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Tiaa Real Estate Account

Filed: 8 May 20, 3:12pm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2020
OR
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from__________to __________
Commission file number: 33-92990; 333-230322

TIAA REAL ESTATE ACCOUNT
(Exact name of registrant as specified in its charter)
NEW YORK
(State or other jurisdiction
of incorporation or organization)
NOT APPLICABLE
(I.R.S. Employer Identification No.)
C/O TEACHERS INSURANCE AND
ANNUITY ASSOCIATION OF AMERICA
730 THIRD AVENUE
NEW YORK, NEW YORK 10017-3206
(Address of principal executive offices, including zip code)
Registrant’s telephone number, including area code: (212) 490-9000
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
YES ý  NO o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
YES ý  NO o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer o
 
Accelerated filer o
Non-accelerated filer ý (Do not check if a smaller reporting company)
 
Smaller Reporting Company o
  
Emerging Growth Company o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
YES o  NO ý




TABLE OF CONTENTS
   Page
Part IFinancial Information 
 Item 1.Unaudited Consolidated Financial Statements 
  
  
  
  
  
  
 Item 2.Management's Discussion and Analysis of the Account's Financial Condition and Results of Operations
 Item 3.Quantitative and Qualitative Disclosures about Market Risk
 Item 4.Controls and Procedures
Part IIOther Information 
 Item 1.Legal Proceedings
 Item 1A.Risk Factors
 Item 2.Unregistered Sales of Equity Securities and Use of Proceeds
 Item 3.Defaults Upon Senior Securities
 Item 4.Mine Safety Disclosures
 Item 5.Other Information
 Item 6.Exhibits
Signatures 






PART I. FINANCIAL INFORMATION
ITEM 1. UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
TIAA REAL ESTATE ACCOUNT
CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES
(In millions, except per accumulation unit amounts)
 March 31, December 31,
 2020 2019
 (Unaudited)   
ASSETS     
Investments, at fair value:     
Real estate properties
(cost: $14,098.9 and $13,048.5)
$17,082.1
  $15,835.0
 
       Real estate joint ventures and funds
(cost: $5,042.0 and $6,244.4)
6,591.5
  7,516.0
 
Marketable securities:     
Real estate-related
(cost: $800.4 and $686.0)
724.7
(1) 
 825.7
(1) 
Other
(cost: $1,354.4 and $4,144.7)
1,347.3
  4,150.2
 
Loans receivable
(principal: $1,574.5 and $1,504.5)
1,562.5
  1,503.1
 
      Loans receivable with related parties
(principal: $69.3 and $69.3)
68.5
  69.0
 
Total investments
(cost: $22,939.5 and $25,697.4)
27,376.6
  29,899.0
 
Cash and cash equivalents1,354.1
  15.1
 
Due from investment manager
  5.5
 
Receivable for securities sold363.5
  
 
Other270.2
(2) 
 290.3
(2) 
TOTAL ASSETS29,364.4
  30,209.9
 
LIABILITIES     
  Loans payable, at fair value
(principal outstanding: $2,624.3 and $2,338.0)
2,605.6
  2,365.0
 
Line of credit, at fair value190.0
  250.0
 
Due to investment manager19.0
  
 
Accrued real estate property expenses242.4
  225.9
 
Payable for collateral for securities loaned2.5
  25.7
 
Payable for securities purchased251.6
  
 
Other38.2
  35.4
 
TOTAL LIABILITIES3,349.3
  2,902.0
 
COMMITMENTS AND CONTINGENCIES
  
 
NET ASSETS     
Accumulation Fund25,466.4
  26,759.1
 
Annuity Fund548.7
  548.8
 
TOTAL NET ASSETS$26,015.1
  $27,307.9
 
NUMBER OF ACCUMULATION UNITS OUTSTANDING57.8
  60.8
 
NET ASSET VALUE, PER ACCUMULATION UNIT$440.892
  $440.422
 
(1) Includes securities loaned of $2.4 million at March 31, 2020 and $25.2 million at December 31, 2019.
(2) Includes cash collateral for securities loaned of $2.5 million at March 31, 2020 and $25.7 million at December 31, 2019.

