Tiaa Real Estate Account S-1 IPO registration

As filed with the Securities and Exchange Commission on March 24, 2008

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 other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer 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)

Copy to:
Jeffrey S. Puretz, Esquire
Dechert LLP
1775 I Street, N.W.
Washington, D.C. 20006

          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, 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, 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(d) under the Securities Act, 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, 333-132580 and 333-141513 (collectively, the “Prior Registration Statements”).

          Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.

          Large accelerated filero     Accelerated filero     Non-accelerated filerx     Smaller Reporting Companyo

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(1)
Accumulation units in TIAA Real Estate Account	*	*	$ 5,000,000,000**	$ 196,500**

*	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 $5,000,000,000 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.

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and we are not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED MARCH 24, 2008

PROSPECTUS
______,2008

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, or the value of real estate related securities, decrease due to general economic conditions and/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” on page 12.

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          %.

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:

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

■ SRAs (Supplemental Retirement Annuities)

■ GSRAs (Group Supplemental Retirement Annuities)

■ Retirement Choice and Retirement Choice Plus Annuity

■ GAs (Group Annuities) and Institutionally-Owned GSRAs

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

■ Keoghs

■ 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.

Neither the Securities and Exchange Commission (SEC) nor any state securities commission has approved or disapproved of 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.

TABLE OF CONTENTS

About the Real Estate Account and TIAA	2
The Account’s Investment Objective and Strategy	3
Past Performance	5
Summary of Account’s Expense Deductions	5
About the Account’s Investments — In General	7
General Investment and Operating Policies	10
Risks	12
Establishing and Managing the Account — The Role of TIAA	23
Description of Properties	27
Legal Proceedings	40
Selected Financial Data	41
Quarterly Selected Financial Information (Unaudited)	42
Management’s Discussion and Analysis of Financial Condition and Results of Operations	43

Quantitative and Qualitative Disclosures About Market Risk	66
Valuing the Account’s Assets	68
Expense Deductions	73
Employer Plan Fee Withdrawals	74
Certain Relationships With TIAA	74
The Contracts	75
How to Transfer and Withdraw Your Money	81
Receiving Annuity Income	87
Death Benefits	91
Taxes	93
General Matters	98
Distribution	100
State Regulation	101
Legal Matters	101
Experts	101
Additional Information	102
Financial Statements	103
Index to Financial Statements	104
Appendix A — Management of TIAA	171
Appendix B — Special Terms	174

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, 2007, TIAA’s general account had a mortgage and real property portfolio of approximately $22.1 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 and CREF serve approximately 3.3 million people and over 15,000 institutions. As of December 31, 2007, TIAA’s assets were approximately $196.4 billion; the combined assets for TIAA and CREF totaled approximately $417.8 billion.

          The Account offers individual and group accumulating annuity contracts (with contributions made on a pre-tax or after-tax basis), as well as individual lifetime and term-certain variable payout annuity contracts (including the payment of death benefits to beneficiaries). Investors are entitled to transfer funds to or from the Account under certain circumstances. Funds invested in the Account for each category of contract are expressed in terms of units, and unit values will fluctuate depending on the Account’s performance.

          More information about the Account may be obtained by writing us at 730 Third Avenue, New York, New York 10017-3206, calling us at 877 518-9161 or visiting our website at www.tiaa-cref.org.

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 85 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

TIAA Real Estate Account § Prospectus 3

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, 2007, the Account’s net assets totaled $17,660,536,799. At December 31, 2007, the Account held a total of 111 real estate property investments (including its interests in 12 real estate-related joint ventures) and one remaining equity interest in a joint venture in which the Account sold its real estate investment during the third quarter of 2007, representing 77.91% of the Account’s total investment portfolio (“Total Investments”).

          As of that date, the Account also held investments in a mortgage loan receivable, representing 0.38% of Total Investments, real estate equity securities, representing 2.24% of Total Investments, real estate limited partnerships, representing 1.74% of Total Investments, commercial paper, representing 9.23% of Total Investments, certificates of deposit, representing 2.22% of Total Investments, variable notes, representing 0.26% of Total Investments, bankers acceptance, representing 0.20% of Total Investments, and government agency bonds, representing 5.82% of Total Investments.

          Risks: An investment in the Account is subject to the risks associated with real estate investing, including the risks of acquiring, owning and selling real property, interest rate risk, market risk, credit risk, and regulatory and environmental risks. Further risks include the risks associated with making mortgage loan investments and investing in mortgage-backed securities, liquid investments and foreign real estate investments. These risks, among others, are described in “Risks” beginning on page 12. You may lose money by investing in this Account.

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PAST PERFORMANCE

          The bar chart and performance table below helps illustrate some of the risks of investing in the Account, and how investment performance during the accumulation period varies. The bar chart shows the Account’s total return during the accumulation period over the last ten calendar years and the performance table shows the Account’s returns during the accumulation period for the one-, three-, five- and ten-year periods through December 31, 2007. How the Account has performed in the past is not necessarily an indication of how it will perform in the future.

Best quarter: ____%, for the quarter ended ______.

Worst quarter: ____ %, for the quarter ended ______.

AVERAGE ANNUAL TOTAL RETURN (AS OF DECEMBER 31, 2007)

1 Year	3 Year	5 Year	10 Year
13.80%	13.96%	12.35%	9.79%

SUMMARY OF ACCOUNT’S 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 registered broker-dealer and wholly owned subsidiary of TIAA. In particular, TIAA performs investment management services and administration services for the Account, and Services provides distribution services for the Account. 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.

TIAA Real Estate Account § Prospectus 5

          The estimated annual expense deduction rate that appears in the expense table below reflects an estimate of the amount we expect to deduct to approximate the costs that the Account will incur from May 1, 2008 through April 30, 2009:

Type of Expense Deduction	Estimated Percent of Net Assets Annually	Services Performed
Investment Management	%	For investment advisory, investment management, portfolio accounting, custodial and similar services, including independent fiduciary and appraisal fees
Administration	%	For administrative services performed by TIAA, such as receiving and allocating premiums and calculating and making annuity payments
Distribution	%	For Services’ expenses related to distributing the annuity contracts
Mortality and Expense Risk	%	For TIAA’s bearing certain mortality and expense risks
Liquidity Guarantee	%	For TIAA’s liquidity guarantee
Total Annual Expense Deduction1,2	%	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 41 for additional information.

          Effective January 1, 2008, TIAA commenced performing the administration functions previously performed for the Account by Services (which include receiving and allocating premiums, calculating and making annuity payments and providing recordkeeping and other services). Distribution services for the Account, which include, without limitation, distribution of the annuity contracts, advising existing annuity contract owners in connection with their accumulations and providing assistance in designing, installing and providing administrative services to retirement plans for participating institutions and contract owners, continue to be performed by Services. Services is a wholly owned subsidiary of TIAA.

          TIAA and Services provide administration and distribution services, as applicable, on an at-cost basis. Since expenses are charged at cost, the expenses described are estimates for the year based on projected expense and asset levels. Administration charges also include certain costs associated with providing recordkeeping and other services to participants in retirement plans administered by TIAA-CREF entities that offer other pension products in addition to the Account. A portion of these administration expenses are allocated to the Account in accordance with applicable allocation procedures. Any differences between actual and estimated expenses are adjusted quarterly. The expenses identified in the table above do not include any fees which may be imposed by your employer under a plan maintained by your employer. For more detailed information, see “Expense Deductions” on page 73.

          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 and an annual expense

6Prospectus§ TIAA Real Estate Account

deduction equal to          %. These figures do not represent actual expenses or investment performance, which may differ.

1 Year	$
3 Year	$
5 Years	$
10 Years	$

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 also 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 would 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 likely would 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 would be subject to greater risks.

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

TIAA Real Estate Account§Prospectus7

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, and

• 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 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

8Prospectus§ TIAA Real Estate Account

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.

          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.

TIAA Real Estate Account§Prospectus9

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, along with an independent external appraisal, in connection with the purchase of a property by the Account. The Account will normally receive an independent external appraisal performed by a third party appraisal firm at or before the time it buys a real estate asset, and the Account also generally obtains an independent appraisal when it makes mortgage loans. The Account’s properties and mortgage loans will then 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 appraisals on a quarterly basis. See “Valuing the Account’s Assets” on page 68.

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          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—Risks of Borrowing” on page 16.

          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 national or regional independent third party property management company to perform the day-to-day management services for each of 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 property manager will also recommend changes in rent schedules and create marketing and advertising programs to attain and maintain high levels of occupancy by responsible tenants. The Account may also hire independent third party leasing companies to perform or coordinate leasing and marketing services to fill any vacancies. The fees paid to the property 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 Account§Prospectus11

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, at the time a 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:The Account has not registered, and 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:Under the terms of the contracts and in accordance with applicable insurance law, TIAA can decide to change, in its sole discretion, the operating policies of the Account or to 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. All investors in the Account 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 fluctuate based on the value of the Account’s assets and the income the assets generate.You can lose money by investing in the Account. The value of an investment in the Account will fluctuate based on the value of the Account’s assets and the income the assets generate. There is risk associated with an investor attempting to “time” an investment in the Account’s units, or effecting a redemption of an investor’s units. 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.”

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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 in particular the following:

• Economic Conditions.The economic conditions in the markets where the Account’s properties are located may be adversely impacted by factors which include:

• general global economic conditions;

• a weak market for real estate generally and/or in specific locations;

• availability of financing;

• an oversupply of, or a reduced demand for, certain types of real estate properties;

• business closings, industry slowdowns, employment losses and related factors;

• natural disasters, terrorist attacks and/or other man-made events; and

• decline in population or shifting demographics.

          The incidence of some or all of these factors could reduce occupancy or rental rates and the market value of the Account’s real properties. Further, the Account may experience periods in which its investments are geographically concentrated, either regionally or in certain markets with similar demographics. Also, the Account may experience periods in which its tenant base is concentrated within a particular industry sector. In these events, the Account’s income and performance may be adversely impacted disproportionately by deteriorating economic conditions in those areas or industry sectors in which the Account’s investments are concentrated.

•

Competition. The Account may face competition for real estate investments from multiple sources, including individuals, corporations, insurance companies or other insurance company separate accounts, as well as real estate limited partnerships, real estate investment funds, commercial developers, pension plans, other institutional and foreign investors and other entities engaged in real estate investment activities. Some of these competitors may have similar financial and other resources as the Account, and/or they may have investment strategies that allow them to compete more aggressively for real estate investment opportunities, which could result in the Account paying higher prices for investments, experiencing delays in acquiring investments or failing to consummate such purchases. Any resulting delays in the acquisition of investments, or the failure to consummate acquisitions the Account deems desirable, may increase the Account’s costs or otherwise adversely affect the Account’s investment results.

In addition, the Account’s properties may be located close to properties that are owned by other real estate investors and that compete with the Account for tenants. These competing properties may be better located and more

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	suitable for tenants than our properties, resulting in a competitive advantage for these other properties. We may also face similar competition from other properties that may be developed in the future. This competition may limit the Account’s ability to lease space, increase its costs of securing tenants, limit our ability to maximize our rents and/or require the Account to make capital improvements it otherwise would not, in order to make its properties more attractive to prospective tenants.
•	Leasing Risk. A number of factors could cause the Account’s rental income, a key source of the Account’s revenue, to decline, which would adversely impact the Account’s results and investment returns. These factors include:
	•	A property may be unable to attract tenants. This situation could be exacerbated if a concentration of lease expirations occurred during any one time period.
	•	The Account could lose revenue if tenants do not pay rent when contractually obligated, or if the Account is forced to terminate a lease for nonpayment.
	•	Tenants may default under a lease at one of the Account’s properties, and in the event of any such default, we may experience a delay in, or an inability to effect, the enforcement of our rights against that tenant. Further, any disputes with tenants could involve costly litigation.
	•	In the event a tenant vacates its space at an Account property, whether as a result of a default, the expiration of the lease term or otherwise, we may not be able to re-lease the vacant space for as much as the rent payable under the previous lease or not at all. Also, we may not be able to re-lease such space without incurring substantial expenditures for tenant improvements and other lease-up related costs, while still being obligated for any mortgage payments, real estate taxes and other expenditures related to the property.
	•	In some instances, our properties may be specifically suited to and/or outfitted for the particular needs of a certain tenant based on the type of business the tenant operates. For example, many companies desire space with an open floor plan. We may have difficulty obtaining a new tenant for any vacant space in our properties, particularly if the floor plan limits the types of businesses that can use the space without major renovation, which may require us to incur substantial expense in re-planning the space.
	•	The Account owns and operates retail properties, which, in addition to the risks listed above, are subject to specific risks, including variations in rental revenues due to customary “percentage rent” clauses which may be in place for retail tenants and the insolvency and/or closing of an anchor tenant. Under certain circumstances, the leases may allow other tenants in a retail property to terminate their leases, reduce or withhold rental payments. The insolvency and/or closing of an anchor tenant may also cause such tenants to fail to renew their leases at expiration.
•	Operating Costs. A property’s cash flow could decrease if operating costs, such as property taxes, utilities, maintenance and insurance costs that are not

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reimbursed by tenants increase in relation to gross rental income, or if the property needs unanticipated repairs and renovations.

•

Terrorism and Acts of War and Violence.Terrorist attacks may harm our property investments and therefore your investment return. The Account cannot assure you that there will not be further terrorist attacks against the United States, U.S. businesses or elsewhere in the world. These attacks or armed conflicts may directly or indirectly impact the value of the property we own or that secure our loans. Losses resulting from these types of events may be uninsurable or not insurable to the full extent of the loss suffered. Moreover, any of these events could cause consumer confidence and spending to decrease or result in increased volatility in the United States and worldwide financial markets and economy. Such events could also result in economic uncertainty in the United States or abroad. Adverse economic conditions resulting from terrorist activities could reduce demand for space in the Account’s properties and thereby reduce the value of the Account’s properties.

          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.

• Due to the cyclical nature of real estate, general economic conditions impacting the location of the property, potential disruption in the credit markets and the availability of financing on favorable terms or at all, and the supply of and demand for available tenant space, among other reasons, the Account might not be able to sell a property at a particular time for its full value. 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.

• For any particular property, the Account may be required to make expenditures for improvements to, or to correct defects in, the property before the Account is able to market and/or sell the property.

          Appraisal Risks:Real estate appraisals are 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. Appraisals can be subjective in certain respects and rely on a variety of assumptions and conditions at that property or in the market (including, without limitation, a potential lack of recent transaction activity in such market) in which the property is located, which may change materially after the appraisal is conducted. 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 an appraisal is 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, as the Account

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generally obtains appraisals on a quarterly basis, there may 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 or in the Account’s periodic financial statements. This disparity may be more apparent when the commercial and/or residential real estate markets experience an overall and possibly dramatic decline in property values in a relatively short period of time between appraisals.

          Risks of Borrowing:The Account acquires some of its properties subject to existing financing or by borrowing new funds at the time of purchase, and may from time to time place new leverage on, or increase the leverage already placed on, existing properties the Account owns. 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:

• Regardless of the quality of the Account’s property for which financing is sought, general economic conditions, or the market conditions then in effect in the real estate finance industry, may hinder the Account’s ability to obtain financing for its property investments on favorable terms or at all. Such unfavorable terms might include high interest rates, increased fees and costs and restrictive covenants applicable to the Account’s operation of the property.

• The Account may be unable 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 on terms commercially acceptable to the Account or at all. The Account then may be forced to sell the property or other properties under unfavorable market conditions or default on its mortgage, resulting in the lender exercising its remedies, which may include repossession of the property.

• 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.

A general disruption in the credit markets, such as the credit markets have been recently experiencing, may aggravate some or all of these risks.

          Investment Risk Associated with Participant Transactions.The amount we have available to invest in new properties and other real estate related assets will depend, in large part, on the level of participant premiums coming into the

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Account, as well as the level of net participant transfers into or out of the Account. If the amount of such premiums and/or net participant transfers into the Account were to experience a significant decline for a period of time, we may not have enough available funds to pursue, or consummate, every new investment opportunity presented to us that is otherwise attractive to the Account. This, in turn, could harm the Account’s returns.

          Regulatory Risks:Government regulation at the federal, state and local levels, including, without limitation, zoning laws, rent control or rent stabilization laws, laws regulating housing on the Account’s multifamily residential properties, the Americans with Disabilities Act, property taxes and fiscal, accounting, environmental or other government policies, could operate or change in a way that adversely affects 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 or injury to individuals 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. Further, environmental laws may impose restrictions on the manner in which a property may be used, the tenants which may be allowed, or the manner in which businesses may be operated, which may require the Account to expend funds, and such laws may also cause the most ideal use of the property to differ from that originally contemplated and as a result could impair the Account’s returns. The cost of any required cleanup relating to a single real estate investment (including remediating contaminated property) and the Account’s potential liability for environmental damage, including paying personal injury claims and performing under indemnification obligations to third parties, 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.

          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

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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 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 be unable to fulfill its obligations (such as to fund its pro rata share of expenditures or guarantee obligations of the venture) during the term of such agreement or may become insolvent or bankrupt, either of 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 be unable 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.

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:

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• The borrower may default on the loan, 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, which could be caused by general or local economic conditions or other factors beyond the control of the Account, 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 be unable 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 that that which is then available in the market 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 be unable 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 may 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 become liable for the borrower’s debts.

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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 and potentially significant price volatility due to changing conditions in the financial markets and, in particular, changes in overall interest rates, regardless of the value of the underlying real estate such REIT may own.

          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. Further, the underlying mortgage loans may experience defaults with greater frequency than projected when such mortgages were underwritten, which would impact the values of these securities, and could hamper our ability to sell such securities.

          Importantly, the market value of these securities is also highly sensitive to changes in interest rates, liquidity of the secondary market and economic conditions impacting financial institutions and the credit markets generally. 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, volatility and disruption in the mortgage market and credit markets generally (such as has recently been the case) may cause there to be a very limited secondary market for these securities and they may be harder to sell than other securities.

CONFLICTS OF INTEREST WITHIN TIAA

          TIAA and its affiliates (including Teachers Advisors, Inc., its wholly owned subsidiary) have interests in other real estate programs and accounts and also engage in other business activities and as such, they will have conflicts of interest in

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allocating their time between the Account’s business and these other activities. Also, the Account may be buying properties at the same time as TIAA affiliates that may have similar investment objectives to those of the Account. There is also a risk that TIAA will choose a property that provides lower returns to us than a property purchased by TIAA and its affiliates. Further, the Account will likely acquire properties in geographic areas where TIAA and its affiliates own properties. In addition, the Account may desire to sell a property at the same time another TIAA affiliate is selling a property in an overlapping market. Conflicts could also arise because some properties owned by TIAA and its affiliates may compete with the Account’s properties for tenants. Among other things, if one of the TIAA entities attracts a tenant that we are competing for, we could suffer a loss of revenue due to delays in locating another suitable tenant. TIAA has adopted allocation policies and procedures applicable to the purchasing conflicts scenario, but the resolution of such conflicts may be economically disadvantageous to the Account. As a result of TIAA’s and its affiliates’ obligations to other current and potential TIAA-sponsored investment vehicles with similar objectives to those of the Account, we cannot assure you that the Account will be able to take advantage of every attractive investment opportunity that otherwise is in accordance with the Account’s investment objectives. For a discussion of the relevant allocation policies and procedures TIAA has established, see “Establishing and Managing the Account – the Role of TIAA – Conflicts of Interest.”

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.

          Further, to the extent that a significant portion of the Account’s net assets at any particular time are comprised of cash, cash equivalents and marketable securities, the Account’s returns may suffer as compared to the return that could have been generated by more profitable investments.

RISKS OF FOREIGN INVESTMENTS

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

• The value of foreign investments or rental income can increase or decrease due to changes in currency rates, currency exchange control regulations,

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	possible expropriation or confiscatory taxation, political, social, and economic developments, and foreign regulations.
•	Foreign real estate markets may have different liquidity and volatility attributes than U.S. markets.
•	It may be more difficult to obtain and collect a judgment on foreign investments than on domestic investments, and the costs associated with contesting claims relating to foreign investments may exceed those costs associated with a similar claim on domestic investments.
•	The Account may, but is not required to, seek to hedge its exposure to changes in currency rates, which could involve extra costs. Further, any hedging activities might not be successful.

NO OPPORTUNITY FOR PRIOR REVIEW OF PURCHASE

          Investors do not have the opportunity to evaluate the economic or financial 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 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.

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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. The Account does not have officers, directors or employees. TIAA’s investment management responsibilities include:

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

• providing (including by arranging for others to provide) 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 and its affiliates provide all services to the Account at cost. For more information about the charge for investment management services, see “Expense Deductions” on page 73.

          You don’t have the right to vote for TIAA Trustees. See “Voting Rights” on page 99. For information about the Trustees, certain executive officers of TIAA and the Account’s portfolio managment team, see Appendix A of this prospectus on page 171.

          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 withdrawal requests. If the Account can’t fund participant requests from the

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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 after your transfer or cash withdrawal request is received in good order. 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 the Account’s net assets. See “Expense Deductions” on page 73.

          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 offer (and may in the future 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, a privately offered core property investment fund (the “core property investment fund”), TIAA-CREF U.S. Real Estate Fund I, L.P (the “U.S. Real Estate Fund” which, along with the core property investment fund, is managed by Advisors), may sometimes compete with the Real Estate Account in the purchase of investments. (Each of TIAA’s General Account, the Real Estate Account, the core property investment fund and the U.S. Real Estate Fund, together with any other real estate accounts or funds that may be established by TIAA or its affiliates in the future, are herein referred to as an “account.”)

          Allocation Procedure. TIAA and its affiliates allocate new investments among the accounts in accordance with a written allocation procedure as adopted by TIAA and modified from time to time. Generally, the portfolio managers for each of the accounts will identify acquisition 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 (including the portfolio managers for each account), will seek to resolve any conflict by considering a number of factors, including the investment strategy of the bidding account, the relative 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

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market and such other factors deemed relevant by the Allocation Committee (and subject to any investment limitations or other requirements in the account’s governing documents, Investment Guidelines or applicable laws or regulations (including ERISA and insurance laws)). 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. The secretary of the Allocation Committee will prepare a quarterly report describing the allocations made during the previous quarter based on this allocation procedure. This report will also be reviewed by a committee of senior TIAA executives which is separate from the Allocation Committee and which functions as an internal monitor of compliance with this allocation procedure.

          Conflicts could also arise because some properties in TIAA’s General Account, the core property investment fund and other accounts 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, the core property investment fund and the U.S. Real Estate Fund 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 trustees, against certain liabilities to the extent permitted by law, including 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

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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;

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

• approving the appointment of all independent appraisers;

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

• 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 ensure 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; and

• 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 consisting of five (5) independent outside members 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 three (3) out of the five (5) subcommittee members and will not be reappointed if two (2) of the subcommittee members disapprove the reappointment. The independent fiduciary can resign after at least 180 days’ written notice.

26Prospectus§TIAA Real Estate Account

          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.

DESCRIPTION OF PROPERTIES

THE PROPERTIES — IN GENERAL

          As of December 31, 2007, the Account owned a total of 111 real estate property investments (99 of which were wholly owned and 12 of which were held in real estate related joint ventures and one remaining equity interest in a joint venture in which the Account sold its real estate holdings during the third quarter of 2007) representing 77.91% of the Account’s total investment portfolio. The real estate portfolio included:

• 46 office properties (five of which were held in joint ventures and one property located in London, United Kingdom),

• 27 industrial properties (including one held in a joint venture),

• 21 apartment complexes,

• 16 retail properties (including five held in joint ventures and one property located in Paris, France), and

• a 75% joint venture interest in a portfolio of storage facilities located throughout the United States.

          Of the 111 real estate property investments, 20 were subject to debt (including seven joint venture property investments).

          In the table immediately below you will find general information about each of the Account’s portfolio property investments as of December 31, 2007. The Account’s property investments include 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 Account§Prospectus27

OFFICE PROPERTY INVESTMENTS

Property	Location	Year Built		Year Purchased	Rentable Area (Sq. ft.	)(1)	Percent Leased		Annual Avg. Base Rent Per Leased Sq. Ft.		(2)	Market Value		(3)
1001 Pennsylvania Ave	Washington, DC	1987		2004	756,603		100	%	$	37.15		$	640,149,632	(4)
Fourth & Madison(5)	Seattle, WA	2002		2004	845,533		98	%		27.53		$	487,000,000	(4)
50 Fremont Street	San Francisco, CA	1983		2004	817,412		97	%		30.25		$	478,000,000	(4)
1 & 7 Westferry Circus	London, UK	1992, 1993		2005	386,206		81	%		64.08		$	436,127,130	(4)(6)
Four Oaks Place	Houston, TX	1983		2004	1,754,334		96	%		18.73		$	419,270,107
The Newbry	Boston, MA	1940-1961	(7)	2006	607,424		100	%		26.47		$	389,880,008
780 Third Avenue	New York, NY	1984		1999	487,566		95	%		50.01		$	375,000,000
Yahoo! Center(8)	Santa Monica, CA	1984		2004	1,087,952		92	%		32.66		$	369,402,407
99 High Street	Boston, MA	1971		2005	731,204		96	%		29.99		$	344,688,328	(4)
Lincoln Centre	Dallas, TX	1984		2005	1,638,132		87	%		16.95		$	305,000,000	(4)
1900 K Street	Washington, DC	1996		2004	333,098		100	%		44.27		$	285,000,000
701 Brickell	Miami, FL	1986	(9)	2002	677,667		94	%		29.60		$	275,941,582
275 Battery(10)	San Francisco, CA	1988		2005	472,261		90	%		34.73		$	271,917,498
Mellon Financial Center at One Boston Place(11)	Boston, MA	1970	(9)	2002	804,444		95	%		38.74		$	246,440,493
Wilshire Rodeo Plaza	Beverly Hills, CA	1935, 1984		2006	261,932		98	%		46.81		$	230,439,415	(4)
1401 H Street NW	Washington, D.C.	1992		2006	350,635		100	%		41.20		$	224,576,156	(4)
Ten & Twenty Westport Road	Wilton, CT	1974(9), 2001		2001	538,840		100	%		30.07		$	183,006,040
980 9th Street and 1010 8th Street(12)	Sacramento, CA	1992		2005	447,865		95	%	$	23.66		$	178,000,000
Millennium Corporate Park	Redmond, VA	1999, 2000		2006	536,884		100	%		13.80		$	158,000,000
Urban Centre	Tampa, FL	1984, 1987		2005	547,979		91	%		21.16		$	135,577,463
Pacific Plaza	San Diego, CA	2000, 2002		2007	215,758		87	%		26.48		$	127,130,076	(4)
Inverness Center	Birmingham, AL	1980-1985		2005	903,857		100	%		12.27		$	125,521,529
88 Kearny Street	San Francisco, CA	1986		1999	228,358		94	%		41.48		$	123,822,200
Morris Corporate Center III	Parsippany, NJ	1990		2000	526,052		78	%		20.06		$	119,600,001
Treat Towers(13)	Walnut Creek, CA	1999		2003	367,313		85	%		23.39		$	118,997,021
Prominence in Buckhead(13)	Atlanta, GA	1999		2003	423,916		95	%		27.68		$	115,427,071
The Ellipse at Ballston	Arlington, VA	1989		2006	194,914		100	%		32.81		$	92,504,000
Oak Brook Regency Towers	Oakbrook, IL	1977	(9)	2002	402,318		78	%		13.09		$	86,891,650
Camelback Center	Phoenix, AZ	2001		2007	231,345		94	%		24.38		$	80,000,000

