Additional detailed information regarding the Account’s properties, including its commercial (non-residential) and residential property investments, as well as the Account’s ten largest tenants, as of December 31, 20172023 can be found in the Account’s 20172023 Form 10-K and is incorporated by reference in this prospectus. The Account’s investments include both properties that are wholly owned by the Account and properties owned by the Account’s joint venture investments. Certain property investments are comprised of a portfolio of properties.
properties purchased are either borne or reimbursed, in whole or in part, by the property tenants, although the terms vary under each lease. The Account is responsible for operating expenses not reimbursed under the terms of a lease.
We value the Account’s assets as of the close of each valuation day by taking the sum of:
the value of the individual real properties (based on the most recent valuation of that property) and other real estate-relatedestate–related investments owned by the Account;
and then reducing the sum by the Account’s liabilities, including the daily investment management, administration and distribution fees and certain other fees and expenses attributable to operating the Account. Daily estimates of net operating income are adjusted to reflect actual net operating income on a monthly basis, at which time such adjustments (if any) are reflected in the Account’s unit value. Please see the section below entitled “Expense deductions.”
Fair value for the Account’s assets is based upon quoted market prices in active exchange markets, where available. If listed prices or quotes in such markets are not available, fair value is based upon vendor-provided, evaluated prices or internally developed models that primarily use market-based or independently sourced market data, including interest rate yield curves, market spreads, and currency rates. Valuation adjustments may be made to reflect credit quality, a counterparty’s creditworthiness, the Account’s creditworthiness,
liquidity, and other observable and unobservable data that are applied consistently over time.
The methods described earlier are considered to produce a fair value calculation that represents a good faith estimate as to what an unaffiliated buyer in the market place would pay to purchase the asset or 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.
Fair value for real estate properties is defined as the price that would be received to sell the asset in an orderly transaction between market participants at the measurement date. Determination of fair value involves significant levels of
judgment because the actual market value of real estate can be determined only by negotiation between the parties in a sales transaction. Property and investment values are affected by, among other things, the availability of capital, occupancy rates, rental rates, and interest and inflation rates. As a result, determining real estate and investment values involves many assumptions. Amounts ultimately realized from each investment may vary significantly from the market value presented. Actual results could differ from those estimates. Please see the section above entitled “Risk factors — Risks associated with real estate investing — Valuation and appraisal risks.”
Subsequently, each property will be valued each quarter by an independent appraiser and the property value will be updated as appropriate. In general, the Account obtains independent appraisals of its real estate properties spread out throughout the quarter, which is intended to result in appraisal adjustments, and thus, adjustments to the valuations of its holdings (to the extent such adjustments are made), that happen regularly throughout each quarter and not on one specific day in each quarter.
Further, management reserves the right to order an appraisal and/or conduct another valuation outside of the normal quarterly process when facts or circumstances at a specific property change (for example, under certain circumstances a valuation adjustment could be made when bids are obtained for properties held for sale). The Account’s independent fiduciary, RERC, LLC,SITUS, oversees the Account’s entire appraisal process and, among other things, must approve all
independent appraisers used by the Account. TIAA’s internal appraisal staff oversees the entire appraisal process and reviews each independent quarterly appraisal, in conjunction with the Account’s independent fiduciary, prior to the value reflected in that appraisal being recorded in the Account. Any differences in the conclusions of TIAA’s internal appraisal staff and the independent appraiser will be reviewed by the independent fiduciary, which will make a final determination on the matter (which may include ordering a subsequent independent appraisal).
Real estate appraisals are estimates of property values based on a professional’s opinion. All appraisals are performed in accordance with Uniform Standards of Professional Appraisal Practices, the real estate appraisal industry standards created by The Appraisal Foundation. Appraisals of properties held outside of the U.S. are performed in accordance with industry standards commonly applied in the applicable jurisdiction. Further, these independent appraisers (as well as TIAA’s internal appraisal staff) are always expected to be
MAI-designated members of the Appraisal Institute (or its European equivalent, Royal Institute of Chartered Surveyors) and state certified appraisers from national or regional firms with relevant property type experience and market knowledge. Under the Account’s current procedures, each independent appraisal firm will be rotated off of a particular property at least every three years, although such appraisal firm may perform appraisals of other Account properties subsequent to such rotation.
We intend that the overarching principle and primary objective when valuing our real estate investments will be to produce a valuation that represents a fair and accurate estimate of the fair value of our investments. Implicit in our definition of fair value is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby:
The Account’s net asset value will include the value of any note receivable (an amount that someone else owes the Account) from selling a real estate-relatedestate–related
investment. We’ll estimate the value of the note by applying a discount rate appropriate to then-current market conditions.
spreads on comparable loans, the liquidity for mortgage loans of similar characteristics, the performance of the underlying collateral (such as the loan-to-value ratio and the cash flow of the underlying collateral), the maturity date of the loan, the return demands of the market, and the credit quality of the Account. Different assumptions or changes in future market conditions could significantly affect estimated fair values. At times, the Account may assume debt in connection with
most recent net asset value of the partnership, as reported by the sponsor. Since market quotations are not readily available, the limited partnershipreal estate fund interests are valued at fair value as determined in good faith under the direction of the Investment Committee of the Board and in accordance with the responsibilities of the Board as a whole. As circumstances warrant, prior to the receipt of financial statements of the limited partnership,real estate fund, the Account will estimate the value of its interests in good faith and will from time to time seek input from the issuer or the sponsor of the investment vehicle.
Every year, we prepare a month-by-month estimate of the revenues and expenses (estimated net operating income) for each of the Account’s properties. Each day, we add the appropriate fraction of the estimated net operating income for the month to the Account’s net asset value.
Every month, the Account receives a report of the actual operating results for the prior month for each property (actual net operating income). We then recognize the actual net operating income on the accounting records of the Account and adjust the outstanding daily accrued receivable accordingly. As the Account actually receives income from a property, we’ll adjust the daily accrued receivable and other accounts appropriately.
independent fiduciary can require additional appraisals if it believes a property’s value may have changed materially and such change is not reflected in the quarterly valuation review, or otherwise to ensure that the Account is valued appropriately. For example, under certain circumstances a valuation adjustment could be made when bids are obtained for properties held for sale by the Account. In addition, adjustments may be made for events or circumstances indicating an impairment of a tenant’s ability to pay amounts due to the Account under a lease (including due to a bankruptcy filing of that tenant). Also, adjustments may be made to reflect factors (such as sales values for comparable properties or local employment rate) bearing uniquely on a particular region in which the Account holds properties. We may not always be aware of each event that might require a valuation adjustment, and because our evaluation is based on subjective factors and we give different weight to different factors, we may not in all cases make a valuation adjustment where changing conditions could potentially affect the value of an investment.
We value equity securities traded on the Nasdaq Stock Market at the Nasdaq Official Closing Price on the valuation day. If no sale is reported that day, we use the mean of the last bid and asked prices, exclusive of transaction costs. Other U.S. over-the-counter equity securities are valued at the mean of the last bid and asked prices.
Expense deductions are made each valuation day from the net assets of the Account for various services to manage the Account’s investments, administer the Account and the contracts, distribute the contracts and to cover certain risks borne by TIAA. Investment management, administration and distribution services are provided “at cost” by TIAA and Services.Services, as applicable. Currently, TIAA provides investment management services and administration services for the
Account, and Services provides distribution services for the Account. In addition, TIAA charges the Account a fee to bear certain mortality and expense risks, and risks associated with providing the liquidity guarantee. TIAA guarantees that in the aggregate, the expense charges will never be more than 2.50% of average net assets per year.
The estimated annual expense deduction rate that appears in the expense table below reflects an estimate of the amount we currently expect to deduct to approximate the costs that the Account will incur from May 1, 20182024 through April 30, 2019.2025. Actual expenses may be higher or lower. The expenses identified in the table below do not include any fees which may be imposed by your
Since expenses for services provided to the Account are charged to the Account at cost, they are estimates for the year based on projected expense and asset levels. Administration charges include certain costs associated with the provision by TIAA entities of recordkeeping and other services for retirement plans and other pension products in addition to the Account.
At the end of every quarter, we reconcile the amount deducted from the Account during that quarter as discussed above with the expenses the Account actually incurred. If there is a difference, we add it to or deduct it from the Account in equal daily installments over the remaining days in the immediately following quarter, provided that material differences may be repaid in the current calendar quarter in accordance with GAAP. Our at cost deductions are based on projections of Account assets and overall expenses, and the size of any adjusting payments will be directly affected by how different our projections are from the Account’s actual assets or expenses. The expenses identified in the table above do not include any fees which may be imposed by your employer under a plan maintained by your employer.
The size of the Account’s assets can be affected by many factors, including changes in the value of portfolio holdings, net income earned on the Account’s investments, premium activity and participantcontract owner transfers into or out of the Account and participantcontract owner cash withdrawals from the Account. In addition, our operating expenses can fluctuate based on a number of factors including participantcontract owner transaction volume, operational efficiency, and technological, personnel and other infrastructure costs. Historically, the adjusting payments have resulted in both
upward and downward adjustments to the Account’s expense deductions for the following quarter.
The Board can revise the estimated expense rates (the daily deduction rate before the quarterly adjustment referenced above) for the Account from time to time, usually on an annual basis, to keep deductions as close as possible to actual expenses.
Currently there are no deductions from premiums, transfers or withdrawals, but we reserve the right to change this in the future. Any such deductions would only be assessed to the extent the relevant contract provided for such deductions at the time the contract was issued.
Certain relationships with TIAA
As noted elsewhere in this prospectus, the TIAA General Account plays a significant role in operating the Account, including providing a liquidity guarantee and investment advisory, administration and other services.services as well as the liquidity guarantee. In addition, Services, a wholly owned subsidiary of TIAA, provides distribution services for the Account.
Liquidity Guarantee. As noted above under the section entitled “Establishing and managing the Account — The role of TIAA — Liquidity guarantee,” if the
Account’s liquid assets and its cash flow from operating activities and participantcontract owner transactions are insufficient to fund redemption requests, the TIAA General Account has agreed to purchase liquidity units. TIAA thereby guarantees that a participantcontract owner can redeem accumulation units at their next determined net asset value next determined.
In the years ended December 31, 2008 and December 31, 2009, TIAA purchased liquidity units in a number of separate transactions at a purchase price equal to $155.6 million and approximately $1.1 billion, respectively. Since January 1, 2010 and through the date of this prospectus, the TIAA General Account has purchased no additional liquidity units.valuation. These liquidity units are valued in the same manner as are accumulation units held by the Account’s participants.contract owners.
Pursuant to its existing liquidity guarantee obligation, for the year ended December 31, 2023, the TIAA General Account purchased 1.2 million liquidity units issued by the Account, for a total of $617.6 million. The independent fiduciary, which has the right to adjust the trigger point, has established the trigger point at 45% of the issued and outstanding accumulation units. As of December 31, 2023, the TIAA General Account owned approximately 2.57% of the outstanding accumulation units of the Account.
For the years ended December 31, 2017,2023, December 31, 20162022 and December 31, 2015,2021, the Account expensed $47.0$73.9 million, $38.4$89.2 million and $31.7$69.1 million, respectively, for this liquidity guarantee from TIAA through a daily deduction from the net assets of the Account.
Investment Advisory, Administration and Distribution Services/Mortality and Expense Risks Borne by TIAA. As noted above under the section entitled “Expense deductions”,deductions,” deductions are made each valuation day from the net assets of the Account for various services required to manage investments, administer the Account and distribute the contracts. These services are performed at cost by TIAA and Services. Deductions are also made each valuation day to cover mortality and expense risks borne by TIAA.
For the years ended December 31, 2017,2023, December 31, 20162022 and December 31, 2015,2021, the Account expensed $72.0$83.2 million, $72.6$86.3 million and $69.3$62.4 million, respectively, for investment management services, and $1.2$0.0 million, $1.2$0.5 million and $1.1$1.3 million, respectively, for mortality and expense risks provided/borne by TIAA. For the same period, the Account expensed $85.0$87.2 million, $89.8$66.5 million and $80.8$77.3 million, respectively, for administrative and distribution services provided by TIAA and Services, as applicable.
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Legal proceedings
The Account is party to various claims and routine litigation arising in the ordinary course of business. As of the date of this prospectus, management of
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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.
The contracts
TIAA offers the Real Estate Account as a variable option for the annuity contracts described below. Some employer plans may not offer the Real Estate Account as an option for RA, GA, SRA, GRA, GSRA (including institutionally owned GSRA), Retirement Choice, Retirement Choice Plus or Keogh contracts. CREF is a companion organization to TIAA. A companion CREF contract may have been
issued to you when you received the TIAA contract offering the Account. For more information about the CREF annuity contracts, the TIAATIAA’s Traditional Annuity, the TIAA Access variable annuity accounts, other TIAA annuities and separate accounts offered from time to time and particular funds and investment options offered under the terms of your plan, please see the applicable contracts and respective prospectuses for those investment options.
Importantly, neither TIAA nor CREF guarantee the investment performance of the Account nor do they guarantee the value of your units at any time.
RA (Retirement Annuity) and GRA (Group Retirement Annuity)
RA and GRA contracts are used mainly for employer sponsored retirement plans. RA contracts are issued directly to you. GRA contracts, which are group contracts, are issued through an agreement between your employer and TIAA.
Depending on the terms of your employer’s plan, RA premiums can be paid by your employer, you, or both. GRA premiums can only be paid by your employer (though some premiums may be paid by your employer pursuant to a salary reduction agreement with you). If you are paying some or all of the periodic premiums, your contributions can be in either pre-tax dollars by salary reduction or after-tax dollars by payroll deduction. Your employer may offer you the option of making contributions in the form of after-tax Roth IRA-style contributions, though you won’t be able to take tax deductions for these contributions. You can also transfer accumulations from another investment choice under your employer’s plan to your contract. Your GRA premiums can be from pre-tax or after-tax contributions. As with RAs, you can transfer your accumulations from another investment choice under your employer’s plan to your GRA contract.
SRA (Supplemental Retirement Annuity) and GSRA (Group Supplemental Retirement Annuity)
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These are generally limited to supplemental voluntary tax-deferred annuity (“TDA”) plans and supplemental 401(k) plans. SRA contracts are issued directly to you. GSRA contracts, which are group contracts, are issued through an agreement between your employer and TIAA. Generally, your employer pays premiums in pre-tax dollars through salary reduction. Your employer may offer you
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the option of making contributions in the form of after-tax Roth IRA-style contributions, though you won’t be able to take tax deductions for these contributions. Although you cannot pay premiums directly, you can transfer amounts from other TDA plans subject to the terms of the plan.
Retirement Choice/Retirement Choice Plus annuities
These are very similar in operation to the GRAs and GSRAs, respectively, except that, they are issued directly to your employer or your plan’s trustee. Among other rights, the employer retains the right to transfer accumulations under these contracts to alternate funding vehicles.
Traditional IRA and Roth IRA
You and your spouse can each open a Traditional IRA with an annual contribution of up to $5,500$7,000 each or by rolling over funds from another IRA or an eligible retirement plan, if you meet the Account’s eligibility requirements. If you are age 50 or older, you may contribute up to $6,500.$8,000. The combined limit for your contributions to a Traditional IRA and a Roth IRA for a single year is $5,500,$7,000, or $6,500$8,000 if you are age 50 or older, excluding rollovers. (The dollar limits listed are for 2017 and 2018;2024; different dollar limits may apply in future years.)
You and your spouse can each open a Roth IRA with an annual contribution up to $5,500$7,000 each or with a rollover from another IRA or a Traditional IRA issued by TIAA if you meet the Account’s eligibility requirements, subject to rules applicable to Roth IRA conversions. If you are age 50 or older you may contribute up to $6,500.$8,000. The combined limit for your contributions to a Traditional IRA and a Roth IRA for a single year is $5,500,$7,000, or $6,500$8,000 if you are age 50 or older, excluding rollovers. (The dollar limits listed are for 2017 and 2018;2024; different dollar limits may apply in future years.)
Both Traditional and Roth IRAs are issued directly to you. Joint accounts are not permissible.
Your employer may offer SEP IRAs (Simplified Employee Pension Plans), which are subject to different rules.
Traditional and Roth IRAs may together be referred to as “IRAs” in this prospectus.
GA (Group Annuity) and institutionally owned GSRAs
These contracts are used exclusively for employer retirement plans and are issued directly to your employer or your plan’s trustee. Your employer pays premiums directly to TIAA (you can’t pay the premiums directly to TIAA) and your employer or the plan’s trustee may control the allocation of contributions and
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transfers to and from these contracts including withdrawing completely from the Account. If a GA or Institutionally Owned GSRA contract is issued pursuant to your plan, the rules relating to transferring and withdrawing your money, receiving any annuity income or death benefits, and the timing of payments may be different,
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and are determined by your plan. Ask your employer or plan administrator for more information.
Keogh contracts
If you are a self-employed individual who owns an unincorporated business, you could, prior to 2013, use the Account’s Keogh contracts for a Keogh plan, and cover common law employees, subject to the Account’s eligibility requirements. Note, however, that while TIAA will offer new contracts for new entrants into Keogh plans established prior to 2013, it will no longer offer contracts for Keogh plans that the Account is not currently funding.
ATRA (after-tax retirement annuity)
The after-tax retirement annuities (“ATRA”) are individual non-qualified deferred annuity contracts, issued to participantscontract owners who are eligible and would like to remit personal premiums under the contractual provisions of their RA contract. To be eligible, you must have an active and premium-paying or paid up RA contract.
Note that the tax rules governing these non-qualified contracts differ significantly from the treatment of qualified contracts. Please see the section below entitled “Taxes” for more information.
Eligibility for IRA and Keogh contracts
Each of you and your spouse can open a Traditional or Roth IRA or a Keogh, subject to the limitations described above, if you’re a current or retired employee or trustee of an Eligible Institution, or if you own a TIAA or CREF annuity contract or a TIAA individual insurance contract. To be considered a retired employee for this purpose, an individual must be at least 55 years old and have completed at least three years of service at an Eligible Institution. In the case of partnerships, at least half the partners must be eligible individuals and the partnership itself must be primarily engaged in education or research. Eligibility may be restricted by certain income limits on opening Roth IRA contracts.
State regulatory approval
State regulatory approval may be pending for certain of these contracts, and these contracts may not currently be available in your state.
Starting out
Generally, we’ll issue you a TIAA contract when we receive a completed application or enrollment form in good“good order.” “Good order” means actual receipt of the transaction request along with all forms, information and supporting legal documentation necessary to effect the transaction.transaction so that TIAA does not need to exercise discretion. This information and
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documentation generally includes your complete application (or complete request for redemptions, transfers, withdrawals or payment of death or other benefits), and any other information or supporting documentation we may require. With respect to purchase requests, “good order” also generally includes receipt of sufficient funds by us to effect the transaction. We may, in our sole discretion, determine whether any particular transaction request (including, among others, a purchase, redemption or withdrawal request or a request to pay benefits) is in good order“good order” and reserve the right to change or waive any good order“good order” requirement at any time either in general or with respect to a particular plan, contract or transaction.
If your application is incomplete and we do not receive the necessary information and signed application in good order“good order” within five business days of our receipt of the initial premium, we will return the initial premium at that time. In addition, it is also possible that if we are unable to reach you to obtain additional
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or missing information relating to incomplete applications, or the transaction requests that arerequest is not in good“good order,” the transaction may be cancelled.canceled.
If we receive premiums from your employer and, where applicable, a completed application from you before we receive your specific allocation instructions (or if your allocation instructions violate employer plan restrictions or do not total 100%), we will invest all premiums remitted on your behalf in the default option your employer has designated. It is possible that the default option will not be the Account but will be another investment option available under your plan. We consider your employer’s designation of a default option to be an instruction to us to allocate your premiums to that option as described above. You should consult your plan documents or sales representative to determine your employer’s designated default option and to obtain information about that option. Further, to the extent you hold an IRA contract, the default option will be that fund or account specified in your IRA forms.
When we receive complete allocation instructions from you in good“good order,” we’ll follow your instructions for future premiums. However, if you want the premiums previously allocated to the default option (and earnings and losses on them) to be transferred to the options identified in your instructions, you must specifically request that we transfer these amounts from the default option to your investment option choices.
Amounts may be invested in an account other than the Real Estate Account only in the limited circumstances identified in the paragraph immediately above (which require a participant’scontract owner’s specific instructions) and the circumstances outlined under the section below entitled “How to transfer and withdraw your money — Restrictions on premiums and transfers to the Account”,Account,” namely: (1) we receive premiums before we receive your completed application or allocation instructions, (2) a participant’scontract owner’s allocations violate employer plan restrictions or do not total 100%, or (3) we stop accepting premiums for and/or transfers into the Account.
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TIAA doesn’t generally restrict the amount or frequency of payment of premiums to your contract, although we may in the future. Your employer’s retirement plan may limit your premium amounts. There also may be restrictions on remitting premiums on an IRA. In addition, the Internal Revenue Code of 1986, as amended (the “Code”) limits the total annual premiums you may invest in plans qualified for favorable tax treatment. If you want to directly contribute personal premiums under the contractual provisions of your RA contract, you will be issued an ATRA contract. Premiums and any earnings on the ATRA contract will not be subject to your employer’s retirement plan. The restrictions relating to these premiums are in the contract itself.
In most cases (subject to any restriction we may impose, as described in this prospectus), TIAA accepts premiums to a contract during your accumulation period. Once your first premium has been paid, your TIAA contract can’t lapse or be forfeited for nonpayment of premiums. However, TIAA can stop accepting premiums to the Real Estate Account at any time.
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You may remit premium payments to the following address: P.O. Box 1259, Charlotte, N.C.NC 28201.
Note that we cannot accept credit cards, money orders, travelers’ checks or travelers checks.digital (including virtual or crypto) currencies (e.g., Bitcoin). In addition, we will not accept a third-party check where the relationship of the payor to the account owner cannot be identified from the face of the check.
You will receive a confirmation statement each time you make a transfer to, a transfer out of, or a cash withdrawal from the Account. The statement will show the date and amount of each transaction. However, if you’re remitting premiums through an employer or other qualified plan, using an automatic investment plan
or systematic withdrawal plan, you may instead receive a statement confirming those transactions following the end of each calendar quarter.
If you have any accumulations in the Account, you will be sent a statement in each quarter which sets forth the following information:
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(1) | Premiums paid during the quarter; |
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(2) | The number and dollar value of accumulation units in the Account credited to you during the quarter and in total; |
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(3) | Cash withdrawals, if any, from the Account during the quarter; and |
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(4) | Any transfers during the quarter. |
(1) Premiums paid during the quarter;
(2) The number and dollar value of accumulation units in the Account credited to you during the quarter and in total;
(3) Cash withdrawals, if any, from the Account during the quarter; and
(4) Any transfers during the quarter.
You also will receive reports containing the financial statements of the Account and certain information about the Account’s investments.
Important information about procedures for opening a new account
To help the U.S. Government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify and record information that identifies each person who opens an account.
What this means for you: When you open an account, we will ask for your name, street address (not a post office box), date of birth, Social Security number and other information that will allow us to identify you, such as your home telephone number and driver’s license or certain other identifying
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documents. Until you provide us with the information needed, we may not be able to open an account or effect any transactions for you. Furthermore, if we are unable to verify your identity, or that of another person authorized to act on your behalf, or if it is believed that potentially criminal activity has been identified, we reserve the right to take such action as deemed appropriate, which may include closing your account.
Choosing among investment accounts
Once an account is opened on your behalf, you may allocate all or part of your premiums to the Real Estate Account, unless your employer’s plan precludes that choice. You can also allocate premiums to TIAA’s Traditional Annuity, the CREF variable investment accounts, the TIAA Access variable annuity accounts, other TIAA annuities and separate accounts offered from time to time (if available under
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the terms of your employer’s plan) and, in some cases, certain funds if the account or fund is available under your employer’s plan.
You can change your allocation choices for future premiums by:
•using the TIAA website’s account access feature at www.tiaa.org 24 hours a day. Once logged into your account, the website will lead you through the process.
•calling our Automated Telephone Service at 800-842-2252 which will allow you to check your accumulation balances and hear other personal account updates 24 hours a day. You can also speak with a consultant during call center hours.
•writing to our officeTIAA at P.O. Box 1259, Charlotte, N.C. 28201;
using the TIAA Web Center’s account access feature at www.tiaa.org; or
calling our Automated Telephone Service (24 hours a day) at 800 842-2252.North Carolina, 28201
The right to cancel your contract
Generally, you may cancel any RA, SRA, GSRA, IRA, ATRA or Keogh contract in accordance with the contract’s Right to Examine provision (unless we have begun making annuity payments from it) and subject to the time period regulated by the state in which the contract is issued. Although the contract terms and state law provisions differ, you will generally have between 10 and 60 days to exercise this cancellation right. To cancel a contract, you must mail or deliver the contract with your cancellation instructions (or signed Notice of Cancellation when such has been provided with your contract) to our home office. We’ll cancel the contract, then send either the current accumulation or the premium, depending on the requirements of the state in which your contract was issued, to whomever originally submitted the premiums. Unless we are returning premiums paid as required by state law, you will bear the investment risk during this period.
Determining the value of your interest in the accountAccount — accumulation units
Each payment to the Real Estate Account buys a number of accumulation units. Similarly, any withdrawal from the Account results in the redemption of a number of accumulation units. The price you pay for accumulation units, and the price you receive for accumulation units when you redeem accumulation units, is the value of the accumulation units calculated for the business day on which we receive your purchase, redemption or transfer request in good order“good order” (unless you ask for a later date for a redemption or transfer). This date is called the “effective date.” Therefore, if we receive your purchase, redemption or transfer
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request in good order“good order” before the NYSE closes, that business day will be considered the effective date of your order. If we receive your request in good order“good order” after the NYSE closes, the next business day will be considered the effective date of your order.
Payments and orders to redeem accumulation units (or adjustments thereto) may be processed after the effective date. “Processed” means when amounts are credited or debited to you in the Account. In the event there are market fluctuations between the effective date and the processing date and the price of
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accumulation units on the processing date is higher or lower than your price on the effective date, that difference will be retained or paid, or retainedrespectively, by Services, the Account’s distributor. This amount which may be positive or negative,negative. Such amount is processed together with similar amounts paid or retained by Services in connection with transactions involving other investment products offered under pension plans administered by TIAA or its affiliates and theaffiliates. The amount of interest, if any, paid by Services to participantscontract owners in connection with certain delayed payments is apportioned to the Account pursuant to an agreement with Services, under whichServices. Under the terms of such agreement, the Account reimburses Services for the services it has provided to the Account.
The accumulation unit value reflects the Account’s investment experience (i.e.(i.e., the real estate net operating income accrued, as well as dividends, interest and other income accrued), realized and unrealized capital gains and losses, as well as Account expense charges.
Calculating Accumulation Unit Values: We calculate the Account’s accumulation unit value at the end of each valuation day. To do that, we multiply
the previous day’s value by the net investment factor for the Account. The net investment factor is calculated as A divided by B, where A and B are defined as:
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A. | The value of the Account’s net assets at the end of the current valuation period, less premiums received during the current valuation period. |
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B. | The value of the Account’s net assets at the end of the current valuation period, less premiums received during the current valuation period. |
A.The value of the Account’s net assets at the end of the current valuation period, less premiums received during the current valuation period.
B.The value of the Account’s net assets at the end of the previous valuation period, plus the net effect of transactions made at the start of the current valuation period.
How to transfer and withdraw your money
Generally, depending on the terms of your plan, contracts, tax law and applicable governing documents, TIAA allows you to move your money to and from the Real Estate Account in the following ways:
•from the Real Estate Account to the following accounts if available under your employer’s plan or IRA: a CREF investment account, a TIAA Access variable account or TIAA’s Traditional Annuity;
•to the Real Estate Account from the following accounts if available under your employer’s plan or IRA: a CREF investment account, a TIAA Access variable account or TIAA’s Traditional Annuity (transfers from TIAA’s
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Traditional Annuity under RA, GRA or Retirement Choice contracts are subject to restrictions);
•from the Real Estate Account to a fund (including TIAA-CREF affiliated funds), if available under your plan or IRA;
•to the Real Estate Account from a TIAA-CREF affiliated fund, if available under your plan or IRA;
•depending on the terms of your plan, contracts and governing instruments, to the Real Estate Account from other TIAA annuity products and separate
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accounts, and/or from the Real Estate Account to other TIAA annuity products and separate accounts;
•from the Real Estate Account to investment options offered by other companies, if available under your plan or IRA;
•to the Real Estate Account from other companies/plans;
•by withdrawing cash; and
•by setting up a program of automatic withdrawals or transfers.