See notes to the consolidated financial statements

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TIAA REAL ESTATE ACCOUNT
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions)
(Unaudited)
 For the Three Months Ended March 31,
2020 2019
INVESTMENT INCOME   
Real estate income, net:   
Rental income$299.7
 $262.6
Real estate property level expenses and taxes:   
Operating expenses69.2
 59.2
Real estate taxes50.1
 46.6
Interest expense24.3
 25.7
Total real estate property level expenses and taxes143.6
 131.5
Real estate income, net156.1
 131.1
Income from real estate joint ventures and funds55.2
 49.7
Interest42.5
 41.1
Dividends4.5
 4.4
TOTAL INVESTMENT INCOME258.3
 226.3
Expenses:   
Investment management charges17.2
 19.5
Administrative charges11.7
 13.3
Distribution charges7.6
 7.9
Mortality and expense risk charges0.3
 0.3
Liquidity guarantee charges16.2
 12.9
TOTAL EXPENSES53.0
 53.9
INVESTMENT INCOME, NET205.3
 172.4
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND LOANS PAYABLE   
Net realized gain (loss) on investments:   
Real estate properties(59.2) 
Real estate joint ventures and funds(460.3) 5.1
Marketable securities35.2
 141.0
Loans receivable(1.6) 
Net realized (loss) gain on investments(485.9) 146.1
Net change in unrealized appreciation (depreciation) on:   
Real estate properties196.7
 73.9
Real estate joint ventures and funds300.5
 2.5
Marketable securities(230.8) 76.3
Loans receivable(10.6) 1.2
Loans receivable with related parties(0.5) 
Loans payable45.7
 (29.6)
Net change in unrealized appreciation on
investments and loans payable
301.0
 124.3
NET REALIZED AND UNREALIZED (LOSS) GAIN ON INVESTMENTS AND LOANS PAYABLE(184.9) 270.4
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS$20.4
 $442.8


See notes to the consolidated financial statements

4


TIAA REAL ESTATE ACCOUNT
CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS
(In millions)
(Unaudited)
 For the Three Months Ended March 31,
2020 2019
FROM OPERATIONS   
Investment income, net$205.3
 $172.4
Net realized (loss) gain on investments(485.9) 146.1
Net change in unrealized appreciation on investments and loans payable301.0
 124.3
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS
20.4
 442.8
FROM PARTICIPANT TRANSACTIONS   
Premiums702.6
 677.4
Annuity payments(12.3) (11.5)
Withdrawals and death benefits(2,003.5) (629.6)
NET (DECREASE) INCREASE IN NET ASSETS
RESULTING FROM PARTICIPANT TRANSACTIONS
(1,313.2) 36.3
NET (DECREASE) INCREASE IN NET ASSETS(1,292.8) 479.1
NET ASSETS   
Beginning of period27,307.9
 25,842.6
End of period$26,015.1
 $26,321.7




























See notes to the consolidated financial statements

5


TIAA REAL ESTATE ACCOUNT
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions, Unaudited)
 For the Three Months Ended March 31,
2020 2019
CASH FLOWS FROM OPERATING ACTIVITIES   
Net increase in net assets resulting from operations$20.4
 $442.8
Adjustments to reconcile net changes in net assets resulting from operations to net cash provided by (used in) operating activities:   
Net realized gain (loss) on investments485.9
 (146.1)
Net change in unrealized appreciation on investments
and loans payable
(301.0) (124.3)
Purchase of real estate properties(1,097.7) (301.0)
Capital improvements on real estate properties(68.5) (54.7)
Proceeds from sale of real estate properties347.6
 3.1
Purchases of long term investments(701.7) (105.6)
Proceeds from long term investments1,385.8
 542.5
Purchases and originations of loans receivable(107.7) (74.4)
Proceeds from sales of loans receivable28.0
 
Proceeds from payoffs of loans receivable11.4
 21.3
Decrease (Increase) in other investments2,788.6
 (179.3)
Change in due to (from) investment manager24.5
 (7.8)
Increase in receivable for securities sold(363.5) 
Increase in payable for securities purchased251.6
 
Decrease in other assets16.3
 79.6
Decrease in other liabilities(8.3) (94.2)
NET CASH PROVIDED BY OPERATING ACTIVITIES2,711.7
 1.9
CASH FLOWS FROM FINANCING ACTIVITIES   
Proceeds from line of credit400.0
 
Payments on line of credit(460.0) 
Payments of mortgage loans(3.3) (4.7)
Premiums702.6
 677.4
Annuity payments(12.3) (11.5)
Withdrawals and death benefits(2,003.5) (629.6)
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES(1,376.5) 31.6
NET INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH1,335.2
 33.5
CASH, CASH EQUIVALENTS AND RESTRICTED CASH   
 Beginning of period cash, cash equivalents and restricted cash40.4
 47.3
 Net increase in cash, cash equivalents and restricted cash1,335.2
 33.5
 End of period cash, cash equivalents and restricted cash$1,375.6
 $80.8
SUPPLEMENTAL DISCLOSURES:   
 Cash paid for interest$24.3
 $26.2
 Mortgage loan assumed as part of real estate acquisition$289.6
 $
 Loan receivable converted to equity in real estate investment$(3.3) $
The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Statements of Assets and Liabilities that sum to the total of the same such amounts shown in the Consolidated Statements of Cash Flows (in millions):
 As of March 31,
 2020 2019
Cash and cash equivalents$1,354.1
 $38.1
Restricted cash(1)
21.5
 42.7
TOTAL CASH, CASH EQUIVALENTS AND RESTRICTED CASH$1,375.6
 $80.8
(1) Restricted cash is included within other assets in the Consolidated Statements of Assets and Liabilities.
See notes to the consolidated financial statements

