SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
January 9, 2003 (September 9, 2002)
TIAA REAL ESTATE ACCOUNT
(Exact name of registrant as specified in its charter)
New York 33-92990, Not Applicable
(State or other 333-13477, (IRS Employer
Jurisdiction of 333-22809 and Identification No.)
incorporation) 333-59778
(Commission File Nos.)
c/o Teachers Insurance and Annuity
Association of America
730 Third Avenue
New York, New York 10017-3206
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 490-9000
ITEM 5. OTHER EVENTS AND REQUIRED FD DISCLOSURE.
THE FOLLOWING DESCRIBES RECENT PROPERTY TRANSACTIONS BY THE TIAA REAL ESTATE
ACCOUNT (THE "ACCOUNT"). IT SUPPLEMENTS THE "DESCRIPTION OF PROPERTIES" SECTION
OF THE PROSPECTUS. EXCEPT AS OTHERWISE NOTED, NONE OF THE PROPERTIES DESCRIBED
BELOW IS SUBJECT TO A MORTGAGE. FURTHER, EXCEPT AS NOTED, THE EXPENSES FOR
OPERATING THE PROPERTIES ARE EITHER BORNE OR REIMBURSED BY THE PROPERTY TENANTS,
ALTHOUGH THE TERMS VARY UNDER EACH LEASE.
PURCHASES
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OFFICE PROPERTIES
MELLON FINANCIAL CENTER AT ONE BOSTON PLACE - BOSTON, MA
On December 3, 2002, the Account purchased a 50.25% interest in a private real
estate investment trust (the "REIT") which owns a 41-story Class A office
building in Boston, Massachusetts for approximately $131.5 million. The
remaining 49.75% interest in the REIT is owned by Societe Immobilier
Trans-Quebec (49.70%) and 100 individuals (.05%). Mellon Financial Center at One
Boston Place, built in 1970, contains 782,241 net rentable square feet and is
98% leased. The two largest tenants are The Boston Company (271,982 square feet)
and Standish Mellon (79,461 square feet). Rental rates average $39.09 per square
foot, which is below the range for current average market rent for comparable
properties. The property is in the Financial District office submarket of
downtown Boston, which has approximately 28.2 million square feet with an
overall vacancy rate of 9.8%.
701 BRICKELL AVENUE - MIAMI, FL
On November 27, 2002, the Account purchased a 33-story Class A office building
in Miami, Florida for approximately $172.1 million. 701 Brickell, built in 1986,
contains 677,667 net rentable square feet and is 98% leased. The two largest
tenants are Holland & Knight (107,616 square feet) and Bank of America (88,115
square feet). Rental rates average $28.27 per square foot, which is below the
range for current average market rent for comparable properties. The property is
in the Brickell Avenue office submarket of Miami, FL, which has approximately 5
million square feet with an overall vacancy rate of 10.9%.
OAK BROOK REGENCY TOWERS - OAKBROOK, IL
On November 26, 2002, the Account purchased two thirteen-story Class A office
buildings in Oakbrook, Illinois for approximately $66.6 million. Oak Brook
Regency Towers, built in 1977 and renovated in 1993, contains 402,318 net
rentable square feet and is 89% leased. The two largest tenants are Blue
Cross/Blue Shield (46,383 square feet) and Ameritech Illinois (30,922 square
feet). Rental rates average $16.66 per square foot, which is within the range
for current average market rent for comparable properties. The property is in
the East-West Corridor office market of Chicago, IL, which has approximately
22.4 million square feet with an overall vacancy rate of 22%. The vacancy rate
in the immediate submarket surrounding the Oak Brook Center Mall, which contains
2.8 million square feet of office space, is 7.5%.
CORPORATE BOULEVARD - ROCKVILLE, MD
On October 31, 2002, the Account purchased one five-story and two four-story
Class A office buildings in Rockville, Maryland for approximately $68.0 million.
Corporate Boulevard, built between 1984-1989, contains 339,786 net rentable
square feet and is 98% leased. The two largest tenants are Lockheed Martin
Corporation (150,954 square feet) and the U.S. Food and Drug Administration
(102,163 square feet). Rental rates average $22.95 per square foot, which is
below the range for current average market rent for comparable properties. The
property is in the I-270 (Rockville) office submarket of Maryland, which has
approximately 15.4 million square feet with an overall vacancy rate of 8.2%.
THE POINTE ON TAMPA BAY - TAMPA, FL
On October 9, 2002, the Account purchased a ten-story Class A office building in
Tampa, Florida for approximately $41.2 million. The Pointe, built in 1982,
contains 249,215 net rentable square feet and is 90% leased. The three largest
tenants are The Hartford Insurance Company (50,965 square feet), GATX
Corporation (41,408 square feet) and Illuminet Holdings, Inc. (25,389 square
feet). Rental rates average $23.45 per square foot, which is within the range
for current average market rent for comparable properties. The property is in
the Westshore office submarket of Tampa, FL, which has approximately 9 million
square feet with an overall vacancy rate of 19%.