For more information regarding the transfer policies of CREF, TIAA Access, TIAA’s Traditional Annuity or another investment option listed above, please see the respective contract, prospectus or other governing instrument. These options may be limited by the terms of your employer’s plan, by current tax law, or by the terms of your contract, as set forth below.
Currently, transfersTransfers from the Real Estate Account to any TIAA annuity offered by your employer’s plan, to one of the CREF accounts or to funds offered under the terms of your plan do not require a minimum transaction amount; however, in the future, TIAA reserves the right, in its sole discretion, to impose minimum transactions levels, which levels willmust generally be at least $1,000 (except for systematic transfers, which must be at least $100) or your entire accumulation, if less. These minimums may be reduced or eliminated in the future. Any such change will be applied uniformly across all contracts going forward. Lump sum cash withdrawals from the Real Estate Account, transfers to TIAA to immediately begin annuity income, and transfers to other companies are not subject to a minimum amount. Transfers and cash withdrawals are currently free. Because excessive transfer activity can hurt performance and other participants,In addition, TIAA may in the future, subject to applicable state law and the terms of your contract, limit how often you transfer or otherwise modify the transfer privilege, including,privilege. Such contract-based limitations may include, among other things, placing restrictions on transfers or charging fees for transfers and/or withdrawals. Currently, TIAA does not charge REA contract owners for transfers of their accumulation to the TIAA Traditional annuity product. However, TIAA reserves the right to charge REA contract owners in the accumulation phase a fee on transfers to TIAA Traditional in the future. Contract owners will receive prior notice of the imposition of such a transfer fee. Please see the section below entitled “How to transfer and withdraw your money — Restrictions on premiums and transfers to the Account,” and refer to your TIAA contract for specific details related to such limitations.
As indicated, transfers and cash withdrawals are effective at the end of the business day we receive your request and all required documentation in good“good order.” You can also choose to have transfers and withdrawals take effect at the close of any future valuation day. For any transfers to TIAA’s Traditional Annuity, the crediting rate will, with regard to initial investments in TIAA’s Traditional Annuity, be the rate in effect at the close of business of the first day that you participate in TIAA’s Traditional Annuity, which is the next business day after the effective date of the transfer. With regard to internal transfers of accumulations in the Account to Traditional Annuity, the crediting rate will be as of the end of the effective date of the internal transfer.
To request a transfer or to withdraw cash, you may:
write to TIAA’s office at P.O. Box 1259, Charlotte, N.C. 28201;
call us at 800-842-2252; or
use the TIAA Web Center’s account access feature at www.tiaa.org.
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•use the TIAA website’s account access feature at www.tiaa.org 24 hours a day. Once logged into your account, the website will lead you through the transaction process, asking specific questions to ensure the validity of the request. TIAA is not responsible for loss due to unauthorized or fraudulent transactions.
•call our Automated Telephone Service at 800-842-2252, which will allow you to check your accumulation balances and hear other personal account updates 24 hours a day. You can also speak with a consultant during call center hours.
•write to TIAA at P.O. Box 1259, Charlotte, North Carolina 28201
If you are married, and all or part of your accumulation is attributable to contributions made under
•an employer plan subject to ERISA;ERISA, or
•an employer plan that provides for spousal rights to benefits,
then only to the extent required by the Internal Revenue Code the (“Code”) or ERISA or the terms of your employer plan, will your rights to choose certain benefits arebe restricted by the rights of your spouse to receive benefits.
You may be required to complete and return certain forms (in good order)in “good order” to effect these transactions. WeAll transactions made within the TIAA website and the Automated Telephone Service are electronically recorded. TIAA can limit, suspend or terminate your ability to transact by telephone, over the Internet, or by fax at any time, for any reason. Also, telephone, Internet or fax transactions may not always be available.
Before you transfer or withdraw cash, please make sure that you consult the terms of your employer’s plan, as it may contain additional restrictions. In addition, please make sure you understand the possible federal and other income tax consequences. Please see the section below entitled “Taxes.”
Transfers to and from other TIAA-CREF accounts and funds
Transfers from the Real Estate Account.Once every calendar quarter you can transfer some or all of your accumulation in the Real Estate Account to the following accounts if offered by your employer’s plan or IRA: to TIAA’s Traditional Annuity, to another TIAA annuity, to one of the CREF accounts, to a TIAA Access variable annuity account or to funds (which may include TIAA-CREF affiliated funds). Transfers to TIAA’s Traditional Annuity or other TIAA annuities or accounts, a CREF account or to certain other options may be restricted by your employer’s plan, current tax law or by the terms of your contract. In addition, there are important exceptions to this once per calendar quarter limitation, as outlined in the section below entitled “How to transfer and withdraw your money — Market timing/excessive trading policy.”
Transfers to the Real Estate Account. Currently, you can also transfer some or all of your accumulation in TIAA’s Traditional Annuity, in your CREF accounts, TIAA
Access variable annuity accounts or in the funds or TIAA annuities offered under the terms of your plan to the Real Estate Account, if your employer’s plan offers
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the Account; subject to the terms of the plan, current tax law and the terms of your contract. Transfers from TIAA’s Traditional Annuity to the Real Estate Account under RA, GRA or Retirement Choice contracts can only be effected over a period of time (up to 10 annual installments) and may be subject to other limitations, as specified in your contract. Amounts held under an ATRA contract cannot be transferred to or from any retirement plan contract.
Currently, theseThese transfers do not require a minimum transaction amount; however, in the future TIAA reserves the right, in its sole discretion, to impose minimum transaction levels, which levels willmust generally be at least $1,000 (except for systematic transfers, which must be at least $100) or your entire accumulation, if less. Because excessive transfer activity can hurt performance and other participants,These minimums may be reduced or eliminated in the future. Any such change will be applied uniformly across all contracts going forward. In addition, TIAA may in the future, subject to applicable state law and the terms of your contract, limit how often you transfer or otherwise modify the transfer privilege, including,privilege. Such contract-based limitations may include, among other things, placing restrictions on transfers or charging fees for transfers and/or withdrawals. Please see the section below entitled “How to transfer and withdraw your money — Restrictions on premiums and transfers to th
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e Account.” and refer to your TIAA contract for specific details related to such limitations.
Transfers to other companies
Generally you may transfer funds from the Real Estate Account to a company other than TIAA or CREF, subject to certain tax restrictions. This right may be limited by your employer’s plan or the terms of your contract. If your employer participates in our special transfer services program, we can make automatic monthly transfers from your RA or GRA contract to another company. Roth amounts in a 403(b) or 401(a) plan can only be rolled over to another Roth account under such plan or to a Roth IRA, as permitted by applicable law and the terms of the plans. IRA to IRA rollover rules have recently changed. See the section below entitled “Taxes” for more information on these developments.
Under the Retirement Choice and Retirement Choice Plus contracts, your employer could transfer monies from the Account and apply it to another account or investment option, subject to the terms of your plan, and without your consent.
Transfers from other companies/plans
Subject to your employer’s plan and federal tax law, you can usually transfer or roll over money from another 403(b), 401(a)/403(a) or governmental 457(b) retirement plan to your qualified TIAA contract. You may also roll over before-tax amounts in a Traditional IRA to 403(b) plans, 401(a)/403(a) plans or eligible governmental 457(b) plans, provided such employer plans agree to accept the rollover. Roth amounts in a 403(b) or 401(a) plan can only be rolled over to another Roth account under such plan or to a Roth IRA, as permitted by applicable law and the terms of the plans. Funds inheld by the sponsor of a private 457(b) plan can be transferred only to another private 457(b) plan only.sponsor, if both plans allow a transfer. Accumulations in private 457(b) plans may not be
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rolled over to a qualified plan (e.g.(e.g., a 401(a) plan), a 403(b) plan, a governmental 457(b) plan or an IRA. IRA to IRA rollover rules have recently changed. See the section below entitled “Taxes” for more information on these developments.
Withdrawing cash
You may withdraw cash from your SRA, GSRA, IRA, ATRA or Keogh Real Estate Account accumulation at any time during the accumulation period, provided federal tax law and the terms of your employer’s plan permit it (see below). Normally, you can’t withdraw money from a contract if you’ve already applied that money to begin receiving lifetime annuity income. Current federal tax law restricts your ability to make cash withdrawals from your accumulation under most voluntary salary reduction agreements. In addition, if you are married, you may be required by law or your employer’s plan to show us advance written consent from your spouse before TIAA makes certain transactions on your behalf.
Withdrawals are generally available only if you reach age 59½, leave your job, become disabled, die, satisfy requirements related to qualified reservist distributions or if your employer terminates its retirement plan. If your employer’s plan permits, you may also be able to withdraw money if you encounter hardship,
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as defined by the IRS, but depending upon your employer’s plan provisions, hardship withdrawals canmight be from contributions only, and not investment earnings. You may be subject to a 10% penaltyearly distribution tax if you make a withdrawal before you reach age 59½, unless an exception applies to your situation. Consult your qualified tax advisor for more information. For a discussion of the hardship distribution rules, please see the section below entitled “Taxes on Withdrawals.”
Under current federal tax law, you are not permitted to withdraw from 457(b) plans earlier than the calendar year in which you reach age 70½, for private plans or leave your job or are faced with an unforeseeable emergency (as defined by law). For governmental 457(b) plans only, the minimum age for in-service withdrawals has been lowered to 59½. There are generally no early withdrawal tax penalties if you withdraw under any of these circumstances ((i.e.i.e., no 10% early distribution tax on distributionswithdrawals prior to age 59½).
Special rules and restrictions apply to Traditional and Roth IRAs. Investors should check with their qualified tax advisor.
If you request a withdrawal, we will send the proceeds by check to the address of record, or by electronic funds transfer to the bank account on file. A letter of instruction with a bank signature guarantee is required if the withdrawal is sent to an address other than the address of record, or to an address of record that has been changed within either the last 30 or 14 calendar days, depending on the service model applicable to your plan. You may obtain a signature guarantee from some commercial or savings banks, credit unions, trust companies, or member firms of a U.S. stock exchange. A notary public cannot provide a signature guarantee. Proceeds directed to a bank account not on file have similar restrictions that require completion of a verification process. Please contact us for further
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information. We reserve the right to require a signature guarantee on any redemption.
Systematic withdrawals and transfers
If your employer’s plan allows, you can set up a program to make cash withdrawals or transfers automatically by specifying that we withdraw from your Real Estate Account accumulation, or transfer to or from the Real Estate Account, any fixed number of accumulation units, dollar amount, or percentage of accumulation until you tell us to stop or until your accumulation is exhausted. Currently, the program must be set up so that at least $100 is automatically transferred or withdrawn at a time. In the future, we may eliminate this minimum transfer amount. Further, a systematic plan of this type may allow pre-specified transfers or withdrawals to be made more often than quarterly, depending on the terms of your employer’s plan. Additional restrictions on systematic transfers to the Real Estate Account may apply for Account participantscontract owners with accumulation amounts (in most contracts)total Real Estate Account accumulations (under all contracts to such contract owner) exceeding $150,000. This restriction may vary for certain IRA contracts issued in the state of Florida. Please refer to your TIAA contract for specific details related to this limitation. See “Restrictions on premiums and transfers to the Account” below.
Withdrawals to pay financial advisor fees
If permitted by your employer’s plan, you may authorize a series of systematic withdrawals to pay the fees of a financial advisor. Such systematic withdrawals are subject to all provisions applicable to systematic withdrawals, except as otherwise described in this section. One series of systematic withdrawals to pay
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financial advisor fees may be in effect at the same time that one otheranother series of systematic withdrawals is also in effect. Systematic withdrawals to pay financial advisor fees must be scheduled to be made quarterly only, on the first day of each calendar quarter. The amount withdrawn from each investment account must be specified in dollars or as a percentage of accumulation, and will be in proportion to the accumulations in each account at the end of the business day prior to the withdrawal. The financial advisor may request that we stop making withdrawals. We reserve the right to determine the eligibility of financial advisors for this type of fee reimbursement. Before you set up this program, make sure you understand the possible tax consequences of these withdrawals. Please see the discussion in the section below entitled “Taxes.”
Restrictions on premiums and transfers to the Account
From time to time we may stop accepting premiums for and/or transfers into the Account. We might do so if, for example, we can’t find sufficient appropriate real estate-relatedestate–related investment opportunities at a particular time. Whenever reasonably possible, we will notify you before we decide to restrict premiums and/or transfers. However, because we may need to respond quickly to changing
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market conditions or to the liquidity needs and demands of the Account, we reserve the right (subject to the terms of some contracts) to stop accepting premiums and/or transfers at any time without prior notice.
With most contracts, individual participantscontract owners are limited from making internal funding vehicle transfers (as defined below) into their Account accumulation if, after giving effect to such transfer, the total value of such participant’scontract owner’s Account accumulation (under all contracts issued to such participant)contract owner) would exceed $150,000. This restrictionlimitation may vary for certain IRA contracts issued in the state of Florida. Please refer to your TIAA contract for specific details related to this limitation.
As of the date of this prospectus, allAll jurisdictions in which the Account is offered have approved this limitation, but the effective date of the limitation as applies to an individual participantcontract owner will be reflected on his or her applicable contract or endorsement form. These contracts or endorsements will contain important details with respect to this limitation.
Under this limitation, an internal“internal funding vehicle transfertransfer” means the movement (or attempted movement) of accumulations from any of the following to the Account:
a TIAA•an accumulation in TIAA’s Traditional Annuity, accumulation,
•a Real Estate Account accumulation (from one contract to another)another, subject to a one-time exception for inter-contract transfers of accumulations required of contract owners only when unsubscribing from a TIAA-sponsored advice product or service),
•a companion CREF certificate,
•other TIAA separate account accumulations, and
•any other funding vehicle accumulation which is administered by TIAA or CREF on the same record-keepingrecordkeeping system as the contract.
The following transfers are considered exclusions that are currently not subject to this limitation:
systematic transfers and withdrawals,
automatic rebalancing activity,
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any transaction arising from an investment decision directed by a TIAA-sponsored advice product or service, and
•Transfer Payout Annuity payments directed to the Account.
This limitation does not apply to most types of premium contributions and certain group contracts recordkeptrecord kept on non-TIAA platforms. Minimum Distribution Option (“MDO”) contracts will be subject to this limitation, but the limitation does not apply to other annuity pay-out contracts.
A transfer which cannot be applied pursuant to this limitation, along with any other attempted movements of funds submitted as part of a noncompliant transfer request into the Account, will be rejected in its entirety, and therefore the funds that were to be transferred will remain in the investment option from which the transfer was to be made. The Account accumulation unit values used in applying this provision will be those calculated as of the valuation day preceding the day on which the proposed transfer is to be effective. A participantcontract owner will not
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be required to reduce his or her accumulation to a level at or below $150,000 if the total value of the participant’scontract owner’s Account accumulation under all contracts exceeds $150,000 on the effective date as indicated in the contract or contract endorsement. This provision may vary for certain IRA contracts issued in the state of Florida. Please refer to your TIAA contract for specific details related to the provision. TIAA reserves the right to reverse transactions which are determined to be in violation of the limitation and in the future to modify the nature of this limitation and to include categories of transactions associated with services that may be introduced in the future.
If we decide to stop accepting premiums into the Account, amounts that would otherwise be allocated to the Account will be allocated to the default option designated by your employer instead (or the default option specified on your IRA forms), unless you give us other allocation instructions. We will not transfer these amounts out of the default option designated by your employer when the restriction period is over, unless you request that we do so. However, we will resume allocating premiums to the Account on the date we remove the restrictions.
Additional limitations
Federal law requires us to obtain, verify and record information that identifies each person who opens an account. Until we receive the information we need, we may not be able to effect transactions for you. Furthermore, if we are unable to verify your identity, or that of another person authorized to act on your behalf, or if we believe that we have identified potentially criminal activity, we reserve the right to take such action as we deem appropriate, which may include closing your account.
Market timing/excessive trading policy
There are participantscontract owners who may try to profit from making transactions back and forth among the CREF accounts, the Account, the TIAA Access variable account and the funds or other investment options available under the terms of your plan in an effort to “time” the market or for other reasons. As money is shifted in and
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out of these accounts, the accounts or funds may incur transaction costs, including, among other things, expenses for buying and selling securities. These costs are borne by all participants,contract owners, including long-term investors who do not generate these costs. In addition, excessive trading can interfere with efficient portfolio management and cause dilution if traders are able to take advantage of pricing inefficiencies. Consequently, the Account is not appropriate for market timing or frequent trading and you should not invest in the Account if you want to engage in such activity.
To discourage this activity, transfers of accumulations from the Real Estate Account to a CREF or TIAA account, or another investment option, are limited to once every calendar quarter. A few limited exceptions to this once per calendar quarter limitation apply, including:
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(ii) | annual portfolio rebalancing activities; |
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(iii) | plan or plan-sponsor initiated transactions, including transfers and rollovers made to external carriers; |
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(iv) | participants enrolled in TIAA’s qualified managed account for retirement plan assets; |
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(v) | single-sum distributions where funds are moved from one TIAA annuity contract or certificate to another, as well as those made directly to a participant; |
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(vi) | asset allocation programs and similar programs approved by TIAA’s management; |
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(vii) | death and hardship withdrawals or withdrawals made pursuant to a qualified domestic relations order (“QDRO”); and |
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(viii) | certain transactions made within a retirement or employee benefit plan, such as contributions, mandatory (or minimum) distributions and loans. |
(i)systematic transfers out of the Real Estate Account (as described in the section above entitled “How to transfer and withdraw your money — Systematic withdrawals and transfers”);
(ii)annual portfolio rebalancing activities;
(iii)plan or plan-sponsor initiated transactions, including transfers and rollovers made to external carriers;
(iv)contract owners enrolled in TIAA’s qualified managed account for retirement plan assets;
(v)single-sum distributions where funds are moved from one TIAA annuity contract or certificate to another, as well as those made directly to a contract owner;
(vi)asset allocation programs and similar programs approved by TIAA’s management;
(vii)death and hardship withdrawals or withdrawals made pursuant to a qualified domestic relations order (“QDRO”); and
(viii)certain transactions made within a retirement or employee benefit plan, such as contributions, mandatory (or minimum) distributions and loans.
TIAA reserves the right to reject any purchase or exchange request with respect to the Account, including when it is believed that a request would be disruptive to the Account’s efficient portfolio management. TIAA also may suspend or terminate your ability to transact in the Account by telephone, fax or over the Internet for any reason, including the prevention of excessive trading. A purchase or exchange request could be rejected or electronic trading privileges could be suspended because of the timing or amount of the investment or because of a history of excessive trading by the participant.contract owner. Because TIAA has discretion in applying this policy, it is possible that similar transaction activity could be handled differently because of the surrounding circumstances.
Notwithstanding such discretion, TIAA seeks to apply its excessive trading policies and procedures uniformly to all Account participants.contract owners. As circumstances warrant, TIAA may request transaction data from intermediaries from time to time to verify whether the Account’s policies are being followed and/or to instruct intermediaries to take action against participantscontract owners who have violated the Account’s
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policies. TIAA has the right to modify these policies and procedures at any time without advance notice.
The Account is not appropriate for excessive trading. You should not invest in the Account if you want to engage in excessive trading or market timing activity. ParticipantsContract owners seeking to engage in excessive trading may deploy a variety of strategies to avoid detection, and, despite TIAA’s efforts to discourage excessive trading, there is no guarantee that TIAA or its agents will be able to identify all such participantscontract owners or curtail their trading practices.
If you invest in the Account through an intermediary, including through a retirement or employee benefit plan, you may be subject to additional market timing or excessive trading policies implemented by the intermediary or plan. Please contact your intermediary or plan sponsor for more details.
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When you are ready to receive annuity income
The annuity period in general
You can receive an income stream from all or part of an accumulation in the Account. Generally, once distributions are permitted to begin under your plan or contract, you may begin to receive annuity income. You should be at least age 59½to begin receiving annuity income other than from a one-life or two-life annuity. Otherwise, you may have to pay a 10% penaltyearly distribution tax on the taxable amount, except under certain circumstances. Consult your qualified tax advisor for more information. In addition, you cannot begin receiving income later than permitted under the minimum distribution rules of the Code. See “Taxes” for more information. Also, under the terms of the contract, you cannot begin a one-life annuity after age 90 or a two-life annuity after either you or your annuity partner reaches age 90.
Your income payments may be paid out from the Account through a variety of income options. You can pick a different income option for different portions of your accumulation, but once you’ve started life annuity payments you cannot change your income option or annuity partner for that payment stream. Usually income payments are monthly. You can choose quarterly, semiannual and annual payments as well. TIAA has the right to notrefuse to make payments at any interval that would cause the initial payment to be less than $100. We will send your payments by mail to your home address or, on your request, by mail or electronic funds transfer to your bank.
For one-life annuities, two-life annuities, annuities for a fixed period, and Income Test Drive (described, below, under “Annuity income options”), your initial income payments are based on the value of your accumulation on the last valuation day before the annuity starting date. We calculate initial income based on:
•the amount of moneyyour accumulated balance that you have accumulated in the Accountapply to begin to receive income;
•the income option or options you choose; and
•an assumed annual investment return of 4% and, for one-life annuities, two-life annuities, and Income Test Drive, mortality assumptions for you and your annuity partner, if you have one.
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On your annuity starting date, all of your accumulation units allocated to one-life annuities, two-life annuities or annuities for a fixed period will be converted to annuity units of the Account.
For one-life annuities, two-life annuities, annuities for a fixed period, and Income Test Drive there are two income change methods for annuity payments: annual and monthly. Under the annual income change method, payments change each May 1, based on the net investment results of the Account during the prior year (from the day following the last Valuation Day in March of the prior year through the last Valuation Day in March of the current year). Under the monthly income change method, payments change every month, based on the net
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investment results during the previous valuation period. Under this method, we value annuity units on the 20th of each month or on the preceding Business Day if the 20th is not a Business Day. The total value of your annuity payments may be more or less than your total premiums.
Annuity starting date
Ordinarily, annuity payments begin on the date you designate as your annuity starting date, provided we have received all documentation necessary for the income option you have picked. If something is missing, we will defer your annuity starting date until we receive the missing information. Your first annuity payment may be delayed while we process your choice of income options and calculate the amount of your initial payment. You may designate any future date for your annuitization request, in accordance with our procedures and as long as it is one on which we process annuitizations.
Any premiums received within 70 days after payments begin may be used to provide additional annuity income. Premiums received after 70 days will remain in your accumulating annuity contract until you have given further instructions. Ordinarily, your first annuity payment can be made on any business day between the first and twentieth of any month.
Annuity income options
Both the number of annuity units you purchase and the amount of your income payments will depend on which income option(s) you pick. Your employer’s plan,
tax law and ERISA may limit which income options you can use to receive income. Tax law may restrict your annuity options, depending on whom you name as second annuitant or beneficiary. Certain designated beneficiaries may need to receive payment of death benefits within 10 years of the year of your death, and if you die after your required beginning date your designated beneficiary will have to continue minimum distributions for the first nine years of the 10 year period in order to satisfy required minimum distribution rules.
For minimum distributions from your IRA, you may elect to calculate your required minimum distribution calculated by including the value of your annuity contracts and apply the payments from those annuity contracts toward satisfying your annual RMD for that IRA and other IRAs you aggregate with it for purposes of satisfying RMD. Employer plans may also adopt this calculation method, with aggregation restricted to 403(b) plans. We are still waiting on further guidance from the IRS and the U.S. Treasury Department on certain aspects of this calculation of minimum distributions. Until such guidance is issued, we do not anticipate the need to modify the calculation of RMD for purposes of administering employer plans. You should consult a qualified tax advisor before calculating your required minimum distributions. For more information, see “Taxes.” Ordinarily, you will choose your income options shortly before you want payments to begin, but you can make or change your choice any time before your annuity starting date.
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All of the income options provide variable payments, and the amount of income you receive depends in part on the investment experience of the investment accounts selected by you. The current options are:
•One-Life Annuity with or without Guaranteed Period: Pays income as long as you live. If you opt for a guaranteed period (10, 15 or 20 years) and you die before it’s over, income payments will generally continue to your beneficiary until the end of the period.period, or we will commute the guaranteed period payments in compliance with your beneficiary’s minimum distribution requirements. Required minimum distribution rules may require payment to your beneficiary within ten years to avoid an excise tax. If you do not opt for a guaranteed period, all payments end at your death, so, it’s possible for you to receive only one payment if you die l
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essless than a month after payments start. (The 15-year guaranteed period is not available under all contracts.)
•Annuity for a Fixed Period: Pays income for any perioda set number of years chosen by you. The available number of years for you to choose from five to 30 years (two to 30 years for RAs, GRAs,varies by contract and SRAs). Thisthis option is not available under all contracts.
•Two-Life Annuity:Annuity with or without Guaranteed Period: Pays income to you as long as you live, then continues at either the same or a reduced level for the life of your annuity partner. There are four types of two-life annuity options, all available with or without a guaranteed period-Fullperiod -- Full Benefit to Survivor, Two-Thirds Benefit to Survivor, 75% Benefit to Annuity Partner and a Half-Benefit to Annuity Partner. Under the Two-Thirds Benefit to Survivor option, paymentsthe dollar amount of each payment to you will be reduced by one third upon the death of your annuity partner. If you opt for a guaranteed period (10, 15 or 20 years) and you and your annuity partner die before the end of the period, income payments will continue to your beneficiary until the end of the period (although required minimum distribution rules may require payment within ten years to avoid an excise tax). If you do not opt for a guaranteed period, all payments end on the death of the latter of you and your annuity partner, so, it’s possible for you to receive only one payment if you and your annuity partner die less than a month after payments start. (The 15-year guaranteed period is not available under all contracts.)
•Minimum Distribution Option (“MDO”): Generally available only if you must begin annuity payments under the IRCCode’s minimum distribution requirements. (Some employer plans allow you to elect this option earlier. Please contact TIAA for more information.) The option, if elected, automatically pays an amount designed to fulfill the distribution requirements under federal tax law. (The option is not available under all contracts.) The value of the accumulation placed under this option must be at least $10,000. You must apply your entire accumulation under a contract if you want to use the MDO. It is possible that income under the MDO will cease during your lifetime. Prior to age 90, and subject to applicable plan and legal restrictions, you can apply any remaining part of an accumulation applied to the MDO to any other income option for which you’re eligible.
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Using the MDO will not affect your right to take a cash withdrawal of any accumulation not yet distributed (to the extent that a cash withdrawal was available to you under your contract and under the terms of your employer’s plan). This automatic payout option is not available under all contracts. Instead, for some contracts, required minimum distributions will be paid directly from these contracts pursuant to the terms of your employer’s plan.
•Income Test Drive: Income Test Drive is an optional feature that lets you try variable income payments for a 2-year period without making an irrevocable decision. Your annuity unit payments will not begin during the Income Test Drive; instead, payments made during the Income Test Drive are withdrawals from your accumulation units. Payments are calculated to approximate the amount you would receive under a One-life or Two-life annuity for the income option and income change method you select, adjusted to reflect the Income Test Drive. If you decide to Income Test Drive your entire accumulation, any premiums received during the 2-year period will be applied to purchase accumulation units that will be used to increase your variable income payments. You can change your mind during the Income Test Drive, and future payments will stop when you notify us of your decision prior to expiration of the 2-year period. If you die during the Income Test Drive, payments will stop, and the beneficiary named in your contract will be entitled to the remaining accumulation.accumulation (required minimum distribution rules may require payment within ten years and a continuation of minimum distributions if you die after your required beginning date). At the end of the Income Test Drive, if you have not decided to stop payments, your remaining accumulation applied to the Income Test Drive feature will be converted to annuity units payable under the income option you chose when you started this feature. Once the conversion to annuity units takes place, it is irrevocable. If you decide before the end of the Income Test Drive that you want to convert to annuity units immediately, you may do so subject to certain election
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procedures. The conversion of accumulation units to annuity units may result in annuity payments that are greater or lesserless than the amount of the last payment during the Income Test Drive. State regulatory approval may be pending for the Income Test Drive and it may not currently be available in your state. We may stop providing the Income Test Drive feature at any time. The Income Test Drive feature may not be available under the terms of your employer’s plan. For information about withdrawals from your contract, see “How to transfer and withdraw your money.”