28Prospectus§TIAAReal Estate Account

Property	Location	Year Built		Year Purchased	Rentable Area (Sq. ft.	)(1)	Percent Leased		Annual Avg. Base Rent Per Leased Sq. Ft.		(2)	Market Value		(3)
West Lake North Business Park	Westlake Village, CA	2000		2004	198,558		93	%		27.58		$	68,621,818
Centerside I	San Diego, CA	1982		2004	202,913		67	%		19.06		$	67,500,000
The North 40 Office Complex	Boca Raton, FL	1983, 1984		2006	350,000		93	%		10.44		$	67,003,544
Parkview Plaza	Oakbrook, IL	1990		1997	264,461		95	%		15.98		$	66,066,513
3 Hutton Centre	Santa Ana, CA	1985	(9)	2003	197,819		96	%		20.04		$	64,200,000
8270 Greensboro Drive	McLean, VA	2000		2005	158,110		100	%		35.93		$	63,500,000
The Pointe on Tampa Bay	Tampa, FL	1982	(9)	2002	250,357		97	%		23.93		$	60,971,897
One Virginia Square	Arlington, VA	1999		2004	116,077		100	%		17.18		$	59,538,690
Capitol Place	Sacramento, CA	1988	(9)	2003	167,920		96	%		26.72		$	53,539,218
Wellpoint	Westlake Village, CA	1986, 1998		2006	216,751		100	%		12.93		$	51,000,000
Park Place on Turtle Creek	Dallas, TX	1986		2006	177,169		93	%		22.43		$	48,282,785
4200 West Cypress Street	Tampa, FL	1989		2003	219,815		100	%		22.36		$	48,043,650
Preston Sherry Plaza	Dallas, TX	1986		2007	147,008		95	%		24.03		$	45,500,000
Tysons Executive Plaza II(14)	McLean, VA	1988		2000	259,614		81	%		23.50		$	44,178,210
Creeksides at Centerpoint	Kent, WA	1985		2006	218,712		84	%		12.30		$	42,000,000
Needham Corporate Center	Needham, MA	1987		2001	138,259		87	%		20.00		$	33,275,228
Columbus Portfolio	Various, OH	1997-1998		1999, 2001	259,686		92	%		9.90		$	26,314,686
Subtotal—Office Property Investments							94	%				$	8,332,846,046
INDUSTRIAL PROPERTY INVESTMENTS
Ontario Industrial Portfolio(15)	Various, CA	1997-1998		1998, 2000, 2004	3,981,894		100	%		3.08		$	355,398,714	(4)
Dallas Industrial Portfolio(16)(17)	Dallas and Coppell, TX	1997-2001		2000-2002	3,684,941		96	%		2.98		$	154,055,892
Rancho Cucamonga Industrial Portfolio(18)	Rancho Cucamonga, CA
		2000-2002		2000, 2001, 2002, 2004	1,490,235		100	%		3.31		$	133,000,000
Seneca Industrial Park	Pembroke Park, FL	1999-2001		2007	882,182		96	%		5.62		$	122,334,422
Southern California RA Industrial Portfolio	Los Angeles, CA	1982		2004	920,078		98	%	$	6.44		$	110,718,042

TIAA Real Estate Account§Prospectus29

Property	Location		Year Built	Year Purchased	Rentable Area (Sq. ft.	)(1)	Percent Leased		Annual Avg. Base Rent Per Leased Sq. Ft.		(2)	Market Value		(3)
Chicago Industrial Portfolio(17)	Chicago and Joliet, IL		1997-2000	1998; 2000	1,427,699		100	%		3.94		$	86,420,886
Rainier Corporate Park	Fife, WA		1991-1997	2003	1,104,646		100	%		3.52		$	81,160,792
Chicago CALEast Industrial Portfolio(17)	Chicago, IL		1974-2005	2003	1,280,784		100	%		3.62		$	77,642,826
Shawnee Ridge Industrial Portfolio	Atlanta, GA	��	2000-2005	2005	1,422,922		100	%		3.19		$	76,742,231
IDI National Portfolio(19)	Various, U.S.		1999-2004	2004	3,655,671		100	%		3.50		$	76,536,044
Regal Logistics Campus	Seattle, WA		1999-2004	2005	968,535		100	%		4.15		$	71,000,000
Northern California RA Industrial Portfolio(17)	Oakland, CA		1981	2004	657,602		98	%		4.11		$	69,601,997
Atlanta Industrial Portfolio(17)	Lawrenceville, GA		1996-1999	2000	1,295,440		95	%		2.64		$	58,300,000
South River Road Industrial	Cranbury, NJ		1999	2001	858,957		53	%		2.57		$	53,400,000
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	%		3.47		$	46,700,000
New Jersey CALEast
Industrial Portfolio	Cranbury, NJ		1982-1989	2003	807,773		50	%		2.23		$	42,225,000
East North Central RA
Industrial Portfolio	Chicago, IL		1978	2004	541,266		98	%		4.25		$	38,016,397
Broadlands Business Park	Elkton, MD		2006	2006	756,600		100	%		2.85		$	35,500,000
Centre Pointe and Valley View	Los Angeles County, CA		1965-1989	2004	307,685		58	%		4.62		$	34,142,741
Northeast RA Industrial Portfolio	Boston, MA		2000	2004	384,000		88	%		5.71		$	33,300,000
Summit Distribution Center	Memphis, TN		2002	2003	708,532		100	%		2.52		$	27,500,000
Airways Distribution Center	Memphis, TN		2005	2006	556,600		100	%		3.20		$	24,300,000
Konica Photo Imaging Headquarters	Mahwah, NJ		1999	1999	168,000		100	%		2.87		$	23,500,000

30Prospectus§TIAAReal Estate Account

Property	Location	Year Built		Year Purchased	Rentable Area (Sq. ft.)		(1)	Percent Leased		Annual Avg. Base Rent Per Leased Sq. Ft.		(2)	Market Value		(3)
Northwest RA Industrial Portfolio	Seattle, WA	1996		2004		312,321		100	%		3.21		$	23,401,540
UPS Distribution Facility	Fernley, NV	1998		1998		256,000		100	%		3.39		$	15,900,000
FEDEX Distribution Facility	Crofton, MD	1998		1998		110,842		100	%		2.99		$	9,900,000
Subtotal—Industrial Property Investments								96	%				$	1,928,697,524
RETAIL PROPERTY INVESTMENTS
DDR Joint Venture(20)	Various, U.S.	Various		2007		16,183,158		95	%	$	11.46		$	1,028,297,460
The Florida Mall(21)	Orlando, FL	1986	(9)	2002		1,061,308	(22)	99	%		41.99		$	296,486,153
Printemps de l’Homme	Paris, France	1930		2007		142,363		100	%		84.73		$	279,077,542	(6)
Florida Retail Portfolio(23)	Various, FL	1974-2005		2006		1,259,554		95	%		15.63		$	260,879,060
Miami International Mall(21)	Miami, FL	1982	(9)	2002		296,746	(22)	98	%		36.41		$	109,944,638
Mazza Gallerie	Washington, DC	1975		2004		293,935		99	%		19.84		$	97,000,019
Westwood Marketplace	Los Angeles, CA	1950	(9)	2002		202,201		100	%		29.93		$	96,562,192
Marketfair	West Windsor, NJ	1987		2006		244,469		99	%		23.04		$	95,500,000
West Town Mall(21)	Knoxville, TN	1972	(9)	2002		759,447	(22)	97	%		21.10		$	75,826,066
Publix at Weston Commons	Weston, FL	2005		2006		126,922		96	%		23.98		$	55,200,000	(4)
Plainsboro Plaza	Plainsboro, NJ	1987		2005		206,503		87	%		10.67		$	51,000,000
South Frisco Village	Frisco, TX	2002		2006		227,175		99	%		13.85		$	48,500,000	(4)
The Market at Southpark	Littleton, CO	1988		2004		190,104		98	%		10.16		$	35,800,000
Suncrest Village	Orlando, FL	1987		2005		93,358		98	%		10.89		$	19,500,000
Champlin Marketplace	Champlin, MN	1998-1999, 2005		2007		88,577		100	%		13.47		$	18,375,000
Plantation Grove	Ocoee, FL	1995		1995		73,655		99	%		11.82		$	15,400,000
Subtotal—Retail Property Investments								97	%				$	2,583,348,130
RESIDENTIAL PROPERTY INVESTMENTS(24)
Houston Apartment Portfolio(25)	Houston, TX	1984-2004		2006		NA		93	%		NA		$	296,241,497
Palomino Park Apartments	Denver, CO	1996-2001		2005		NA		92	%		NA		$	194,001,036
Kierland Apartment Portfolio(26)	Scottsdale, AZ	1996-2000		2006		NA		97	%		NA		$	170,084,494

TIAA Real Estate Account§Prospectus31

Property	Location	Year Built	Year Purchased	Rentable Area (Sq. ft.)		(1)	Percent Leased		Annual Avg. Base Rent Per Leased Sq. Ft.		(2)	Market Value		(3)
Phoenix Apartment Portfolio(27)	Greater Phoenix Area, AZ	1995-1998	2006		NA		96	%		NA		$	156,109,517
The Legacy at Westwood Apartments	Los Angeles, CA	2001	2002		NA		79	%		NA		$	126,579,694
The Colorado	New York, NY	1987	1999		NA		98	%		NA		$	113,033,240
Larkspur Courts	Larkspur, CA	1991	1999		NA		94	%		NA		$	97,000,000
Ashford Meadows Apartments	Herndon, VA	1998	2000		NA		96	%		NA		$	94,059,776
1050 Lenox Park	Atlanta, GA	2001	2005		NA		97	%		NA		$	85,500,000
Regents Court Apartments	San Diego, CA	2001	2002		NA		99	%		NA		$	69,000,000
South Florida Apartment	Boca Raton and
Portfolio	Plantation, FL	1986	2001		NA		92	%		NA		$	68,248,605
The Caruth	Dallas, TX	1999	2005		NA		88	%		NA		$	65,427,458
Glenridge Walk	Atlanta, GA	1996, 2001	2005		NA		94	%		NA		$	52,900,000
The Reserve at Sugarloaf	Duluth, GA	2000	2005		NA		92	%		NA		$	52,000,000	(4)
The Lodge at Willow Creek	Denver, CO	1997	1997		NA		97	%		NA		$	43,500,000
The Maroneal	Houston, TX	1998	2005		NA		97	%		NA		$	40,033,822
Westcreek Apartments	Westlake Village, CA	1988	1997		NA		87	%		NA		$	39,189,673
Lincoln Woods Apartments	Lafayette Hill, PA	1991	1997		NA		95	%		NA		$	37,917,165
The Fairways of Carolina	Margate, FL	1993	2001		NA		96	%		NA		$	27,207,661
Royal St. George	W. Palm Beach, FL	1995	1996		NA		96	%		NA		$	27,000,000
Quiet Water at Coquina Lakes	Deerfield Beach, FL	1995	2001		NA		97	%		NA		$	26,204,860
Subtotal—Residential Property Investments							94	%				$	1,881,238,498
OTHER COMMERCIAL PROPERTY INVESTMENTS
Storage Portfolio I(28)	Various, U.S.	1972-1990	2003		2,301,187		84	%	$	9.83		$	81,943,321
Subtotal—Commercial Property Investments												$	12,926,835,021
Total—All Property Investments												$	14,808,073,519

32Prospectus§TIAA Real Estate Account

(1)	The square footage is an approximate measure and is subject to periodic remeasurement.
(2)	Based on total contractual rent for leases existing as of December 31, 2007. For those properties purchased in fourth quarter of 2007 the rent is based on the existing leases as of the date of purchase. The contractual rent can be either on a gross or net basis, depending on the terms of the 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. The account joint venture interest in 161 North Clark Street was sold on August 24, 2007. A residual value of $3.15 million remains in the statement of investments but not on the property list.
(4)	Market value shown represents the Account’s interest gross of debt.
(5)	Formerly known as “IDX Tower”.
(6)	1 & 7 Westferry Circus is located in the United Kingdom, and the market value reflects the Account’s interest gross of debt. Printemps de l’Homme is located in France. The market value of each property is converted from local currency to U.S. Dollars at the exchange rate as of December 31, 2007.
(7)	This property was substantially renovated in 1961, 2004 and 2006.
(8)	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.
(9)	Undergone extensive renovations since original construction.
(10)	Formerly known as “Embarcadero Plaza.”
(11)	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.
(12)	Formerly known as “U.S. Bank Plaza.”
(13)	This investment 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.
(14)	This investment 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.
(15)	The Ontario Industrial Portfolio contains six investment properties, including one portfolio which consists of 1.1 million square feet located in Mira Loma, California. As of January 30, 2007, 1900 South Burgundy Place was added to the Ontario Industrial Portfolio.
(16)	The Dallas Industrial Portfolio contains ten warehouse distribution properties located in Dallas and Coppell, Texas.
(17)	A portion of this portfolio was sold on June 27, 2007.
(18)	Formerly known as “Cabot Industrial Portfolio”. As of January 31, 2007 the Weber Distribution property was consolidated into the existing Rancho Cucamonga Industrial Portfolio.

TIAA Real Estate Account§ Prospectus 33

(19)	Property 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.
(20)	This property investment consists of 65 properties located in 13 states and is held in a 85%/15% joint venture with Developers Diversified Realty Corporation. Market Value shown reflects the value of the Account’s interest in the joint venture, net of debt.
(21)	These property investments are held in 50%/50% joint ventures with the Simon Property Group. Market values shown reflect the value of the Account’s interest in the joint ventures, net of debt.
(22)	Reflects the square footage owned by the joint venture.
(23)	This investment property 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 net of debt. This portfolio contains seven neighborhood and/or community shopping centers located in the Ft. Lauderdale, Miami, Orlando and Tampa, Florida areas.
(24)	For the average unit size and annual average rent per unit for each residential property, see “Residential Properties” below.
(25)	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.
(26)	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.
(27)	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.
(28)	Property held in 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.

34 Prospectus§ TIAA Real Estate Account

COMMERCIAL (NON-RESIDENTIAL) PROPERTIES

          At December 31, 2007, the Account held 90 commercial (non-residential) property investments in its portfolio, including a portfolio of storage facilities located throughout the United States. Twelve of these property investments were held through joint ventures, and 19 were subject to mortgages (including seven joint venture property investments). 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 diversified by both property type and geographic location. The portfolio consists of:

• 46 office properties containing approximately 21 million square feet located in 14 states, the District of Columbia and the United Kingdom;

• 27 industrial properties containing approximately 30 million square feet located in 11 states, including a 60% interest in a portfolio of industrial properties located throughout the United States; and

• 16 retail properties containing approximately 21.4 million square feet located in eight states, the District of Columbia, the United Kingdom and Paris, France.

          One of the retail property investments is an 85% interest in a portfolio containing 65 individual retail shopping centers located throughout the Eastern and Southeastern states. In addition, the Account has a 75% interest in a portfolio of storage facilities located throughout the United States containing approximately 2.3 million square feet.

          As of December 31, 2007, the average overall occupancy rate of the Account’s commercial real estate portfolio was 95%. On an average basis, the Account’s office properties were 94% leased, industrial properties were 96% leased, retail properties were 97% leased and the storage portfolio was 84% leased.

          Major Tenants:The following tables list the Account’s major commercial tenants based on the total space they occupied as of December 31, 2007 in the Account’s properties.

MAJOR OFFICE TENANTS	Occupied Square Feet		Percentage of Total Rentable Area of Account’s Office Properties			Percentage of Total Rentable Area of Account’s Non-Residential Properties
Deloitte & Touche		517,855		2.5	%		0.7	%
BHP Petroleum		463,734		2.2	%		0.6	%
Mellon (Boston Co)		457,248		2.2	%		0.6	%
Southern Company Services, Inc		456,235		2.2	%		0.6	%
Yahoo!		448,147		2.1	%		0.6	%
Microsoft		361,527		1.7	%		0.5	%
Crowell & Moring		320,539		1.5	%		0.4	%
ATMOS Energy		293,835		1.4	%		0.4	%
Fourth & Madison		284,630		1.3	%		0.4	%
Kirkpatrick & Lockhart Preston Gates Ellis		248,982		1.2	%		0.3	%

TIAA Real Estate Account§ Prospectus35

MAJOR INDUSTRIAL TENANTS	Occupied Square Feet	Percentage of Total Rentable Area of Account’s Industrial Properties		Percentage of Total Rentable Area of Account’s Non-Residential Properties
Meiko America	1,115,000	3.7	%	1.5	%
Walmart	1,099,112	3.6	%	1.5	%
General Electric	1,004,000	3.3	%	1.4	%
Priority Fulfillment	993,120	3.3	%	1.4	%
Regal West	968,535	3.2	%	1.3	%
Covidien (FKA Tyco)	800,000	2.6	%	1.1	%
Michelin (TNT)	756,600	2.5	%	1.0	%
Hewlett-Packard	708,532	2.3	%	1.0	%
Del Monte	689,660	2.3	%	0.9	%
RR Donnelley	659,157	2.2	%	0.9	%

MAJOR RETAIL TENANTS	Occupied Square Feet	Percentage of Total Rentable Area of Account’s Retail Properties		Percentage of Total Rentable Area of Account’s Non-Residential Properties
Walmart	944,437	4.4	%	1.3	%
Kohl’s	609,529	2.8	%	0.8	%
Goody’s	589,392	2.7	%	0.8	%
Publix Super Markets	565,187	2.6	%	0.8	%
Ross	564,927	2.6	%	0.8	%
Dick’s Sporting Goods	522,486	2.4	%	0.7	%
PetSmart	496,595	2.3	%	0.7	%
Michael’s	492,636	2.3	%	0.7	%
Bed, Bath & Beyond	455,510	2.1	%	0.6	%
Linens ’N Things	426,523	2.0	%	0.6	%

          The following tables list the rentable area subject to expiring leases during the next five years, and an aggregate figure for expirations in 2013 and thereafter, in the Account’s commercial (non-residential) properties.

OFFICE 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
2008		2,025,032	9.6	%
2009		1,841,797	8.7	%
2010		2,254,954	10.7	%
2011		2,673,274	12.7	%
2012		1,731,962	8.2	%
2013 and thereafter		8,606,526	40.9	%
Total		19,133,545	90.8	%

36Prospectus§TIAA Real Estate Account

INDUSTRIAL PROPERTIES 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
2008		4,373,313	14.4	%
2009		4,120,869	13.5	%
2010		4,570,510	15.0	%
2011		4,336,083	14.2	%
2012		1,542,068	5.1	%
2013 and thereafter		9,800,725	32.2	%
Total		28,743,568	94.4	%

RETAIL PROPERTIES 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
2008		1,325,407	6.2	%
2009		1,244,001	5.8	%
2010		1,789,246	8.3	%
2011		2,224,269	10.4	%
2012		2,289,812	10.7	%
2013 and thereafter		11,315,396	52.7	%
Total		20,188,131	94.1	%

RESIDENTIAL PROPERTIES

          The Account’s residential property portfolio currently consists of 21 property investments comprised of first class or luxury multi-family, garden, midrise, and high-rise apartment buildings. The portfolio contains approximately 10,650 units located in nine states and has a 94% average occupancy rate as of December 31, 2007. 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.

TIAA Real Estate Account §Prospectus 37

          The table below contains detailed information regarding the apartment complexes in the Account’s portfolio as of December 31, 2007.

Property	Location	Number of Units	Average Unit Size (Square Feet)	Avg. Rent Per Unit/ Per Month
Houston Apartment Portfolio	Houston, TX	2,295	1,351	$	1,341
Palomino Park	Highlands Ranch, CO	1,184	1,095	$	1,153
Kierland Apartment Portfolio	Scottsdale, AZ	1,000	1,047	$	1,260
Phoenix Apartment Portfolio	Greater Phoenix, AZ	1,176	1,094	$	1,122
Legacy at Westwood	Los Angeles, CA	187	1,181	$	4,212
The Colorado	New York, NY	256	617	$	3,173
Larkspur Courts	Larkspur, CA	248	1,001	$	2,382
Ashford Meadows	Herndon, VA	440	1,057	$	1,493
1050 Lenox Park	Atlanta, GA	407	1,023	$	1,386
Regents Court	San Diego, CA	251	884	$	2,208
South Florida Apartment Portfolio	Boca Raton, Plantation, FL	550	906	$	1,109
Caruth at Lincoln Park	Dallas, TX	338	1,168	$	1,723
Glenridge Walk	Atlanta, GA	296	1,142	$	1,409
The Reserve at Sugarloaf	Duluth, GA	333	1,222	$	1,175
The Lodge at Willow Creek	Denver, CO	316	996	$	1,082
The Maroneal	Houston, TX	309	926	$	1,224
Westcreek Apartments	Westlake Village, CA	126	951	$	2,019
Lincoln Woods Apartments	Lafayette Hill, PA	216	774	$	1,264
Fairways of Carolina	Margate, FL	208	1,026	$	1,181
The Royal St. George Apts	West Palm Beach, FL	224	870	$	1,094
Quiet Waters Apartments	Deerfield Beach, FL	200	1,048	$	1,241

RECENT TRANSACTIONS

          The following describes property transactions by the Account since October 5, 2007, the date of the last supplement to the Account’s 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.

PURCHASES

Office Properties

          Pacific Plaza – San Diego, CA

          On November 11, 2007, the Account purchased a three building, Class A, office development in San Diego, California for approximately $127.1 million, subject to $8.9 million in debt, for a net investment of approximately $118.2 million. The $8.9 million mortgage loan bears an interest rate of 5.55% and matures in September 2013. The property was built in 2000 and 2002, and it contains a total of 220,405 square feet of office space, of which 82% was occupied at the time of purchase. The three largest tenants are Qualcomm Incorporated (85,329 square feet), Iomega Corporation (39,045 square feet) and Cisco Systems (23,292 square feet). Rental rates for the office space average $30.00 per square foot plus utilities, which is below the current average market rent for comparable properties. The property is

38 Prospectus §TIAA Real Estate Account

located in the Del Mar Heights/Carmel Valley submarket, which had an inventory of 3.4 million square feet and an 11.6% vacancy rate at the time of purchase.

Industrial Properties

          Seneca Industrial Park – Ft. Lauderdale (Pembroke Pines), FL

          On December 14, 2007, the Account purchased six industrial buildings in Pembroke Pines, Florida for approximately $122.3 million. The properties contain 882,000 square feet and were 96% occupied at the time of purchase. The properties were built in 1999 through 2001. The three largest tenants are Mohawk Industries, Inc. (258,270 square feet), Royal Caribbean Cruises Ltd (154,405 square feet) and Sound Advice (111,985 square feet). Rental rates average $6.50 per square foot, net of expenses, which is below the current average market rent for comparable properties. They are located in the industrial submarket of Southeast Broward which had an inventory of 30.7 million square feet and a vacancy rate of 3.3% at the time of purchase.

Retail Properties

          The Colorado – New York, NY

          On February 12, 2008, the Account purchased a tenant’s leasehold interest in approximately 40,000 square feet of retail space for approximately $42.7 million. The Colorado is a 35-story high-rise apartment building and was acquired by the Account in 1999. There are two tenants who occupy substantially all of the retail space; Banana Republic (approximately 17,000 square feet) and Yoga & Fitness (approximately 22,000 square feet). This transaction provides the Account with control of all of the property’s rentable space.

SALES

Office Properties

          10 Waterview – Parsippany, NJ

          On October 18, 2007, the Account sold an office building located in Parsippany, New Jersey for net sales proceeds of approximately $36.6 million. The Account purchased the property for an original investment of $31.1 million. At the time of sale, the property had a market value of $39.0 million and a cost to date of $36.7 million in the records of the Account.

          9 Hutton Centre – Santa Ana, CA

          On October 31, 2007, the Account sold an office building located in Santa Ana, California for net sales proceeds of approximately $36.5 million. The Account purchased the property for an original investment of $20.4 million. At the time of sale, the property had a market value of $38.5 million and a cost to date of $25.6 million in the records of the Account.

TIAA Real Estate Account§ Prospectus 39

          One Monument Place – Fairfax, VA

          On November 29, 2007, the Account sold an office building located in Fairfax, Virginia for net sales proceeds of approximately $60.3 million. The Account purchased the property for an original investment of $34.6 million. At the time of sale, the property had a market value of $63.1 million and a cost to date of $42.6 million in the records of the Account.

LEGAL PROCEEDINGS

          The Account is party to various claims and routine litigation arising in the ordinary course of business. As of the date of this prospectus, management of the Account does not believe that the results of any such claims or litigation, individually or in the aggregate, will have a material effect on the Account’s business, financial position or results of operations.

40Prospectus§ TIAA Real Estate Account

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.

	Years Ended December 31,
	2007		2006		2005		2004		2003
Investment income:
Real estate income, net	$	529,412,759	$	444,782,843	$	340,089,550	$	239,429,500	$	224,938,080
Income from real estate joint ventures and limited partnerships		93,724,569		60,788,998		71,826,443		71,390,397		31,989,569
Dividends and interest		141,913,253		135,407,210		70,999,212		27,508,560		19,461,931
Total investment income		765,050,581		640,979,051		482,915,205		338,328,457		276,389,580
Expenses		140,294,447		83,448,664		56,100,197		36,728,425		31,654,065
Investment income, net		624,756,134		557,530,387		426,815,008		301,600,032		244,735,515
Net realized and unrealized gain (loss) on investments and mortgage notes payable		1,438,434,738		1,056,670,295		765,970,272		414,580,303		58,837,371
Net increase in net assets resulting from operations		2,063,190,872		1,614,200,682		1,192,785,280		716,180,335		303,572,886
Participant transactions		1,464,653,415		1,969,780,728		2,110,375,836		1,735,947,490		813,860,715
Net increase in net assets	$	3,527,844,287	$	3,583,981,410	$	3,303,161,116	$	2,452,127,825	$	1,117,433,601
	Years Ended December 31,
	2007		2006		2005		2004		2003
Total assets	$	19,232,767,244	$	15,759,961,333	$	11,685,426,413	$	7,843,979,924	$	4,867,089,727
Total liabilities		1,572,230,445		1,627,268,821		1,136,715,311		598,429,938		73,667,566
Total net assets	$	17,660,536,799	$	14,132,692,512	$	10,548,711,102	$	7,245,549,986	$	4,793,422,161
Accumulation units outstanding		55,105,718		50,146,354		42,623,491		33,337,597		24,724,183
Accumulation unit value	$	311.41	$	273.65	$	239.95	$	210.44	$	186.94
Mortgage notes payable	$	1,392,092,982	$	1,437,149,148	$	973,502,186	$	499,479,256	$	—

TIAA Real Estate Account§ Prospectus 41

QUARTERLY SELECTED FINANCIAL INFORMATION

          The following selected unaudited financial data for each full quarter of 2007 and 2006 are derived from the financial statements of the Account for the years ended December 31, 2007 and 2006. Certain amounts below have been reclassified in accordance with the reclassifications discussed in Note 1 of the Notes to Financial Statements.

	2007
	For the Three Months Ended
													Year Ended December 31
	March 31			June 30			September 30			December 31
Investment income, net	$	142,720,924		$	158,634,655		$	155,766,287		$	167,634,268		$	624,756,134
Net realized and unrealized gain on investments and mortgage loans payable		436,763,627			355,602,333			442,916,313			203,152,465			1,438,434,738
Net increase in net assets resulting from operations	$	579,484,551		$	514,236,988		$	598,682,600		$	370,786,733		$	2,063,190,872
Total return		4.02	%		3.31	%		3.66	%		2.15	%		13.80	%
	2006
	For the Three Months Ended
	March 31			June 30			September 30			December 31			Year Ended December 31
Investment income, net	$	118,718,422		$	135,473,310		$	149,429,649		$	153,909,006		$	557,530,387
Net realized and unrealized gain on investments and mortgage loans payable		228,328,042			411,291,318			290,628,996			126,421,939			1,056,670,295
Net increase in net assets resulting from operations	$	347,046,464		$	546,764,628		$	440,058,645		$	280,330,945		$	1,614,200,682
Total return		3.21	%		4.69	%		3.43	%		2.04	%		14.04	%

42 Prospectus§ TIAA Real Estate Account

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 below, and the section entitled “Risks,” which begins on page 12. The past performance of the Account is not indicative of future results.

