Note 2—~~Management Agreements, Arrangements and~~ Related Party Transactions

Investment ~~advisory~~management, administrative and distribution services are provided to the Account at cost by TIAA. Services provided at cost are paid by the Account on a daily basis based upon projected expenses to be provided to the Account. Payments are adjusted periodically to ensure daily payments are as close as possible to the Account’s actual expenses incurred. Differences between actual expenses and the amounts paid by the Account are reconciled and adjusted quarterly.

Investment management services for the Account are provided by TIAA officers, under the direction and control of the Board, 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 various portfolio accounting and related services for the Account.

The Account is a party to the Distribution Agreement for the Contracts Funded by the TIAA Real Estate Account (the “Distribution Agreement”), dated January 1, 2008, by and among TIAA, for itself and on behalf of the Account, and TIAA-CREF Individual and Institutional Services, LLC (“Services”), a wholly-owned subsidiary of TIAA and a registered broker-dealer and a member of the Financial Industry Regulatory Authority. Pursuant to the Distribution Agreement, Services performs distribution services for the Account which include, among other things, (i) distributing of annuity contracts issued by TIAA and funded by the Account, (ii) advising existing annuity contract owners in connection with their accumulations and (iii) helping employers implement and manage retirement plans. In addition, TIAA performs administrative functions for the Account, which include, among other things, (i) maintaining accounting records and performing accounting services, (ii) receiving and allocating premiums, (iii) calculating and making annuity payments, (iv) processing withdrawal requests, (v) providing regulatory compliance and reporting services, (vi)

maintaining the Account’s records of contract ownership and (vii) otherwise assisting generally in all aspects of the Account’s operations. Both distribution services (pursuant to the Distribution Agreement) and administrative services are provided to the Account by Services and TIAA, as applicable, on an at cost basis.

The Distribution Agreement is terminable by either party upon 60 days written notice and terminates automatically upon any assignment thereof.

In addition to providing the services described above, TIAA ~~and Services provide investment management, administrative and distribution services at cost. TIAA and Services receive payments from~~charges the Account onfees to bear certain mortality and expense risks, and risks with providing the liquidity guarantee. These fees are charged as a ~~daily basis according to formulas~~percentage of the net assets of the Account. Rates for these fees are established ~~each year and adjusted periodically with the objective~~annually.

Once an Account participant begins receiving lifetime annuity income benefits, payment levels cannot be reduced as a result of ~~keeping the payments as close as possible to~~ the Account’s actual mortality experience. As such, mortality and expense risk expenses ~~actually incurred. Any differences between actual expenses and the amounts paid by the Account~~ are ~~adjusted quarterly.~~contractual charges for TIAA’s assumption of this risk.

~~TIAA also provides a~~The liquidity guarantee ~~to the Account, for a fee, to ensure~~ensures 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 ensures sufficient funds are available for such transfer and withdrawal requests by purchasing accumulation units of the Account.~~

To the extent TIAA owns accumulation units issued pursuant to the liquidity guarantee, the independent fiduciary monitors and oversees, among other things, TIAA’s ownership interest in the Account and may require TIAA to eventually redeem some of its units, particularly when the Account has un-invested cash or liquid investments available. TIAA also receives a fee for assuming certain mortality and expense risks.

~~The expenses~~Expenses for the services ~~noted~~and fees described above ~~that are provided to the Account by TIAA and Services~~ are identified as such in the accompanying ~~consolidated statements~~Consolidated Statements of ~~operations~~Operations and are ~~reflected~~further identified as "Expenses" in Note 8—9—Financial Highlights.

Note 3—~~Credit~~Concentrations of Risk ~~Concentrations~~

Concentrations of ~~credit~~ risk may arise when a number of properties ~~or tenants~~ are located in a similar geographic region such that the economic conditions of that region could impact tenants’ obligations to meet their contractual obligations or cause the values of individual properties to decline. Additionally, concentrations of risk may arise if any one tenant comprises a significant amount of the Account's rent, or if tenants are concentrated in a particular industry.

As of ~~June~~September 30, 2018, the Account had no significant concentrations of tenants as no single tenant had annual contract rent that made up more than 3% of the rental income of the Account. Moreover, the Account's tenants have no notable concentration present in any one industry. There are no significant lease expirations scheduled to occur over the next twelve months.

The Account’s wholly-owned real estate investments and investments in joint ~~venture~~ventures are located in the United States. The following table represents the diversification of the Account’s portfolio by region and property type as of ~~June~~September 30, 2018 (unaudited):


Diversification by Fair Value⁽¹⁾	Diversification by Fair Value⁽¹⁾										Diversification by Fair Value⁽¹⁾

	West		East		South		Midwest		Total		West		East		South		Midwest		Total
Office	16.5	%	19.5	%	5.0	%	—	%	41.0	%	14.0	%	18.6	%	5.5	%	—	%	38.1	%
Apartment	8.4	%	7.8	%	4.8	%	0.9	%	21.9	%	8.7	%	8.3	%	6.0	%	1.1	%	24.1	%
Retail	8.1	%	3.0	%	7.6	%	0.7	%	19.4	%	8.1	%	3.1	%	7.8	%	0.7	%	19.7	%
Industrial	7.8	%	2.2	%	4.1	%	0.5	%	14.6	%	8.1	%	1.7	%	4.4	%	0.5	%	14.7	%
Other⁽²⁾	0.4	%	2.5	%	0.1	%	0.1	%	3.1	%	0.6	%	2.6	%	0.1	%	0.1	%	3.4	%
Total	41.2	%	35.0	%	21.6	%	2.2	%	100.0	%	39.5	%	34.3	%	23.8	%	2.4	%	100.0	%


⁽¹⁾	Wholly-owned properties are represented at fair value and gross of any debt, while joint venture properties are represented at the net equity value.


⁽²⁾	Represents interests in Storage Portfolio investments, a fee interest encumbered by a ground lease real estate investment and land.

Properties in the “West” region are located in: AK, AZ, CA, CO, HI, ID, MT, NM, NV, OR, UT, WA, WY

Properties in the “East” region are located in: CT, DC, DE, KY, MA, MD, ME, NC, NH, NJ, NY, PA, RI, SC, VA, VT, WV

Properties in the “South” region are located in: AL, AR, FL, GA, LA, MS, OK, TN, TX

Properties in the “Midwest” region are located in: IA, IL, IN, KS, MI, MN, MO, ND, NE, OH, SD, WI

Note 4—Assets and Liabilities Measured at Fair Value on a Recurring Basis

Valuation Hierarchy: The Account’s fair value measurements are grouped categorically into three levels, as defined by the FASB. The levels are defined as follows:

Level 1—Valuations using unadjusted quoted prices for assets traded in active markets, such as stocks listed on the New York Stock Exchange. Active markets are defined as having the following characteristics for the measured asset or liability: (i) many transactions, (ii) current prices, (iii) price quotes not varying substantially among market makers, (iv) narrow bid/ask spreads and (v) most information regarding the issuer is publicly available. Level 1 assets held by the Account are generally marketable equity securities.

Level 2—Valuations for assets and liabilities traded in less active, dealer or broker markets. Fair values are primarily obtained from third party pricing services for identical or comparable assets or liabilities. Level 2 inputs for fair value measurements are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include:


a.	Quoted prices for similar assets or liabilities in active markets;


b.	Quoted prices for identical or similar assets or liabilities in markets that are not active (that is, markets in which there are few transactions for the asset (or liability), the prices are not current, price quotations vary substantially either over time or among market makers (for example, some brokered markets), or in which little information is released publicly);


c.	Inputs other than quoted prices that are observable within the market for the asset (or liability) (for example, interest rates and yield curves, implied volatilities, prepayment speeds, loss severities, credit risks, and default rates that are observable at commonly quoted intervals); and


d.	Inputs that are derived principally from or corroborated by observable market data by correlation or other means (for example, market-corroborated inputs).

Examples of securities which may be held by the Account and included in Level 2 include certificates of deposit, commercial paper, government agency notes, variable notes, United States Treasury securities, and debt securities.

Level 3—Valuations for assets and liabilities that are derived from other valuation methodologies, including pricing models, discounted cash flow models and similar techniques, and are not based on market exchange, dealer, or broker-traded transactions. Level 3 valuations incorporate certain assumptions and projections that are not observable in the market, and require significant professional judgment in determining the fair value assigned to such assets or liabilities. Examples of Level 3 assets and liabilities which may be held by the Account from time to time include investments in real estate, investments in joint ventures, and loans receivable and payable.

An investment’s categorization within the valuation hierarchy described above is based upon the lowest level of input that is significant to the fair value measurement. The ~~Account’s~~Account's limited partnership investments are valued using the net asset value per share as a practical expedient which ~~excludes the investments~~are excluded from the valuation hierarchy.

The Account’s determination of 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 will be made to reflect changes in credit quality, counterparty’s creditworthiness, the Account’s creditworthiness, liquidity, and other observable and unobservable inputs that are applied consistently over time.

The methods described above are considered to produce fair values that represent a good faith estimate of what an unaffiliated buyer in the marketplace would pay to purchase the asset or would receive to transfer 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 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. As discussed in Note 1—Organization and Significant

Accounting Policies in more detail, the Account generally obtains independent third party appraisals on a quarterly basis; there may be circumstances in the interim in which the true realizable value of a property is not reflected in the Account’s daily net asset value calculation or in the Account’s periodic Consolidated Financial Statements. This disparity may be more apparent when the commercial and/or residential real estate markets experience an overall and possibly dramatic decline (or increase) in property values in a relatively short period of time between appraisals.

The following tables show the major categories of assets and liabilities measured at fair value on a recurring basis as of ~~June~~September 30, 2018 (unaudited) and December 31, 2017, using unadjusted quoted prices in active markets for identical assets (Level 1); significant other observable inputs (Level 2); and significant unobservable inputs (Level 3); and fair value using the practical expedient (in millions):


Description	Level 1: Quoted Prices in Active Markets for Identical Assets		Level 2: Significant Other Observable Inputs		Level 3: Significant Unobservable Inputs			Fair Value Using Practical Expedient		Total at June 30, 2018			Level 1: Quoted Prices in Active Markets for Identical Assets		Level 2: Significant Other Observable Inputs		Level 3: Significant Unobservable Inputs			Fair Value Using Practical Expedient		Total at September 30, 2018
Real estate properties	$	—	$	—	$	16,042.7		$	—	$	16,042.7		$	—	$	—	$	15,345.9		$	—	$	15,345.9
Real estate joint ventures	—		—		5,915.3			—		5,915.3			—		—		5,795.3			—		5,795.3
Limited partnerships	—		—		—			94.2		94.2			—		—		—			140.9		140.9
Marketable securities:
Real estate-related	1,451.2		—		—			—		1,451.2			1,430.6		—		—			—		1,430.6
Government agency notes	—		2,539.7		—			—		2,539.7			—		2,560.7		—			—		2,560.7
United States Treasury securities	—		1,533.8		—			—		1,533.8			—		2,284.0		—			—		2,284.0
Loans receivable	—		—		618.3			—		618.3			—		—		855.1			—		855.1
Total Investments at June 30, 2018	$	1,451.2	$	4,073.5	$	22,576.3		$	94.2	$	28,195.2
Total Investments at September 30, 2018													$	1,430.6	$	4,844.7	$	21,996.3		$	140.9	$	28,412.5
Mortgage loans payable	$	—	$	—	$	(2,891.4	)	$	—	$	(2,891.4	)	$	—	$	—	$	(2,743.2	)	$	—	$	(2,743.2	)



Description	Level 1: Quoted Prices in Active Markets for Identical Assets		Level 2: Significant Other Observable Inputs		Level 3: Significant Unobservable Inputs			Fair Value Using Practical Expedient		Total at December 31, 2017
Real estate properties	$	—	$	—	$	15,742.7		$	—	$	15,742.7
Real estate joint ventures	—		—		5,860.6			—		5,860.6
Limited partnerships	—		—		—			142.4		142.4
Marketable securities:
Real estate-related	1,238.0		—		—			—		1,238.0
Government agency notes	—		2,872.3		—			—		2,872.3
United States Treasury securities	—		1,015.2		—			—		1,015.2
Loans receivable	—		—		298.8			—		298.8
Total Investments at December 31, 2017	$	1,238.0	$	3,887.5	$	21,902.1		$	142.4	$	27,170.0
Mortgage loans payable	$	—	$	—	$	(2,238.3	)	$	—	$	(2,238.3	)

The following tables show the reconciliation of the beginning and ending balances for assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the three and ~~six~~nine months ended ~~June~~September 30, 2018 and 2017 (in millions, unaudited):


	Real Estate Properties			Real Estate Joint Ventures			Loans Receivable			Total Level 3 Investments			Mortgage Loans Payable			Real Estate Properties			Real Estate Joint Ventures			Loans Receivable			Total Level 3 Investments			Mortgage Loans Payable
For the three months ended June 30, 2018
Beginning balance April 1, 2018	$	15,906.0		$	5,805.6		$	319.0		$	22,030.6		$	(2,594.2	)
For the three months ended September 30, 2018
Beginning balance July 1, 2018																$	16,042.7		$	5,915.3		$	618.3		$	22,576.3		$	(2,891.4	)
Total realized and unrealized gains (losses) included in changes in net assets	7.8			67.4			(0.1		)	75.1			27.5			114.6			7.5			1.0			123.1			(0.8		)
Purchases⁽¹⁾	360.4			69.4			299.4			729.2			(359.9		)	253.7			242.1			380.1			875.9			(72.0		)
Sales	(231.5		)	—			—			(231.5		)	—			(1,065.1		)	—			—			(1,065.1		)	—
Settlements⁽²⁾	—			(27.1		)	—			(27.1		)	35.2			—			(369.6		)	(144.3		)	(513.9		)	221.0
Ending balance June 30, 2018	$	16,042.7		$	5,915.3		$	618.3		$	22,576.3		$	(2,891.4	)
Ending balance September 30, 2018																$	15,345.9		$	5,795.3		$	855.1		$	21,996.3		$	(2,743.2	)