For any of the income options described above, current federal tax law provides that your guaranteed period can’t exceed the joint life expectancy of you and your beneficiary or annuity partner.partner (although required minimum distribution rules may require payment within ten years to avoid an excise tax). Other codeCode stipulations may make some income options unavailable to you. If you are married at your annuity start date, you may be required by law to choose an income option that provides survivor annuity income to your spouse, unless your spouse waives the right.
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Receiving Lump-Sum Payments (Retirement Transition Benefit):Payments: If your employer’s plan allows, then, subject to applicable tax law, you may be able to receive a single sum payment of up to 10% of the value of any part of an accumulation being converted to a one-lifesome or two-life annuity on the annuity starting date. Such employer plan and 10% limitations do not apply to IRAs. Of course, if your employer’s plan allows cash withdrawals, you can take a larger amount (up to 100%)all of your accumulationReal Estate Accumulation as a cash payment. The retirement transition benefit will be subject to current federal income tax requirements and possible early distribution penalties. See “Taxes.”lump sum.
Other income options may become available in the future, subject to the terms of your retirement plan and relevant federal and state laws. TIAA may stop offering certain income options in the future. For more information about any annuity option, please contact TIAA.
Transfers during the annuity period
After you begin receiving annuity income from a one-life annuity, two-life annuity or annuity for a fixed period, you can transfer all or part of the future annuity income (which is the actuarial present value of the payments based on the applicable interest rate and the mortality basis associated with that fund at the time of the transfer) payable once each calendar quarter (i) from the Real Estate Account into a “comparable annuity” payable from a CREF or TIAA account or TIAA’s Traditional Annuity, or (ii) from a CREF or TIAA variable account into a comparable annuity payable from the Real Estate Account. Comparable annuities are those which are payable under the same income option and have the same first and second annuitant, and remaining guaranteed period.
We’ll process your transfer on the business day we receive your request in good“good order.” You can also choose to have a transfer take effect at the close of any future business day. Transfers under the annual income payment method will affect your annuity payments beginning on the May 1 following the March 31 which is on or after the effective date of the transfer. Transfers under the monthly income payment method and all transfers into TIAA’s Traditional Annuity will affect your annuity payments beginning with the first payment due after the monthly payment valuation day that is on or after the transfer date. You can switch
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between the annual and monthly income change methods, and the switch will go into effect on the last valuation day of March. Although the payout streams are actuarially equivalent and there is no charge for engaging in such a transfer, it is possible that the new funds may apply different mortality or interest assumptions, and could therefore result in variation between the initial payments from the new fund and the payments that were being made out of the original fund.
Annuity payments
The amount of annuity payments from a one-life annuity, two-life annuity, or annuity for a fixed period we pay you or your beneficiary (annuitant) will depend upon the number and value of the annuity units payable. The number of annuity units is first determined on the day before the annuity starting date. The amount of the annuity payments will change according to the income change method chosen.
Under the annual income change method, the value of an annuity unit for payments is redetermined on March 31 of each year (or, if March 31 is not a valuation day, the immediately preceding valuation day). This date is called the “annual
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“annual payment valuation day.” Annuity payments change beginning May 1. The change reflects the net investment experience of the Real Estate Account. The net investment experience for the twelve months following the annual payment valuation day will be reflected in the annuity unit value determined on the next year’s annual payment valuation day.
Under the monthly income change method, the value of an annuity unit for payments is determined on the payment valuation day, which is the 20th day of the month preceding the payment due date or, if the 20th is not a business day, the preceding business day. The monthly changes in the value of an annuity unit reflect the net investment experience of the Account. The formulas for calculating the number and value of annuity units payable are described below.
Calculating the Number of Annuity Units Payable: When a participantcontract owner or a beneficiary converts the value of all or a portion of his or her accumulation into a one-life annuity, two-life annuity or annuity for a fixed period, the number of annuity units payable from the Real Estate Account under an income change method is determined by dividing the value of the Account accumulation to be applied to provide the annuity payments by the product of the annuity unit value for that income change method and an annuity factor. The annuity factor as of the annuity starting date is the value of an annuity in the amount of $1.00 per month beginning on the first day such annuity units are payable, and continuing for as long as such annuity units are payable.
The annuity factor will reflect interest assumed at the effective annual rate of 4%, and the mortality assumptions for the person(s) on whose life (lives) the annuity payments will be based. Mortality assumptions will be based on the then-current settlement mortality schedules for this Account. Annuitants bear no mortality risk under their contracts — actual mortality experience will not reduce annuity payments after they have started. TIAA may change the mortality
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assumptions used to determine the number of annuity units payable for any future accumulations converted to provide annuity payments.
The number of annuity units payable under an income change method under your contract will be reduced by the number of annuity units you transfer out of that income change method under your contract. The number of annuity units payable will be increased by any internal transfers you make to that income change method under your contract.
Value of Annuity Units: The Real Estate Account’s annuity unit value is calculated separately for each income change method for each valuation day. The annuity unit value for each income change method is determined by updating the annuity unit value from the previous valuation day to reflect the net investment performance of the Account for the current valuation period relative to the 4% assumed investment return. In general, your payments will increase if the performance of the Account is greater than 4% and decrease if the valueperformance is less than 4%. The value is further adjusted to take into account any changes expected to occur in the future at revaluation either once a year or once a month, assuming the Account will earn the 4% assumed investment return in the future.
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The initial value of the annuity unit for a new annuitant is the value determined as of the valuation day before annuity payments start.
For participantscontract owners under the annual income change method, the value of the annuity unit for paymentpayments remains level until the following May 1. For those who have already begun receiving annuity income as of March 31, the value of the annuity unit for payments due on and after the next succeeding May 1 is equal to the annuity unit value determined as of the last valuation day in March.
For participantscontract owners under the monthly income change method, the value of the annuity unit for payments changes on the payment valuation day of each month for the payment due on the first of the following month.
Further, certain variable annuity payouts might not be available if issuing the payout annuity would violate state law.
TIAA reserves the right, subject to approval by the Board of Trustees, to modify the manner in which the number and/or value of annuity units is calculated in the future. No such modification will reduce any participant’scontract owner’s benefit once the participant’scontract owner’s annuitization period has commenced.
Illustrations of annuity payments
Investment performance of the Account during the accumulation period affects the amount you are accumulating for retirement. Once you are no longer accumulating and you begin to receive income payments under your annuity contract, investment performance of the Account affects the amount of your income payments. The following line graph shows how the performance of the Account has affected the income payments of an individual contract owner over the last 20 years receiving a one-life annuity, two-life annuity, or annuity for a fixed period.
The line graph is based on the actual investment performance of the Account from May 1, 2003 through March 31, 2023, which is the investment performance that impacts the payment amounts for the period that is presented. Investment performance does not take into account the impact of any TIAA plan pricing where the Account is an investment option in an employer retirement plan. Income shown for each plot point on the line graph for the stated year is for the payment period May 1 of the stated year through April 1 of the following year. The line graph assumes that the annuitant received an initial annuity payment of $1,000 on May 1 of the first year presented in the line graph under the annual income change method. Each plot point on the line graph for the stated year represents the amount of the 12 monthly annuity payments made in that fiscal year under an annuity contract based on the above assumptions. The line graph shows how income payments would have changed over time if all of the contract owner’s income were received from the Account.
The changes in income payments shown in the line graph primarily reflect the investment performance of the Account. In particular, the investment performance of the Account can be impacted by the asset class (commercial real estate, equity (including REIT stocks) or fixed income) exposure within the Account. In general,
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increased exposure to commercial real estate, equity securities or fixed-income securities as different asset classes may have a negative impact on investment performance of the Account during periods of general market appreciation or depreciation, as the case may be. Annuity income payment experience can be impacted by: (i) the blended asset class exposure that exists at any given time within the Account when annuitizing from it; and (ii) the period in the market cycle in which the annuity payout occurs.
To understand the effect of investment performance, keep in mind that income payments reflect an assumed investment return of 4%. If the investment performance of the Account is constantly equal to the assumed investment return of 4% in a given year, a contract owner’s income payment in the following year would not change. If investment performance is 10% or 3% in a given year, income payments in the following year would increase by approximately 6% or decrease by approximately 1%, respectively.
The line graph shows the effect on income payments of past investment performance of the Account. There can be no assurance that future investment performance will be the same as in the past, and income payments under your contract may change more or less than those shown in the line graph below. The investment return of the Account will fluctuate over time. Such fluctuations in investment return could cause income payments under your annuity contract to vary. The amount of your initial income payment will depend upon several factors, including the size of your account balance that you apply to purchase income, which annuity income option you select (such as options on one or two lives and options with or without a guaranteed period), your payment frequency (monthly, quarterly, etc.) and your age (and the age of your annuity partner, if any).
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Death benefits
Choosing beneficiaries
Subject to the terms of your employer’s plan, death benefits under TIAA contracts are payable to the beneficiaries you name. When you purchase your annuity contract, you name one or more beneficiaries to receive the death benefit if you die. You can generally change your beneficiaries any time before you die, and, unless you instruct otherwise, your annuity partner can do the same after your death. Changing beneficiaries may impact your annuity options, even for annuities that have already begun to make payments. Changes in tax laws may require certain designated beneficiaries to receive payment of death benefits within ten years of the year of your death in order to satisfy applicable federal income tax rules. For more information, see “Taxes.”
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Amount of death benefit
If you die during the accumulation period, the death benefit is the amount of your accumulation. If you and your annuity partner die during the annuity period while payments are still due under a fixed-period annuity or for the remainder of a guaranteed period, the death benefit is the present value, based on an specified effective annual interest rate of 4%, of the unit annuity payments due for the remainder of the period.
Special Option for Spouses. If the surviving spouse is the sole beneficiary when the contract owner dies for contracts issued under an IRA or ATRA the surviving spouse can choose to become the contract owner and continue the contract, or receive the death benefit. However, if the surviving spouse is the sole beneficiary when the contract owner dies for contracts issued under employer-sponsored employee benefit plans (e.g., RA, SRA, GRA, GSRA, Retirement Choice, and Retirement Choice Plus annuity contracts), then the spouse cannot accept the inherited contract as an owner.
Payment of death benefit
To authorize payment and pay a death benefit, we must have received all necessary forms and documentation (in good order),in “good order,” including proof of death and the selection of the method of payment.
Every state has some form of unclaimed property laws that impose varying legal and practical obligations on insurers and, indirectly, on contract owners, insureds, beneficiaries and other payees of proceeds. Unclaimed property laws generally provide for escheatment to the state of unclaimed proceeds under various circumstances.circumstances for non-ERISA accounts.
Contract ownersare urged to keep their own, as well as their insureds’, beneficiaries’ and other payees’, information up to date, including full names, postal and electronic media addresses, telephone numbers, dates of birth, and Social Security numbers. Such updates should be communicated electronically via www.tiaa.org, in writing to TIAA at P . O . Box 1259, Charlotte, NC 28201, or by calling our Automated Telephone Service (24 hours a day) at 800-842-2252 or via www.tiaa.org.800-842-2252.
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Methods of payment of death benefits
Generally, you can choose for your beneficiary the method we will use to pay the death benefit, but few participantscontract owners do this. If you choose a payment method,
you can also prevent your beneficiaries from changing it. Most people leave the choice to their beneficiaries. We can prevent any choice if its initial payment is less than $25. IfYour choice of beneficiary may limit your beneficiary does not specifically instruct usavailable options with regard to start payingpayment of the death benefit. Changes in tax laws may require certain designated beneficiaries to receive payment of death benefits within a yearten years of your death we can start making paymentsin order to them over five years using the fixed-period annuity method of payment.satisfy applicable federal income tax rules. For more information, see “Taxes.”
Payments during accumulation period: Currently, the available methods of payment for death benefits from funds in the accumulation period are:
•Single-Sum Payment, in which the entire death benefit is paid to your beneficiary at once;
•One-Life Annuity With or Without Guaranteed Period, in which the death benefit is paid for the life of the beneficiary or through the guaranteed period;period. This method is only available to eligible designated beneficiaries (see “Taxes” below);
•Annuity for a Fixed Period of 5 to 30 years (not(only available under Retirement Choice and Retirement Choice Plus contracts or IRA contracts that are issued or opened on or after October 11, 2010)for certain contracts), in which the death benefit is paid for a fixed period;number of years (subject to the terms of the contract and the Internal Revenue Code’s minimum distribution requirements); and
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Minimum Distribution Payments, in which the beneficiary can elect to have payments made automatically in the amounts necessary to satisfy the Internal Revenue Code’s minimum distribution requirements. It is possible under this methodIn Notice 2023-54, the IRS announced that final regulations updating existing minimum distribution requirements for qualified retirement plans, 403(b) plans, governmental 457(b) plans and IRAs will be effective no earlier than the 2024 calendar year. The Notice provides transition relief for some aspects of 2023 RMD. We cannot predict which proposed regulations will become final regulations. Consult your beneficiary will not receive incomequalified tax advisor for life.more information. Effective January 1, 2024, Secure 2.0 [see
“Enacted Tax Legislation” below] has modified the minimum distribution requirements applicable to surviving spouses (see “Taxes” below for more information).Death benefits are usually paid monthly (unless you chose a single-sum method of payment), but your beneficiary can switch them to quarterly, semiannual or annual payments. Note that for Retirement Choice and Retirement Choice Plus contracts, beneficiaries may only receive either a single-sum payment or a one-life annuity (with or without a guaranteed benefit in the plan).
Payments during annuity period:If you and your annuity partner die during the annuity period, your beneficiary can choose to receive any remaining guaranteed periodic payments due under your contract. Alternatively, your beneficiary can choose to receive the commuted value of those payments in a single sum unless you have indicated otherwise. The amount of the commuted value will be different from the total of the periodic payments that would otherwise be paid.
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Ordinarily, death benefits are subject to federal tax. If taken as a lump sum, death benefits would be taxed like complete withdrawals. If taken as annuity benefits, the death benefit would be taxed like annuity payments. For more information, see the discussion under “Taxes” below.
Recordkeeping and other Plan-Related Expenses
In addition to services provided to the Account, TIAA provides recordkeeping and other plan-related services for retirement plans and their participants, including participants or contractowners investing in the Account or other TIAA-related products. TIAA and retirement plan sponsors may agree on a total plan price to be paid to TIAA for providing these services, which will be based on various factors, including the bundle of services provided to the plan and participants and the usage of such services. TIAA’s compensation for these services is indirectly derived in part from the administrative charges under the Account and other TIAA-related products. TIAA may, at its own expense, reduce a portion of the fees payable to TIAA for recordkeeping and plan-related services pertaining to specific products (an “offset”). If total revenue to TIAA from the plan is higher or lower than the plan price, the plan may receive a credit or be charged (an “adjustment”) in order to meet the plan price. Any such offset or adjustment has no effect on the administrative charges under the Account or other TIAA-related products, but may effectively change the total retirement-related expenses paid to TIAA by a plan and its participants. The offset or adjustment may be a factor that a plan or its sponsor could consider in selecting TIAA as a service provider for the plan, and in making available a particular product as an investment option for plan participants.
Employer plan fee withdrawals
Your employer may, in accordance with the terms of your plan, and with TIAA’s approval, withdraw amounts from your Account accumulation under your
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Retirement Choice or Retirement Choice Plus contract, and, on a limited basis if your certificate so provides, under your GA, GSRA, GRA or Keogh contract, to pay fees associated with the administration of the plan. TIAA also reserves the right to suspend or reinstate its approval for a plan to make such withdrawals. The amount and the effective date of an employer plan fee withdrawal will be in accordance with the terms of your plan. TIAA will determine all values as of the end of the effective date under the plan.
An employer plan fee withdrawal cannot be revoked after its effective date under the plan. Each employer plan fee withdrawal will be made on a prorata basis from all your available TIAA and CREF accounts. An employer plan fee withdrawal reduces the accumulation from which it is paid by the amount withdrawn. If allowed by your contract, your employer may also charge a fee on your Account to pay fees associated with administering the plan.
Your spouse’s rights to death benefits
In general, your choice of beneficiary for death benefits may, in some cases, be subject to the consent of your spouse. Similarly, if you are married at the time of your death, federal law may generally require a portion of the death benefit be paid to your spouse even if you have named someone else as beneficiary. If you die without having named any beneficiary, any portion of your death benefit not payable to your spouse will generally go to your estate unless your employer’s plan provides otherwise.
If you are married, and all or part of your accumulation is attributable to contributions made under:
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A.an employer plan subject to ERISA, or
B.an employer plan that provides for spousal rights to benefits,
then, only to the extent required by the Code or ERISA or the terms of your employer plan, will your rights to choose certain benefits be restricted by the rights of your spouse to receive benefits as follows:
•Spouse’s survivor retirement benefit. If you are married on your annuity starting date, your income benefit must be paid under a two-life annuity with your spouse as second annuitant.
•Spouse’s survivor death benefit. If you die before your annuity starting date and your spouse survives you, the payment of the death benefit to your named beneficiary may be subject to your spouse’s right to receive a death benefit. Under an employer plan subject to ERISA, your spouse has the right to a death benefit of at least 50% of any part of your accumulation attributable to contributions made under such a plan. Under an employer plan not subject to ERISA, your spouse may have the right to a death benefit in the amount stipulated in the plan.
Your spouse may consent to a waiver of his or her rights to these benefits.
Waiver of spouse’s rights to death benefits
If you are married, and all or part of your accumulation is attributable to contributions made under:
A.an employer plan subject to ERISA, or
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then, only to the extent required by the Code or ERISA or the terms of your employer plan, your spouse must consent to a waiver of his or her rights to survivor benefits before you can choose:
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B. | an employer plan that provides for spousal rights to benefits, then, only to the extent required by the IRC or ERISA or the terms of your employer plan, your spouse must consent to a waiver of his or her rights to survivor benefits before you can choose: |
•an income option other than a two-life annuity with your spouse as second annuitant; or
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•beneficiaries who are not your spouse for more than the percentage of the death benefit allowed by the employer plan; or
•a lump-sum benefit.
In order toTo waive the rights to spousal survivor benefits, we must receive, in a form satisfactory to us, your spouse’s consent, or a satisfactory verification that your spouse cannot be located. A waiver of rights with respect to an income option or a lump-sum benefit must be made in accordance with the IRCCode and ERISA, or the applicable provisions of your employer plan. A waiver of the survivor death benefit may not be effective if it is made prior to the earlier of the plan year in which you reach age 35 or your severance from employment of your employer.
Verification of your marital status may be required, in a form satisfactory to us, for purposes of establishing your spouse’s rights to benefits or a waiver of these rights. You may revoke a waiver of your spouse’s rights to benefits at any time during your lifetime and before the annuity starting date. Your spouse may not revoke a consent to a waiver after the consent has been given.
Taxes
This section offers general information concerning federal taxes. It doesn’t cover every situation. Tax treatment varies depending on the circumstances, and state and local taxes may also be involved. For complete information on your personal tax situation, check withplease consult a qualified tax or legal advisor.
How the Real Estate Account is treated for tax purposes
The Account is not a separate taxpayer for purposes of the Code — itsCode. Its earnings are taxed as part of TIAA’s operations. Although TIAA is not expected to owe any federal income taxes on the Account’s earnings, if TIAA does incur taxes attributable to the Account, it may make a corresponding charge against the Account.
Contributions
Generally, contributions you can make under an employer’s plan are limited by federal tax law. For 2024, employee voluntary salary reduction contributions and Roth after-tax contributions to 403(b) and 401(k) plans are limited in the aggregate to $23,000 per year ($30,500 per year if you are age 50 or older). Certain long-term employees may be able to defer additional amounts to a 403(b) plan. 2024 contributions to Traditional and Roth IRAs, other than rollover contributions, cannot generally exceed $7,000 per year ($8,000 per year for taxpayers age 50 or older). The maximum contribution limit to a 457(b) non-qualified deferred compensation plan for employees of state and local governments is $23,000 ($30,500 if you are age 50 or older). Special catch-up rules may permit a higher contribution in one or more of the last three years prior to an individual’s normal retirement age under the plan.
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Note that the dollar limits listed above are for 2024; different dollar limits may apply in future years.
Taxes in generalon Withdrawals
During the accumulation period, Real Estate Account premiums paid in before-tax dollars, employer contributions and earnings attributable to these amounts are not taxed until they’re withdrawn. Annuity payments, single-sum withdrawals, systematic withdrawals, and death benefits are usually taxed as ordinary income. Premiums paid in after-tax dollars aren’tare not taxable when withdrawn, but earnings attributable to these amounts are taxable unless those amounts are contributed as(unless attributable to Roth contributions to a 401(a), 403(b) or governmental 457(b) plan and
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certain criteria are met before the amounts (and the income on the amounts) are withdrawn.withdrawn). Generally, transfersrollovers between qualified retirement plans and transfers between 403(b) plans are not taxed.
OnlyIf you are planning to receive a distribution from an IRA for the purposes of rollover, you should be aware that only one rollover between IRAs is permitted in a 12 month12-month period. The 12 month12-month restriction period applies to the aggregate of all of the taxpayer’s IRAs, effectively treating them as one IRA for purposes of the limit. Please consult your qualified tax or legal adviser for more information before making anyan IRA rollover.
Generally, contributions you can make under an employer’s plan are limited by federal tax law. Employee voluntary salary reduction contributions and Roth after-tax contributions to 403(b) and 401(k) plans are limited in the aggregate to $18,500 per year ($24,500 per year if you are age 50 or older). Certain long-term employees may be able to defer additional amounts to a 403(b) plan. Contributions to Traditional and Roth IRAs, other than rollover contributions, cannot generally exceed $5,500 per year ($6,500 per year for taxpayers age 50 or older). The maximum contribution limit to a 457(b) non-qualified deferred compensation plan for employees of state and local governments is $18,500 ($24,500 if you are age 50 or older). Special catch-up rules may permit a higher contribution in one or more of the last three years prior to an individual’s normal retirement age under the plan.
Note that the dollar limits listed above are for 2018; different dollar limits may apply in future years.
Early distributions
If you want to withdraw funds or begin receiving income from any 401(a), 403(a), or 403(b) retirement plan or an IRA before you reach age 59½, and you do not timely roll over or directly transfer such distribution to an IRA or employer plan in accordance with federal tax law, you may have to pay a 10 percent early distribution tax on the taxable amount. Distributions from a Roth IRA generally are not taxed, except that, once aggregate distributions exceed contributions to the Roth IRA, income tax and a 10% penaltyearly distribution tax may apply to distributionswithdrawals made (1) before age 59½ (subject to certain exceptions) or (2) during the five taxable years starting with the year in which the first contribution is made to any Roth IRA. A 10% penaltyearly distribution tax may apply to amounts attributable to a Roth IRA conversion from an IRA if they are distributed during the five taxable years beginning with the year in which the Roth IRA conversion was made. You won’t haveIn general, however, there is no early distribution tax (1) made on or after the taxpayer reaches age 59½, (2) made on or after the death of the contract owner, (3) attributable to pay thisthe taxpayer’s becoming disabled, or (4) made as part of a series of substantially equal periodic payments for the life (or life expectancy) of the taxpayer. As enacted under Secure 2.0 (see the section below entitled “Enacted tax legislation”), the substantially equal periodic payments exception continues to apply in the case of a rollover of a retirement account, or application of a retirement account to an annuity making distributions that satisfy the required minimum distribution rules. This is effective for transfers, rollovers, and exchanges after December 31, 2024 and effective for annuity distributions on or after December 29, 2023. Other exceptions may be applicable under certain circumstances.circumstances such as distributions made in cases of financial hardship or
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unforeseeable emergencies or in connection with a qualified birth or adoption or terminal illness, and special rules may be applicable in connection with the exceptions enumerated above. Early distributions from 457(b) plans are not subject to a 10% penaltyearly distribution tax unless, in the case of a governmental 457(b) plan, the distribution includes amounts rolled over to the plan from an IRA, 401(a)/403(a), or 403(b) plan. Consult your tax or legal advisor for more information.
Minimum distribution requirements
In most cases, paymentsyou must begin taking minimum distributions from your qualified contracts must begin by your required beginning date of April 1 of the year afterfollowing the calendar year in which you reach age 70½, oryour RMD Applicable Age (or retirement, if later by retirement.for employer retirement plan accounts.) For Traditional IRAs (other than Roth IRAs), and with respect to 5% or more owners of the business covered by a Keogh plan, payments must begin byyour required beginning date is April 1 of the year afterfollowing the calendar year in which you reach your RMD Applicable Age.
The changes in federal tax law enacted in Secure 2.0 (see “Enacted Tax Legislation” below) have redefined your “RMD Applicable Age” as age 70½ if you were born before 7/1/1949; age 72 if you were born on or after 7/1/1949 or in 1950; age 73 if you were born between 1951 and 1958, and age 75 if you were born on or after 1960. A technical correction to the legislation has established the RMD Applicable Age for those born in 1959 (age 73).
Other minimum distribution requirements apply to beneficiaries of deceased participants. Under the terms of certain retirement plans, the plan administrator may direct us to
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make the minimum distributions required by law even if you do not elect to receive them. In addition, if you don’t begin distributions on time, you may be subject to an excise tax of up to 25% on the amount exceeding what you should have received. Although, if a 50%failure to take a required minimum distribution is corrected within a correction window, as defined under Secure 2.0, the excise tax on the amount you should have received but did not.failure is further reduced to 10%. Roth IRAs are generally not subject to these rules requiring minimum distributions during your lifetime. Effective beginning in 2024, Secure 2.0 extends the lifetime RMD exception to designated Roth accounts under employer plans beginning in 2024. You are responsible for requesting distributions that comply with the minimum distribution rules. Please consult your tax or legal advisor for more information.
Premium taxes
Some states assess premium taxes onAmounts payable to an individual non-spouse beneficiary must generally be distributed in full within a 10-year period after the premiums paid underyear of the contract. We will deductparticipant’s death. If a participant’s death occurs after the total amountparticipant’s required beginning date, the non-spouse beneficiary must continue to take required minimum distributions at least as rapidly as the decedent during the first 9 years of premium taxes, if any, from your accumulation based on current state insurance laws, subjectthe 10-year period. After the first beneficiary dies, the 10-year distribution period would generally apply to the provisionsbeneficiary of your contract,the first deceased beneficiary. Generally, the second-generation beneficiary is also required to continue required minimum distributions at least as rapidly for the remainder of the 10-year distribution period. Certain
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exceptions apply to “eligible designated beneficiaries” which include chronically ill individuals (or a trust for their benefit), a minor child of the participant until he or she reaches majority (21 years of age), and our statusanyone else who is older than or not more than 10 years younger than the participant. An eligible designated beneficiary is generally able to satisfy the minimum distribution requirements by “stretching” payouts over the beneficiary’s life expectancy. Effective for years after 2023, under Secure 2.0, surviving spouses may elect to determine RMD in the state. Generally, premium taxes range from 0%same manner as the deceased participant, using the Uniform Lifetime Table. There has been no IRS guidance on implementation of this provision and you should consult your qualified tax or legal advisor for more information. The current law also applies to 3.5%, dependingOne-Life, Two-Life and Fixed Period annuities beginning payments after December 19, 2019. The IRS and Treasury released comprehensive proposed regulations with an effective date of January 1, 2022 updating existing minimum distribution requirements for qualified retirement plans, 403(b) plans, governmental 457(b) plans and IRAs. These proposals include rules to address many of the outstanding issues concerning interpretation of the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019, Division O of the Further Consolidated Appropriations Act of 2019, P.L. 115-94, enacted in December 2019. Notice 2023-54, provides that final regulations on minimum distribution requirements for qualified retirement plans, 403(b) plans, governmental 457(b) plans and IRAs will be effective no earlier than the state.2024 calendar year. We cannot predict which proposed regulations will become final regulations. Consult your qualified tax or legal advisor for more information.