FORWARD-LOOKING STATEMENTS

          Some statements in this prospectus which are not historical facts may be “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements about management’s expectations, beliefs, intentions or strategies for the future, include the assumptions underlying these forward-looking statements, and are based on current expectations, estimates and projections about the real estate industry, markets in which the Account operates, management’s beliefs, assumptions made by management and the transactions described in this prospectus. While management believes the assumptions underlying any of its forward-looking statements and information to be reasonable, such information may be subject to uncertainties and may involve certain risks which may be difficult to predict and are beyond management’s control. Forward-looking statements involve risks and uncertainties, some of which are referenced in the section of the prospectus entitled “Risks” and in this prospectus below and also in the section entitled “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.

          2007 Overview

          The TIAA Real Estate Account (the “Account”) invests primarily in high quality, core 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. The Account does not directly invest in either single-family residential real estate or residential mortgage-backed securities. Performance of commercial real estate during 2007 was positive as U.S. economic growth continued to support real estate market fundamentals. Investor demand for commercial real estate remained strong through much of the year. According to Real Capital Analytics, a primary source of commercial real estate transaction data, transactional volume reached a record $430 billion in 2007, a 34% increase

TIAA Real Estate Account§ Prospectus 43

over the $322 billion recorded in 2006. Large transactions which contributed to 2007’s record breaking results included the privatization of Archstone Smith and Equity Office Properties. While sales were strong for the year as a whole, sales slowed dramatically in the fourth quarter as capital markets uncertainties escalated. Sales activity in the quarter declined by roughly 33% compared with the fourth quarter of 2006.

          The shift in capital market conditions that materialized in the summer and fall of 2007 was the conclusion of a capital markets cycle phase characterized by plentiful capital, inexpensive and abundant debt, and increasingly aggressive risk pricing for all asset types. As deteriorating credit in sub-prime residential mortgages became evident in 2007, the value of structured securities containing those mortgages plunged and effectively closed down demand for new issues of such securities. The loss of confidence in this sector of the market ignited, in turn, a re-evaluation of risk pricing through-out the capital markets. Credit spreads on corporate debt, conventional commercial mortgages and commercial mortgage-backed securities (CMBS) have widened to levels not seen since the last recession. CMBS new issuances have all but halted as a loss of confidence spilled over from sub-prime residential mortgages. Various specialty instruments have withered as well, also largely the result of this loss of confidence. The risk re-pricing brought the long phase of commercial real estate capitalization rate compression to a halt. By year end 2007, cap rates showed slight widening across certain property types though based on very few transactions. The slowing in transactions probably reflects both heightened uncertainty as market participants wait out the capital markets volatility and the constraining effect of less available and more expensive commercial mortgage financing.

          In the public sector, REITs performed poorly during most of 2007, despite healthy real estate market fundamentals. After a seven year run of above-average returns, REIT returns as indicated by the Dow Jones Wilshire Real Estate Securities Index were a negative 17.7% for the year as compared with a gain of 5.5% for the S&P 500. Several REITs were taken private during the year at what turned out to be peak prices; those that remained public saw their share prices decline. Because of their liquidity, REIT returns have historically been more volatile than commercial property returns, as stock market investors will often move money between sectors based on swings in sentiment and other factors. While the Account does invest in REITs, these holdings amount to less than 5% of the total value of the Account as of December 31, 2007.

          The U.S. economy continued to expand in 2007; however, growth slowed measurably over the course of the year due in large part to the slowdown in the housing market. Home prices declined across the nation, and the number of residential mortgage delinquencies increased, particularly among borrowers who bought homes with adjustable rate mortgages. Housing construction dropped sharply over the course of the year as inventories of unsold homes increased and mortgage lenders tightened lending standards.

44 Prospectus § TIAA Real Estate Account

          Historically, there has not been a direct link between the performance of commercial real estate and single-family housing due to the different market fundamentals that drive each. In its January 2008 “Beige Book”, which reports on economic conditions in the 12 Federal Reserve Districts, the Federal Reserve characterized commercial real estate activity at year-end 2007 as generally stable, with some markets reporting little to no change while others reported a slight easing. By comparison, according to the Beige Book, “residential real estate conditions continued to be weak in all districts”.

          Nonetheless, the performance of the single-family housing market has had an indirect impact on commercial real estate markets. For example, bankruptcies of subprime mortgage lenders have negatively affected office space demand in Orange County, California, where several of the largest subprime lenders were headquartered. The Account has minimal exposure to the Orange County market, with one investment totaling $64 million, or 0.3% of total Account value. Similarly, job losses in the financial services sector can affect retail market conditions since financial services jobs are among the most highly paid. While retail sales softened nationally in 2007, the impact has been minimal in the Account’s primary retail markets to date.

          During the second half of 2007, as the national economy continued to weaken and the housing market downturn deepened, the Federal Open Market Committee (“FOMC”) cut the federal funds rate three times, first by 50 basis points (0.50%) in September, and then by another 25 basis points (0.25%) in both October and December In early-2008, the Federal Reserve lowered the federal funds rate two more times by a total of 125 basis points (1.25%). Cuts in interest rates are designed to spur economic activity by increasing consumer spending and business borrowing. The effects of cuts in the federal funds rate and other Federal Reserve actions often take 6-9 months to become evident, and the Federal Reserve will be watching for signs that its cuts have stimulated economic activity. While credit markets remain constrained as of early 2008, the Federal Reserve’s efforts to stimulate economic activity through cuts in the federal funds rate give management reason to believe that the economic and capital markets environment will provide fundamental support for U.S. commercial real estate markets in 2008.

          Investments as of December 31, 2007

          As of December 31, 2007, the Account had total net assets in the amount of $17,660,536,799, a 3% increase from the end of the third quarter of 2007 and a 25% increase from year-end 2006. The growth in net assets was due to the continued positive inflow of premiums and net transfers into the Account, combined with a 12% increase in net investment income and capital appreciation on the Account’s investment portfolio during the year ended December 31, 2007, as compared to 2006.

          As of December 31, 2007, the Account owned a total of 111 real estate property investments (99 of which were wholly-owned, 12 of which were held in joint ventures) and one remaining equity interest in a joint venture, which sold its real

TIAA Real Estate Account§Prospectus45

estate investments during the third quarter of 2007, representing 77.9% of the Account’s total investment portfolio. The real estate portfolio included 46 office properties (5 of which were held in joint ventures and one located in London, England), 27 industrial properties (including one held in a joint venture), 21 apartment complexes, 16 retail properties (including five held in joint ventures and one located in Paris, France), and a 75% joint venture interest in a portfolio of storage facilities. Of the 111 real estate property investments, 20 are subject to debt (including seven joint venture property investments). Total debt on the Account’s wholly-owned real estate portfolio as of December 31, 2007 was $1,392,092,982 representing 7.9% 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, 2007 was $3,383,875,582 representing 19.2% of Total Net Assets. The Account currently has no fund-level debt.

          During 2007, the Account purchased 7 property investments, one of which was a joint venture interest in a portfolio containing 65 retail properties, for a total net equity investment of $1.7 billion. These purchases were diversified by both location (16 states and Paris, France) and by sector. The properties are listed in the chart below:

PROPERTY INVESTMENTS ACQUIRED IN 2007

Property Name	Property Type	City	State	Net Acquisition Cost		Joint Venture/ % Interest		Third Party Debt		Gross Acquisition Cost
Camelback Center	Office	Phoenix	AZ	$	75,743,245		No	$	—	$	75,743,245
DDR Retail Portfolio	Retail	various	various		1,043,213,518		Yes - 85%		1,531,873,092		2,575,086,610
Printemps de l’Homme	Retail	Paris	France		259,842,066		No		—		259,842,066
Preston Sherry Plaza	Office	Dallas	TX		45,211,077		No		—		45,211,077
Champlin Marketplace	Retail	Champlin	MN		18,352,263		No		—		18,352,263
Pacific Plaza	Office	San Diego	CA		118,221,017		No		8,922,033		127,143,050
Seneca Industrial Park	Industrial	Pembroke Park	FL		122,334,422		No		—		122,334,422
Total				$	1,682,917,608			$	1,540,795,125	$	3,223,712,733

          The Account also sold 15 property investments and 5 properties from larger portfolios for approximately $801.8 million. We believe that 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

46 Prospectus § TIAA Real Estate Account

on the Account’s overall performance. The properties sold had a cumulative realized gain of approximately $199.1 million. The properties are listed below:

PROPERTY INVESTMENTS SOLD IN 2007

Property Name	Property Type	City	State	Net Sales Price (less selling exp)
Greens at Metrowest	Apartment	Orlando	FL	$	21,656,260
Eastgate Distribution Center	Industrial	San Diego	CA		31,800,127
Woodcreek III-Chicago Industrial(1)	Industrial	Bollingbrook	IL		6,717,149
IDI Kentucky	Industrial	Hebron	KY		66,981,460
Corporate Lakes-Atlanta Industrial(1)	Industrial	Atlanta	GA		30,653,575
Landmark at Salt Lake City	Industrial	Salt Lake City	UT		16,176,540
2101 Design Road-Dallas Industrial Portfolio(1)	Industrial	Arlington	TX		9,279,890
1155 Harvester-Chicago CalEast Portfolio(1)	Industrial	West Chicago	IL		8,727,620
Memphis Portfolio	Industrial	Memphis	TN		61,485,333
Mideast RA Industrial Portfolio	Industrial	New Castle	DE		15,207,210
Mountain RA Industrial Portfolio	Industrial	Phoenix	AZ		9,014,952
Sabre Street-Northern CA RA Industrial(1)	Industrial	Hayward	CA		6,547,463
Batterymarch Park II	Office	Quincy	MA		17,291,200
161 N. Clark Street (75% Account Interest)	Office	Chicago	IL		239,493,750
Butterfield Industrial Park	Industrial	El Paso	TX		5,035,162
Legends at Chase Oaks	Apartment	Plano	TX		36,631,000
Sawgrass Office Portfolio	Office	Sunrise	FL		85,656,950
10 Waterview	Office	Parsippany	NJ		36,633,763
9 Hutton Centre	Office	Santa Ana	CA		36,535,781
One Monument Place	Office	Fairfax	VA		60,263,855
Total				$	801,789,040

⁽¹⁾ Partial sale of a single building which was part of an existing portfolio

          In addition to the acquisition and sales activity, the Account entered into a commitment to purchase a limited partnership interest in the amount of $50 million in a real estate fund providing mezzanine financing on commercial real estate, and refinanced the debt on West Town Mall, reducing the interest rate from 6.90% to 6.34%, and increasing the amount of its share in the loan from $38 million to $105 million.

          Management believes that the Account’s real estate portfolio is diversified by location and property type. The largest investment, DDR Joint Venture, consists of 65 properties in 13 states, represents 5.41% of Total Investments and 6.94% of its total real estate investments. No single property investment represented more than 3.37% of Total Investments or more than 4.32% of 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

TIAA Real Estate Account§Prospectus47

metropolitan statistical area. All information is based on the values of the properties at December 31, 2007.

DIVERSIFICATION BY MARKET VALUE

	East (27)		West (36)		South (36)		Midwest (7)		Various* (3)		Foreign** (2)		Total (111)
Office (46)	20.9	%	20.1	%	11.1	%	1.2	%	0.0	%	2.9	%	56.2	%
Apartment (21)	1.7	%	6.1	%	5.0	%	0.0	%	0.0	%	0.0	%	12.8	%
Industrial (27)	1.7	%	6.0	%	3.4	%	1.4	%	0.5	%	0.0	%	13.0	%
Retail (16)	1.6	%	0.9	%	6.0	%	0.1	%	6.9	%	1.9	%	17.4	%
Other (1)***	0.0	%	0.0	%	0.0	%	0.0	%	0.6	%	0.0	%	0.6	%
Total (111)	25.9	%	33.1	%	25.5	%	2.7	%	8.0	%	4.8	%	100.0	%

( )	Number of property investments in parentheses.
*	Represents a portfolio of storage facilities, a portfolio of industrial properties, and a portfolio of retail properties located in various regions across the U.S.
**	Represents real estate investments in the United Kingdom and France.
***	Represents a portfolio of storage facilities.
Properties in the “East” region are located in: ME, NH, VT, MA, RI, CT, NY, NJ, PA, DE, MD, DC, WV, VA, NC, SC, KY
Properties in the “Midwest” region are located in: WI, MI, OH, IN, IL, MN, IA, MO, KS, NE, ND, SD
Properties in the “South” region are located in: TN, MS, AL, GA, FL, OK, AR, LA, TX
Properties in the “West” region are located in: MT, ID, WY, CO, NM, AZ, UT, NV, WA, OR, CA, AK, HI

TOP TEN LARGEST REAL ESTATE PROPERTY INVESTMENTS

Property Name	City	State/ Country	Property Type	Market Value ($M)(a)				% of Total Real Estate Portfolio(b)		% of Total Investments
DDR Joint Venture	Various	USA	Retail		$	1,028.3	(c)	6.94	%	5.41	%
1001 Pennsylvania Avenue	Washington	DC	Office		$	640.1	(d)	4.32	%	3.37	%
Fourth and Madison	Seattle	WA	Office		$	487.0	(e)	3.29	%	2.56	%
50 Fremont	San Francisco	CA	Office		$	478.0	(f)	3.23	%	2.51	%
1 & 7 Westferry Circus	London	UK	Office		$	436.1	(g)	2.94	%	2.29	%
Four Oaks Place	Houston	TX	Office		$	419.3		2.83	%	2.21	%
The Newbry	Boston	MA	Office		$	389.9		2.63	%	2.05	%
780 Third Avenue	New York City	NY	Office		$	375.0		2.53	%	1.97	%
Yahoo! Center	Santa Monica	CA	Office		$	369.4		2.49	%	1.94	%
Ontario Industrial Portfolio	Ontario	CA	Industrial		$	355.4	(h)	2.40	%	1.87	%

(a)	Value as reported in the December 31, 2007 Statement of Investments. Investments owned 100% by TIAA are reported based on market value. Investments in joint ventures are reported based on the equity method of accounting.
(b)	Total Real Estate Portfolio excludes the mortgage loan receivable.
(c)	This property is held in a 85%/15% joint venture with Developers Diversified Realty Corporation (DDR), and consists of 65 retail properties located in 13 states.

48Prospectus§TIAA Real Estate Account

(d)	This property is shown gross of debt. The value of the Account’s interest less leverage is $428.8M.
(e)	This property is shown gross of debt. The value of the Account’s interest less leverage is $339.8M.
(f)	This property is shown gross of debt. The value of the Account’s interest less leverage is $341.0M.
(g)	This property is shown gross of debt. The value of the Account’s interest less leverage is $180.6M.
(h)	This property is held in a 50%/50% joint venture with Equity Office Properties Trust.
(i)	This property is shown gross of debt. The value of the Account’s interest less leverage is $346.0M.

TOP FIVE OVERALL MARKET EXPOSURE

Metropolitan Statistical Area (MSA)	% Leased		# of Investments	% Total Investments
Washington-Arlington-Alexandria DC-VA-MD-WV	99.2	%	9	8.42	%
Los Angeles-Long Beach-Glendale CA	92.5	%	8	5.72	%
Boston-Quincy MA	96.7	%	5	5.51	%
San Francisco-San Mateo-Redwood City CA	94.4	%	4	5.11	%
Seattle-Bellevue-Everett WA	97.9	%	5	4.11	%

          As of December 31, 2007, the Account also held investments in real estate limited partnerships, representing 1.74% of Total Investments, real estate equity securities, representing 2.24% of Total Investments, a mortgage loan receivable representing 0.38% of Total Investments, certificates of deposit representing 2.22% of Total Investments, commercial paper representing 9.23% of Total Investments, government bonds, representing 5.82% of Total Investments, variable notes representing 0.26% of Total Investments, and bankers acceptance representing 0.20% of Total Investments.

          Real Estate Market Update By Property Type

          (Commercial real estate market statistics discussed in this section are obtained by the Account from sources that Management considers reliable, but some of the data are preliminary for the year ended December 31, 2007 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.)

          In 2007 the United States economy grew steadily for the first seven months and then at a pace which slowed measurably from August to the end of 2007. Employment growth, which is a crucially important influence on the demand side of commercial property markets, slowed with the economy. An estimated 1.7 million jobs were added during 2007, down significantly from 2.5 million in 2006. While the service sector expanded, job losses were concentrated in the construction (primarily residential building) and manufacturing sectors. The unemployment rate began to increase during the second half of the year, ending at 5.0%, as compared to 4.4% at the end of 2006. Despite weaker economic activity, commercial real estate fundamentals remained healthy, although varied from market to market and by property sectors during the year. In general, vacancy rates across most property types remained at or below equilibrium levels and rents grew in most markets.

TIAA Real Estate Account§ Prospectus49

          Payroll employment grew in all of the Account’s primary metropolitan areas in 2007. The Account’s top five markets based on the net equity value of the Account’s property investments were Washington, D.C., Los Angeles, Boston, San Francisco, and Seattle. Employment growth was strongest in Seattle, where the number of jobs increased by 2.8% in 2007. Payroll growth was also positive in San Francisco (2.2%), Boston (1.7%), and Washington, D.C (1.5%). Employment growth in Los Angeles registered a more modest 1.0% gain during the year. In comparison, payroll employment in the U.S. grew by 1.3%.

          Office market conditions, particularly in the primary markets, were stable over the course of 2007. Torto Wheaton Research, an independent subsidiary of CB Richard Ellis and a widely-used source of real estate market data, reported that U.S. office vacancies averaged 12.5% as of year-end 2007 as compared to 12.6% at year-end 2006. In comparison, at year-end 2007, the vacancy rate of the Account’s portfolio was 5.2%, which was well below the national average. The office market remained stable despite job losses in financial activities, a key office using sector. The downturn of the housing market and collapse of several of the largest subprime mortgage lenders contributed to the loss of around 21,000 jobs in the financial activities sector in the latter half of 2007. “Credit intermediation”, a category which includes subprime lenders, lost 75,000 jobs, most of which occurred during the third and fourth quarters. However, job losses in financial services were more than offset by larger gains in the professional and business services sector, which generated 314,000 jobs over the course of the year.

          Office market fundamentals remained positive in the Account’s top office markets during 2007. All of the Account’s top office markets enjoyed vacancy rates below the national average. In Washington, D.C., where the largest proportion of the Account’s office investments are concentrated, the year-end 2007 vacancy rate was 10.0%, which is below the national average but marginally above the market’s vacancy rate of 9.1% at year-end 2006. By comparison, the average vacancy rate for the Account’s Washington, D.C. properties was 0.6% at year-end 2007. Similarly, the table below shows that the average vacancy rate of the Account’s property investments is well below that of their respective markets in Boston, San Francisco, Los Angeles, and Seattle.

50Prospectus§ TIAA Real Estate Account

Metropolitan Sector Statistical Area (MSA)		Total Sector By MSA ($M)			% of Total Investments		Account Weighted Average Vacancy		MSA Vacancy (*)		National Average (*)
Office							5.7	%			12.5	%
1	Washington-Arlington-Alexandria DC-VA-MD-WV		$	1,409	7.4	%	0.6	%	10.0	%
2	Boston-Quincy MA		$	1,014	5.3	%	3.0	%	10.8	%
3	San Francisco-San Mateo-Redwood City CA		$	874	4.6	%	5.6	%	9.1	%
4	Los Angeles-Long Beach-Glendale CA		$	719	3.8	%	5.4	%	10.0	%
5	Seattle-Bellevue-Everett WA		$	687	3.6	%	3.6	%	9.5	%

* Source: Torto Wheaton Research

          Industrial space demand is influenced by a number of factors including the national business cycle, industrial production, international trade, as well as employment growth in the manufacturing, wholesale trade and transportation and warehousing industries. Gross Domestic Product (GDP), a basic indicator of the national economic activity, grew an estimated 2.2% in 2007, as compared with 2.9% in 2006 and 3.1% in 2005. GDP growth was especially weak in the fourth quarter of 2007 at 0.6% (a preliminary estimate), which many economists believe will remain similarly weak in the first half of 2008. Nonetheless, industrial market conditions were stable in 2007. According to Torto Wheaton Research, industrial market vacancies in the U.S. averaged 9.4% as of year-end 2007, unchanged from year-end 2006. In comparison, the average vacancy rate of the Account’s portfolio of industrial properties was 4.3% as of year-end 2007, below the national average. The average vacancy rates of the Account’s properties in its top industrial markets are as follows:

Metropolitan Sector Statistical Area (MSA)		Total Sector By MSA ($M)			% of Total Investments		Account Weighted Average Vacancy		MSA Vacancy (*)		National Average (*)
Industrial							4.3	%			9.4	%
1	Riverside-San Bernardino-Ontario CA		$	488	2.6	%	0.0	%	9.1	%
2	Chicago-Naperville-Joliet IL		$	202	1.1	%	0.4	%	10.4	%
3	Dallas-Plano-Irving TX		$	201	1.1	%	3.7	%	10.6	%
4	Los Angeles-Long Beach-Glendale CA		$	145	0.8	%	11.4	%	4.6	%
5	Atlanta-Sandy Springs-Marietta GA		$	135	0.7	%	2.2	%	12.9	%

* Source: Torto Wheaton Research

          Riverside, California, where the largest concentration of the Account’s industrial assets is located, had a year-end 2007 vacancy rate of 9.1%, slightly below the 9.4% national average. Riverside is the nation’s top industrial market due to its proximity to the Ports of Los Angeles and Long Beach where approximately 40% of the nation’s imports enter the U.S. The Account’s industrial properties in Riverside are fully leased and occupied. Although vacancy rates in Chicago and Dallas were above the national average, both markets saw vacancies

TIAA Real Estate Account§ Prospectus 51

decline over the course of 2007. The Account’s industrial properties in Chicago and Dallas had a vacancy rate of 0.4% and 3.7%, respectively, as of year-end 2007, which are well below their respective market averages. Vacancy rates in Atlanta averaged 12.9% as of year-end 2007, virtually unchanged from year-end 2006. In comparison, the Account’s industrial properties in Atlanta had a vacancy rate of 2.2% at year-end 2007. The only market in which the Account’s properties have a higher vacancy rate than the market average is Los Angeles, where vacancies in the Account’s industrial properties averaged 11.4% as of year-end 2007 versus the 4.6% market average. The higher vacancy rate in the Account’s properties is due to two tenants moving to other buildings following expiration of their leases.

          The rental apartment market remained relatively healthy in 2007, despite the downturn in the housing market, which resulted in increasing competition from unsold condominiums and single-family rentals being offered for rent. Preliminary data from Torto Wheaton Research indicates that vacancy rates in U.S. apartment markets averaged 4.7% as of year-end as compared with 4.8% at year-end 2006. While national vacancies were largely unchanged, markets that experienced a boom of single family and condominium construction in 2005-2006 generally experienced an increase in vacancies. These markets include Phoenix and much of Florida (e.g., Orlando, Ft. Lauderdale and Miami). The average vacancy rate for the Account’s apartment holdings was 6.5% at the end of 2007. The average vacancy rates of properties in the Account’s top apartment markets are shown below:

Metropolitan Sector Statistical Area (MSA)		Total Sector By MSA ($M)			% of Total Investments		Account Weighted Average Vacancy		MSA Vacancy (*)		National Average (*)
Apartment							6.5	%			4.7	%
1	Houston-Bay Town-Sugar Land TX		$	336	1.8	%	6.5	%	6.9	%
2	Phoenix-Mesa-Scottsdale AZ		$	326	1.7	%	3.5	%	6.7	%
3	Denver-Aurora CO		$	238	1.2	%	7.1	%	4.6	%
4	Atlanta-Sandy Springs-Marietta GA		$	190	1.0	%	5.2	%	6.0	%
5	Los Angeles-Long Beach-Glendale CA		$	127	0.7	%	21.0	%	2.6	%

* Source: Torto Wheaton Research

          As shown above, with the exception of the Account’s apartment properties in Denver and Los Angeles, the average vacancy rates of its apartment properties were generally similar to or modestly lower than their respective market averages. In Los Angeles, the Account’s single property has experienced direct competition from new rental projects. In Denver, one property has a 3% vacancy while the second property has a vacancy of 8% due to direct competition from lower priced properties.

          Retail markets weakened modestly during 2007 despite healthy consumer spending during much of the year. Preliminary data from the U.S. Department of Commerce indicated that retail and food service sales (excluding autos and auto parts) increased 5.7% in the fourth quarter of 2007 as compared to the fourth

52Prospectus§ TIAA Real Estate Account

quarter of 2006. (Year-over-year comparisons are necessary to account for seasonal sales patterns.) However, a number of major retailers reported that sales were very soft during December, leading many economists to speculate that slower job growth, elevated energy prices and declining home prices has caused consumers to cut back on discretionary spending. According to Torto Wheaton Research, vacancies in neighborhood and community centers averaged 9.8% at year-end 2007, up from 8.7% at year-end 2006. In comparison, the average vacancy rate as of December 31, 2007 for the Account’s entire retail portfolio as well as its neighborhood and community centers was much lower at 2.5%, and lower than this same time in 2006 at 3.0%.

          Overall, Management believes real estate markets are at or close to equilibrium. The consistent declines in vacancy rates that occurred on a quarterly basis in recent years appear to have ended. Similarly, rent growth has slowed or leveled off in a number of markets. Management believes that this reaction of the real estate market activity is consistent with the slowing of the overall U.S. economic activity and job growth. Fortunately, markets remained balanced, and the level of construction of new commercial real estate has been moderate, and generally in-line with anticipated demand. Torto Wheaton Research projects approximately 73 million square feet of multi-tenant office space to be built in 2008, a total which is below the average of 93 million square feet that were built during the 1999-2001 construction peak. Similarly, in the industrial market, Torto Wheaton Research expects around 170 million square feet to be built in 2008, as compared with an average of nearly 250 million square feet in 1999-2001. Apartment construction is expected to total 215,000 units in 2008, which is essentially similar to the 1999-2001 average, but below the 225,000 unit average built in 2006-2007. However, Torto Wheaton’s forecast of apartment construction may ultimately prove too high given the 9% decline in permits issued for new multi-family buildings (an indicator of future construction) in 2007. Construction of new neighborhood and community centers is expected to total just over 20 million square feet in 2008, down from 36 million square feet in 2007, which is consistent with announcements by several major retailers that plan to reduce their new store openings in 2008.

          Outlook for 2008

          While commercial real estate fundamentals have remained positive to date despite the capital markets turmoil of recent months, Management expects these fundamentals to weaken to some degree in the months ahead as a result of a weak economic growth environment. There is little disagreement among economic forecasters with regard to the first half of 2008; expectations of sub-par growth are unanimous. Some forecasters are expecting mildly negative GDP growth during the first half while others are expecting weakly positive growth. While the difference might well determine whether this period is actually deemed to be a “recession”, the impact on commercial real estate will probably not differ much one way or the other. The larger question is whether economic growth will

TIAA Real Estate Account§ Prospectus 53

rebound materially in the second half of the year. Here, Management shares the view among more optimistic forecasters which calls for a return to near-trend growth in the third and fourth quarters largely as a result of the Federal Reserve’s interest rate cuts that began in September. This view is shared by the Federal Open Market Committee which is the policy setting arm of the Federal Reserve. As reported by Chairman Bernanke in his February 2008 Semiannual Monetary Policy Report to Congress, the FOMC members believe that GDP growth in 2008 will amount to 1.3% to 2.0% with a rebound “close to or a little above its longer-term trend” in 2009 and 2010. They also expect inflation will be “moderate” from its 2007 pace.

          With slow growth or mild recession in the first half of 2008, growth in tenant demand for office, industrial and retail space will likely slip, rent growth will likely slow or flatten out, and vacancy rates may inch up. The degree of commercial real estate market weakening will be mitigated by the generally balanced conditions that currently prevail in many if not most metro area markets. In addition, the credit market constraints now in play will likely constrain new commercial real estate construction activity in 2009. Constrained additions to supply along with the expected rebound in economic growth will set the stage for a rapid repair of fundamentals in 2009.

