of revenues over certain expenses		$	3,738,975		$	996,782

See notes to statements of revenues and certain expenses.

NOTES TO STATEMENTS OF REVENUES AND CERTAIN EXPENSES

1 — Organizaton and Basis of Presentation
The Property, located in Boca Raton, Florida, consists of two buildings, 5201 Congress Avenue and 901 Yamato Road. The buildings contain approximately 350,000 square feet of commercial space, 202,000 square feet at 5201 Congress Avenue and 148,000 square feet at 901 Yamato Road, which are currently 99.6% and 100% leased, respectively, to a total of 13 tenants. The tenant leases contain provisions for additional rent based on increases in operating expenses and real estate taxes over base period amounts.

The accompanying financial statements are presented in conformity with Rule 3-14 of Securities and Exchange Commission Regulation S-X. Accordingly, the financial statements are not representative of actual operations for the periods presented, as certain expenses, which may not be comparable to the expenses expected to be incurred in the future operations of the Property, have been excluded.

124|ProspectusTIAA Real Estate Account

Expenses excluded consist of interest, depreciation and amortization and certain other expenses not directly related to the future operations of the Property.

The statement of revenues and certain expenses for the three months ended March 31, 2006 is unaudited. However, in the opinion of management, all adjustments (consisting solely of normal recurring adjustments) necessary for the fair presentation of this statement of revenues and certain expenses for the interim period on the basis described above have been included. The results for such an interim period are not necessarily indicative of the results for the entire year.

2 — Summary of Significant Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

Revenue Recognition

Rental income from leases with scheduled rent increases is recognized on a straight-line basis over the lease term, as required by the Financial Accounting Standards Board’s Statement No. 13, “Accounting for Leases” (FASB Statement No. 13). Recoveries, based on payments for real estate taxes and operating expenses, are estimated and accrued.

3 — Major Tenants
Three tenants lease approximately 60% of the Property’s square footage, and base rent income from these tenants represented approximately 60% of the total for the year ended December 31, 2005.

4 — Operating Leases
Space in the Property is leased to tenants under noncancelable operating leases. Approximate minimum future rents required under leases in effect at December 31, 2005 are as follows:

Year Ending December 31,
2006	$	3,959,000
2007		3,796,000
2008		3,609,000
2009		3,721,000
2010		3,787,000
Thereafter		7,020,000
	$	25,892,000

TIAA Real Estate AccountProspectus |125

5 — Related Party Transaction
The Property is managed by Flagship Group, Inc., an affiliate of the Property’s owner. Management fees of approximately $261,000 were incurred for the year ended December 31, 2005. Management fees for the three months ended March 31, 2006 were approximately $69,000 (unaudited).

126|ProspectusTIAA Real Estate Account

Publix at Weston Commons, Weston, Florida

INDEPENDENT AUDITORS’ REPORT

To the Management of Teachers Insurance and Annuity Association

We have audited the accompanying statement of revenues and certain expenses of the property known as Publix at Weston Commons, Weston, Florida (the “Property”), as described in Note 1, for the year ended December 31, 2005. This financial statement is the responsibility of the Property’s management. Our responsibility is to express an opinion on this financial statement based on our audit.

June 2, 2006

TIAA Real Estate AccountProspectus |127

Publix at Weston Commons, Weston, Florida

STATEMENTS OF REVENUES AND CERTAIN EXPENSES

	Year Ended			Four Months Ended
	December 31, 2005			April 30, 2006
	(Audited)			(Unaudited)
REVENUES
Rental income		$	2,019,171		$	932,153
Recoveries			543,423			249,603
Other income			480			30
			2,563,074			1,181,786
CERTAIN EXPENSES
Utilities			96,926			72,214
Administrative			8,763			6,367
Repairs and maintenance			11,718			8,817
Site maintenance			223,322			102,253
Real estate taxes			267,272			168,000
Insurance			98,049			44,340
Management fees			93,100			44,562
Nonreimbursed expenses			222,960			124,213
			1,022,110			570,766
Excess of revenues over certain expenses		$	1,540,964		$	611,020

See notes to statements of revenues and certain expenses.

NOTES TO STATEMENTS OF REVENUES AND CERTAIN EXPENSES

1 — Organizaton and Basis of Presentation
The Property, located in Weston, Florida, contains approximately 127,000 square feet of commercial space. At April 30, 2006, the Property was 96% leased. The tenant leases contain provisions for additional rent based on the pro-rata share of common area maintenance expenses and real estate taxes.

The statement of revenues and certain expenses for the four months ended April 30, 2006 is unaudited. However, in the opinion of management, all adjustments (consisting solely of normal recurring adjustments) necessary for the fair presentation of this statement of revenues and certain expenses for the interim period on the basis described above have been included. The results for such an interim period are not necessarily indicative of the results for the entire year.

128|ProspectusTIAA Real Estate Account

2 — Summary of Significant Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

Revenue Recognition

Rental income from leases with scheduled rent increases is recognized on a straight-line basis over the lease term. Recoveries, based on payments for real estate taxes and common area maintenance expenses, are estimated and accrued.

3 — Major Tenant
One tenant leases approximately 35% of the Property’s square footage. Rent from this tenant represented approximately 36% of rental income for the year ended December 31, 2005 and 25% for the four months ended April 30, 2006.

4 — Operating Leases
Space in the Property is rented to tenants under various noncancelable operating leases. Approximate minimum future rents required under leases in effect at December 31, 2005 are as follows:

Year Ending December 31,
2006	$	1,896,000
2007		2,686,000
2008		2,699,000
2009		2,678,000
2010		2,445,000
Thereafter		19,574,000
	$	31,978,000

5 — Related Party Transaction
The current owner of the Property pays a monthly management fee to West City Partners, an affiliate, computed at 4% of billings. Management fees paid were approximately $93,100 for the year ended December 31, 2005 and $44,500 for the four months ended April 30, 2006.

TIAA Real Estate AccountProspectus |129

City Center, Washington, DC

INDEPENDENT AUDITORS’ REPORT

To the Management of Teachers Insurance and Annuity Association

We have audited the accompanying statement of revenues and certain expenses of the property known as City Center, located in Washington, DC (the “Property”), as described in Note 1, for the year ended December 31, 2005. This financial statement is the responsibility of the Property’s management. Our responsibility is to express an opinion on this financial statement based on our audit.

June 5, 2006

130|ProspectusTIAA Real Estate Account

City Center, Washington, DC

STATEMENTS OF REVENUES AND CERTAIN EXPENSES

	Year Ended			Three Months Ended
	December 31, 2005			March 31, 2006
	(Audited)			(Unaudited)
REVENUES
Rental income		$	13,138,258		$	3,432,414
FASB Statement No. 13 accrual			485,767			14,155
Recoveries			1,127,357			167,333
Parking income			194,422			92,160
Storage			98,779			24,158
Other income			131,727			26,411
			15,176,310			3,756,631
CERTAIN EXPENSES
Operating expenses			2,972,614			726,925
Management fees			440,999			112,127
Insurance			97,717			27,003
Real estate taxes			2,042,959			798,888
			5,554,289			1,664,943
Excess of revenues over certain expenses		$	9,622,021		$	2,091,688

See notes to statements of revenues and certain expenses.

NOTES TO STATEMENTS OF REVENUES AND CERTAIN EXPENSES

1 — Organizaton and Basis of Presentation
The Property, located in Washington, DC, contains approximately 499,000 square feet of commercial space and is currently 90% leased to 16 tenants. The tenant leases contain provisions for additional rent based on increases in operating expenses and real estate taxes over base period amounts.

The accompanying financial statement for 2005 is presented in conformity with Rule 3-14 of Securities and Exchange Commission Regulation S-X. Accordingly, the financial statement is not representative of actual operations for the periods presented, as certain expenses, which may not be comparable to the expenses expected to be incurred in the future operations of the Property, have been excluded. Expenses excluded consist of interest, depreciation and amortization and certain other expenses not directly related to the future operations of the Property.

TIAA Real Estate AccountProspectus |131

2 — Summary of Significant Accounting Policies

Use of Estimates

Revenue Recognition

Rental income from leases with scheduled rent increases is recognized on a straight-line basis over the lease term. Recoveries, based on payments for real estate taxes and operating expenses, are estimated and accrued.

3 — Major Tenants
Two tenants lease approximately 55% of the Property’s square footage. Rent from these tenants represented approximately 70% of total revenues for the year ended December 31, 2005.

Year Ending December 31,
2006	$	13,350,000
2007		12,784,000
2008		11,539,000
2009		6,676,000
2010		6,107,000
Thereafter		16,991,000
	$	67,447,000

5 — Related Party Transaction
The Property is managed by George Comfort & Sons Inc., an affiliate of the Property’s owner. Management fees of approximately $441,000 were incurred for the year ended December 31, 2005. Management fees for the three months ended March 31, 2006 were approximately $112,000 (unaudited).

132|ProspectusTIAA Real Estate Account

WellPoint Office Campus, Westlake, California

INDEPENDENT AUDITORS’ REPORT

To the Management of Teachers’ Insurance and Annuity Association

We have audited the accompanying statement of revenues and certain expenses of WellPoint Office Campus, Westlake Village, California, located at 4553 La Tienda Drive and 120 Via Merida (the “Property”), as described in Note 1, for the year ended December 31, 2005. This financial statement is the responsibility of the Property’s management. Our responsibility is to express an opinion on this financial statement based on our audit.

June 9, 2006

TIAA Real Estate AccountProspectus |133

WellPoint Office Campus, Westlake, California

STATEMENTS OF REVENUES AND CERTAIN EXPENSES

	Year Ended			Four Months Ended
	December 31, 2005			April 30, 2006
	(Audited)			(Unaudited)
REVENUES
Rental income
La Tienda		$	1,223,411		$	432,370
Via Merida			1,469,135			477,250
			2,692,546			909,620
CERTAIN EXPENSES
Property management fees, general partner
La Tienda			41,463			13,428
Via Merida			40,228			13,409
Insurance			7,941			—
Professional services			15,832			21,921
Miscellaneous			2,102			1,796
			107,566			50,554
Excess of revenues over certain expenses		$	2,584,980		$	859,066

See notes to statements of revenues and certain expenses.

NOTES TO STATEMENTS OF REVENUES AND CERTAIN EXPENSES

1 — Organizaton and Basis of Presentation
The Property, located in Westlake Village, California, contains approximately 208,000 square feet of commercial space. At April 30, 2006, the Property was 100% “triple net leased” under two leases to WellPoint Health Networks, Inc. Under both leases, the lessee is responsible for utilities, taxes, insurance and other operating costs.

The accompanying financial statement for 2005 is presented in conformity with Rule 3-14 of Securities and Exchange Commission Regulation S-X. Accordingly, the financial statement is not representative of actual operations for the period presented, as certain expenses, which may not be comparable to the expenses expected to be incurred in the future operations of the Property, have been excluded. Expenses excluded consist of interest, depreciation and amortization and certain other expenses not directly related to the future operations of the Property.

134|ProspectusTIAA Real Estate Account

period on the basis described above have been included. The results for such an interim period are not necessarily indicative of the results for the entire year.

2 — Summary of Significant Accounting Policies

Use of Estimates

Revenue Recognition

Rental income is recognized as earned in accordance with lease agreements.