Withholding on distributions
If we pay an “eligible rollover” distribution directly to you, federal law requires us to withhold 20% from the taxable portion. On the other hand, if we roll over such a distribution directly to an IRA or employer plan, we do not withhold any federal income tax. The 20% withholding also does not apply to certain types of distributions that are not considered eligible rollovers such as payments from IRAs, hardship withdrawals, lifetime annuity payments, substantially equal periodic payments over your life expectancy or over 10 or more years, or minimum distribution payments.
For the taxable portion of non-eligible rollover distributions, we will usually withhold federal income taxes unless you tell us not to and you are eligible to avoid withholding. However, if you tell us not to withhold but we don’t have your taxpayer identification number on file, we still are required to withhold taxes. Regardless of whether you elect not to have federal income tax withheld, you are still liable for payment of federal income tax on the taxable portion of the payment. These rules also apply to distributions from governmental 457(b) plans. In general, all amounts received under a private 457(b) plan are taxable and are subject to federal income tax withholding as wages. Nonresident aliens who pay U.S. taxes are subject to different withholding rules.
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In addition, distributions may be subject to state and/or local taxes. You should consult a qualified tax or legal advisor regarding the appropriate withholding for your situation.
Premium taxes
Some states assess premium taxes on the qualified annuity premiums paid under the contract (e.g., IRA, 403(b), or 401(k)). We will deduct the total amount of premium taxes, if any, from your accumulation based on current state insurance laws, subject to the provisions of your contract, and our status in the state. Generally, premium taxes range from 0% to 1% on qualified annuity premiums depending on the state.
Federal estate, gift, and generation-skipping transfer taxes
While no attempt is being made to discuss in detail the federal estate tax implications of the contract, aA purchaser should keep in mind that the value of an annuity contract owned by a decedent and payable to a beneficiary who survives the decedent is included in the decedent’s gross estate. Depending on the terms of the contract, the value of the annuity included in the gross estate may be the
value of the lump sum payment payable to the designated beneficiary or the actuarial value of the payments to be received by the beneficiary. Consult an estate planning advisor for more information.
Under certain circumstances, the Code may impose a gift tax when all or part of an annuity contract is transferred to another person for less than adequate consideration and a generation-skipping (“GST”) tax when all or part of an annuity contract is transferred to, or a death
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benefit is paid to, an individual two or more generations younger than the contract owner. Regulations issued under the Code may require us to deduct the tax from your contract, or from any applicable payment, and pay it directly to the IRS. For 2018,2024, the federal estate tax, gift tax, and GST tax exemptions and maximum rates are $11.2 million$13,610,000 and 40%, respectively. The potential application of these taxes underscores the importance of seeking guidance from a qualified adviser to help ensure that your estate plan adequately addresses your needs and those of your beneficiaries under all possible scenarios.
Definition of Spouse“Spouse” under Federal Law
A person who meets the definition of “spouse” under federal law may avail themselves to certain rights and benefits under a contract. Any right of a spouse that is made available to continue the contract and all contract provisions relating to spouses and spousal continuation are available only to a person who meets the definition of ‘‘spouse’’“spouse” under federal law. IRS guidance provides that civil unions and domestic partnerships that may be recognized under state law are not marriages unless denominated as such. The impact of the Respect for Marriage Act, providing certain protections for interracial and same-sex marriages, on IRS guidance regarding civil unions and domestic partnerships is uncertain. Consult a qualified tax or legal advisor for more information on this subject.
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Special rules for after-tax retirement annuities
If you paid premiums directly to an RA and the premiums are not subject to your employer’s retirement plan, or if you have been issued an ATRA contract, the following general discussion describes our understanding of current federal income tax law that applies to these accumulations. This discussion does not apply to premiums paid on your behalf under the terms of your employer’s retirement plan. It also does not cover every situation and does not address all possible circumstances.
In General. These annuities are generally not taxed until distributions occur. When distributions occur, they are taxed as follows:
•Withdrawals, including withdrawals of the entire accumulation under the contract, are generally taxed as ordinary income to the extent that the contract’s value is more than your investment in the contract ((i.e.i.e., what you have paid into it).
•Annuity payments are generally treated in part as taxable ordinary income and in part as non-taxable recovery of your investment in the contract until you recover all of your investment in the contract. After that, annuity payments are taxable in full as ordinary income.
Required Distributions. In general, if you die after you start your annuity payments but before the entire interest in the annuity contract has been
distributed, the remaining portion must be distributed at least as quickly as under the method in effect on the date of your death. If you die before your annuity payments begin, the entire interest in your annuity contract generally must be distributed within five years after your death, or be used to provide payments that begin within one year of your death and that will be made for the life of your designated beneficiary or for a period not extending beyond the life expectancy of
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your designated beneficiary. The “designated beneficiary” refers to a natural person you designate and to whom ownership of the contract passes because of your death. However, if the designated beneficiary is your surviving spouse, your surviving spouse can continue the annuity contract as the new owner.
Death Benefit Proceeds. Death benefit proceeds are taxed like withdrawals of the entire accumulation in the contract if distributed in a single sum and are taxed like annuity payments if distributed as annuity payments. Your beneficiary may be required to take death benefit proceeds within a certain time period.
Penalty Tax on Certain Distributions. You may have to pay a penaltyan early distribution tax (10% of the amount treated as taxable income) on distributions you take prior to age 59½. There are some exceptions to this rule, however. You should consult a qualified tax or legal advisor for information about those exceptions.
Medicare Tax. Distributions from after-tax contracts (such as ATRA contracts) may be considered “investment income” for purposes of the Medicare tax on investment income. Thus, in certain circumstances, a 3.8% tax may be applied to some or all of the taxable portion of distributions (i.e., earnings) to individuals whose income exceeds certain threshold amounts ($200,000 for filing single, $250,000
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$250,000 for married filing jointly and $125,000 for married filing separately.) Please consult a tax or legal advisor for more information.
Withholding. Annuity distributions are generally subject to federal income tax withholding but most recipients can usually choose not to have the tax withheld.
Certain Designations or Exchanges. Designating an annuitant, payee or other beneficiary, or exchanging a contract may have tax consequences that should be discussed with a tax or legal advisor before you engage in any of these transactions.
Multiple Contracts. All non-qualified deferred annuity contracts issued by us and certain of our affiliates to the same owner during a calendar year must generally be treated as a single contract in determining when and how much income is taxable and how much income is subject to the 10% penaltyearly distribution tax (see above).
Diversification Requirements. The investments of the Real Estate Account must be “adequately diversified” in order for the ATRA Contracts to be treated as annuity contracts for Federal income tax purposes. It is intended that Real Estate Account will satisfy these diversification requirements.
Owner Control. In certain circumstances, owners of non-qualified variable annuity contracts have been considered for Federal income tax purposes to be the owners of the assets of the separate account supporting their contracts due to their ability to exercise investment control over those assets. When this is the case, the contract owners have been currently taxed on income and gains
attributable to the variable account assets. While we believe that the ATRA Contracts do not give you investment control over assets in the Real Estate Account or any other separate account underlying your ATRA Contract, we reserve the right to modify the ATRA Contracts as necessary to prevent you from being treated as an owner of the assets in the Real Estate Account.
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Premium Taxes. Some states, the District of Columbia, and Puerto Rico assess premium taxes on the non-qualified premiums paid under the ATRA contract. We will deduct the total amount of premium taxes, if any, from your accumulation based on current state insurance laws, subject to the provisions of your contract, and our status in the state. Generally, the premium taxes range from 0.5%0% to 3.5% on non-qualified premiums depending on the state.
Please consult a qualified tax or legal advisor for more information in relationship to the facts surrounding your personal financial situation.
Residents of Puerto Rico
The IRS has announcedIRS’s current position is that income from ana nonqualified annuity received by residents of Puerto Rico from a contract issued by a U.S. insurer is U.S.-sourceU.S. source income that is generally subject to United States federal income tax.
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Annuity purchases by nonresident, aliensnon-citizens of the United States
The discussion above provides general information regarding U.S. federal income tax consequences to annuity purchasers that are U.S. citizens or residents. Purchasers that are not U.S. citizens or residents will generally be subject to U.S. federal withholding tax on taxable distributions from annuity contracts at a 30% rate, unless a lower treaty rate applies. In addition, purchasers may be subject to state and/or municipal taxes and taxes that may be imposed by the purchaser’s country of citizenship or residence. Prospective purchasers who are nonresident aliens are advised to consult with a qualified tax or legal adviser regarding U.S., state, and foreign taxation with respect to an annuity contract purchase.
Special rules for withdrawals to pay advisory fees
If you have arranged for us to pay advisory fees to your financial advisor from your accumulations, those partial withdrawals generally will not be treated as taxable distributions as long as:
•the payment is for expenses that are ordinary and necessary;
•the payment is made from a Section 401 or 403 retirement plan or an IRA;
•your financial advisor’s payment is only made from the accumulations in your retirement plan or IRA, as applicable, and not directly by you or anyone else, under the agreement with your financial advisor; and
•once advisory fees begin to be paid from your retirement plan or IRA, as applicable, you continue to pay those fees solely from your plan or IRA, as applicable, and not from any other source.
However, withdrawals to pay advisory fees to your financial advisor from your accumulations under an ATRA contract will be treated as taxable distributions. The IRS has privately ruled that withdrawals to pay advisory fees under some insurers’ non-qualified contracts will not be treated as taxable distributions. TIAA did not obtain a ruling of this type for the ATRA Contract and the contract has not been changed to prepare for such a ruling request. You should consult a qualified tax or legal adviser as to whether you may exclude from income advisory fees paid to your financial advisor from ATRA contracts.
Foreign tax credit
The Account may be subject to foreign taxes on investments in other countries, including capital gains tax on any appreciation in value when a real estate investment in a foreign jurisdiction is eventually sold. Any potential tax impact will not be reflected in the valuation of the foreign investment and may not be fully reflected in a tax accrual by the Account. Upon payment of any foreign tax by the
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Account, TIAA may be eligible to receive a foreign tax credit, which (subject to certain limitations) may be available to reduce its U.S. tax burden. The Account is a segregated asset account of TIAA and incurs no material federal income tax attributable to the investment performance of the Account under the Code. As a result, the Account will not realize any tax benefit from any foreign tax credit that
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may be available to TIAA; however, to the extent that TIAA can utilize the foreign tax credit in its consolidated tax return, TIAA will reimburse the Account for that benefit at that time. The extent to which TIAA is able to utilize the credits when the Account incurs a foreign tax will determine the amount and timing of reimbursement from TIAA to the Account for the resulting foreign tax credit. The Account’s unit values may be adversely impacted in the future if a foreign tax is paid, and TIAA is not able to utilize (and therefore does not reimburse the Account for), either immediately or in the future, the foreign tax credit earned as a result of the foreign tax paid by the Account.
Enacted tax legislation
On December 22, 2017, H.R. 129, 2022, the Secure 2.0 Act of 2022 (“Secure 2.0” or the “Act”) was enactedsigned into law under Division T of the Consolidated Appropriations Act of 2023. Secure 2.0 is a significant bipartisan package of provisions that are mostly focused on improving access to, and administration of, retirement plans, and recognizes the importance of lifetime income as P.L. 115-77, popularly known asa key component of retirement readiness. The Act is generally effective after 2023, with several key provisions effective in 2024 or later years. A number of provisions may directly impact your contract. These will be discussed in relevant sections of this Prospectus. TIAA is working with trade associations and other groups to obtain guidance and transition relief (from the “Tax CutsIRS and Jobs Act” (the “Act”), permanently cutting the corporate tax rate from 35% to 21%, temporarily reducing individual tax rates and providing a partial deductionTreasury Department) for certain income earned by pass-through entities until 2026, while making fundamental changesprovisions as we work to adopt procedures and modify systems to comply with the taxation of foreign persons and income. To broaden the income tax base to pay for the rate cuts and pass-through income deduction, many corporate deductions have been eliminated or modified and many individual deductions suspended until 2026. With most provisions effective on January 1, 2018, the Joint Committee on Taxation (“JCT”) estimates that the Act will increase the federal deficit by approximately $1.5 trillion over 10 years. The JCT also estimates that the Act will result in some economic growth over the same period. While the Act is expected to have effects on the economy that will impact the performance of real estate and credit markets, we cannot predict those effects. You should discuss the possibility of such impacts with your financial adviser.
Certain provisions of the Act should have more direct impacts on real estate and credit markets. A limitation on the aggregate deduction for state and local income taxes and property taxes to $10,000 and certain limitations on the deduction for qualified residence interest could impact the housing market in certain areas, affecting the performance of certain real estate investments. Limitations on deductibility of business interest and increased expensing provisions could impact the market for commercial real estate. Other provisions may also impact real estate or credit markets in certain circumstances in ways that we cannot predict. Guidance to be issued by the Treasury Department and Internal Revenue Service may alter these effects. Your tax adviser should monitor these developments.
We have not identified any provisions of the Act that would diminish the favorable tax treatment that annuity contract owners currently receive.
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Act.
Possible tax law changes
There is always the possibility that the tax treatment of your contract could change by legislation or otherwise. However, the timing and nature of legislative changes is uncertain. Consult a tax or legal advisor with respect to legislative developments and their effect on your contract. We have the right to modify the contract in response to legislative changes that could otherwise diminish the favorable tax treatment that annuity contract owners currently receive. We make no guarantee regarding the tax status of any contract and do not intend the above discussion asdoes not constitute tax advice.
General matters
Making choices and changes
You may have to make certain choices or changes (e.g.(e.g., changing your income option, making a cash withdrawal) by written notice in good order“good order” satisfactory to us and received at our home office or at some other location that we have specifically designated for that purpose. When we receive a notice of a change in beneficiary or other person named to receive payments, we’ll execute the change as of the date it was signed, even if the signer has died in the meantime. We execute all other changes as of the date received.
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Telephone and internetInternet transactions
You can use our Automated Telephone Service (“ATS”) or the TIAA Web Center’swebsite’s account access feature toat www.tiaa.org 24 hours a day. Once logged into your account you can check your account balances, transfer to TIAA’s Traditional Annuity, TIAA Access variable annuity accounts or CREF, and/or allocate future premiums among the accounts and funds available to you through TIAA. Note that, currently, all requestsTIAA and/or to make lump-sumrequest lump sum transfers out of the Real Estate Account to another investment option (whether or not affiliated withoption. You can call our Automated Telephone Service at 800-842-2252 to check your accumulation balances and hear other personal account updates 24 hours a day. TIAA or CREF) may not be made by means of TIAA’s Internet website. You will be asked to enter your Personal Identification Number (“PIN”) and Social Security number for both systems. (You can establish a PIN by calling us.) Both will lead you through the transaction process and will use reasonable procedures to confirm that instructions given online or by phone are genuine. If we use such procedures, we are not responsible for incorrect or fraudulent transactions. All transactions made overthrough the ATS and Internetwebsite or by phone are electronically recorded.
To use the ATS, you need a touch-tone phone. The toll free number for the ATS is 800-842-2252. To use the Internet, go to the account access feature of the TIAA Web Center at www.tiaa.org. We can suspend or terminate your ability to transact by telephone or over the Internet or by fax at any time, for any reason.
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Voting rights
You don’t have the right to vote on the management and operation of the Account directly; however, you may send ballots to advise the TIAA Board of Overseers about voting for nominees for the TIAA Board of Trustees.
Electronic prospectus
If you received this prospectus electronically and would like a paper copy, please call 877-518-9161 and we will send it to you. Under certain circumstances where we are legally required to deliver a prospectus to you, we cannot send you a prospectus electronically unless you’ve consented.
Householding
To lower costs and eliminate duplicate documents sent to your home, we may begin mailing only one copy of the Account’s prospectus, prospectus supplements or any other required documents to your household, even if more than one participantcontract owner lives there. If you would prefer to continue receiving your own copy of any of these documents, you may call us toll-free at 877-518-9161, or write us.us at TIAA, P.O. Box 1529, Charlotte, NC 28201.
Miscellaneous policies
Amending the Contracts: The contract may be amended by agreement of TIAA and the contract owner without the consent of any other person, provided that such change does not reduce any benefit purchased under the contract up to that time. Any endorsement or amendment of the contract, waiver of any of its provisions, or change in rate schedule will be valid only if in writing and signed by an executive officer of TIAA.
If You’re Married: If you’re married, you may be required by law or your employer’s plan to get advance written consent from your spouse before we make
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certain transactions for you. If you’re married at your annuity starting date, you may also be required by law or your employer’s plan to choose an income option that provides survivor annuity income to your spouse, unless he or she waives that right in writing. There are limited exceptions to the waiver requirement.
Texas Optional Retirement Program Restrictions: If you’re in the Texas Optional Retirement Program, you or your beneficiary can redeem some or all of your accumulation only if you retire, die, or leave your job in the state’s public institutions of higher education.
Assigning Your Contract: Generally, neither you nor your beneficiaries can assign your ownership of a TIAA retirement contract to anyone else.
Overpayment of Premiums: If your employer mistakenly sends more premiums on your behalf than you’re entitled to under your employer’s retirement plan or the Code, we’ll refund them to your employer as long as we’re requested to do so (in writing) before you start receiving annuity income.
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Any timeAnytime there’s a question about premium refunds, TIAA will rely on information from your employer. If you’ve withdrawn or transferred the amounts involved from your accumulation, we won’t refund them.
Errors or Omissions: We reserve the right to correct any errors or omissions on any form, report, or statement that we send you.
Payment to an Estate, Guardian, Trustee, etc.: We reserve the right to pay in one sum the commuted value of any benefits due an estate, corporation, partnership, trustee, or other entity not a natural person. Neither TIAA nor the Account will be responsible for the conduct of any executor, trustee, guardian, or other third party to whom payment is made.
Benefits Based on Incorrect Information: If the amounts of benefits provided under a contract were based on information that is incorrect, benefits will be recalculated on the basis of the correct data. If the Account has overpaid or underpaid, appropriate adjustments will be made.
Proof of Survival: We reserve the right to require satisfactory proof that anyone named to receive benefits under a contract is living on the date payment is due. If we have not received this proof after we request it in writing, the Account will have the right to make reduced payments or to withhold payments entirely until such proof is received.
Distribution
The annuity contracts are offered continuously by Services, which is registered with the SEC as a broker-dealer and a registered investment adviser and is a member of the Financial Industry Regulatory Authority (“FINRA”). Teachers Personal InvestorsFINRA. Services Inc. (“TPIS”), alsois a broker-dealer registered with the SECdirect wholly owned subsidiary of TIAA and a member of FINRA, may participate in the distribution of the contracts on a limited basis. Services and TPIS are direct or indirect wholly-owned subsidiaries of TIAA. Their addresses areis located at 730 Third Avenue, New York, NY 10017-3206. No front end or deferred sales loads, sales charges or commissions are paid for distributingin connection with the distribution of contracts.
State regulation
TIAA, the Real Estate Account, and the contracts (including any proposed modification thereto) are subject to regulation by the NYDFS as well as by the insurance regulatory authorities of certain other states and jurisdictions.
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TIAA and the Real Estate Account must file with the NYDFS both quarterly and annual statements. The Account’s books and assets are subject to review and examination by the NYDFS at all times, and a full examination into the affairs of the Account is made at least every five years. In addition, examinations of the Account’s operations are usually conducted periodically by insurance regulators in several other states.
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Legal matters
All matters involving state law and relating to the contracts, including TIAA’s right to issue the contracts, have been passed upon by Phillip Rollock,Deirdre Hykal, Executive Vice President, Deputy Chief Legal Officer, of TIAA.General Counsel, Product & Distribution.
Dechert LLP has provided legal advice to the Account related to certain matters under the federal securities laws.
Experts
The consolidated financial statements of the TIAA Real Estate Account incorporated in this Prospectus by reference to the Annual Report on Form 10-K of the TIAA Real Estate Account for the year ended December 31, 20172023 have been so incorporated in reliance on the report of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.
Mitchell Titus, an independent auditor, has audited the statement of revenues and certain expenses of the following property:
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(i) | One Beeman Road, located in Northborough, MA, for the year ended December 31, 2016. |
After reasonable inquiry, the Account is not aware of any material factors relating to the specific properties audited by Mitchell Titus, other than as specifically set forth elsewhere in this prospectus that would cause the reported financial information indicated in such financial statements not to be necessarily indicative of future operating results.
We have included these financial statements in the prospectus and elsewhere in the registration statement in reliance on Mitchell Titus’ reports, given on the authority of such firm as experts in accounting and auditing.
Carr, Riggs & Ingram, LLC, an independent auditor, has audited the statement of revenues and certain expenses of the following properties:
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(i) | The Bridges, Minneapolis, MN, for the year ended December 31, 2016; and |
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(ii) | The Knoll, Minneapolis, MN, for the year ended December 31, 2016. |
After reasonable inquiry, the Account is not aware of any material factors relating to the specific properties audited by Carr, Riggs & Ingram, LLC, other than as specifically set forth elsewhere in this prospectus that would cause the reported financial information indicated in such financial statements not to be necessarily indicative of future operating results.
We have included these financial statements in the prospectus and elsewhere in the registration statement in reliance on Carr, Riggs & Ingram, LLC’s reports, given on the authority of such firm as experts in accounting and auditing.
CohnReznick LLP, an independent auditor, has audited the statement of revenues and certain expenses of the following properties:
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(i) | 803 Corday ("AMLI at Naperville"), Naperville, IL, for the year ended December 31, 2016; |
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(ii) | Village Crossing Phase I, Niles, IL, for the year ended December 31, 2016; |
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(iii) | Broward Industrial Portfolio, Broward County, Florida, for the year ended December 31, 2016; |
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(iv) | Orion on Orpington, Orlando, FL, for the year ended December 31, 2016; |
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(v) | Bridgepointe Shopping Center, San Mateo, CA, for the year ended December 31, 2016; |
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(vi) | Frontera Industrial Business Park, San Diego, CA, for the year ended December 31, 2016; and |
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(vii) | Carrington Park, Plano, TX, for the year ended December 31, 2017. |
After reasonable inquiry, the Account is not aware of any material factors relating to the specific properties audited by CohnReznick LLP, other than as specifically set forth elsewhere in this prospectus that would cause the reported financial information indicated in such financial statements not to be necessarily indicative of future operating results.
We have included these financial statements in the prospectus and elsewhere in the registration statement in reliance on CohnReznick LLP’s reports, given on the authority of such firm as experts in accounting and auditing.
Grant Thornton LLP, an independent auditor, has audited the statement of revenues and certain expenses of the following properties:
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(i) | Allure at Camarillo, Camarillo, CA, for the year ended December 31, 2016; |
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(ii) | Storage Portfolio II ("Project Jazz"), Various, USA, for the year ended December 31, 2016; and |
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(iii) | 30700 Russell Ranch Road, Westlake Village, CA, for the year ended December 31, 2016. |
After reasonable inquiry, the Account is not aware of any material factors relating to the specific properties audited by Grant Thornton LLP, other than as specifically set forth elsewhere in this prospectus that would cause the reported financial information indicated in such financial statements not to be necessarily indicative of future operating results.
We have included these financial statements in the prospectus and elsewhere in the registration statement in reliance on Grant Thornton LLP’s reports, given on the authority of such firm as experts in accounting and auditing.
Additional information
Information available at the SEC
The Account has filed annual reports, quarterly reports, current reports and other information with the SEC. You may read or obtain a copy of these reportsInformation about the Account is also available at the SEC’s public reference room at 100 F Street, N.E., Room 1580, Washington, D.C. 20549. You may obtain information on the operation of the public reference roomwww.tiaa.org. The U.S. Securities and their copy charges by calling the SEC at 1-800-SEC-0330. The SECExchange Commission (SEC) maintains a websitean internet site (www.sec.gov) that contains registration statements, reports, proxy
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and information statements, and other information regarding registrants (including the Account) that file electronically with the SEC. The address of the website is http://www.sec.gov.
The Account has also filed with the SEC a Registration Statement on Form S-1 under the Securities Act to register the units offered by this prospectus. The term “registration statement” means the original registration statement and any and all amendments thereto, including the schedules and exhibits to the original registration statement or any amendment. This prospectus, and any documents incorporated therein, are part of that registration statement. This prospectus does not contain all of the information set forth in the registration statement or the exhibits to the registration statement. For further information with respect to us and the units we are offering pursuant to this prospectus, you should refer to the registration statement and its exhibits as well as any documents incorporated by reference (including the Account’s 20172023 Form 10-K). Statements contained in this
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prospectus as to the contents of any contract, agreement or other document referred to herein are not necessarily complete, and you should refer to the copy of that contract or other documents filed as an exhibit to the registration statement. You may read or obtain a copy of the registration statement at the SEC’s public reference facilities and Internet site referred to above.
Incorporation of information by reference
The SEC allows the Account to “incorporate by reference” certain information that the Account files with the SEC. Incorporation by reference allows the Account to disclose important information to you by referring you to those other documents. The information incorporated by reference is an important part of this prospectus. The Account filed a registration statement on Form S-1 under the Securities Act, of 1933, as amended, with the SEC with respect to the securities it may offer pursuant to this prospectus. This prospectus omits certain information contained in the registration statement, as permitted by the SEC. You should refer to the registration statement, including the exhibits and other documents incorporated by reference herein, for further information about us and the securities the Account may offer pursuant to this prospectus.
Statements in this prospectus regarding the provisions of certain documents filed with, or incorporated by reference in, the registration statement are not necessarily complete and each statement is qualified in all respects by that reference. Copies of all or any part of the registration statement, including the documents incorporated by reference or the exhibits, may be obtained upon payment of the prescribed rates at the offices of the SEC listed above in “Information Available from the SEC.”
The documents the Account is incorporating by reference into this prospectus are:
Theare the Account’s 20172023 Form 10-K. The 20172023 Form 10-K contains, among other things, the Account’s annual audited financial statements as well as additional information regarding the Account’s business, properties, legal proceedings, changes in and disagreements with the accountants on accounting and financial disclosure, “Management’s Discussion and
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TIAA Real Estate AccountnProspectus
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Analysis of Financial Condition and Results of Operations” and quantitative and qualitative disclosure about market risk.
Unless otherwise noted, the SEC file number for each of the documentsdocument listed above is 033-92990.
Any statement contained in a document incorporated by reference in this prospectus will be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained in this prospectus modifies or supersedes the statement. Any statement so modified or superseded will not be deemed, except as so modified or superseded, to constitute a part of this prospectus.
You may request, orally or in writing, a copy of any or all of the documents incorporated by reference herein. These documents will be provided to you at no cost, by contacting: Office of the Corporate Secretary, TIAA, 730 Third Avenue,
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TIAA Real Estate AccountnProspectus
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New York, NY 10017-3206, telephone: 212-916-4000. In addition, such incorporated reports and documents can be located on TIAA’s website at http://www.tiaa.org/public/prospectuses/index.html.
The SEC also maintains a website that contains reports and information statements and other information we file with the SEC at www.sec.gov. Copies of these reports, information statements and other information may also be obtained, after paying a duplicating fee, by electronic request at publicinfo@sec.gov.
You should rely only on information contained in, or incorporated by reference into, this prospectus and any prospectus supplement. The Account has not authorized anyone to provide you with information different from that contained in this prospectus or incorporated by reference in this prospectus. The Account is not making offers to sell the securities in any jurisdiction in which such an offer or solicitation is not authorized or in which the person making such offer or solicitation is not qualified to do so or to anyone to whom it is unlawful to make such offer or solicitation.