          Commercial real estate pricing in the near term will be largely determined by a combination of factors including the level and uncertainty associated with Treasury rates and inflation, and the general pricing of risk across all asset types. Assuming that the period of economic weakness is short-lived, Treasury rates should achieve a cycle low in the first half of the year and then slowly rebound as the economy recovers. Low Treasury rates would cushion the impact of wider cap rate spreads which, for commercial real estate, are approaching their long-term norms. Finally, pricing pressures have so far been concentrated on properties that are in less attractive locations or have less attractive investment characteristics; Management believes that such distinctions will continue in light of the ongoing strong investor demand for the most attractive properties. Nonetheless, in light of less available and more expensive commercial mortgage debt, it is possible that the number of investors pursuing commercial real estate will be smaller in 2008 than in prior years, contributing to some easing of pricing across the quality spectrum.

          Management believes that its property investments are diversified by both sector and geographic location, which will allow it to weather a continued slowdown of economic and real estate market conditions. The Account will continue to balance these fundamentals against pricing pressures when executing its core investment strategy.However, market conditions affecting real estate investments at any given time cannot be predicted, and any downturn in one or a number of the markets in which the Account invests could significantly and adversely impact the Account’s returns.

54Prospectus§ TIAA Real Estate Account

Results of Operations

          Year Ended December 31, 2007 Compared to Year Ended December 31, 2006

          Performance

          The Account’s total return was 13.80% for the year ended December 31, 2007, 24 basis points lower than the 2006 annual return of 14.04%. The Account’s overall performance on a year-to-year basis reflects the continued strong performance of the Account’s real estate property investments, including investments owned in joint ventures. This strong performance was offset by the substantial decrease in performance of its marketable securities (described in Net Realized and Unrealized Gains and Losses on Investments and Mortgage Loans Payable).

          Commercial real estate has continued to experience historically high pricing in 2007 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, 2007 was 13.96%, 12.35% and 9.79%. The respective returns for the year ended December 31, 2006 were 13.53%, 10.22% and 9.43%.

          The Account’s total net assets grew 25.0% from December 31, 2006 to December 31, 2007. The primary drivers of this growth were a significant increase in the Account’s net realized and unrealized gains on its real estate investments including joint ventures and funds, net positive participant transactions, and an increase in the Account’s net investment income from its investment portfolio over the last twelve months. Management believes that the continued significant realized and unrealized gains on the real estate investments, including joint ventures, is due to the positive real estate market fundamentals, and the core property investment strategy upon which the Account is based. Management also believes that the continued positive net participant transfers into the Account are due to its strong long-term historic performance and its historically low return volatility relative to other available investment options.

          Income and Expenses

          The Account’s net investment income, after deduction of all expenses, was 12% higher for the year ended December 31, 2007, as compared to 2006. This increase was due to a 23% increase in net income from the Account’s real estate properties, including joint venture holdings and limited partnerships, augmented by a 5% increase in income from marketable securities, all of which was partially offset by a 68% increase in Account level expenses for the year ended 2007 as compared to 2006.

TIAA Real Estate Account§Prospectus55

          The Account’s real estate holdings, including real estate joint ventures and limited partnerships, generated approximately 81% and 79% of the Account’s total investment income (before deducting Account level expenses) during 2007 and 2006, respectively. The 23% increase in the Account’s total investment income was derived from its investment in real estate, joint ventures and limited partnerships. 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.

          Gross real estate rental income increased approximately 18% during the year ended December 31, 2007, as compared to the same period in 2006. This increase was primarily due to income derived from properties acquired in 2006 and 2007, which included properties with larger income streams due to their relative size. Income from real estate joint ventures and limited partnerships was $93,724,569 for the year ended December 31, 2007, as compared with $60,788,998 for the year ended December 31, 2006. This 54% increase was primarily due to an increase in gross rental income from the properties owned in joint ventures, which increased substantially with the acquisition of a joint venture interest in 65 retail properties in the first quarter of 2007. Total investment income on the Account’s investments in all marketable securities increased by 5%, from $135,407,210 for the year ended December 31, 2006 to $141,913,253 for the comparable period in 2007. This change was due to an increase in the Account’s investment income from other marketable securities, which was partially offset by a decrease in the Account’s investment income from REIT securities due to their poor performance in 2007.

          Total real estate property level expenses and taxes for wholly-owned property investments for the years ended December 31, 2007 and 2006 were $458,021,539 and $389,672,945, respectively. In 2007, operating expenses and real estate taxes represented 54% and 28% of the total real estate property level expenses and taxes, respectively, with the remaining 18% representing interest payments on mortgages. In comparison, operating expenses, real estate taxes, and interest expenses similarly represented 53%, 28% and 19% of total property level expenses, respectively, in 2006. Overall, property level expenses increased by only 18% from 2006 to 2007. The majority of this increase (83%) 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 17% of the overall increase. As of year-end 2007, there were 13 wholly-owned properties subject to debt, as compared to 12 properties at year-end 2006. Three of the thirteen properties with debt as of December 31, 2007 were added to the Account’s real estate portfolio in the second half of 2006; and one was added in fourth quarter 2007.

          The Account incurred overall Account level expenses for the year ended December 31, 2007 of $140,294,447, which was a 68% increase from expenses of $83,448,664 for the year ended December 31, 2006. The overall change in expenses was primarily due to the growth of the Account’s total net assets (which increased

56 Prospectus§ TIAA Real Estate Account

by approximately 25% from December 31, 2006 to December 31, 2007), increased actual expenses associated with managing the Account, due in part to adjustments made to the allocation methodology, and increases in certain of the Account’s expense deduction rates effective May 1, 2007. Investment advisory charges grew to $49,239,366 for the year ended December 31, 2007 as compared to $26,899,307 for the year ended December 31, 2006. This increase was primarily the result of higher operational costs (including personnel and other infrastructure costs) due to the Account’s increasing diversity of assets and associated costs due to increased property asset management activities. Further, a component of this increase (approximately $5.2 million) was the result of reconciliation, during the twelve month period ended December 31, 2007 and in accordance with the Account’s procedures, of the difference between actual and estimated expenses of the Account. In addition, the direct investment advisory charges associated with the Account increased with the continued growth of the Account’s total net assets. Total administrative and distribution expenses increased to $63,593,008 for the year ended December 31, 2007 as compared to $45,712,473 for the year ended December 31, 2006. Administrative and distribution expenses increased due to adjustments made to the Account’s expense base, in accordance with the Account’s procedures, for any difference between actual and estimated expenses. This increase in expenses primarily resulted from larger allocated operational expenses including costs associated with new technology investments. In addition, the direct administrative and distribution charges associated with the Account increased with the continued growth of the Account’s total net assets. Finally, liquidity guarantee expenses increased to $19,409,759 for the year ended December 31, 2007 as compared to $3,905,051 for the year ended December 31, 2006, due to an increase in the liquidity guarantee expense deduction rate, which increased from 0.035% of annual net assets to 0.160% of annual net assets as of May 1, 2007.

          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 $1,438,434,738 for the year ended December 31, 2007, as compared with net realized and unrealized gains on investments and mortgage loans payable of $1,056,670,295 for the year ended December 31, 2006, a 36% year over year increase. The overall increase was primarily driven by the increase in net realized and unrealized gains on the Account’s real estate joint ventures and limited partnerships to $462,098,173 for 2007 from $217,360,271 for the year ended December 31, 2006. In addition, the Account had a strong increase in net realized and unrealized gains on the real estate properties to $1,026,007,574 for the year ended December 31, 2007 from $735,507,509 for 2006. The increase in net realized and unrealized gains on the Account’s property investments, including those held in joint ventures, was due to the solid real estate market fundamentals and continued liquidity in the commercial real estate markets. The effect of these

TIAA Real Estate Account§Prospectus57

positive conditions was to increase the value of the Account’s existing real estate assets, as reflected in the unrealized gains on the real estate properties of $898,172,653 and the realized gains on the sales of real estate properties of $127,834,921. During the year ended December 31, 2007, the Account sold nineteen wholly-owned properties, which included two apartments, five office buildings and a portfolio of several industrial properties for total net proceeds of $562.3 million, and recognized a cumulative net gain of $127.8 million. The Account also sold one joint venture, a 75% equity interest in the 161 N. Clark Street joint venture for total net proceeds of $239.5 million, and recognized a net gain of $69.9 million. The Account posted a net realized and unrealized loss on its marketable securities of $101,479,347 for the year ended December 31, 2007, as compared to a net realized and unrealized gain of $130,710,746 in the same period of 2006. The losses on the Account’s marketable securities in the year ended December 31, 2007 were primarily due to the Account’s investments in real estate equity securities (REITs). The U.S. REIT market struggled through a volatile 2007 and ended the year down by more than 17%, as compared to the strong 2006 performance where the market increased by 35%. We believe that the volatility in the REIT market was a reaction to a perceived fear of an overall slowdown in the real estate markets due to the continued problems of the subprime market, and the subsequent credit crunch.

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

          As of December 31, 2006 the Account’s total return (after expenses) over the prior 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% 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 prior year. Management believes that the net participant transfers into the Account were 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 30.6% higher for the year ended December 31, 2006, as compared to 2005. This

58Prospectus§ TIAA Real Estate Account

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% and 85% 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 35% 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 $60,788,998 for the year ended December 31, 2006, as compared with $71,826,443 for the year ended December 31, 2005. This 15% decrease was due to the timing of distributions from the joint venture partners. Investment income on the Account’s investments in marketable securities increased by 91%, from $70,999,212 in 2005 to $135,407,210 in 2006. This increase was due to an increase in the number of marketable securities 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

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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 $1,056,670,295 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 $610,734,011 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 $217,360,271 for the year ended December 31, 2006, as compared to unrealized gains of $175,619,683 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 Account’s existing real estate assets. This trend 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.

Liquidity and Capital Resources

          At year-end 2007 and 2006, the Account’s liquid assets (i.e., cash and marketable securities) had a value of $3,804,639,841 and $2,747,445,678, 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.

          In 2007, the Account received $1,186,870,080 in premiums and $934,307,324 in net participant transfers from TIAA, CREF Accounts and affiliated mutual funds, while, for 2006, the Account received $1,085,057,614 in premiums and $1,354,697,847 in net participant transfers. The Account’s net investment income increased from $557,530,387 for the year ended December 31, 2006 to $624,756,134 for the year ended December 31, 2007.

          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

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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 accumulation units (liquidity units) in accordance with TIAA’s liquidity guarantee to the Account.

          The Account, under certain conditions more fully described under “General Investment and Operating Policies”, may borrow money and assume or obtain a mortgage on a property (i.e., 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 the costs incurred in developing a property.

Contractual Obligations

          The following table sets forth a summary regarding our known contractual obligations, including required interest payments for those items that are interest bearing, at December 31, 2007:

	Amounts Due During Years Ending December 31,
	2008		2009		2010		2011		2012		Thereafter		Total
Mortgage Loans Payable:
Principal Payments	$	736,371	$	788,911	$	2,161,722	$	10,241,993	$	269,313,872	$	1,144,614,574	$	1,427,857,443
Interest Payments(1)		83,561,479		83,440,048		83,353,568		82,863,631		80,543,446		124,780,243		538,542,415
Total Mortgage Loans Payable		84,297,850		84,228,959		85,515,290		93,105,624		349,857,318		1,269,394,817		1,966,399,858
Commitment to Purchase		42,728,299		—		—		—		—		—		42,728,299
Leasehold Interest(2)
Other Commitments(3)		87,562,894		—		—		—		—		—		87,562,894
Total Contractual Obligations	$	214,589,043	$	84,228,959	$	85,515,290	$	93,105,624	$	349,857,318	$	1,269,394,817	$	2,096,691,051

(1)	These amounts represent interest payments due on mortgage loans payable based on the stated rates and, where applicable, the foreign currency exchange rates at December 31, 2007.
(2)	The Account purchased this leasehold interest on February 12, 2008.
(3)	This includes the Account’s commitment to purchase interest in six limited partnerships and to purchase shares in a private real estate equity investment trust.

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.

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Critical Accounting Policies

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

          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 historical financial statements affect the significant judgments, estimates and assumptions used in preparing its historical 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 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 with an independent appraisal value completed for 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 valuations for each real estate property and updates the property value as appropriate. 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 a property’s value has changed materially and such change is not reflected in the quarterly valuation review, or otherwise to ensure that the Account is valued appropriately. The independent fiduciary must also approve any valuation change where a property’s value changed by more than 6% from the most recent independent annual appraisal, or if the value of the Account would change by more than 4% within any calendar quarter or more than 2% since the prior month. When a real estate property is subject to a mortgage, the mortgage is valued independently of the property and its fair value is reported separately. The

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independent fiduciary reviews and approves 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 and, for the joint ventures, are adjusted to value their real estate holdings and mortgage notes payable at fair value. Upon the disposition of all real estate investments by an investee entity, the Account will continue to state its equity in the remaining net assets of the investee entity during the wind down period, if any, that occurs prior to the dissolution of the investee entity.

          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 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 initially valued at the face amount of the mortgage loan funding as representative of fair value. 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

          Mortgage loans payable are stated at fair value. 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

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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 any 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. The Account pays a fee to TIAA to assume the 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 on the sale of a real estate property 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. 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

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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 of the income distributed by the joint venture. Income earned by the joint venture, but not yet distributed to the Account by the joint venture investment, is recorded as unrealized gains and losses on real estate joint ventures.

          Transactions in marketable securities 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 as applicable. 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.

          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 adoption of FIN 48 did not have a significant impact on the Account’s financial position and 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 under generally accepted accounting principles in the United States, and requires additional disclosures 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. This statement is effective January 1, 2008 for the Account. The Account has assessed the impact of Statement No. 157 and determined that it will not significantly change the Account’s financial position and results of operations at the effective date.

          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 financial instruments and certain other items at fair value and is expected to expand the use of fair value measurement when warranted. The Account effectively adopted Statement 159 on January 1, 2008 and plans to report all existing and future Mortgage Loans Payable at fair value using this Statement. Historically, the Account recorded Mortgage Loans Payable at fair value. The

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Account has assessed the impact of Statement 159 in comparison to historical reporting and determined that it will not significantly change the Account’s financial position and results of operations.

          In June 2007, the Accounting Standards Executive Committee (“ACSEC”) of the American Institute of Certified Public Accountants (“AICPA”) issued Statement of Position (SOP) 07-1, Clarification of the Scope of the Audit and Accounting Guide Investment Companies and Accounting by Parent Companies and Equity Method Investors for Investments in Investment Companies. The SOP clarifies which entities are required to apply the provisions of the Investment Companies Audit and Accounting Guide (“Guide”) and provides guidance on accounting by parent companies and equity method investors for investments in investment companies. The SOP is effective for fiscal years beginning on or after December 15, 2007. In February 2008, FASB issued Staff Position (“FSP”) SOP 07-1-1 indefinitely delaying the effective date of SOP 07-1 to allow FASB time to consider significant issues related to the implementation of SOP 07-1. Management of the Account will continue to monitor FASB developments and will evaluate the financial reporting implications to the Account, as necessary.

          In December 2007, FASB issued Statement No. 141(R), “Business Combinations,” which establishes principles and requirements for how the acquirer shall recognize and measure in its financial statements the identifiable assets acquired, liabilities assumed, any noncontrolling interest in the acquiree and goodwill acquired in a business combination or a gain from a bargain purchase. This Statement is effective for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. The Account is currently assessing the impact that Statement No. 141(R) will have on its financial position and results of operations.

          In December 2007, FASB issued Statement No. 160, “Noncontrolling Interests in Consolidated Financial Statements – an Amendment of ARB No. 51,” which establishes and expands accounting and reporting standards for minority interests, which will be recharacterized as noncontrolling interests, in a subsidiary and the deconsolidation of a subsidiary. This Statement is effective for fiscal years beginning on or after December 15, 2008. The Account is currently assessing the potential impact that Statement No. 160 will have on its financial position and results of operations.

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, 2007 represented 79.7% 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;

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• 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, 2007, 20.3% 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 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

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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.

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, and

• an estimate of the net operating income accrued by the Account from its properties and other real estate-related investments,

and then reducing the sum 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 73.

          Fair value is based upon quoted market prices, where available. If listed prices or quotes are not available, fair value is based upon vendor-provided, evaluated prices or internally-developed models that primarily use market-based or independently-sourced market data, including interest rate yield curves, market spreads, and currency rates. Valuation adjustments may be made to reflect credit quality, the Account’s creditworthiness, liquidity, and other observable and unobservable data that are applied consistently over time.

          The methods described above are considered to produce a fair value calculation that represents a good faith estimate as to what a buyer in the market place would pay to purchase the asset or assume the liability. Since fair value calculations involve significant professional judgment in the application of both observable and unobservable attributes, actual realizable values or future fair values may differ from amounts reported. Furthermore, while the Account

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believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments, while reasonable, could result in different estimates of fair value at the reporting date.

VALUING REAL ESTATE INVESTMENTS

          Valuing Real Property: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 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 based on an independent appraisal at the time of the closing of the purchase, which may result in a potential unrealized gain or loss reflecting the difference between an investment’s fair value (i.e., exit price) and its cost basis (which is inclusive of transaction costs).

          Subsequently, the properties are valued on a quarterly cycle with an independent third party appraisal completed for each real estate property at least once a year The Account’s independent fiduciary, Real Estate Research Corporation, must approve all independent appraisers used by the Account. TIAA’s appraisal staff performs the other quarterly valuations for each real estate property and updates the property value as appropriate. 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 a property’s value has changed materially and such change is not reflected in the quarterly valuation review, or otherwise to ensure that the Account is valued appropriately. The independent fiduciary must also approve any valuation change where a property’s value changed by more than 6% from the most recent independent annual appraisal, or if the value of the Account would change by more than 4% within any calendar quarter or more than 2% since the prior month.

          The Account’s net asset value will include the 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 will be carried at fair value, which is anticipated initially to equal 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,

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

          We retain independent appraisers, each of whom have been approved by the independent fiduciary, to prepare the initial and subsequent annual third-party appraisals. These independent appraisers retained are always expected to be MAI-designated members of the Appraisal Institute and state certified appraisers from national or regional firms with relevant property type experience and market knowledge.

          We intend that the overarching principle when valuing our real estate investments will be to produce a valuation that represents a fair and accurate estimate of the fair value of our investments. Implicit in our definition of fair value is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby:

• Buyer and seller are typically motivated;

• Both parties are well informed or well advised, and acting in what they consider their best interests;

• A reasonable time is allowed for exposure in the open market;

• Payment is made in terms of cash or in terms of financial arrangements comparable thereto; and

• The price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.

          Because of the nature of real estate assets and because the fair value of our investments is not reduced by transaction costs that will be incurred to sell the investments, the Account’s net asset value won’t necessarily reflect the net realizable value of its real estate assets (i.e., what the Account would receive if it sold them).

          Valuing Real Property Encumbered by Debt:When a real estate property is subject to a mortgage, the mortgage is valued independently of the property and its fair value is reported separately. The independent fiduciary reviews and approves 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.

          Valuing 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.

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          Valuing Mortgage Loans Payable:Mortgage loans payable are stated at fair value. The estimated fair value of mortgage loans payable is 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. Fair values are estimated basedon market factors, such as market interest rates and spreads on comparable loans. Different assumptions or changes in future market conditions could significantly affect estimated fair values. At times, the Account may assume debt in connection with the purchase of real estate.

          Valuation of Real Estate Joint Ventures and Limited Partnerships:Real estate joint ventures and limited partnerships are stated at the fair value of the Account’s ownership interests in the underlying entities. The Account’s ownership interests are valued based on the fair value of the underlying real estate, any related mortgages payable, and other factors, such as ownership percentage, ownership rights, buy/sell agreements, distribution provisions and capital call obligations. Upon the disposition of all real estate investments by an investee entity, the Account will continue to state its equity in the remaining net assets of the investee entity during the wind down period, if any that occurs prior to the dissolution of the investee entity.

          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 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

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• 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, and/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 by using a pricing matrix that has various types of money market instruments along one axis and various maturities along the other. All debt securities, including those for which market quotations are not readily available, may also be valued at fair value as determined in good faith by the Investment Committee of the TIAA Board of Trustees and in accordance with the responsibilities of the Board as a whole.

          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 last 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 Market at the Nasdaq Official Closing Price on the valuation day. If no sale is reported that day, we use the mean of the last bid and asked prices. Other U.S. over-the-counter equity securities are valued at the mean of the last 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

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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 Services. In particular, TIAA performs investment management services and administration services for the Account, and Services provides distribution services for the Account. 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 estimated annual expense deduction rate that appears in the expense table below reflects an estimate of the amount we expect to deduct to approximate the costs that the Account will incur from May 1, 2008 through April 30, 2009:

Type of Expense Deduction	Estimated Percent of Net Assets Annually	Services Performed
Investment Management	%	For investment advisory, investment management, portfolio accounting, custodial and similar services, including independent fiduciary and appraisal fees
Administration	%	For administrative services performed by TIAA, such as receiving and allocating premiums and calculating and making annuity payments
Distribution	%	For Services’ expenses related to distributing the annuity contracts
Mortality and Expense Risk	%	For TIAA’s bearing certain mortality and expense risks
Liquidity Guarantee	%	For TIAA’s liquidity guarantee
Total Annual Expense Deduction1,2	%	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 also see “Summary of Account’s Expense Deductions” on page 5 for more detail regarding TIAA’s and Services’ provision of these at cost services to the Account.

          After the end of every quarter, we reconcile the amount 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

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remaining days in the quarter. Our at-cost deductions are based on projections of Account assets and overall expenses, and the size of any adjusting payments will be directly affected by how different our projections are from the Account’s actual assets or expenses.

          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. In addition, our operating expenses can fluctuate based on a number of factors including participant transaction volume, operational efficiency, and technological, personnel and other infrastructure costs. 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 for the Account from time to time, usually on an annual basis, 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.

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, administration and other services. In addition, Services, a wholly-owned subsidiary of TIAA, provides 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

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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 net asset value next determined. For the years ended December 31, 2007, December 31, 2006 and December 31, 2005, the Account expensed $19,409,759, $3,905,051 and $3,170,017, 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, 2007, December 31, 2006 and December 31, 2005, the Account expensed $49,239,366, $26,899,307 and $19,603,225, respectively, for investment management services and $8,052,314, $6,931,833 and $6,196,549, respectively, for mortality and expense risks provided/borne by TIAA. For the same period, the Account expensed $63,593,008, $45,712,473 and $27,130,406, 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. 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.

          Depending on the terms of your employer’s plan, RA premiums can be paid by your employer, you, or both. GRA premiums can only be paid by your employer. If

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you’re paying some or all of 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 IRA-style contributions, though you won’t be able to take tax deductions for these contributions. You can also transfer accumulations 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 generally limited to supplemental voluntary tax-deferred annuity (TDA) plans and supplemental 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 IRA-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, unlike GRAs, 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. Joint accounts are not permissible. You and your spouse can each open a Classic IRA with an annual contribution of up to $5,000 or by rolling over funds from another IRA or eligible retirement plan, if you meet the Account’s eligibility requirements. If you are age 50 or older, you may contribute up to $6,000. The combined limit for your contributions to a Classic IRA and a Roth IRA for a single year is $5,000, or $6,000 if you are age 50 or older, excluding rollovers. (The dollar limits listed are for 2008; 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 $5,000 or with a rollover from another IRA or a Classic IRA issued by TIAA if you meet the Account’s eligibility requirements, subject to rules applicable to Roth IRA conversions. If you are age 50 or older you may contribute up to $6,000. The combined limit for your contributions to a Classic IRA and a Roth IRA for a single year is $5,000, or $6,000 if you are age 50 or older, excluding rollovers. (The dollar

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limits listed are for 2008; different dollar limits may apply in future years.) We can’t issue you a joint contract.

          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 employer 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 Institutionally Owned 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.

KEOGH CONTRACTS

          TIAA also offers contracts under Keogh plans. If you are a self-employed individual who owns an unincorporated business, you can use the Account’s Keogh contracts for a Keogh plan, and cover common law employees, subject to the Account’s 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 93 for more information.

ELIGIBILITY FOR IRA AND KEOGH CONTRACTS

          Each of you and your spouse can open a 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 contract 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.

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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 as of the end of the business day we receive a completed application or enrollment form in good order. Your premiums will be credited to the Real Estate Account as of the end of the business day we receive them in good order.

          If we receive premiums from your employer before we receive 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.) For some employer plans, when the completed application or form arrives transfer the appropriate amount (premiums plus earnings) from the CREF Money Market Account and credit it to the Real Estate Account as of end of the business day we receive the completed form in good order.

          Generally, if your application or enrollment form is incomplete, or if your allocations violate employer plan restrictions that have been provided to TIAA, or total more than 100 percent, we’ll invest premiums remitted by your employer in the CREF Money Market Account (some employer plans may have a different default). After we receive a complete and correct application in good order with proper allocation instructions, we’ll follow your allocation instructions for future premiums. However, in this situation, you must request that we transfer any amounts that we credited to the CREF Money Market Account to the Real Estate Account. They will be credited as of the business day we receive that request in good order.

          TIAA generally doesn’t currently restrict the amount or frequency of payment of premiums to your contract, although we may in the future. Your employer’s retirement plan may limit your premium amounts. There also may be restrictions on remitting premiums on an IRA. In addition, 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 be subject to your employer’s retirement plan. The only restrictions relating to these premiums are in the contract itself.

          In most cases (subject to any restriction we may impose, as described in this prospectus), TIAA accepts premiums to a contract 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.

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

          You will receive a confirmation statement each time you remit premiums, or make a transfer to or a cash withdrawal from the Account. The statement will show the date and amount of each transaction. However, if you’re using an automatic investment plan, you’ll receive a statement confirming those transactions following the end of each calendar quarter.

          If you have any accumulations in the Account, you will be sent a statement in each quarter which sets forth the following information:

          (1) Premiums paid during the quarter;

          (2) The number and dollar value of accumulation units in the Account credited to the participant during the quarter and in total;

          (3) Cash withdrawals, if any, from the Account during the quarter; and

          (4) Any transfers between the Account and TIAA’s Traditional Annuity, CREF accounts, another TIAA annuity or separate account or mutual funds that may be offered under the terms of your plan during the quarter.

          You also will receive reports containing the financial statements of the Account and certain information about the Account’s investments.

          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 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 and driver’s license or certain other identifying documents. Until you provide us with the information needed, we may not be able to open an account or effect any 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 it is believed that potentially criminal activity has been identified, we reserve the right to take such action as deemed appropriate, which may include closing your account.

CHOOSING AMONG INVESTMENT ACCOUNTS

          After you receive your contract, 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

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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 at 730 Third Avenue, New York, New York 10017-3206,

          •          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 may cancel any RA, SRA, Classic IRA, ATRA or Keogh contract in accordance with the contract’s Right to Examine provision (unless we have begun making annuity payments from it) subject to the time period regulated by the state in which the contract is issued. To cancel a contract, 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 some or all of the current accumulation or premiums, depending on the state in which your contract was issued, to whoever originally submitted the premiums.

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

          Each payment to the Real Estate Account buys a number of accumulation units. Similarly, any withdrawal from the Account results in the redemption of a number of accumulation units. The price you pay for accumulation units, and the price you receive for accumulation units when you redeem accumulation units, is the value of the accumulation units calculated for the business day on which we receive your purchase, redemption or transfer request in good order (unless you ask for a later date for a redemption or transfer). This date is called the “effective date.” Therefore, if we receive your purchase, redemption or transfer request in good order before the NYSE closes, that business day will be considered the effective date of your order. If we receive your request in good order after the NYSE closes, the next business day will be considered the effective date of your order.

          Payments and orders to redeem accumulation units may be processed after the effective date. “Processed” means credited to the Account in the case of a purchase, or debited to the Account in the case of a redemption. In the event there are market fluctuations between the effective date and the processing date and the price of accumulation units on the processing date is higher or lower than your price on the effective date, that difference will be paid or retained by Services, the Account’s distributor. This amount, which may be positive or negative, together with similar amounts paid or retained by Services in connection with transactions involving other investment products offered under pension plans administered by TIAA or its affiliates, is apportioned to the Account pursuant to an agreement

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with Services, under which the Account reimburses Services for the services it has provided to the Account.