Property
Annual Interest Rate and
Payment Frequency⁽²⁾
Principal
Amounts Outstanding as of Maturity
June 30, 2018 December 31, 2017
(Unaudited)
Mass Court^{(1) (4)}
2.88% paid monthly 91.1
92.1
September 1, 2019
Red Canyon at Palomino Park^{(4) (5)}
5.34% paid monthly 27.1
27.1
August 1, 2020
Green River at Palomino Park^{(4) (5)}
5.34% paid monthly 33.2
33.2
August 1, 2020
Blue Ridge at Palomino Park^{(4) (5)}
5.34% paid monthly 33.4
33.4
August 1, 2020
Ashford Meadows Apartments⁽⁴⁾
5.17% paid monthly 44.6
44.6
August 1, 2020
The Knoll^{(1) (4)}
3.98% paid monthly 17.2
17.5
December 5, 2020
The Corner⁽⁴⁾
4.66% paid monthly 105.0
105.0
June 1, 2021
The Palatine^{(1) (4)}
4.25% paid monthly 78.1
78.8
January 10, 2022
The Forum at Carlsbad^{(1) (4)}
4.25% paid monthly 88.1
88.9
March 1, 2022
The Colorado⁽¹⁾⁽⁴⁾
3.69% paid monthly 90.7
91.7
November 1, 2022
The Legacy at Westwood^{(1) (4)}
3.69% paid monthly 46.3
46.7
November 1, 2022
Regents Court^{(1) (4)}
3.69% paid monthly 39.3
39.6
November 1, 2022
Fourth & Madison⁽⁴⁾
3.75% paid monthly 200.0
200.0
June 1, 2023
Fourth & Madison⁽⁴⁾
4.17% paid monthly 90.0
—
June 1, 2023
1001 Pennsylvania Avenue 3.70% paid monthly 330.0
330.0
June 1, 2023
Biltmore at Midtown⁽⁴⁾
3.94% paid monthly 36.4
—
July 5, 2023
Cherry Knoll⁽⁴⁾
3.78% paid monthly 35.3
—
July 5, 2023
Lofts at SoDo⁽⁴⁾
3.94% paid monthly 35.1
—
July 5, 2023
1401 H Street NW⁽⁴⁾
3.65% paid monthly 115.0
115.0
November 5, 2024
Circa Green Lake⁽⁴⁾
3.71% paid monthly 52.0
—
March 5, 2025
Union - South Lake Union⁽⁴⁾
3.66% paid monthly 57.0
—
March 5, 2025
Holly Street Village ⁽⁴⁾
3.65% paid monthly 81.0
—
May 1, 2025
Township Apartments⁽⁴⁾
3.65% paid monthly 49.0
—
May 1, 2025
32 South State Street⁽⁴⁾
4.48% paid monthly 24.0
24.0
June 6, 2025
780 Third Avenue⁽⁴⁾
3.55% paid monthly 150.0
150.0
August 1, 2025
780 Third Avenue⁽⁴⁾
3.55% paid monthly 20.0
20.0
August 1, 2025
701 Brickell Avenue⁽⁴⁾
3.66% paid monthly 184.0
184.0
April 1, 2026
55 Second Street^{(4) (6)}
3.74% paid monthly 137.5
137.5
October 1, 2026
1900 K Street, NW 3.93% paid monthly 163.0
163.0
April 1, 2028
501 Boylston Street⁽⁴⁾
3.70% paid monthly 216.5
216.5
April 1, 2028
99 High Street⁽⁴⁾
3.90% paid monthly 277.0
—
March 1, 2030
Total Principal Outstanding $ 2,946.9
$ 2,238.6

Fair Value Adjustment⁽³⁾
(55.5 ) (0.3 )
Total Mortgage Loans Payable $ 2,891.4
$ 2,238.3



Property	Annual Interest Rate and Payment Frequency⁽²⁾	Principal Amounts Outstanding as of						Maturity
Property	Annual Interest Rate and Payment Frequency⁽²⁾	September 30, 2018 (unaudited)			December 31, 2017			Maturity
Mass Court⁽¹⁾	2.88% paid monthly	90.7			92.1			September 1, 2019
Red Canyon at Palomino Park⁽⁴⁾	5.34% paid monthly	27.1			27.1			August 1, 2020
Green River at Palomino Park⁽⁴⁾	5.34% paid monthly	33.2			33.2			August 1, 2020
Blue Ridge at Palomino Park⁽⁴⁾	5.34% paid monthly	33.4			33.4			August 1, 2020
Ashford Meadows Apartments	5.17% paid monthly	44.6			44.6			August 1, 2020
The Knoll⁽¹⁾	3.98% paid monthly	17.1			17.5			December 5, 2020
The Corner	4.66% paid monthly	105.0			105.0			June 1, 2021
Ascent at Windward	3.51% paid monthly	34.6			—			January 1, 2022
The Palatine⁽¹⁾	4.25% paid monthly	77.7			78.8			January 10, 2022
The Forum at Carlsbad⁽¹⁾	4.25% paid monthly	87.7			88.9			March 1, 2022
Fusion 1560	3.42% paid monthly	37.4			—			June 10, 2022
The Colorado⁽¹⁾	3.69% paid monthly	90.3			91.7			November 1, 2022
The Legacy at Westwood⁽¹⁾	3.69% paid monthly	46.1			46.7			November 1, 2022
Regents Court⁽¹⁾	3.69% paid monthly	39.1			39.6			November 1, 2022
Fourth & Madison⁽¹⁾	3.75% paid monthly	199.1			200.0			June 1, 2023
Fourth & Madison	4.17% paid monthly	90.0			—			June 1, 2023
1001 Pennsylvania Avenue⁽¹⁾	3.70% paid monthly	328.5			330.0			June 1, 2023
Biltmore at Midtown	3.94% paid monthly	36.4			—			July 5, 2023
Cherry Knoll	3.78% paid monthly	35.3			—			July 5, 2023
Lofts at SoDo	3.94% paid monthly	35.1			—			July 5, 2023
1401 H Street NW	3.65% paid monthly	115.0			115.0			November 5, 2024
Circa Green Lake	3.71% paid monthly	52.0			—			March 5, 2025
Union - South Lake Union	3.66% paid monthly	57.0			—			March 5, 2025
Holly Street Village	3.65% paid monthly	81.0			—			May 1, 2025
Township Apartments	3.65% paid monthly	49.0			—			May 1, 2025
32 South State Street	4.48% paid monthly	24.0			24.0			June 6, 2025
780 Third Avenue	3.55% paid monthly	150.0			150.0			August 1, 2025
780 Third Avenue	3.55% paid monthly	20.0			20.0			August 1, 2025
701 Brickell Avenue	3.66% paid monthly	184.0			184.0			April 1, 2026
55 Second Street⁽⁵⁾	3.74% paid monthly	137.5			137.5			October 1, 2026
1900 K Street, NW	3.93% paid monthly	163.0			163.0			April 1, 2028
501 Boylston Street⁽⁶⁾	3.70% paid monthly	—			216.5			April 1, 2028
99 High Street	3.90% paid monthly	277.0			—			March 1, 2030
Total Principal Outstanding		$	2,797.9		$	2,238.6
Fair Value Adjustment⁽³⁾		(54.7		)	(0.3		)
Total Mortgage Loans Payable		$	2,743.2		$	2,238.3

Shares Issuer Fair Value at
June 30, 2018 December 31, 2017
2018 2017
(Unaudited)
265,349
223,448
Digital Realty Trust, Inc. $ 29.6
$ 25.5

207,228
174,051
Douglas Emmett, Inc. 8.3
7.1

460,212
388,940
Duke Realty Corporation 13.4
10.6

60,363
46,776
Easterly Government Properties, Inc. 1.2
1.0

44,417
36,626
EastGroup Properties, Inc. 4.2
3.2

98,738
82,652
Education Realty Trust, Inc. 4.1
2.9

173,806
139,642
Empire State Realty Trust 3.0
2.9

95,190
68,867
EPR Properties 6.2
4.5

102,276
85,048
Equinix Inc. 44.0
38.5

151,976
132,344
Equity Commonwealth 4.8
4.0

108,837
89,456
Equity Lifestyle Properties, Inc. 10.0
8.0

463,217
390,235
Equity Residential 29.5
24.9

—
39,142
Escrow Winthrop Realty Trust —
0.3

84,852
71,499
Essex Property Trust, Inc. 20.3
17.3

157,435
133,620
Extra Space Storage, Inc. 15.7
11.7

39,335
33,146
Farmland Partners, Inc. 0.3
⁽⁷
⁾
0.3
⁽⁷
⁾
94,029
78,850
Federal Realty Investment Trust 11.9
10.5

159,807
130,114
First Industrial Realty Trust, Inc. 5.3
4.1

274,543
266,222
Forest City Realty Trust A 6.3
6.4

83,563
68,809
Four Corners Property Trust 2.1
1.8

138,566
119,538
Franklin Street Properties Corp. 1.2
1.3

59,534
—
Front Yard Residential Corp. 0.6
—

260,028
221,037
Gaming and Leisure Properties, Inc. 9.3
8.2

802,374
674,285
General Growth Properties, Inc. 16.4
15.8

155,580
134,715
GEO Group Inc./The 4.3
3.2

42,630
36,337
Getty Realty Corp. 1.2
1.0

37,480
30,560
Gladstone Commercial Corporation 0.7
0.6

17,897
11,775
Gladstone Land Corporation 0.2
⁽⁷
⁾
0.2

21,950
14,323
Global Medical REIT, Inc. 0.2
0.1
⁽⁷
⁾
87,682
73,715
Global Net Lease, Inc. 1.8
1.5

126,437
102,459
Government Properties Income Trust 2.0
1.9

205,436
173,959
Gramercy Property Trust Inc. 5.6
4.6

606,987
513,801
HCP, Inc. 15.7
13.4

159,409
133,528
Healthcare Realty Trust Inc. 4.6
4.3

262,963
221,345
Healthcare Trust of America 7.1
6.6

46,670
45,394
Hersha Hospitality Trust 1.0
0.8

131,203
111,471
Highwoods Properties, Inc. 6.7
5.7

209,735
179,103
Hospitality Properties Trust 6.0
5.3

945,128
799,202
Host Hotels & Resorts, Inc. 19.9
15.9

198,672
171,423
Hudson Pacific Properties, Inc. 7.0
5.9

113,014
93,383
Independence Realty Trust, Inc. 1.2
0.9

27,799
—
Industrial Logics Properties 0.6
—

150,224
130,841
Investors Real Estate Trust 0.8
0.7

384,097
320,427
Invitation Homes, Inc. 8.9
7.6

366,328
302,923
Iron Mountain Inc. 12.8
11.4

1,500,000
1,500,000
iShares Dow Jones US Real Estate Index Fund 120.9
121.5
⁽⁷
⁾
132,181
94,915
JBG Smith Properties 4.8
3.3

125,033
106,012
Kilroy Realty Corporation 9.5
7.9

524,544
451,921
Kimco Realty Corporation 8.9
8.2



Location/Description	Type	Fair Value at
Location/Description	Type	September 30, 2018			December 31, 2017
		(Unaudited)
T-C 225 Binney, LLC 225 Binney Street (70% Account Interest)	Office	$	205.5		$	201.9
T-C 501 Boylston Street Member, LLC 501 Boylston (50.1% Account Interest)	Office	185.2		⁽²⁾	—
Nevada:
Fashion Show Holding I, LLC Fashion Show (50% Account Interest)	Retail	847.0		⁽²⁾	844.4		⁽²⁾
New York:
401 West 14th Street, LLC 401 West 14th Street (42.19% Account Interest)	Retail	48.5		⁽²⁾	46.4		⁽²⁾
817 Broadway Owner, LLC 817 Broadway (61.46% Account Interest)	Office	22.9		⁽²⁾	23.0		⁽²⁾
MRA Hub 34 Holding, LLC The Hub (95% Account Interest)	Office	58.3		⁽²⁾	56.9		⁽²⁾
RGM 42, LLC MiMA (70% Account Interest)	Apartments	123.3		⁽²⁾	189.2		⁽²⁾
TREA 35th Street LIC Investor Member, LLC Commerce LIC (97.5% Account Interest)	Industrial	65.0			58.2
Tennessee:
West Town Mall, LLC West Town Mall (50% Account Interest)	Retail	154.3		⁽²⁾	140.4		⁽²⁾
Texas:
Four Oaks Venture LP Four Oaks Place LP (51% Account Interest)	Office	344.0		⁽²⁾	338.7		⁽²⁾
THP The Forum at Sam Houston, LLC The Forum - Sam Houston (97% Account Interest)	Apartments	16.6		⁽²⁾	—
THP West Campus, LLC Aspen Heights (97% Account Interest)	Apartments	41.5		⁽²⁾	—
Washington:
T-C REA 400 Fairview Investor, LLC 400 Fairview (90% Account Interest)	Office	1.5		⁽¹⁴⁾	263.7
Various:
DDRTC Core Retail Fund, LLC DDR Joint Venture (85% Account Interest)	Retail	624.1		^(2,3)	636.2		^(2,3)
Storage Portfolio I, LLC Storage Portfolio I (66.02% Account Interest)⁽⁸⁾	Storage	91.2		^(2,3)	177.5		^(2,3)
Storage Portfolio II, LLC Storage Portfolio II (90% Account Interest)	Storage	115.7		^(2,3)	91.8		^(2,3)
TOTAL REAL ESTATE JOINT VENTURES (Cost $4,453.0 and $4,534.5)		$	5,795.3		$	5,860.6


