Tiaa Real Estate Account 8-K Results of Operations and Financial Condition

TIAA Retirement Annuity Accounts

Exhibit 99.1

TIAA Real Estate Account

Real Estate

As of 9/30/2016

Portfolio Net Assets $24.0 Billion

Inception Date 10/2/1995

Symbol QREARX

Estimated Annual Expenses1 2 0.89%

Portfolio Strategies

Performance

This variable annuity account seeks favorable long-term returns primarily through rental income and appreciation of real estate and real estate-related investments owned by the Account. The Account will also invest in non-real estate-related publicly traded securities and short-term higher quality liquid investments that are easily converted to cash to enable the Account to meet participant redemption requests, purchase or improve properties or cover other expense needs. The Account intends to have between 75% and 85% of its net assets invested directly in real estate or real estate-related assets with the goal of producing favorable long-term returns. The Account’s principal strategy is to purchase direct ownership interests in income-producing real estate, primarily office, industrial, retail and multi-family residential properties. The Account may also make foreign real estate investments. Under the Account’s investment guidelines, investments in direct foreign real estate, together with foreign real estate-related securities and foreign non-real estate-related liquid investments may not comprise more than 25% of the Account’s net assets. The Account will invest the remaining portion of its assets (targeted between 15% and 25% of net assets) in publicly traded, liquid investments.

Total Return

Average Annual Total Return

3 Months

YTD

1 Year

3 Years

5 Years

10 Years

Since Inception

TIAA Real Estate Account

0.68%

3.90%

5.59%

8.62%

9.31%

3.46%

6.46%

The returns quoted represent past performance, which is no guarantee of future results. Returns and the principal value of your investment will fluctuate. Current performance may be higher or lower than that shown, and you may have a gain or a loss when you redeem your accumulation units. For current performance information, including performance to the most recent month-end, please visit TIAA.org, or call 800-842-2252. Performance may reflect waivers or reimbursements of certain expenses. Absent these waivers or reimbursement arrangements, performance may be lower.

1The total annual expense deduction, which includes investment management, administration, and distribution expenses, mortality and expense risk charges, and the liquidity guarantee, is estimated each year based on projected expense and asset levels. Differences between actual expenses and the estimate are adjusted quarterly and are reflected in current investment results. Historically, adjustments have been small.

2The Account’s total annual expense deduction appears in the Account’s prospectus, and may be different than that shown herein due to rounding. Please refer to the prospectus for further details.

Learn More

Hypothetical Growth of $10,000

For more information please contact: 800-842-2252 Weekdays, 8 a.m. to 10 p.m. (ET),  Saturdays, 9 a.m. to 6 p.m. (ET), or visit TIAA.org

The chart illustrates the performance of a hypothetical $10,000 investment on September 30, 2006 and redeemed on September 30, 2016.

— TIAA Real Estate Account

$14,055

The total returns are not adjusted to reflect sales charges, the effects of taxation or redemption fees, but are adjusted to reflect actual ongoing expenses, and assume reinvestment of dividends and capital gains, net of all recurring costs.

Properties by Type

(As of 9/30/2016)

Properties by Region

(As of 9/30/2016)

% of Real Estate Investments3 4

% of Real Estate Investments4

Office

43.5

West

40.0

Apartment

20.7

East

37.2

Retail

18.8

South

21.4

Industrial

14.0

Midwest

1.4

Other

3.0

3Other properties represents interest in Storage Portfolio investment and a fee interest encumbered by a ground lease real estate investment.

4Wholly owned properties are represented at fair value and gross of any debt, while joint venture properties are represented at the net equity value.