          “Good order” means actual receipt of an order along with all the information and supporting legal documentation necessary to effect the transaction. This information and documentation generally includes the contract number, the transaction amount (in dollars or accumulation units), signatures of all contract owners exactly as registered on the contract, and any other information or supporting documentation as may be required. With respect to purchase requests, “good order” also generally includes receipt of sufficient funds by us to effect the purchase. We may, in our sole discretion, determine whether any particular transaction request is in good order and reserve the right to change or waive any good order requirement at any time.

          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 asAdivided byB, whereAandBare 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.

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          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 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.

          As indicated, transfers and cash withdrawals are effective at the end of the business day we receive your request and all required documentation in good order. 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 93.

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 employer’s plan. Transfers to CREF accounts or to certain other options may be restricted by your employer’s plan, current tax law or by the terms of your contract.

          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 nine (9) 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.

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          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 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 the 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 and federal tax law, you can usually transfer or roll over money from another 403(b), 401(a)/403(a) or governmental 457(b) retirement plan to your qualified TIAA contract. You may also roll over 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, subject to your employer’s plan, you may be able to roll over funds from 401(a), 403(a), 403(b) and governmental 457(b) plans to a TIAA Classic IRA or, subject to applicable income limits, from an IRA containing funds originally contributed to such plans, to either a TIAA Classic or Roth IRA, subject to rules applicable to Roth IRA conversion. 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

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salary reduction agreements. Withdrawals are generally available only if you reach age 59½, leave your job, become disabled, die, or satisfy requirements related to qualified distributions 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, and 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, 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). If you’re married, you may be required by law or your employer’s plan to show us advance written consent from your spouse before TIAA makes certain transactions on your behalf.

          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 (if your employer’s plan allows) or IRA accumulations to pay your financial advisor. 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.

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          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.

MARKET TIMING / EXCESSIVE TRADING POLICY

          There are participants who may try to profit from making transactions back and forth among the CREF accounts, the Real Estate Account, the TIAA Access variable accounts and the mutual funds or other investment options 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 may 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 these costs. In addition, market timing can interfere with efficient portfolio management and cause dilution if timers are able to take advantage of pricing inefficiencies. Consequently, the Account is not appropriate for such market timing and you should not invest in the Account if you want to engage in market timing activity.

          To discourage market-timing activity, transfers from the Account to a CREF or TIAA account, or another nonaffiliated investment option, are limited to once every calendar quarter.

          TIAA reserves the right to reject any purchase or exchange request with respect to the Account, including when it is believed that a request would be disruptive to the Account’s efficient portfolio management. TIAA also may suspend or terminate your ability to transact in the Account by telephone, fax or over the Internet for any reason, including the prevention of excessive trading. A purchase or exchange request could be rejected or electronic trading privileges could be suspended because of the timing or amount of the investment or because of a history of excessive trading by the participant. Because TIAA has discretion in applying this policy, it is possible that similar transaction activity could be handled differently because of the surrounding circumstances.

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          TIAA seeks to apply its specifically defined excessive trading policies and procedures uniformly to all Account participants, and not to make exceptions with respect to those policies and procedures. These efforts may include requesting transaction data from intermediaries from time to time to verify whether the Account’s policies are being followed and/or to instruct intermediaries to take action against participants who have violated the Account’s market timing policies. TIAA has the right to modify these market timing policies and procedures at any time without advance notice.

          The Account is not appropriate for market timing. You should not invest in the Account if you want to engage in market timing activity.

          Participants seeking to engage in market timing may deploy a variety of strategies to avoid detection, and, despite TIAA’s efforts to discourage market timing, there is no guarantee that TIAA or its agents will be able to identify all such participants or curtail their trading practices.

          If you invest in the Account through an intermediary, including through a retirement or employee benefit plan, you may be subject to additional market timing or excessive trading policies implemented by the intermediary or plan. Please contact your intermediary or plan sponsor for more details.

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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 94. 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 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 90. 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 the missing information. 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

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have given 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.)

• 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 four types of two-life annuity options, all available with or without a guaranteed period — Full Benefit to Survivor, Two-Thirds Benefit to Survivor, 75% Benefit to Annuity Partner 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

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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 provides that your guaranteed period can’t exceed the joint life expectancy of you and your beneficiary or annuity partner. If you are married at your annuity start date, you may be required by law to choose an income option that provides survivor annuity income to your spouse, unless your spouse reserves the right. 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 93.

          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.

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 in good order. 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

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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 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.

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          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.

          Further, certain variable annuity payouts might not be available if issuing the payout annuity would violate state law.

          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.

DEATH BENEFITS

AVAILABILITY; CHOOSING BENEFICIARIES

          Subject to the terms of your employer’s plan, TIAA may pay death benefits if you or your annuity partner dies. 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.

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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 prevent your beneficiaries from changing it. Most people leave the choice to their beneficiaries. We can prevent 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:

• 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 (also called the TIAA-CREF Savings & Investment Plan),which automatically pays income according to the Internal Revenue Code’s minimum distribution requirements (not available

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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.

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,

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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 $5,000 per year ($6,000 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 2008; 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 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.

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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 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

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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).

          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

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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.

RESIDENTS OF PUERTO RICO

          The IRS has announced that income from an annuity received by residents of Puerto Rico 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 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.

TIAA Real Estate Account§ Prospectus97

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 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.

98Prospectus§ TIAA Real Estate Account

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 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 the 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.

TIAA Real Estate Account§ Prospectus99

          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.

          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 Services, which is registered with the SEC as a broker-dealer and a registered investment adviser and is a member of the Financial Industry Regulatory Authority (“FINRA”). Teachers Personal Investors Services, Inc. (TPIS), which is also registered with the SEC and is a member of FINRA, may participate in the distribution of the contracts on

100Prospectus§ TIAA Real Estate Account

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 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. Dechert LLP has provided legal advice to the Account related to certain matters under the federal securities laws.

EXPERTS

          The financial statements as of December 31, 2007 and December 31, 2006 and for each of the three years in the period ended December 31, 2007 included in this prospectus have been so included in reliance on the report of PricewaterhouseCoopers LLP (“PWC”), an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.

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

(i)	The properties comprising the Account’s joint venture with Developers Diversified Realty Corporation (“DDR”), in which the Account has an 85% equity interest and DDR has a 15% equity interest, for the year ended December 31, 2005;
(ii)	Printemps de l’Homme (Paris, France) for the year ended December 31, 2005;
(iii)	8600 114th Avenue North, Champlin, Minnesota for the year ended December 31, 2006;
(iv)	Seneca Industrial Park, Pembroke Park, Florida, for the year ended December 31, 2006; and

TIAA Real Estate Account§ Prospectus101

(v) Preston Sherry, Dallas, Texas, for the year ended December 31, 2006.

          Aarons Grant & Habif, LLC, an independent registered public accounting firm, has audited the statement of revenues and certain expenses of the following properties:

(i)	Camelback Center, Phoenix, Arizona, for the year ended December 31, 2005; and
(ii)	Pacific Plaza, San Diego, California, for the year ended December 31, 2006.

          After reasonable inquiry, the Account is not aware of any material factors relating to the specific properties audited by either of Friedman 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). The public may obtain information on the operation of the SEC’s public reference room by calling the SEC at 1-800-SEC-0330.

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.

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.

102Prospectus§ TIAA Real Estate Account

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§ Prospectus103

INDEX TO FINANCIAL STATEMENTSTIAA REAL ESTATE ACCOUNT

Audited Financial Statements:		Property Financial Statements:
TIAA Real Estate Account		Joint Venture with Developers Diversified Realty Corporation	148
		Printemps de l’Homme (Paris, France)	152
Report of Management Responsibility	105	8600 114th Avenue North, Champlin, Minnesota	155
Report of the Audit Committee	106	Seneca Industrial Park, Pembroke Park, Florida	158
		Preston Sherry, Dallas, Texas	161
Audited Financial Statements:		Camelback Center, Phoenix, Arizona	164
		Pacific Plaza, San Diego, California	167
Statements of Assets and Liabilities	108
Statements of Operations	109	TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF AMERICA
Statements of Changes in Net Assets	110
Statements of Cash Flows	111	[Note: Will be filed via amendment.]
Notes to Financial Statements	112
Statements of Investments	124
Report of Independent Registered Public Accounting Firm	143
Pro Forma Condensed Financial Statements (Unaudited):
Pro Forma Condensed Statement of Assets and Liabilities	144
Pro Forma Condensed Statement of Operations	145
Notes to Pro Forma Condensed Financial Statements	146

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 an effective system of internal controls over financial reporting designed to provide reasonable assurance that assets are properly safeguarded, that 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 regular reviews and assessments of the internal controls and operations of the Account, and the Senior Vice President of Internal Audit regularly reports to the Audit Committee of the TIAA Board of Trustees.

          The independent registered public accounting firm of PricewaterhouseCoopers LLP has audited the accompanying financial statements for the years ended December 31, 2007, 2006 and 2005. To maintain auditor independence and avoid even the appearance of a conflict of interest, it continues to be the Account’s policy (consistent with TIAA’s specific auditor independence policies, which are designed to avoid such conflicts) that any management advisory or consulting services would be obtained from a firm other than the independent accounting firm. The independent auditors’ report expresses an independent opinion of the fairness of presentation of the Account’s financial statements.

          The Audit Committee of the TIAA Board of Trustees, comprised entirely of independent, non-management trustees, meets regularly with management, representatives of the independent registered public accounting firm and internal audit personnel to review matters relating to financial reporting, internal controls and auditing. In addition to the annual independent audit of the Account’s financial statements, the New York State Insurance Department and other state insurance departments regularly examine the operations and financial statements of the Account as part of their periodic corporate examinations.

March 20, 2008
Herbert M. Allison, Jr.	Georganne C. Proctor
Chairman, President and	Executive Vice President and
Chief Executive Officer	Chief Financial Officer

TIAA-CREF§Real Estate Account§Prospectus105

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.

106Prospectus§TIAA-CREF§Real Estate Account

          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
Glenn A. Britt, Audit Committee Member
Donald K. Peterson, Audit Committee Member
David L. Shedlarz, Audit Committee Member

March 20, 2008

TIAA-CREF§ Real Estate Account§Prospectus  107

Statements of assets and liabilities  |  TIAA Real Estate Account

December 31,	2007		2006
ASSETS
Investments, at value:
Real estate properties (cost: $9,804,488,802 and $9,462,471,032)	$	11,983,715,574	$	10,743,487,689
Real estate joint ventures and limited partnerships (cost: $2,260,919,575 and $1,413,322,924)		3,158,870,373		1,948,028,002
Marketable securities:
Real estate-related (cost: $439,154,248 and $569,326,795)		426,630,212		704,922,323
Other (cost: $3,371,895,300 and $2,038,681,194)		3,371,865,684		2,038,938,210
Mortgage loans receivable (cost: $75,000,000 and $75,000,000)		72,519,684		74,660,626
Total investments (cost: $15,951,457,925 and $13,558,801,945)		19,013,601,527		15,510,036,850
Cash		6,143,945		3,585,145
Due from investment advisor		11,195,734		8,461,793
Other		201,826,038		237,877,545
TOTAL ASSETS		19,232,767,244		15,759,961,333
LIABILITIES
Mortgage loans payable–Note 5 (principal outstanding: $1,427,857,443 and $1,415,032,586)		1,392,092,982		1,437,149,148
Payable for securities transactions		866,209		1,219,323
Accrued real estate property level expenses		154,638,976		169,657,402
Security deposits held		24,632,278		19,242,948
TOTAL LIABILITIES		1,572,230,445		1,627,268,821
NET ASSETS
Accumulation Fund		17,160,703,167		13,722,700,176
Annuity Fund		499,833,632		409,992,336
TOTAL NET ASSETS	$	17,660,536,799	$	14,132,692,512
NUMBER OF ACCUMULATION UNITS OUTSTANDING–Notes 6 and 7		55,105,718		50,146,354
NET ASSET VALUE, PER ACCUMULATION UNIT–Note 6	$	311.41	$	273.65

SEE NOTES TO THE FINANCIAL STATEMENTS

108  Prospectus §TIAA-CREF§ Real Estate Account

Statements of operations  |  TIAA Real Estate Account

Years Ended December 31,	2007			2006			2005
INVESTMENT INCOME
Real estate income, net:
Rental income	$	987,434,298		$	834,455,788		$	618,633,580
Real estate property level expenses and taxes:
Operating expenses		247,473,125			207,452,982			150,501,136
Real estate taxes		126,925,585			110,059,852			88,014,264
Interest expense		83,622,829			72,160,111			40,028,630
Total real estate property level expenses and taxes		458,021,539			389,672,945			278,544,030
Real estate income, net		529,412,759			444,782,843			340,089,550
Income from real estate joint ventures and limited partnerships		93,724,569			60,788,998			71,826,443
Interest		129,473,616			118,621,441			54,114,448
Dividends		12,439,637			16,785,769			16,884,764
TOTAL INCOME		765,050,581			640,979,051			482,915,205
EXPENSES–NOTE 2:
Investment advisory charges		49,239,366			26,899,307			19,603,225
Administrative and distribution charges		63,593,008			45,712,473			27,130,406
Mortality and expense risk charges		8,052,314			6,931,833			6,196,549
Liquidity guarantee charges		19,409,759			3,905,051			3,170,017
TOTAL EXPENSES		140,294,447			83,448,664			56,100,197
INVESTMENT INCOME–NET		624,756,134			557,530,387			426,815,008
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND MORTGAGE LOANS PAYABLE
Net realized gain (loss) on:
Real estate properties		127,834,921			76,137,064			76,164,380
Real estate joint ventures and limited partnerships		70,765,537			—			8,599,762
Marketable securities		47,179,736			10,257,108			36,871,417
Total realized gain on investments		245,780,194			86,394,172			121,635,559
Net change in unrealized appreciation (depreciation) on:
Real estate properties		898,172,653			659,370,445			534,569,631
Real estate joint ventures and limited partnerships		391,332,636			217,360,271			167,019,921
Marketable securities		(148,659,083	)		120,453,638			(28,100,691	)
Mortgage loan receivable		(2,140,942	)		(339,374	)		—
Mortgage loans payable		53,949,280			(26,568,857	)		(29,154,148	)
Net change in unrealized appreciation on investments and mortgage loans payable		1,192,654,544			970,276,123			644,334,713
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND MORTGAGE LOANS PAYABLE		1,438,434,738			1,056,670,295			765,970,272
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	2,063,190,872		$	1,614,200,682		$	1,192,785,280

SEE NOTES TO THE FINANCIAL STATEMENTS

TIAA-CREF  §  Real Estate Account  §  Prospectus  109

Statements of changes in net assets  |  TIAA Real Estate Account

Years Ended December 31,	2007			2006			2005
FROM OPERATIONS
Investment income, net	$	624,756,134		$	557,530,387		$	426,815,008
Net realized gain on investments		245,780,194			86,394,172			121,635,559
Net change in unrealized appreciation on investments and mortgage loans payable		1,192,654,544			970,276,123			644,334,713
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS		2,063,190,872			1,614,200,682			1,192,785,280
FROM PARTICIPANT TRANSACTIONS
Premiums		1,186,870,080			1,085,057,614			968,189,436
Net transfers from TIAA		153,136,947			215,893,898			172,305,147
Net transfers from CREF Accounts		832,782,037			1,154,122,836			1,238,160,587
Net transfers from (to) TIAA-CREF Institutional Mutual Funds		(51,611,660	)		(15,318,887	)		24,967,250
Annuity and other periodic payments		(95,776,359	)		(65,192,000	)		(44,487,142	)
Withdrawals and death benefits		(560,747,630	)		(404,782,733	)		(248,759,442	)
NET INCREASE IN NET ASSETS RESULTING FROM PARTICIPANT TRANSACTIONS		1,464,653,415			1,969,780,728			2,110,375,836
NET INCREASE IN NET ASSETS		3,527,844,287			3,583,981,410			3,303,161,116
NET ASSETS
Beginning of period		14,132,692,512			10,548,711,102			7,245,549,986
End of period	$	17,660,536,799		$	14,132,692,512		$	10,548,711,102

SEE NOTES TO THE FINANCIAL STATEMENTS

110  Prospectus §TIAA-CREF§ Real Estate Account

Statements of cash flows  TIAA Real Estate Account

Years Ended December 31,	2007			2006			2005
CASH FLOWS FROM OPERATING ACTIVITIES
Net increase in net assets resulting from operations	$	2,063,190,872		$	1,614,200,682		$	1,192,785,280
Adjustments to reconcile net increase in net assets resulting from operations to net cash used in operating activities:
Purchase of real estate properties		(639,704,090	)		(2,016,229,061	)		(1,864,646,776	)
Amortization of discount on debt		530,626			461,761			170,352
Capital improvements on real estate properties		(133,714,188	)		(117,041,456	)		(83,150,771	)
Proceeds from sale of real estate properties		568,120,000			387,290,000			511,500,399
Net increase in other investments		(1,904,858,906	)		(836,478,000	)		(1,313,958,742	)
Increase in mortgage loan receivable		—			(74,660,626	)		—
Decrease (increase) in other assets		33,317,566			(47,865,701	)		(80,412,203	)
Decrease in amounts due to bank		—			—			(231,476	)
Increase (decrease) in accrued real estate property level expenses and taxes		(15,018,427	)		23,868,125			60,829,395
Increase in security deposits held		5,389,330			2,812,909			2,670,715
Increase (decrease) in other liabilities		(353,114	)		225,514			(1,162,347	)
Net realized gain on investments		(245,780,194	)		(86,394,172	)		(121,635,559	)
Net unrealized gain on investments and mortgage loans payable		(1,192,654,544	)		(970,276,123	)		(644,334,713	)
NET CASH USED IN OPERATING ACTIVITIES		(1,461,535,069	)		(2,120,086,148	)		(2,341,576,446	)
CASH FLOWS FROM FINANCING ACTIVITIES
Mortgage loan acquired		—			153,000,000			232,585,341
Principal payments on mortgage loans payable		(559,546	)		(320,805	)		(173,361	)
Premiums		1,186,870,080			1,085,057,614			968,189,436
Net transfers from TIAA		153,136,947			215,893,898			172,305,147
Net transfers from CREF Accounts		832,782,037			1,154,122,836			1,238,160,587
Net transfers from (to) TIAA-CREF Institutional Mutual Funds		(51,611,660	)		(15,318,887	)		24,967,250
Annuity and other periodic payments		(95,776,359	)		(65,192,000	)		(44,487,142	)
Withdrawals and death benefits		(560,747,630	)		(404,782,733	)		(248,759,442	)
NET CASH PROVIDED BY FINANCING ACTIVITIES		1,464,093,869			2,122,459,923			2,342,787,816
NET INCREASE IN CASH		2,558,800			2,373,775			1,211,370
CASH
Beginning of period		3,585,145			1,211,370			—
End of period	$	6,143,945		$	3,585,145		$	1,211,370
SUPPLEMENTAL DISCLOSURES:
Cash paid for interest	$	83,063,017		$	68,034,179		$	38,267,618
Debt assumed in acquisition of properties	$	8,922,033		$	288,950,559		$	211,400,000

SEE NOTES TO THE FINANCIAL STATEMENTS

TIAA-CREF  §  Real Estate Account  §  Prospectus  111

Notes to financial statements |TIAA Real Estate Account

Note 1—Organization and Significant Accounting Policies

          Business: 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 real estate joint ventures and limited partnerships in which the Account does not hold a controlling interest; as such, they are not consolidated for financial statement purposes. The Account also invests in mortgage loans receivable collateralized by commercial real estate properties. The Account also invests in publicly-traded securities and other instruments to maintain adequate liquidity for operating expenses, capital expenditures and benefit payments.

          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.

          Reclassifications: During 2007, the Account determined that its pro rata share of 2006 undistributed earnings from joint venture investments totaling approximately $24 million was reported as income from real estate joint ventures and limited partnerships for the year ended December 31, 2006 when the Account should have reported this amount as unrealized appreciation on real estate joint ventures and limited partnerships. Accordingly, the Statement of Operations for the year ended December 31, 2006 has been adjusted to reflect a reclassification of these undistributed earnings to unrealized appreciation on real estate joint ventures and limited partnerships equal to this amount. There is no impact to the Account’s total assets, total net assets or net asset value per accumulation unit for the periods presented as a result of this reclassification.

          Certain other 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.

          Valuation of Real Estate Properties: Investments in real estate properties are stated at fair value, as determined in accordance with procedures approved by

112 Prospectus§ TIAA-CREF§ Real Estate Account

Notes to financial statements continued

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 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 with an independent appraisal value completed for 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 valuations for each real estate property and updates the property value as appropriate. 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 a property’s value has changed materially and such change is not reflected in the quarterly valuation review, or otherwise to ensure that the Account is valued appropriately. The independent fiduciary must also approve any valuation change where a property’s value changed by more than 6% from the most recent independent annual appraisal, or if the value of the Account would change by more than 4% within any calendar quarter or more than 2% since the prior month. When a real estate property is subject to a mortgage, the mortgage is valued independently of the property and its fair value is reported separately. The independent fiduciary reviews and approves 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 certain limited partnerships are stated at the Account’s equity in the net assets of the underlying entities, and for the joint ventures, are adjusted to value their real estate holdings and mortgage notes payable at fair value. Upon the disposition of all real estate investments by an investee entity, the Account will continue to state its equity in the remaining net assets of the investee entity during the wind down period, if any, that occurs prior to the dissolution of the investee entity.

TIAA-CREF§ Real Estate Account§Prospectus 113

Notes to financial statements continued

          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 pricing matrix that has various types of money market instruments along one axis and various maturities along the other. Portfolio securities and certain 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 initially valued at the face amount of the mortgage loan funding as representive of fair value. 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: Mortgage loans payable are stated at fair value. 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 effect of any 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.

114Prospectus§ TIAA-CREF§ Real Estate Account

Notes to financial statements continued

          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 on the sale of a real estate property 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. 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 when 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 real estate investment trust (“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 when the financial statements of the limited partnerships are received by the Account.

          Income from real estate joint ventures is recorded based on the Account’s proportional interest of the income distributed by the joint venture. Income earned by the joint venture, but not yet distributed to the Account by the joint venture investment, is recorded as unrealized gains and losses on real estate joint ventures.

TIAA-CREF§ Real Estate Account§Prospectus115

Notes to financial statements continued

          Transactions in marketable securities 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 as applicable. 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 and as such, the Account should incur no material federal income tax attributable to the net investment activity of the Account.

Note 2—Management Agreements and Arrangements

          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 subject to review by the Account’s independent fiduciary. TIAA also provides all portfolio accounting and related services for the Account.

          Through December 31, 2007, 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 a member of the Financial Industry Regulatory Authority.

          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 expenses actually incurred. Any differences between actual expenses and the amounts paid by the Account 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 would fund any such transfer and withdrawal requests by purchasing accumulation units in the Account. 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 Services are identified in the accompanying Statements of Operations and are reflected in the Condensed Financial Information disclosed in Note 6.

          Effective January 1, 2008, the Account entered into a Distribution Agreement for the Contracts Funded by the TIAA Real Estate Account (the “New Distribution Agreement”), dated as of January 1, 2008, by and among TIAA, for itself and on behalf of the Account, and Services.

116Prospectus§ TIAA-CREF§ Real Estate Account

Notes to financial statements continued

          Pursuant to the New Distribution Agreement, distribution services for the Account, which include, among other things, (i) distribution of annuity contracts issued by TIAA and funded by the Account, (ii) advising existing annuity contract owners in connection with their accumulations, and (iii) providing assistance in designing, installing and providing administrative services for contract owners or institutions, will be performed by Services. The New Distribution Agreement is terminable by either party upon 60 days written notice and terminates automatically upon any assignment thereof.

          Effective January 1, 2008, the administrative functions previously performed for the Account by Services, which include, among other things, (i) computing the Account’s daily unit value, (ii) maintaining accounting records and performing accounting services, (iii) receiving and allocating premiums, (iv) calculating and making annuity payments, (v) processing withdrawal requests, (vi) providing regulatory compliance and reporting services, (vii) maintaining the Account’s records of contract ownership, and (viii) otherwise assisting generally in all aspects of the Account’s operations, will be performed by TIAA.

          Both distribution services (pursuant to the New Distribution Agreement) and administrative services will continue to be provided to the Account by Services and TIAA, as applicable, on an at cost basis.

Note 3—Leases

          The Account’s real estate properties are leased to tenants under operating lease agreements which expire on various dates through 2058. Aggregate minimum annual rentals for the properties owned, excluding short-term residential and storage facility leases, are as follows:

Years Ending December 31,
2008	$	975,895,973
2009		906,194,738
2010		797,243,797
2011		659,462,763
2012		549,590,444
2013–2058		1,934,542,421
Total	$	5,822,930,136

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

TIAA-CREF§ Real Estate Account§Prospectus 117

Notes to financial statements continued

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, 2007, the Account held 12 joint venture investments with non-controlling ownership interest percentages that ranged from 50% to 85%. The Account’s allocated portion of the mortgage notes payable was $1,991,782,600 and $472,167,225 at December 31, 2007 and December 31, 2006, respectively. The Account’s equity in the joint ventures at December 31, 2007 and December 31, 2006 was $2,827,508,939 and $1,668,744,951, respectively. A condensed summary of the financial position and results of operations of the joint ventures is shown below.

	December 31, 2007		December 31, 2006
Assets
Real estate properties, at value	$	7,001,687,137	$	3,650,902,513
Other assets		99,798,401		63,839,503
Total assets	$	7,101,485,538	$	3,714,742,016
Liabilities and Equity
Mortgage loans payable, at value	$	2,707,160,513	$	875,560,195
Other liabilities		64,738,173		47,949,271
Total liabilities		2,771,898,686		923,509,466
Equity		4,329,586,852		2,791,232,550
Total liabilities and equity	$	7,101,485,538	$	3,714,742,016

	Year Ended December 31, 2007		Year Ended December 31, 2006		Year Ended December 31, 2005
Operating Revenues and Expenses
Revenues	$	534,468,876	$	299,078,956	$	270,519,206
Expenses		315,076,922		157,806,671		142,782,169
Excess of revenues over expenses	$	219,391,954	$	141,272,285	$	127,737,037

          The Account invests in limited partnerships that own real estate properties and receives distributions from the limited partnerships based on the Account’s non-controlling ownership interest percentages. At December 31, 2007, the Account held five limited partnership investments with non-controlling ownership interest percentages that ranged from 5.27% to 18.45%. The Account’s investment in limited partnerships was $331,361,434 and $279,283,051 at December 31, 2007 and December 31, 2006, respectively.