LIMITED PARTNERSHIPS—0.5% and 0.5%
Clarion Gables Multi-Family Trust LP (3.378% Account Interest)		$	54.3		$	126.7
LCS SHIP Venture I, LLC (90% Account Interest)		70.7			—
Taconic New York City GP Fund, LP (60% Account Interest)		15.9			10.8
Transwestern Mezz Realty Partners III, LLC (11.715% Account Interest)		—			4.9
TOTAL LIMITED PARTNERSHIPS (Cost $151.2 and $140.8)		$	140.9		$	142.4
TOTAL REAL ESTATE JOINT VENTURES AND LIMITED PARTNERSHIPS (Cost $4,604.2 and $4,675.3)		$	5,936.2		$	6,003.0

Shares Issuer Fair Value at
June 30, 2018 December 31, 2017
2018 2017
(Unaudited)
107,478
90,119
Kite Realty Group Trust $ 1.8
$ 1.8

107,492
91,259
Lamar Advertising Corporation 7.3
6.8

142,078
124,427
LaSalle Hotel Properties 4.9
3.5

275,417
257,171
Lexington Realty Trust 2.4
2.5

190,436
161,972
Liberty Property Trust 8.4
7.0

59,177
50,130
Life Storage, Inc. 5.8
4.5

51,209
42,489
LTC Properties, Inc. 2.2
1.9

117,624
99,130
Mack-Cali Realty Corporation 2.4
2.1

37,703
29,800
Medequities Realty Trust, Inc. 0.4
0.3

468,727
399,374
Medical Properties Trust, Inc. 6.6
5.5

146,361
123,965
Mid-America Apartment Communities, Inc. 14.7
12.5

99,593
80,492
Monmouth Real Estate Investment Corporation 1.6
1.4

51,796
43,294
National Health Investors, Inc. 3.8
3.3

197,565
165,743
National Retail Properties, Inc. 8.7
7.1

66,878
49,957
National Storage Affiliates Trust 2.1
1.4

97,013
90,062
New Senior Investment Group 0.7
0.7

23,360
19,294
Nexpoint Residential Trust, Inc. 0.7
0.5

60,527
61,800
NorthStar Realty Europe Corp. 0.9
0.8

252,877
214,048
Omega Healthcare Investors, Inc. 7.8
5.9
⁽⁷
⁾
18,659
16,324
One Liberty Properties, Inc. 0.5
0.4

181,058
152,483
Outfront Media Inc. 3.5
3.5

270,574
225,256
Paramount Group Inc. 4.2
3.6

258,754
159,738
Park Hotels & Resorts, Inc. 7.9
4.6

87,388
75,337
Pebblebrook Hotel Trust 3.4
2.8

87,599
69,866
Pennsylvania Real Estate Investment Trust 1.0
0.8

233,426
195,747
Physicians Realty Trust 3.7
3.5

164,860
159,189
Piedmont Office Realty Trust, Inc. 3.3
3.1

78,505
44,326
Potlatch Corporation 4.0
2.2

50,310
39,774
Preferred Apartment Communities, Inc. 0.9
0.8

684,315
577,161
ProLogis 45.0
37.2

25,609
21,348
PS Business Parks, Inc. 3.3
2.7

191,584
161,952
Public Storage, Inc. 43.5
33.8

65,238
53,551
QTS Realty Trust, Inc. 2.6
2.9

122,517
104,106
Quality Care Properties 2.6
1.4

101,860
84,467
Ramco-Gershenson Properties Trust 1.3
1.2

166,495
140,926
Rayonier, Inc. 6.4
4.5

367,073
308,355
Realty Income Corporation 19.7
17.6

195,980
163,631
Regency Centers Corporation 12.2
11.3

140,371
118,002
Retail Opportunity Investment 2.7
2.4

282,946
248,555
Retail Properties of America 3.6
3.3

103,295
83,912
Rexford Industrial Realty Inc. 3.2
2.4

221,026
185,465
RLJ Lodging Trust 4.9
4.1

57,622
48,519
Ryman Hospitality Properties 4.8
3.3

228,015
191,602
Sabra Health Care REIT Inc. 5.0
3.6

10,996
11,006
Safety Income and Growth, Inc 0.2
0.2

15,597
12,343
Saul Centers, Inc. 0.8
0.8

146,971
131,401
SBA Communications Corporation 24.3
21.5

82,771
69,474
Select Income Real Estate Investment Trust 1.9
1.7

303,363
259,176
Senior Housing Properties Trust 5.5
5.0



Shares		Issuer	Fair Value at
Shares			September 30, 2018			December 31, 2017
2018	2017		September 30, 2018			December 31, 2017
			(Unaudited)
—	101,202	DCT Industrial Trust, Inc.	$	—		$	5.9
196,448	340,952	DDR Corp	2.6			3.1
263,923	219,132	DiamondRock Hospitality Company	3.1			2.5
263,167	223,448	Digital Realty Trust, Inc.	29.6			25.5
205,736	174,051	Douglas Emmett, Inc.	7.8			7.1
456,565	388,940	Duke Realty Corporation	13.0			10.6
78,664	46,776	Easterly Government Properties, Inc.	1.5			1.0
44,417	36,626	EastGroup Properties, Inc.	4.2			3.2
—	82,652	Education Realty Trust, Inc.	—			2.9
173,806	139,642	Empire State Realty Trust	2.9			2.9
94,433	68,867	EPR Properties	6.5			4.5
101,494	85,048	Equinix Inc.	43.9			38.5
151,976	132,344	Equity Commonwealth	4.9			4.0
108,258	89,456	Equity Lifestyle Properties, Inc.	10.4			8.0
459,600	390,235	Equity Residential	30.5			24.9
—	39,142	Escrow Winthrop Realty Trust	—			0.3
43,681	—	Essential Properties Realty	0.6			—
84,218	71,499	Essex Property Trust, Inc.	20.8			17.3
156,084	133,620	Extra Space Storage, Inc.	13.5			11.7
39,335	33,146	Farmland Partners, Inc.	0.3		⁽⁷⁾	0.3		⁽⁷⁾
93,263	78,850	Federal Realty Investment Trust	11.8			10.5
159,807	130,114	First Industrial Realty Trust, Inc.	5.0			4.1
272,460	266,222	Forest City Realty Trust A	6.8			6.4
87,257	68,809	Four Corners Property Trust	2.2			1.8
138,566	119,538	Franklin Street Properties Corp.	1.1			1.3
59,534	—	Front Yard Residential Corp.	0.6			—
258,438	221,037	Gaming and Leisure Properties, Inc.	9.1			8.2
—	674,285	General Growth Properties, Inc.	—			15.8
152,887	134,715	GEO Group Inc./The	3.8			3.2
42,630	36,337	Getty Realty Corp.	1.2			1.0
37,480	30,560	Gladstone Commercial Corporation	0.7			0.6
17,897	11,775	Gladstone Land Corporation	0.2		⁽⁷⁾	0.2
21,950	14,323	Global Medical REIT, Inc.	0.2			0.1		⁽⁷⁾
91,164	73,715	Global Net Lease, Inc.	1.9			1.5
126,437	102,459	Government Properties Income Trust	1.4		⁽⁷⁾	1.9
205,436	173,959	Gramercy Property Trust Inc.	5.6			4.6
602,427	513,801	HCP, Inc.	15.9			13.4
159,409	133,528	Healthcare Realty Trust Inc.	4.7			4.3
262,963	221,345	Healthcare Trust of America	7.0			6.6
46,670	45,394	Hersha Hospitality Trust	1.1			0.8
131,203	111,471	Highwoods Properties, Inc.	6.2			5.7
209,735	179,103	Hospitality Properties Trust	6.0			5.3
937,685	799,202	Host Hotels & Resorts, Inc.	19.8			15.9
198,672	171,423	Hudson Pacific Properties, Inc.	6.5			5.9
113,014	93,383	Independence Realty Trust, Inc.	1.2			0.9
27,799	—	Industrial Logics Properties	0.6		⁽⁷⁾	—
150,224	130,841	Investors Real Estate Trust	0.9			0.7
384,097	320,427	Invitation Homes, Inc.	8.9			7.6
363,628	302,923	Iron Mountain Inc.	12.6			11.4

Principal Issuer
Yield⁽⁴⁾

Maturity
Date
Fair Value at
June 30, 2018 December 31, 2017
2018 2017
(Unaudited)
$ —
$ 35.1
Fannie Mae Discount Notes 1.079% 1/30/2018 $ —
$ 35.1
—
26.2
Fannie Mae Discount Notes 1.109% - 1.225% 2/7/2018 —
26.2
—
25.0
Fannie Mae Discount Notes 1.145% 2/16/2018 —
25.0
—
50.0
Fannie Mae Discount Notes 1.140% - 1.150% 2/20/2018 —
49.9
—
30.2
Fannie Mae Discount Notes 1.140% 2/21/2018 —
30.2
—
40.0
Fannie Mae Discount Notes 1.221% 3/7/2018 —
39.9
—
40.0
Fannie Mae Discount Notes 1.221% 3/8/2018 —
39.9
—
34.1
Fannie Mae Discount Notes 1.221% 3/9/2018 —
34.0
—
20.0
Fannie Mae Discount Notes 1.303% 3/13/2018 —
19.9
—
37.2
Fannie Mae Discount Notes 1.313% 3/19/2018 —
37.0
—
15.0
Fannie Mae Discount Notes 1.303% 3/20/2018 —
15.0
—
10.0
Fannie Mae Discount Notes 1.308% 3/22/2018 —
10.0
—
39.3
Fannie Mae Discount Notes 1.318% 3/29/2018 —
39.1
—
30.0
Fannie Mae Discount Notes 1.323% 4/2/2018 —
29.9
—
35.2
Fannie Mae Discount Notes 1.313% - 1.323% 4/3/2018 —
35.1
—
40.0
Fannie Mae Discount Notes 1.334% 4/9/2018 —
39.9
25.0
—
Fannie Mae Discount Notes 1.733% 7/2/2018 25.0
—
14.2
—
Fannie Mae Discount Notes 1.733% 7/3/2018 14.2
—
30.0
—
Fannie Mae Discount Notes 1.733% 7/6/2018 30.0
—
35.0
—
Fannie Mae Discount Notes 1.856% 7/11/2018 35.0
—
30.0
—
Fannie Mae Discount Notes 1.723% 7/13/2018 30.0
—
40.0
—
Fannie Mae Discount Notes 1.701% 7/17/2018 40.0
—
40.0
—
Fannie Mae Discount Notes 1.701% 7/25/2018 40.0
—
41.2
—
Fannie Mae Discount Notes 1.723% 8/1/2018 41.1
—
20.0
—
Fannie Mae Discount Notes 1.876% 8/6/2018 20.0
—
24.5
—
Fannie Mae Discount Notes 1.846% 8/13/2018 24.5
—
37.7
—
Fannie Mae Discount Notes 1.862% - 1.876% 8/14/2018 37.6
—
20.0
—
Fannie Mae Discount Notes 1.856% 8/17/2018 20.0
—
20.0
—
Fannie Mae Discount Notes 1.899% 9/4/2018 19.9
—
—
14.0
Farmer Mac Discount Notes 1.169% 2/1/2018 —
14.0
20.0
—
Farmer Mac Discount Notes 1.805% 8/3/2018 20.0
—
8.8
—
Farmer Mac Discount Notes 1.873% 9/5/2018 8.7
—
10.0
—
Federal Farm Credit Bank Discount Notes 1.751% 7/3/2018 10.0
—
10.0
—
Federal Farm Credit Bank Discount Notes 1.855% 8/14/2018 10.0
—
—
20.2
Federal Home Loan Bank Discount Notes 1.069% 1/2/2018 —
20.2
—
40.0
Federal Home Loan Bank Discount Notes 1.079% 1/3/2018 —
40.0
—
40.0
Federal Home Loan Bank Discount Notes 1.068% 1/5/2018 —
40.0
—
40.0
Federal Home Loan Bank Discount Notes 1.068% 1/8/2018 —
40.0
—
33.0
Federal Home Loan Bank Discount Notes 1.058% 1/9/2018 —
33.0
—
50.0
Federal Home Loan Bank Discount Notes 1.068% - 1.118% 1/10/2018 —
50.0
—
30.0
Federal Home Loan Bank Discount Notes 1.089% - 1.108% 1/12/2018 —
30.0
—
38.1
Federal Home Loan Bank Discount Notes 1.068% 1/16/2018 —
38.1
—
50.0
Federal Home Loan Bank Discount Notes 1.094% - 1.118% 1/17/2018 —
50.0
—
30.2
Federal Home Loan Bank Discount Notes 1.063% 1/19/2018 —
30.1
—
20.0
Federal Home Loan Bank Discount Notes 1.134% 1/22/2018 —
20.0
—
38.0
Federal Home Loan Bank Discount Notes 1.063% 1/25/2018 —
37.9
—
36.1
Federal Home Loan Bank Discount Notes 1.063% 1/26/2018 —
36.1
—
29.2
Federal Home Loan Bank Discount Notes 1.069% - 1.290% 1/29/2018 —
29.1