3 — Operating Leases
Space in the Property is rented to tenants under various noncancelable operating leases. Approximate minimum future rents required under leases in effect at December 31, 2005 are as follows:

Year Ending December 31,
2006	$	2,634,000
2007		2,673,000
2008		2,673,000
2009		2,739,000
2010		2,745,000
Thereafter		18,665,000
	$	32,129,000

TIAA Real Estate AccountProspectus |135

DLF Multifamily Portfolio, Houston, Texas and Phoenix, Arizona

INDEPENDENT AUDITORS’ REPORT

To the Management of Teachers Insurance and Annuity Association

We have audited the accompanying statement of revenues and certain expenses of the DLF Multi-family Portfolio - Houston, Texas and Phoenix, Arizona (the “Property”), as described in Note 1, for the year ended December 31, 2005. This financial statement is the responsibility of the Property’s management. Our responsibility is to express an opinion on this financial statement based on our audit.

June 12, 2006

136|ProspectusTIAA Real Estate Account

DLF Multifamily Portfolio, Houston, Texas and Phoenix, Arizona

STATEMENTS OF REVENUES AND CERTAIN EXPENSES

	Year Ended			Four Months Ended
	December 31, 2005			April 30, 2006
	(Audited)			(Unaudited)
REVENUES
Rental income		$	49,956,301		$	17,439,303
Parking			104,963			39,226
Storage			21,083			8,672
Lease termination fees			385,169			75,389
Other income			1,321,579			470,960
			51,789,095			18,033,550
CERTAIN EXPENSES
Operating expenses			13,977,143			4,569,654
Management fees			1,798,251			629,253
Insurance			807,542			327,072
Real estate taxes			6,051,196			2,039,755
Other taxes and licenses			186,421			35,007
			22,820,553			7,600,741
Excess of revenues over certain expenses		$	28,968,542		$	10,432,809

See notes to statements of revenues and certain expenses.

NOTES TO STATEMENTS OF REVENUES AND CERTAIN EXPENSES

1 — Organizaton and Basis of Presentation
The Properties, located in Houston, Texas and Phoenix, Arizona, consist of 18 multifamily properties with a total of 4,471 units. At April 30, 2006, the Properties were approximately 93% occupied.

TIAA Real Estate AccountProspectus |137

2 — Summary of Significant Accounting Policies

Use of Estimates

Rental Income

Rental income is recognized as earned in accordance with lease agreements.

138|ProspectusTIAA Real Estate Account

The Creeksides at CenterPoint, Kent, Washington

INDEPENDENT AUDITORS’ REPORT

To the Management of Teachers Insurance and Annuity Association

We have audited the accompanying statement of revenues and certain expenses of The Creeksides at CenterPoint, located in Kent, Washington (the “Property”), as described in Note 1, for the year ended December 31, 2005. This financial statement is the responsibility of the Property’s management. Our responsibility is to express an opinion on this financial statement based on our audit.

June 14, 2006

TIAA Real Estate AccountProspectus |139

The Creeksides at CenterPoint, Kent, Washington

STATEMENTS OF REVENUES AND CERTAIN EXPENSES

	Year Ended			Four Months Ended
	December 31, 2005			April 30, 2006
	(Audited)			(Unaudited)
REVENUES
Rental income		$	3,506,542		$	988,093
Recoveries - operating			1,464,889			421,621
Recoveries - direct tenant			78,074			32,882
Other income			14,914			780
			5,064,419			1,443,376
CERTAIN EXPENSES
Repairs and maintenance			303,687			76,529
Utilities			498,774			153,692
Security			44,336			16,444
Cleaning			245,300			73,638
General and administrative			211,275			65,983
Management fees			64,139			18,747
Real estate taxes			333,709			119,967
Insurance			80,886			31,304
Other			6,789			4,371
			1,788,895			560,675
Excess of revenues over certain expenses		$	3,275,524		$	882,701

See notes to statements of revenues and certain expenses.

NOTES TO STATEMENTS OF REVENUES AND CERTAIN EXPENSES

1 — Organizaton and Basis of Presentation
The Property, located in Kent, Washington, contains approximately 219,000 square feet of commercial space. At April 30, 2006, the Property was 90% leased to 15 tenants. Tenant leases contain provisions for operating expense recoveries and direct tenant expenses.

140|ProspectusTIAA Real Estate Account

2 — Summary of Significant Accounting Policies

Use of Estimates

Revenue Recognition

3 — Major Tenants
Two tenants lease approximately 30% of the Property’s square footage. Rent from these tenants represented approximately 35% of rental income for the year ended December 31, 2005 and the four months ended April 30, 2006.

Year Ending December 31,
2006	$	2,949,000
2007		2,543,000
2008		2,411,000
2009		2,018,000
2010		887,000
	$	10,808,000

TIAA Real Estate AccountProspectus |141

Park Place on Turtle Creek, Dallas, Texas

INDEPENDENT AUDITORS’ REPORT

To the Management of Teachers Insurance and Annuity Association

We have audited the accompanying statement of revenues and certain expenses of Park Place on Turtle Creek, Dallas, Texas (the “Property”), as described in Note 1, for the year ended December 31, 2005. This financial statement is the responsibility of the Property’s management. Our responsibility is to express an opinion on this financial statement based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the owner’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement, 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.

June 23, 2006

142|ProspectusTIAA Real Estate Account

Park Place on Turtle Creek, Dallas, Texas

STATEMENTS OF REVENUES AND CERTAIN EXPENSES

	Year Ended			Four Months Ended
	December 31, 2005			April 30, 2006
	(Audited)			(Unaudited)
REVENUES
Rental income		$	3,894,240		$	1,377,382
FASB Statement No. 13 accrual			334,914			(8,544	)
Recoveries			550,947			137,181
Parking income			49,900			17,500
Other income			14,449			13,745
			4,844,450			1,537,264
CERTAIN EXPENSES
Operating expenses			1,169,448			358,913
Management fees			88,351			29,221
Insurance			57,049			28,258
Real estate taxes			761,940			253,980
			2,076,788			670,372
Excess of revenues over certain expenses		$	2,767,662		$	866,892

See notes to statements of revenues and certain expenses.

NOTES TO STATEMENTS OF REVENUES AND CERTAIN EXPENSES

1 — Organizaton and Basis of Presentation
The Property, located in Dallas, Texas, contains approximately 177,000 square feet of commercial space. At April 30, 2006, the Property was 95% leased to 22 tenants. The tenant leases contain provisions for additional rent based on increases in operating expenses and real estate taxes over base period amounts.

TIAA Real Estate AccountProspectus |143

2 — Summary of Significant Accounting Policies

Use of Estimates

Revenue Recognition

3 — Major Tenants
Four tenants lease approximately 52% of the Property’s square footage. Rent from these tenants represented approximately 55% of total revenues for the year ended December 31, 2005 and for the four months ended April 30, 2006.

Year Ending December 31,
2006	$	4,247,000
2007		4,081,000
2008		2,859,000
2009		2,340,000
2010		2,170,000
Thereafter		4,559,000
	$	20,256,000

144|ProspectusTIAA Real Estate Account

Marketfair, Princeton, New Jersey

INDEPENDENT AUDITORS’ REPORT

To the Management of Teachers Insurance and Annuity Association

We have audited the accompanying statement of revenues and certain expenses of Marketfair, located in Princeton, New Jersey (the “Property”), as described in Note 1, for the year ended December 31, 2005. This financial statement is the responsibility of the Property’s management. Our responsibility is to express an opinion on this financial statement based on our audit.

June 30, 2006

TIAA Real Estate AccountProspectus |145

Marketfair, Princeton, New Jersey

STATEMENTS OF REVENUES AND CERTAIN EXPENSES

	Year Ended			Four Months Ended
	December 31, 2005			April 30, 2006
	(Audited)			(Unaudited)
REVENUES
Rental income		$	5,313,514		$	1,818,882
Percentage rent			297,784			161,939
Recoveries			3,414,532			1,251,486
Other income			172,748			51,885
			9,198,578			3,284,192
CERTAIN EXPENSES
Operating expenses			2,799,421			621,821
Management fees			231,752			78,993
Insurance			33,864			11,108
Real estate taxes			1,110,322			369,646
			4,175,359			1,081,568
Excess of revenues over certain expenses		$	5,023,219		$	2,202,624

See notes to statements of revenues and certain expenses.

NOTES TO STATEMENTS OF REVENUES AND CERTAIN EXPENSES

1 — Organizaton and Basis of Presentation
The Property, located in Princeton, New Jersey, contains approximately 235,000 square feet of retail and restaurant space. Tenant leases include provisions for additional rent based on tenant sales and the pro-rata share of common area maintenance expenses and real estate taxes.

146|ProspectusTIAA Real Estate Account

2 — Summary of Significant Accounting Policies

Use of Estimates

Revenue Recognition

3 — Major Tenants
Two tenants lease approximately 29% of the Property’s square footage. Rent from these tenants represented approximately 21% of total revenues for the year ended December 31, 2005 and the four months ended April 30, 2006.

Year Ending December 31,
2006	$	5,114,000
2007		5,074,000
2008		4,946,000
2009		4,648,000
2010		3,541,000
Thereafter		9,119,000
	$	32,442,000

TIAA Real Estate AccountProspectus |147

5 — Related Party Transaction
The current owner of the Property is affiliated, through common ownership, with Madison Marquette Realty Services, LP, Madison Marquette Retail Services, Inc. and Madison Marquette Development Company LLC (collectively referred to as “MMR”). MMR is paid a management fee of 2.5% of gross revenue and leasing commissions, as defined in the agreement, and is reimbursed for costs related to on-site management. Amounts incurred under this arrangement were as follows:

	Year Ended		Four Months Ended
	December 31, 2005		April 30, 2006
Management fees	$	231,752		$	78,993
Leasing commissions		13,622			68,919
On-site reimbursement costs		274,780			103,389
	$	520,154		$	251,301

148|ProspectusTIAA Real Estate Account

South Frisco Village, Frisco, Texas

INDEPENDENT AUDITORS’ REPORT

To the Management of Teachers Insurance and Annuity Association

We have audited the accompanying statement of revenues and certain expenses of the property located at South Frisco Village, Frisco, Texas (the “Property”), as described in Note 1, for the year ended December 31, 2005. This financial statement is the responsibility of the Property’s management. Our responsibility is to express an opinion on this financial statement based on our audit.

August 16, 2006

TIAA Real Estate AccountProspectus |149

South Frisco Village, Frisco, Texas

STATEMENTS OF REVENUES AND CERTAIN EXPENSES

	Year Ended			Five Months Ended
	December 31, 2005			May 31, 2006
	(Audited)			(Unaudited)
REVENUES
Rental income		$	3,232,326		$	1,358,113
Recoveries			1,164,693			509,722
Other income			12,021			4,500
			4,409,040			1,872,335
CERTAIN EXPENSES
Operating expenses			253,692			110,403
Management fees			76,525			32,173
Administrative fees			9,000			3,750
Insurance			101,251			36,500
Real estate taxes			864,116			360,000
			1,304,584			542,826
Excess of revenues over certain expenses		$	3,104,456		$	1,329,509

See notes to statements of revenues and certain expenses.

NOTES TO STATEMENTS OF REVENUES AND CERTAIN EXPENSES

1 — Organizaton and Basis of Presentation
The Property, located in South Frisco Village, Frisco, Texas, contains approximately 227,000 square feet of commercial space. At May 31, 2006, the Property was 99% leased to 27 tenants. The tenant leases contain provisions for additional rent based on increases in operating expenses and real estate taxes over base period amounts.

The accompanying financial statement is presented in conformity with Rule 3-14 of Securities and Exchange Commission Regulation S-X. Accordingly, the financial statement is not representative of actual operations for the periods presented, as certain expenses, which may not be comparable to the expenses expected to be incurred in the future operations of the Property, have been excluded. Expenses excluded consist of interest, depreciation and amortization and certain other expenses not directly related to the future operations of the Property.