Information from TIAA
TIAA plan pricing
TIAA provides recordkeeping and other plan-related services for many retirement plans and their contract owners investing in the Account. A retirement plan sponsor typically agrees with TIAA on the services to be provided and a total price for providing these services to its plan and its contract owners. TIAA plan pricing arrangements can affect the overall costs of retirement plan investments for plan sponsors and contract owners. TIAA plan pricing arrangements are not reflected in the Account expenses described in this prospectus, and may result in compensation to TIAA that is more or less than TIAA’s cost associated with services for any plan.
Employer plan fees
Your employer may, in accordance with the terms of your plan, withdraw amounts from your accumulations under your Retirement Choice or Retirement Choice Plus contract, and, if your certificate so provides, on your GRA or GSRA, or GA contract, to pay fees associated with the administration of the plan. TIAA processes such fee withdrawals in accordance with the terms of the record-keeping service agreement between TIAA and the plan sponsor. An employer plan fee withdrawal cannot be revoked after its effective date under the plan and will reduce the accumulation from which it is paid by the amount withdrawn.
Further information; reports to participantscontract owners
TIAA will mail to each participantcontract owner in the Account periodic reports providing information relating to their accumulations in the Account, including premiums paid, number and value of accumulations, and withdrawals or transfers during the
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130 | TIAA Real Estate AccountnProspectus
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period, as well as such other information as may be required by applicable law or regulations. Further information may be obtained from TIAA at 730 Third Avenue, New York, NY 10017-3206.
Customer complaints
Customer complaints may be directed to TIAA Customer Care, P .O. Box 1259, Charlotte, NC 28201-1259, telephone 800-842-2252.
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106 | ProspectusnTIAA Real Estate Account
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Financial statements
The unaudited pro-forma condensed financial statements of the Account, certain property-specific financial statements and the condensed statutory-basis financial statement information of TIAA follow within this prospectus. The full audited statutory-basis financial statements of TIAA are included in this prospectus.
The statements of TIAA should be distinguished from the financial statements of the Account and should be considered only as bearing on the ability of TIAA to meet its obligations under the contracts. They should not be considered as bearing upon the assets held in the Account.
The audited financial statements of the TIAA Real Estate Account are incorporated into this prospectus by reference to the Account’s 2017 Form 10-K as outlined in the section above entitled “Additional information — Incorporation of information by reference.”Index to financial statements
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TIAA REAL ESTATE ACCOUNT |
PRO FORMA CONDENSED FINANCIAL STATEMENTS (UNAUDITED) |
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PROPERTY FINANCIAL STATEMENTS: |
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TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF AMERICA |
— | | Condensed statutory-basis financial statement information |
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TIAA Real Estate Account n Prospectus
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Pro forma condensed statement of assets and liabilities(unaudited)
TIAA Real Estate Account
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(in millions) | As of December 31, 2017 |
Historical |
| Adjustments |
| | Pro Forma |
|
ASSETS | | | | |
Real estate properties and real estate joint ventures and limited partnerships, at value | $ | 21,745.7 |
| $ | 97.0 |
| (a) | $ | 21,842.7 |
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Marketable securities | 5,125.5 |
| — |
| | 5,125.5 |
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Loans receivable | 298.8 |
| — |
| | 298.8 |
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Other | 283.6 |
| — |
| | 283.6 |
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TOTAL ASSETS | 27,453.6 |
| 97.0 |
| | 27,550.6 |
|
Mortgage notes payable | 2,238.3 |
| — |
| | 2,238.3 |
|
Accrued real estate property level expenses and taxes | 199.1 |
| — |
| | 199.1 |
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Payable for collateral for securities loaned | 18.5 |
| — |
| | 18.5 |
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Other | 55.1 |
| — |
| | 55.1 |
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TOTAL LIABILITIES | 2,511.0 |
| — |
| | 2,511.0 |
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NET ASSETS | $ | 24,942.6 |
| $ | 97.0 |
| | $ | 25,039.6 |
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Pro forma condensed statement of operations (unaudited)
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| For the Year Ended December 31, 2017 |
Historical |
| Adjustments |
| | Pro Forma |
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Rental income | $ | 1,059.6 |
| $ | 38.2 |
| (b) | $ | 1,097.8 |
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Operating expenses | 221.2 |
| 9.1 |
| (b) | 230.3 |
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Real estate taxes | 166.7 |
| 5.5 |
| (b) | 172.2 |
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Interest expense | 89.7 |
| — |
| | 89.7 |
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Total real estate property expenses and taxes | 477.6 |
| 14.6 |
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| 492.2 |
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Real estate income, net | 582.0 |
| 23.6 |
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| 605.6 |
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Income from real estate joint ventures and limited partnerships | 214.1 |
| 17.6 |
| (c) | 231.7 |
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Interest and dividends | 80.4 |
| — |
| | 80.4 |
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TOTAL INCOME, NET | 876.5 |
| 41.2 |
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| 917.7 |
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EXPENSES | 205.2 |
| 1.7 |
| (d) | 206.9 |
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INVESTMENT INCOME, NET | 671.3 |
| 39.5 |
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| 710.8 |
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REALIZED AND UNREALIZED GAINS | 387.1 |
| — |
| | 387.1 |
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NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 1,058.4 |
| $ | 39.5 |
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| $ | 1,097.9 |
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108 | ProspectusnTIAA Real Estate Account
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Notes to pro forma condensed financial statements(unaudited)
TIAA Real Estate Account
Note 1—Purpose and Assumptions
As required by the Securities and Exchange Commission under Regulation S-X Article 11-01(5), these pro forma condensed financial statements of the TIAA Real Estate Account (“Account”) have been prepared because the Account has made significant purchases of real estate property investments during the period from January 1, 2017 through the date of this prospectus.
Various assumptions have been made in order to prepare these pro forma condensed financial statements. The pro forma condensed statement of operations for the year ended December 31, 2017 has been prepared assuming real estate property investments purchased during the period from January 1, 2017 through the date of this prospectus, were purchased as of January 1, 2017.
Note 2—Pro Forma Adjustments
The following pro forma adjustments were made in preparing the pro forma condensed financial statements to reflect the purpose described in Note 1.
Pro forma Condensed Statement of Assets and Liabilities:
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(a) | To record the cost of real estate property investments purchased during the period from January 1, 2018 through March 1, 2018. |
Pro forma Condensed Statement of Operations:
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(b) | To record the rental income and real estate property level expenses of the real estate properties purchased during the period from January 1, 2017 through the date of this prospectus, assuming such properties were owned for the entire year ended December 31, 2017. |
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(c) | To record income for the joint ventures purchased during the period from January 1, 2017 through the date of this prospectus, assuming the joint venture interests were owned for the entire year ended December 31, 2017. |
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(d) | To record additional investment management expense charges which would have been incurred during the year ended December 31, 2017, based on the net investment amounts involved and assuming the real estate property investments purchased during the period from January 1, 2017 through the date of this prospectus had been purchased as of January 1, 2017. |
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TIAA Real Estate AccountnProspectus
| 109 |
One Beeman Road — Northborough, Massachusetts
INDEPENDENT AUDITOR’S REPORT
To Management
Teachers Insurance and Annuity Association of America
We have audited the accompanying statements of revenues and certain expenses of One Beeman Road, located in Northborough, MA 01532 (the ‘‘Property’’), as described in Note 1, for the year ended December 31, 2016, and the related notes to the financial statement.
Management’s Responsibility for the Financial Statement
Management is responsible for the preparation and fair presentation of the financial statement in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of a financial statement that is free from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on the financial statement based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statement. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statement, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statement in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statement.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statement referred to above presents fairly, in all material respects, the revenues and certain expenses of the Property, as
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110 | ProspectusnTIAA Real Estate Account
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described in Note 1, for the year ended December 31, 2016, in conformity with accounting principles generally accepted in the United States of America.
Emphasis of Matter
The accompanying statements of revenues and certain expenses was prepared for the purpose of complying with Rule 3-14 of Regulation S-X promulgated by the Securities and Exchange Commission and, as described in Note 1, is not intended to be a complete presentation of the Property’s revenue and expenses.
May 30, 2017
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TIAA Real Estate AccountnProspectus
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One Beeman Road — Northborough, Massachusetts
Statements of revenue and certain expenses
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| Two Months Ended February 28, 2017 (Unaudited) |
| | Year Ended December 31, 2016 (Audited) |
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REVENUES | | | | |
Rental revenue | $ | 416,205 |
| | $ | 2,282,147 |
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Tenant recoveries and other income | 109,155 |
| | 641,565 |
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Total revenue | 525,360 |
| | 2,923,712 |
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CERTAIN EXPENSES | | | | |
Real estate taxes | 58,427 |
| | 350,733 |
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Common area maintenance | 59,063 |
| | 105,983 |
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Property management fee | 12,681 |
| | 75,733 |
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Building repairs and maintenance | 19,630 |
| | 61,816 |
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Insurance | 2,661 |
| | 17,957 |
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Utilities | 3,374 |
| | 14,839 |
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Payroll | 1,162 |
| | 518 |
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Total certain expenses | 156,998 |
| | 627,579 |
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Revenue in excess of certain expenses | $ | 368,362 |
| | $ | 2,296,133 |
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The accompanying notes are an integral part of this financial statement.
Notes to Statements of Revenues and Certain Expenses
For the Year Ended December 31, 2016 and for the Two Months Ended February 28, 2017 (unaudited)
Note 1 — Basis of presentation
The accompanying statements of revenues and certain expenses include the operations of One Beeman Road, located in Northborough, MA 01532 (“the Property”). The Property is a 342,900-square-foot industrial distribution facility.
The accompanying statements of revenues and certain expenses relate to the Property and have been prepared for the purpose of complying with Rule 3-14 of Regulation S-X promulgated by the Securities and Exchange Commission of 1933, as amended. Accordingly, the statements are not representative of the actual operations for the periods presented, as revenues and certain operating expenses, which may be directly attributable to the revenues and expenses expected to be incurred in the future operations of the Property, have been excluded. Such items include depreciation, amortization, interest expense, interest income, income taxes, amortization of above- and below-market leases, and certain other expenses directly related to the future operations of the Property.
The statements of revenues and certain expenses for the two months ended February 28, 2017, is unaudited. However, in the opinion of management, all
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112 | ProspectusnTIAA Real Estate Account
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One Beeman Road — Northborough, Massachusetts
adjustments (consisting solely of normal recurring adjustments) necessary for the fair presentation of this statements of revenues and certain expenses for the interim period on the basis described above have been included. The results for such an interim period do not necessarily indicate the results for the entire year.
Note 2 — Summary of significant accounting policies
Use of estimates
The preparation of the statements of revenues and certain expenses in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions that affect various amounts reported in the financial statement and accompanying notes. Actual results could differ from those estimates.
Revenue recognition
Rental income from operating leases, which include scheduled increases over the lease term, is recognized on a straight-line basis. For the year ended December 31, 2016, income recognized on a straight-line bases is less than income that would have been accrued in accordance with the lease terms by approximately $63,799. For the unaudited two month period ended February 28, 2017, income recognized on a straight-line basis is more that income that would have been accrued in accordance with the lease terms by approximately $16,633.
Tenant recoveries and other income related to reimbursement of real estate taxes, insurance, repairs and maintenance, and other operating expenses are recognized as revenue in the period the applicable expenses are incurred.
Note 3 — Tenant concentrations
For the year ended December 31, 2016, and the two month period ended February 28, 2017 (unaudited), all revenue generated by the Property is from one tenant in the courier industry.
Note 4 — Minimum future lease rentals
There is a lease agreement in place with one tenant to lease space in the Property. The minimum future cash rents receivable under the operating lease in each of the next five years and thereafter as of December 31, 2016, are as follows:
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TIAA Real Estate AccountnProspectus
| 113 |
One Beeman Road — Northborough, Massachusetts
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Year | | Amount |
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2017 | | $ | 2,403,431 |
|
2018 | | 2,403,431 |
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2019 | | 2,426,503 |
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2020 | | 2,541,862 |
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2021 | | 2,541,862 |
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2022 | | 2,541,862 |
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Thereafter | | 17,144 |
|
Leases generally require reimbursement of the tenant’s proportional share of common area, real estate taxes, and other operating expenses, and have been excluded from the amounts above.
Note 5 — Subsequent events
Subsequent events have been evaluated through May 30, 2017, the date the statements of revenues and certain expenses were available for issuance. Management has determined that there are no subsequent events that require disclosure under Financial Accounting Standards Board Accounting Standards Codification Topic 855, Subsequent Events.
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114 | ProspectusnTIAA Real Estate Account
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The Bridges — Minneapolis, Minnesota
INDEPENDENT AUDITOR’S REPORT
To the Management of
Teachers Insurance and Annuity Association of America
We have audited the accompanying statements of revenues and certain expenses of The Bridges (the "Property"), as described in Note A, for the year ended December 31, 2016, and the related notes to the financial statements.
Management’s Responsibility for the Financial Statement
Management is responsible for the preparation and fair presentation of the financial statement in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of a financial statement that is free from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on the financial statement based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statement. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statement, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statement in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statement.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statement referred to above presents fairly, in all material respects, the revenues and certain expenses of the Property, as described in Note A, for the year ended December 31, 2016, in conformity with accounting principles generally accepted in the United States of America.
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TIAA Real Estate AccountnProspectus
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Emphasis of Matter
The accompanying statement of revenues and certain expenses was prepared for the purpose of complying with Rule 3-14 of Regulation S-X promulgated by the Securities and Exchange Commission and, as described in Note A, is not intended to be a complete presentation of the Property's revenues and expense.
CARR, RIGGS & INGRAM, LLC
July 31, 2017
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116 | ProspectusnTIAA Real Estate Account
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The Bridges — Minneapolis, Minnesota
Statements of revenues and certain expenses
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| For The Year Ended December 31, 2016 (Audited) |
| | For The Period Ended May 31, 2017 (Unaudited) |
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REVENUES | | | | |
Rental income | $ | 4,467,253 |
| | $ | 2,019,915 |
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Other operating income | 640,896 |
| | 218,295 |
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Total revenues | 5,108,149 |
| | 2,238,210 |
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CERTAIN EXPENSES | | | | |
Advertising and marketing | 117,620 |
| | 52,631 |
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General and administrative | 61,258 |
| | 27,748 |
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Insurance | 36,185 |
| | 24,462 |
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Management fees | 165,692 |
| | 72,004 |
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Real estate taxes | 874,083 |
| | 445,303 |
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Repairs and maintenance | 383,337 |
| | 158,192 |
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Salaries and wages | 402,282 |
| | 146,969 |
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Utilities | 186,115 |
| | 76,559 |
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Total certain expenses | 2,226,572 |
| | 1,003,868 |
| |
Revenue in excess of certain expenses | $ | 2,881,577 |
| | $ | 1,234,342 |
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See Independent Auditors' Report and Accompanying Notes
Notes to Statements of Revenues and Certain Expenses
Note A — Organization and basis of presentation
The statement of revenues and certain expenses (the “financial statement”) for the year ended December 31, 2016 relates to the operations of The Bridges (the “Property”). The Property was built in 2014 and consists of 210 apartment units with a total of 360 beds in an eleven-story residential apartment building, and a two-level parking structure located in Minneapolis, Minnesota. TIAA Real Estate Account, a subsidiary of TIAA-CREF, purchased the Property on July 13, 2017. As of December 31, 2016 and April 30, 2017, the Property was 98% and 99% leased, respectively.
The accompanying financial statement is presented in conformity with Rule 3-14 of Regulation S-X promulgated by the Securities and Exchange Commission. Accordingly, the financial statement is not representative of the actual operations for the period presented, as certain expenses which may not be comparable to the expenses expected to be incurred in the future operations of the Property have been excluded. Expenses excluded consist of depreciation, amortization, income taxes and certain other expenses not directly related to the future operations of the Property.
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TIAA Real Estate AccountnProspectus
| 117 |
The Bridges — Minneapolis, Minnesota
The statement of revenues and certain expenses for the period ended May 31, 2017 is unaudited. However, in the opinion of management, all adjustments (consisting solely of normal recurring adjustments) necessary for the fair presentation of this statement of revenues and certain expenses for the interim period on the basis described above have been included. The results for such an interim period are not necessarily indicative of the results for the entire year.
Note B — Summary of significant accounting policies
Use of estimates
The preparation of the financial statement in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect various amounts reported in the financial statement and accompanying notes. Actual results could differ from those estimates.
Revenue recognition
Rental income from tenant leases is recognized as earned. Lease terms generally do not extend beyond one year.
Advertising and marketing costs
Advertising and marketing costs are expensed as incurred.
Note C — Related parties
The Property is under a property management agreement with an affiliate of the seller. For the year ended December 31, 2016 and the period ended May 31, 2017, the Property incurred $165,692 and $72,004 in management fees, respectively. Additionally, during the year ended December 31, 2016 and the period ended May 31, 2017, the Property paid $402,282 and $146,969, respectively, to the affiliate for the cost of salaries and wages earned.
Note D — Subsequent events
Subsequent events have been evaluated through July 31, 2017, the date the financial statement was available for issuance. Management has determined that there are no subsequent events that require disclosure under Financial Accounting Standards Board Accounting Standards Codification Topic 855, Subsequent Events.
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118 | ProspectusnTIAA Real Estate Account
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The Knoll — Minneapolis, Minnesota
INDEPENDENT AUDITOR’S REPORT
To the Management of
Teachers Insurance and Annuity Association of America
We have audited the accompanying statements of revenues and certain expenses of The Knoll (the "Property"), as described in Note A, for the year ended December 31, 2016, and the related notes to the financial statements.
Management’s Responsibility for the Financial Statement
Management is responsible for the preparation and fair presentation of the financial statement in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of a financial statement that is free from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on the financial statement based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statement. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statement, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statement in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statement.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statement referred to above presents fairly, in all material respects, the revenues and certain expenses of the Property, as described in Note A, for the year ended December 31, 2016, in conformity with accounting principles generally accepted in the United States of America.
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TIAA Real Estate AccountnProspectus
| 119 |
Emphasis of Matter
The accompanying statement of revenues and certain expenses was prepared for the purpose of complying with Rule 3-14 of Regulation S-X promulgated by the Securities and Exchange Commission and, as described in Note A, is not intended to be a complete presentation of the Property's revenues and expense.
CARR, RIGGS & INGRAM, LLC
July 31, 2017
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120 | ProspectusnTIAA Real Estate Account
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The Knoll — Minneapolis, Minnesota
Statements of revenues and certain expenses
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| For The Year Ended December 31, 2016 (Audited) |
| | For The Period Ended May 31, 2017 (Unaudited) |
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REVENUES | | | | |
Rental income | $ | 2,440,536 |
| | $ | 1,068,812 |
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Other operating income | 316,266 |
| | 121,314 |
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Total revenues | 2,756,802 |
| | 1,190,126 |
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CERTAIN EXPENSES | | | | |
Advertising and marketing | 72,234 |
| | 27,972 |
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General and administrative | 35,892 |
| | 14,610 |
| |
Insurance | 49,155 |
| | 26,769 |
| |
Management fees | 89,379 |
| | 38,696 |
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Real estate taxes | 444,148 |
| | 244,308 |
| |
Repairs and maintenance | 231,511 |
| | 106,209 |
| |
Salaries and wages | 250,812 |
| | 84,803 |
| |
Utilities | 76,641 |
| | 31,582 |
| |
Total certain expenses | 1,249,772 |
| | 574,949 |
| |
Revenue in excess of certain expenses | $ | 1,507,030 |
| | $ | 615,177 |
| |
See Independent Auditors' Report and Accompanying Notes
Notes to Statements of Revenues and Certain Expenses
Note A — Organization and basis of presentation
The statement of revenues and certain expenses (the “financial statement”) for the year ended December 31, 2016 relates to the operations of The Knoll (the “Property”). The Property was built in 2013 and consists of 101 apartment units with a total of 226 beds in a five-story residential apartment building, and a two-level underground parking structure located in Minneapolis, Minnesota. TIAA Real Estate Account, a subsidiary of TIAA-CREF, purchased the Property on July 13, 2017. As of December 31, 2016 and May 31, 2017, the Property was 96% and 95% leased, respectively.
The accompanying financial statement is presented in conformity with Rule 3-14 of Regulation S-X promulgated by the Securities and Exchange Commission. Accordingly, the financial statement is not representative of the actual operations for the period presented, as certain expenses which may not be comparable to the expenses expected to be incurred in the future operations of the Property have been excluded. Expenses excluded consist of depreciation, amortization, income taxes and certain other expenses not directly related to the future operations of the Property.
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TIAA Real Estate AccountnProspectus
| 121 |
The Knoll — Minneapolis, Minnesota
The statement of revenues and certain expenses for the period ended May 31, 2017 is unaudited. However, in the opinion of management, all adjustments (consisting solely of normal recurring adjustments) necessary for the fair presentation of this statement of revenues and certain expenses for the interim period on the basis described above have been included. The results for such an interim period are not necessarily indicative of the results for the entire year.
Note B — Summary of significant accounting policies
Use of estimates
The preparation of the financial statement in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect various amounts reported in the financial statement and accompanying notes. Actual results could differ from those estimates.
Revenue recognition
Rental income from tenant leases is recognized as earned. Lease terms generally do not extend beyond one year.
Advertising and marketing costs
Advertising and marketing costs are expensed as incurred.
Note C — Related parties
The Property is under a property management agreement with an affiliate of the seller. For the year ended December 31, 2016 and the period ended May 31, 2017, the Property incurred $89,379 and $38,696 in management fees, respectively. Additionally, during the year ended December 31, 2016 and the period ended May 31, 2017, the Property paid $250,812 and $84,803, respectively, to the affiliate for the cost of salaries and wages earned.
Note D — Subsequent events
Subsequent events have been evaluated through July 31, 2017, the date the financial statement was available for issuance. Management has determined that there are no subsequent events that require disclosure under Financial Accounting Standards Board Accounting Standards Codification Topic 855, Subsequent Events.
|
| |
122 | ProspectusnTIAA Real Estate Account
|
803 Corday (AMLI at Naperville) — Naperville, Illinois
INDEPENDENT AUDITOR’S REPORT
To the Board of Directors and Stockholders
TIAA-CREF, Inc.
AMLI at Naperville
We have audited the accompanying Statements of Revenues and Certain Operating Expenses (the "financial statement") of AMLI at Naperville located in Naperville, Illinois (the "Property") for the year ended December 31, 2016, and the related notes to the financial statement.
Management’s Responsibility for the Financial Statement
Management of the Seller of AMLI at Naperville is responsible for the preparation and fair presentation of the financial statement in conformity with U.S. generally accepted accounting principles; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the financial statement that are free from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on the financial statement based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statement, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statement in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statement.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statement referred to above presents fairly, in all material respects, the revenue and certain operating expenses described in Note 1 to the financial statement of AMLI at Naperville for the year ended December 31, 2016, in conformity with U.S. generally accepted accounting principles.
|
| |
TIAA Real Estate AccountnProspectus
| 123 |
Other Matter
As described in Note 1 to the financial statement, the Statement of Revenue and Certain Operating Expenses has been prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission for inclusion in registration statements of TIAA Real Estate Account and is not intended to be a complete presentation of the Property’s revenue and expenses. Our opinion is not modified with respect to this matter.
Charlotte, North Carolina
November 27, 2017
|
| |
124 | ProspectusnTIAA Real Estate Account
|
803 Corday (AMLI at Naperville) — Naperville, Illinois
Statements of revenue and certain operating expenses
|
| | | | | | | | |
| Year Ended December 31, 2016 (audited) |
| | Period from January 1, 2017 to June 30, 2017 (unaudited) |
| |
REVENUES | | | | |
Base rent | $ | 6,909,605 |
| | $ | 3,478,743 |
| |
Tenant reimbursements | 266,940 |
| | 136,108 |
| |
Other income | 342,160 |
| | 183,427 |
| |
Total operating revenues | 7,518,705 |
| | 3,798,278 |
| |
CERTAIN EXPENSES | | | | |
Real estate taxes | 1,084,786 |
| | 554,100 |
| |
Salaries and wages | 572,632 |
| | 311,104 |
| |
Utilities | 350,520 |
| | 186,579 |
| |
Repairs and maintenance | 293,791 |
| | 174,818 |
| |
Property operating expenses | 152,001 |
| | 72,279 |
| |
Other expenses | 536,076 |
| | 268,266 |
| |
Total certain operating expenses | 2,989,806 |
| | 1,567,146 |
| |
Excess of revenue over certain operating expenses | $ | 4,528,899 |
| | $ | 2,231,132 |
| |
See Notes to Statements of Revenue and Certain Operating Expenses.
Notes to Statements of Revenue and Certain Operating Expenses
Year Ended December 31, 2016 and Period From January 1, 2017 Through June 30, 2017 (Unaudited)
Note 1 — Organization and basis of presentation
The accompanying Statements of Revenue and Certain Operating Expenses (the “financial statements”) for the year ended December 31, 2016 and the 6 months ended June 30, 2017 (unaudited), relate to the operations of AMLI at Naperville located in Naperville, IL acquired from Dan Levine and Frankel Trust, an unaffiliated entity.
The accompanying financial statement was prepared for the purpose of complying with Rule 3-14 of Regulation S-X of the Securities and Exchange Commission for the acquisition of real estate properties. The Statement of Revenue and Certain Operating Expenses is not representative of the actual operations for the periods presented, as certain expenses, which may not be comparable to the expenses expected to be incurred in the future operations of the Property, have been excluded. Expenses excluded generally consist of interest and debt related costs, depreciation and amortization expense, interest income, income taxes and certain other expenses not directly related to the future operations of the Property. Therefore, the Statement of Revenue and Certain
|
| |
TIAA Real Estate AccountnProspectus
| 125 |
803 Corday (AMLI at Naperville) — Naperville, Illinois
Operating Expenses may not be comparable to a statement of operations for AMLI at Naperville after its acquisition by the Company. Except as noted above, TIAA-CREF is not aware of any material factors relating to AMLI at Naperville for the year ended December 31, 2016 or the period from January 1, 2017 through June 30, 2017 (unaudited), that would cause the reported financial information not to be indicative of future operating results.
Note 2 — Summary of significant accounting policies
Basis of accounting
The Statement of Revenue and Certain Operating Expenses has been prepared using the accrual method of accounting on the basis of presentation described in Note 1. As such, revenue is recorded when earned and expenses are recognized when incurred.
Revenue Recognition
Rental income is recognized as rentals become due. Rental payments received in advance are deferred until earned. All leases between the partnership and the tenants of the property are operating leases.
Property operations
Certain operating expenses represent the direct expenses of operating AMLI at Naperville and consist primarily of repairs and maintenance, utilities, real estate taxes, property insurance, general and administrative and other operating expenses that are expected to continue in the ongoing operation of AMLI at Naperville.
Use of estimates
The preparation of the accompanying Statement of Revenue and Certain Operating Expenses in accordance with the accounting principles generally accepted in the United States requires management of the Seller of AMLI at Naperville to make certain estimates and assumptions that the reported amounts of revenue and certain operating expenses during the reporting periods. Actual results could differ from those estimates.
Note 3 — Subsequent events
Events that occur after December 31, 2016 but before the financial statement was available to be issued must be evaluated for recognition or disclosure. The effects of subsequent events that provide evidence about conditions that existed at December 31, 2016 are recognized in the accompanying financial statements. Subsequent events which provide evidence about conditions that existed after December 31, 2016 require disclosure in the accompanying notes. Management evaluated the activity of the Property through November 27, 2017 (the date the financial statements were available to be issued) and concluded that no
|
| |
126 | ProspectusnTIAA Real Estate Account
|
803 Corday (AMLI at Naperville) — Naperville, Illinois
subsequent events have occurred that would require recognition in the Statement of Revenue and Certain Operating Expenses and related footnotes.
|
| |
TIAA Real Estate AccountnProspectus
| 127 |
Village Crossing Phase 1 — Niles, Illinois
INDEPENDENT AUDITOR’S REPORT
To the Board of Directors and Stockholders
TIAA
Village Crossing Phase 1
We have audited the accompanying Statements of Revenue and Certain Operating Expenses (the "financial statement") of Village Crossing Phase 1 located in Niles, Illinois (the "Property") for the year ended December 31, 2016, and the related notes to the financial statement.