Shares		Issuer	Fair Value at
Shares			September 30, 2018		December 31, 2017
2018	2017		September 30, 2018		December 31, 2017
			(Unaudited)
10,996	11,006	Safety Income and Growth, Inc	$	0.2	$	0.2
15,597	12,343	Saul Centers, Inc.	0.9		0.8
145,882	131,401	SBA Communications Corporation	23.4		21.5
82,771	69,474	Select Income Real Estate Investment Trust	1.8		1.7
303,363	259,176	Senior Housing Properties Trust	5.3		5.0
394,796	340,430	Simon Property Group, Inc.	69.8		58.5
107,233	105,521	SL Green Realty Corp.	10.5		10.7
59,766	—	Spirit MTA REIT	0.7		—
552,000	498,344	Spirit Realty Capital Inc.	4.4		4.3
133,579	102,712	Stag Industrial, Inc.	3.7		2.8
236,679	187,343	STORE Capital Corporation	6.6		4.9
134,700	113,544	Summit Hotel Properties, Inc.	1.8		1.7
106,132	83,430	Sun Communities, Inc.	10.8		7.7
289,287	247,441	Sunstone Hotel Investors, L.L.C.	4.7		4.1
117,303	101,087	Tanger Factory Outlet Centers, Inc.	2.7		2.7		⁽⁷⁾
75,746	64,816	Taubman Centers, Inc.	4.5		4.2
72,921	58,066	Terreno Realty Corporation	2.7		2.0
174,005	149,606	The Macerich Company	9.6		9.8
65,014	54,543	Tier Inc.	1.6		1.1
339,387	289,926	UDR, Inc.	13.7		11.2
41,013	34,876	UMH Properties, Inc.	0.6		0.5
212,357	182,231	UNITI Group, Inc.	4.3		3.2		⁽⁷⁾
16,940	14,449	Universal Health Realty Income Trust	1.3		1.1
140,350	112,531	Urban Edge Properties	3.1		2.9
39,928	31,959	Urstadt Biddle Properties, Inc.	0.9		0.7
456,005	388,195	Ventas, Inc.	24.8		23.3
1,240,172	1,065,264	VEREIT, Inc.	9.0		8.3
474,936	—	Vici Properties, Inc.	10.3		—
220,700	188,214	Vornado Realty Trust	16.1		14.7
243,395	203,651	Washington Prime Group, Inc.	1.8		1.4
100,281	85,659	Washington Real Estate Investment Trust	3.1		2.7
154,301	132,066	Weingarten Realty Investors	4.6		4.3
476,725	401,236	Welltower Inc.	30.7		25.6
970,122	816,991	Weyerhaeuser Company	31.3		28.8
49,986	38,883	Whitestone Real Estate Investment Trust B	0.7		0.6
135,744	116,079	WP Carey Inc.	8.7		8.0
143,077	118,158	Xenia Hotels & Resorts Inc.	3.4		2.6
TOTAL REAL ESTATE-RELATED MARKETABLE SECURITIES (Cost $1,182.1 and $991.0)			$	1,430.6	$	1,238.0

Principal Issuer
Yield⁽⁴⁾

Maturity
Date
Fair Value at
June 30, 2018 December 31, 2017
2018 2017
(Unaudited)
$ —
$ 24.3
Federal Home Loan Bank Discount Notes 1.225% 2/6/2018 $ —
$ 24.2
—
47.1
Federal Home Loan Bank Discount Notes 1.069% - 1.220% 2/9/2018 —
47.1
—
11.8
Federal Home Loan Bank Discount Notes 1.140% 2/14/2018 —
11.8
—
25.0
Federal Home Loan Bank Discount Notes 1.130% 2/16/2018 —
25.0
—
10.0
Federal Home Loan Bank Discount Notes 1.306% 2/21/2018 —
10.0
—
40.0
Federal Home Loan Bank Discount Notes 1.120% 2/26/2018 —
39.9
—
39.4
Federal Home Loan Bank Discount Notes 1.120% - 1.186% 2/27/2018 —
39.3
—
22.2
Federal Home Loan Bank Discount Notes 1.161% - 1.232% 3/2/2018 —
22.1
—
45.0
Federal Home Loan Bank Discount Notes 1.212% - 1.313% 3/12/2018 —
44.9
—
28.0
Federal Home Loan Bank Discount Notes 1.176% 3/13/2018 —
27.9
—
5.0
Federal Home Loan Bank Discount Notes 1.318% 3/16/2018 —
5.0
—
40.0
Federal Home Loan Bank Discount Notes 1.304% 3/27/2018 —
39.9
—
47.4
Federal Home Loan Bank Discount Notes 1.304% 3/28/2018 —
47.2
—
40.2
Federal Home Loan Bank Discount Notes 1.324% 4/11/2018 —
40.0
—
15.2
Federal Home Loan Bank Discount Notes 1.359% 4/12/2018 —
15.2
—
29.1
Federal Home Loan Bank Discount Notes 1.354% 4/16/2018 —
29.0
—
39.2
Federal Home Loan Bank Discount Notes 1.365% 4/19/2018 —
39.0
—
40.2
Federal Home Loan Bank Discount Notes 1.365% 4/20/2018 —
40.0
—
33.2
Federal Home Loan Bank Discount Notes 1.365% 4/23/2018 —
33.0
—
34.2
Federal Home Loan Bank Discount Notes 1.375% 4/24/2018 —
34.1
—
15.2
Federal Home Loan Bank Discount Notes 1.371% 4/25/2018 —
15.2
—
28.4
Federal Home Loan Bank Discount Notes 1.403% 5/4/2018 —
28.2
30.0
—
Federal Home Loan Bank Discount Notes 1.836% 7/9/2018 30.0
—
29.8
—
Federal Home Loan Bank Discount Notes 1.836% 7/10/2018 29.8
—
50.0
—
Federal Home Loan Bank Discount Notes 1.734% 7/16/2018 50.0
—
8.5
—
Federal Home Loan Bank Discount Notes 1.879% 7/20/2018 8.5
—
2.9
—
Federal Home Loan Bank Discount Notes 1.895% 7/24/2018 2.9
—
40.0
—
Federal Home Loan Bank Discount Notes 1.806% 7/27/2018 39.9
—
40.0
—
Federal Home Loan Bank Discount Notes 1.806% 7/30/2018 39.9
—
11.2
—
Federal Home Loan Bank Discount Notes 1.835% 8/3/2018 11.2
—
25.0
—
Federal Home Loan Bank Discount Notes 1.885% 8/7/2018 25.0
—
40.0
—
Federal Home Loan Bank Discount Notes 1.830% 8/8/2018 39.9
—
40.0
—
Federal Home Loan Bank Discount Notes 1.754% 8/10/2018 39.9
—
52.1
—
Federal Home Loan Bank Discount Notes 1.846% - 1.896% 8/15/2018 51.9
—
20.0
—
Federal Home Loan Bank Discount Notes 1.885% 8/17/2018 20.0
—
25.3
—
Federal Home Loan Bank Discount Notes 1.891% 8/20/2018 25.2
—
25.8
—
Federal Home Loan Bank Discount Notes 1.908% 8/28/2018 25.8
—
25.0
—
Federal Home Loan Bank Discount Notes 1.938% 9/4/2018 24.9
—
13.3
—
Federal Home Loan Bank Discount Notes 1.957% 9/10/2018 13.2
—
25.0
—
Federal Home Loan Bank Discount Notes 1.961% 9/12/2018 24.9
—
25.0
—
Federal Home Loan Bank Discount Notes 1.957% 9/14/2018 24.9
—
37.7
—
Federal Home Loan Bank Discount Notes 1.957% 9/17/2018 37.5
—
50.0
—
Federal Home Loan Bank Discount Notes 1.990% 9/18/2018 49.8
—
18.1
—
Federal Home Loan Bank Discount Notes 1.956% 9/21/2018 18.0
—
8.6
—
Federal Home Loan Bank Discount Notes 1.960% 9/25/2018 8.5
—
30.0
—
Federal Home Loan Bank Discount Notes 1.984% 9/28/2018 29.9
—
50.0
—
Federal Home Loan Bank Discount Notes 1.958% 10/5/2018 49.7
—
39.5
—
Federal Home Loan Bank Discount Notes 1.947% - 1.989% 10/9/2018 39.3
—



Principal				Issuer	Yield⁽⁴⁾	Maturity Date	Fair Value at
Principal							September 30, 2018		December 31, 2017
2018		2017					September 30, 2018		December 31, 2017
							(Unaudited)
$	—	$	19.0	Fannie Mae Discount Notes	1.118%	1/19/2018	$	—	$	19.0
—		30.0		Fannie Mae Discount Notes	1.038%	1/22/2018	—		30.0
—		46.2		Fannie Mae Discount Notes	1.038%	1/23/2018	—		46.1
—		35.1		Fannie Mae Discount Notes	1.038%	1/24/2018	—		35.1
—		14.6		Fannie Mae Discount Notes	1.088%	1/29/2018	—		14.5
—		35.1		Fannie Mae Discount Notes	1.079%	1/30/2018	—		35.1
—		26.2		Fannie Mae Discount Notes	1.109% - 1.225%	2/7/2018	—		26.2
—		25.0		Fannie Mae Discount Notes	1.145%	2/16/2018	—		25.0
—		50.0		Fannie Mae Discount Notes	1.140% - 1.150%	2/20/2018	—		49.9
—		30.2		Fannie Mae Discount Notes	1.140%	2/21/2018	—		30.2
—		40.0		Fannie Mae Discount Notes	1.221%	3/7/2018	—		39.9
—		40.0		Fannie Mae Discount Notes	1.221%	3/8/2018	—		39.9
—		34.1		Fannie Mae Discount Notes	1.221%	3/9/2018	—		34.0
—		20.0		Fannie Mae Discount Notes	1.303%	3/13/2018	—		19.9
—		37.2		Fannie Mae Discount Notes	1.313%	3/19/2018	—		37.0
—		15.0		Fannie Mae Discount Notes	1.303%	3/20/2018	—		15.0
—		10.0		Fannie Mae Discount Notes	1.308%	3/22/2018	—		10.0
—		39.3		Fannie Mae Discount Notes	1.318%	3/29/2018	—		39.1
—		30.0		Fannie Mae Discount Notes	1.323%	4/2/2018	—		29.9
—		35.2		Fannie Mae Discount Notes	1.313% - 1.323%	4/3/2018	—		35.1
—		40.0		Fannie Mae Discount Notes	1.334%	4/9/2018	—		39.9
70.0		—		Fannie Mae Discount Notes	1.982%	10/10/2018	70.0		—
20.0		—		Fannie Mae Discount Notes	1.950%	10/12/2018	20.0		—
34.1		—		Fannie Mae Discount Notes	1.960%	10/16/2018	34.1		—
20.0		—		Fannie Mae Discount Notes	1.970%	10/22/2018	20.0		—
7.2		—		Fannie Mae Discount Notes	2.080%	11/6/2018	7.2		—
31.6		—		Fannie Mae Discount Notes	2.100%	11/16/2018	31.5		—
21.6		—		Fannie Mae Discount Notes	2.120%	11/27/2018	21.6		—
—		14.0		Farmer Mac Discount Notes	1.169%	2/1/2018	—		14.0
10.0		—		Farmer Mac Discount Notes	2.120%	12/3/2018	10.0		—
10.0		—		Federal Farm Credit Bank Discount Notes	2.160%	12/10/2018	10.0		—
—		20.2		Federal Home Loan Bank Discount Notes	1.069%	1/2/2018	—		20.2
—		40.0		Federal Home Loan Bank Discount Notes	1.079%	1/3/2018	—		40.0
—		40.0		Federal Home Loan Bank Discount Notes	1.068%	1/5/2018	—		40.0
—		40.0		Federal Home Loan Bank Discount Notes	1.068%	1/8/2018	—		40.0
—		33.0		Federal Home Loan Bank Discount Notes	1.058%	1/9/2018	—		33.0
—		50.0		Federal Home Loan Bank Discount Notes	1.068% - 1.118%	1/10/2018	—		50.0
—		30.0		Federal Home Loan Bank Discount Notes	1.089% - 1.108%	1/12/2018	—		30.0
—		38.1		Federal Home Loan Bank Discount Notes	1.068%	1/16/2018	—		38.1
—		50.0		Federal Home Loan Bank Discount Notes	1.094% - 1.118%	1/17/2018	—		50.0
—		30.2		Federal Home Loan Bank Discount Notes	1.063%	1/19/2018	—		30.1
—		20.0		Federal Home Loan Bank Discount Notes	1.134%	1/22/2018	—		20.0
��		38.0		Federal Home Loan Bank Discount Notes	1.063%	1/25/2018	—		37.9
—		36.1		Federal Home Loan Bank Discount Notes	1.063%	1/26/2018	—		36.1
—		29.2		Federal Home Loan Bank Discount Notes	1.069% - 1.290%	1/29/2018	—		29.1
—		24.3		Federal Home Loan Bank Discount Notes	1.225%	2/6/2018	—		24.2
—		47.1		Federal Home Loan Bank Discount Notes	1.069% - 1.220%	2/9/2018	—		47.1
—		11.8		Federal Home Loan Bank Discount Notes	1.140%	2/14/2018	—		11.8


⁽¹⁴⁾	The joint venture has not legally dissolved as of September 30, 2018. The property investment held within the joint venture was sold on July 10, 2018.


⁽¹⁵⁾	On September 4, 2018, concurrent with the payoff of a portion of the outstanding principal, the borrower elected a one year extension option as provided by the original loan. The maturity date and interest rate established by the extension option are July 12, 2019 and 5.0%, respectively.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of the Account’s financial condition and results of operations should be read together with the consolidated financial statements and notes contained in this report and with consideration to the sub-section entitled “Forward-Looking Statements,” which begins below, and the section of the Account’s Annual Report on Form 10-K for the year ended December 31, 2017 (the “Form 10-K”) entitled “Item 1A. Risk Factors.” The past performance of the Account is not indicative of future results.