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TIAA REAL ESTATE ACCOUNT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1—Organization and Significant Accounting Policies
Business: The TIAA Real Estate Account (“Account”) is an insurance separate account of Teachers Insurance and Annuity Association of America (“TIAA”) and was established by resolution of TIAA’s Board of Trustees (the “Board”) on February 22, 1995, under the insurance laws of the State of New York, for the purpose of funding variable annuity contracts issued by TIAA. The Account offers individual and group accumulating annuity contracts (with contributions made on a pre-tax or after-tax basis), as well as individual lifetime and term-certain variable payout annuity contracts (including the payment of death benefits to beneficiaries). Investors are entitled to transfer funds to or from the Account, and make withdrawals from the Account on a daily basis, under certain circumstances. Funds invested in the Account for each category of contract are expressed in terms of units, and unit values will fluctuate depending on the Account’s performance.
The investment objective of the Account is to seek favorable total returns primarily through the rental income and appreciation of a diversified portfolio of directly held, private real estate investments and real estate-related investments while offering investors guaranteed, daily liquidity. The Account holds real estate properties directly and through subsidiaries wholly-owned by TIAA for the sole benefit of the Account. The Account also holds limited interests in real estate joint ventures and funds, as well as investments in loans receivable with real estate properties as underlying collateral. Additionally, the Account invests in real estate-related and non-real estate-related publicly traded securities, cash and other instruments to maintain adequate liquidity levels for operating expenses, capital expenditures and to fund benefit payments (withdrawals, transfers and related transactions).
The Consolidated Financial Statements were prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"), which requires the use of estimates made by management. Actual results may vary from those estimates and such differences may be material.
The Consolidated Financial Statements of the Account as of March 31, 2020 and for the three months ended March 31, 2020 and 2019 are unaudited and include all adjustments necessary to present a fair statement of results for the interim periods presented. Results of operations for the interim periods are not necessarily indicative of results for the entire year. These Consolidated Financial Statements have been prepared in accordance with the applicable rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, certain footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted from this report pursuant to the rules of the SEC. As a result, these Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and notes thereto included in the Account’s annual report on Form 10-K for the year ended December 31, 2019.
The following is a summary of the significant accounting policies of the Account.
Basis of Presentation: The accompanying Consolidated Financial Statements include the Account and those subsidiaries wholly-owned by TIAA for the sole benefit of the Account. All significant intercompany accounts and transactions between the Account and such subsidiaries have been eliminated.
The Accumulation Unit Value (“AUV”) used for financial reporting purposes may differ from the AUV used for processing transactions. The AUV used for financial reporting purposes includes security and participant transactions effective through the period end date to which this report relates. Total return is computed based on the AUV used for processing transactions.
Determination of Investments at Fair Value: The Account reports all investments at fair value in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 946, Financial Services—Investment Companies ("ASC 946"). Further in accordance with the adoption of the fair value option allowed under ASC 825 - Financial Instruments, and at the election of Account management, loans payable and a line of credit are reported at fair value. The FASB has defined fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants excluding transaction costs.

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The following is a description of the valuation methodologies used to determine the fair value of the Account’s investments and investment related loans payable.
Valuation of Real Estate Properties—Investments in real estate properties are stated at fair value, as determined in accordance with policies and procedures reviewed by the Investment Committee of the Board and in accordance with the responsibilities of the Board as a whole. Accordingly, the Account does not record depreciation. Determination of fair value involves significant levels of judgment because the actual fair value of real estate can be determined only by negotiation between the parties in a sales transaction.
The Account’s primary objective when valuing its real estate investments is to produce a valuation that represents a reasonable estimate of the fair value of its investments. Implicit in the Account’s definition of fair value are the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby:
Buyer and seller are similarly motivated;
Both parties are well informed or well advised, and acting in what they consider their best interests;
A reasonable time is allowed for exposure in the open market;
Payment is made in terms of cash or in terms of financial arrangements comparable thereto; and
The price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.
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. Key inputs and assumptions include rental income and expense amounts, related rental income and expense growth rates, capital expenditures, discount rates and capitalization rates. Valuation techniques include discounted cash flow analysis, prevailing market capitalization rates or multiples applied to earnings from the property, analysis of recent comparable sales transactions, actual sale negotiations and bona fide purchase offers received from third parties. Amounts ultimately realized from each investment may vary significantly from the fair value presented.
Real estate properties owned by the Account are initially valued based on an independent third party appraisal, as reviewed by TIAA’s internal appraisal staff and as applicable by the Independent Fiduciary, RERC, LLC (the "Independent Fiduciary"), at the time of the closing of the purchase. Such initial valuation may result in a potential unrealized gain or loss reflecting the difference between an investment’s fair value (i.e., exit price) and its cost basis (which is inclusive of transaction costs).
Subsequently, each property is appraised each quarter by an independent third party appraiser, reviewed by TIAA’s internal appraisal staff and as applicable the Account’s Independent Fiduciary. In general, the Account obtains 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 or month in each period.
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 the account receives a bona fide bid for the sale of a property held within the Account or one of the Account’s joint ventures. 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). Alternatively, adjustments may be made to reflect the execution or renewal of a significant lease. 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. TIAA’s internal appraisal staff oversees the entire appraisal process, in conjunction with the Independent Fiduciary (the Independent Fiduciary is more fully described in the following paragraph). 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).