118 Prospectus§ TIAA-CREF§ Real Estate Account

Notes to financial statements continued

Note 5—Mortgage Loans Payable

          At December 31, 2007, the Account had outstanding mortgage loans payable on the following properties:

Property	Interest Rate Percentage and Payment Frequency		Amount December 31, 2007			Due
50 Fremont	6.40 paid monthly		$	135,000,000		August 21, 2013
Ontario Industrial Portfolio(a,b)	7.42 paid monthly			8,917,619		May 1, 2011
Fourth & Madison	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	5.52 paid monthly			185,000,000		November 11, 2015
Reserve at Sugarloaf(a)	5.49 paid monthly			25,891,337		June 1, 2013
1 & 7 Westferry Circus	5.40 paid quarterly	(c)		267,188,869		November 15, 2012
Lincoln Centre	5.51 paid monthly			153,000,000		February 1, 2016
Wilshire Rodeo Plaza(b)	5.28 paid monthly			112,700,000		April 11, 2014
1401 H Street(b)	5.97 paid monthly			115,000,000		December 7, 2014
South Frisco Village(b)	5.85 paid monthly			26,250,559		June 1, 2013
Pacific Plaza(a)	5.55 paid monthly			8,909,059		September 1, 2013
Publix at Weston Commons(b)	5.08 paid monthly			35,000,000		January 1, 2036
Total principal outstanding				1,427,857,443
Unamortized discount				(4,746,752	)
Amortized principal				1,423,110,691
Fair value adjustment				3,585,820
Cumulative foreign currency translation				(34,603,529	)
Total mortgage loans payable			$	1,392,092,982

(a)	The mortgage is adjusted monthly for principal payments.
(b)	The mortgage was acquired at a discount which is amortized monthly.
(c)	The mortgage is denominated in British pounds and the principal has been converted to U.S. dollars using the exchange rate as of December 31, 2007. The quarterly payments are interest only, with a balloon payment at maturity. The interest rate is fixed.
	Principal on mortgage loans payable is due as follows:

	Amount
2008	$	736,371
2009		788,911
2010		2,161,722
2011		10,241,993
2012		269,313,872
Thereafter		1,144,614,574
Total maturities	$	1,427,857,443

TIAA-CREF§Real Estate Account§Prospectus  119

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,
	2007			2006			2005			2004			2003
Per Accumulation Unit data:
Rental income	$	17.975		$	16.717		$	15.604		$	13.422		$	15.584
Real estate property level expenses and taxes		8.338			7.807			7.026			5.331			5.890
Real estate income, net		9.637			8.910			8.578			8.091			9.694
Other income		4.289			3.931			3.602			3.341			2.218
Total income		13.926			12.841			12.180			11.432			11.912
Expense charges(1)		2.554			1.671			1.415			1.241			1.365
Investment income, net		11.372			11.170			10.765			10.191			10.547
Net realized and unrealized gain (loss) on investments and mortgage loans payable		26.389			22.530			18.744			13.314			2.492
Net increase in Accumulation Unit Value		37.761			33.700			29.509			23.505			13.039
Accumulation Unit Value:
Beginning of year		273.653			239.953			210.444			186.939			173.900
End of year	$	311.414		$	273.653		$	239.953		$	210.444		$	186.939
Total return		13.80	%		14.04	%		14.02	%		12.57	%		7.50	%
Ratios to Average Net Assets:
Expenses(1)		0.87	%		0.67	%		0.63	%		0.63	%		0.76	%
Investment income, net		3.88	%		4.49	%		4.82	%		5.17	%		5.87	%
Portfolio turnover rate:
Real estate properties		5.59	%		3.62	%		6.72	%		2.32	%		5.12	%
Marketable securities		13.03	%		51.05	%		77.63	%		143.47	%		71.83	%
Accumulation Units outstanding at end of year (in thousands)		55,105			50,146			42,623			33,338			24,724
Net assets end of year (in thousands)	$	17,660,537		$	14,132,693		$	10,548,711		$	7,245,550		$	4,793,422

(1) Expense charges per Accumulation Unit and the Ratio of Expenses to Average Net Assets reflect Account-level expenses and exclude real estate property level expenses which are included in net real estate income. If the real estate property level expenses were included, the expense charge per Accumulation Unit for the year ended December 31, 2007 would be $10.892 ($9.478, $8.441, $6.572, and $7.255 for the years ended December 31, 2006, 2005, 2004, and 2003, respectively), and the Ratio of Expenses to Average Net Assets for the year ended December 31, 2007 would be 3.71% (3.81%, 3.78%, 3.33%, and 4.04% for the years ended December 31, 2006, 2005, 2004, and 2003, respectively).

120  Prospectus§TIAA-CREF§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,
	2007		2006		2005
Credited for premiums		3,795,126		4,056,196		4,335,121
Net units credited for transfers, net disbursements and amounts applied to the Annuity Fund		1,164,238		3,466,667		4,950,773
Outstanding:
Beginning of year		50,146,354		42,623,491		33,337,597
End of year		55,105,718		50,146,354		42,623,491

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 properties. As of December 31, 2007, the Account had an outstanding commitment to purchase a leasehold interest in approximately 40,000 square feet of retail space located in an apartment property owned by the Account in New York and has subsequently purchased for approximately $42.7 million.

          As of December 31, 2007, the Account entered into a commitment to purchase an interest in a limited partnership in the amount of $50 million. Together with the Account’s outstanding commitments to purchase interests in five other limited partnerships and to purchase shares in a private real estate equity investment trust, as of December 31, 2007, $87.6 million remains to be funded under these commitments.

          The Account is party to various other claims and routine litigation arising in the ordinary course of business. Management of the Account does not believe that the results of any such claims or litigation, individually, or in the aggregate, will have a material effect on the Account’s business, financial position, or results of operations.

          Effective March 3, 2008, the Account has entered into an agreement with State Street Bank and Trust Company (“State Street”) to serve as the Account’s service provider to perform certain custodial functions, as well as investment accounting, recordkeeping, and valuation functions relating to portfolio transactions in securities made through the Account, and to provide other data and information as described in the agreement.

TIAA-CREF§Real Estate Account§Prospectus  121

Notes to financial statements continued

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 adoption of FIN 48 did not have a significant impact on the Account’s financial position and 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 under generally accepted accounting principles in the United States, and requires additional disclosures 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. This Statement is effective January 1, 2008 for the Account. The Account has assessed the impact of Statement No. 157 and determined that it will not significantly change the Account’s financial position and results of operations at the effective date.

          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 financial instruments and certain other items at fair value and is expected to expand the use of fair value measurement when warranted. The Account effectively adopted Statement 159 on January 1, 2008 and plans to report all existing and future Mortgage Loans Payable at fair value using this Statement. Historically, the Account recorded Mortgage Loans Payable at fair value. The Account has assessed the impact of Statement 159 in comparison to historical reporting and determined that it will not significantly change the Account’s financial position and results of operations.

          In June 2007, the Accounting Standards Executive Committee (“ACSEC”) of the American Institute of Certified Public Accountants (“AICPA”) issued Statement of Position (SOP) 07-1, Clarification of the Scope of the Audit and Accounting Guide Investment Companies and Accounting by Parent Companies and Equity Method Investors for Investments in Investment Companies. The SOP clarifies which entities are required to apply the provisions of the Investment Companies Audit and Accounting Guide (“Guide”) and provides guidance on accounting by parent companies and equity method investors for investments in investment companies. The SOP is effective for fiscal years beginning on or after December 15, 2007. In February 2008, FASB issued Staff Position (“FSP”) SOP 07-1-1 indefinitely delaying the effective date of SOP 07-1 to allow FASB time to consider significant issues related to the implementation of SOP 07-1. Management of the Account will continue to monitor FASB developments and will evaluate the financial reporting implications to the Account, as necessary.

122Prospectus§TIAA-CREF§Real Estate Account

Notes to financial statements concluded

          In December 2007, FASB issued Statement No. 141(R), “Business Combinations,” which establishes principles and requirements for how the acquirer shall recognize and measure in its financial statements the identifiable assets acquired, liabilities assumed, any noncontrolling interest in the acquiree and goodwill acquired in a business combination or a gain from a bargain purchase. This Statement is effective for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. The Account is currently assessing the impact that Statement No. 141(R) will have on its financial position and results of operations.

          In December 2007, FASB issued Statement No. 160, “Noncontrolling Interests in Consolidated Financial Statements – an Amendment of ARB No. 51,” which establishes and expands accounting and reporting standards for minority interests, which will be recharacterized as noncontrolling interests, in a subsidiary and the deconsolidation of a subsidiary. This Statement is effective for fiscal years beginning on or after December 15, 2008. The Account is currently assessing the potential impact that Statement No. 160 will have on its financial position and results of operations.

TIAA-CREF§Real Estate Account§Prospectus123

Statement of investments TIAA Real Estate Account
December 31, 2007 and 2006

	VALUE
LOCATION/DESCRIPTION	2007			2006
REAL ESTATE PROPERTIES—63.04% AND 69.27%
ALABAMA:
Inverness Center—Office building	$	125,521,529		$	112,256,914
ARIZONA:
Camelback Center—Office building		80,000,000			—
Kierland Apartment Portfolio—Apartments		170,084,494			206,100,000
Mountain RA Industrial Portfolio—Industrial building		—			6,605,429
Phoenix Apartment Portfolio—Apartments		156,109,517			182,900,000
CALIFORNIA:
3 Hutton Centre Drive—Office building		64,200,000			59,011,323
9 Hutton Centre—Office building		—			29,000,000
50 Fremont—Office building		478,000,000	(1)		421,000,000	(1)
88 Kearny Street—Office building		123,822,200			90,310,024
275 Battery—Office building		271,917,498			231,000,000
980 9th Street and 1010 8th Street—Office building		178,000,000			168,000,000
Rancho Cucamonga Industrial Portfolio—Industrial building		133,000,000			109,000,000
Capitol Place—Office building		53,539,218			50,331,828
Centerside I—Office building		67,500,000			67,000,000
Centre Pointe and Valley View—Industrial building		34,142,741			32,385,980
Eastgate Distribution Center—Industrial building		—			25,558,962
Larkspur Courts—Apartments		97,000,000			93,043,346
Northern CA RA Industrial Portfolio—Industrial building		69,601,997			71,317,741
Ontario Industrial Portfolio—Industrial building		355,398,714	(1)		298,045,226	(1)
Pacific Plaza—Office building		127,130,076	(1)		—
Regents Court—Apartments		69,000,000			67,800,000
Southern CA RA Industrial Portfolio—Industrial building		110,718,042			97,558,473
The Legacy at Westwood—Apartments		126,579,694			110,231,593
Wellpoint—Office building		51,000,000			49,000,000
Westcreek—Apartments		39,189,673			35,300,000
West Lake North Business Park—Office building		68,621,818			61,000,000
Westwood Marketplace—Shopping center		96,562,192			91,467,954
Wilshire Rodeo Plaza—Office building		230,439,415	(1)		204,084,734	(1)
COLORADO:
Palomino Park—Apartments		194,001,036			184,000,000
The Lodge at Willow Creek—Apartments		43,500,000			39,501,399
The Market at Southpark—Shopping center		35,800,000			35,800,000
CONNECTICUT:
Ten & Twenty Westport Road—Office building		183,006,040			175,000,000
DELAWARE:
Mideast RA Industrial Portfolio—Industrial building		—			16,014,758
FLORIDA:
701 Brickell—Office building		275,941,582			231,239,379
4200 West Cypress Street—Office building		48,043,650			43,100,425
Plantation Grove—Shopping center		15,400,000			15,010,406
Pointe on Tampa Bay—Office building		60,971,897			50,573,824
Publix at Weston Commons—Shopping center		55,200,000	(1)		54,411,436	(1)
Quiet Waters at Coquina Lakes—Apartments		26,204,860			24,006,100
Royal St. George—Apartments		27,000,000			25,000,000
Sawgrass Office Portfolio—Office building		—			72,000,000

124Prospectus§TIAA-CREF§ Real Estate Account

	TIAA Real Estate Account December 31, 2007 and 2006
Statement of investments		continued

	VALUE
LOCATION/DESCRIPTION	2007			2006
Seneca Industrial Park—Industrial building	$	122,334,422		$	—
South Florida Apartment Portfolio—Apartments		68,248,605			65,099,785
Suncrest Village—Shopping center		19,500,000			17,009,378
The Fairways of Carolina—Apartments		27,207,661			25,309,965
The Greens at Metrowest—Apartments		—			21,011,825
The North 40 Office Complex—Office building		67,003,544			63,500,000
Urban Centre—Office building		135,577,463			121,000,000
FRANCE:
Printemps De L’Homme—Shopping center		279,077,542			—
GEORGIA:
1050 Lenox Park—Apartments		85,500,000			79,470,836
Atlanta Industrial Portfolio—Industrial building		58,300,000			77,863,416
Glenridge Walk—Apartments		52,900,000			48,710,574
Reserve at Sugarloaf—Apartments		52,000,000	(1)		49,500,000	(1)
Shawnee Ridge Industrial Portfolio—Industrial building		76,742,231			76,117,193
ILLINOIS:
Chicago Caleast Industrial Portfolio—Industrial building		77,642,826			74,999,590
Chicago Industrial Portfolio—Industrial building		86,420,886			89,104,640
East North Central RA Industrial Portfolio—Industrial building		38,016,397			37,503,284
Oak Brook Regency Towers—Office building		86,891,650			83,200,000
Parkview Plaza—Office building		66,066,513			59,400,000
KENTUCKY:
IDI Kentucky Portfolio—Industrial building		—			66,552,034
MARYLAND:
Broadlands Business Park—Industrial building		35,500,000			35,002,731
FEDEX Distribution Facility—Industrial building		9,900,000			8,500,000
GE Appliance East Coast Distribution Facility—Industrial building		48,000,000			48,000,000
MASSACHUSETTS:
99 High Street—Office building		344,688,328	(1)		291,806,564	(1)
Batterymarch Park II—Office building		—			13,234,314
Needham Corporate Center—Office building		33,275,228			22,712,550
Northeast RA Industrial Portfolio—Industrial building		33,300,000			30,900,000
The Newbry—Office building		389,880,008			370,745,525
MINNESOTA:
Champlin Marketplace—Shopping center		18,375,000			—
NEVADA:
UPS Distribution Facility—Industrial building		15,900,000			15,000,000
NEW JERSEY:
10 Waterview Boulevard—Office building		—			32,100,000
Konica Photo Imaging Headquarters—Industrial building		23,500,000			23,100,000
Marketfair—Shopping center		95,500,000			94,058,427
Morris Corporate Center III—Office building		119,600,001			114,857,104
NJ Caleast Industrial Portfolio—Industrial building		42,225,000			41,920,988
Plainsboro Plaza—Shopping center		51,000,000			50,900,000
South River Road Industrial—Industrial building		53,400,000			60,600,000
NEW YORK:
780 Third Avenue—Office building		375,000,000			298,000,000
The Colorado—Apartments		113,033,240			100,000,000

TIAA-CREF§ Real Estate Account§Prospectus125

	TIAA Real Estate Account December 31, 2007 and 2006
Statement of investments		continued

	VALUE
LOCATION/DESCRIPTION	2007			2006
OHIO:
Columbus Portfolio—Office building	$	26,314,686		$	24,600,000
PENNSYLVANIA:
Lincoln Woods—Apartments		37,917,165			37,781,555
TENNESSEE:
Airways Distribution Center—Industrial building		24,300,000			24,857,278
Memphis Caleast Industrial Portfolio—Industrial building		—			52,500,000
Summit Distribution Center—Industrial building		27,500,000			26,300,000
TEXAS:
Butterfield Industrial Park—Industrial building		—			5,100,000	(2)
Dallas Industrial Portfolio—Industrial building		154,055,892			153,210,519
Four Oaks Place—Office building		419,270,107			306,200,984
Houston Apartment Portfolio—Apartments		296,241,497			306,042,523
Lincoln Centre—Office building		305,000,000	(1)		270,000,000	(1)
Park Place on Turtle Creek—Office building		48,282,785			44,573,669
Pinnacle Industrial /DFW Trade Center—Industrial building		46,700,000			45,874,807
Preston Sherry Plaza—Office building		45,500,000			—
South Frisco Village—Shopping center		48,500,000	(1)		47,014,065	(1)
The Caruth—Apartments		65,427,458			60,007,237
The Legends at Chase Oaks—Apartments		—			29,025,236
The Maroneal—Apartments		40,033,822			39,113,694
UNITED KINGDOM:
1 & 7 Westferry Circus—Office building		436,127,130	(1)		428,574,628	(1)
UTAH:
Landmark at Salt Lake City (Building #4)—Industrial building		—			16,509,871
VIRGINIA:
8270 Greensboro Drive—Office building		63,500,000			62,000,000
Ashford Meadows—Apartments		94,059,776			89,091,341
Monument Place—Office building		—			58,600,000
One Virginia Square—Office building		59,538,690			53,000,000
The Ellipse at Ballston—Office building		92,504,000			85,439,350
WASHINGTON:
Creeksides at Centerpoint—Office building		42,000,000			40,508,139
Fourth & Madison—Office building		487,000,000	(1)		398,990,017	(1)
Millennium Corporate Park—Office building		158,000,000			139,107,181
Northwest RA Industrial Portfolio—Industrial building		23,401,540			20,684,499
Rainier Corporate Park—Industrial building		81,160,792			69,362,219
Regal Logistics Campus—Industrial building		71,000,000			66,000,000
WASHINGTON DC:
1001 Pennsylvania Avenue—Office building		640,149,632	(1)		552,502,209	(1)
1401 H Street, NW—Office building		224,576,156	(1)		207,806,286	(1)
1900 K Street—Office building		285,000,000			255,002,226
Mazza Gallerie—Shopping center		97,000,018			86,350,179
TOTAL REAL ESTATE PROPERTIES
(Cost $9,804,488,802 and $9,462,471,032)		11,983,715,574			10,743,487,689

126Prospectus§TIAA-CREF§ Real Estate Account

	TIAA Real Estate Account December 31, 2007 and 2006
Statement of investments		continued

	VALUE
LOCATION/DESCRIPTION	2007			2006
OTHER REAL ESTATE-RELATED INVESTMENTS—16.61%
AND 12.56%
REAL ESTATE JOINT VENTURES—14.87% AND 10.76%
CA—Colorado Center LP
Yahoo! Center (50% Account Interest)	$	369,402,407	(3)	$	187,766,625	(3)
CA—Treat Towers LP
Treat Towers (75% Account Interest)		118,997,021			94,023,131
GA—Buckhead LLC
Prominence in Buckhead (75% Account Interest)		115,427,071			107,256,320
Florida Mall Associates, Ltd.
The Florida Mall (50% Account Interest)		296,486,153	(3)		237,919,775	(3)
IL—161 Clark Street LLC
161 North Clark Street (75% Account Interest)		3,150,995	(4)		189,183,793
MA—One Boston Place REIT
One Boston Place (50.25% Account Interest)		246,440,493			177,900,327
DDR TC LLC
DDR Joint Venture–Various (85% Account Interest)		1,028,297,460	(3,5)		—
Storage Portfolio I, LLC
Storage Portfolio (75% Account Interest)		81,943,321	(3,5)		74,864,074	(3,5)
Strategic Ind Portfolio I, LLC
IDI Nationwide Industrial Portfolio (60% Account Interest)		76,536,044	(3,5)		70,348,753	(3,5)
Teachers REA IV, LLC
Tyson’s Executive Plaza II (50% Account Interest)		44,178,210			40,570,382
TREA Florida Retail, LLC
Florida Retail Portfolio (80% Account Interest)		260,879,060			265,396,677
West Dade Associates
Miami International Mall (50% Account Interest)		109,944,638	(3)		97,300,131	(3)
West Town Mall, LLC
West Town Mall (50% Account Interest)		75,826,066	(3)		126,214,963	(3)
TOTAL REAL ESTATE JOINT VENTURES
(Cost $2,005,340,226 and $1,168,027,179)		2,827,508,939			1,668,744,951
LIMITED PARTNERSHIPS—1.74% AND 1.80%
Cobalt Industrial REIT (10.998% Account Interest)		32,840,031			26,506,381
Colony Realty Partners LP (5.27% Account Interest)		32,505,008			26,382,659
Heitman Value Partners Fund (8.43% Account Interest)		24,488,535			24,578,388
Lion Gables Apartment Fund (18.45% Account Interest)		205,162,203			179,013,211
MONY/Transwestern Mezzanine Fund RP (19.75% Account Interest)		—			454,319
MONY/Transwestern Mezz RP II (16.67% Account Interest)		36,365,657			22,348,093
TOTAL LIMITED PARTNERSHIPS
(Cost $255,579,349 and $245,295,745)		331,361,434			279,283,051
TOTAL REAL ESTATE JOINT VENTURES AND LIMITED PARTNERSHIPS
(Cost $2,260,919,575 and $1,413,322,924)		3,158,870,373			1,948,028,002

TIAA-CREF§ Real Estate Account§ Prospectus  127

	TIAA Real Estate Account December 31, 2007 and 2006
Statement of investments		continued

SHARES				VALUE
2007	2006		ISSUER	2007		2006
MARKETABLE SECURITIES—19.97% AND 17.69%
REAL ESTATE-RELATED MARKETABLE SECURITIES—2.24% AND 4.54%
REAL ESTATE EQUITY SECURITIES—2.24% AND 3.99%
51,200		53,300	Acadia Realty Trust	$	1,311,232	$	1,333,566
—		68,700	Affordable Residential Communities LP		—		800,355
—		68,700	Affordable Residential Communities LP share rights (expired 1/23/07)		—		16,488
3,300		3,800	Alexander’s Inc.		1,165,725		1,594,670
53,100		54,400	Alexandria Real Estate Equities Inc.		5,398,677		5,461,760
164,585		166,985	AMB Property Corp.		9,473,513		9,786,991
45,100		42,500	American Campus Communities Inc.		1,210,935		1,209,975
214,600		244,900	American Financial Realty Trust		1,721,092		2,801,656
159,700		181,500	Apartment Investment & Management Co.		5,546,381		10,167,630
—		408,900	Archstone-Smith Trust		—		23,802,069
200,000		118,500	Ashford Hospitality Trust Inc.		1,438,000		1,475,325
27,500		33,300	Associated Estates Realty Corp.		259,600		457,542
132,200		138,900	AvalonBay Communities Inc.		12,445,308		18,063,945
109,100		122,400	BioMed Realty Trust Inc.		2,527,847		3,500,640
198,600		217,200	Boston Properties Inc.		18,233,466		24,300,336
148,100		171,500	Brandywine Realty Trust		2,655,433		5,702,375
86,500		94,200	BRE Properties Inc.		3,505,845		6,124,884
341,650		220,300	Brookfield Properties Corp.		6,576,763		8,664,399
93,500		105,200	Camden Property Trust		4,502,025		7,769,020
110,900		121,500	CBL & Associates Properties Inc.		2,651,619		5,267,025
74,900		74,900	Cedar Shopping Centers Inc.		766,227		1,191,659
75,400		87,600	Colonial Properties Trust		1,706,302		4,106,688
79,500		80,600	Corporate Office Properties Trust		2,504,250		4,067,882
71,100		75,500	Cousins Properties Inc.		1,571,310		2,662,885
—		179,000	Crescent Real Estate Equities Company		—		3,535,250
281,100		—	DCT Industrial Trust Inc.		2,617,041		—
205,000		204,000	Developers Diversified Realty Corp.		7,849,450		12,841,800
157,000		125,500	DiamondRock Hospitality Co.		2,351,860		2,260,255
99,000		84,100	Digital Realty Trust Inc.		3,798,630		2,878,743
164,400		123,500	Douglas Emmett Inc.		3,717,084		3,283,865
243,000		252,100	Duke Realty Corp.		6,337,440		10,310,890
51,700		—	Dupont Fabros Technology		1,013,320		—
39,400		42,900	EastGroup Properties Inc.		1,648,890		2,297,724
49,900		49,900	Education Realty Trust Inc.		560,876		737,023
—		103,400	Equity Inns Inc.		—		1,650,264
37,300		38,800	Equity Lifestyle Properties Inc.		1,703,491		2,111,884
—		654,500	Equity Office Properties Trust		—		31,527,265
60,800		69,900	Equity One Inc.		1,400,224		1,863,534
452,300		544,300	Equity Residential		16,495,381		27,623,225
42,000		43,600	Essex Property Trust Inc.		4,094,580		5,635,300
108,700		120,200	Extra Space Storage Inc.		1,553,323		2,194,852
93,700		103,200	Federal Realty Investment Trust		7,697,455		8,772,000

128  Prospectus§ TIAA-CREF§ Real Estate Account

	TIAA Real Estate Account December 31, 2007 and 2006
Statement of investments		continued

SHARES				VALUE
2007	2006		ISSUER	2007		2006
101,300		115,300	FelCor Lodging Trust Inc.	$	1,579,267	$	2,518,152
74,700		84,300	First Industrial Realty Trust Inc.		2,584,620		3,952,827
41,600		41,600	First Potomac Realty Trust		719,264		1,210,976
384,500		423,600	General Growth Properties Inc.		15,833,710		22,124,628
62,700		69,600	Glimcher Realty Trust		895,983		1,859,016
64,200		73,800	GMH Communities Trust		354,384		749,070
360,900		—	HCP Inc		12,552,102		—
141,700		—	Health Care REIT Inc		6,332,573		—
84,600		—	Healthcare Realty Trust Inc		2,147,994		—
70,900		59,500	Hersha Hospitality Trust		673,550		674,730
—		107,500	Highland Hospitality Corp.		—		1,531,875
96,300		101,700	Highwoods Properties Inc.		2,829,294		4,145,292
55,500		64,000	Home Properties Inc.		2,489,175		3,793,280
155,800		147,900	Hospitality Properties Trust		5,019,876		7,029,687
869,070		973,570	Host Hotels & Resorts Inc.		14,808,953		23,901,143
375,400		396,700	HRPT Properties Trust		2,901,842		4,899,245
95,300		116,700	Inland Real Estate Corp.		1,349,448		2,184,624
—		84,800	Innkeepers USA Trust		—		1,314,400
54,100		59,400	Kilroy Realty Corp.		2,973,336		4,633,200
365,921		409,521	Kimco Realty Corp.		13,319,524		18,407,969
47,600		55,300	Kite Realty Group Trust		726,852		1,029,686
66,600		75,000	LaSalle Hotel Properties		2,124,540		3,438,750
151,900		167,000	Liberty Property Trust		4,376,239		8,206,380
121,000		135,900	Macerich Co./The		8,598,260		11,764,863
111,900		118,700	Mack-Cali Realty Corp.		3,804,600		6,053,700
59,900		81,000	Maguire Properties Inc.		1,765,253		3,240,000
42,300		44,000	Mid-America Apartment Communities		1,808,325		2,518,560
—		100,200	Mills Corp./The		—		2,004,000
155,200		—	Nationwide Health Properties Inc.		4,868,624		—
—		198,000	New Plan Excel Realty Trust		—		5,441,040
25,400		25,100	Parkway Properties Inc./Md		939,292		1,280,351
65,900		69,500	Pennsylvania Real Estate Investment Trust		1,955,912		2,736,910
72,200		79,300	Post Properties Inc.		2,535,664		3,624,010
427,900		462,500	Prologis		27,120,302		28,106,125
26,900		30,200	PS Business Parks Inc.		1,413,595		2,135,442
214,614		241,114	Public Storage Inc.		15,754,814		23,508,615
31,500		28,500	Ramco-Gershenson Properties		673,155		1,086,990
—		157,000	Reckson Associates Realty Corp.		—		7,159,200
115,100		129,300	Regency Centers Corp.		7,422,799		10,107,381
19,300		20,600	Saul Centers Inc.		1,031,199		1,136,914
139,600		—	Senior Housing Properties Trust		3,166,128		—
373,221		412,821	Simon Property Group Inc.		32,417,976		41,814,639
98,507		86,300	SL Green Realty Corp.		9,206,464		11,458,914
36,500		33,500	Sovran Self Storage Inc.		1,463,650		1,918,880
124,300		134,700	Strategic Hotels & Resorts Inc.		2,079,539		2,935,113
27,800		30,900	Sun Communities Inc.		585,746		999,924
98,200		109,400	Sunstone Hotel Investors Inc.		1,796,078		2,924,262
52,300		58,300	Tanger Factory Outlet Centers		1,972,233		2,278,364

TIAA-CREF§ Real Estate Account§ Prospectus  129

	TIAA Real Estate Account December 31, 2007 and 2006
Statement of investments		continued

SHARES					VALUE
2007		2006		ISSUER	2007		2006
	88,800		98,400	Taubman Centers Inc.	$	4,368,072	$	5,004,624
	224,000		—	UDR, Inc.		4,446,400		—
	—		250,400	United Dominion Realty Trust Inc.		—		7,960,216
	17,000		—	Universal Health Realty Income Trust		602,480		—
	78,500		95,400	U-Store-It Trust		719,060		1,960,470
	221,800		—	Ventas Inc.		10,036,450		—
	237,100		245,800	Vornado Realty Trust		20,852,945		29,864,700
	77,700		85,500	Washington Real Estate Investment		2,440,556		3,420,000
	133,000		148,500	Weingarten Realty Investors		4,181,520		6,847,335
	—		44,700	Winston Hotels Inc.		—		592,275
TOTAL REAL ESTATE EQUITY SECURITIES (Cost $439,154,248 and $484,071,757)						426,630,212		619,342,386