Forward-looking Statements

Some statements in this Form 10-Q 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 and beliefs underlying these forward-looking statements, and are based on current expectations, estimates and projections about the real estate industry, domestic and global economic conditions, including conditions in the credit and capital markets, the sectors, and markets in which the Account invests and operates, and the transactions described in this Form 10-Q. 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. These risks and uncertainties could cause actual results to differ materially from those contained in any forward-looking statement. These risks and uncertainties include, but are not limited to, the risks associated with the following:

Acquiring and Owning Real Estate: The risks associated with acquiring and owning real property, including general economic and real estate market conditions, the availability of, and economic cost associated with, financing the Account’s properties, the risk that the Account’s properties become too concentrated (whether by geography, sector or by tenant mix), competition for acquiring real estate properties, leasing risk (including tenant defaults) and the risk of uninsured losses at properties (including due to terrorism, natural disasters, and acts of violence);

Selling Real Estate: The risk that the sales price of a property may differ, perhaps significantly, from its estimated or appraised value, leading to losses or reduced profits to the Account, the risk that the Account might not be able to sell a property at a particular time for a price which management believes represents its fair or full value, the risk of a lack of availability of financing (for potential purchasers of the Account’s properties), risks associated with disruptions in the credit and capital markets, and the risk that the Account may be required to make significant expenditures before the Account is able to market and/or sell a property;

Valuation: The risks associated with property valuations, including the fact that appraisals can be subjective in a number of respects and the fact that the Account’s appraisals are generally obtained on a quarterly basis and there may be periods between appraisals of a property during which the value attributed to the property for purposes of the Account’s daily accumulation unit value may be more or less than the actual realizable value of the property;

Borrowing: Risks associated with financing the Account’s properties, including the risk of default on loans secured by the Account’s properties (which could lead to foreclosure), the risk associated with high loan to value ratios on the Account’s properties (including the fact that the Account may have limited, or no net value in such a property), the risk that significant sums of cash could be required to make principal and interest payments on the loans and the risk that the Account may not have the ability to obtain financing or refinancing on favorable terms (or at all), which may be aggravated by general disruptions in credit and capital markets;

Participant Transactions and Cash Management: Investment risk associated with participant transactions, in particular that (i) significant net participant transfers out of the Account may impair our ability to pursue or consummate new investment opportunities that are otherwise attractive to the Account and/ or may result in sales of real estate-related assets to generate liquidity, (ii) significant net participant transfers into the Account may result, on a temporary basis, in our cash holdings and/ or holdings in liquid real estate-related investments exceeding our long-term targeted holding levels and (iii) high levels of cash and liquid non-real estate-related

investments in the Account during times of appreciating real estate values can impair the Account’s overall return;

Joint Venture Investments: The risks associated with joint ventures organized as limited partnerships or limited liability companies, as applicable, including the risk that a co-venturer may have interests or goals inconsistent with those of the Account, that a co-venturer may have financial difficulties, and the risk that the Account may have limited rights with respect to operation of the property and transfer of the Account’s interest;

Regulatory Matters: Uncertainties associated with environmental liability and regulations and other governmental regulatory matters such as zoning laws, rent control laws, and property taxes;

Foreign Investments: The risks associated with purchasing, owning and disposing foreign investments (primarily foreign real estate properties, foreign real estate loans, and foreign mezzanine and other debt), including political risk, the risk associated with foreign currency fluctuations (whether hedged or not), regulatory and taxation risks and risks of enforcing judgments;

Conflicts of Interest: Conflicts of interest associated with TIAA serving as investment manager of the Account and provider of the liquidity guarantee at the same time as TIAA and its affiliates are serving as an investment manager to other real estate accounts or funds, including conflicts associated with satisfying its fiduciary duties to all such accounts and funds associated with purchasing, selling and leasing of properties;

Required Property Sales: The risk that, if TIAA were to own too large a percentage of the Account’s accumulation units through funding the liquidity guarantee (as determined by the independent fiduciary), the independent fiduciary could require the sales of properties to reduce TIAA’s ownership interest, which sales could occur at times and at prices that depress the sale proceeds to the Account;

Government and Government Agency Securities: Risks associated with investment securities issued by U.S. government agencies and U.S. government-sponsored entities, including the risk that the issuer may not have their securities backed by the full faith and credit of the U.S. government, and that transaction activity may fluctuate significantly from time to time, which could negatively impact the value of the securities and the Account’s ability to dispose of a security at a favorable time; and

Liquid Assets and Securities: Risks associated with investments in real estate-related liquid assets (which could include, from time to time, registered or unregistered real estate investment trust (“REIT”) securities and commercial mortgage-backed securities (“CMBS”)), and non-real estate-related liquid assets, including:

Financial/credit risk—Risks that the issuer will not be able to pay principal and interest when due or that the issuer’s earnings will fall;

Market volatility risk—Risk that the changing conditions in financial markets may cause the Account’s investments to experience price volatility;

Interest rate volatility risk—Risk that interest rate volatility may affect the Account’s current income from an investment or the pricing of that investment. In general, changing interest rates could have unpredictable effects on the markets and may expose markets to heightened volatility; and

Deposit/money market risk—Risks that the Account could experience losses if banks fail.

More detailed discussions of certain of these risk factors are contained in the section of the Form 10-K entitled “Item 1A. Risk Factors” and in this section below and also in the section below entitled “Quantitative and Qualitative Disclosures About Market Risk.” These risks 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 that this report is filed. 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.

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 period ended ~~June~~September 30, 2018 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.

ABOUT THE TIAA REAL ESTATE ACCOUNT

The Account was established in February 1995 as an insurance separate account of TIAA and interests in the Account were first offered to eligible participants on October 2, 1995. 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.

Investment Objective and Strategy

The Account seeks to generate favorable ~~long-term~~total returns primarily through the rental income and appreciation of ~~real estate and~~a diversified portfolio of directly held, private real estate investments ~~owned by the Account.~~and real estate-related investments while offering investors guaranteed, daily liquidity. 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.

Real Estate-Related Investments. The Account intends to have between 75% and 85% of its net assets invested directly in real estate or real estate-related investments with the goal of producing favorable long-term returns primarily through rental income and appreciation. These investments may consist of:

Direct ownership interests in real estate;

Direct ownership of real estate through interests in joint ventures; or

Indirect interests in real estate through real estate-related securities, such as:

public and/or privately placed registered and unregistered equity investments in REITs, which investments may consist of common or preferred stock interests;

real estate limited partnerships and limited liability companies;

investments in equity or debt securities of companies whose operations involve real estate (i.e., that primarily own or manage real estate) which may not be REITs; and

conventional commercial mortgage loans, participating mortgage loans, secured domestic and foreign (including U.K.) mezzanine loans, subordinated loans and collateralized mortgage obligations, including CMBS and other similar investments.

The Account’s principal investment strategy is to purchase direct ownership interests in income-producing real estate, primarily office, industrial, retail and multi-family residential properties. The Account is targeted to hold between 65% and 80% of the Account’s net assets in such direct ownership interests at any time. Historically, approximately 70% of the Account’s net assets have been comprised of such direct ownership interests in real estate.

In addition, while the Account is authorized to hold up to 25% of its net assets in liquid real estate-related securities, such as REITs and CMBS, management intends that the Account will not hold more than 10% of its net assets in such securities on a long-term basis. Traditionally, less than 10% of the Account’s net assets have been comprised of interests in these securities; although, the Account has recently held approximately 10% of its net assets in equity REIT securities at times. In addition, under the Account’s current investment guidelines, the Account is authorized to hold up to 10% of its net assets in CMBS. As of ~~June~~September 30, 2018, REIT securities comprised approximately ~~5.7%~~5.6% of the Account’s net assets, and the Account held no CMBS as of such date.

Non-Real Estate-Related Investments. The Account will invest the remaining portion of its assets (targeted to be between 15% and 25% of its net assets) in publicly traded, liquid investments; namely:

Short-term government-related instruments, including U.S. Treasury bills;

Long-term government-related instruments, such as securities issued by U.S. government agencies or U.S. government-sponsored entities;

Short-term non-government-related instruments, such as money market instruments and commercial paper;

Long-term non-government-related instruments, such as corporate debt securities; and

Stock of companies that do not primarily own or manage real estate.

However, from time to time, the Account’s non-real estate-related liquid investments may comprise less than 15% (and possibly less than 10%) of its assets (on a net basis and/or a gross basis), especially during and immediately following periods of significant net participant outflows, in particular due to significant participant transfer activity. In addition, the Account, from time to time and on a temporary basis, may hold in excess of 25% of its net assets in non-real estate-related liquid investments, particularly during times of significant inflows into the Account and/or a lack of attractive real estate-related investments available in the market.

Liquid Securities Generally. Primarily due to management’s need to manage fluctuations in cash flows, in particular during and immediately following periods of significant participant net transfer activity into or out of the Account, the Account may, on a temporary basis (i) exceed the upper end of its targeted holdings (currently 35% of the Account’s net assets) in liquid securities of all types, including both publicly traded non-real estate-related liquid investments and liquid real estate-related securities, such as REITs and CMBS, or (ii) be below the low end of its targeted holdings in such liquid securities (currently 15% of the Account’s net assets).

The portion of the Account’s net assets invested in liquid investments of all types may exceed the upper end of its target, for example, if (i) the Account receives a large inflow of money in a short period of time, in particular due to significant participant transfer activity into the Account, (ii) the Account receives significant proceeds from sales or financings of direct real estate assets, (iii) there is a lack of attractive direct real estate investments available on the market, and/or (iv) the Account anticipates more near-term cash needs, including to apply to acquire direct real estate investments, pay expenses or repay indebtedness.

Foreign Investments. The Account from time to time will 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. As of ~~June~~September 30, 2018, the Account did not hold any foreign real estate investments.

~~SECOND~~THIRD QUARTER 2018 U.S. ECONOMIC AND COMMERCIAL REAL ESTATE OVERVIEW

The Account invests primarily in high-quality, core 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.

Economic Overview and Outlook

Key U.S. economic indicators and their near-term outlook are summarized in the table below. According to the “advance estimate” from the Bureau of Economic Analysis, U.S. Gross Domestic Product (“GDP”) increased at a 4.1% rate during the second quarter as compared to 2.2% during the first quarter. The Bureau of Labor Statistics reported that the U.S. economy added 632,000 jobs during the second quarter of 2018 compared to 655,000 jobs during the first quarter of 2018. The economy created an average of 211,000 jobs over the past three months, above the 12-month average of 198,000. The unemployment rate dipped to 3.9% for the second quarter after ending the first quarter at 4.1%.

Economic Indicators*


	Actuals		Forecast
	1Q 2018	2Q 2018	2018	2019
Key Macro Economic Indicators					Actuals		Forecast
Key Macro Economic Indicators					2Q 2018	3Q 2018	2018	2019
Economy⁽¹⁾
GDP	2.2%	4.1%	2.9%	2.6%	4.2%	3.5%	2.9%	2.6%
Employment Growth (Thousands)	655	632	2,304	1,824	651	569	2,260	1,800
Unemployment Rate	4.1%	3.9%	3.8%	3.6%	4.0%	3.7%	4.4%	4.1%
Interest Rates⁽²⁾
10 Year Treasury	2.8%	2.9%	3.0%	3.4%	2.9%	2.9%	3.0%	3.3%

Sources: Blue Chip Economic Indicators, Blue Chip Financial Forecasts, BEA, Bureau of Labor Statistics, Federal Reserve and Moody’s Analytics


*	Data subject to revision


⁽¹⁾	GDP growth rates are annual rates. Quarterly unemployment rates are the reported value for the final month of the quarter while annual values represent a twelve-month average.


⁽²⁾	Treasury rates are an average over the stated period.

The Federal Open Market Committee ("FOMC") voted in ~~June 2018~~September to raise the target range for the federal funds rate to ~~1.75%-2.00% “in view of realized~~2.00% - 2.25%. As indicated in the meeting minutes, the FOMC justified the rate hike due to "realized and expected labor market conditions and ~~inflation” as indicated in the June meeting minutes.~~inflation." The ~~committee~~FOMC expects that economic conditions will continue to evolve in a manner that will warrant gradual rate ~~increases. The committee is~~increases; however, further increases are not generally ~~expected to raise rates one or two additional times in~~considered likely for the remainder of 2018.

Consumer spending increased in the ~~second~~third quarter after rising at a ~~modest~~similar pace in the ~~first quarter.~~second quarter and has grown every month in 2018. In the near term, gains in employment, real disposable income, and households’ net worth continue to be supportive of solid personal consumption expenditures growth. Consumer and business confidence remain high, the unemployment rate ~~remains~~sits at an 18 year low, and job growth ~~remains solid. Economists expect~~has been consistently strong. GDP is expected to increase at a 2.9% rate for all of 2018 and at a 2.6% rate in 2019. ~~Management of the Account believes these trends in employment~~Employment growth and GDP of this magnitude is supportive of ~~the~~ ongoing improvement in commercial real estate market conditions.

Real Estate Market Conditions and Outlook

Commercial real estate conditions improved moderately during the ~~second~~third quarter of 2018. Tenant demand was strong enough to support vacancy rate improvements across all four sectors. Transaction activity weakened compared to first quarter levels due to a decrease in sales in the office, industrial and multifamily sectors. Real Capital Analytics (“RCA”) reported that sales of office, industrial, retail, and multi-family properties totaled $102.2 billion during second quarter 2018, a 3.4% increase quarter-over-quarter and a 0.2% increase year-over-year. Property pricing as calculated by the Green Street Advisor Commercial Property Price Index (“CPPI”) increased 2%1% during the ~~second~~third quarter and 1%2% on a year-over-year basis. Property pricing has been relatively flat ~~in during the first six months of~~throughout 2018.

For the quarter ending ~~June~~September 30, 2018, the NCREIF Fund Index Open-End Diversified Core Equity (“NFI-ODCE”) Equal Weight total return, net of fees ~~was 1.89%~~dipped slightly during the third quarter to 1.88%, a decrease from ~~1.96%~~1.89% in the ~~first quarter of 2018.~~second quarter. The Account’s real estate assets generated a ~~1.67%~~1.61% total return during the ~~second~~third quarter. Total returns were positive for the 3334^rdth consecutive quarter.