The statement of revenues and certain expenses for the five months ended May 31, 2006 is unaudited. However, in the opinion of management, all adjustments (consisting solely of normal recurring adjustments) necessary for the fair presentation of this statement of revenues and certain expenses for the interim period on the basis described above have been included. The results for such an interim period are not necessarily indicative of the results for the entire year.

150|ProspectusTIAA Real Estate Account

2 — Summary of Significant Accounting Policies

Use of Estimates

Revenue Recognition

3 — Major Tenants
Five tenants lease approximately 72% of the Property’s square footage. Rent from these tenants represented approximately 58% of total revenues for the year ended December 31, 2005 and for the five months ended May 31, 2006.

4 — Operating Leases
Space in the Property is rented to tenants under noncancelable operating leases. Approximate minimum future rents required under leases in effect at December 31, 2005 are as follows:

Year Ending December 31,
2006	$	3,144,000
2007		3,036,000
2008		2,792,000
2009		2,788,000
2010		2,643,000
Thereafter		14,623,000
	$	29,026,000

5 — Related Party Transactions
Amounts paid to an affiliated company for management fees and administrative fees were $76,525 and $9,000, respectively, for the year ended December 31, 2005.

Amounts paid to an affiliated company for management fees and administrative fees were $32,173 and $3,750, respectively, for the five months ended May 31, 2005.

TIAA Real Estate AccountProspectus |151

IDI National Industrial Portfolio, Atlanta, Chicago, Dallas, Memphis

INDEPENDENT AUDITORS’ REPORT

To the Management of Teachers Insurance and Annuity Association

We have audited the accompanying statement of revenues and certain expenses of the IDI National Industrial Portfolio (the “Property”), as described in Note 1, for the year ended December 31, 2005. This financial statement is the responsibility of the Property’s management. Our responsibility is to express an opinion on this financial statement based on our audit.

August 30, 2006

152|ProspectusTIAA Real Estate Account

IDI National Industrial Portfolio, Atlanta, Chicago, Dallas, Memphis

STATEMENTS OF REVENUES AND CERTAIN EXPENSES

	Year Ended			Six Months Ended
	December 31, 2005			June 30, 2006
	(Audited)			(Unaudited)
REVENUES
Rental income		$	2,233,055		$	2,361,025
Recoveries			344,900			567,926
			2,577,955			2,928,951
CERTAIN EXPENSES
Operating expenses			377,130			258,651
Management fees			68,696			73,043
Insurance			64,170			64,418
Real estate taxes			521,548			576,482
			1,031,544			972,594
Excess of revenues over certain expenses		$	1,546,411		$	1,956,357

See notes to financial statements.

NOTES TO STATEMENTS OF REVENUES AND CERTAIN EXPENSES

1 — Organizaton and Basis of Presentation
The Property, a portfolio of industrial distribution buildings located in Atlanta, Chicago, Dallas and Memphis, contains approximately 2,228,000 square feet of commercial space. At June 30, 2006, the Property was 92% leased. The leases contain provisions for additional rent based on increases in operating expenses and real estate taxes.

The statement of revenues and certain expenses for the six months ended June 30, 2006 is unaudited. However, in the opinion of management, all adjustments (consisting solely of normal recurring adjustments) necessary for the fair presentation of this statement of revenues and certain expenses for the interim period on the basis described above have been included. The results for such an interim period are not necessarily indicative of the results for the entire year.

TIAA Real Estate AccountProspectus |153

2 — Summary of Significant Accounting Policies

Use of Estimates

Revenue Recognition

3 — Major Tenant
One tenant leases approximately 18% of the Property’s square footage. Rent from this tenant represented approximately 35% and 30% of total revenues for the year ended December 31, 2005 and the six months ended June 30, 2006, respectively.

Year Ending December 31,
2006	$	4,378,000
2007		7,258,000
2008		7,420,000
2009		6,543,000
2010		5,273,000
Thereafter		31,121,000
	$	61,993,000

5 — Related Party Transaction
An affiliate of the owner of the Property manages the buildings. Management fees of $68,696 and $73,042 were incurred for the year ended December 31, 2005 and the six months ended June 30, 2006, respectively.

154|ProspectusTIAA Real Estate Account

Millennium Corporate Park, Redmond, Washington

INDEPENDENT AUDITORS’ REPORT

To the Management of Teachers Insurance and Annuity Association

We have audited the accompanying statement of revenues and certain expenses of Millennium Corporate Park, Redmond, Washington (the “Property”), as described in Note 1, for the year ended December 31, 2005. This financial statement is the responsibility of the Property’s management. Our responsibility is to express an opinion on this financial statement based on our audit.

September 22, 2006

TIAA Real Estate AccountProspectus |155

Millennium Corporate Park, Redmond, Washington

STATEMENTS OF REVENUES AND CERTAIN EXPENSES

	Year Ended			Eight Months Ended
	December 31, 2005			August 31, 2006
	(Audited)			(Unaudited)
REVENUES
Rent		$	7,900,666		$	5,161,202
Operating cost recovery			2,827,006			2,302,335
Other property revenue			13,442			935
			10,741,114			7,464,472
CERTAIN EXPENSES
Property recoverable
Janitorial			631,345			455,361
Security			37,001			35,619
Utilities			467,463			358,562
Mechanical and electrical			79,546			71,893
Parking lot/garage			132,436			37,826
Exterior grounds			344,980			249,679
Repairs and maintenance			32,312			24,741
Property general and administrative expenses			368,606			234,573
Insurance			116,602			87,835
Management fees			301,722			221,504
Taxes			832,379			534,848
			3,344,392			2,312,441
Property non-recoverable
Leasing and marketing			20,142			3,997
Legal and other professional fees			21,098			9,332
Other landlord costs			68,729			6,327
			109,969			19,656
			3,454,361			2,332,097
Excess of revenues over certain expenses		$	7,286,753		$	5,132,375

See notes to statements of revenues and certain expenses.

NOTES TO STATEMENTS OF REVENUES AND CERTAIN EXPENSES

1 — Organizaton and Basis of Presentation
Millennium Corporate Park, Redmond, Washington, contains approximately 537,000 square feet of commercial space. At August 31, 2006, the Property was 100% leased to 8 tenants. The tenant leases contain provisions for additional rent based on increases in operating expenses and real estate taxes over base period amounts.

156|ProspectusTIAA Real Estate Account

The statement of revenues and certain expenses for the eight months ended August 31, 2006 is unaudited. However, in the opinion of management, all adjustments (consisting solely of normal recurring adjustments) necessary for the fair presentation of this statement of revenues and certain expenses for the interim period on the basis described above have been included. The results for such an interim period are not necessarily indicative of the results for the entire year.

2 — Summary of Significant Accounting Policies

Use of Estimates

Revenue Recognition

3 — Major Tenant
One tenant leases approximately 67% of the Property’s square footage. Rent from this tenant represented approximately 75% of total revenues for the year ended December 31, 2005 and for the eight months ended August 31, 2006.

Year Ending December 31,
2006	$	7,663,000
2007		7,962,000
2008		7,271,000
2009		5,230,000
2010		3,973,000
Thereafter		5,859,000
	$	37,958,000

TIAA Real Estate AccountProspectus |157

5 — Related Party Transactions
Amounts paid to an affiliated company for management fees, leasing commissions and allocated payroll expenses were $301,720, $89,401 and $413,081, respectively, for the year ended December 31, 2005.

Amounts paid to an affiliated company for management fees, leasing commissions and allocated payroll expenses were $221,504, $85,223 and $264,912, respectively, for the eight months ended August 31, 2006.

158|ProspectusTIAA Real Estate Account

Alafaya Square, Oviedo, Florida

INDEPENDENT AUDITORS’ REPORT

To the Management of Teachers Insurance and Annuity Association

We have audited the accompanying statement of revenues and certain expenses of the property located at Alafaya Square, Oviedo, Florida (the “Property”), as described in Note 1, for the year ended December 31, 2005. This financial statement is the responsibility of the Property’s management. Our responsibility is to express an opinion on this financial statement based on our audit.

October 17, 2006

TIAA Real Estate AccountProspectus |159

Alafaya Square, Oviedo, Florida

STATEMENTS OF REVENUES AND CERTAIN EXPENSES

	Year Ended			Eight Months Ended
	December 31, 2005			August 31, 2006
	(Audited)			(Unaudited)
REVENUES
Rental income		$	1,482,821		$	1,296,530
Recoveries			451,350			434,537
Lease cancellation fee			—			45,000
Other income			3,670			3,331
			1,937,841			1,779,398
CERTAIN EXPENSES
Operating expenses			227,437			158,413
Management fees			113,791			110,124
Insurance			84,154			74,691
Real estate taxes			275,228			192,594
General and administrative expenses			36,162			46,990
			736,772			582,812
Excess of revenues over certain expenses		$	1,201,069		$	1,196,586

See notes to statements of revenues and certain expenses.

NOTES TO STATEMENTS OF REVENUES AND CERTAIN EXPENSES

1 — Organization and Basis of Presentation
The Property, located in Oviedo, Florida, contains approximately 177,000 square feet of commercial space. At August 31, 2006, the Property was 100% leased. The tenant leases contain provisions for additional rent based on increases in operating expenses and real estate taxes over base period amounts.

160|ProspectusTIAA Real Estate Account

2 — Summary of Significant Accounting Policies

Use of Estimates

Revenue Recognition

3 — Major Tenant
One tenant leases approximately 32% of the Property’s square footage. Rent from this tenant represented approximately 24% of rental income for the year ended December 31, 2005 and 19% for the eight months ended August 31, 2006.

Year Ending December 31,
2006	$	2,138,000
2007		2,177,000
2008		2,030,000
2009		1,823,000
2010		1,560,000
Thereafter		3,374,000
	$	13,102,000

5 — Related Party Transactions
An affiliate of the owner received management fees and certain salary and marketing cost reimbursements of $154,927 for the year ended December 31, 2005 and $135,837 for the eight months ended August 31, 2006.

TIAA Real Estate AccountProspectus |161

East Lake Woodlands, Palm Harbor, Florida

INDEPENDENT AUDITORS’ REPORT

To the Management of Teachers Insurance and Annuity Association

We have audited the accompanying statement of revenues and certain expenses of the property located at East Lake Woodlands, Palm Harbor, Florida (the “Property”), as described in Note 1, for the period August 5, 2005 (commencement of operations) to December 31, 2005. This financial statement is the responsibility of the Property’s management. Our responsibility is to express an opinion on this financial statement based on our audit.

In our opinion, the financial statement referred to above presents fairly, in all material respects, the revenues and certain expenses of the Property for the period August 5, 2005 (commencement of operations) to December 31, 2005, in conformity with accounting principles generally accepted in the United States of America.

October 17, 2006

162|ProspectusTIAA Real Estate Account

East Lake Woodlands, Palm Harbor, Florida

STATEMENTS OF REVENUES AND CERTAIN EXPENSES

	August 5, 2005 to			Eight Months Ended
	December 31, 2005			August 31, 2006
	(Audited)			(Unaudited)
REVENUES
Rental income		$	613,338		$	1,076,616
Recoveries			233,758			429,121
Other income			135			3,524
			847,231			1,509,261
CERTAIN EXPENSES
Operating expenses			133,296			249,001
Management fees			28,100			59,488
Insurance			56,205			63,306
Real estate taxes			123,483			219,437
General and administrative			23,798			31,000
			364,882			622,232
Excess of revenues over certain expenses		$	482,349		$	887,029

See notes to statements of revenues and certain expenses.

NOTES TO STATEMENTS OF REVENUES AND CERTAIN EXPENSES

1 — Organization and Basis of Presentation
The Property, located in Palm Harbor, Florida, was acquired on August 5, 2005 and contains approximately 140,000 square feet of commercial space. At August 31, 2006, the Property was 91% leased. The tenant leases contain provisions for additional rent based on increases in operating expenses and real estate taxes over base period amounts.