RETAIL PROPERTIES
WESTWOOD MARKETPLACE - LOS ANGELES, CA
On September 26, 2002, the Account purchased a three-story retail development in
Los Angeles, California for approximately $74.0 million. The retail center,
built in 1950 and completely renovated in 2001, contains 202,201 square feet of
gross leasable area, and is 100% leased to four tenants: Home Depot Expo Design
Center (98,350 square feet), Ralph's Fresh Fare (Kroger) (52,040 square feet),
Best Buy (33,657 square feet) and Longs Drugs (18,154 square feet). Rental rates
average $27.25 per square foot, which is the current average market rent for
comparable properties.
RESIDENTIAL PROPERTIES
ALEXAN BUCKHEAD - ATLANTA, GA
On December 30, 2002, the Account purchased a multi-family mid-rise apartment
complex in Atlanta, Georgia for approximately $45.7 million. The complex,
completed in late 2002, contains 231 studio, one and two bedroom units in four
six-story buildings. Its amenities include a gated entrance, resident lounge,
business center, on site leasing and retail center, and full-service fitness
center. The apartment complex includes a seven level parking garage containing
344 parking spaces. The property is currently in its lease-up phase and 25% of
the units are leased at an average monthly rent of $1,532. At closing, an escrow
was established to provide the Account a 7% return on this investment for the
first twelve months of ownership. The Account is responsible for the expenses
of operating the
property. Alexan is in the Buckhead apartment market of Atlanta, which has a
vacancy rate of 8.3%.
LONGWOOD TOWERS - BROOKLINE, MA
On December 12, 2002, the Account purchased a multi-family mid-rise apartment
complex in Brookline, Massachusetts for approximately $80.2 million. The
complex, built in 1926 and completely renovated in 1997, contains 268 studio,
one, two, three and four bedroom units in three, eight-story buildings. Its
amenities include secured access with 24-hour doormen and valet parking, a
wood-paneled grand lobby, community room, banquet and restaurant facilities and
full-service fitness center. The apartment complex includes an adjoining three
level parking garage containing 278 parking spaces. The property is currently
90% occupied at an average monthly rent of $2,211. The Account is responsible
for the expenses of operating the property. Longwood Towers is in the Brookline
apartment market of Boston, which has a vacancy rate of 4%.
REGENTS COURT APARTMENTS - SAN DIEGO, CA
On November 15, 2002, the Account purchased a multi-family mid-rise apartment
complex in San Diego, California for approximately $49.6 million. The complex,
built in 2001, contains 251 one, two and three bedroom units in a four-story
building. Its amenities include secured access, a marble-clad lobby, resident
lounge, a business center, multimedia room with theater seating and fitness
center. The apartment complex includes a six level parking structure containing
441 parking spaces. The property is currently 97% occupied at an average monthly
rent of $1,422. The Account is responsible for the expenses of operating the
property. Regents Court Apartments is in the University Town Center/Golden
Triangle submarket of San Diego, which has a vacancy rate of 8%.
THE LEGACY AT WESTWOOD APARTMENTS - LOS ANGELES, CA
On September 9, 2002, the Account purchased a multi-family mid-rise apartment
complex in Los Angeles, California for approximately $85.1 million. The complex,
built in 2001, contains 187 one, two and three bedroom units in a six-story
building. Its amenities include secured access with 24-hour doormen and valet
parking, a marble-clad lobby, resident lounge, business center and full-service
fitness center. The apartment complex includes a three level subterranean
parking garage containing 471 parking spaces. The property is currently 91%
occupied at an average monthly rent of $3,425. The Account is responsible for
the expenses of operating the property. The Legacy at Westwood is in the West
Los Angeles apartment market of Los Angeles, which has a vacancy rate of 4%.
SALES
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THE FOLLOWING DESCRIBES A RECENT PROPERTY SALE BY THE ACCOUNT. WHEN REVIEWING
THIS INFORMATION, IT IS IMPORTANT TO KEEP IN MIND THAT ANY CHANGES IN THE
VALUATION OF THE PROPERTY SINCE IT WAS PURCHASED HAVE BEEN REFLECTED IN THE
ACCOUNT'S DAILY UNIT VALUE OVER THE PERIOD THE ACCOUNT OWNED THE PROPERTY.
WESTINGHOUSE FACILITY - CORAL SPRINGS, FL
On January 9, 2003, the Account sold one flex/industrial building (the
Westinghouse Facility) located in Coral Springs, Florida for approximately $5.3
million. The Account had purchased the building in February 1997 at a cost of
approximately $6.1 million.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TIAA REAL ESTATE ACCOUNT
By: TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA
DATE: January 9, 2003 By: /s/ Lisa Snow
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Lisa Snow
Vice President and Chief Counsel,
Corporate Law