COMMERCIAL MORTGAGE-BACKED SECURITIES—0.00% AND 0.55%

PRINCIPAL					VALUE
2007		2006		ISSUER, INTEREST RATE AND MATURITY DATE	2007		2006
$	—	$	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	GS Mortgage Securities Co
				5.682% 5/3/18		—		10,186,930
	—		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	Morgan Stanley Dean Witter
				5.712% 2/3/16		—		10,137,150
	—		14,642,368	Wachovia Bank Commercial
				5.440% 9/15/21		—		14,642,997
TOTAL COMMERCIAL MORTGAGE-BACKED SECURITIES (Cost $0 and $85,255,038)						—		85,579,937
TOTAL REAL ESTATE-RELATED MARKETABLE SECURITIES (Cost $439,154,248 and $569,326,795)						426,630,212		704,922,323
OTHER MARKETABLE SECURITIES—17.73% AND 13.15%
CERTIFICATES OF DEPOSIT—2.22% AND .86%
	—		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

130Prospectus§TIAA-CREF§Real Estate Account

	TIAA Real Estate Account December 31, 2007 and 2006
Statement of investments		continued

PRINCIPAL					VALUE
2007		2006		ISSUER, INTEREST RATE AND MATURITY DATE	2007		2006
$	—	$	24,000,000	American Express Bank, FSB
				5.280% 1/18/07	$	—	$	23,999,578
	25,000,000		—	American Express Centurion Bank
				4.750% 2/4/08		25,001,875		—
	20,000,000		—	American Express Centurion Bank
				4.750% 2/5/08		20,001,556		—
	—		25,000,000	American Express Centurion Bank
				5.290% 1/3/07		—		24,999,988
	—		19,165,000	American Express Centurion Bank
				5.290% 1/8/07		—		19,164,962
	—		20,000,000	American Express Centurion Bank
				5.290% 1/9/07		—		19,999,954
	10,000,000		—	Bank of Montreal
				5.030% 2/14/08		10,004,439		—
	45,000,000		—	Bank of Montreal
				5.100% 3/7/08		45,031,437		—
	25,000,000		—	Bank of Nova Scotia
				5.060% 1/16/08		25,003,988		—
	25,000,000		—	Barclays Bank
				4.990% 2/27/08		25,012,510		—
	10,000,000		—	Calyon
				4.820% 1/31/08		10,001,100		—
	50,000,000		—	Calyon
				5.050% 3/12/08		50,032,645		—
	25,000,000		—	Deutsche Bank
				4.950% 1/24/08		25,004,197		—
	—		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
	32,000,000		—	Dexia Banque SA
				4.990% 3/10/08		32,016,554		—
	20,000,000		—	Dexia Banque SA
				4.880% 3/25/08		20,008,286		—
	30,000,000		—	Rabobank Nederland
				5.020% 3/5/08		30,016,305		—
	30,000,000		—	Royal Bank of Canada
				5.060% 1/25/08		30,007,494		—
	20,000,000		—	SunTrust Banks, Inc.
				4.845% 1/28/08		19,998,920		—
	40,000,000		—	Toronto Dominion Bank
				5.300% 1/22/08		40,014,108		—
	15,000,000		—	Toronto Dominion Bank
				5.040% 2/26/08		15,008,718		—
TOTAL CERTIFICATES OF DEPOSIT (Cost $422,007,080 and $132,665,429)						422,164,132		132,663,829

TIAA-CREF§Real Estate Account§Prospectus131

	TIAA Real Estate Account December 31, 2007 and 2006
Statement of investments		continued

PRINCIPAL					VALUE
2007		2006		ISSUER, YIELD(6)AND MATURITY DATE	2007		2006
COMMERCIAL PAPER—9.23% AND 9.81%
$	10,000,000	$	—	Abbey National North America LLC
				4.670% 1/8/08	$	9,989,577	$	—
	20,000,000		—	Abbey National North America LLC
				4.930% 1/9/08		19,976,550		—
	—		25,000,000	Abbey National North America LLC
				5.260% 1/17/07		—		24,945,207
	50,000,000		—	American Express Credit Corp.
				4.510% 1/14/08		49,908,220		—
	32,490,000		—	American Honda Finance Corp.
				4.50-4.510% 1/29/08		32,369,946		—
	2,137,000		—	American Honda Finance Corp.
				4.380% 1/4/08		2,135,879		—
	15,438,000		—	American Honda Finance Corp.
				4.310% 2/11/08		15,355,978		—
	7,050,000			American Honda Finance Corp.
				4.250% 2/28/08		6,996,781		—
	—		50,000,000	American Honda Finance Corp.
				5.210-5.240% 1/22/07		—		49,853,055
	—		17,475,000	American Honda Finance Corp.
				5.240% 2/9/07		—		17,377,605
	—		10,000,000	Anheuser - Busch Co.
				5.250% 1/19/07		—		9,975,019
	20,000,000		—	Bank of America Corp
				4.970% 1/15/08		19,960,666		—
	13,200,000		—	Bank of America Corp
				4.780% 3/6/08		13,087,663		—
	30,000,000		—	Bank of America Corp
				4.800% 4/8/08		29,604,246		—
	27,400,000		—	Bank of Scotland
				4.710% 2/26/08		27,200,523		—
	34,525,000		—	Bank of Scotland
				4.720% 2/29/08		34,259,731		—
	—		25,000,000	Barclay’s U.S. Funding Corp.
				5.240% 1/26/07		—		24,912,383
	—		20,000,000	BMW US Capital Corp.
				5.210% 2/7/07		—		19,894,400
	—		23,050,000	BMW US Capital Corp.
				5.240% 2/9/07		—		22,921,533
	20,000,000		—	Canadian Imperial Holdings, Inc.
				4.703% 1/29/08		19,926,098		—
	—		25,000,000	Ciesco LP
				5.250% 1/9/07		—		24,973,942
	—		14,000,000	Ciesco LP
				5.260% 1/25/07		—		13,952,299
	40,000,000		—	Citigroup Funding Inc.
				4.850% 1/23/08		39,880,984		—

132Prospectus§TIAA-CREF§Real Estate Account

	TIAA Real Estate Account December 31, 2007 and 2006
Statement of investments		continued

PRINCIPAL					VALUE
				ISSUER, YIELD(6)AND MATURITY DATE
2007		2006			2007		2006
$	25,000,000	$	—	Citigroup Funding Inc.
				4.650% 2/12/08	$	24,864,937	$	—
	25,000,000		—	Citigroup Funding Inc.
				4.650% 2/7/08		24,880,483		—
	—		50,000,000	Citigroup Funding Inc.
				5.250% 1/11/07		—		49,934,060
	—		35,825,000	Citigroup Funding Inc.
				5.260% 2/5/07		—		35,647,365
	5,255,000		—	Coca Cola Co.
				4.200% 2/15/08		5,224,421		—
	20,000,000		—	Coca Cola Co.
				4.430% 2/19/08		19,873,054		—
	13,000,000		—	Coca Cola Co.
				4.390% 2/25/08		12,907,098		—
	—		6,000,000	Corporate Asset Funding Corp, Inc.
				5.260% 1/22/07		—		5,982,193
	—		8,760,000	Corporate Asset Funding Corp, Inc.
				5.250% 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.
				5.260% 2/8/07		—		53,705,295
	30,000,000		—	Danske Corp.
				4.920% 3/6/08		29,746,338		—
	—		7,000,000	Dorada Finance Inc.
				5.230% 1/9/07		—		6,992,704
	20,000,000		—	Edison Asset Securitization, LLC
				4.740% 3/11/08		19,789,840		—
	—		24,000,000	Edison Asset Securitization, LLC
				5.240% 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
				5.260% 1/17/07		—		32,826,521
	20,460,000		—	General Electric Capital Corp.
				4.510% 2/19/08		20,330,987		—
	15,340,000		—	General Electric Capital Corp.
				4.550% 2/20/08		15,241,250		—
	30,000,000		—	General Electric Capital Corp.
				4.580% 4/8/08		29,606,721		—
	—		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.
				5.240% 2/15/07		—		29,807,499

TIAA-CREF§ Real Estate Account§Prospectus 133

	TIAA Real Estate Account December 31, 2007 and 2006
Statement of investments		continued

PRINCIPAL					VALUE
				ISSUER, YIELD(6)AND MATURITY DATE
	2007	2006			2007		2006
$	30,540,000	$	—	General Electric Co
				4.540% 3/4/08	$	30,290,195	$	—
	13,200,000		—	Goldman Sachs Group Inc
				5.200% 1/08/08		13,186,155		—
	12,000,000		—	Govco Incorporated
				4.680% 1/28/08		11,948,442		—
	20,000,000		—	Govco Incorporated
				5.400% 2/12/08		19,869,924		—
	37,860,000		—	Govco Incorporated
				5.100% 2/20/08		37,570,693		—
	29,000,000		—	Govco Incorporated
				4.850% 3/13/08		28,687,505		—
	—		25,700,000	Govco Incorporated
				5.230% 3/8/07		—		25,454,668
	—		50,000,000	Govco Incorporated
				5.330% 1/5/07		—		49,977,665
	35,140,000		—	Greenwich Capital Holding
				4.850% 4/14/08		34,649,576		—
	—		33,000,000	Greyhawk Funding LLC
				5.260% 2/6/07		—		32,829,314
	6,990,000		—	Harley-Davidson Funding
				4.480% 2/21/08		6,943,777		—
	—		8,415,000	HBOS Treasury Srvcs PLC
				5.250% 3/21/07		—		8,319,680
	30,000,000		—	HSBC Finance Corporation
				4.700% 2/21/08		29,757,135		—
	—		40,000,000	HSBC Finance Corporation
				5.250% 1/26/07		—		39,859,012
	25,000,000		—	IBM Capital Inc
				4.250% 3/10/08		24,773,325		—
	—		22,200,000	IBM Capital Inc.
				5.220% 3/16/07		—		21,963,166
	10,000,000		—	IBM International Group
				4.725% 1/14/08		9,981,644		—
	18,900,000		—	IBM International Group
				4.725% 1/15/08		18,862,829		—
	20,000,000		—	IBM International Group
				4.220% 2/27/08		19,851,712		—
	5,420,000		—	IBM (International Business Machines Corp.)
				4.230% 1/3/08		5,417,868		—
	—		19,000,000	IBM (International Business Machines Corp.)
				5.250% 1/10/07		—		18,966,750
	20,000,000		—	ING (US) Finance
				4.730% 1/30/08		19,924,332		—
	25,000,000		—	ING (US) Finance
				4.820% 2/22/08		24,832,460		—

134 Prospectus§TIAA-CREF§ Real Estate Account

	TIAA Real Estate Account December 31, 2007 and 2006
Statement of investments		continued

PRINCIPAL					VALUE
				ISSUER, YIELD(6)AND MATURITY DATE
2007		2006			2007		2006
$	—	$	25,000,000	ING (US) Finance
				5.240% 3/27/07	$	—	$	24,695,265
	—		24,000,000	Johnson & Johnson
				5.270% 1/2/07		—		24,000,000
	—		25,000,000	Johnson & Johnson
				5.200% 1/18/07		—		24,941,555
	—		20,259,000	Kimberly-Clark Worldwide, Inc.
				5.230% 1/29/07		—		20,179,184
	22,904,000		—	Kitty Hawk Funding Corp
				5.030% 3/14/08		22,653,437		—
	—		10,000,000	Links Finance L.L.C.
				5.250% 1/16/07		—		9,979,190
	—		30,000,000	Morgan Stanley Dean Witter
				5.240% 2/12/07		—		29,819,598
	20,000,000		—	Nestle Capital Corp
				4.740% 2/6/08		19,906,862		—
	14,500,000		—	Nestle Capital Corp
				5.090% 3/11/08		14,367,337		—
	20,000,000		—	Nestle Capital Corp
				5.210% 3/5/08		19,833,636		—
	9,300,000		—	Paccar Financial Corp
				4.730% 1/14/08		9,283,038		—
	10,000,000		—	Paccar Financial Corp
				4.490% 2/11/08		9,947,220		—
	15,300,000		—	Paccar Financial Corp
				4.500% 2/28/08		15,185,256		—
	10,000,000		—	Park Avenue Receivables
				4.650% 3/18/08		9,884,430		—
	19,645,000		—	Pfizer Inc
				4.410% 5/15/08		19,285,726		—
	—		11,601,000	Pitney Bowes Inc.
				5.300% 1/4/07		—		11,597,578
	28,000,000		—	Private Export Funding Corporation
				4.640-4.750% 1/30/08		27,893,365		—
	1,500,000		—	Private Export Funding Corporation
				4.530% 1/31/08		1,494,098		—
	10,000,000		—	Private Export Funding Corporation
				4.680% 2/11/08		9,946,870		—
	20,000,000		—	Private Export Funding Corporation
				4.740% 2/5/08		19,908,760		—
	10,000,000		—	Private Export Funding Corporation
				4.680% 3/3/08		9,919,045		—
	—		20,500,000	Private Export Funding Corporation
				5.220% 1/3/07		—		20,496,976
	—		1,845,000	Private Export Funding Corporation
				5.260% 1/11/07		—		1,842,553

TIAA-CREF§ Real Estate Account§ Prospectus 135

	TIAA Real Estate Account December 31, 2007 and 2006
Statement of investments		continued

PRINCIPAL					VALUE
				ISSUER, YIELD(6)AND MATURITY DATE
2007		2006			2007		2006
$	—	$	23,000,000	Private Export Funding Corporation
				5.22-5.23% 1/18/07	$	—	$	22,945,922
	—		6,000,000	Private Export Funding Corporation
				5.220% 1/23/07		—		5,981,485
	—		15,000,000	Private Export Funding Corporation
				5.230% 2/15/07		—		14,903,199
	—		14,120,000	Private Export Funding Corporation
				5.230% 3/6/07		—		13,989,828
	—		25,000,000	Procter & Gamble Co
				5.230% 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.
				5.250% 2/14/07		—		49,686,455
	10,000,000		—	Procter & Gamble International S.C.
				4.740% 1/16/08		9,979,155		—
	10,000,000		—	Procter & Gamble International S.C.
				4.750% 1/18/08		9,976,550		—
	10,000,000		—	Procter & Gamble International S.C.
				4.200% 1/31/08		9,960,914		—
	4,665,000		—	Procter & Gamble International S.C.
				4.750% 1/4/08		4,662,569		—
	30,000,000		—	Procter & Gamble International S.C.
				4.740% 2/14/08		29,830,500		—
	17,000,000		—	Procter & Gamble International S.C.
				4.600% 2/1/08		16,931,441		—
	8,000,000		—	Procter & Gamble International S.C.
				4.350% 3/12/08		7,925,696		—
	9,000,000		—	Procter & Gamble International S.C.
				4.190% 3/14/08		8,913,882		—
	12,000,000		—	Ranger Funding Company LLC
				5.110% 1/10/08		11,981,685		—
	31,573,000		—	Ranger Funding Company LLC
				5.080-5.580% 1/18/08		31,486,411		—
	—		10,000,000	Ranger Funding Company LLC
				5.260% 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
				5.300% 2/12/07		—		23,616,311
	25,000,000		—	Royal Bank of Scotland
				4.740% 2/8/08		24,877,365		—
	—		10,000,000	Scaldis Capital LLC
				5.250% 1/10/07		—		9,988,068
	—		25,000,000	Sheffield Receivables Corporation
				5.240% 1/12/07		—		24,962,735

136Prospectus§TIAA-CREF§Real Estate Account

	TIAA Real Estate Account December 31, 2007 and 2006
Statement of investments		continued

PRINCIPAL					VALUE
				ISSUER, YIELD(6)AND MATURITY DATE
2007		2006			2007		2006
$	—	$	35,750,000	Sheffield Receivables Corporation
				5.260% 1/17/07	$	—	$	35,670,156
	10,000,000		—	Shell International Financial
				4.470% 3/28/08		9,884,402		—
	20,000,000		—	Societe Generale North America, Inc.
				5.155% 1/10/08		19,973,944		—
	15,000,000		—	Societe Generale North America, Inc.
				4.780% 2/1/08		14,939,506		—
	25,000,000		—	Societe Generale North America, Inc.
				4.830% 3/26/08		24,718,170		—
	17,420,000		—	Societe Generale North America, Inc.
				4.640% 4/4/08		17,201,414		—
	—		7,850,000	Societe Generale North America, Inc.
				5.250% 1/10/07		—		7,836,262
	—		25,000,000	Societe Generale North America, Inc.
				5.250% 1/19/07		—		24,937,902
	—		20,000,000	SunTrust Banks, Inc.
				5.245% 5/1/07		—		20,001,700
	18,505,000		—	Svensk Exportkredit AB
				4.720-4.820% 01/14/08		18,471,249		—
	17,800,000		—	Svensk Exportkredit AB
				4.860% 1/15/08		17,765,215		—
	36,000,000		—	Svensk Exportkredit AB
				4.740% 1/17/08		35,920,267		—
	16,000,000		—	Svensk Exportkredit AB
				4.370% 3/12/08		15,851,392		—
	10,000,000		—	Svensk Exportkredit AB
				4.720% 04/09/08		9,867,500		—
	—		14,675,000	Swedish Export Credit Corp.
				5.240% 1/10/07		—		14,657,788
	—		33,895,000	Swedish Export Credit Corp.
				5.24-5.26% 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
	10,000,000		—	Toronto-Dominion Holdings
				5.060% 01/31/08		9,960,914		—
	25,000,000		—	Toronto-Dominion Holdings
				4.710% 2/11/08		24,868,050		—
	19,000,000		—	Toyota Motor Credit Corp.
				4.520% 1/8/08		18,980,196		—
	30,000,000		—	Toyota Motor Credit Corp.
				4.880% 2/15/08		29,826,579		—
	30,000,000		—	Toyota Motor Credit Corp.
				4.740% 2/25/08		29,787,012		—

TIAA-CREF§Real Estate Account§Prospectus 137

	TIAA Real Estate Account December 31, 2007 and 2006
Statement of investments		continued

PRINCIPAL					VALUE
				ISSUER, YIELD(6)AND MATURITY DATE
2007		2006			2007		2006
$	20,000,000	$	—	Toyota Motor Credit Corp.
				4.530% 2/28/08	$	19,850,008	$	—
	—		50,000,000	Toyota Motor Credit Corp.
				5.230% 1/23/07		—		49,846,580
	—		30,000,000	Toyota Motor Credit Corp.
				5.230% 1/25/07		—		29,899,221
	20,000,000		—	UBS Finance, (Delaware) Inc.
				5.030% 2/13/08		19,889,486		—
	17,215,000		—	UBS Finance, (Delaware) Inc.
				5.000% 2/21/08		17,101,908		—
	25,000,000		—	UBS Finance, (Delaware) Inc.
				4.910% 4/7/08		24,675,782		—
	—		17,500,000	UBS Finance, (Delaware) Inc.
				5.250% 2/20/07		—		17,375,018
	3,970,000		—	Unilever Capital Corp
				4.230% 1/11/08		3,964,274		—
	10,000,000		—	United Parcel Service Inc
				4.300% 3/18/08		9,898,686		—
	30,000,000		—	United Parcel Service Inc
				4.400% 3/31/08		29,640,321		—
	20,000,000		—	United Parcel Service Inc
				4.340% 4/28/08		19,680,880		—
	20,000,000		—	United Parcel Service Inc
				4.340% 4/29/08		19,678,000		—
	20,000,000		—	United Parcel Service Inc
				4.380% 4/1/08		19,757,426		—
	7,831,000		—	Variable Funding Capital Corporation
				4.640% 4/15/08		7,694,387		—
	—		34,530,000	Variable Funding Capital Corporation
				5.250% 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
	30,000,000		—	Yorktown Capital, LLC
				4.875% 4/15/08		29,527,943		—
	—		23,415,000	Yorktown Capital, LLC
				5.260% 1/4/07		—		23,408,027
TOTAL COMMERCIAL PAPER (Cost $1,755,527,807 and $1,520,729,804)						1,755,075,702		1,520,881,551

138Prospectus§TIAA-CREF§Real Estate Account

	TIAA Real Estate Account December 31, 2007 and 2006
Statement of investments		continued

PRINCIPAL					VALUE
2007		2006		ISSUER, INTEREST RATE AND MATURITY DATE	2007		2006
GOVERNMENT AGENCY BONDS—5.82% AND 2.36%
$	—	$	17,700,000	Federal Home Loan Banks
				5.130% 1/5/07	$	—	$	17,694,938
	—		19,745,000	Federal Home Loan Banks
				5.180% 1/12/07		—		19,719,628
	—		39,969,000	Federal Home Loan Banks
				5.200% 1/19/07		—		39,877,711
	—		23,753,000	Federal Home Loan Banks
				5.180% 2/28/07		—		23,563,451
	25,000,000		—	Federal Home Loan Banks
				4.450% 1/2/08		25,000,000		—
	25,000,000		—	Federal Home Loan Banks
				4.450% 1/3/08		24,997,275		—
	28,850,000		—	Federal Home Loan Banks
				4.661% 1/4/08		28,843,711		—
	34,945,000		—	Federal Home Loan Banks
				4.450% 1/7/08		34,925,990		—
	41,450,000		—	Federal Home Loan Banks
				4.260-4.900% 1/11/08		41,409,379		—
	77,800,000		—	Federal Home Loan Banks
				4.280-4.290% 1/16/08		77,681,433		—
	32,500,000		—	Federal Home Loan Banks
				4.260% 1/25/08		32,418,620		—
	43,830,000		—	Federal Home Loan Banks
				4.300% 1/28/08		43,705,917		—
	2,000,000		—	Federal Home Loan Banks
				4.480% 2/1/08		1,993,134		—
	25,000,000		—	Federal Home Loan Banks
				4.200% 2/13/08		24,879,825		—
	23,694,000		—	Federal Home Loan Banks
				4.250% 3/12/08		23,504,638		—
	30,000,000		—	Federal Home Loan Banks
				4.270% 3/17/08		29,743,140		—
	20,000,000		—	Federal Home Loan Banks
				4.270% 3/19/08		19,824,180		—
	85,900,000		—	Federal Home Loan Banks
				4.260% 3/24/08		85,095,804		—
	15,000,000		—	Federal Home Loan Bank Systems
				4.700% 11/20/08		14,991,900		—
	—		13,654,000	Federal Home Loan Mortgage Corporation
				5.110% 1/2/07		—		13,654,000
	—		22,250,000	Federal Home Loan Mortgage Corporation
				5.130% 1/16/07		—		22,208,704
	—		43,400,000	Federal Home Loan Mortgage Corporation
				5.150% 1/24/07		—		43,269,887
	—		50,000,000	Federal Home Loan Mortgage Corporation
				5.130% 1/30/07		—		49,807,250

TIAA-CREF§Real Estate Account§Prospectus 139

	TIAA Real Estate Account December 31, 2007 and 2006
Statement of investments		continued

PRINCIPAL					VALUE
2007		2006		ISSUER, INTEREST RATE AND MATURITY DATE	2007		2006
$	—	$	33,675,000	Federal Home Loan Mortgage Corporation
				5.150% 1/31/07	$	—	$	33,540,367
	—		30,000,000	Federal National Mortgage Association
				5.150% 2/6/07		—		29,854,650
	—		23,768,000	Federal National Mortgage Association
				5.150% 1/8/07		—		23,751,029
	—		50,000,000	Federal National Mortgage Association
				5.160% 3/21/07		—		49,452,450
	32,465,000		—	Fannie Mae Discount Notes
				4.330% 1/4/08		32,457,922		—
	18,990,000		—	Fannie Mae Discount Notes
				4.230% 2/15/08		18,894,366		—
	20,000,000		—	Fannie Mae Discount Notes
				4.200% 2/19/08		19,890,140		—
	16,600,000		—	Fannie Mae Discount Notes
				4.280% 2/21/08		16,505,015		—
	25,000,000		—	Fannie Mae Discount Notes
				4.270% 2/22/08		24,854,075		—
	23,725,000		—	Fannie Mae Discount Notes
				4.170% 3/5/08		23,554,345		—
	44,000,000		—	Fannie Mae Discount Notes
				4.260% 3/6/08		43,678,492		—
	29,045,000		—	Fannie Mae Discount Notes
				4.190-4.280% 3/20/08		28,786,354		—
	30,000,000		—	Fannie Mae Discount Notes
				4.280% 3/21/08		29,729,430		—
	12,840,000		—	Fannie Mae Discount Notes
				4.285% 3/26/08		12,716,864		—
	22,518,000		—	Fannie Mae Discount Notes
				4.190-4.240% 3/27/08		22,299,485		—
	17,890,000		—	Fannie Mae Discount Notes
				4.270% 3/28/08		17,714,356		—
	30,000,000		—	Fannie Mae Discount Notes
				4.220% 4/24/08		29,613,930		—
	41,650,000		—	Fannie Mae Discount Notes
				4.150-4.180% 4/30/08		41,085,518		—
	31,901,000		—	Fannie Mae Discount Notes
				4.100% 5/28/08		31,359,658		—
	30,000,000		—	Freddie Mac Discount Note
				4.330% 1/24/08		29,928,120		—
	32,470,000		—	Freddie Mac Discount Note
				4.320% 1/31/08		32,367,460		—
	22,400,000		—	Freddie Mac Discount Note
				4.220% 2/14/08		22,289,770		—
	25,487,000		—	Freddie Mac Discount Note
				4.210% 2/20/08		25,344,069		—

140Prospectus§TIAA-CREF§Real Estate Account

	TIAA Real Estate Account December 31, 2007 and 2006
Statement of investments		continued

PRINCIPAL					VALUE
2007		2006		ISSUER, INTEREST RATE AND MATURITY DATE	2007		2006
$	10,000,000	$	—	Freddie Mac Discount Note
				4.320% 2/21/08	$	9,942,780	$	—
	8,500,000		—	Freddie Mac Discount Note
				4.240% 3/3/08		8,440,806		—
	17,925,000		—	Freddie Mac Discount Note
				4.120% 3/31/08		17,737,868		—
	26,735,000		—	Freddie Mac Discount Note
				4.145% 4/10/08		26,433,563		—
	20,817,000		—	Freddie Mac Discount Note
				4.175% 4/18/08		20,563,324		—
	10,795,000		—	Freddie Mac Discount Note
				4.180% 4/25/08		10,654,849		—
TOTAL GOVERNMENT AGENCY BONDS
(Cost $1,105,524,756 and $366,282,560)						1,105,857,505		366,394,065
VARIABLE NOTES—0.26% AND 0.12%
	—		19,000,000	US Bank NA
				5.735% 12/5/07		—		18,998,765
	25,000,000		—	Wells Fargo Bank
				4.600% 1/7/08		24,999,308		—
	25,000,000		—	Wells Fargo Bank
				4.600% 1/8/08		24,999,210		—
TOTAL VARIABLE NOTES
(Cost $50,000,000 and $19,003,401)						49,998,518		18,998,765
BANKERS ACCEPTANCE—0.20% AND 0.00%
	4,359,000		—	JPMorgan Chase Bank
				4.400% 1/18/08		4,349,127		—
	10,000,000		—	Wachovia Bank
				4.380% 4/21/08		9,850,480		—
	25,000,000		—	Wachovia Bank
				4.300% 5/7/08		24,570,220		—
TOTAL BANKERS ACCEPTANCE
(Cost $38,835,657 and $0)						38,769,827		—
TOTAL OTHER MARKETABLE SECURITIES
(Cost $3,371,895,300 and $2,038,681,194)						3,371,865,684		2,038,938,210
TOTAL MARKETABLE SECURITIES
(Cost $3,811,049,548 and $2,608,007,989)						3,798,495,896		2,743,860,533

TIAA-CREF§Real Estate Account§Prospectus 141

	TIAA Real Estate Account December 31, 2007 and 2006
Statement of investments		concluded

PRINCIPAL					VALUE
2007		2006		ISSUER, INTEREST RATE AND MATURITY DATE	2007		2006
MORTGAGE LOAN RECEIVABLE—0.38% AND 0.48%
$	75,000,000	$	75,000,000	Klingle Corporation
				6.17% 07/10/11	$	72,519,684	$	74,660,626
TOTAL MORTGAGE LOAN RECEIVABLE
(Cost $75,000,000 and $75,000,000)						72,519,684		74,660,626
TOTAL INVESTMENTS
(Cost $15,951,457,925 and $13,558,801,945)					$	19,013,601,527	$	15,510,036,850

(1)	The investment has a mortgage loan payable outstanding as indicated in Note 5.
(2)	Leasehold interest only.
(3)	The market value reflects the Account’s interest in the joint venture, net of any debt.
(4)	The market value reflects the final settlement due the Account. The investment was sold on 8/24/07.
(5)	Located throughout the U.S.
(6)	Yield represents the annualized yield at the date of purchase.