TIAA Real Estate AccountProspectus |163

2 — Summary of Significant Accounting Policies

Use of Estimates

Revenue Recognition

3 — Major Tenant
One tenant leases approximately 32% of the Property’s square footage. Rent from this tenant represented approximately 17% of rental income for the period August 5, 2005 to December 31, 2005 and 15% for the eight months ended August 31, 2006.

Year Ending December 31,
2006	$	1,396,000
2007		1,289,000
2008		1,116,000
2009		878,000
2010		653,000
Thereafter		1,221,000
	$	6,553,000

5 — Related Party Transactions
An affiliate of the owner received management fees and certain salary and marketing cost reimbursements of $38,999 for the period August 5, 2005 to December 31, 2005 and $76,702 for the eight months ended August 31, 2006.

164|ProspectusTIAA Real Estate Account

Kendall Corners, Miami, Florida

INDEPENDENT AUDITORS’ REPORT

To the Management of Teachers Insurance and Annuity Association

We have audited the accompanying statement of revenues and certain expenses of the property located at Kendall Corners, Miami, Florida (the “Property”), as described in Note 1, for the year ended December 31, 2005. This financial statement is the responsibility of the Property’s management. Our responsibility is to express an opinion on this financial statement based on our audit.

October 17, 2006

TIAA Real Estate AccountProspectus |165

Kendall Corners, Miami, Florida

STATEMENTS OF REVENUES AND CERTAIN EXPENSES

	Year Ended			Eight Months Ended
	December 31, 2005			August 31, 2006
	(Audited)			(Unaudited)
REVENUES
Rental income		$	1,954,457		$	1,397,183
Recoveries			688,584			454,937
Lease cancellation fee			27,678			—
Other income			6,110			8,761
			2,676,829			1,860,881
CERTAIN EXPENSES
Operating expenses			249,015			189,425
Management fees			90,054			69,832
Insurance			65,043			58,475
Real estate taxes			397,220			275,400
General and administrative			27,279			18,701
			828,611			611,833
Excess of revenues over certain expenses		$	1,848,218		$	1,249,048

See notes to statements of revenues and certain expenses.

NOTES TO STATEMENTS OF REVENUES AND CERTAIN EXPENSES

1 — Organization and Basis of Presentation
The Property, located in Miami, Florida, contains approximately 97,000 square feet of commercial space. At August 31, 2006, the Property was 100% leased.

The tenant leases contain provisions for additional rent based on increases in operating expenses and real estate taxes over base period amounts.

166|ProspectusTIAA Real Estate Account

2 — Summary of Significant Accounting Policies

Use of Estimates

Revenue Recognition

3 — Major Tenant
One tenant leases approximately 34% of the Property’s square footage. Rent from this tenant represented approximately 30% of rental income for the year ended December 31, 2005 and the eight months ended August 31, 2006.

Year Ending December 31,
2006	$	2,103,000
2007		1,884,000
2008		1,778,000
2009		1,595,000
2010		1,401,000
Thereafter		7,850,000
	$	16,611,000

5 — Related Party Transactions
An affiliate of the owner received management fees totaling $90,054 for the year ended December 31, 2005 and $69,832 for the eight months ended August 31, 2006.

TIAA Real Estate AccountProspectus |167

International Drive Value Center, Orlando, Florida

INDEPENDENT AUDITORS’ REPORT

To the Management of Teachers Insurance and Annuity Association

We have audited the accompanying statement of revenues and certain expenses of the property located at International Drive Value Center, Orlando, Florida (the “Property”), as described in Note 1, for the period January 18, 2005 (commencement of operations) to December 31, 2005. This financial statement is the responsibility of the Property’s management. Our responsibility is to express an opinion on this financial statement based on our audit.

In our opinion, the financial statement referred to above presents fairly, in all material respects, the revenues and certain expenses of the Property for the period January 18, 2005 (commencement of operations) to December 31, 2005, in conformity with accounting principles generally accepted in the United States of America.

October 17, 2006

168|ProspectusTIAA Real Estate Account

International Drive Value Center, Orlando, Florida

STATEMENTS OF REVENUES AND CERTAIN EXPENSES

	January 18, 2005 to			Eight Months Ended
	December 31, 2005			August 31, 2006
	(Audited)			(Unaudited)
REVENUES
Rental income		$	1,757,371		$	1,497,443
Recoveries			458,169			391,320
Other income			250			803
			2,215,790			1,889,566
CERTAIN EXPENSES
Operating			211,500			137,787
Management fees			74,495			84,781
Insurance			107,479			77,797
Real estate taxes			319,053			218,400
General and administrative			10,600			57,386
			723,127			576,151
Excess of revenues over certain expenses		$	1,492,663		$	1,313,415

See notes to statements of revenues and certain expenses.

NOTES TO STATEMENTS OF REVENUES AND CERTAIN EXPENSES

1 — Organization and Basis of Presentation
The Property, located in Orlando, Florida, was acquired on January 18, 2005 and contains approximately 186,000 square feet of commercial space. At August 31, 2006, the Property was 100% leased. The tenant leases contain provisions for additional rent based on increases in operating expenses and real estate taxes over base period amounts.

TIAA Real Estate AccountProspectus |169

2 — Summary of Significant Accounting Policies

Use of Estimates

Revenue Recognition

3 — Major Tenants
Four tenants lease approximately 65% of the Property’s square footage. Rent from these tenants represented approximately 81% of rental income for the period January 18, 2005 to December 31, 2005 and 69% for the eight months ended August 31, 2006.

Year Ending December 31,
2006	$	2,179,000
2007		2,319,000
2008		2,106,000
2009		1,917,000
2010		1,759,000
Thereafter		902,000
	$	11,182,000

5 — Related Party Transactions
An affiliate of the owner received management fees and certain salary and other cost reimbursements of $110,658 for the year ended December 31, 2005 and $116,025 for the eight months ended August 31, 2006.

170|ProspectusTIAA Real Estate Account

The Marketplace at Dr. Phillips, Orlando, Florida

INDEPENDENT AUDITORS’ REPORT

To the Management of Teachers Insurance and Annuity Association

We have audited the accompanying statement of revenues and certain expenses of the property located at The Marketplace at Dr. Phillips, Orlando, Florida (the “Property”), as described in Note 1, for the year ended December 31, 2005. This financial statement is the responsibility of the Property’s management. Our responsibility is to express an opinion on this financial statement based on our audit.

October 17, 2006

TIAA Real Estate AccountProspectus |171

The Marketplace at Dr. Phillips, Orlando, Florida

STATEMENTS OF REVENUES AND CERTAIN EXPENSES

	Year Ended			Eight Months Ended
	December 31, 2005			August 31, 2006
	(Audited)			(Unaudited)
REVENUES
Rental income		$	5,266,968		$	4,316,033
Recoveries			1,323,065			1,114,479
Lease cancellation fee			8,305			—
Other income			997			844
			6,599,335			5,431,356
CERTAIN EXPENSES
Operating expenses			657,888			466,954
Management fees			281,582			278,779
Insurance			201,500			121,218
Real estate taxes			862,628			605,616
General and administrative expenses			74,943			55,819
			2,078,541			1,528,386
Excess of revenues over certain expenses		$	4,520,794		$	3,902,970

See notes to statements of revenues and certain expenses.

NOTES TO STATEMENTS OF REVENUES AND CERTAIN EXPENSES

1 — Organization and Basis of Presentation
The Property, located in Orlando, Florida, contains approximately 328,000 square feet of commercial space. At August 31, 2006, the Property was 99% leased. The tenant leases contain provisions for additional rent based on increases in operating expenses and real estate taxes over base period amounts.

172|ProspectusTIAA Real Estate Account

2 — Summary of Significant Accounting Policies

Use of Estimates

Revenue Recognition

3 — Major Tenants
Two tenants lease approximately 31% of the Property’s square footage. Rent from these tenants represented approximately 17% of rental income for the year ended December 31, 2005 and 14% for the eight months ended August 31, 2006.

Year Ending December 31,
2006	$	5,754,000
2007		5,465,000
2008		5,166,000
2009		4,087,000
2010		3,308,000
Thereafter		7,236,000
	$	31,016,000

5 — Related Party Transactions
An affiliate of the owner received management fees and certain salary and other expense reimbursements of $325,878 for the year ended December 31, 2005 and $306,727 for the eight months ended August 31, 2006.

The affiliate occupies 3,455 square feet of space in the Property and was charged rents of $79,465 for the year ended December 31, 2005 and $59,598 for the eight months ended August 31, 2006.

TIAA Real Estate AccountProspectus |173

Palm Lakes Plaza, Margate, Florida

INDEPENDENT AUDITORS’ REPORT

To the Management of Teachers Insurance and Annuity Association

We have audited the accompanying statement of revenues and certain expenses of the property located at Palm Lakes Plaza, Margate, Florida (the “Property”), as described in Note 1, for the year ended December 31, 2005. This financial statement is the responsibility of the Property’s management. Our responsibility is to express an opinion on this financial statement based on our audit.

October 17, 2006

174|ProspectusTIAA Real Estate Account

Palm Lakes Plaza, Margate, Florida

STATEMENTS OF REVENUES AND CERTAIN EXPENSES

	Year Ended			Eight Months Ended
	December 31, 2005			August 31, 2006
	(Audited)			(Unaudited)
REVENUES
Rental income		$	771,477		$	872,076
Recoveries			323,125			264,859
Other income			3,115			19,901
			1,097,717			1,156,836
CERTAIN EXPENSES
Operating expenses			329,142			245,242
Management fees			39,793			46,679
Insurance			67,083			56,123
Real estate taxes			191,970			134,379
General and administrative expenses			50,653			25,531
			678,641			507,954
Excess of revenues over certain expenses		$	419,076		$	648,882

See notes to statements of revenues and certain expenses.

NOTES TO STATEMENTS OF REVENUES AND CERTAIN EXPENSES

1 — Organization and Basis of Presentation
The Property, located in Margate, Florida, contains approximately 114,000 square feet of commercial space. At August 31, 2006, the Property was 91% leased. The tenant leases contain provisions for additional rent based on increases in operating expenses and real estate taxes over base period amounts.

TIAA Real Estate AccountProspectus |175

2 — Summary of Significant Accounting Policies

Use of Estimates

Revenue Recognition

3 — Major Tenants
Three tenants lease approximately 45% of the Property’s square footage. Rent from these tenants represented approximately 43% of rental income for the year ended December 31, 2005 and 25% for the eight months ended August 31, 2006.

Year Ending December 31,
2006	$	1,346,000
2007		1,457,000
2008		1,475,000
2009		1,452,000
2010		1,199,000
Thereafter		5,404,000
	$	12,333,000

5 — Related Party Transactions
An affiliate of the owner received management fees totaling $39,793 for the year ended December 31, 2005 and $46,679 for the eight months ended August 31, 2006.

176|ProspectusTIAA Real Estate Account

South Dade Shopping Center, Miami, Florida

INDEPENDENT AUDITORS’ REPORT

To the Management of Teachers Insurance and Annuity Association

We have audited the accompanying statement of revenues and certain expenses of the property located at South Dade Shopping Center, Miami, Florida (the “Property”), as described in Note 1, for the year ended December 31, 2005. This financial statement is the responsibility of the Property’s management. Our responsibility is to express an opinion on this financial statement based on our audit.