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The Independent Fiduciary was initially appointed in March 2006 by a special subcommittee of the Investment Committee of the Board to, among other things, oversee the entire appraisal process. In March 2018, RERC, LLC, was re-appointed as the Account's Independent Fiduciary for a term expiring in February 2021. The Independent Fiduciary must approve all independent appraisers used by the Account. All appraisals are performed in accordance with Uniform Standards of Professional Appraisal Practices, the real estate appraisal industry standards created by The Appraisal Foundation. Real estate appraisals are estimates of property values based on a professional’s opinion. Appraisals of properties held outside of the U.S. are performed in accordance with industry standards commonly applied in the applicable jurisdiction. These independent appraisers 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.
Also, the Independent Fiduciary may require additional appraisals if factors or events have occurred that could materially change a property’s value (including those identified previously) and such change is not reflected in the quarterly valuation review, or otherwise to ensure that the Account is valued appropriately. The Independent Fiduciary must also approve any valuation change of real estate-related assets where a property’s value changed by more than 6% from the most recent independent annual appraisal, or if the value of the Account would change by more than 4% within any calendar quarter or more than 2% since the prior calendar month. When a real estate property is subject to a mortgage, the property is valued independently of the mortgage and the property and mortgage fair values are reported separately (see Valuation of Loans Payable). The Independent Fiduciary reviews and approves all mortgage valuation adjustments before such adjustments are recorded by the Account. The Account continues to use the revised value for each real estate property and mortgage loan payable to calculate the Account’s daily net asset value until the next valuation review or appraisal.
Valuation of Real Estate Joint Ventures—Real estate joint ventures are stated at the fair value of the Account’s ownership
interests of the underlying entities. The Account’s ownership interests are valued based on the fair value of the underlying
real estate, any related loans payable, and other factors, such as ownership percentage, ownership rights, buy/sell agreements, distribution provisions and capital call obligations. The fair value of real estate and loans payable held by
joint ventures is determined in the same manner described above in Valuation of Real Estate Properties. The Independent
Fiduciary reviews and approves all valuation adjustments before such adjustments are recorded by the Account. Upon
the disposition of all real estate investments by an investee entity, the Account will continue to state its equity in the
remaining net assets of the investee entity during the wind down period, if any, which occurs prior to the dissolution
of the investee entity.
Valuation of Real Estate Funds—Real estate fund interests are stated at the fair value of the Account’s ownership in
the real estate fund. Management uses net asset value information provided by limited partners as a practical expedient to estimate fair value. The Account receives estimates from limited partners on a quarterly basis, and audited information is provided annually. Upon receipt of the information, management reviews and determines whether the net asset values provided are an appropriate representation of the fair value of the Account's interests in the real estate funds and makes valuation adjustments as necessary. Valuation of real estate funds proceeds under the direction of the Investment Committee of the Board and in accordance with the responsibilities of the Board as a whole.
Valuation of Marketable Securities—Equity securities listed or traded on any national market or exchange are valued at the last sale price as of the close of the principal securities market or exchange on which such securities are traded or, if there is no sale, at the mean of the last bid and asked prices on such market or exchange, exclusive of transaction costs.




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Valuation of Debt Securities—Debt securities with readily available market quotations, other than money market instruments, are generally valued at the most recent bid price or the equivalent quoted yield for such securities (or those of comparable maturity, quality and type). Debt securities for which market quotations are not readily available, are valued at fair value as determined by management and the Investment Committee of the Board and in accordance with the responsibilities of the Board as a whole.
Short-term investments are valued in the same manner as debt securities, as described above.
Money market instruments are valued at amortized cost, which approximates fair value.
Valuation of Loans Receivable (i.e., the Account as a creditor)—Loans receivable are stated at fair value and are initially valued at the face amount of the loan funding. Subsequently, loans receivable are valued at least quarterly by TIAA’s internal valuation department based on market factors, such as market interest rates and spreads for comparable loans, the liquidity for 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) and the credit quality of the counterparty. The Independent Fiduciary reviews and approves all loan receivable valuation adjustments before such adjustments are recorded by the Account. The Account continues to use the revised value for each loan receivable to calculate the Account’s daily net asset value until the next valuation review.
Valuation of Loans Payable (i.e., the Account as a debtor)—Mortgage or other loans payable, including the Account's
line of credit, are stated at fair value. The estimated fair value of loans payable is generally based on the amount at which the liability could be transferred in a current transaction, exclusive of transaction costs. Fair values are estimated
based on market factors, such as market interest rates and spreads on comparable loans, the liquidity for 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 the purchase of real estate (including under the Account's
line of credit or additional credit facilities). The Independent Fiduciary reviews and approves all valuation adjustments
before such adjustments are recorded by the Account.
See Note 5Assets and Liabilities Measured at Fair Value on a Recurring Basis for further discussion and disclosure regarding the determination of the fair value of the Account’s investments.
Accumulation and Annuity Funds: The accumulation fund represents the net assets attributable to participants in the accumulation phase of their investment (“Accumulation Fund”). The annuity fund represents the net assets attributable to the participants currently receiving annuity payments (“Annuity Fund”). The net increase or decrease in net assets from investment operations is apportioned between the funds based upon their relative daily net asset values. Once an Account participant begins receiving lifetime annuity income benefits, payment levels cannot be reduced as a result of the Account’s actual mortality experience. In addition, the contracts pursuant to which the Account is offered are required to stipulate the maximum expense charge for all Account level expenses that can be assessed, which is not to exceed 2.5% of average net assets per year. The Account pays a fee to TIAA to assume mortality and expense risks.
Accounting for Investments: The investments held by the Account are accounted for as follows:
Real Estate Properties—Rent from real estate properties consists of all amounts earned under tenant leases, including base rent, recoveries of real estate taxes and other expenses and charges for miscellaneous services provided to tenants. Rental income is recognized in accordance with the billing terms of the lease agreements. The Account bears the direct expenses of the real estate properties owned. These expenses include, but are not limited to, fees to local property management companies, property taxes, utilities, maintenance, repairs, insurance, and other operating and administrative costs. An estimate of the net operating income earned from each real estate property is accrued by the Account on a daily basis and such estimates are adjusted when actual operating results are determined.
Real Estate Joint Ventures—The Account has ownership interests in various real estate joint ventures (collectively, the “joint ventures”). The Account records its contributions as increases to its investments in the joint ventures, and distributions from the joint ventures are treated as income within income from real estate joint ventures and funds in