Occupancy in the Account’s properties averaged ~~92.1%~~91.9% during the ~~second~~third quarter of 2018 as compared to ~~91.9%~~92.1% in the ~~first~~second quarter. Data for the Account’s top five markets in terms of market value as of ~~June~~September 30, 2018 are provided below. These five markets represent nearly half of the Account’s total real estate portfolio.


Top 5 Metro Areas by Fair Market Value	Account % Leased Fair Value Weighted*	Number of Property Investments	Metro Area Fair Value as a % of Total RE Portfolio**	Metro Area Fair Value as a % of Total Investments	Account % Leased Fair Value Weighted*	Number of Property Investments	Metro Area Fair Value as a % of Total RE Portfolio**	Metro Area Fair Value as a % of Total Investments
New York-Jersey City-White Plains, NY-NJ	90.2%	15	12.3%	9.6%	90.7%	15	11.9%	8.9%
Washington-Arlington-Alexandria, DC-VA-MD-WV	85.6%	13	10.9%	8.5%	85.3%	13	11.3%	8.4%
Los Angeles-Long Beach-Glendale, CA	90.2%	12	8.7%	6.8%	91.6%	12	9.1%	6.8%
San Francisco-Redwood City-South San Francisco, CA					94.8%	8	6.6%	4.9%
Boston, MA	89.2%	5	7.0%	5.4%	90.7%	5	5.7%	4.2%
San Francisco-Redwood City-South San Francisco, CA	93.8%	8	6.3%	4.9%


⁽²⁾	On September 6, 2018, the borrower paid off the principal balance in advance of its maturity date.


⁽³⁾	On September 7, 2018, the Account sold its position in the senior mezzanine note.


⁽⁴⁾	On September 12, 2018, the Account sold its position in the senior mezzanine note.

Financings

Property Name Financing Date Ownership Percentage Interest Rate Sector Maturity Date Location
Financing Amount⁽¹⁾
Holly Street Village 04/02/2018 100.00% 3.65% Apartments 05/01/2025 Pasadena, CA $ 81.0
Township Apartments 04/05/2018 100.0% 3.65% Apartments 05/01/2025 Redwood City, CA 49.0
Fourth and Madison 05/30/2018 100.0% 4.17% Office 06/01/2023 Seattle, WA 90.0
Park on Morton 06/01/2018 97.0% 4.02% Apartments 06/15/2023 Bloomington, IN 26.9
Lofts at SoDo⁽²⁾
06/14/2018 100.0% 3.94% Apartments 07/05/2023 Orlando, FL 35.1
Biltmore at Midtown 06/14/2018 100.0% 3.94% Apartments 07/05/2023 Atlanta, GA 36.4
Cherry Knoll 06/14/2018 100.0% 3.78% Apartments 07/05/2023 Germantown, MD 35.3

Property Name

Financing Date

Ownership Percentage

Interest Rate

Sector

Maturity Date

Location

Financing Amount⁽¹⁾

The Forum

07/03/2018

97.0%

4.25%

Apartments

08/01/2025

Huntsville, TX

15.9

Ascent at Windward

07/11/2018

100.0%

3.51%

Apartments

01/01/2022

Alpharetta, GA

34.6

Fusion 1560

07/11/2018

100.0%

3.42%

Apartments

06/10/2022

St. Petersburg, FL

37.4

501 Boylston Street⁽²⁾

08/21/2018

100.0%

3.70%

Office

04/01/2028

Boston, MA

(216.8

)

T-C 501 Boylston Street Member, LLC⁽²⁾

08/21/2018

50.1%

3.70%

Office

04/01/2028

Boston, MA

108.5

Pacific City

09/06/2018

70.0%

4.12%

Retail

10/01/2023

Huntington Beach, CA

73.5

Aspen Heights

09/13/2018

97.0%

3.75%

Apartments

09/15/2023

Austin, TX

40.0


⁽¹⁾	Values represent new mortgage loans and any loans assumed, ~~mortgage loans, existing loans~~transferred, refinanced or ~~loans~~ paid off during the ~~second~~third quarter of 2018.


⁽²⁾	~~This property assumed mortgage~~Represents the transfer of the debt inon 501 Boylston Street to the ~~amount~~new joint venture with Norges, T-C 501 Boylston Street Member, LLC, of ~~$33.1 million at~~which the ~~time of acquisition. The assumed debt was paid off and a new mortgage loan in the amount of $35.1 million was put into place.~~Account owns 50.1%.

Critical Accounting Policies

Management’s discussion and analysis of the Account’s financial condition and results of operations is based on the Account’s ~~consolidated interim financial statements,~~Consolidated Interim Financial Statements, which have been prepared by management in accordance with GAAP. The preparation of the Account’s financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the financial statements and disclosures. Some of these estimates and assumptions require application of difficult, subjective, and/or complex judgments about the effect of matters that are inherently uncertain and that may change in subsequent periods. Management evaluates its estimates and assumptions on an ongoing basis. Management bases its estimates on historical experience and on various other assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities of the Account that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

In the ~~Account’s Annual Report on~~ Form 10-K for the year ended December 31, 2017, management identified the critical accounting policies which affect its significant estimates and assumptions used in preparing the Account’s financial statements. Certain of these accounting policies are described in Note 1—Organization and Significant Accounting Policies in this Form 10-Q. There have been no material changes to these accounting policies to those disclosed in ~~our 2017~~the Account's Annual Report on Form ~~10-K.~~10-K for the year ended December 31, 2017.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Account’s real estate holdings, including real estate joint venture, limited partnerships and loans receivable, which, as of ~~June~~September 30, 2018, represented ~~80.4%~~77.9% 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 decline due to general economic conditions, a weak market for real estate generally, disruptions in the credit and/or capital markets, or changing supply and demand for certain types of properties;

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

Risk Relating to Property Sales—The risk that the Account might not be able to sell a property at a particular time for its full value, particularly in a declining 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, buys a property subject to a mortgage or holds a property subject to a mortgage, and hedging against such interest rate changes, if undertaken by the Account, may entail additional costs and be unsuccessful; 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 currency changes, if undertaken by the Account, may entail additional costs and be unsuccessful.

The Account believes the diversification of its real estate portfolio, both geographically and by sector, along with its quarterly valuation procedure, helps manage the real estate and appraisal risks described above.

As of ~~June~~September 30, 2018, ~~19.6%~~22.1% of the Account’s total investments were comprised of marketable securities. Marketable securities include high-quality debt instruments (i.e., U.S. government agency notes) and REIT securities. The ~~consolidated schedule~~Consolidated Schedule of ~~investments~~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 earlier in the Critical Accounting Policies section above and in Note 1—Organization and Significant Accounting Policies to the Account’s Consolidated Financial Statements included herewith. As of the date of this report, the Account does not invest in derivative financial investments, nor does the Account engage in any hedging activity, although it may do so in selected circumstances in the future.

Risks associated with investments in real estate-related liquid assets (which could include, from time to time, REIT securities and CMBS), and non-real estate-related liquid assets, including financial/credit risk, market volatility risk, interest rate volatility risk and deposit/money market risk.

Financial/Credit Risk—The risk, for debt securities, that the issuer will not be able to pay principal and interest when due (and/or declare bankruptcy or be subject to receivership) and, for equity securities such as 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 Volatility Risk—The risk that the Account’s investments will experience price volatility due to changing conditions in the financial markets regardless of the credit quality or financial condition of the underlying issuer. This risk is particularly acute to the extent the Account holds equity securities, which have experienced significant short-term price volatility over the past year. Also, to the extent the Account holds debt securities, changes in overall interest rates can cause price fluctuations.

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

Deposit/Money Market Risk—The risk that, to the extent the Account’s cash held in bank deposit accounts exceeds federally insured limits as to that bank, the Account could experience losses if that bank fails. The Account does not believe it has exposure to significant concentration of deposit risk. In addition, investments held in money market accounts may also suffer losses.

In addition, to the extent the Account were to hold mortgage-backed securities (including commercial mortgage-backed securities) these securities are subject to prepayment risk or extension risk (i.e., the risk that borrowers will repay the loans earlier or later than anticipated). If the underlying mortgage assets experience faster than anticipated repayments of principal, the Account could fail to recoup some or all of its initial investment in these securities, since the original price paid by the Account was based in part on assumptions regarding the receipt of interest payments. If the underlying mortgage assets are repaid later than anticipated, the Account could lose the opportunity to reinvest the anticipated cash flows at a time when interest rates might be rising. The rate of prepayment depends on a variety of geographic, social and other functions, including prevailing market interest rates and general economic factors. The fair 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 (such as REIT stocks and mortgage-backed securities) would be 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.

ITEM 4. CONTROLS AND PROCEDURES

(a) The registrant maintains a system of disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in the registrant’s reports under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including TIAA’s Executive Vice President, Institutional Investment & Endowment Services (Principal Executive Officer (“PEO”)) and TIAA’s Senior Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer (“PFO”)), as appropriate, to allow timely decisions regarding required disclosure.

Under the supervision and participation of the registrant’s management, including the registrant’s PEO and PFO, the registrant conducted an evaluation of the effectiveness of the registrant’s disclosure controls and procedures as defined in Rule 13a-15(e) under the Exchange Act as of ~~June~~September 30, 2018. Based upon management’s review, the PEO and PFO concluded that the registrant’s disclosure controls and procedures provide reasonable assurance that material information required to be included in the Account's periodic reports is recorded, processed, summarized and reported within the time periods specified in the relevant SEC rules and forms.

(b) Changes in internal control over financial reporting. There have been no changes in the registrant’s internal control over financial reporting that occurred during the registrant’s last fiscal quarter that materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

In the normal course of business, the Account may be named, from time to time, as a defendant or may be involved in various legal actions, including arbitrations, class actions and other litigation.

The Account establishes an accrual for all litigation and regulatory matters when it believes it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. Once established, accruals are adjusted, as appropriate, in light of additional information. The amount of loss ultimately incurred in relation to those matters may be higher or lower than the amounts accrued for those matters.

As of the date of this annual report, 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.

ITEM 1A. RISK FACTORS.

There have been no material changes from the Account’s risk factors as previously reported in the Account’s Annual Report on Form 10-K for the year ended December 31, 2017.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

Not applicable.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

Not applicable.

ITEM 4. MINE SAFETY DISCLOSURES.

Not applicable.

ITEM 5. OTHER INFORMATION.

The Code of Ethics for TIAA’s senior financial officers, including its principal executive officer, principal financial officer, principal accounting officer, or controller, and persons performing similar functions, has been filed as an exhibit to the Account’s Annual Report on Form 10-K for the year ended December 31, 2017 and can also be found on the following web site, http://www.tiaa.org/public/prospectuses/index.html.

ITEM 6. EXHIBITS



(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, LLC¹
		http://www.sec.gov/Archives/edgar/data/946155/000093041313001686/c72835_ex1a.htm
(3)	(A)	Restated Charter of TIAA (as amended)²
		http://www.sec.gov/Archives/edgar/data/946155/000093041315001888/c80401_ex3a.htm
	(B)	Amended Bylaws of TIAA³
		http://www.sec.gov/Archives/edgar/data/946155/000093041315001888/c80401_ex3b.htm
(4)	(A)	Forms of RA, GRA, GSRA, SRA, IRA Real Estate Account Endorsements,⁴ Keogh Contract,⁵ Retirement Choice and Retirement Choice Plus Contracts⁵ and Retirement Select and Retirement Select Plus Contracts and Endorsements⁶
		http://www.sec.gov/Archives/edgar/data/946155/000093041304002268/c31392_ex4-a.txt
		http://www.sec.gov/Archives/edgar/data/946155/0000950146-96-000627-index.html
		http://www.sec.gov/Archives/edgar/data/946155/000093041305003249/c35876_ex4.htm
	(B)	Forms of Income-Paying Contracts⁴
		http://www.sec.gov/Archives/edgar/data/946155/0000950146-96-000627-index.html
	(C)	Form of Contract Endorsement for Internal Transfer Limitation⁷
		http://www.sec.gov/Archives/edgar/data/946155/000093041310005579/c62766_ex-4c.htm
	(D)	Form of Non-ERISA Retirement Choice Plus Contract⁹
		http://www.sec.gov/Archives/edgar/data/946155/000162828017002745/exhibit4d1.htm
		http://www.sec.gov/Archives/edgar/data/946155/000162828017002745/exhibit4d2.htm
	(E)	Form of Trust Company Retirement Choice Contract¹⁰
		http://www.sec.gov/Archives/edgar/data/946155/000162828017002745/exhibit4e1.htm
		http://www.sec.gov/Archives/edgar/data/946155/000162828017002745/exhibit4e2.htm
	(F)	Form of Trust Company Retirement Choice Plus Contract¹¹
		http://www.sec.gov/Archives/edgar/data/946155/000162828017002745/exhibit4f1.htm
		http://www.sec.gov/Archives/edgar/data/946155/000162828017002745/exhibit4f2.htm
	(G)	Form of Income Test Drive Endorsement for Retirement Annuity Contracts. After-Tax Retirement Annuity Contracts, Supplemental Retirement Annuity Contracts and IRA Contracts (including Rollover IRA, Contributory IRA, Roth IRA, OneIRA)¹²
		http://www.sec.gov/Archives/edgar/data/946155/000162828018003214/exhibit4g123117.htm
	(H)	Form of Income Test Drive Endorsement for Group Retirement Annuity Certificates, Group Supplemental Retirement Annuity Certificates, Keogh Certificates, Retirement Choice Certificates, Retirement Choice Plus Certificates, Non-ERISA Retirement Choice Plus Certificates, Trust Retirement Choice Certificates, and Trust Retirement Choice Plus Certificates¹³
		http://www.sec.gov/Archives/edgar/data/946155/000162828018003214/exhibit4h123117.htm
	(I)	Form of OneIRA Non-Qualified Deferred Annuity Contract (and Rate Schedule)¹⁴
		http://www.sec.gov/Archives/edgar/data/946155/000162828018003214/exhibit4i123117.htm
(10)	(A)	Amended and Restated Independent Fiduciary Letter Agreement, dated as of February 21, 2018, between TIAA, on behalf of the Registrant, and RERC, LLC¹⁵
		http://www.sec.gov/Archives/edgar/data/946155/000162828018002605/ifsrercsigned20180223.htm
	(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
		http://www.sec.gov/Archives/edgar/data/946155/000093041313001652/c71842_ex10-b.htm
(31)		Rule 13(a)-15(e)/ Rule 13a-15(e)/15d-15(e) Certifications*
(32)		Section 1350 Certifications*
(101)		The following financial information from the Quarterly Report on Form 10-Q for the period ended ~~June~~September 30, 2018 (Unaudited), formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Statements of Assets and Liabilities as of ~~June~~September 30, 2018 (Unaudited), (ii) the Consolidated Statements of Operations for the three and ~~six~~nine months ended ~~June~~September 30, 2018 and 2017 (Unaudited) , (iii) the Consolidated Statements of Changes in Net Assets for the three and ~~six~~nine months ended ~~June~~September 30, 2018 and 2017 (Unaudited), (iv) the Consolidated Statements of Cash Flows for the ~~six~~nine months ended ~~June~~September 30, 2018 and 2017 (Unaudited), and (v) the Notes to the Consolidated Financial Statements (Unaudited).**


*	Filed herewith.