October 17, 2006

TIAA Real Estate AccountProspectus |177

South Dade Shopping Center, Miami, Florida

STATEMENTS OF REVENUES AND CERTAIN EXPENSES

	Year Ended			Eight Months Ended
	December 31, 2005			August 31, 2006
	(Audited)			(Unaudited)
REVENUES
Rental income		$	2,004,440		$	2,139,392
Recoveries			912,206			570,656
Other income			2,364			623
			2,919,010			2,710,671
CERTAIN EXPENSES
Operating expenses			566,716			417,869
Management fees			139,973			115,103
Insurance			167,598			159,463
Real estate taxes			451,300			401,938
General and administrative expenses			50,483			46,735
			1,376,070			1,141,108
Excess of revenues over certain expenses		$	1,542,940		$	1,569,563

See notes to statements of revenues and certain expenses.

NOTES TO STATEMENTS OF REVENUES AND CERTAIN EXPENSES

1 — Organization and Basis of Presentation
The Property, located in Miami, Florida, contains approximately 219,000 square feet of commercial space. At August 31, 2006, the Property was 99% leased. The tenant leases contain provisions for additional rent based on increases in operating expenses and real estate taxes over base period amounts.

178|ProspectusTIAA Real Estate Account

2 — Summary of Significant Accounting Policies

Use of Estimates

Revenue Recognition

3 — Major Tenants
Two tenants lease approximately 30% of the Property’s square footage. Rent from these tenants represented approximately 18% of rental income for the year ended December 31, 2005 and 14% for the eight months ended August 31, 2006.

Year Ending December 31,
2006	$	3,010,000
2007		3,099,000
2008		3,034,000
2009		2,793,000
2010		2,057,000
Thereafter		6,510,000
	$	20,503,000

5 — Related Party Transactions
An affiliate of the owner received management fees and certain salary and marketing cost reimbursements of $186,898 for the year ended December 31, 2005 and $161,759 for the eight months ended August 31, 2006.

TIAA Real Estate AccountProspectus |179

The Ellipse at Ballston, Arlington, Virginia

INDEPENDENT AUDITORS’ REPORT

To the Management of Teachers Insurance and Annuity Association

We have audited the accompanying statement of revenues and certain expenses of the property located at The Ellipse at Ballston, Arlington, Virginia (the “Property”), as described in Note 1, for the year ended December 31, 2005. This financial statement is the responsibility of the Property’s management. Our responsibility is to express an opinion on this financial statement based on our audit.

October 30, 2006

180|ProspectusTIAA Real Estate Account

The Ellipse at Ballston, Arlington, Virginia

STATEMENTS OF REVENUES AND CERTAIN EXPENSES

	Year Ended			Nine Months Ended
	December 31, 2005			September 30, 2006
	(Audited)			(Unaudited)
REVENUES
Rental income		$	5,249,995		$	4,367,328
Parking garage income			269,243			202,455
Recoveries			243,335			244,189
Other income			3,093			6,763
			5,765,666			4,820,735
CERTAIN EXPENSES
Operating expenses			988,642			758,854
Insurance			56,926			45,348
Real estate taxes			421,335			354,104
General and administrative expenses			298,469			307,075
			1,765,372			1,465,381
Excess of revenues over certain expenses		$	4,000,294		$	3,355,354

See notes to statements of revenues and certain expenses.

NOTES TO STATEMENTS OF REVENUES AND CERTAIN EXPENSES

1 — Organization and Basis of Presentation
The Property, located in Arlington, Virginia, contains approximately 197,000 square feet of commercial space. At September 30, 2006, the Property was 97% leased. The tenant leases contain provisions for additional rent based on increases in operating expenses and real estate taxes over base period amounts.

The statement of revenues and certain expenses for the nine months ended September 30, 2006 is unaudited. However, in the opinion of management, all adjustments (consisting solely of normal recurring adjustments) necessary for the fair presentation of this statement of revenues and certain expenses for the interim period on the basis described above have been included. The results for such an interim period are not necessarily indicative of the results for the entire year.

TIAA Real Estate AccountProspectus |181

2 — Summary of Significant Accounting Policies

Use of Estimates

Revenue Recognition

3 — Major Tenants
Three tenants currently lease approximately 31% of the Property’s square footage. Rent from these tenants represented approximately 42% of revenues for the year ended December 31, 2005 and 34% for the nine months ended September 30, 2006.

4 — Operating Leases
Space in the Property is rented to tenants under various noncancelable operating leases. Approximate minimum future rents based on leases in effect at October 30, 2006 are as follows:

Year Ending December 31,
2006	$	5,465,000
2007		6,220,000
2008		6,335,000
2009		6,076,000
2010		5,164,000
Thereafter		9,497,000
	$	38,757,000

5 — Related Party Transaction
Amounts paid to an affiliated company for management fees were $161,451 and $136,019 for the year ended December 31, 2005 and the nine months ended September 30, 2006, respectively.

182|ProspectusTIAA Real Estate Account

Developers Diversified Realty Corp., Joint Venture Portfolio

INDEPENDENT AUDITORS’ REPORT

To the Management of Teachers Insurance and Annuity Association

We have audited the accompanying statement of revenues and certain expenses of the Teachers Insurance and Annuity Association/Developers Diversified Realty Corp. Joint Venture Portfolio (the “Portfolio”), as described in Note 1, for the year ended December 31, 2005. This financial statement is the responsibility of the Portfolio’s management. Our responsibility is to express an opinion on this financial statement based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Portfolio’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement, 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, the financial statement referred to above presents fairly, in all material respects, the revenues and certain expenses of the Portfolio for the year ended December 31, 2005, in conformity with accounting principles generally accepted in the United States of America.

December 6, 2006

TIAA Real Estate AccountProspectus |183

Developers Diversified Realty Corp., Joint Venture Portfolio

STATEMENTS OF REVENUES AND CERTAIN EXPENSES

	Year Ended			Nine Months Ended
	December 31, 2005			September 30, 2006
	(Audited)			(Unaudited)
REVENUES
Rental income		$	201,195,384		$	151,177,708
Recoveries			46,774,911			36,116,240
Lease termination fees			387,706			4,775,876
Other income			229,847			452,315
			248,587,848			192,522,139
CERTAIN EXPENSES
Common area maintenance			21,220,085			16,338,417
Operating expenses			4,539,528			4,196,920
Real estate taxes			29,201,010			22,614,759
Management fees			11,065,183			8,415,742
Ground rent			1,33,669			998,002
Insurance			1,902,789			1,472,102
General and administrative			183,442			166,530
			69,442,706			54,202,472
Excess of revenues over certain expenses		$	179,145,142		$	138,319,667

See notes to statements of revenues and certain expenses.

NOTES TO STATEMENTS OF REVENUES AND CERTAIN EXPENSES

1 — Organizaton and Basis of Presentation
The Portfolio consists of 67 community retail centers, comprised of 97 individual properties, predominately located in the Southeastern region of the United States. The Portfolio contains approximately 16.7 million square feet of commercial space, and was 97% leased at September 30, 2006. The tenant leases contain provisions for additional rent based on increases in operating expenses and real estate taxes.

The statement of revenues and certain expenses for the nine months ended September 30, 2006 is unaudited. However, in the opinion of management, all

184|ProspectusTIAA Real Estate Account

adjustments (consisting solely of normal recurring adjustments) necessary for the fair presentation of this statement of revenues and certain expenses for the interim period on the basis described above have been included. The results for such an interim period are not necessarily indicative of the results for the entire year.

2 — Summary of Significant Accounting Policies

Use of Estimates

Revenue Recognition

Rental income from leases with scheduled rent increases is recognized on a straight-line basis over the lease term. Included in rental income for the year ended December 31, 2005 and the nine months ended September 30, 2006 are accruals of $6,441,351 and $3,117,126, respectively, representing the revenue recognized in excess of rents due under the lease agreements. Recoveries, based on payments for real estate taxes and operating expenses, are estimated and accrued.

3 — Operating Leases
Space in the Portfolio is rented to tenants under various noncancelable operating leases. Approximate minimum future rents required under leases in effect at December 31, 2005 are as follows:

Year Ending December 31,
2006	$	191,171,000
2007		189,242,000
2008		169,754,000
2009		158,037,000
2010		144,599,000
Thereafter		676,827,000
	$	1,529,630,000

4 — Related Party Transactions
The owner of the properties in the Portfolio also owns the companies which provide property management services. Management fees of $11,065,183 and $8,415,742 were incurred for the year ended December 31, 2005 and the nine months ended September 30, 2006, respectively.

Metropolitan Construction Services, an affiliate of a stockholder of the properties’ owner, provides construction services, including general contracting services and ongoing repairs and maintenance. Costs of $1,491,974 and $757,799

TIAA Real Estate AccountProspectus |185

were incurred for the year ended December 31, 2005 and the nine months ended September 30, 2006, respectively.

5 — Ground Lease Commitments
The Portfolio holds ground leases for certain properties. Rent expense is recognized on a straight-line basis over the lease term. The lease terms expire through February 28, 2051. Total rent expense was $1,330,669 and $998,002 for the year ended December 31, 2005 and the nine months ended September 30, 2006, respectively. Included in rent expense are accruals of $685,669 and $514,252 for the year ended December 31, 2005 and the nine months ended September 30, 2006, respectively.

Minimum future annual payments required under the leases are approximately as follows:

Year Ending December 31,
2006	$	645,000
2007		645,000
2008		646,000
2009		647,000
2010		647,000
Thereafter		57,908,000
	$	61,138,000

186|ProspectusTIAA Real Estate Account

Printemps de L’Homme, 110 Rue de Provence, Paris, France

INDEPENDENT AUDITORS’ REPORT

To the Management of Teachers Insurance and Annuity Association

We have audited the accompanying statement of revenues and certain expenses of the property known as Printemps de l’Homme, located at 110 Rue de Provence, Paris, France (the “Property”), as described in Note 1, for the year ended December 31, 2005. This financial statement is the responsibility of the Property’s management. Our responsibility is to express an opinion on this financial statement based on our audit.

December 22, 2006

TIAA Real Estate AccountProspectus |187

Printemps de L’Homme, 110 Rue de Provence, Paris, France

STATEMENTS OF REVENUES AND CERTAIN EXPENSES

	Year Ended			Nine Months Ended
	December 31, 2005			September 30, 2006
(In thousands)	(Audited)			(Unaudited)
REVENUES
Rental income		$	9,126		$	7,168
Property tax			253			198
Office tax			33			25
Cleaning tax			8			6
			9,420			7,397
CERTAIN EXPENSES
Property tax			253			198
Management fee			68			36
Office tax			33			25
Cleaning tax			8			6
Building insurance			7			5
			369			270
Excess of revenues over certain expenses		$	9,051		$	7,127

See notes to statements of revenues and certain expenses.

NOTES TO STATEMENTS OF REVENUES AND CERTAIN EXPENSES

1 — Organizaton and Basis of Presentation
The Property consists of a building located at 110 Rue de Provence, Paris, France, which contains approximately 142,000 square feet of commercial space. The building is located in the “Grands Magasins” district, which was created at the end of the 19th century. The Property is leased to one tenant under a lease which expires on September 30, 2010, and which contains a provision for annual increases based on the increase in the National Institute for Statistics and Economic Studies (“INSEE”) index for the cost of construction. In addition, the tenant pays all property expenses, including property, office and cleaning taxes, but excluding management fees.

188|ProspectusTIAA Real Estate Account

The accompanying financial statements have been converted from Euros to U.S. dollars using the Federal Reserve Board’s average exchange rates for the year ended December 31, 2005 and the nine months ended September 30, 2006 of 1.2400 and 1.2522, respectively. The conversion rate used for minimum future rents in Note 3 is 1.1842.

2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

Rental income from the lease is recognized as earned over the lease term. Service charges for taxes and insurance are billed as incurred or on an estimated basis as set forth in the lease agreement.