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the Account’s Consolidated Statements of Operations. Distributions that are identified as returns of capital are recorded as a reduction to the cost basis of the investment, whereas distributions identified as capital gains
or losses are recorded as realized gains or losses. Income distributions from the joint ventures are recorded based on
the Account’s proportional interest of the income distributed by the joint ventures. Income and losses incurred but not
yet distributed or realized from the Account by the joint ventures are recorded as unrealized gains and losses.
Real Estate Funds—The Account has limited ownership interests in various private real estate funds. The Account records its contributions as increases to the investments, and distributions from the investments are treated as income within income from real estate joint ventures and funds in the Account’s Consolidated Statements of Operations. Distributions that are identified as returns of capital are recorded as a reduction to the cost basis of the investment, whereas distributions identified as capital gains or losses are recorded as realized gains or losses. Unrealized gains and losses are recorded based upon the changes in the net asset values of the real estate funds as determined from the financial statements of the real estate funds when received by the Account. Prior to the receipt of the financial statements from the real estate funds, the Account estimates the value of its interest using information provided by the limited partners. Changes in value based on such estimates are recorded by the Account as unrealized gains and losses.
Marketable Securities—Transactions in marketable securities are accounted for as of the date the securities are purchased or sold (trade date). Interest income is recorded as earned. Dividend income is recorded on the ex-dividend date within dividend income. Dividends that are identified as returns of capital are recorded as a reduction to the cost basis of the investment, whereas dividends identified as capital gains or losses are recorded as realized gains or losses. Realized gains and losses on securities transactions are accounted for on the specific identification method.
Loans Receivable—The Account may originate, purchase or sell loans collateralized by real estate. The cost basis of originated loans is comprised of the principal balance and direct costs incurred that represent a component of the loan’s reported fair value. The cost basis of purchased loans consists of the purchase price of the loan and additional direct costs incurred that represent a component of the loan’s reported fair value. Additional costs incurred by the Account to originate or purchase loans that do not represent a component of a loan’s fair value are recorded as expenses in the
period incurred. Nonrefundable origination fees paid by borrowers are recognized as interest income once all activities required to execute the loan are completed. Prepayment fees received from the payoff of loans in advance of their maturity date are recognized as interest income on the date the payoff occurs. Interest income from loans in accrual status is recognized based on the current coupon rate of the loans.
Interest income accruals are suspended when a loan becomes a non-performing loan, defined as a loan more than ninety days in arrears or at any point when management believes the full collection of principal is doubtful. Interest income on non-performing loans is recognized only as cash payments are received. Loans can be rehabilitated to accrual status once all past due interest has been collected and management believes the full collection of principal is likely.
Realized and Unrealized Gains and Losses—Realized gains and losses are recorded at the time an investment is sold
or a distribution is received in relation to an investment sale from a real estate joint venture or fund. Real estate and loan receivable transactions are accounted for as of the date on which the purchase or sale transactions close (settlement date). The Account recognizes a realized gain on the sale of an investment to the extent that the contract sales price exceeds the cost-to-date of the investment being sold. A realized loss occurs when the cost-to-date exceeds the sales price. Realized gains and losses from partial sales of non-financial assets are recognized in accordance with ASC 610-20 - Gains and Losses from the Derecognition of Nonfinancial Assets. Realized gains and losses from the sale of financial assets are recognized in accordance with ASC 860 - Transfers and Servicing. Unrealized gains and losses are recorded as the fair values of the Account’s investments are adjusted, and as discussed within the Real Estate Joint Ventures, Real Estate Funds and Loans Receivable sections above.
Unrealized gains and losses are recorded as the fair values of the Account’s investments are adjusted, and as discussed within the Real Estate Joint Ventures and Real Estate Funds sections above.
Net Assets—The Account’s net assets as of the close of each valuation day are valued by taking the sum of:
the value of the Account’s cash, cash equivalents, and short-term and other debt instruments;
the value of the Account’s other securities and other non-real estate assets;