**	Furnished electronically herewith.


⁽¹⁾	Previously filed and incorporated herein by reference to Exhibit 1(A) to the Account’s Registration Statement on Form S-1, filed with the Commission on March 15, 2013 (File No. 333-187309).


⁽²⁾	Previously filed and incorporated herein by reference to Exhibit 3(A) to the Account’s Registration Statement on Form S-1, filed with the Commission on April 22, 2015 (File No. 333-202583).


⁽³⁾	Previously filed and incorporated herein by reference to Exhibit 3(B) to the Account’s Registration Statement on Form S-1, filed with the Commission on April 22, 2015 (File No. 333-202583).


⁽⁴⁾	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 with the Commission on April 30, 1996 (File No. 33-92990).


⁽⁵⁾	Previously filed and incorporated herein by reference to Exhibit 4(A) to the Account’s Post-Effective Amendment No. 1 to the Registration Statement on Form S-1, filed with the Commission on May 2, 2005 (File No. 333-121493).


⁽⁶⁾	Previously filed and incorporated herein by reference to the Account’s Pre-Effective Amendment No. 1 to the Registration Statement on Form S-1, filed with the Commission on April 29, 2004 (File No. 333-113602).


⁽⁷⁾	Previously filed and incorporated by reference to Exhibit 4(C) to the Account’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2010 and filed with the Commission on November 12, 2010 (File No. 33-92990).


⁽⁸⁾	Previously filed and incorporated herein by reference to Exhibit 10(B) to the Account's Annual Report on Form 10-K for the fiscal year ended December 31, 2012 and filed with the Commission on March 14, 2013 (File No. 33-92990).


⁽⁹⁾	Previously filed and incorporated herein by reference to Exhibit 4(D)(1) and 4(D)(2) to the Account’s Registration Statement on Form S-1, filed with the Commission on March 21, 2017 (File No. 333-216849).


⁽¹⁰⁾	Previously filed and incorporated herein by reference to Exhibit 4(E)(1) and 4(E)(2) to the Account’s Registration Statement on Form S-1, filed with the Commission on March 21, 2017 (File No. 333-216849).


⁽¹¹⁾	Previously filed and incorporated herein by reference to Exhibit 4(F)(1) and 4(F)(2) to the Account’s Registration Statement on Form S-1, filed with the Commission on March 21, 2017 (File No. 333-216849).


⁽¹²⁾	Previously filed and incorporated herein by reference to Exhibit 4(G) to the Account’s Annual Report on Form 10-K, filed with the Commission on March 15, 2018 (File No. 333-216849).


⁽¹³⁾	Previously filed and incorporated herein by reference to Exhibit 4(H) to the Account’s Annual Report on Form 10-K, filed with the Commission on March 15, 2018 (File No. 333-216849).


⁽¹⁴⁾	Previously filed and incorporated herein by reference to Exhibit 4(I) to the Account’s Annual Report on Form 10-K, filed with the Commission on March 15, 2018 (File No. 333-216849).


⁽¹⁵⁾	Previously filed and incorporated herein by reference to Exhibit 10.1 to the Account’s Current Report on Form 8-K, filed with the Commission on March 1, 2018 (File No. 33-92990).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant, TIAA Real Estate Account, has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized, in New York, New York, on the ~~7th~~6th day of ~~August,~~November, 2018.



	TIAA REAL ESTATE ACCOUNT

	By:	TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF AMERICA

~~August 7,~~November 6, 2018	By:	/s/ Carol W. Deckbar
		Carol W. Deckbar Executive Vice President, Institutional Investment & Endowment Services Teachers Insurance and Annuity Association of America (Principal Executive Officer)

~~August 7,~~November 6, 2018	By:	/s/ Virginia M. Wilson
		Virginia M. Wilson Senior Executive Vice President and Chief Financial Officer, Teachers Insurance and Annuity Association of America (Principal Financial and Accounting Officer)

6562



Large accelerated filer o		Accelerated filer o
Non-accelerated filer ý (Do not check if a smaller reporting company)		Smaller Reporting Company o
		Emerging Growth Company o



			Page
Part I	Financial Information
	Item 1.	Unaudited Consolidated Financial Statements
		Consolidated Statements of Assets and Liabilities	3
		Consolidated Statements of Operations	4
		Consolidated Statements of Changes in Net Assets	5
		Consolidated Statements of Cash Flows	6
		Notes to the Consolidated Financial Statements	7
		Consolidated Schedules of Investments	2625
	Item 2.	Management's Discussion and Analysis of the Account's Financial Condition and Results of Operations	4140
	Item 3.	Quantitative and Qualitative Disclosures about Market Risk	6058
	Item 4.	Controls and Procedures	6159
Part II	Other Information
	Item 1.	Legal Proceedings	6260
	Item 1A.	Risk Factors	6260
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	6260
	Item 3.	Defaults Upon Senior Securities	6260
	Item 4.	Mine Safety Disclosures	6260
	Item 5.	Other Information	6260
	Item 6.	Exhibits	6361
Signatures			6463


	June 30,			December 31,			September 30,			December 31,
	2018			2017			2018			2017
	(Unaudited)						(Unaudited)
ASSETS
Investments, at fair value:
Real estate properties (cost: $13,217.8 and $12,972.5)	$	16,042.7		$	15,742.7
Real estate joint ventures and limited partnerships (cost: $4,599.9 and $4,675.3)	6,009.5			6,003.0
Real estate properties (cost: $12,586.2 and $12,972.5)							$	15,345.9		$	15,742.7
Real estate joint ventures and limited partnerships (cost: $4,604.2 and $4,675.3)							5,936.2			6,003.0
Marketable securities:
Real estate-related (cost: $1,195.6 and $991.0)	1,451.2		⁽¹⁾	1,238.0		⁽¹⁾
Other (cost: $4,073.6 and $3,888.1)	4,073.5			3,887.5
Loans receivable (cost: $616.2 and $296.7)	618.3			298.8
Total investments (cost: $23,703.1 and $22,823.6)	28,195.2			27,170.0
Real estate-related (cost: $1,182.1 and $991.0)							1,430.6		⁽¹⁾	1,238.0		⁽¹⁾
Other (cost: $4,845.4 and $3,888.1)							4,844.7			3,887.5
Loans receivable (cost: $852.0 and $296.7)							855.1			298.8
Total investments (cost: $24,069.9 and $22,823.6)							28,412.5			27,170.0
Cash and cash equivalents	5.6			11.7			10.1			11.7
Due from investment manager	13.0			1.0			6.1			1.0
Other	237.9		⁽²⁾	270.9		⁽²⁾	249.1		⁽²⁾	270.9		⁽²⁾
TOTAL ASSETS	28,451.7			27,453.6			28,677.8			27,453.6
LIABILITIES
Mortgage loans payable, at fair value (principal outstanding: $2,946.9 and $2,238.6)	2,891.4			2,238.3
Mortgage loans payable, at fair value (principal outstanding: $2,797.9 and $2,238.6)							2,743.2			2,238.3
Accrued real estate property expenses	201.3			199.1			237.2			199.1
Payable for collateral for securities loaned	2.0			18.5			6.5			18.5		��
Other	56.5			55.1			56.8			55.1
TOTAL LIABILITIES	3,151.2			2,511.0			3,043.7			2,511.0
COMMITMENTS AND CONTINGENCIES
NET ASSETS
Accumulation Fund	24,783.8			24,430.8			25,112.7			24,430.8
Annuity Fund	516.7			511.8			521.4			511.8
TOTAL NET ASSETS	$	25,300.5		$	24,942.6		$	25,634.1		$	24,942.6
NUMBER OF ACCUMULATION UNITS OUTSTANDING	60.6			61.3			60.7			61.3
NET ASSET VALUE, PER ACCUMULATION UNIT	$	408.679		$	398.329		$	413.479		$	398.329


	For the Three Months Ended June 30,						For the Six Months Ended June 30,					For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2018			2017			2018		2017			2018			2017			2018			2017
INVESTMENT INCOME
Real estate income, net:
Rental income	$	277.4		$	265.3		$	549.4	$	523.7		$	273.3		$	267.9		$	822.7		$	791.6
Real estate property level expenses and taxes:
Operating expenses	55.9			52.7			113.2		108.0			58.5			56.9			171.7			164.9
Real estate taxes	45.0			41.6			89.9		84.1			45.4			43.2			135.3			127.3
Interest expense	28.6			22.3			52.4		44.8			30.4			22.5			82.8			67.3
Total real estate property level expenses and taxes	129.5			116.6			255.5		236.9			134.3			122.6			389.8			359.5
Real estate income, net	147.9			148.7			293.9		286.8			139.0			145.3			432.9			432.1
Income from real estate joint ventures and limited partnerships	65.6			47.5			120.5		93.4			37.3			60.9			157.8			154.3
Interest	24.4			12.0			42.5		21.7			35.1			15.9			77.6			37.6
Dividends	12.3			8.5			22.0		7.8			14.7			7.9			36.7			15.7
TOTAL INVESTMENT INCOME	250.2			216.7			478.9		409.7			226.1			230.0			705.0			639.7
Expenses:
Investment management charges	17.8			16.9			32.4		37.4			13.9			15.5			46.3			52.9
Administrative charges	11.9			15.7			26.7		31.3			14.3			14.7			41.0			46.0
Distribution charges	7.1			6.0			14.0		13.2			6.8			6.4			20.8			19.6
Mortality and expense risk charges	0.3			0.3			0.6		0.6			0.3			0.3			0.9			0.9
Liquidity guarantee charges	12.5			11.8			24.7		22.0			12.8			12.5			37.5			34.5
TOTAL EXPENSES	49.6			50.7			98.4		104.5			48.1			49.4			146.5			153.9
INVESTMENT INCOME, NET	200.6			166.0			380.5		305.2			178.0			180.6			558.5			485.8
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND MORTGAGE LOANS PAYABLE
Net realized gain (loss) on investments:
Real estate properties	55.4			0.4			43.6		(16.8		)	179.8			75.2			223.4			58.4
Real estate joint ventures and limited partnerships	—			—			0.2		—			56.8			(8.6		)	57.0			(8.6		)
Marketable securities	3.9			8.1			6.9		12.7			3.3			2.6			10.2			15.3
Net realized gain (loss) on investments	59.3			8.5			50.7		(4.1		)
Net realized gain on investments												239.9			69.2			290.6			65.1
Net change in unrealized appreciation (depreciation) on:
Real estate properties	(47.6		)	32.4			54.7		84.2			(65.2		)	(9.4		)	(10.5		)	74.8
Real estate joint ventures and limited partnerships	68.0			0.8			92.3		61.8			(49.3		)	26.9			43.0			88.7
Marketable securities	97.7			8.7			6.9		32.0			(6.4		)	2.2			0.5			34.2
Loans receivable	(0.1		)	—			—		—			1.0			1.4			1.0			1.4
Mortgage loans payable	27.5			(18.1		)	55.2		(6.5		)	(0.8		)	(4.1		)	54.4			(10.6		)
Net change in unrealized appreciation on investments and mortgage loans payable	145.5			23.8			209.1		171.5
Net change in unrealized appreciation (depreciation) on investments and mortgage loans payable												(120.7		)	17.0			88.4			188.5
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND MORTGAGE LOANS PAYABLE	204.8			32.3			259.8		167.4			119.2			86.2			379.0			253.6
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	405.4		$	198.3		$	640.3	$	472.6		$	297.2		$	266.8		$	937.5		$	739.4


	For the Three Months Ended June 30,						For the Six Months Ended June 30,						For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2018			2017			2018			2017			2018			2017			2018			2017
FROM OPERATIONS
Investment income, net	$	200.6		$	166.0		$	380.5		$	305.2		$	178.0		$	180.6		$	558.5		$	485.8
Net realized gain (loss) on investments	59.3			8.5			50.7			(4.1		)
Net change in unrealized appreciation on investments and mortgage loans payable	145.5			23.8			209.1			171.5
Net realized gain on investments													239.9			69.2			290.6			65.1
Net change in unrealized appreciation (depreciation) on investments and mortgage loans payable													(120.7		)	17.0			88.4			188.5
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	405.4			198.3			640.3			472.6			297.2			266.8			937.5			739.4
FROM PARTICIPANT TRANSACTIONS
Premiums	603.6			648.7			1,272.7			1,428.2			648.2			552.4			1,920.9			1,980.6
Annuity payments	(11.2		)	(10.6		)	(22.4		)	(21.5		)	(11.2		)	(10.8		)	(33.6		)	(32.3		)
Withdrawals and death benefits	(571.2		)	(675.2		)	(1,532.7		)	(1,375.1		)	(600.6		)	(777.5		)	(2,133.3		)	(2,152.6		)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM PARTICIPANT TRANSACTIONS	21.2			(37.1		)	(282.4		)	31.6			36.4			(235.9		)	(246.0		)	(204.3		)
NET INCREASE IN NET ASSETS	426.6			161.2			357.9			504.2			333.6			30.9			691.5			535.1
NET ASSETS
Beginning of period	24,873.9			24,647.7			24,942.6			24,304.7			25,300.5			24,808.9			24,942.6			24,304.7
End of period	$	25,300.5		$	24,808.9		$	25,300.5		$	24,808.9		$	25,634.1		$	24,839.8		$	25,634.1		$	24,839.8


	As of June 30,				As of September 30,
	2018		2017		2018		2017
Cash and cash equivalents	$	5.6	$	14.3	$	10.1	$	6.8
Restricted cash⁽¹⁾	42.5		41.9		45.1		41.8
TOTAL CASH, CASH EQUIVALENTS AND RESTRICTED CASH	$	48.1	$	56.2	$	55.2	$	48.6


⁽¹⁾	Includes purchases, contributions for joint ventures, capital expenditures, lending for loans receivable and assumption of mortgage loans payable.