Revenue Recognition

3 — OPERATING LEASES
Space in the Property is rented to the tenant under a noncancelable operating lease. Approximate minimum future rents required as of December 31, 2005 are as follows:

Year Ending December 31,	(Amount in thousands)
2006		$	8,959
2007			8,959
2008			8,959
2009			8,959
2010			6,719
		$	42,555

TIAA Real Estate AccountProspectus |189

501 Boylston Street

INDEPENDENT AUDITORS’ REPORT

To the Stockholders of Teachers Insurance and
Annuity Association of America for the Benefit of the Real Estate Account

We have audited the accompanying statement of revenues and certain expenses of 501 Boylston Street (the “Property”) for the year ended December 31, 2005. The financial statement is the responsibility of the Property’s management. Our responsibility is to express an opinion on this financial statement based on our audit.

We conducted our audit in accordance with the auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the statement of revenue and certain expenses is free from material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the statement of revenues and certain expenses. 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.

The accompanying statement of revenues and certain expenses was prepared for the purpose of complying with Rule 3-14 of Regulation S-X of the Securities and Exchange Commission and is not intended to be a complete presentation of the Property’s revenues and certain expenses.

In our opinion, the financial statement referred to above presents fairly, in all material respects, the revenues and certain expenses of the Property as described in Note 1, for the year ended December 31, 2005, in conformity with accounting principles generally accepted in the United States of America.

Certified Public Accountants

New York, New York
December 28, 2006

190|ProspectusTIAA Real Estate Account

501 Boylston Street

STATEMENT OF REVENUES AND CERTAIN EXPENSES

	Nine Months Ended
	September 30, 2006			Year Ended
	(Unaudited)			December 31, 2005
REVENUES:
Office rent		$	7,568,822		$	9,008,100
Retail rent			2,255,347			979,688
Parking income			1,271,884			1,306,883
Tenant reimbursements			2,256,424			1,293,529
Tenant service charge income			74,239			160,652
Miscellaneous			—			10,648
TOTAL REVENUES			13,426,716			12,759,500
CERTAIN EXPENSES:
Operating expenses			5,755,057			6,286,779
Real estate taxes			1,767,184			2,231,549
General and administrative			387,995			534,664
Management fees			427,101			355,529
Insurance			116,550			131,420
TOTAL CERTAIN EXPENSES			8,453,887			9,539,941
REVENUES IN EXCESS OF CERTAIN EXPENSES		$	4,972,829		$	3,219,559

The accompanying notes to the statement of revenues and certain expenses are an integral part of this statement.

1 — Summary of Accounting Policies

(a) Basis of Presentation

Presented herein is the statement of revenues and certain expenses related to the operation of a commercial condominium building located at 501 Boylston Street (the “Property”) in Boston, Massachusetts.

Teachers Insurance and Annuity Association of America for the Benefit of the Real Estate Account (“Account”) purchased the Property on December 28, 2006.

The accompanying financial statement has been prepared in accordance with the applicable rules and regulations of the Securities and Exchange Commission for the acquisition of real estate properties. Accordingly, the financial statement excludes certain expenses that may not be comparable to those expected to be incurred by Account in the proposed future operations of the aforementioned property. Items excluded consist of depreciation and amortization, interest expense and other financing costs, and general and administrative expenses not directly related to the future operations.

TIAA Real Estate AccountProspectus |191

(b) Use of Estimates

The preparation of the statement of revenues and certain expenses in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the statement of revenues and certain expenses and accompanying notes. Actual results could differ from those estimates.

(c) Revenue Recognition

Minimum rental income is recognized on a straight-line basis over the term of the lease. Tenant reimbursements and service charge income are recognized as the related expenses are incurred or as services are rendered, respectively.

2 — Significant Tenant and Future Minimum Rents Schedule
During 2005, one tenant accounted for approximately 70% of total revenues. Future minimum lease payments to be received as of December 31, 2005 under noncancelable operating leases, after giving effect to leases executed through December 14, 2006, are as follows:

2006	$	15,617,000
2007		24,135,000
2008		24,957,000
2009		23,175,000
2010		23,736,000
Thereafter		162,295,000
	$	273,915,000

Some of these leases contain renewal options and increases in minimum rent based on increases in certain consumer price indexes or increases in sales over base amounts. The leases also provide for reimbursements of certain utility, real estate and operating expenses (“Tenant Reimbursements”).

3 — Related Party Transactions

(a) For the year ended December 31, 2005, management fees of approximately $153,000 were paid to an affiliate of the Property owner.

(b) For the year ended December 31, 2005, rental revenue received from an affiliate of the Property owner was approximately $1,867,000.

4 — Interim Unaudited Financial Information
The statement of revenues and certain expenses for the nine months ended September 30, 2006 is unaudited; however, in the opinion of management, all adjustments (consisting solely of normal recurring adjustments) necessary for a fair presentation of the statement of revenues and certain expenses for the interim period have been included. The results of interim periods are not necessarily indicative of the results to be obtained for a full fiscal year.

192|ProspectusTIAA Real Estate Account

Camelback Center, Phoenix, Arizona

INDEPENDENT AUDITORS’ REPORT

To the Management of Teachers Insurance and Annuity Association

We have audited the accompanying statement of revenues and certain expenses of Camelback Center – Phoenix, Arizona (the “Property”), as described in Note A, for the year ended December 31, 2005. This financial statement is the responsibility of the Property’s management. Our responsibility is to express an opinion on this financial statement based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America. 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 consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Property’s internal control over financial reporting. Accordingly we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. 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.

The accompanying statement of revenues and certain expenses was prepared for the purpose of complying with Rule 3-14 of Securities and Exchange Commission Regulation S-X and, as described in Note A, is not intended to be a complete presentation of the Property’s revenues and expenses.

In our opinion, the financial statement referred to above presents fairly, in all material respects, the revenue and certain expenses of the Property for the year ended December 31, 2005 in conformity with accounting principles generally accepted in the United States of America.

Aarons Grant & Habif, LLC
December 28, 2006

TIAA Real Estate AccountProspectus |193

Camelback Center, Phoenix, Arizona

STATEMENT OF REVENUES AND CERTAIN EXPENSES

				For the
		For the Year Ended		Eleven Months Ended
		December 31, 2005		November 30, 2006
		(Audited)		(Unaudited)
REVENUES
Rental income	$	2,556,012	$	3,367,516
Recoveries		3,323		105,779
Other income		40,905		171,921
Total Revenues		2,600,240		3,645,216
CERTAIN EXPENSES
Utilities		251,587		317,633
Repairs and maintenance		496,282		623,743
Management Fees		164,529		193,022
Real estate taxes		647,707		754,428
Insurance		34,978		37,121
Total certain expenses		1,595,083		1,925,947
Revenues in excess of certain expenses	$	1,005,157	$	1,719,269

See Independent Auditors’ Report

Note A — Basis of Presentation
The statement of revenue and certain expenses (the financial statement) for the year ended December 31, 2005 and the eleven months ended November 30, 2006 (unaudited) relate to the operations of Camelback Center (the Property), which will be acquired by Teachers Insurance and Annuity Association (the Company). The Property located in Phoenix, Arizona, contains 231,345 square feet of rentable commercial space.

The accompanying financial statement is presented in conformity with Rule 3-14 of Securities and Exchange Commission Regulation S-X. Accordingly, the financial statement is not representative of the actual operations for the periods presented, as certain expenses, which may not be comparable to the expenses expected to be incurred in the future operations of the Property, have been excluded. Expenses excluded consist of interest, depreciation and amortization and certain other expenses not directly related to the future operations of the Property.

Note B — Summary of Significant Accounting Policies
This summary of significant accounting policies of the Property is presented to assist in understanding the Property’s financial statement. The financial statement and notes are representations of the Property’s management who is responsible for their integrity and objectivity. These accounting policies conform to generally accepted accounting principles and have been consistently applied in the preparation of the consolidated financial statements.

194|ProspectusTIAA Real Estate Account

Use of Estimates

The preparation of financial statements requires management to make estimates and assumptions that affect the reporting and disclosure of revenue and certain expenses during the reporting period to prepare the statement in conformity with accounting principles generally accepted in the United States of America. Actual results could differ from those estimates.

Revenue Recognition

Revenue from operating leases, which includes scheduled increases over the lease term, is recognized on a straight-line basis.

Unaudited interim statement

The statement of revenue and certain expenses for the eleven months ended November 30, 2006 is unaudited. However, in the opinion of management, all adjustments (consisting solely of normal recurring adjustments) necessary for the fair presentation of this statement of revenues and certain expenses for the interim period on the basis described above have been included. The results for such an interim period are not necessarily indicative of the results for the entire year.

Note C — Future Rent Payments
Space in the Property is rented to tenants under various noncancelable operating leases. Approximate minimum future rents required under these leases in effect at December 31, 2005 are as follows:

December 31,
2006	$	3,012,321
2007		3,699,562
2008		3,465,692
2009		2,850,714
2010		1,512,778
2011 and thereafter		2,275,662
	$	16,816,729

Note D — Concentrations
One tenant leases approximately 11% of the Property’s square footage. Income from this tenant represented approximately 18% of total revenue for the year ended December 31, 2005.

Note E — Property Management Fees
Property management expense has been included in the financial statement for the Property, with the property management fee on the property ranging from 5 – 6% of cash receipts.

TIAA Real Estate AccountProspectus |195

9345 Santa Anita Avenue

INDEPENDENT AUDITORS’ REPORT

To the Stockholders of Teachers Insurance and
Annuity Association of America for the Benefit of the Real Estate Account

We have audited the accompanying statement of revenues and certain expenses of 9345 Santa Anita Avenue (the “Property”) for the year ended December 31, 2005. The financial statement is the responsibility of the Property’s management. Our responsibility is to express an opinion on this financial statement based on our audit.

Certified Public Accountants
New York, New York
September 26, 2006

196|ProspectusTIAA Real Estate Account

9345 Santa Anita Avenue

STATEMENT OF REVENUES AND CERTAIN EXPENSES

		Six Months Ended
		June 30, 2006		Year Ended
		(Unaudited)		December 31, 2005
REVENUES:
Base rents	$	455,389	$	910,778
Tenant reimbursements (insurance)		26,885		52,326
TOTAL REVENUES		482,274		963,104
CERTAIN EXPENSES:
Insurance expense		26,885		52,326
TOTAL CERTAIN EXPENSES		26,885		52,326
REVENUES IN EXCESS OF CERTAIN EXPENSES	$	455,389	$	910,778

The accompanying notes to the statement of revenues and certain expenses are an integral part of this statement.

1 — Summary of Accounting Policies

(a) Basis of Presentation

Presented herein is the statement of revenues and certain expenses related to the operation of an industrial building located at 9345 Santa Anita Ave. (the “Property”) in Rancho Cucamonga, California.

Teachers Insurance and Annuity Association of America for the Benefit of the Real Estate Account (“Account”) purchased the Property on September 26, 2006.

The accompanying financial statement has been prepared in accordance with the applicable rules and regulations of the Securities and Exchange Commission for the acquisition of real estate properties. Accordingly, the financial statement excludes certain expenses that may not be comparable to those expected to be incurred by Account in the proposed future operations of the aforementioned property. Items excluded consist of depreciation and amortization, and general and administrative expenses not directly related to the future operations.

(b) Use of Estimates

(c) Revenue Recognition

Minimum rental income is recognized on a straight-line basis over the term of the lease. Accordingly, the amount of rent recognized in the accompanying financial statement for the (unaudited) six months ended June 30, 2006 and for

TIAA Real Estate AccountProspectus |197

the year ended December 31, 2005 is $74,069 and $148,138, respectively, less than the amounts required to be paid under the terms of the lease.