Management’s Responsibility for the Financial Statement
Management of the Seller of Village Crossing Phase 1 is responsible for the preparation and fair presentation of the financial statement in conformity with U.S. generally accepted accounting principles; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the financial statement that are free from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on the financial statement based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statement, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statement in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statement.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statement referred to above presents fairly, in all material respects, the revenue and certain operating expenses described in Note 1 to the financial statement of Village Crossing Phase 1 for the year ended
|
| |
128 | ProspectusnTIAA Real Estate Account
|
December 31, 2016, in conformity with U.S. generally accepted accounting principles.
Other Matter
As described in Note 1 to the financial statement, the Statement of Revenue and Certain Operating Expenses has been prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission for inclusion in registration statements of the TIAA Real Estate Account and is not intended to be a complete presentation of the Property’s revenue and expenses. Our opinion is not modified with respect to this matter.
Charlotte, North Carolina
February 26, 2018
|
| |
TIAA Real Estate AccountnProspectus
| 129 |
Village Crossing Phase 1 — Niles, Illinois
Statements of revenue and certain operating expenses
|
| | | | | | | | |
| Year Ended December 31, 2016 (audited) |
| | Period from January 1, 2017 to June 30, 2017 (unaudited) |
| |
REVENUES | | | | |
Rental revenue | $ | 3,356,551 |
| | $ | 1,660,418 |
| |
Tenant reimbursables | 1,459,084 |
| | 706,172 |
| |
Other operating revenue (expense) | 5,855 |
| | 2,899 |
| |
Total operating revenue | 4,821,490 |
| | 2,369,489 |
| |
CERTAIN EXPENSES | | | | |
Real estate taxes | 1,248,288 |
| | 674,806 |
| |
Repairs and maintenance | 117,108 |
| | 21,048 |
| |
Utilities | 91,550 |
| | 52,485 |
| |
Other reimbursable property expenses | 259,158 |
| | 124,750 |
| |
Non-reimbursable operating expenses | 87,714 |
| | 21,879 |
| |
Total certain operating expenses | 1,803,818 |
| | 894,968 |
| |
Excess of revenue over certain operating expenses | $ | 3,017,672 |
| | $ | 1,474,521 |
| |
See Notes to Statements of Revenue and Certain Operating Expenses.
Notes to Statements of Revenue and Certain Operating Expenses
Year Ended December 31, 2016 and Period From January 1, 2017 Through June 30, 2017 (Unaudited)
Note 1 — Organization and basis of presentation
The accompanying Statements of Revenue and Certain Operating Expenses (the “financial statements”) for the year ended December 31, 2016 and the period from January 1, 2017 through June 30, 2017 (unaudited), relate to the operations of Village Crossing Phase 1 located in Niles, Illinois, acquired from State Teachers Retirement System of Ohio, an unaffiliated entity.
The accompanying financial statements were prepared for the purpose of complying with Rule 3-14 of Regulation S-X of the Securities and Exchange Commission for the acquisition of real estate properties. The financial statements are not representative of the actual operations for the periods presented, as certain expenses, which may not be comparable to the expenses expected to be incurred in the future operations of the Property, have been excluded. Expenses excluded generally consist of interest and debt related costs, depreciation and amortization expense, interest income, income taxes, property management fees, insurance expense and certain other expenses not directly related to the future operations of the Property. Therefore, the financial statements may not be comparable to a statement of operations for Village Crossing Phase 1 after its
|
| |
130 | ProspectusnTIAA Real Estate Account
|
Village Crossing Phase 1 — Niles, Illinois
acquisition by the Company. Except as noted above, TIAA is not aware of any material factors relating to Village Crossing Phase 1 for the year ended December 31, 2016 or the period from January 1, 2017 through June 30, 2017 (unaudited), that would cause the reported financial information not to be indicative of future operating results.
Note 2 — Summary of significant accounting policies
Basis of accounting
The financial statements have been prepared using the accrual method of accounting on the basis of presentation described in Note 1. As such, expenses are recognized when incurred.
Revenue Recognition
Rental income from the operating leases, which include schedule increases over the lease term, is recognized on a straight-line basis. For the year ended December 31, 2016, income recognized on a straight-line basis is less than income that would have been accrued in accordance with the lease terms by approximately $190,494. For the six month period ended June 30, 2017 income recognized on a straight-line basis is less than income that would have been accrued in accordance with the lease terms by approximately $7,080.
Property operations
Certain operating expenses represent the direct expenses of operating Village Crossing Phase 1 and consist primarily of repairs and maintenance, utilities, real estate taxes, general and administrative and other operating expenses that are expected to continue in the ongoing operation of Village Crossing Phase 1.
Use of estimates
The preparation of the accompanying financial statements in accordance with the accounting principles generally accepted in the United States requires management of the Seller of Village Crossing Phase 1 to make certain estimates and assumptions that the reported amounts of revenue and certain operating expenses during the reporting periods. Actual results could differ from those estimates.
Note 3 — Future rent payments
Approximate minimum future rents required under the lease in effect at December 31, 2016 are as follows:
|
| |
TIAA Real Estate AccountnProspectus
| 131 |
Village Crossing Phase 1 — Niles, Illinois
|
| | | | |
For the year ended December 31, 2017 | | $ | 3,541,993 |
|
For the year ended December 31, 2018 | | 3,564,605 |
|
For the year ended December 31, 2019 | | 3,376,363 |
|
For the year ended December 31, 2020 | | 3,200,791 |
|
For the year ended December 31, 2021 | | 1,822,505 |
|
Thereafter | | 2,610,022 |
|
Total | | $ | 18,116,279 |
|
Note 4 — Subsequent events
Events that occur after December 31, 2016 but before the financial statement was available to be issued must be evaluated for recognition or disclosure. The effects of subsequent events that provide evidence about conditions that existed at December 31, 2016 are recognized in the accompanying financial statements. Subsequent events which provide evidence about conditions that existed after December 31, 2016 require disclosure in the accompanying notes. Management evaluated the activity of the Property through February 26, 2018 (the date the financial statements were available to be issued) and concluded that no subsequent events have occurred that would require recognition in the financial statements and related footnotes.
|
| |
132 | ProspectusnTIAA Real Estate Account
|
Broward Industrial Portfolio — Broward County, Florida
INDEPENDENT AUDITOR’S REPORT
To the Board of Directors and Stockholders
TH Real Estate
Broward Industrial Portfolio
We have audited the accompanying Statement of Revenue and Certain Operating Expenses (the "financial statement") of Broward Industrial Portfolio located in Broward County, Florida (the "Property") for the year ended December 31, 2016, and the related notes to the financial statement.
Management’s Responsibility for the Financial Statement
Management of the Seller of Broward Industrial Portfolio is responsible for the preparation and fair presentation of the financial statement in conformity with U.S. generally accepted accounting principles; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the financial statement that are free from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on the financial statement based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statement, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statement in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statement.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statement referred to above presents fairly, in all material respects, the revenue and certain operating expenses described in Note 1 to the financial statement of Broward Industrial Portfolio for the year ended
|
| |
TIAA Real Estate AccountnProspectus
| 133 |
December 31, 2016, in conformity with U.S. generally accepted accounting principles.
Other Matter
As described in Note 1 to the financial statement, the Statement of Revenue and Certain Operating Expenses has been prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission for inclusion in registration statements of TIAA Real Estate Account and is not intended to be a complete presentation of the Property’s revenue and expenses. Our opinion is not modified with respect to this matter.
Charlotte, North Carolina
February 2, 2018
|
| |
134 | ProspectusnTIAA Real Estate Account
|
Broward Industrial Portfolio — Broward County, Florida
Statements of revenue and certain operating expenses
|
| | | | | | | | |
| Year Ended December 31, 2016 |
| | Period from January 1, 2017 to June 30, 2017 (unaudited) |
| |
REVENUE | | | | |
Base rent | $ | 2,748,640 |
| | $ | 2,019,300 |
| |
Free rent | (72,424 | ) | | (47,577 | ) | |
Tenant reimbursements | 1,262,253 |
| | 580,964 |
| |
Other income | 24,036 |
| | 14,066 |
| |
Total operating revenue | 3,962,505 |
| | 2,566,753 |
| |
CERTAIN EXPENSES | | | | |
Real estate taxes | 804,382 |
| | 479,021 |
| |
Salaries and wages | 20,433 |
| | 14,998 |
| |
Utilities | 68,550 |
| | 51,145 |
| |
Repairs and maintenance | 247,801 |
| | 117,240 |
| |
Landscaping | 116,815 |
| | 63,971 |
| |
Management fee | 141,033 |
| | 81,640 |
| |
Insurance | 84,001 |
| | 52,721 |
| |
Bad debt expense | 197,950 |
| | 22,951 |
| |
General and administrative | 6,553 |
| | 2,541 |
| |
Total certain operating expenses | 1,687,518 |
| | 886,228 |
| |
Excess of revenue over certain operating expenses | $ | 2,274,987 |
| | $ | 1,680,525 |
| |
See Notes to Statements of Revenue and Certain Operating Expenses.
Notes to Statements of Revenue and Certain Operating Expenses
Year Ended December 31, 2016 and Period From January 1, 2017 Through June 30, 2017 (Unaudited)
Note 1 — Organization and basis of presentation
The accompanying Statements of Revenue and Certain Operating Expenses (the "financial statements") for the year ended December 31, 2016 and the six months ended June 30, 2017 (unaudited), relate to the operations of Broward Industrial Portfolio located in Broward County, Florida, acquired from CBRE, an unaffiliated entity.
The accompanying financial statement was prepared for the purpose of complying with Rule 3-14 of Regulation S-X of the Securities and Exchange Commission for the acquisition of real estate properties. The Statement of Revenue and Certain Operating Expenses is not representative of the actual operations for the periods presented, as certain expenses, which may not be
|
| |
TIAA Real Estate AccountnProspectus
| 135 |
Broward Industrial Portfolio — Broward County, Florida
comparable to the expenses expected to be incurred in the future operations of the Property, have been excluded. Expenses excluded generally consist of interest and debt related costs, depreciation and amortization expense, interest income, income taxes and certain other expenses not directly related to the future operations of the Property. Therefore, the Statement of Revenue and Certain Operating Expenses may not be comparable to a statement of operations for Broward Industrial Portfolio after its acquisition by the Company. Except as noted above, TIAA Real Estate Accounting is not aware of any material factors relating to Broward Industrial Portfolio for the year ended December 31, 2016 or the period from January 1, 2017 through June 30, 2017 (unaudited), that would cause the reported financial information not to be indicative of future operating results.
Note 2 — Summary of significant accounting policies
Basis of accounting
The Statement of Revenue and Certain Operating Expenses has been prepared using the accrual method of accounting on the basis of presentation described in Note 1. As such, revenue is recorded when earned and expenses are recognized when incurred.
Revenue Recognition
Rental income from the operating lease, which includes scheduled increases over the lease term, is recognized on a straight-line basis. For the year ended December 31, 2016, income recognized on a straight-line basis is less than income that would have been accrued in accordance with the lease terms by approximately $33,930. For the period January 1, 2017 to June 30, 2017 (unaudited), income recognized on a straight-line basis is more than income that would have been accrued in accordance with the lease terms by approximately $142,185.
Property operations
Certain operating expenses represent the direct expenses of operating Broward Industrial Portfolio and consist primarily of repairs and maintenance, utilities, real estate taxes, property insurance, general and administrative and other operating expenses that are expected to continue in the ongoing operation of Broward Industrial Portfolio.
Use of estimates
The preparation of the accompanying Statement of Revenue and Certain Operating Expenses in accordance with the accounting principles generally accepted in the United States requires management of the Seller of Broward Industrial Portfolio to make certain estimates and assumptions that the reported amounts of revenue and certain operating expenses during the reporting periods. Actual results could differ from those estimates.
|
| |
136 | ProspectusnTIAA Real Estate Account
|
Broward Industrial Portfolio — Broward County, Florida
Note 3 — Future rent payments
Approximate minimum future rents required under the lease in effect at December 31, 2016 are as follows:
|
| | | | |
For the year ended December 31, 2017 | | $ | 3,008,940 |
|
For the year ended December 31, 2018 | | 2,864,666 |
|
For the year ended December 31, 2019 | | 2,600,851 |
|
For the year ended December 31, 2020 | | 1,350,197 |
|
For the year ended December 31, 2021 | | 956,186 |
|
Thereafter | | 2,617,097 |
|
Total | | $ | 13,397,937 |
|
Note 4 — Subsequent events
Events that occur after December 31, 2016 but before the financial statement was available to be issued must be evaluated for recognition or disclosure. The effects of subsequent events that provide evidence about conditions that existed at December 31, 2016 are recognized in the accompanying financial statements. Subsequent events which provide evidence about conditions that existed after December 31, 2016 require disclosure in the accompanying notes. Management evaluated the activity of the Property through February 2, 2018 (the date the financial statements were available to be issued) and concluded that no subsequent events have occurred that would require recognition in the Statement of Revenue and Certain Operating Expenses and related footnotes.
|
| |
TIAA Real Estate AccountnProspectus
| 137 |
Orion on Orpington— Orlando, Florida
INDEPENDENT AUDITOR’S REPORT
To the Board of Directors and Stockholders
TIAA-CREF, Inc.
Orion on Orpington
We have audited the accompanying Statement of Revenue and Certain Operating Expenses (the "financial statement") of Orion on Orpington located in Orlando, Florida (the "Property") for the year ended December 31, 2016, and the related notes to the financial statement.
Management’s Responsibility for the Financial Statement
Management of the Seller of Orion on Orpington is responsible for the preparation and fair presentation of the financial statement in conformity with U.S. generally accepted accounting principles; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the financial statement that are free from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on the financial statement based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statement, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statement in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statement.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statement referred to above presents fairly, in all material respects, the revenue and certain operating expenses described in Note 1 to the financial statement of Orion on Orpington for the year ended December 31, 2016, in conformity with U.S. generally accepted accounting principles.
|
| |
138 | ProspectusnTIAA Real Estate Account
|
Other Matter
As described in Note 1 to the financial statement, the Statement of Revenue and Certain Operating Expenses has been prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission for inclusion in registration statements of TIAA Real Estate Account and is not intended to be a complete presentation of the Property’s revenue and expenses. Our opinion is not modified with respect to this matter.
Charlotte, North Carolina
January 4, 2018
|
| |
TIAA Real Estate AccountnProspectus
| 139 |
Orion on Orpington — Orlando, Florida
Statements of revenue and certain operating expenses
|
| | | | | | | | |
| Year Ended December 31, 2016 |
| | Period from January 1, 2017 to July 31, 2017 (unaudited) |
| |
REVENUE | | | | |
Base rent | $ | 4,117,313 |
| | $ | 2,439,948 |
| |
Gain/loss to lease | 7,371 |
| | 53,307 |
| |
Vacancy loss | (85,888 | ) | | (69,941 | ) | |
Fees | 165,032 |
| | 132,981 |
| |
Tenant Reimbursement | 361,755 |
| | 220,145 |
| |
Other income | 85,976 |
| | 26,668 |
| |
Total operating revenues | 4,651,559 |
| | 2,803,108 |
| |
CERTAIN OPERATING EXPENSES | | | | |
Marketing | 75,857 |
| | 36,320 |
| |
Administrative | 161,852 |
| | 95,097 |
| |
Management fee | 138,065 |
| | 82,193 |
| |
Payroll | 397,921 |
| | 210,912 |
| |
Maintenance | 216,377 |
| | 116,485 |
| |
Tenant turnover | 59,565 |
| | 2,440 |
| |
Utilities | 598,251 |
| | 360,648 |
| |
Insurance | 86,622 |
| | 47,486 |
| |
Real estate taxes | 440,571 |
| | 277,263 |
| |
Total certain operating expenses | 2,175,081 |
| | 1,228,844 |
| |
Excess of revenue over certain operating expenses | $ | 2,476,478 |
| | $ | 1,574,264 |
| |
See Notes to Statements of Revenue and Certain Operating Expenses.
Notes to Statements of Revenue and Certain Operating Expenses
Year Ended December 31, 2016 and Period From January 1, 2017 Through July 31, 2017 (Unaudited)
Note 1 — Organization and basis of presentation
The accompanying Statements of Revenue and Certain Operating Expenses (the "financial statements") for the year ended December 31, 2016 and the 7 months ended July 31, 2017 (unaudited), relate to the operations of Orion on Orpington located in Orlando, Florida, acquired from Holiday Fenoglio Fowler, L.P., an unaffiliated entity.
The accompanying financial statement was prepared for the purpose of complying with Rule 3-14 of Regulation S-X of the Securities and Exchange
|
| |
140 | ProspectusnTIAA Real Estate Account
|
Orion on Orpington — Orlando, Florida
Commission for the acquisition of real estate properties. The Statement of Revenue and Certain Operating Expenses is not representative of the actual operations for the periods presented, as certain expenses, which may not be comparable to the expenses expected to be incurred in the future operations of the Property, have been excluded. Expenses excluded generally consist of interest and debt related costs, depreciation and amortization expense, interest income, income taxes and certain other expenses not directly related to the future operations of the Property. Therefore, the Statement of Revenue and Certain Operating Expenses may not be comparable to a statement of operations for Orion on Orpington after its acquisition by the Company. Except as noted above, TIAA-CREF is not aware of any material factors relating to Orion on Orpington for the year ended December 31, 2016 or the period from January 1, 2017 through July 31, 2017 (unaudited), that would cause the reported financial information not to be indicative of future operating results.
Note 2 — Summary of significant accounting policies
Basis of accounting
The Statement of Revenue and Certain Operating Expenses has been prepared using the accrual method of accounting on the basis of presentation described in Note 1. As such, revenue is recorded when earned and expenses are recognized when incurred.
Revenue Recognition
Rental income is recognized as rentals become due. Rental payments received in advance are deferred until earned. All leases between the partnership and the tenants of the property are operating leases.
Property operations
Certain operating expenses represent the direct expenses of operating Orion on Orpington and consist primarily of repairs and maintenance, utilities, real estate taxes, property insurance, general and administrative and other operating expenses that are expected to continue in the ongoing operation of Orion on Orpington.
Use of estimates
The preparation of the accompanying Statement of Revenue and Certain Operating Expenses in accordance with the accounting principles generally accepted in the United States requires management of the Seller of Orion on Orpington to make certain estimates and assumptions that the reported amounts of revenue and certain operating expenses during the reporting periods. Actual results could differ from those estimates.
Note 3 — Subsequent events
|
| |
TIAA Real Estate AccountnProspectus
| 141 |
Orion on Orpington — Orlando, Florida
Events that occur after December 31, 2016 but before the financial statement was available to be issued must be evaluated for recognition or disclosure. The effects of subsequent events that provide evidence about conditions that existed at December 31, 2016 are recognized in the accompanying financial statements. Subsequent events which provide evidence about conditions that existed after December 31, 2016 require disclosure in the accompanying notes. Management evaluated the activity of the Property through January 4, 2018 (the date the financial statements were available to be issued) and concluded that no subsequent events have occurred that would require recognition in the Statement of Revenue and Certain Operating Expenses and related footnotes.
|
| |
142 | ProspectusnTIAA Real Estate Account
|
Bridgepointe Shopping Center— San Mateo, California
INDEPENDENT AUDITOR’S REPORT
To the Board of Directors and Stockholders
TH Real Estate
Bridgepointe Shopping Center
We have audited the accompanying Statement of Revenue and Certain Operating Expenses (the "financial statement") of Bridgepointe Shopping Center located in Orlando, Florida (the "Property") for the year ended December 31, 2016, and the related notes to the financial statement.
Management’s Responsibility for the Financial Statement
Management of the Seller of Bridgepointe Shopping Center is responsible for the preparation and fair presentation of the financial statement in conformity with U.S. generally accepted accounting principles; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the financial statement that are free from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on the financial statement based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statement, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statement in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statement.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statement referred to above presents fairly, in all material respects, the revenue and certain operating expenses described in Note 1 to the financial statement of Bridgepointe Shopping Center for the year ended
|
| |
TIAA Real Estate AccountnProspectus
| 143 |
December 31, 2016, in conformity with U.S. generally accepted accounting principles.
Other Matter
As described in Note 1 to the financial statement, the Statement of Revenue and Certain Operating Expenses has been prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission for inclusion in registration statements of TIAA Real Estate Account and is not intended to be a complete presentation of the Property’s revenue and expenses. Our opinion is not modified with respect to this matter.
Charlotte, North Carolina
January 3, 2018
|
| |
144 | ProspectusnTIAA Real Estate Account
|
Bridgepointe Shopping Center — San Mateo, California
Statements of revenue and certain operating expenses
|
| | | | | | | | |
| Year Ended December 31, 2016 |
| | Period from January 1, 2017 to September 30, 2017 (unaudited) |
| |
REVENUE | | | | |
Rental revenue | $ | 5,932,299 |
| | $ | 4,045,205 |
| |
Tenant reimbursement | 1,977,247 |
| | 1,022,176 |
| |
Percentage rent | 129,101 |
| | 3,582 |
| |
Other operating revenue (expense) | (5,866 | ) | | 5,954 |
| |
Total operating revenues | 8,032,781 |
| | 5,076,917 |
| |
CERTAIN OPERATING EXPENSES | | | | |
Real estate taxes | 1,301,788 |
| | 622,894 |
| |
Insurance | 308,184 |
| | 296,391 |
| |
Common area maintenance | 607,528 |
| | 188,913 |
| |
Utilities | 144,246 |
| | 90,588 |
| |
Landscaping and maintenance | 77,354 |
| | 42,259 |
| |
Management fees | 251,412 |
| | 167,463 |
| |
Non recoverable operating expenses | — |
| | 13,658 |
| |
Total certain operating expenses | 2,690,512 |
| | 1,422,166 |
| |
Excess of revenue over certain operating expenses | $ | 5,342,269 |
| | $ | 3,654,751 |
| |
See Notes to Statements of Revenue and Certain Operating Expenses.
Notes to Statements of Revenue and Certain Operating Expenses
Year Ended December 31, 2016 and Period From January 1, 2017 Through September 30, 2017 (Unaudited)
Note 1 — Organization and basis of presentation
The accompanying Statements of Revenue and Certain Operating Expenses (the “financial statements”) for the year ended December 31, 2016 and the period from January 1, 2017 through September 30, 2017 (unaudited), relate to the operations of Bridgepointe Shopping Center located in San Mateo, California, acquired from SPI Holdings, an unaffiliated entity.
The accompanying financial statements were prepared for the purpose of complying with Rule 3-14 of Regulation S-X of the Securities and Exchange Commission for the acquisition of real estate properties. The financial statements are not representative of the actual operations for the periods presented, as certain expenses, which may not be comparable to the expenses expected to be incurred in the future operations of the Property, have been excluded. Expenses excluded generally consist of interest and debt related costs, depreciation and amortization expense, interest income, income taxes and certain other expenses
|
| |
TIAA Real Estate AccountnProspectus
| 145 |
Bridgepointe Shopping Center — San Mateo, California
not directly related to the future operations of the Property. Therefore, the financial statements may not be comparable to a statement of operations for Bridgepointe Shopping Center after its acquisition by the Company. Except as noted above, TIAA is not aware of any material factors relating to Bridgepointe Shopping Center for the year ended December 31, 2016 or the period from January 1, 2017 through September 30, 2017 (unaudited), that would cause the reported financial information not to be indicative of future operating results.
Note 2 — Summary of significant accounting policies
Basis of accounting
The financial statements have been prepared using the actual method of accounting on the basis of presentation described in Note 1. As such, expenses are recognized when incurred.
Revenue Recognition
Rental income from the operating leases, which include schedule increases over the lease term, is recognized on a straight-line basis. For the year ended December 31, 2016, income recognized on a straight-line basis is more than income that would have been accrued in accordance with the lease terms by approximately $4,060. For the nine month period ended September 30, 2017 income recognized on a straight-line basis is less than income that would have been accrued in accordance with the lease terms by approximately $(13,453).
Property operations
Certain operating expenses represent the direct expenses of operating Bridgepointe Shopping Center and consist primarily of repairs and maintenance, utilities, real estate taxes, property insurance, general and administrative and other operating expenses that are expected to continue in the ongoing operation of Bridgepointe Shopping Center.
Use of estimates
The preparation of the accompanying financial statements in accordance with the accounting principles generally accepted in the United States requires management of the Seller of Bridgepointe Shopping Center to make certain estimates and assumptions that the reported amounts of revenue and certain operating expenses during the reporting periods. Actual results could differ from those estimates.
Note 3 — Future rent payments
Approximate minimum future rents required under the lease in effect at December 31, 2016 are as follows:
|
| |
146 | ProspectusnTIAA Real Estate Account
|
Bridgepointe Shopping Center — San Mateo, California
|
| | | | |
For the year ended December 31, 2017 | | $ | 5,393,420 |
|
2018 | | 5,483,729 |
|
2019 | | 3,162,797 |
|
2020 | | 2,148,204 |
|
2021 | | 1,518,489 |
|
Thereafter | | 7,279,958 |
|
| | $ | 24,986,597 |
|
Note 4 — Subsequent events
Events that occur after December 31, 2016 but before the financial statement was available to be issued must be evaluated for recognition or disclosure. The effects of subsequent events that provide evidence about conditions that existed at December 31, 2016 are recognized in the accompanying financial statements. Subsequent events which provide evidence about conditions that existed after December 31, 2016 require disclosure in the accompanying notes. Management evaluated the activity of the Property through January 3, 2018 (the date the financial statements were available to be issued) and concluded that no subsequent events have occurred that would require recognition in the financial statements and related footnotes.
|
| |
TIAA Real Estate AccountnProspectus
| 147 |
Frontera Industrial Business Park— San Diego, California
INDEPENDENT AUDITOR’S REPORT
To the Board of Directors and Stockholders
TIAA
Frontera Industrial Business Park
We have audited the accompanying Statement of Revenue and Certain Operating Expenses (the "financial statement") of Frontera Industrial Business Park located in San Diego, California (the "Property") for the year ended December 31, 2016, and the related notes to the financial statement.
Management’s Responsibility for the Financial Statement
Management of the Seller of Frontera Industrial Business Park is responsible for the preparation and fair presentation of the financial statement in conformity with U.S. generally accepted accounting principles; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the financial statement that are free from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on the financial statement based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statement, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statement in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statement.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statement referred to above presents fairly, in all material respects, the revenue and certain operating expenses described in Note 1 to the financial statement of Frontera Industrial Business Park for the
|
| |
148 | ProspectusnTIAA Real Estate Account
|
year ended December 31, 2016, in conformity with U.S. generally accepted accounting principles.
Other Matter
As described in Note 1 to the financial statement, the Statement of Revenue and Certain Operating Expenses has been prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission for inclusion in registration statements of TIAA Real Estate Account and is not intended to be a complete presentation of the Property’s revenue and expenses. Our opinion is not modified with respect to this matter.
Charlotte, North Carolina
February 1, 2018
|
| |
TIAA Real Estate AccountnProspectus
| 149 |
Frontera Industrial Business Park — San Diego, California
Statements of revenue and certain operating expenses
|
| | | | | | | | |
| Year Ended December 31, 2016 |
| | Period from January 1, 2017 to July 31, 2017 (unaudited) |
| |
REVENUE | | | | |
Base rent | $ | 2,238,519 |
| | $ | 1,359,449 |
| |
Expense recoveries | 818,721 |
| | 659,469 |
| |
Other income | 111,387 |
| | 13,012 |
| |
Total operating revenues | 3,168,627 |
| | 2,031,930 |
| |
CERTAIN OPERATING EXPENSES | | | | |
Cleaning | 66,039 |
| | 51,749 |
| |
Repairs and maintenance | 192,661 |
| | 72,616 |
| |
Utilities | 135,533 |
| | 81,513 |
| |
Roads/Grounds | 104,392 |
| | 68,485 |
| |
Security | 16,597 |
| | 36,765 |
| |
Parking | 25,837 |
| | 2,918 |
| |
Administration | 3,080 |
| | 8,932 |
| |
Real estate tax | 379,073 |
| | 224,408 |
| |
Insurance | 106,783 |
| | 63,328 |
| |
Total certain operating expenses | 1,029,995 |
| | 610,714 |
| |
Excess of revenue over certain operating expenses | $ | 2,138,632 |
| | $ | 1,421,216 |
| |
See Notes to Statements of Revenue and Certain Operating Expenses.