11


the value of the individual real properties (based on the most recent valuation of that property) and other real estate-related investments owned by the Account;
an estimate of the net operating income accrued by the Account from its properties, other real estate-related investments and non-real estate-related investments (including short-term marketable securities) since the end of the prior valuation day; and
actual net operating income earned from the Account’s properties, other real estate-related investments and non-real estate-related investments (but only to the extent any such item of income differs from the estimated income accrued for on such investments),
and then reducing the sum by liabilities held within the Account, including the daily investment management fee, administration and distribution fees, mortality and expense fee, liquidity guarantee fee, and certain other 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.
After the end of every quarter, the Account reconciles the amount of expenses deducted from the Account (which is established in order to approximate the costs that the Account will incur) with the expenses the Account actually incurred. If there is a difference, the Account adds it to or deducts it from the Account in equal daily installments over the remaining days of the following quarter. Material differences may be repaid in the current calendar quarter. The Account’s 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 the difference between management’s projections and the Account’s actual assets or expenses.
Variable Interest Entities: Variable interests are financial relationships which expose a reporting entity to the risks and rewards of variability in the entity's assets and operations. When variable interests exist, they are subject to evaluation under the variable interest entity ("VIE") model if any one of the following four characteristics are present: (a) the entity is insufficiently capitalized; (b) the equity holders do not have power to control the activities that most significantly impact the entity's financial performance; (c) the voting rights of the equity holders are not proportionate
to their economic interests; or (d) the equity holders are not exposed to the residual losses or benefits that would normally be associated with equity interests.
ASC 810 - Consolidation prohibits a reporting entity that qualifies as an investment company under ASC 946 from consolidating an investee that is not an investment company. This scope exception does not apply to situations in which an investment company has an interest in another investment company. Accordingly, the Account's investments in other investment companies (e.g., real estate funds) are subject to evaluation under the VIE model.
The Account consolidates a VIE if it concludes that the Account is the primary beneficiary of the VIE. The primary beneficiary has both: (i) the power to direct the activities of a VIE that most significantly impact the VIE's economic performance; and (ii) the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. The following activities have been identified by the Account as having the most significant impact on a VIE's economic performance:
control over the ability to acquire and dispose of investments held by the entity;
the ability to kick out a managing entity without cause, either unilaterally or with a group of equity investors;
the ability to modify the power of the managing entity without its consent; and
control over the day-to-day decision making of the underlying investments
An equity investor in a VIE may not actively be involved in the significant activities (i.e., it may cede day-to-day decision making to a third party), but if the equity investor has approval rights or some other mechanism to retain ultimate control, the equity investor with these rights would be concluded as having power over the activity. On a quarterly basis, the Account evaluates all involvements with VIEs, including any changes to governing powers of continuing VIEs. The consolidation status of VIEs may change as a result of such continued evaluation. At the reporting date, the Account was not deemed to be the primary beneficiary of any VIEs. Refer to Note 7—Investments in Real Estate Funds for additional detail.

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Cash and Cash Equivalents: Cash and cash equivalents are balances held by the Account in bank deposit accounts which, at times, exceed federally insured limits. The Account’s management monitors these balances to mitigate the exposure of risk due to concentration and has not experienced any losses from such concentration.
Other Assets and Other Liabilities: Other assets and other liabilities consist of operating assets and liabilities utilized
and held at each individual real estate property investment. Other assets consist of, amongst other items, cash, tenant receivables and prepaid expenses; whereas other liabilities primarily consist of security deposits. Other assets also include cash collateral held for securities on loan.
Federal Income Taxes: Based on provisions of Section 817 of the Internal Revenue Code of 1986, as amended, the Account is taxed as a segregated asset account of TIAA and as such, the Account incurs no material federal income tax attributable to the net investment activity of the Account. The Account’s federal income tax return is generally subject to examination for a period of three years after filed. State and local tax returns may be subject to examination for an additional period of time depending on the jurisdiction. Management has analyzed the Account’s tax positions taken for all open federal income tax years and has concluded that no provision for federal income tax is required in the Account’s Consolidated Financial Statements.
Restricted Cash: The Account held restricted cash in escrow accounts for security deposits, as required by certain states, as well as for property taxes, insurance, and various other property related matters as required by certain creditors related to outstanding loans payable collateralized by certain real estate investments. These amounts are recorded within other assets on the Consolidated Statements of Assets and Liabilities. See Note 9—Loans Payable for additional information regarding the Account’s outstanding loans payable.
Changes in Net Assets: Premiums include premiums paid by existing accumulation unit holders in the Account and transfers into the Account. Withdrawals and death benefits include withdrawals out of the Account which include transfers out of the Account and required minimum distributions.
Due to/from Investment Manager: Due to/from investment manager represents amounts that are to be paid or received by TIAA on behalf of the Account. Amounts generally are paid or received by the Account within one or two business days and no interest is contractually charged on these amounts.
Securities Lending: The Account may lend securities to qualified borrowers to earn additional income. The Account receives cash collateral against the loaned securities and maintains cash collateral in an amount not less than 100% of the market value of loaned securities during the period of the loan; any additional collateral required due to changes in security values is delivered to the Account the next business day. Cash collateral received by the Account is invested exclusively in an interest-bearing deposit account. The value of the loaned securities and the liability to return the cash collateral received are reflected in the Consolidated Statements of Assets and Liabilities. When loaning securities, the Account retains the benefits of owning the securities, including the economic equivalent of dividends or interest generated by the securities. All income generated by the securities lending program is reflected within interest income on the Consolidated Statements of Operations.
Securities lending transactions are for real estate-related equity securities, and the resulting loans are continuous, can be recalled at any time, and have no set maturity. Securities lending income recognized by the Account consists of interest earned on cash collateral and lending fees, net of any rebates to the borrower and compensation to the agent. Such income is reflected within interest income on the Consolidated Statements of Operations.  In lending its securities, the Account bears the market risk with respect to the investment of collateral and the risk that the agent may default on its contractual obligations to the Account. The agent bears the risk that the borrower may default on its obligation to return the loaned securities as the agent is contractually obligated to indemnify the Account if at the time of a default by a borrower some or all of the loan securities have not been returned.
Accounting Pronouncement: In March 2020, the FASB issued ASU 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”). The guidance provides optional expedients and exceptions for applying generally accepted accounting principles to contract modifications and hedging relationships, subject to meeting certain criteria, that reference the London Interbank Offered Rate ("LIBOR") or another reference rate expected to be discontinued. The guidance is effective for all entities as of March 12, 2020 through December 31, 2022. Management does not expect the guidance to materially impact the Account.