2 — Significant Tenant and Future Minimum Rents Schedule
The entire Property is being leased to one tenant, a distributor, under a noncancelable triple net lease (the “Lease”). Under the terms of the Lease, the lessee will operate, manage and pay substantially all costs associated with operating the Property. Pursuant to the Lease, the landlord has the option of either paying for real estate taxes on the Property and obtaining reimbursement for the same from the tenant, or directing the tenant to make payments for real estate taxes directly to the taxing jurisdiction. Real estate taxes paid directly by the tenant to the taxing jurisdiction for the (unaudited) six months ended June 30, 2006 and for the year ended December 31, 2005 amounted to $69,180 and $137,813, respectively. Such amounts are not included in the accompanying financial statement.

Future minimum lease payments to be received as of December 31, 2005 under this noncancelable operating lease are as follows:

2006	$	1,058,916
2007		1,114,066
2008		1,125,096
2009		750,064
	$	4,048,142

The tenant has three options to extend the Lease with each such extension being for a term of five years. The first extended term would commence on the last day of the initial term of the lease.

3 — Interim Unaudited Financial Information
The statement of revenues and certain expenses for the six months ended June 30, 2006 is unaudited; however, in the opinion of management, all adjustments (consisting solely of normal recurring adjustments) necessary for a fair presentation of the statement of revenues and certain expenses for the interim period has been included. The results of interim periods are not necessarily indicative of the results to be obtained for a full fiscal year.

198|ProspectusTIAA Real Estate Account

1900 South Burgundy, Ontario, California

INDEPENDENT AUDITORS’ REPORT

To the Management of Teachers Insurance and Annuity Association

We have audited the accompanying statement of revenues and certain expenses of 1900 South Burgundy Place, Ontario, California (the “Property”), as described in Note 1, for the year ended December 31, 2005. This financial statement is the responsibility of the Property’s management. Our responsibility is to express an opinion on this financial statement based on our audit.

December 13, 2006

TIAA Real Estate AccountProspectus |199

1900 South Burgundy, Ontario, California

STATEMENTS OF REVENUES AND CERTAIN EXPENSES

		Year Ended		Nine Months Ended
		December 31, 2005		September 30, 2006
		(Audited)		(Unaudited)
REVENUES
Rental income	$	1,550,326	$	1,156,326
Recoveries		287,443		216,084
		1,837,769		1,372,410
CERTAIN EXPENSES
Real estate taxes		254,660		190,127
Management fees		36,000		27,000
Insurance		33,269		32,798
Professional fees		3,363		—
Administrative		938		3,035
Miscellaneous		758		—
		328,988		252,960
Excess of revenues over certain expenses	$	1,508,781	$	1,119,450
See notes to statements of revenues and certain expenses.

1 — Organizaton and Basis of Presentation
The Property, located in Ontario, California, contains approximately 397,000 square feet of commercial space, and is 100% “triple net leased” to subsidiaries of, and guaranteed by, Test-Rite International Co., Ltd. The lessee is responsible for utilities, taxes, insurance and other operating costs.

The accompanying financial statements are presented in conformity with Rule 3-14 of Securities and Exchange Commission Regulation S-X. Accordingly, the financial statements are not representative of actual operations for the period presented, as certain expenses, which may not be comparable to the expenses expected to be incurred in the future operations of the Property, have been excluded. Expenses excluded consist of interest, depreciation and amortization and certain other expenses not directly related to the future operations of the Property.

200|ProspectusTIAA Real Estate Account

2 — Summary of Significant Accounting Policies

Use of Estimates

Revenue Recognition

Rental income from the lease is recognized on a straight-line basis over the lease term. Included in rental income for the year ended December 31, 2005 and the nine months ended September 30, 2006 are accruals of $131,400 and $78,700, respectively, representing revenue recognized in excess of rents due under the lease agreement. Recoveries, based on payments for real estate taxes and certain operating expenses, are accrued.

3 — Operating Leases
Space in the Property is rented to the tenant under a noncancelable operating lease. Approximate minimum future rents required under the lease in effect at December 31, 2005 are as follows:

Year Ending December 31,
2006	$	1,437,000
2007		1,464,000
2008		1,547,000
2009		1,547,000
2010		1,636,000
Thereafter		2,916,000
	$	10,547,000

TIAA Real Estate AccountProspectus |201

Wilshire Rodeo Plaza, Beverly Hills, California

INDEPENDENT AUDITORS’ REPORT

To the Management of Teachers Insurance and Annuity Association

We have audited the accompanying statement of revenues and certain expenses of the property known as Wilshire Rodeo Plaza, located in Beverly Hills, California (the “Property”), as described in Note 1, for the nine months ended September 30, 2005. This financial statement is the responsibility of the Property’s management. Our responsibility is to express an opinion on this financial statement based on our audit.

In our opinion, the financial statement referred to above presents fairly, in all material respects, the revenues and certain expenses of the Property for the nine months ended September 30, 2005, in conformity with accounting principles generally accepted in the United States of America.

January 10, 2006

202|ProspectusTIAA Real Estate Account

Wilshire Rodeo Plaza, Beverly Hills, California

STATEMENT OF REVENUES AND CERTAIN EXPENSES

		Nine Months Ended
		September 30, 2005
REVENUES
Rental income	$	7,304,909
FASB Statement No. 13 accrual		1,616,500
Recoveries		1,880,033
Parking income		696,860
Storage		466,423
Lease termination fees		750,000
Other income		102,350
		12,817,075
CERTAIN EXPENSES
Operating expenses		1,783,092
Management fees		306,779
Insurance		213,280
Real estate taxes		1,281,066
Garage expense		3,529
Other taxes and licenses		82,877
		3,670,623
Excess of revenues over certain expenses	$	9,146,452

The accompanying notes are an integral part of this financial statement.

1 — Organizaton and Basis of Presentation
The Property, located in Beverly Hills, California, contains approximately 262,000 square feet square feet comprised of office and retail space. At September 30, 2005, the Property was 100% leased to eleven tenants. The tenant leases contain provisions for additional rent based on increases in operating expenses and real estate taxes over base period amounts.

The accompanying financial statement is presented in conformity with Rule 3-14 of Securities and Exchange Commission Regulation S-X. Accordingly, the financial statement is not representative of actual operations for the period presented, as certain expenses, which may not be comparable to the expenses expected to be incurred in the future operations of the Property, have been excluded. Expenses excluded consist of interest, depreciation and amortization and certain other expenses not directly related to the future operations of the Property.

TIAA Real Estate AccountProspectus |203

2 — Summary of Significant Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Revenue Recognition

3 — Major Tenants
Four tenants lease approximately 13%, 14%, 27% and 28%, respectively, for an aggregate of 82% of the Property’s total square footage. Rental income derived from these tenants is approximately the same percentages of total rental income.

4 — Operating Leases
Space in the Property is leased to tenants under various operating leases. Approximate minimum future rents required under leases in effect at December 31, 2005 are as follows:

Year Ending December 31,
2006	$	12,283,000
2007		12,504,000
2008		12,676,000
2009		12,887,000
2010		13,438,000
Thereafter		62,828,000
	$	126,616,000

5 — Related Party Transactions
The Property is managed by Broadway Real Estate Services, LLC, an affiliate of the owner of the Property. Management fees of approximately $307,000 were incurred for the nine months ended September 30, 2005.

204|ProspectusTIAA Real Estate Account

[THE CONDENSED STATUTORY-BASIS FINANCIAL STATEMENTS OF TIAA WILL
BE FILED BY AMENDMENT TO THIS REGISTRATION STATEMENT ON FORM S-1.]

TIAA Real Estate AccountProspectus |205

APPENDIX A — MANAGEMENT OF TIAA

The Real Estate Account has no officers or directors. The Trustees and principal executive officers of TIAA as of March 15, 2007, their ages, and their principal occupations, are as follows:

TRUSTEES

Name	Age	Principal Occupations During Past 5 Years
Elizabeth E. Bailey	68	John C. Hower Professor of Public Policy and Management, Wharton School, University of Pennsylvania. Director, CSX Corporation and Altria Group, Inc., Chair, National Bureau of Economic Research. Honorary Trustee, the Brookings Institution.

Robert C. Clark	63	Harvard University Distinguished Service Professor and Austin Wakeman Scott Professor of Law, Harvard Law School, Harvard University. Formerly Dean and Royall Professor of Law, Harvard Law School. Director, Collins & Aikman Corporation, Time Warner, Inc. and Omnicom Group.

Edward M. Hundert, M.D.	50	Former President, Case Western Reserve University. Formerly, Dean, 2000-2002, University of Rochester School of Medicine and Dentistry, Professor of Medical Humanities and Psychiatry, 1997-2002. Board Member, Rock and Roll Hall of Fame.

Marjorie Fine Knowles	67	Professor of Law, Georgia State University College of Law.

Donald K. Peterson	57	Former Chairman and Chief Executive Officer, Avaya Inc. Formerly, Executive Vice President and Chief Financial Officer, Lucent Technologies. Chairman, Board of Trustees, Worcester Polytechnic Institute. Director, Opti-Scrip.

Sidney A. Ribeau	59	President, Bowling Green University. Director, The Andersons, Convergys and Worthington Industries.

Dorothy K. Robinson	56	Vice President and General Counsel, Yale University (since 1986). Director, Newark Public Radio Inc., Youth Rights Media and Friends of New Haven Legal Assistance.

David L. Shedlarz	58	Vice Chairman of Pfizer Inc. Executive Vice President of Pfizer Inc. from 1999 to 2005 and Chief Financial Officer from 1995 to 2005. Director, Pitney Bowes Inc. Trustee of the International Accounting Standards Committee Foundation and a member of the J. P. Morgan Chase & Co. National Advisory Board. Director of the Board of Overseers, Leonard N. Stern School of Business, New York University; Chairman of the Board of the Multiple Sclerosis Society of New York and Director of the National Multiple Sclerosis Society; Director of Junior Achievement of New York.

Leonard S. Simon	70	Former Vice Chairman, Charter One Financial, Inc. Formerly, Chairman, President and Chief Executive Officer, RCSB Financial, Inc. and Chairman and Chief Executive Officer, Rochester Community Savings Bank. Director, Landmark Technology Partners, Inc., Integrated Nano-Technologies, LLC and I3T Corporation.

David F. Swensen	53	Chief Investment Officer, Yale University. Trustee, Brookings Institution, Carnegie Institution of Washington, Wesleyan University, and Hopkins School; Member, University of Cambridge Investment Board.

206|ProspectusTIAA Real Estate Account

TRUSTEES

Name	Age	Principal Occupations During Past 5 Years
Ronald L. Thompson	57	Chairman and Chief Executive Officer, Midwest Stamping and Manufacturing Company. Director, Interstate Bakeries Corporation and Washington University in St. Louis.

Marta Tienda	56	Maurice P. During ‘22 Professor of Demographic Studies, Princeton University. Director, Office of Population Research, Princeton University, 1998-2002. Director, Corporation of Brown University, the Princeton Healthcare System, Sloan Foundation, Jacobs Foundation and RAND Corporation.

Paul R. Tregurtha	71	Chairman and Chief Executive Officer, Mormac Marine Group, Inc. and Moran Transportation Company, Inc.; Vice Chairman, Interlake Steamship Company and Lakes Shipping Company; Formerly, Chairman, Meridian Aggregates, L.P. Director, FPL Group, Inc.

Rosalie J. Wolf	65	Managing Partner, Botanica Capital Partners LLC. Formerly, Managing Director, Offit Hall Capital Management LLC and its predecessor company, Laurel Management Company LLC; formerly, Treasurer and Chief Investment Officer, The Rockefeller Foundation. Director, North European Oil Royalty Trust; Chairman, Sanford C. Bernstein Fund, Inc.