TIAA Retirement Annuity Accounts
TIAA Real Estate Account
Real Estate							As of 9/30/2016
Portfolio Composition			As of 9/30/2016		Market Recap
Investments by Type		% of Net Assets			Real Estate Market Conditions Improve Further Despite Global Economic Uncertainty
Real Estate Properties (Net Of Debt)			53.4	%	The Bureau of Labor Statistics reported that the U.S. economy added 575,000 jobs during the third quarter of 2016 compared to 439,000 jobs during the second quarter of 2016. All major employment sectors expanded during the quarter except for information services and manufacturing and mining. The unemployment rate ticked up in September to end the quarter at 5.0% as the labor force increased. Finance and professional and business are the primary drivers of office space demand. In the third quarter, the financial services sector added 36,000 jobs as compared to 54,000 in the second quarter, while professional and business services employment increased by 182,000 as compared to 137,000 previously. CB Richard Ellis Econometric Advisors (“CBRE-EA”) reported that the national office vacancy rate held steady at 13.0% during third quarter. The vacancy rate is now approaching the previous cyclical low of 12.4% achieved in the second quarter of 2007. Vacancy rates improved in most major office markets, with declines in 37 of the 63 markets tracked by CBRE-EA. Industrial market conditions improved for the 26th consecutive quarter, the longest stretch of declining availability on record. The national availability rate declined to 8.4% from 8.6% in the second quarter. CBRE-EA notes that industrial market conditions have benefited from strong e-commerce demand. Availability rates increased in only 10 of the 59 markets tracked by CBRE-EA, most of which were likely due to increasing supply. The national apartment vacancy rate increased to 4.6% in third quarter 2016 from 4.3% in third quarter 2015. (Year-over-year comparisons are necessary due to seasonal leasing patterns.) The increase in the national vacancy rate was the second since late-2009. CBRE-EA notes that the increases are not yet a cause for concern as rental demand remains strong, supported by the expanding labor market. Nonetheless, CBRE-EA expects rent growth to moderate in the near-term as new supply peaks in the next year, which will likely contribute to rising vacancy rates. Preliminary data from the U.S. Census Bureau indicate that retail sales excluding motor vehicles and parts increased 0.3% from second quarter 2016 and 2.3% over third quarter 2015 sales. Continued retail sales growth supported improvement in retail market conditions during the third quarter as the national availability rate declined to 10.4% from 10.6% in the second quarter. Modest but steady improvements in retail market conditions have brought the availability rate down from its peak of 13.2% in mid-2011. Employment and personal income growth trends remain favorable for consumer spending, which should support meaningful rent growth in upcoming quarters. Note: Data subject to revision
Real Estate Joint Venture And Limited Partnerships			22.7	%
Short Term Investments			18.4	%
Marketable Securities Real Estate Related			4.7	%
Loans Receivable			0.7	%
Other (Net Receivable/Liability)			0.1	%
Top 10 Holdings5			As of 9/30/2016
		% of Total Investments6
1001 Pennsylvania Avenue			3.1	%
Fashion Show			3.0	%
The Florida Mall			2.8	%
Colorado Center			2.0	%
Fourth and Madison			2.0	%
DDR			2.0	%
99 High Street			2.0	%
501 Boylston Street			1.8	%
425 Park Avenue			1.7	%
Ontario Industrial Portfolio			1.7	%
Important Information
5	The top 10 holdings are subject to change and may not be representative of the Account’s current or future investments. The holdings listed only include the Account’s long-term investments. Money market instruments and/or futures contracts, if applicable, are excluded. The holdings do not include the Account’s entire investment portfolio and should not be considered a recommendation to buy or sell a particular security.
6	Fair Value as reported in the September 30, 2016 Consolidated Schedule of Investments. Investments owned 100% by the Account are reported based on fair value. Investments in joint ventures are reported at the net equity value on a fair value basis, and are presented at the Account’s ownership interest.
	1001 Pennsylvania Avenue is presented gross of debt. The value of the property less the fair value of leverage is $469.5 million. Fashion Show is held in a joint venture with General Growth Properties, in which the Account holds a 49% interest, and is presented net of debt. As of September 30, 2016, this debt had a fair value of $435.8 million. The Florida Mall is held in a joint venture with Simon Property Group, L.P., in which the Account holds a 50% interest, and is presented net of debt. As of September 30, 2016, this debt had a fair value of $184.2 million. Colorado Center is held in a joint venture with EOP Operating LP, in which the Account holds a 50% interest. Fourth and Madison is presented gross of debt. The value of the Account's interest less the fair value of leverage is $317.2 million. DDR Joint Venture, in which the Account holds an 85% interest, and consists of 25 retail properties located in 11 states and is presented net of debt. As of September 30, 2016, this debt had a fair value of $679.9 million. 501 Boylston Street is presented gross of debt. The value of the Account’s interest less the fair value of leverage is $263.5 million.
	Real estate investment portfolio turnover rate was 5.7% for the year ended 12/31/2015. Real estate investment portfolio turnover rate is calculated by dividing the lesser of purchases or sales of real estate property investments (including contributions to, or return of capital distributions received from, existing joint venture and limited partnership investments) by the average value of the portfolio of real estate investments held during the period. Marketable securities portfolio turnover rate was 10.0% for the year ended 12/31/2015. Marketable securities portfolio turnover rate is calculated by
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TIAA Retirement Annuity Accounts
TIAA Real Estate Account
Real Estate	As of 9/30/2016
dividing the lesser of purchases or sales of securities, excluding securities having maturity dates at acquisition of one year or less, by the average value of the portfolio securities held during the period.
Teachers Insurance and Annuity Association of America (TIAA), New York, NY, issues annuity contracts and certificates.
TIAA-CREF Individual & Institutional Services, LLC, Teachers Personal Investors Services, Inc., Members FINRA and SIPC, distribute securities products.
Investment, insurance and annuity products are not FDIC insured, are not bank guaranteed, are not deposits, are not insured by any federal government agency, are not a condition to any banking service or activity and may lose value.
THIS MATERIAL MUST BE PRECEDED OR ACCOMPANIED BY A CURRENT PROSPECTUS FOR THE TIAA REAL ESTATE ACCOUNT. PLEASE CAREFULLY CONSIDER THE INVESTMENT OBJECTIVES, RISKS, CHARGES, AND EXPENSES BEFORE INVESTING AND CAREFULLY READ THE PROSPECTUS. ADDITIONAL COPIES OF THE PROSPECTUS CAN BE OBTAINED BY CALLING 877-518-9161.
A Note About Risks
In general, the value of the TIAA Real Estate Account will fluctuate based on the underlying value of the direct real estate or real estate-related securities in which it invests.
The risks associated with investing in the Real Estate Account include the risks associated with real estate ownership including among other things fluctuations in property values, higher expenses or lower income than expected, risks associated with borrowing and potential environmental problems and liability, as well as risks associated with participant flows and conflicts of interest. For a more complete discussion of these and other risks, please consult the prospectus.
©2016 Teachers Insurance and Annuity Association of America-College Retirement Equities Fund, 730 Third Avenue, New York, NY 10017
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