Notes to Statements of Revenue and Certain Operating Expenses
Year Ended December 31, 2016 and Period From January 1, 2017 Through July 31, 2017 (Unaudited)
Note 1 — Organization and basis of presentation
The accompanying Statements of Revenue and Certain Operating Expenses (the “financial statements”) for the year ended December 31, 2016 and the period from January 1, 2017 through July 31, 2017 (unaudited), relate to the operations of Frontera Industrial Business Park located in San Diego, California, acquired from SPI Holdings, an unaffiliated entity.
The accompanying financial statements were prepared for the purpose of complying with Rule 3-14 of Regulation S-X of the Securities and Exchange Commission for the acquisition of real estate properties. The financial statements are not representative of the actual operations for the periods presented, as certain expenses, which may not be comparable to the expenses expected to be incurred in the future operations of the Property, have been excluded. Expenses
|
| |
150 | ProspectusnTIAA Real Estate Account
|
Frontera Industrial Business Park — San Diego, California
excluded generally consist of interest and debt related costs, depreciation and amortization expense, property management fees, interest income, income taxes and certain other expenses not directly related to the future operations of the Property. Therefore, the financial statements may not be comparable to a statement of operations for Frontera Industrial Business Park after its acquisition by the Company. Except as noted above, TIAA is not aware of any material factors relating to Frontera Industrial Business Park for the year ended December 31, 2016 or the period from January 1, 2017 through July 31, 2017 (unaudited), that would cause the reported financial information not to be indicative of future operating results.
Note 2 — Summary of significant accounting policies
Basis of accounting
The financial statements have been prepared using the accrual method of accounting on the basis of presentation described in Note 1. As such, expenses are recognized when incurred.
Revenue Recognition
Rental income from the operating leases, which include schedule increases over the lease term, is recognized on a straight-line basis. For the year ended December 31, 2016, income recognized on a straight-line basis is more than income that would have been accrued in accordance with the lease terms by approximately $100,622. For the seven-month period ended July 31, 2017 income recognized on a straight-line basis is ore than income that would have been accrued in accordance with the lease terms by approximately $151,111.
Property operations
Certain operating expenses represent the direct expenses of operating Frontera Industrial Business Park and consist primarily of repairs and maintenance, utilities, real estate taxes, property insurance, general and administrative and other operating expenses that are expected to continue in the ongoing operation of Frontera Industrial Business Park.
Use of estimates
The preparation of the accompanying financial statements in accordance with the accounting principles generally accepted in the United States requires management of the Seller of Frontera Industrial Business Park to make certain estimates and assumptions that the reported amounts of revenue and certain operating expenses during the reporting periods. Actual results could differ from those estimates.
Note 3 — Future rent payments
Approximate minimum future rents required under the lease in effect at December 31, 2016 are as follows:
|
| |
TIAA Real Estate AccountnProspectus
| 151 |
Frontera Industrial Business Park — San Diego, California
|
| | | | |
For the year ended December 31, 2017 | | $ | 1,982,500 |
|
2018 | | 2,144,721 |
|
2019 | | 2,099,754 |
|
2020 | | 1,692,308 |
|
2021 | | 1,323,376 |
|
Thereafter | | 494,662 |
|
| | $ | 9,737,321 |
|
Note 4 — Subsequent events
Events that occur after December 31, 2016 but before the financial statement was available to be issued must be evaluated for recognition or disclosure. The effects of subsequent events that provide evidence about conditions that existed at December 31, 2016 are recognized in the accompanying financial statements. Subsequent events which provide evidence about conditions that existed after December 31, 2016 require disclosure in the accompanying notes. Management evaluated the activity of the Property through February 1, 2018 (the date the financial statements were available to be issued) and concluded that no subsequent events have occurred that would require recognition in the financial statements and related footnotes.
|
| |
152 | ProspectusnTIAA Real Estate Account
|
Allure at Camarillo — Camarillo, California
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors Of
Teachers Insurance and Annuity Association of America (TIAA):
We have audited the accompanying statement of revenues and certain expenses of Allure at Camarillo located in Camarillo, California (the "Property"), for the year ended December 31, 2016 and the related notes to the financial statement (the Financial Statement).
Management’s responsibility for the financial statement
Management is responsible for the preparation and fair presentation of this Financial Statement in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the Financial Statement that is free from material misstatement, whether due to fraud or error.
Auditors’ responsibility
Our responsibility is to express an opinion on this Financial Statement based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether this Financial Statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Financial Statement. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the Financial Statement, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the Financial Statement in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the Financial Statement.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the Financial Statement referred to above presents fairly, in all material respects, the revenues and certain expenses (described in Note 1) of the Property for the year ended December 31, 2016 in accordance with accounting principles generally accepted in the United States of America.
|
| |
TIAA Real Estate AccountnProspectus
| 153 |
Emphasis of Matter
We draw attention to Note 1 to the Financial Statement, which describes that the accompanying Financial Statement was prepared for the purpose of complying with Rule 3-14 of the Securities and Exchange Commission Regulation S-X (for inclusion in the Registration Statement on Form S-1 of the TIAA Real Estate Account) and is not intended to be a complete presentation of the Property’s revenues and expenses. Our opinion is not modified with respect to this matter.
Charlotte, North Carolina
February 28, 2018
|
| |
154 | ProspectusnTIAA Real Estate Account
|
Allure at Camarillo — Camarillo, California
Statements of revenues and certain operating expenses
|
| | | | | | | | |
| Year Ended December 31, 2016 |
| | Period from January 1, 2017 through July 31, 2017 (unaudited) |
| |
REVENUES | | | | |
Rent revenue | $ | 3,555,687 |
| | $ | 2,164,665 |
| |
Other revenue | 263,833 |
| | 139,816 |
| |
Total revenues | 3,819,520 |
| | 2,304,481 |
| |
CERTAIN OPERATING EXPENSES | | | | |
Management fees | 114,785 |
| | 68,897 |
| |
Payroll | 334,989 |
| | 210,035 |
| |
General and administrative | 70,683 |
| | 38,475 |
| |
Repairs and maintenance | 239,326 |
| | 114,685 |
| |
Utilities | 191,290 |
| | 110,125 |
| |
Property insurance | 50,115 |
| | 28,272 |
| |
Property taxes | 438,308 |
| | 257,810 |
| |
Total certain operating expenses | 1,439,496 |
| | 828,299 |
| |
Excess of revenue over certain operating expenses | $ | 2,380,024 |
| | $ | 1,476,182 |
| |
The accompanying notes are an integral part of these financial statements.
Notes to Statements of Revenue and Certain Operating Expenses
1 — Organization and basis of presentation
The accompanying Statements of Revenues and Certain Operating Expenses (the Financial Statements) for the year ended December 31, 2016 and the period from January 1, 2017 through July 31, 2017 (unaudited), relate to the operations of the multi-family apartment rental property known as Allure at Camarillo (the Property), in Camarillo, California, acquired from a third-party entity (the Seller).
The accompanying Financial Statements were prepared for the purpose of complying with Rule 3-14 of Regulation S-X of the Securities and Exchange Commission for the acquisition of the Property. The Financial Statements are not representative of the actual operations for the periods presented, as certain expenses, which may not be comparable to the expenses expected to be incurred in the future operations of the Property, have been excluded. Expenses excluded generally consist of interest and debt related costs, depreciation and amortization expense, interest income, income taxes and certain other expenses not directly related to the future operations of the Property. Therefore, the Financial Statements may not be comparable to a statement of operations for the Property after its acquisition by Teachers Insurance and Annuity Association of America (TIAA). Except as noted above, TIAA is not aware of any material factors relating to
|
| |
TIAA Real Estate AccountnProspectus
| 155 |
Allure at Camarillo — Camarillo, California
the Property for the year ended December 31, 2016 or the period from January 1, 2017 through July 31, 2017 (unaudited), that would cause the reported financial information not to be indicative of future operating results.
2 — Summary of significant accounting policies
Basis of accounting
The financial statements have been prepared using the accrual method of accounting on the basis of presentation described in Note 1. As such, expenses are recognized when incurred.
Revenue Recognition
The Property earns revenue primarily through rental revenue, which is recognized monthly. Rental revenue from the operating leases is recognized monthly based on the terms in the lease agreement. Rental revenue is earned while the tenant is in possession of the space.
Property operations
Certain operating expenses represent the direct expenses of operating the Property and consist primarily of management fees, payroll, general and administrative, repairs and maintenance, utilities, property taxes, and property insurance that are expected to continue in the ongoing operation of the Property.
Use of estimates
The preparation of the accompanying Financial Statements in conformity with accounting principles generally accepted in the United States requires management of the Seller of the Property to make certain estimates and assumptions that affect the reported amounts of revenue and certain operating expenses during the reporting periods. Actual results could differ from those estimates.
3 — Subsequent events
Events that occur after December 31, 2016 but before the Financial Statements were available to be issued must be evaluated for recognition or disclosure. The effects of subsequent events that provide evidence about conditions that existed at December 31, 2016 are recognized in the accompanying Financial Statements. Subsequent events which provide evidence about conditions that existed after December 31, 2016 require disclosure in the accompanying notes. Management evaluated the activity of the Property through February 28, 2018, and concluded that no subsequent events have occurred that would require recognition or disclosure in the Financial Statements and related footnotes.
|
| |
156 | ProspectusnTIAA Real Estate Account
|
Storage Portfolio II (Project Jazz) — Various, United States
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors Of
Teachers Insurance and Annuity Association of America (TIAA):
We have audited the accompanying statement of revenues and certain operating expenses of Project Jazz, a portfolio of properties located in the United States (the "Property"), for the year ended December 31, 2016, and the related notes to the financial statement (the "Financial Statement").
Management’s responsibility for the financial statement
Management is responsible for the preparation and fair presentation of this Financial Statement in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the Financial Statement that is free from material misstatement, whether due to fraud or error.
Auditors’ responsibility
Our responsibility is to express an opinion on this Financial Statement based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether this Financial Statement is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Financial Statement. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the Financial Statement, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Property’s preparation and fair presentation of the Financial Statement in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the Financial Statement.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
|
| |
TIAA Real Estate AccountnProspectus
| 157 |
In our opinion, the Financial Statement referred to above presents fairly, in all material respects, the revenue and certain operating expenses (described in Note 1) of the Property for the year ended December 31, 2016, in accordance with accounting principles generally accepted in the United States of America.
Emphasis of Matter
We draw attention to Note 1 to the Financial Statement, which describes that the accompanying Financial Statement was prepared for the purpose of complying with Rule 3-14 of the Securities and Exchange Commission Regulation S-X (for inclusion in the Registration Statement on Form S-1 of the TIAA Real Estate Account) and is not intended to be a complete presentation of the Property’s revenue and expenses. Our opinion is not modified with respect to this matter.
Charlotte, North Carolina
February 15, 2018
|
| |
158 | ProspectusnTIAA Real Estate Account
|
Storage Portfolio II (Project Jazz)— Various, United States
Statements of revenues and certain operating expenses
|
| | | | | | | | |
| Year Ended December 31, 2016 |
| | Period from January 1, 2017 to September 30, 2017 (unaudited) |
| |
REVENUES | | | | |
Rent revenue | $ | 24,676,441 |
| | $ | 19,654,701 |
| |
Other revenue | 1,714,680 |
| | 1,487,953 |
| |
Total revenues | 26,391,121 |
| | 21,142,654 |
| |
CERTAIN OPERATING EXPENSES | | | | |
Repairs and maintenance | 915,788 |
| | 690,995 |
| |
Utilities | 770,937 |
| | 602,266 |
| |
Real estate tax | 2,573,595 |
| | 2,106,858 |
| |
Property insurance | 251,106 |
| | 138,370 |
| |
General and administrative | 4,158,251 |
| | 3,044,508 |
| |
Other operating expenses | 138,577 |
| | 126,059 |
| |
Total certain operating expenses | 8,808,254 |
| | 6,709,056 |
| |
Excess of revenue over certain operating expenses | $ | 17,582,867 |
| | $ | 14,433,598 |
| |
The accompanying notes are an integral part of these financial statements.
Notes to Statements
1 — Organization and basis of presentation
The accompanying Statements of Revenues and Certain Operating Expenses (the Financial Statements) for the year ended December 31, 2016 and the period from January 1, 2017 through September 30, 2017 (unaudited) relate to the operations of Project Jazz (the Property), a portfolio of 36 individual self-storage unit properties located in 15 states, acquired from a third-party entity (the Seller).
The accompanying Financial Statements were prepared for the purpose of complying with Rule 3-14 of Regulation S-X of the Securities and Exchange Commission for the acquisition of the Property. The Financial Statements are not representative of the actual operations for the periods presented, as certain expenses, which may not be comparable to the expenses expected to be incurred in the future operations of the Property, have been excluded. Expenses excluded generally consist of interest and debt related costs, depreciation and amortization expense, interest income, income taxes and certain other expenses not directly related to the future operations of the Property. Therefore, the Financial Statements may not be comparable to a statement of operations for the Property after its acquisition by Teachers Insurance and Annuity Association of America (TIAA). Except as noted above, TIAA is not aware of any material factors relating to the Property for the year ended December 31, 2016 or the period from January 1,
|
| |
TIAA Real Estate AccountnProspectus
| 159 |
Storage Portfolio II (Project Jazz)— Various, United States
2017 through September 30, 2017 (unaudited), that would cause the reported financial information not to be indicative of future operating results.
2 — Summary of significant accounting policies
Basis of accounting
The financial statements have been prepared using the accrual method of accounting on the basis of presentation described in Note 1. As such, expenses are recognized when incurred.
Revenue Recognition
The Property earns revenue primarily through rental revenue, which is recognized monthly. It is earned while the tenant is in possession of the space, based on terms included in the monthly lease agreement. Late fees are earned when tenants do not pay rent timely and are recognized upon receipt.
Property operations
Certain operating expenses represent the direct expenses of operating the Property and consist primarily of repairs and maintenance, utilities, real estate taxes, property insurance, general and administrative and other operating expenses that are expected to continue in the ongoing operation of the Property.
Use of estimates
The preparation of the accompanying Financial Statements in conformity with accounting principles generally accepted in the United States requires management of the Seller of the Property to make certain estimates and assumptions that affect the reported amounts of revenue and certain operating expenses during the reporting periods. Actual results could differ from those estimates.
3 — Subsequent events
Events that occur after December 31, 2016 but before the Financial Statements were available to be issued must be evaluated for recognition or disclosure. The effects of subsequent events that provide evidence about conditions that existed at December 31, 2016 are recognized in the accompanying Financial Statements. Subsequent events which provide evidence about conditions that existed after December 31, 2016 require disclosure in the accompanying notes. Management evaluated the activity of the Property through February 15, 2018, and concluded that no subsequent events have occurred that would require recognition or disclosure in the Financial Statements and related footnotes.
|
| |
160 | ProspectusnTIAA Real Estate Account
|
Carrington Park— Plano, Texas
INDEPENDENT AUDITOR’S REPORT
To the Board of Directors and Stockholders
TIAA
Carrington Park
We We have audited the accompanying Statement of Revenue and Certain Operating Expenses (the “financial statement”) of Carrington Park located in Plano, Texas (the “Property”) for the year ended December 31, 2017, and the related notes to the financial statement.
Management’s Responsibility for the Financial Statement
Management of the Seller of Carrington Park is responsible for the preparation and fair presentation of the financial statement in conformity with U.S. generally accepted accounting principles; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the financial statement that are free from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on the financial statement based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statement, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statement in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statement.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
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Opinion
In our opinion, the financial statement referred to above presents fairly, in all material respects, the revenue and certain operating expenses described in Note 1 to the financial statement of Carrington Park for the year ended December 31, 2017, in conformity with U.S. generally accepted accounting principles.
Other Matter
As described in Note 1 to the financial statement, the Statement of Revenue and Certain Operating Expenses has been prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission for inclusion in registration statements of the TIAA Real Estate Account and is not intended to be a complete presentation of the Property’s revenue and expenses. Our opinion is not modified with respect to this matter.
Charlotte, North Carolina
March 6, 2018
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162 | ProspectusnTIAA Real Estate Account
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Carrington Park — Plano, Texas
Statements of revenue and certain operating expenses
|
| | | | | | | | |
| Year Ended December 31, 2017 |
| | Period from January 1, 2018 to January 31, 2018 (unaudited) |
| |
REVENUE | | | | |
Gross Potential Rent | $ | 5,331,122 |
| | $ | 555,051 |
| |
Rent Losses | (389,738 | ) | | (76,727 | ) | |
Other Income | 574,187 |
| | 39,094 |
| |
Total operating revenues | 5,515,571 |
| | 517,418 |
| |
CERTAIN OPERATING EXPENSES | | | | |
Controllable Expenses | | | | |
Utilities | 369,167 |
| | 39,793 |
| |
Maintenance & Repairs | 85,347 |
| | 2,965 |
| |
Alarm & Cable | 1,860 |
| | 57 |
| |
Landscaping | 55,385 |
| | 4,934 |
| |
Make-ready/Turnover | 92,217 |
| | 4,842 |
| |
Payroll | 432,114 |
| | 46,316 |
| |
Marketing | 38,842 |
| | 2,129 |
| |
Admin/Office | 78,326 |
| | 19,899 |
| |
Total Controllable Expenses | 1,153,258 |
| | 120,935 |
| |
Controllable Expenses | | | | |
Property Taxes | 1,009,941 |
| | 74,789 |
| |
Licenses & Permits | 7,201 |
| | — |
| |
Total Non-Controllable Expenses | 1,017,142 |
| | 74,789 |
| |
Total certain operating expenses | 2,170,400 |
| | 195,724 |
| |
Excess of revenue over certain operating expenses | $ | 3,345,171 |
| | $ | 321,694 |
| |
See Notes to Statements of Revenue and Certain Operating Expenses.
Notes to Statements of Revenue and Certain Operating Expenses
Year Ended December 31, 2017 and Period From January 1, 2018 through January 31, 2018 (unaudited)
Note 1 — Organization and basis of presentation
The The accompanying Statements of Revenue and Certain Operating Expenses (the “financial statements”) for the year ended December 31, 2017 and the period from January 1, 2018 through January 31, 2018 (unaudited), relate to the operations of Carrington Park located in Plano, Texas.
The accompanying financial statements were prepared for the purpose of complying with Rule 3-14 of Regulation S-X of the Securities and Exchange
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Carrington Park — Plano, Texas
Commission for the acquisition of real estate properties. The financial statements are not representative of the actual operations for the periods presented, as certain expenses, which may not be comparable to the expenses expected to be incurred in the future operations of the Property, have been excluded. Expenses excluded generally consist of interest and debt related costs, depreciation and amortization expense, property management fees, insurance expense, interest income, income taxes and certain other expenses not directly related to the future operations of the Property. Therefore, the financial statements may not be comparable to a statement of operations for Carrington Park after its acquisition by the Company. Except as noted above, TIAA is not aware of any material factors relating to Carrington Park for the year ended December 31, 2017 or the period from January 1, 2018 through January 31, 2018 (unaudited), that would cause the reported financial information not to be indicative of future operating results.
Note 2 — Summary of significant accounting policies
Basis of accounting
The financial statements have been prepared using the accrual method of accounting on the basis of presentation described in Note 1. As such, expenses are recognized when incurred.
Revenue Recognition
Rental income is recognized as rentals become due. Rental payments received in advance are deferred until earned. All leases between the property and the tenants of the property are operating leases.
Property operations
Certain operating expenses represent the direct expenses of operating Carrington Park and consist primarily of repairs and maintenance, utilities, real estate taxes, payroll, general and administrative and other operating expenses that are expected to continue in the ongoing operation of Carrington Park.
Use of estimates
The preparation of the accompanying financial statements in accordance with the accounting principles generally accepted in the United States requires management of the Seller of Carrington Park to make certain estimates and assumptions that the reported amounts of revenue and certain operating expenses during the reporting periods. Actual results could differ from those estimates.
Note 3 — Subsequent events
Events that occur after December 31, 2017 but before the financial statement was available to be issued must be evaluated for recognition or disclosure. The effects of subsequent events that provide evidence about conditions that existed at December 31, 2017 are recognized in the accompanying financial statements.
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Carrington Park — Plano, Texas
Subsequent events which provide evidence about conditions that existed after December 31, 2017 require disclosure in the accompanying notes. Management evaluated the activity of the Property through March 6, 2018 (the date the financial statements were available to be issued) and concluded that no subsequent events have occurred that would require recognition in the financial statements and related footnotes.
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30700 Russell Ranch — Westlake Village, California
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors Of
Teachers Insurance and Annuity Association of America (TIAA):
We have audited the accompanying statement of revenue and certain expenses of 30700 Russell Ranch Road located in Westlake Village, California (the "Property"), for the year ended December 31, 2016 and the related notes to the financial statement (the "Financial Statement").
Management’s responsibility for the financial statement
Management is responsible for the preparation and fair presentation of this Financial Statement in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the Financial Statement that is free from material misstatement, whether due to fraud or error.
Auditors’ responsibility
Our responsibility is to express an opinion on this Financial Statement based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether this Financial Statement is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Financial Statement. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the Financial Statement, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the Financial Statement in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the Financial Statement.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the Financial Statement referred to above presents fairly, in all material respects, the revenue and certain operating expenses (described in
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Note 1) of the Property for the year ended December 31, 2016, in accordance with accounting principles generally accepted in the United States of America.
Emphasis of Matter
We draw attention to Note 1 to the Financial Statement, which describes that the accompanying Financial Statement was prepared for the purpose of complying with Rule 3-14 of the Securities and Exchange Commission Regulation S-X (for inclusion in the Registration Statement on Form S-1 of the TIAA Real Estate Account) and is not intended to be a complete presentation of the Property’s revenue and expenses. Our opinion is not modified with respect to this matter.
Charlotte, North Carolina
February 26, 2018
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30700 Russell Ranch — Westlake Village, California
Statements of revenue and certain operating expenses
|
| | | | | | | | |
| For the Year Ended December 31, 2016 |
| | Period from January 1, 2017 to September 30, 2017 (unaudited) |
| |
REVENUES | | | | |
Rent revenue | $ | 2,990,156 |
| | $ | 2,518,438 |
| |
Other revenue | 14,293 |
| | 11,171 |
| |
Total revenues | 3,004,449 |
| | 2,529,609 |
| |
CERTAIN OPERATING EXPENSES | | | | |
Repairs and maintenance | 635,619 |
| | 388,267 |
| |
Utilities | 292,316 |
| | 248,527 |
| |
Real estate tax | 325,754 |
| | 238,965 |
| |
Property insurance | 51,911 |
| | 34,927 |
| |
General and administrative | 231,933 |
| | 198,557 |
| |
Total certain operating expenses | 1,537,533 |
| | 1,109,243 |
| |
Excess of revenue over certain operating expenses | $ | 1,466,916 |
| | $ | 1,420,366 |
| |
The accompanying notes are an integral part of these financial statements.
Notes to statements of revenue and certain operating expenses
1 — Organization and Basis of Presentation
The accompanying Statements of Revenues and Certain Operating Expenses (the Financial Statements) for the year ended December 31, 2016 and the period from January 1, 2017 through September 30, 2017 (unaudited), relate to the operations of the office rental property known as 30700 Russell Ranch Road (the Property), in Westlake Village, California, acquired from a third-party entity (the Seller).
The accompanying Financial Statements were prepared for the purpose of complying with Rule 3-14 of Regulation S-X of the Securities and Exchange Commission for the acquisition of the Property. The Financial Statements are not representative of the actual operations for the periods presented, as certain expenses, which may not be comparable to the expenses expected to be incurred in the future operations of the Property, have been excluded. Expenses excluded generally consist of interest and debt related costs, depreciation and amortization expense, interest income, income taxes and certain other expenses not directly related to the future operations of the Property. Therefore, the Financial Statements may not be comparable to a statement of operations for the Property after its acquisition by Teachers Insurance and Annuity Association of America (TIAA). Except as noted above, TIAA is not aware of any material factors relating to the Property for the year ended December 31, 2016 or the period from January 1,
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30700 Russell Ranch — Westlake Village, California
2017 through September 30, 2017 (unaudited), that would cause the reported financial information not to be indicative of future operating results.
2 — Summary of significant accounting policies
Basis of accounting
The financial statements have been prepared using the accrual method of accounting on the basis of presentation described in Note 1. As such, expenses are recognized when incurred.
Revenue Recognition
Rental income from the operating leases, which include scheduled increases over the lease term, is recognized on a straight-line basis. For the year ended December 31, 2016, income recognized on a straight-line basis is less than income that would have been accrued in accordance with the lease terms by approximately $93,000. For the nine-month period ended September 30, 2017 (unaudited), income recognized on a straight-line basis is less than income that would have been accrued in accordance with the lease terms by approximately $23,000. Rental revenue is earned while the tenant is in possession of the space.
Property operations
Certain operating expenses represent the direct expenses of operating the Property and consist primarily of repairs and maintenance, utilities, real estate taxes, property insurance, and general and administrative expenses that are expected to continue in the ongoing operation of the Property.
Use of estimates
The preparation of the accompanying Financial Statements in conformity with accounting principles generally accepted in the United States requires management of the Seller of the Property to make certain estimates and assumptions that affect the reported amounts of revenue and certain operating expenses during the reporting periods. Actual results could differ from those estimates.
3 — Future Rental Income
Available space in the Property is leased to tenants under noncancelable operating leases that expire on various dates through 2028. The leases provide for increases in future minimum rental payments and require reimbursement of common area maintenance charges, certain operating expenses, and real estate taxes.
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30700 Russell Ranch — Westlake Village, California
The minimum future rental income from these leases as of December 31, 2016 is as follows:
|
| | |
2017 | 3,506,730 |
|
2018 | 3,793,442 |
|
2019 | 3,876,205 |
|
2020 | 3,554,351 |
|
2021 | 3,618,107 |
|
Thereafter | 3,759,025 |
|
| 22,107,860 |
|
4 — Subsequent events
Events that occur after December 31, 2016, but before the Financial Statements were available to be issued, must be evaluated for recognition or disclosure. The effects of subsequent events that provide evidence about conditions that existed at December 31, 2016, are recognized in the accompanying Financial Statements. Subsequent events which provide evidence about conditions that existed after December 31, 2016 require disclosure in the accompanying notes. Management evaluated the activity of the Property through February 26, 2018, and concluded that no subsequent events have occurred that would require recognition or disclosure in the Financial Statements and related footnotes.