OFFICER-TRUSTEES

Name	Age	Principal Occupations During Past 5 Years
Herbert M. Allison, Jr.	63	Chairman, President and Chief Executive Officer, TIAA. President and Chief Executive Officer, CREF. Formerly, President, Chief Operating Officer and Member of the Board of Directors of Merrill Lynch & Co., Inc., 1997-1999 and President and Chief Executive Officer of Alliance for LifeLong Learning, Inc., 2000-2002. Advisory Board, Yale School of Management; Chair, Business-Higher Education Forum; Director, The Conference Board; Member, Business Roundtable and Financial Services Roundtable.

OTHER OFFICERS

Name	Age	Principal Occupations During Past 5 Years
Georganne C. Proctor	50	Executive Vice President and Chief Financial Officer, TIAA and CREF.

Scott C. Evans	47	Executive Vice President and Head of Asset Management, TIAA and CREF.

Gary Chinery	57	Vice President and Treasurer, TIAA and CREF.

E. Laverne Jones	58	Vice President and Corporate Secretary, TIAA and CREF.

PORTFOLIO MANAGEMENT TEAM

Name	Age	Principal Occupations During Past 5 Years
Margaret A. Brandwein	60	Managing Director — Portfolio Manager, TIAA Real Estate Account.

Thomas Garbutt	48	Managing Director — Head of Global Real Estate Equities, TIAA

Philip J. McAndrews	48	Managing Director — Head of Real Estate Portfolio Management, TIAA.

TIAA Real Estate AccountProspectus |207

APPENDIX B — SPECIAL TERMS

Accumulation: The total value of your accumulation units in the Real Estate Account.

Accumulation Period: The period that begins with your first premium and continues until the entire accumulation has been applied to purchase annuity income, transferred from the Account, or paid to you or a beneficiary.

Accumulation Unit: A share of participation in the Real Estate Account for someone in the accumulation period. The Account’s accumulation unit value changes daily.

Annuity Unit: A measure used to calculate the amount of annuity payments due a participant.

Beneficiary: Any person or institution named to receive benefits if you die during the accumulation period or if you (and your annuity partner, if you have one) die before the guaranteed period of your annuity ends.

Business Day: Any day the New York Stock Exchange (NYSE) is open for trading. A business day ends at 4 p.m. Eastern time, or when trading closes on the NYSE, if earlier.

Calendar Day: Any day of the year. Calendar days end at the same time as business days.

Commuted Value: The present value of annuity payments due under an income option or method of payment not based on life contingencies. Present value is adjusted for investment gains or losses since the annuity unit value was last calculated.

Eligible Institution: A nonprofit institution, including any governmental institution, organized in the United States.

ERISA: The Employee Retirement Income Security Act of 1974, as amended. General Account: All of TIAA’s assets other than those allocated to the Real Estate Account or to other existing or future TIAA separate accounts.

Income Change Method: The method under which you choose to have your annuity payments revalued. Under the annual income change method, your payments are revalued once each year. Under the monthly income change method, your payments are revalued every month.

Separate Account: An investment account legally separated from the general assets of TIAA, whose income and investment gains and losses are credited to or charged against its own assets, without regard to TIAA’s other income, gains or losses.

208|ProspectusTIAA Real Estate Account

Valuation Day:Any day the NYSE is open for trading, as well as, for certain contracts, the last calendar day of each month. Valuation days end as of the close of all U.S. national exchanges where securities or other investments of the Account are principally traded. Valuation days that aren’t business days will end at 4 p.m. eastern time.

Valuation Period:The time from the end of one valuation day to the end of the next.

TIAA Real Estate AccountProspectus |209

[This page intentionally left blank.]

210|ProspectusTIAA Real Estate Account

[This page intentionally left blank.]

TIAA Real Estate AccountProspectus |211

[This page intentionally left blank.]

212|ProspectusTIAA Real Estate Account

PART II

INFORMATION NOT REQUIRED IN A PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution.

SEC Registration Fees	$	122,800
Costs of printing and engraving		600,000	*
Legal fees		10,000	*
Accounting fees		10,000	*
Miscellaneous		7,200	*
Total	$	750,000	*

_______________
* Approximate

Item 14. Indemnification of Directors and Officers.

Trustees, officers, and employees of TIAA may be indemnified against liabilities and expenses incurred in such capacity pursuant to Article Six of TIAA’s bylaws (see Exhibit 3(B)). Article Six provides that, to the extent permitted by law, TIAA will indemnify any person made or threatened to be made a party to any action, suit or proceeding by reason of the fact that such person is or was a trustee, officer, or employee of TIAA or, while a trustee, officer, or employee of TIAA, served any other organization in any capacity at TIAA’s request. To the extent permitted by law, such indemnification could include judgments, fines, amounts paid in settlement, and expenses, including attorney’s fees. TIAA has in effect an insurance policy that will indemnify its trustees, officers, and employees for liabilities arising from certain forms of conduct.

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to trustees, officers, or employees of TIAA, pursuant to the foregoing provision or otherwise, TIAA has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in that Act and is therefore unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment of expenses incurred or paid by a trustee, officer, or employee in the successful defense of any action, suit or proceeding) is asserted by a trustee, officer, or employee in connection with the securities being registered, TIAA will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in that Act and will be governed by the final adjudication of such issue.

Item 15. Recent Sales of Unregistered Securities.

None.

II-1

Item 16. Exhibits and Financial Statement Schedules.

(a)	Exhibits

(1)	Distribution and Administrative Services Agreement, dated September 29, 1995, by and between TIAA and
	TIAA-CREF Individual & Institutional Services, Inc.,¹as amended effective as of May 1, 2005², and as
	amended effective April 28, 2006.³

(3)	(A)	Restated Charter of TIAA⁴

	(B)	Bylaws of TIAA (as amended)⁵

(4)	(A)	Forms of RA, GRA, GSRA, SRA, IRA Real Estate Account Contract Endorsements¹, Keogh
		Contract², Retirement Select and Retirement Select Plus Contracts and Endorsements⁶and
		Retirement Choice and Retirement Choice Plus Contracts²

	(B)	Forms of Income-Paying Contracts¹

(5)	Opinion and Consent of George W. Madison, Esquire**

(10)	(A)	Independent Fiduciary Agreement, dated February 22, 2006, by and among TIAA, the Registrant, and
		The Real Estate Research Corporation⁷

	(B)	Custodial Services Agreement, dated as of June 1, 1995, by and between TIAA and Morgan Guaranty
		Trust Company of New York on behalf of the Registrant (Agreement assigned to The Bank of New
		York, January, 1996)¹

(23)	(A)	Consent of George W. Madison, Esquire (filed as Exhibit 5)**

	(B)	Consent of Sutherland Asbill & Brennan LLP*

	(C)	Consent of PricewaterhouseCoopers LLP*

	(D)	Consent of Ernst & Young LLP*

	(E)	Consent of Friedman LLP*

	(F)	Consent of Berdon LLP*

	(G)	Consent of Aarons Grant & Habif, LLC*

(24)	Powers of Attorney*

____________

1	Previously filed and incorporated herein by reference to the Account’s Post-Effective Amendment No. 2 to the Registration Statement on Form S-1, filed April 30, 1996 (File No. 33-92990).

2	Previously filed and incorporated herein by reference to the Account’s Post-Effective Amendment No. 1 to the Registration Statement on Form S-1 filed May 2, 2005 (File No. 333-121493).

3	Previously filed and incorporated herein by reference to Exhibit 1 to the Account’s Pre-Effective Amendment No. 1 to the Registration Statement on Form S-1 filed May 1, 2006 (File No. 333-132580).

4	Previously filed and incorporated herein by reference to the Account’s Pre-Effective Amendment No. 1 to the Registration Statement on Form S-1 filed December 21, 2004 (File No. 333-121493).

5	Previously filed and incorporated herein by reference to the Account’s Quarterly Report on Form 10-Q for the period ended September 30, 2006 and filed with the Commission on November 14, 2006 (File No. 033-92990).

6	Previously filed and incorporated herein by reference to the Account’s Pre-Effective Amendment No. 1 to the Registration Statement on Form S-1 filed April 29, 2004 (File No. 333-113602).

7	Previously filed and incorporated herein by reference to the Account’s Annual Report on Form 10-K for the period ended December 31, 2005, filed with the Commission on March 15, 2006 (File No. 033-92990).

*	Filed herewith.

**	To be filed by amendment

(b) Financial Statement Schedules

All Schedules have been omitted because they are not required under the related instructions or are inapplicable.

II-2

Item 17. Undertakings.

The undersigned Registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement:

	(i)	To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;

	(ii)	To reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement;

	(iii)	To include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement.

(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initialbona fideoffering thereof.

(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

(4) To provide the full financial statements of TIAA promptly upon written or oral request.

(5) That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.

(6) That, for the purpose of determining liability of the Registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities:

The undersigned Registrant undertakes that in a primary offering of securities of the undersigned Registrant pursuant to this Registration Statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned Registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

	(i)	Any preliminary prospectus or prospectuses of the undersigned Registrant relating to the offer- ing required to be filed pursuant to Rule 424;

	(ii)	Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned Registrant or used or referred to by the undersigned Registrant;

	(iii)	The portion of any other free writing prospectus relating to the offering containing material information about the undersigned Registrant or its securities provided by or on behalf of the undersigned Registrant; and

	(iv)	Any other communication that is an offer in the offering made by the undersigned Registrant to the purchaser.

[The full audited financial statements of TIAA will be filed by amendment to this Registration Statement on Form S-1.]

II-3

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant, TIAA Real Estate Account, has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in New York, New York, on the 22nd day of March, 2007.

	TIAA REAL ESTATE ACCOUNT

	By:	TEACHERS INSURANCE AND
		ANNUITY ASSOCIATION OF AMERICA

	By:	/s/ Herbert M. Allison, Jr.
		Herbert M. Allison, Jr.
		Chairman, President and
		Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following trustees and officers of Teachers Insurance and Annuity Association of America, in the capacities and on the dates indicated.

Signature	Title	Date

/s/ Herbert M. Allison, Jr.	Chairman, President and	March 22, 2007
Herbert M. Allison, Jr.	Chief Executive Officer
	(Principal Executive Officer) and Trustee

/s/ Georganne C. Proctor	Executive Vice President and	March 22, 2007
Georganne C. Proctor	Chief Financial Officer
	(Principal Financial and
	Accounting Officer)

*	Trustee	March 22, 2007
Elizabeth E. Bailey

*	Trustee	March 22, 2007
Robert C. Clark

*	Trustee	March 22, 2007
Edward M. Hundert M.D.

*	Trustee	March 22, 2007
Marjorie Fine Knowles

*	Trustee	March 22, 2007
Donald K. Peterson

*	Trustee	March 22, 2007
Sidney A. Ribeau

*	Trustee	March 22, 2007
Dorothy K. Robinson

	Trustee
David L. Shedlarz

*	Trustee	March 22, 2007
Leonard S. Simon

II-4

*	Trustee	March 22, 2007
David F. Swensen

*	Trustee	March 22, 2007
Ronald L. Thompson

*	Trustee	March 22, 2007
Marta Tienda

*	Trustee	March 22, 2007
Paul R. Tregurtha

*	Trustee	March 22, 2007
Rosalie J. Wolf


/s/ Stewart P. Greene
Stewart P. Greene

* Signed by Stewart P. Greene as attorney-in-fact pursuant to powers of attorney filed herewith.

II-5

Tiaa Real Estate Account S-1IPO registration