13


Note 2—Related Party Transactions
Investment management, administrative and distribution services are provided to the Account at cost by TIAA. Services provided at cost are paid by the Account on a daily basis based upon projected expenses to be provided to the Account. Payments are adjusted periodically to ensure daily payments are as close as possible to the Account’s actual expenses incurred. Differences between actual expenses and the amounts paid by the Account are reconciled and adjusted quarterly.
Investment management services for the Account are provided by TIAA officers, under the direction and control of the Board, pursuant to investment management procedures adopted by TIAA for the Account. TIAA’s investment management decisions for the Account are subject to review by the Independent Fiduciary. TIAA also provides various portfolio accounting and related services for the Account.
The Account is a party to the Distribution Agreement for the Contracts Funded by the TIAA Real Estate Account (the “Distribution Agreement”), dated January 1, 2008, by and among TIAA, for itself and on behalf of the Account, and TIAA-CREF Individual and Institutional Services, LLC (“Services”). Services is a direct wholly-owned subsidiary of TIAA, and is registered with the SEC as a broker-dealer and a registered investment adviser and is a member of the Financial Industry Regulatory Authority. Pursuant to the Distribution Agreement, Services performs distribution services for the Account which include, among other things, (i) distribution of annuity contracts issued by TIAA and funded by the Account, (ii) advising existing annuity contract owners in connection with their accumulations and (iii) helping employers implement and manage retirement plans. In addition, TIAA performs administrative functions for the Account, which include, among other things, (i) maintaining accounting records and performing accounting services, (ii) receiving and allocating premiums, (iii) calculating and making annuity payments, (iv) processing withdrawal requests, (v) providing regulatory compliance and reporting services, (vi) maintaining the Account’s records of contract ownership and (vii) otherwise assisting generally in all aspects of the Account’s operations. Both distribution services (pursuant to the Distribution Agreement) and administrative services are provided to the Account by Services and TIAA, as applicable, on an at cost basis. The Distribution Agreement is terminable by either party upon 60 days written notice and terminates automatically upon any assignment thereof.
In addition to providing the services described above, TIAA charges the Account fees to bear certain mortality and expense risks, and risks with providing the liquidity guarantee (described below). These fees are charged as a percentage of the net assets of the Account. Rates for these fees are established annually.
Once an Account participant begins receiving lifetime annuity income benefits, payment levels cannot be reduced as a result of the Account’s actual mortality experience. As such, mortality and expense risk expenses are contractual charges for TIAA’s assumption of this risk.
TIAA provides the Account with a liquidity guarantee enabling the Account to have funds available to meet participant redemption, transfer or cash withdrawal requests. The liquidity guarantee is required by the New York State Department of Financial Services and is subject to a prohibited transaction exemption that the Account received in 1996 (96-76) from the U.S. Department of Labor (the “PTE 96-76”). The Account pays TIAA for the risk associated with providing the liquidity guarantee through a daily deduction from the Account’s net assets. Whether the liquidity guarantee is exercised is based on the cash level of the Account from time to time, as well as recent participant withdrawal activity and the Account’s expected working capital, debt service and cash needs, and subject to the oversight of the Independent Fiduciary. If the Account cannot fund participant withdrawal or redemption requests from the Account’s own cash flow and liquid investments, TIAA will fund them by purchasing accumulation units issued by the Account (accumulation units that are purchased by TIAA are generally referred to as “liquidity units”). TIAA guarantees that participants can redeem their accumulation units at the accumulation unit value next determined after their transfer or cash withdrawal request is received in good order. Liquidity units owned by TIAA are valued in the same manner as accumulation units owned by the Account’s participants.
Expenses for the services and fees described above are identified as such in the accompanying Consolidated Statements of Operations and are further identified as "Expenses" in Note 11—Financial Highlights.