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Appendix A — Management of TIAA
The TIAA Real Estate Account has no officers or directors and no TIAA trusteeTrustee or executive officer receives compensation from the Account. The Trustees and certain principal executive officers of TIAA as of April 15, 2018, ________, 2024,their years of birth, and their principal occupations during at least the past five years are as follows:
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TRUSTEES |
Name & Year of Birth (YOB) | | Principal Occupations During Past 5 Years |
Ronald L. ThompsonJames R. Chambers
Chairman of the TIAA Board of Trustees YOB: 19491957 | | Director, Fiat Chrysler AutomobilesPresident and Chief Executive Officer (2013 to 2016), and Special Advisor, Board (2016), Weight Watchers International, Inc. Chairman (2018 to 2022), Director (2012 to present), Big Lots, Inc. Finance and Investment Committee Member (2021 to present), Atlantic Health Systems. Strategic Advisor to the Board, Ocean Spray (2022 to present). |
Priya Abani YOB: 1975 | | President, Chief Executive Officer and Director, Alive Cor Inc. (2019 to present). General Manager, Alexa Voice Service team, Amazon, Inc. (2016 to 2019). Director, Jacobs Engineering Group, Inc. (2021 to present). |
Samuel R. Bright YOB: 1984 | | Vice President and General Manager of Google Play at Google (2023 to present). Chief Product and Experience Officer, Upwork (2020 to 2022). Vice President, General Manager – Verticals (2019 to 2020); Vice President, Soft Goods (2018 to 2019); Senior Director, Art & Collectibles (2016 to 2018); and a series of other M&A and Strategic Partnership roles (2012 to 2016), eBay. President and Board Member of certain Upwork subsidiaries (2021 to 2022). Advisory Council Member, Smithsonian National Postal Museum (2019 to 2023). Board Member, Benetech (2016 to 2021). |
Jason E. Brown YOB: 1978 | | CEO, MRO Corp. (2022 to present). CEO, Discovery Health Partners (2018 to 2022). President, Evolent Health (2014 to present)2018). Board Member, Plymouth Ventures Partnership II Advisory Board (2010 to present). Director, Medical University of South Carolina Foundation (2013 to present), and Trustee, Washington University in St. Louis (1987 to 2013 and 2014YMCA Chicago (2019 to present). |
Jeffrey R. Brown YOB: 1968 | | Josef and Margot Lakonishok Professor of Business and Dean of the Gies College of Business at the University of Illinois at Urbana-Champaign (2015 to present). ProfessorChair (2019 to present) and Member (2016 to present), Board of Finance and DirectorManagers of the Center for Business and Public Policy,Illinois Global Gateway, LLC. Member, Board of Managers of University of Illinois at Urbana-Champaign (2007Research Park (2019 to present). Board Member, Center for Audit Quality (2016Illinois Ventures, LLC (2022 to present). |
James R. Chambers
YOB: 1957
| | Special Advisor, Member, Board Weight Watchers International, Inc. (2016)of Managers, Brown Eagle Investments, LLC (2018 to present). Director,Board Member (2020 to present), Executive Vice Chair (2022 to present), and President (2023 to present), Prairielands Council, Scouting BSA. Advisory Board Member, Academic Engagement Network (2018 to present), Tax Policy Center (2013 to present), and Chief Executive Officer (2012 to 2016), Weight Watchers International, Inc. President, US Snacks and Confectionary at Kraft Foods (2010 to 2012). Director, Big Lots, Inc. (2012Aspen Institute Leadership Forum on Retirement Savings (2020 to present). |
Lisa W. Hess YOB: 1955 | | President and Managing Partner, SkyTop Capital (2010 to present)2020). Director, Radian Group, Inc. (2011 to present). Director, TIAA, FSB (a wholly owned subsidiary of TIAA) (2015 to 2023). Trustee, John Simon Guggenheim Memorial Foundation (2023 to present). Trustee, New York Society Library (2023 to present). |
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TRUSTEES |
Name & Year of Birth | | Principal Occupations During Past 5 Years |
Edward M. Hundert, M.D. YOB: 1956 | | Dean for Medical Education and Daniel D. Federman, M.D. Professor in Residence of Global Health and Social Medicine and Medical Education, Harvard University Medical School (2014 to present). Senior lecturer inAdvisor, Huron Consulting Group (2023 to present). Dean for Medical Ethics (2007 to 2014),Education, Associate Director of the Center for Teaching and Learning,Bioethics, Harvard Medical School (2014 to 2023). Faculty member, Massachusetts General Hospital Center for Law, Brain and Behavior (2011 to 2014)2023). |
Lawrence H. LindenGina L. Loften
YOB: 19471965 | | Founding Trustee, Linden TrustChief Technology Officer for Conservation (1993the US at Microsoft Corporation (2019 to 2021). Chief Technology Officer for IBM North American Consulting Services (2018 to 2019), Chief Innovation Officer for IBM (2015 to 2018). Director, TTEC (2021 to present),. Director, World Wildlife Fund (2002Thoughtworks (2021 to present). Director, Foursquare (2021 to present). Board Member, Modernizing Medicine (2021 to present). Director, Interwell Health (2022 to present). Director, NC School of Science and Mathematics Foundation (2021 to present). Board Member, North Carolina A&T Foundation (2023 to present). Trustee, North Carolina AT&T State University (2023 to present). Advisory Board Member, North Carolina A&T School of Engineering (2021 to 2023). Director, Redstone Strategy Group (2006DECODE (2021 to present). Strategic Advisory Board Member, New World Capital Group (2011 to present). |
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Maureen O’Hara YOB: 1953 | | R.W. Purcell Professor of Finance, Johnson Graduate School of Management, Cornell University (1992 to present), where she has taught since 1979. Professor of Finance, University of Technology Sydney (2016 to present)2018). |
Donald K. Peterson
YOB: 1949
| | Director, Sanford C. Bernstein Fund Inc. (2007National Bureau of Economic Research (2021 to present). Director, Bernstein Fund Inc.Executive Advisor, Symbiont (2015 to 2023). Executive Advisor, Ava Labs, Inc. (2019 to present). Trustee Emeritus, Worcester Polytechnic Institute (2015Executive Advisor, BMLL Technologies (2022 to present). |
Sidney A. RibeauRamona E. Romero
YOB: 19471962 | | Professor of Communications, Howard UniversityVice President & General Counsel (2019 to present) and General Counsel (2014 to present)2019), Princeton University. Trustee, Barnard College (2019 to 2023). President, Howard University (2008 to 2013). Co-founder, TM2 Education Search (2016Trustee, Legal Services of New Jersey (2020 to present). Director, Worthington Industries (2000National Association of Women Lawyers (2022 to present). |
Dorothy K. Robinson
YOB: 1951
| | Of Counsel K&L Gates (2016 Member, Presidential Commission on White House Fellowships (2021 to present). Senior Counselor to the President, Yale University (2014 to 2015). Vice President and General Counsel, Yale University (1995 to 2014). |
Kim M. Sharan YOB: 1957 | | Founder and CEO, Kim M. Sharan, LLC (2004(2014 to present). President of Financial PlanningConsultant, The Council (2021 to 2023). Co-Founder, Connective Partners (2022 to present). Managing Partner and Wealth Strategies and Chief Marketing Officer, Ameriprise Financial (2002CEO, The Acelera Connective (2022 to 2014)present). Board Member, Partner Here (2014 to present). Director, Girls Inc.Ag Resource Management (2023 to present). Executive Advisor, Own the Room (2016 to 2023). Advisory Board Member, Hearsay Social (2019 to 2021). Advisory Board Member, Yext (2016 to 2018 and 2021 to 2022). Advisory Board Member, Vera Health (2021 to 2023). Director, TIAA FSB (a wholly-owned subsidiary of TIAA) (2020 to 2023). Director, TIAA, Trust, N.A. (a wholly-owned subsidiary of TIAA) (2023 to present). Board Member, Council for Economic Education (2021 to 2023). Member, Women’s Forum New York (2012 to present). |
La June Montgomery Tabron YOB: 1962 | | President and CEO of the W.K. Kellogg Foundation (2014 to present). Board Member, Kellogg Company, Chair of the W.K. Kellogg Trust (2014 to present). Director, Bronson Healthcare Group (2011 to present). Board Member, Detroit Regional Partnership (2019 to present). Trustee, Upjohn Institute for Employment Research (2022 to present). |
OFFICER-TRUSTEES |
Name & Year of Birth | | Principal Occupations During Past 5 Years |
Thasunda Brown Duckett YOB: 1973 | | President and Chief Executive Officer of TIAA (2021 to present). Prior positions: Chief Executive Officer, Consumer Banking (2016 to 2021) and Chief Executive Officer, Chase Auto Finance (2013 to 2016) at JPMorgan Chase & Co. Director, Nike, Inc. (2019 to present). Director, Brex (2022 to present). |
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TIAA Real Estate Account n Prospectus
| 171133 |
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TRUSTEESOFFICERS |
Name & Year of Birth (YOB) | | Principal Occupations During Past 5 Years |
David L. ShedlarzColbert Narcisse
YOB: 1948 | | Director, Pitney Bowes Inc. (2001 to present). Director, The Hershey Company (2008 to present). Director, Teladoc, Inc. (2016 to present). |
Marta Tienda
YOB: 1950
| | Maurice P. During ’22 Professor in Demographic Studies and Professor of Sociology and Public Affairs, Princeton University (since 1999). Director, Novume Solutions (2017 to present). Board Chair (2017 to present), Trustee (2004 to present), Alfred P. Sloan Foundation. Trustee, Jacobs Foundation of Switzerland (1999 to present). Board member, Robin Hood Foundation (2017 to present). |
OFFICER-TRUSTEES |
Name & Year of Birth (YOB) | | Principal Occupations During Past 5 Years |
Roger W. Ferguson, Jr.
YOB: 1951
| | President and Chief Executive Officer of TIAA and CREF (since 2008). |
OFFICERS |
Name & Year of Birth (YOB) | | Principal Occupations During Past 5 Years |
Carol W. Deckbar
YOB: 1962
| | Executive Vice President, Institutional Investment and Endowment Services of TIAA and Executive Vice President of CREF. Prior positions: Executive Vice President, CEO, TIAA-CREF Asset Management at TIAA; Executive Vice President, COO Asset Management at TIAA.
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Virginia M. Wilson
YOB: 19541965
| | Senior Executive Vice President, Chief FinancialProduct and Business Development Officer, of TIAATIAA; President and Executive Vice President, Chief Financial Officer and Principal Accounting Officer of CREF. Prior position: Executive Vice President, Chief Financial Officer of TIAA. |
Ronald Pressman
YOB: 1958
| | Senior Executive Vice President, Institutional Financial Services Chief Executive Officer, ofCollege Retirement Equities Fund and TIAA and Executive Vice President of theSeparate Account VA-1; Manager, TIAA-CREF Fund Complex.Individual & Institutional Services, LLC. Prior positions: Executive Vice President, National Wealth Advisory Services; Senior Managing Director, National Wealth Advisory Services, TIAA. Managing Director and Chief Operating Officerthe Head of TIAA.International Wealth Management at Morgan Stanley (2017 to 2019). |
Kathie J. AndradeChristopher Baraks
YOB: 19601970 | | Senior Executive Vice President, Retail Financial Services Chief ExecutiveAccounting Officer of TIAA.and Corporate Controller, TIAA and CREF. Prior position: Executivepositions: Vice President, Head of Individual Advisory Services of TIAA.Tax, TIAA and CREF. |
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PORTFOLIO MANAGEMENT TEAM |
Name & Year of Birth (YOB) | | Principal Occupations During Past 5 Years |
Randy GiraldoChris Burk
YOB: 19751971 | | Managing Director, Portfolio Manager, Head of TIAA Real Estate Account. Head of Portfolio Management for THRE division of Nuveen. Prior position: Managing Director. |
Gordon (Chris) McGibbon
YOB: 1972
| | Senior Managing Director, Head of Americas, TH Real Estate.Account (since January 2023). Prior positions: Managing Director, PMCo-Portfolio Manager, Co-Head of GA Mortgage andTIAA Real Estate Portfolios, TIAA.Account (September 2022 to December 2022); Managing Director, PM of Direct, Flagship Open EndedSenior Portfolio Manager, Real Estate, Fund.TIAA (March 2020 to September 2022). Senior Director, Real Estate Portfolio Management, TIAA (2018 to 2020). Senior Director, Regional Head of Acquisitions, TIAA (2017 to 2018). |
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Appendix B — Special terms
Accumulation: The total value of your accumulation units in the Real Estate Account.
Accumulation Period: The period that begins with your first premium and continues until the entire accumulation has been applied to purchase annuity income, transferred from the Account, or paid to you or a beneficiary.
Accumulation Unit: A share of participation in the Real Estate Account for someone in the accumulation period. The Account’s accumulation unit value changes daily.
Annuity Unit: A measure used to calculate the amount of annuity payments due a participant.contract owner.
Beneficiary: Any person or institution named to receive benefits if you die during the accumulation period or if you (and your annuity partner, if you have one) die before the guaranteed period of your annuity ends.
Business Day: Any day the New York Stock Exchange (NYSE)(“NYSE”) or its affiliated exchanges NYSE Arca Equities or NYSE American (collectively with NYSE, the “NYSE Exchanges”) is open for trading. A business dayBusiness Day generally ends at 4 p.m. Eastern Time or when trading closes on the NYSE Exchanges, if earlier. The term “NYSE” includesA Business Day may end early only as of the New York Stock Exchange and its constituent, affiliate and subsidiary exchanges, includinglatest closing time of the regular (or core) trading session of any of the NYSE Arca Equities and NYSE MKT.Exchanges.
Calendar Day: Any day of the year. Calendar days end at the same time as business days.
Commuted Value: The present value of annuity payments due under an income option or method of payment not based on life contingencies. Present value is adjusted for investment gains or losses since the annuity unit value was last calculated.
Contracts: Individual and group variable annuity contracts issued by TIAA.
Eligible Institution: A non-profit institution, including any governmental institution, organized in the United States.
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
General Account: All of TIAA’s assets other than those allocated to the Real Estate Account or to other existing or future TIAA separate accounts.
Good Order: Actual receipt of an order along with all information and supporting legal documentation necessary to effect the transaction. This information and documentation generally includes your complete application (or complete request for redemptions, transfers, withdrawals or payment of death or other benefits), and any other information or supporting documentation we may require. With respect to purchase requests, “good order” also generally includes receipt of sufficient funds by us to effect the purchase. We may, in our sole discretion, determine whether any particular transaction request is in good order“good order” and reserve the right to change or waive any good order“good order” requirement at any time either in general or with respect to a particular plan,
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| 135 |
contract or transaction. In addition, it is also possible that if we are unable to reach you to obtain additional or missing information relating to incomplete applications, or transaction requests that are not in good“good order,” the transaction may be cancelled.
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TIAA Real Estate AccountnProspectus
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Income Change Method: The method under which you choose to have your annuity payments revalued. Under the annual income change method, your payments are revalued once each year. Under the monthly income change method, your payments are revalued every month.
Separate Account: An investment account legally separated from the general assets of TIAA, whose income and investment gains and losses are credited to or charged against its own assets, without regard to TIAA’s other income, gains or losses.
Valuation Day: Any business day.
Valuation Period: The time from the end of one valuation day to the end of the next.
For purposes of this prospectus, the term “we” refers collectively to the Account and the TIAA officers that provide management services to the Account, as well as TIAA and Services, both of which provide services for the Account.
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174136 | ProspectusnTIAA Real Estate AccountnProspectus
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PART II
INFORMATION NOT REQUIRED IN A PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution.
|
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SEC Registration Fees | $ | 498,000 |
| |
Costs of printing and engraving | 600,000 |
| * |
Legal fees | 44,000 |
| * |
Accounting fees | 34,000 |
| * |
Blue Sky Registration Fees | 5,000 |
| * |
Miscellaneous | 18,200 |
| * |
Total | $ | 1,199,200 |
| * |
| | | | | |
SEC registration fees | $ | 1,062,720 | | |
Costs of printing and engraving | 600,000 | | * |
ApproximateLegal fees | 78,000 | | * |
Accounting fees | 30,000 | | * |
Blue Sky registration fees | 5,000 | | * |
Miscellaneous | 18,200 | | * |
Total | $ | 1,793,920 | | * |
*Approximate
Item 14. Indemnification of Directors and Officers.
Trustees, officers, and employees of TIAA may be indemnified against liabilities and expenses incurred in such capacity pursuant to Article Six of TIAA’s bylaws (see Exhibit 3(B)). Article Six provides that, to the extent permitted by law, TIAA will indemnify any person made or threatened to be made a party to any action, suit or proceeding by reason of the fact that such person is or was a trustee, officer, or employee of TIAA or, while a trustee, officer, or employee of TIAA, served any other organization in any capacity at TIAA’s request. To the extent permitted by law, such indemnification could include judgments, fines, amounts paid in settlement, and expenses, including attorney’s fees. TIAA has in effect an insurance policy that will indemnify its trustees, officers, and employees for liabilities arising from certain forms of conduct. No payment of indemnification, advance or allowance under the foregoing provisions shall be made unless a notice shall have been filed with the New York Department of Financial Services not less than thirty days prior to such payment specifying the persons to be paid, the amounts to be paid, the manner in which payment is authorized and the nature and status, at the time of such notice, of the litigation or threatened litigation.
Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended (the “Securities Act”) may be permitted to trustees, officers, or employees of TIAA, pursuant to the foregoing provision or otherwise, TIAA has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in that Securities Act and is therefore unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment of expenses incurred or paid by a trustee, officer, or employee in the successful defense of any action, suit or proceeding) is asserted by a trustee, officer, or employee in connection with the securities being registered, TIAA will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in that Act and will be governed by the final adjudication of such issue.
Item 15. Recent Sales of Unregistered Securities.
None.
Item 16: Exhibits and Financial Statement Schedules
(a) Exhibits
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(1(1) | ) | (A) | |
(3(3) | ) | (A) | |
| (B) | |
(4(4) | ) | (A) | |
| (B) | |
| (C) | |
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| (D) | |
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| (E) | |
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| (F) | |
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| (G) | |
| (H) | |
| (I) | |
(10 | )(J) | |
| (K) | |
| (L) | |
| (M) | |
| (N) | |
| (O) | |
| (P) | |
| (Q) | |
(5) | | | Opinion and Consent of Deirdre Hykal Esq.** |
(10) | | (A) | |
| (B) | |
(23 | )(C) | Form of Amended & Restated Service and Subcontracting Agreement between TIAA and TIAA Shared Services, LLC** |
| (D) | |
| (E) | |
| (F) | |
(23) | | (A) | Consent of Phillip Rollock,Deirdre Hykal, Esq. (included in Exhibit 5)** |
| (B) | |
| (C) | |
(24) | (D) | | |
(99) | (E) | | |
(101) | (F) | |
| (G) | |
(24 | ) | | |
(101 | ) | | |
(107) | | | |
*Filed herewith.
** To be filed by Amendment
1Previously 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).
2Previously 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).
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** | To be filed by Amendment. |
*** Furnished electronically herewith.3Previously 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).
4Previously filed and incorporated herein by reference to the Account’s Post-Effective Amendment No. 2 to the Registration Statement on Form S-1 filed April 30, 1996 (File No. 33-92990).
5Previously filed and incorporated herein by reference to the Account’s Post-Effective Amendment No. 1 to the Registration Statement on Form S-1 filed May 2, 2005 (File No. 333-121493).
6Previously filed and incorporated herein by reference to Exhibit 4(A) to the Account’s Pre-Effective Amendment No. 1 to the Registration Statement on Form S-1 filed April 29, 2004 (File No. 333-113602).
7Previously filed and incorporated herein 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).
8Previously 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).
9Previously filed and incorporated 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).
10Previously filed and incorporated 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).
11Previously filed and incorporated 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).
12Previously filed and incorporated 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).
13Previously filed and incorporated 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).
14Previously filed and incorporated 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).
15Previously filed and incorporated 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).
16Previously filed and incorporated by reference to Exhibit 4(J)(1) to the Account’s Annual Report on Form 10-K, filed with the Commission on March 14, 2019 (File No. 33-92990).
17Previously filed and incorporated by reference to Exhibit 4(J)(2) to the Account’s Annual Report on Form 10-K, filed with the Commission on March 14, 2019 (File No. 33-92990).
18Previously filed and incorporated by reference to Exhibit 4(K) to the Account’s Annual Report on Form 10-K, filed with the Commission on March 14, 2019 (File No. 33-92990).
19Previously filed and incorporated by reference to Exhibit 4(L)(1) to the Account’s Annual Report on Form 10-K, filed with the Commission on March 12, 2020 (File No. 33-92990).
20Previously filed and incorporated by reference to Exhibit 4(L)(2) to the Account’s Annual Report on Form 10-K, filed with the Commission on March 12, 2020 (File No. 33-92990).
21Previously filed and incorporated by reference to Exhibit 4(M) to the Account’s Annual Report on Form 10-K, filed with the Commission on March 11, 2021 (File No. 33-92990).
22Previously filed and incorporated by reference to Exhibit 4(N) to the Account’s Annual Report on Form 10-K, filed with the Commission on March 11, 2021 (File No. 33-92990).
23Previously filed and incorporated by reference to Exhibit 4(O) to the Account’s Annual Report on Form 10-K, filed with the Commission on March 11, 2021 (File No. 33-92990).
24Previously filed and incorporated by reference to Exhibit 4(P) to the Account’s Annual Report on Form 10-K, filed with the Commission on March 11, 2021 (File No. 33-92990).
25Previously filed and incorporated by reference to Exhibit 4(Q) to the Account’s Annual Report on Form 10-K, filed with the Commission on March 11, 2021 (File No. 33-92990).
26Previously filed and incorporated by reference to Exhibit 10.1 to the Account’s Current Report on Form 8-K, filed with the Commission on February 16, 2022 (File No. 33-92990).
27Previously filed and incorporated by reference to Exhibit 4(C)(2) to the Account’s Annual Report on Form 10-K, filed with the Commission on March 9, 2023 (File No. 33-92990).
28Previously filed and incorporated by reference to Exhibit 4(E)(3) to the Account’s Annual Report on Form 10-K, filed with the Commission on March 9, 2023 (File No. 33-92990).
29Previously filed and incorporated by reference to Exhibit 4(E)(4) to the Account’s Annual Report on Form 10-K, filed with the Commission on March 9, 2023 (File No. 33-92990).
30Previously filed and incorporated by reference to Exhibit 4(F)(3) to the Account’s Annual Report on Form 10-K, filed with the Commission on March 9, 2023 (File No. 33-92990).
31Previously filed and incorporated by reference to Exhibit 4(F)(4) to the Account’s Annual Report on Form 10-K, filed with the Commission on March 9, 2023 (File No. 33-92990).
32Previously filed and incorporated by reference to Exhibit 99 to the Account’s Annual Report on Form 10-K, filed with the Commission on March 14, 2024 (File No. 33-92990).
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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). |
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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). |
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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). |
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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 April 30, 1996 (File No. 33-92990). |
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5 | Previously filed and incorporated herein by reference to the Account’s Post-Effective Amendment No. 1 to the Registration Statement on Form S-1 filed May 2, 2005 (File No. 333-121493). |
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6 | Previously filed and incorporated herein by reference to Exhibit 4(A) to the Account’s Pre-Effective Amendment No. 1 to the Registration Statement on Form S-1 filed April 29, 2004 (File No. 333-113602). |
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7 | Previously filed and incorporated herein 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). |
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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). |
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9 | Previously filed and incorporated 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). |
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10 | Previously filed and incorporated 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). |
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11 | Previously filed and incorporated 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). |
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12 | Previously filed and incorporated 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). |
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13 | Previously filed and incorporated 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). |
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14 | Previously filed and incorporated 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). |
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15 | Previously filed and incorporated 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). |
33Previously filed and incorporated by reference to Exhibit 101 to the Account’s Annual Report on Form 10-K, filed with the Commission on March 14, 2024 (File No. 33-92990).
34Previously filed and incorporated herein by reference to Exhibit 10 (C) to the Account’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2022 and filed with the Commission on August 5, 2022 (File No. 33-92990).
35Previously filed and incorporated herein by reference to Exhibit 10(c) to the Account’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2023 and filed with the Commission on August 4, 2023 (File No. 333-270449).
(b) Financial Statement Schedules
All Schedules have been omitted because they are not required under the related instructions or are inapplicable.
Item 17. Undertakings.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933.
(ii) To reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement.
(iii) To include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement.
(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(4) To provide the full financial statements of TIAA promptly upon written or oral request.
(5) That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.
(6) That, for the purpose of determining liability of the Registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities:
The undersigned Registrant undertakes that in a primary offering of securities of the undersigned Registrant pursuant to this Registration Statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned Registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
(i) Any preliminary prospectus or prospectuses of the undersigned Registrant relating to the offering required to be filed pursuant to Rule 424;
(ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned Registrant or used or referred to by the undersigned Registrant;
(iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned Registrant or its securities provided by or on behalf of the undersigned Registrant; and
(iv) Any other communication that is an offer in the offering made by the undersigned Registrant to the purchaser.
[The full audited financial statements of TIAA will be filed by amendment to this Registration Statement on Form S-1]
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant TIAA Real Estate Account, has duly caused this Registration Statement on Form S-1registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, State of New York, on the 16th[14th day of March, 2018.
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TIAA REALESTATEACCOUNT |
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By: | TEACHERSINSURANCEAND ANNUITYASSOCIATION OF OFAMERICA |
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By: | /s/ Carol W. DeckbarColbert Narcisse |
| Carol W. DeckbarColbert Narcisse |
| Senior Executive Vice President, Institutional InvestmentChief Product & Endowment Services, Teachers Insurance and Annuity Association of AmericaBusiness Development Officer, TIAA (Principal Executive Officer) |
Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statementregistration statement has been signed by the following trustees and officers of Teachers Insurance and Annuity Association of America,persons, in the capacities and onas of the dates indicated.
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Signature | | Title | | Date |
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/s/ Roger W. Ferguson, Jr.Thasunda Brown Duckett | | President and Chief Executive Officer of Teachers Insurance and Annuity Association of America and Trustee | | March 16, 201814, 2024 |
Roger W. Ferguson, Jr.Thasunda Brown Duckett | | |
| | | | |
/s/ Carol W. Deckbar | | Executive Vice President, Institutional Investment & Endowment Services of Teachers Insurance and Annuity Association of America (Principal Executive Officer) | | March 16, 2018 |
Carol W. Deckbar | | �� |
| | | | |
/s/ Virginia M. Wilson | | Senior Executive Vice President and Chief Financial Officer, Teachers Insurance and Annuity Association of America (Principal Financial and Accounting Officer) | | March 16, 2018 |
Virginia M. Wilson | | |
* | | Chairman of the Board of Trustees | | March 16, 2018 |
Ronald L. Thompson | | |
* | | Trustee | | March 16, 2018 |
Jeffrey R. Brown | | |
* | | Trustee | | March 16, 2018 |
James R. Chambers | | |
* | | Trustee | | March 16, 2018 |
Lisa W. Hess | | | |
* | | Trustee | | March 16, 2018 |
Edward M. Hundert, M.D. | | |
* | | Trustee | | March 16, 2018 |
Lawrence H. Linden | | |
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/s/ Colbert Narcisse | | Senior Executive Vice President, Chief Product & Business Development Officer, TIAA (Principal Executive Officer) | | March 14, 2024 |
Colbert Narcisse | | |
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/s/ Christopher Baraks | | Senior Vice President, Chief Accounting Officer and Corporate Controller, TIAA (Principal Financial and Accounting Officer) | | March 14, 2024 |
Christopher Baraks | |
Chairman of the Board of Trustees | | March 14, 2024 |
* | | |
James R. Chambers | | | | |
* | | Trustee
Trustee | | March 14, 2024 |
Priya Abani | | |
* | | Trustee | | March 14, 2024 |
Samuel R. Bright | | |
* | | Trustee | | March 14, 2024 |
Jason E. Brown | | |
* | | Trustee | | March 14, 2024 |
Jeffrey R. Brown | | |
* | | Trustee | | March 14, 2024 |
Lisa W. Hess | | |
* | | Trustee | | March 14, 2024 |
Edward M. Hundert, M.D. | | |
* | | Trustee | | March 14, 2024 |
Gina L. Loften | | |
| | | | | | | | | | | | | | |
Signature | | Title | | Date |
* | | Trustee | | March 14, 2024 |
Maureen O’Hara | | | March 16, 2018 |
* | | Trustee | | March 14, 2024 |
Donald K. PetersonRamona E. Romero | | | March 16, 2018 |
* | | Trustee | | |
Sidney A. Ribeau | | | March 16, 2018 |
* | | Trustee | | |
Dorothy K. Robinson | | | March 16, 2018 |
* | | Trustee | | 14, 2024 |
Kim M. Sharan | | | March 16, 2018 |
* | | Trustee | | March 14, 2024 |
David L. ShedlarzLa June Montgomery Tabron | | | March 16, 2018 |
* | | Trustee | | |
Marta Tienda | | | March 16, 2018 |
/s/ F. Scott Thomas
F. Scott Thomas as Attorney-in-Fact
* Signed by F. Scott Thomas as Attorney in FactAttorney-in-Fact.
Exhibit Index
Exhibits
23(B) Consent of Dechert LLP
23(C) Consent of PricewaterhouseCoopers LLC
24 Powers of Attorney
107 Filing Fee Table