142 Prospectus§TIAA-CREF§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 statements 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, 2007 and December 31, 2006 and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2007 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 audits 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 20, 2008

TIAA-CREF§Real Estate Account§Prospectus 143

Pro forma Condensed Statement of Assets and Liabilities (Unaudited)

TIAA Real Estate Account

As of December 31, 2007

	Historical		Adjustments			Pro forma
ASSETS
Real estate properties and
Real estate joint ventures and
limited partnerships, at value	$	15,142,585,947	$	42,728,299	(a)	$	15,185,314,246
Marketable securities		3,798,495,896		—			3,798,495,896
Other		291,685,401		—			291,685,401
TOTAL ASSETS		19,232,767,244		42,728,299			19,275,495,543
Mortgage notes payable		1,392,092,982		42,728,299	(a)		1,434,821,281
Payable for securities transactions		866,209		—			866,209
Accrued real estate property level
expenses and taxes		154,638,976		—			154,638,976
Security deposits held		24,632,278		—			24,632,278
TOTAL LIABILITIES		1,572,230,445		42,728,299			1,614,958,744
NET ASSETS	$	17,660,536,799	$	—		$	17,660,536,799

144Prospectus§TIAA-CREF§Real Estate Account

Pro forma Condensed Statement of Operations (Unaudited)

TIAA Real Estate Account

For the Year Ended December 31, 2007

	Historical		Adjustments			Pro forma
Rental income	$	987,434,298	$	17,906,168	(b)	$	1,005,340,466
Operating expenses		247,473,125		2,819,329	(b)		250,292,454
Real estate taxes		126,925,585		2,560,376	(b)		129,485,961
Interest expense		83,622,829		18,635,553	(b)		102,258,382
Total real estate property
expenses and taxes		458,021,539		24,015,258			482,036,797
Real estate income, net		529,412,759		(6,109,090	)		523,303,669
Income from real estate joint ventures
and limited partnerships		93,724,569		6,257,959	(c)		99,982,528
Interest and dividends		141,913,253		—			141,913,253
TOTAL INCOME		765,050,581		148,869			765,199,450
EXPENSES		140,294,447		2,102,999	(d)		142,397,446
INVESTMENT INCOME, NET		624,756,134		(1,954,130	)		622,802,004
REALIZED AND UNREALIZED GAINS		1,438,434,738		—			1,438,434,738
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS	$	2,063,190,872	$	(1,954,130	)	$	2,061,236,742

TIAA-CREF§Real Estate Account§Prospectus 145

Notes to Pro Forma 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 pro forma 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, 2007 through the date of this prospectus. During 2007, the Account purchased 7 property investments: three office properties, one industrial property, two retail properties and an 85% interest in a joint venture that owns sixty-five retail properties. During the period from January 1, 2007 through the date of this prospectus, the Account purchased one retail property lease buyback. Information regarding this lease buyback is included under “Recent Transactions” on page 38.

          Various assumptions have been made in order to prepare these pro forma condensed financial statements. The pro forma condensed statement of assets and liabilities has been prepared assuming the real estate property investments purchased during the period from January 1, 2008 through the date of this prospectus were purchased as of December 31, 2007. The pro forma condensed statement of operations for the year ended December 31, 2007 has been prepared assuming real estate property investments purchased during the period from January 1, 2007 through the date of this prospectus were purchased as of January 1, 2007.

Note 2—Pro Forma Adjustments

          The following pro forma adjustments were made in preparing the pro forma condensed financial statements to reflect the purpose described in Note 1.

          Pro forma Condensed Statement of Assets and Liabilities:

	(a)	To record the cost of the real estate property investment purchased during the period from January 1, 2008 through the date of this prospectus, assuming such investment was purchased with a short-term loan on January 1, 2007.
Pro forma 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, 2007 through the date of this prospectus, assuming such properties were owned for the entire year ended December 31, 2007 and were purchased with a short-term loan.

146Prospectus§TIAA-CREF§Real Estate Account

(c)	To record the real estate joint venture income of the joint ventures purchased during the period from January 1, 2007 through the date of this prospectus, assuming the joint venture interests were owned for the entire year ended December 31, 2007 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, 2007, based on the gross investment amounts involved and assuming the real estate property investments purchased during the period from January 1, 2007 through the date of this prospectus had been purchased as of January 1, 2007.

TIAA-CREF§Real Estate Account§Prospectus147

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.

          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 Portfolio’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 Portfolio for the year ended December 31, 2005, in conformity with accounting principles generally accepted in the United States of America.

December 6, 2006

148Prospectus§TIAA-CREF§Real Estate Account

Developers Diversified Realty Corp., Joint Venture Portfolio

STATEMENTS OF REVENUES AND CERTAIN EXPENSES

	Year Ended December 31, 2005 (Audited)		Nine Months Ended September 30, 2006 (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		1,330,669		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 — Organization 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 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 Portfolio, have been excluded. Expenses excluded consist of interest, depreciation and amortization and certain other expenses not directly related to the future operations of the Portfolio.

          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

TIAA-CREF§Real Estate Account§Prospectus149

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. 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 were incurred for the year ended December 31, 2005 and the nine months ended September 30, 2006, respectively.

150Prospectus§TIAA-CREF§Real Estate Account

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

TIAA-CREF§Real Estate Account§Prospectus 151

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.

          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.

December 22, 2006

152Prospectus§TIAA-CREF§Real Estate Account

Printemps de L’Homme, 110 Rue de Provence, Paris, France

STATEMENTS OF REVENUES AND CERTAIN EXPENSES

(In thousands)	Year Ended December 31, 2005 (Audited)		Nine Months Ended September 30, 2006 (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 — Organization 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.

          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. Expenses excluded consist of interest, depreciation and amortization and certain other expenses not directly related to the future operations of the Property.

          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

TIAA-CREF§Real Estate Account§Prospectus 153

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.

          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.

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 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.

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

154Prospectus§TIAA-CREF§Real Estate Account

8600 114th Avenue North
Champlin, Minnesota
INDEPENDENT AUDITORS’ REPORT

To the Management
Teachers Insurance and Annuity Association

          We have audited the accompanying statement of revenues and certain expenses of the property located at 8600 114th Avenue North, Champlin, Minnesota (the “Property”), as described in Note 1, for the year ended December 31, 2006. 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, 2006, in conformity with accounting principles generally accepted in the United States of America.

April 9, 2007

TIAA-CREF§Real Estate Account§Prospectus155

Property Located at 8600 114th Avenue North, Champlin, Minnesota

STATEMENTS OF REVENUES AND CERTAIN EXPENSES

	Year Ended December 31, 2006 (Audited)		Two Months Ended February 28, 2007 (Unaudited)
REVENUES
Rental income	$	1,121,203	$	200,804
Recoveries		214,767		41,364
		1,335,970		242,168
CERTAIN EXPENSES
General and administrative		29,606		6,819
Management fees		27,311		5,557
Landscaping/grounds		9,737		777
General repairs and maintenance		27,097		625
Security		4,656		559
Insurance		9,787		1,647
Real estate tax		128,619		23,476
Nonreimbursable expenses		2,567		—
		239,380		39,460
Excess of revenues over certain expenses	$	1,096,590	$	202,708

See notes to statements of revenues and expenses and Independent Auditors’ Report.

NOTES TO STATEMENTS OF REVENUES AND CERTAIN EXPENSES

1 — Organization and Basis of Presentation

          The Property, located in Champlin, Minnesota, contains approximately 104,000 square feet of commercial space. At February 28, 2007, the Property was 100% leased. Tenant leases include provisions for additional rent based on pro-rata shares of common area maintenance expenses and real estate taxes.

          The accompanying financial statement is presented in conformity with Rule 3-14 of Securities and Exchange Commission Regulation S-X. Accordingly, it 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 two months ended February 28, 2007 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.

156  Prospectus§ TIAA-CREF§ 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 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 70% of the Property’s square footage. Rent from these tenants represented approximately 53% of total revenues for the year ended December 31, 2006 and the two months ended February 28, 2007.

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, 2006 are as follows:

Year Ending December 31,
2007	$	1,186,000
2008		1,192,000
2009		1,046,000
2010		923,000
2011		729,000
Thereafter		4,231,000
	$	9,307,000

TIAA-CREF§ Real Estate Account§ Prospectus  157

Seneca Industrial Park, Pembroke Park, Florida

INDEPENDENT AUDITORS’ REPORT

To the Management of Teachers Insurance and Annuity Association of America

          We have audited the accompanying statement of revenues and certain expenses of Seneca Industrial Park, Pembroke Park, Florida (the “Property”), as described in Note 1, for the year ended December 31, 2006. This financial statement is the responsibility of the Property’s Management. Our responsibility 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, 2006 in conformity with accounting principles generally accepted in the United States of America.

December 14, 2007

158  Prospectus§ TIAA-CREF§ Real Estate Account

Seneca Industrial Park, Pembroke Park, Florida

STATEMENTS OF REVENUES AND CERTAIN EXPENSES

	Year Ended December 31, 2006 (Audited)		Eight Months Ended August 31, 2007 (Unaudited)
REVENUES
Rental income	$	5,307,909	$	3,382,703
Recoveries		1,880,632		1,302,138
Other		—		899
		7,188,541		4,685,740
CERTAIN EXPENSES
Repairs and maintenance		197,927		216,340
Utilities		86,252		43,271
Administrative expenses		127,636		63,910
Management fees		132,327		116,980
Insurance		158,689		202,913
Real estate taxes		1,209,053		838,280
		1,911,884		1,481,694
Excess of revenues over certain expenses	$	5,276,657	$	3,204,046

See notes to statements of revenue and certain expenses.

NOTES TO STATEMENTS OF REVENUES AND CERTAIN EXPENSES

1 — Organization and Basis of Presentation

          The Property, located in Pembroke Park, Florida, contains approximately 882,000 square feet of commercial space. At August 31, 2007, it was 96% leased to 17 tenants. Most of the leases contain provisions for additional rent for the reimbursement of real estate taxes and operating expenses.

          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. 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 eight months ended August 31, 2007 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-CREF§ Real Estate Account§ Prospectus  159

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 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 operating expenses, are estimated and accrued.

3 — Major Tenants

          Three tenants lease approximately 60% of the Property’s square footage. Rent from these tenants represented approximately 58% of total revenues for the year ended December 31, 2006 and the eight months ended August 31, 2007.

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, 2006 are as follows:

Year Ending December 31,
2007	$	5,238,000
2008		5,093,000
2009		3,954,000
2010		3,103,000
2011		2,042,000
Thereafter		2,169,000
	$	21,599,000

160  Prospectus§ TIAA-CREF§ Real Estate Account

Preston Sherry, Dallas, Texas

INDEPENDENT AUDITORS’ REPORT

To the Management
Teachers Insurance and Annuity Association

          We have audited the accompanying statement of revenues and certain expenses of the property located at 8201 Preston Road, Dallas, Texas (the “Property”), as described in Note 1, for the year ended December 31, 2006. 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, 2006, in conformity with accounting principles generally accepted in the United States of America.

May 7, 2007

TIAA-CREF§ Real Estate Account§ Prospectus  161

Property Located at 8201 Preston Road, Dallas, Texas

STATEMENTS OF REVENUES AND CERTAIN EXPENSES

	Year Ended December 31, 2006 (Audited)		Three Months Ended March 31, 2007 (Unaudited)
REVENUES
Rental income	$	3,193,477	$	852,734
Recoveries		964,737		277,604
Parking income		168,076		43,424
Storage income		2,724		681
Other income		41,388		10,308
		4,370,402		1,184,751
CERTAIN EXPENSES
General and administrative		558,284		150,412
Management fees		124,875		35,545
Landscaping/grounds		14,584		3,471
General repairs and maintenance		341,519		70,690
Security		232,292		63,229
Insurance		38,686		10,133
Real estate taxes		730,957		192,820
Nonreimbursable expenses		13,192		4,786
		2,054,389		531,086
Excess of revenues over certain expenses	$	2,316,013	$	653,665

See notes to statements of revenues and certain expenses and Independent Auditors’ Report.

NOTES TO STATEMENTS OF REVENUES AND CERTAIN EXPENSES

1 — Organization and Basis of Presentation

          The Property, located in Dallas, Texas, contains approximately 147,000 square feet of commercial space. At March 31, 2007, the Property was 94% 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 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. 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, 2007 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

162Prospectus§TIAA-CREF§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

          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 reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

          Revenue Recognition

          Rental income from leases is recognized on a straight-line basis over the lease terms. Recoveries, based on payments for real estate taxes and certain operating expenses, are accrued.

3 — 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, 2006 are as follows:

Year Ending December 31,
2007	$	3,447,000
2008		3,396,000
2009		2,945,000
2010		2,706,000
2011		1,960,000
Thereafter		1,857,000
	$	16,311,000

          One tenant leases approximately 17% of the Property’s square footage. Rent from this tenant represents approximately 20% of total revenues for the year ended December 31, 2006.

TIAA-CREF§Real Estate Account§Prospectus163

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

164Prospectus§TIAA-CREF§Real Estate Account

Camelback Center, Phoenix, Arizona

STATEMENT OF REVENUES AND CERTAIN EXPENSES

	For the Year Ended December 31, 2005 (Audited)		For the Eleven Months Ended November 30, 2006 (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.

TIAA-CREF§Real Estate Account§Prospectus 165

          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.

166Prospectus§ TIAA-CREF§Real Estate Account

Pacific Plaza, San Diego, 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 Pacific Plaza, San Diego, California (the Property), as described in Note A, for the year ended December 31, 2006. 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 revenues and certain expenses of the Property for the year ended December 31, 2006, in conformity with accounting principles generally accepted in the United States of America.

Aarons Grant & Habif, LLC
October 18, 2007

TIAA-CREF§ Real Estate Account§Prospectus 167

Pacific Plaza, San Diego, California

STATEMENT OF REVENUES AND CERTAIN EXPENSES

	For The Year Ended December 31, 2006 (Audited)		For The Six Months Ended June 30, 2007 (Unaudited)
REVENUES
Rental income	$	6,801,679	$	3,217,385
Recoveries		601,105		563,070
Other income		34,680		14,029
Total revenues		7,437,464		3,794,484
CERTAIN EXPENSES
Insurance		174,762		92,188
Management fees		228,135		106,424
Operating expenses		106,176		128,258
Real estate taxes		933,785		479,982
Repairs and maintenance		414,696		181,337
Salaries and wages		163,968		89,908
Security		70,684		36,170
Utilities		105,851		57,250
Total certain expenses		2,198,057		1,171,517
Revenues in excess of certain expenses	$	5,239,407	$	2,622,967

See Independent Auditors’ Report

NOTE A — Organization and Basis of Presentation

          The statement of revenues and certain expenses (the financial statement) for the year ended December 31, 2006 and the six months ended June 30, 2007, relate to the operations of Pacific Plaza, San Diego, California (the Property). The Property contains 215,758 square feet of rentable commercial space and was approximately 81% leased at June 30, 2007.

          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.

          The statement of revenue and certain expenses for the six months ended June 30, 2007 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.

168Prospectus§ TIAA-CREF§ Real Estate Account

NOTE B — Summary of Significant Accounting Policies

          Use of estimates

          The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect various amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

          Revenue recognition

          Revenue from operating leases, which includes scheduled increases over the lease terms, is recognized on a straight-line basis.

NOTE C — Future Rent Payments

          Space in the Property is rented to tenants under non-cancelable operating leases. Approximate minimum future rents required under the leases in effect at December 31, 2006 are as follows:

2007	$	6,196,429
2008		5,064,270
2009		3,356,407
2010		3,459,039
2011		1,226,969
2012		362,281
	$	19,665,395

NOTE D — Concentrations

          The Company earned 92% of rent revenue from three tenants during the year ended December 31, 2006.

NOTE E — Related Party Transactions

          During the year ended December 31, 2006, management fees paid to an affiliate of the Property owner totaled $228,135.

TIAA-CREF§ Real Estate Account§Prospectus 169

TEACHERS INSURANCE AND ANNUITY ASSOCIATION
OF AMERICA

CONDENSED STATUTORY-BASIS FINANCIAL STATEMENTS INFORMATION

THE CONDENSED STATUTORY-BASIS FINANCIAL STATEMENTS OF TIAA WILL BE FILED BY AMENDMENT TO THIS REGISTRATION STATEMENT ON FORM S-1.

170Prospectus§ TIAA-CREF§ Real Estate Account

APPENDIX A — MANAGEMENT OF TIAA

The Real Estate Account has no officers or directors. The Trustees and certain principal executive officers of TIAA as of March 1, 2008, their dates of birth, and their principal occupations during the past five years, are as follows:

TRUSTEES

Name	Date of Birth	Principal Occupations During Past 5 Years
Elizabeth E. Bailey	11/26/38	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.
Glenn A. Britt	3/6/49	Chief Executive Officer, Time Warner Cable, since 2001, where he has held several positions since 1972. Executive Committee of National Cable & Telecommunications Association, Director of Walter Kaitz Foundation and Xerox Corporation; Trustee of Polytechnic University.
Robert C. Clark	2/26/44	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 from 1989 to 2003. Director, Collins & Aikman Corporation, Time Warner, Inc. and Omnicom Group.
Edward M. Hundert, M.D.	10/1/56	Senior lecturer in Medical Ethics, Harvard Medical School. President, Case Western Reserve University from 2002 to 2006. 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	7/4/39	Professor of Law, Georgia State University College of Law.
Donald K. Peterson	8/13/49	Former Chairman and Chief Executive Officer, Avaya Inc. from 2002 to 2006 and President and Chief Executive Officer from 2000-2001. Formerly, Executive Vice President and Chief Financial Officer, Lucent Technologies. Chairman, Board of Trustees, Worcester Polytechnic Institute. Director, Sanford C. Bernstein Fund Inc. and Emerj Inc.
Sidney A. Ribeau	12/3/47	President, Bowling Green University. Director, The Andersons, Convergys and Worthington Industries.
Dorothy K. Robinson	2/18/51	Vice President and General Counsel, Yale University since 1986. Trustee, Newark Public Radio Inc., Youth Rights Media, Inc. and Friends of New Haven Legal Assistance.

TIAA-CREF § Real Estate Account § Prospectus 171

TRUSTEES

Name	Date of Birth	Principal Occupations During Past 5 Years
David L. Shedlarz	4/17/48	Retired Vice Chairman of Pfizer Inc. from 2006-2007, Executive Vice President from 1999 to 2005 and Chief Financial Officer from 1995 to 2005. Director, Pitney Bowes Inc.; Trustee of International Accounting Standards Committee Foundation and member of J. P. Morgan Chase & Co. National Advisory Board. Chairman of the Board, Multiple Sclerosis Society of New York.
David F. Swensen	1/26/54	Chief Investment Officer, Yale University, and adjunct professor of investment strategy. Trustee, Brookings Institution, Wesleyan University; Member, University of Cambridge Investment Board.
Ronald L. Thompson	6/17/49	Former Chairman and Chief Executive Officer, Midwest Stamping and Manufacturing Company through 2005. Director, Washington University in St. Louis.
Marta Tienda	8/10/50	Maurice P. During ‘22 Professor of Demographic Studies, Princeton University. Director, Office of Population Research, Princeton University, 1998-2002. Director, Corporation of Brown University, Sloan Foundation, Jacobs Foundation and RAND Corporation.
Rosalie J. Wolf	5/8/41	Managing Partner, Botanica Capital Partners LLC. Formerly, Senior Advisor and Managing Director, Offit Hall Capital Management LLC and its predecessor company, Laurel Management Company LLC from 2001 to 2003; formerly, Treasurer and Chief Investment Officer, The Rockefeller Foundation. Director, North European Oil Royalty Trust; Chairman, Sanford C. Bernstein Fund, Inc.
OFFICER-TRUSTEES
Name	Date of Birth	Principal Occupations During Past 5 Years
Herbert M. Allison, Jr.	8/2/43	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, 2000-2002. Advisory Board, Stanford Business School and Yale School of Management; Chair, Business-Higher Education Forum; Director, The Conference Board; Trustee, The Economic Club of New York.

172 Prospectus § TIAA-CREF § Real Estate Account

OTHER OFFICERS

Name	Date of Birth	Principal Occupations During Past 5 Years
Georganne C. Proctor	10/25/56	Executive Vice President and Chief Financial Officer, TIAA and CREF since 2006. Executive Vice President of Finance for Golden West Financial Corporation, the holding company of World Savings Bank, from 2003 through 2005. From 1994 through 2002, served as Senior Vice President, Chief Financial Officer and a member of the board of directors of Bechtel Group, Inc. Director of Redwood Trust, Inc. and Kaiser Aluminum Corporation.
Scott C. Evans	5/11/59	Executive Vice President of TIAA since 1999 and Head of Asset Management since 2006 of TIAA and CREF, the TIAA-CREF Mutual Funds, the TIAA-CREF Institutional Mutual Funds, the TIAA-CREF Life Funds and TIAA Separate Account VA-1 (collectively, the “TIAA-CREF Funds”). Also served as Chief Investment Officer of TIAA between 2004 and 2006 and the TIAA-CREF Funds between 2003 and 2006.
Mary (Maliz) E. Beams	3/29/56	Executive Vice President of TIAA and the TIAA-CREF Funds since 2007. President and Chief Executive Officer, TIAA-CREF Individual & Institutional Services, LLC since 2007. Senior Managing Director and Head of Wealth Management Group of TIAA since 2004. Partner, Spyglass Investments from 2002 to 2003.
Gary Chinery	11/28/49	Vice President and Treasurer, TIAA and CREF.
Marjorie M. Pierre-Merritt	5/28/66	Vice President of TIAA and Acting Corporate Secretary of TIAA and the TIAA-CREF Funds since 2007; Assistant Corporate Secretary of TIAA from 2006-2007. Assistant Corporate Secretary of The Dun & Bradstreet Corporation from 2003 to 2006. Counsel, The New York Times Company from 2001 to 2003.
PORTFOLIO MANAGEMENT TEAM
Name	Date of Birth	Principal Occupations During Past 5 Years
Margaret A. Brandwein	11/26/46	Managing Director and Portfolio Manager, TIAA Real Estate Account since 2004. From 2001 to 2004, Head of Commercial Mortgages — West Coast for TIAA.
Thomas C. Garbutt	10/12/58	Managing Director and Head of Global Real Estate Equity Division, TIAA.
Philip J. McAndrews	12/15/58	Managing Director and Head of Real Estate Portfolio Management, TIAA-CREF Global Real Estate since 2005. Between 2003 and 2005, portfolio manager for the Real Estate Account. Between 1997 and 2003, Head of the Real Estate Acquisitions and Joint Ventures group for TIAA.

TIAA-CREF § Real Estate Account § Prospectus 173

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.

Good Order:Actual receipt of an order along with all the information and supporting legal documentation necessary to effect the transaction. This information and documentation generally includes the contract number, the transaction amount (in dollars or accumulation units), signatures of all contract owners exactly as registered on the contract, and any other information or supporting documentation as may be required. With respect to purchase requests, “good order” also generally includes receipt of sufficient funds by us to effect the purchase. We may, in our sole discretion, determine whether any particular transaction request is in good order and reserve the right to change or waive any good order requirement at any time.

174  Prospectus§ TIAA-CREF§ Real Estate Account

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.

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-CREF§ Real Estate Account§ Prospectus  175

PART II

INFORMATION NOT REQUIRED IN A PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution.

SEC Registration Fees	$	196,500
Costs of printing and engraving		600,000	*
Legal fees		50,000	*
Blue Sky Registration Fees		5,000	*
Accounting fees		20,000	*
Miscellaneous		3,500	*
Total	$	875,000	*

* 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.

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Item 16. Exhibits and Financial Statement Schedules.
(1)	(A)	Distribution Agreement for the Contracts Funded by the TIAA Real Estate Account, dated as of January 1, 2008, by and among Teachers Insurance and Annuity Association of America, for itself and on behalf of the Account, and TIAA-CREF Individual & Institutional Services, LLC.7
(3)	(A)	Charter of TIAA (as amended)1
	(B)	Bylaws of TIAA (as amended)6
(4)	(A)	Forms of RA, GRA, GSRA, SRA, IRA Real Estate Account Endorsements3, Keogh Contract,4Retirement Select and Retirement Select Plus Contracts and Endorsements2and Retirement Choice and Retirement Choice Plus Contracts.4
	(B)	Forms of Income-Paying Contracts3
(10)	(A)	Independent Fiduciary Agreement, dated February 22, 2006, by and among TIAA, the Registrant, and Real Estate Research Corporation5
	(B)	Custodian Agreement, dated as of March 3, 2008, by and between TIAA, on behalf of the Registrant, and State Street Bank and Trust Company, N.A.8
(23)	(A)	Consent of George W. Madison, Esquire (filed as Exhibit 5)**
	(B)	Consent of Dechert LLP*
	(C)	Consent of PricewaterhouseCoopers LLP*
	(D)	Consent of Friedman LLP*
	(E)	Consent of Aarons Grant & Habif, LLC*
(24)	Powers of Attorney*

*	Filed herewith.
**	To be filed by amendment
1	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).
2	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).
3	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).
4	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).
5	Previously filed and incorporated herein by reference to Exhibit 10.(a) to the Annual Report on Form 10-K of the Account filed on March 15, 2006.
6	Previously filed and incorporated herein by reference to Exhibit 3(B) 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.
7	Previously filed and incorporated herein by reference to the Account’s Current Report on Form 8-K, filed with the Commission on January 7, 2008.
8	Previously filed and incorporated herein by reference to Exhibit 10(B) to the Annual Report on Form 10-K of the Account filed on March 20, 2008.

(b) Financial Statement Schedules

          All Schedules have been omitted because they are not required under the related instructions or are not applicable.

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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. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective 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 offering 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.]

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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 24th day of March, 2008.

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 24, 2008
	Chief Executive Officer
Herbert M. Allison, Jr.	(Principal Executive Officer) and Trustee
/s/ Georganne C. Proctor	Executive Vice President and	March 24, 2008
	Chief Financial Officer
Georganne C. Proctor	(Principal Financial and
	Accounting Officer)
*	Trustee	March 24, 2008
Elizabeth E. Bailey
*	Trustee	March 24, 2008
Glenn A. Britt
*	Trustee	March 24, 2008
Robert C. Clark
*	Trustee	March 24, 2008
Edward M. Hundert M.D.
*	Trustee	March 24, 2008
Marjorie Fine Knowles
*	Trustee	March 24, 2008
Donald K. Peterson
*	Trustee	March 24, 2008
Sidney A. Ribeau
*	Trustee	March 24, 2008
Dorothy K. Robinson
*	Trustee	March 24, 2008
David L. Shedlarz

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*	Trustee	March 24, 2008
David F. Swensen
*	Trustee	March 24, 2008
Ronald L. Thompson
*	Trustee	March 24, 2008
Marta Tienda
*	Trustee	March 24, 2008
Rosalie J. Wolf
/s/ Stewart P. Greene

* Signed by Stewart P. Greene as attorney-in-fact pursuant to powers of attorney filed herewith.

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