⁽²⁾	Includes operating income for real estate joint ventures, net of distributions, principal payments and extinguishment of mortgage loans payable.



Type	Asset Class	Valuation Technique(s)	Unobservable Inputs	Range (Weighted Average)
Real Estate Properties and Joint Ventures	Office	Income Approach—Discounted Cash Flow	Discount Rate Terminal Capitalization Rate	5.5% - 8.6% ~~(6.6%~~(6.5%) 4.0% - 7.5% (5.5%)
		Income Approach—Direct Capitalization	Overall Capitalization Rate	~~3.8%~~4.0% - 7.0% (4.9%)
	Industrial	Income Approach—Discounted Cash Flow	Discount Rate Terminal Capitalization Rate	5.5% - 8.9% (6.8%) 4.5% - ~~8.3%~~8.0% (5.6%)
		Income Approach—Direct Capitalization	Overall Capitalization Rate	4.0% - 7.5% (5.0%)
	Apartment	Income Approach—Discounted Cash Flow	Discount Rate Terminal Capitalization Rate	5.3% - 7.8% (6.3%) ~~3.5%~~3.8% - 6.3% ~~(4.8%~~(5.0%)
		Income Approach—Direct Capitalization	Overall Capitalization Rate	3.3% - 5.8% ~~(4.4%~~(4.5%)
	Retail	Income Approach—Discounted Cash Flow	Discount Rate Terminal Capitalization Rate	5.0% - 10.5% (6.4%) 4.3% - 8.8% (5.2%)
		Income Approach—Direct Capitalization	Overall Capitalization Rate	3.8% - 10.5% (4.6%)
Mortgage Loans Payable	Office and Industrial	Discounted Cash Flow	Loan to Value Ratio Equivalency Rate	~~37.5%~~37.7% - ~~69.2% (48.3%~~70.7% (43.2%) ~~4.2%~~3.7% - ~~5.8%~~6.0% (4.4%)
		Net Present Value	Loan to Value Ratio Weighted Average Cost of Capital Risk Premium Multiple	~~37.5%~~37.7% - ~~69.2% (48.3%~~70.7% (43.2%) 1.2 - ~~1.4~~1.5 (1.3)
	Apartment	Discounted Cash Flow	Loan to Value Ratio Equivalency Rate	~~26.3%~~32.3% - ~~64.7% (43.4%~~63.9% (47.2%) ~~3.8%~~4.0% - ~~4.3% (4.0%~~4.4% (4.2%)
		Net Present Value	Loan to Value Ratio Weighted Average Cost of Capital Risk Premium Multiple	~~26.3%~~32.3% - ~~64.7% (43.4%~~63.9% (47.2%) ~~1.1~~1.2 - 1.4 (1.3)
	Retail	Discounted Cash Flow	Loan to Value Ratio Equivalency Rate	~~17.7%~~17.6% - ~~51.4% (32.6%~~55.3% (33.2%) ~~4.0%~~4.1% - ~~5.3% (4.3%~~5.2% (4.4%)
		Net Present Value	Loan to Value Ratio Weighted Average Cost of Capital Risk Premium Multiple	~~17.7%~~17.6% - ~~51.4% (32.6%~~55.3% (33.2%) 1.1 - 1.3 (1.2)
Loans Receivable	Office, Retail and Storage	Discounted Cash Flow	Loan to Value Ratio Equivalency Rate	~~60.2%~~70.8% - 79.2% ~~(75.1%~~(75.8%) 4.2% - 8.3% ~~(6.2%~~(5.7%)



	Real Estate Properties		Real Estate Joint Ventures		Loans Receivable			Total Level 3 Investments		Mortgage Loans Payable
For the three months ended June 30, 2018	$	16.1	$	67.4	$	(0.1	)	$	83.5	$	27.5
For the six months ended June 30, 2018	$	110.7	$	91.6	$	—		$	202.4	$	55.2
For the three months ended June 30, 2017	$	32.4	$	0.1	$	—		$	32.5	$	(18.1	)
For the six months ended June 30, 2017	$	71.0	$	62.8	$	—		$	133.8	$	(6.5	)


⁽¹⁾	The mortgage is adjusted monthly for principal payments.


⁽²⁾	Interest rates are fixed. Some mortgages held by the Account are structured to begin principal and interest payments after an initial interest only period.


⁽³⁾	The fair value adjustment consists of the difference (positive or negative) between the principal amount of the outstanding debt and the fair value of the outstanding debt. See Note 1—Organization and Significant Accounting Policies.


⁽⁴⁾	~~These properties are each owned by separate wholly-owned subsidiaries of TIAA for benefit of the Account.~~


⁽⁵⁾	Represents mortgage loans on these individual properties which are held within the Palomino Park portfolio.


	For the Six Months Ended June 30, 2018			Years Ended December 31,									For the Nine Months Ended September 30, 2018			Years Ended December 31,
				2017			2016			2015						2017			2016			2015
	(Unaudited)												(Unaudited)
Per Accumulation Unit Data:
Rental income	$	9.014		$	17.132		$	16.433		$	15.538		$	13.487		$	17.132		$	16.433		$	15.538
Real estate property level expenses and taxes	4.192			7.722			7.534			7.319			6.390			7.722			7.534			7.319
Real estate income, net	4.822			9.410			8.899			8.219			7.097			9.410			8.899			8.219
Other income	3.035			4.762			3.594			3.342			4.461			4.762			3.594			3.342
Total income	7.857			14.172			12.493			11.561			11.558			14.172			12.493			11.561
Expense charges⁽¹⁾	1.614			3.318			3.290			3.092			2.402			3.318			3.290			3.092
Investment income, net	6.243			10.854			9.203			8.469			9.156			10.854			9.203			8.469
Net realized and unrealized gain on investments and mortgage loans payable	4.107			5.839			9.660			18.911			5.994			5.839			9.660			18.911
Net increase in Accumulation Unit Value	10.350			16.693			18.863			27.380			15.150			16.693			18.863			27.380
Accumulation Unit Value:
Beginning of period	398.329			381.636			362.773			335.393			398.329			381.636			362.773			335.393
End of period	$	408.679		$	398.329		$	381.636		$	362.773		$	413.479		$	398.329		$	381.636		$	362.773
Total return⁽³⁾	2.60		%	4.37		%	5.20		%	8.16		%	3.80		%	4.37		%	5.20		%	8.16		%
Ratios to Average net assets⁽²⁾:
Expenses⁽¹⁾	0.80		%	0.83		%	0.86		%	0.86		%	0.78		%	0.83		%	0.86		%	0.86		%
Investment income, net	3.08		%	2.72		%	2.41		%	2.37		%	2.97		%	2.72		%	2.41		%	2.37		%
Portfolio turnover rate⁽³⁾:
Real estate properties⁽⁴⁾	2.3		%	2.7		%	1.3		%	5.7		%	7.4		%	2.7		%	1.3		%	5.7		%
Marketable securities⁽⁵⁾	1.7		%	5.7		%	3.5		%	10.0		%	3.3		%	5.7		%	3.5		%	10.0		%
Accumulation Units outstanding at end of period (in millions)	60.6			61.3			62.4			60.4			60.7			61.3			62.4			60.4
Net assets end of period (in millions)	$	25,300.5		$	24,942.6		$	24,304.7		$	22,360.0		$	25,634.1		$	24,942.6		$	24,304.7		$	22,360.0


⁽⁶⁾⁽⁵⁾	This mortgage is comprised of three individual loans, all with equal recourse, interest rate and maturity. The principal balances by loan are $79.0 million, $45.0 million and $13.5 million.


⁽⁶⁾	On August 21, 2018 the Account sold a 49.9% interest in the property and transferred the remaining 50.1% to a joint venture investment.


⁽¹⁾	Expense charges per Accumulation Unit and the Ratio of Expenses to average net assets reflect the year to date Account level expenses and exclude real estate property level expenses which are included in real estate income, net.


⁽²⁾	Percentages for the ~~three~~nine months ended ~~June~~September 30, 2018 are annualized.


⁽⁴⁾	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.


⁽⁵⁾	Marketable securities portfolio turnover rate is calculated by 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.


	For the Six Months Ended June 30, 2018		For the Year Ended December 31, 2017		For the Nine Months Ended September 30, 2018		For the Year Ended December 31, 2017
	(Unaudited)				(Unaudited)
Outstanding:
Beginning of period	61.3		62.4		61.3		62.4
Credited for premiums	3.2		6.6		4.7		6.6
Annuity, other periodic payments, withdrawals and death benefits	(3.9	)	(7.7	)	(5.3	)	(7.7	)
End of period	60.6		61.3		60.7		61.3


	June 30, 2018		December 31, 2017		September 30, 2018		December 31, 2017
	(Unaudited)				(Unaudited)
Taconic New York City GP Fund	$	32.0	$	32.0	$	26.0	$	32.0
LCS SHIP Venture I, LLC	89.2		—		40.7		—
	$	121.2	$	32.0	$	66.7	$	32.0


⁽¹⁾	~~The net purchase price represents the purchase price and closing costs.~~


⁽¹⁾	~~The net sales price represents the sales price, less selling expenses.~~


⁽²⁾	~~Majority of the realized gain/loss has been previously recognized as unrealized gains/losses in the Account's Consolidated Statements of Operations.~~


⁽¹⁾	~~Values represent mortgage loans assumed at the time of acquisition.~~


⁽¹⁾	~~Loan Amount represents the Account's mezzanine loan receivable position.~~



LOANS RECEIVABLE—3.0% and 1.1%
		Borrower⁽¹³⁾	Interest Rate⁽⁶⁾	Maturity Date	Fair Value at
Principal					September 30, 2018		December 31, 2017
2018	2017				September 30, 2018		December 31, 2017
					(Unaudited)
6.3	34.2	DJM Capital Partners Senior Mezzanine⁽¹⁵⁾	5.00%	7/12/2019	$	6.3	$	34.2
83.2	—	311 South Wacker Senior Mezzanine	4.70% + LIBOR	6/7/2020	83.3		—
97.7	—	Blackstone RioCan Retail Portfolio Senior Mezzanine	4.65% + LIBOR	6/9/2020	97.7		—
60.0	—	River North Point Junior Mezzanine	4.30% + LIBOR	7/9/2020	60.0		—
20.0	—	Crest at Las Colinas Station Junior Mezzanine	5.11% + LIBOR	5/10/2021	20.0		—
—	37.5	Simply Self Storage Portfolio Junior Mezzanine	8.25%	9/6/2021	—		37.6
125.0	125.0	State Street Financial Center Junior Mezzanine	6.50%	11/10/2021	125.1		125.1
20.0	—	Modera Observatory Park Junior Mezzanine	4.34% + LIBOR	6/10/2022	20.0		—
98.1	—	Rosemont Towson Junior Mezzanine⁽¹¹⁾	2.15% + LIBOR	9/9/2022	98.0		—
126.7	—	1330 Broadway Junior Mezzanine⁽¹²⁾	2.40% + LIBOR	8/10/2023	127.0		—
20.0	—	Aspen Lake Office Portfolio Senior Mezzanine	8.25%	3/10/2028	20.2		—
95.0	—	Merritt on the River Office Portfolio Senior Mezzanine	8.00%	8/1/2028	95.7		—
100.0	100.0	Charles River Plaza North Senior Mezzanine	6.08%	4/6/2029	101.8		101.9
TOTAL LOANS RECEIVABLE (Cost $852.0 and $296.7)					$	855.1	$	298.8
TOTAL INVESTMENTS (Cost $24,069.9 and $22,823.6)					$	28,412.5	$	27,170.0


⁽¹⁾	The investment has a mortgage loan payable outstanding, as indicated in Note 7.


⁽²⁾	The fair value reflects the Account’s interest in the joint venture and is net of debt.


⁽³⁾	Properties within this investment are located throughout the United States.


⁽⁵⁾	A portion of this investment consists of land for development.


⁽⁶⁾	Fixed interest rate loans are represented with a single rate. Variable interest rate loans are presented with their base spread and the corresponding index rate. All variable interest loans currently held by the Account use the one month London Interbank Offered Rate ("LIBOR") rate on U.S. dollar deposits as the index rate, as published by ICE Benchmark Administration Limited.


⁽⁷⁾	All or a portion of these securities are out on loan. The aggregate value of securities on loan ~~is $2.0 million.~~at September 30, 2018 and December 31, 2018 were $6.4 million and $18.1 million, respectively.