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The Account has loans receivable outstanding with related parties as of March 31, 2020. The loans are with joint ventures in which the Account also has an equity interest. The loans are held at fair value in accordance with the valuation policies described in Note 1—Organization and Significant Accounting Policies. The following table presents the key terms of the loans as of the reporting date:
  Related Party Equity Ownership Interest Interest Rate Maturity Date Fair Value at
Principal     March 31, 2020 December 31, 2019
2020 2019      
            (Unaudited)  
36.5
 36.5
 MRA Hub 34 Holding, LLC 95.00% 2.50% + LIBOR 9/1/2022 $36.5
 $36.5
32.8
 32.8
 THP Student Housing, LLC 97.00% 3.200% 9/1/2024 32.0
 32.5
TOTAL LOANS RECEIVABLE WITH RELATED PARTIES $68.5
 $69.0
Note 3—Concentrations of Risk
The outbreak of the novel coronavirus (commonly known as “COVID-19”) and the subsequent global pandemic began significantly impacting the U.S. and global financial markets and economies during the quarter ended March 31, 2020. The worldwide spread of the COVID-19 pandemic has created significant uncertainty in the global economy. At this time the Account reasonably expects tenants will request certain rent relief and lease modifications as a result of the pandemic; however, such requests have not been significant as of March 31, 2020. The duration and extent of COVID-19 over the long-term cannot be reasonably estimated at this time. The ultimate impact of the COVID-19 pandemic and the extent to which the COVID-19 pandemic impacts the Account’s business, results of operations, investments, and cash flows will depend on future developments, which are highly uncertain and difficult to predict.
Concentrations of risk may arise when a number of properties are located in a similar geographic region such that the economic conditions of that region could impact tenants’ obligations to meet their contractual obligations or cause the values of individual properties to decline. Additionally, concentrations of risk may arise if any one tenant comprises a significant amount of the Account's rent, or if tenants are concentrated in a particular industry.
As of March 31, 2020, the Account had no significant concentrations of tenants as no single tenant had annual contract rent that made up more than 4% of the rental income of the Account. Moreover, the Account's tenants have no notable concentration present in any one industry. There are no significant lease expirations scheduled to occur over the next twelve months.
The Account’s wholly-owned real estate investments and investments in joint ventures are located in the United States. The following table represents the diversification of the Account’s portfolio by region and property type as of March 31, 2020 (unaudited):
Diversification by Fair Value(1)
 West East South Midwest Total
Office13.2% 18.7% 5.3% % 37.2%
Apartment10.0% 6.6% 8.1% 1.0% 25.7%
Retail6.8% 3.9% 8.0% 0.9% 19.6%
Industrial9.1% 1.6% 4.6% 0.5% 15.8%
Other(2)
0.6% 0.5% 0.6% % 1.7%
Total39.7% 31.3% 26.6% 2.4% 100.0%

(1) 
Wholly-owned properties are represented at fair value and gross of any debt, while joint venture properties are represented at the net equity value.
(2) 
Represents interests in Storage Portfolio investments, a hotel investment and land.
Properties in the “West” region are located in: AK, AZ, CA, CO, HI, ID, MT, NM, NV, OR, UT, WA, WY.
Properties in the “East” region are located in: CT, DC, DE, KY, MA, MD, ME, NC, NH, NJ, NY, PA, RI, SC, VA, VT, WV.
Properties in the “South” region are located in: AL, AR, FL, GA, LA, MS, OK, TN, TX.
Properties in the “Midwest” region are located in: IA, IL, IN, KS, MI, MN, MO, ND, NE, OH, SD, WI.

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Note 4—Leases
The Account’s wholly-owned real estate properties are leased to tenants under operating lease agreements which expire on various dates through 2051. Rental income is recognized in accordance with the billing terms of the lease agreements. The leases do not have material variable payments, material residual value guarantees or material restrictive covenants. Certain leases have the option to extend or terminate at the tenant's discretion, with termination options resulting in additional fees due to the Account. Aggregate minimum annual rentals for wholly-owned real estate investments owned by the Account through the non-cancelable lease term, excluding short-term residential leases, as of March 31, 2020 (unaudited) and December 31, 2019 are as follows (millions):
  As of
Years Ended March 31, 2020 December 31, 2019
2020 $486.2
(1) 
$550.4
2021 593.9
 505.0
2022 512.9
 442.1
2023 437.7
 381.2
2024 360.6
 316.6
Thereafter 1,209.5
 1,078.4
Total $3,600.8
 $3,273.7
(1) Representative of minimum rents owed for the remaining months of the calendar year ending December 31, 2020.
Certain leases provide for additional rental amounts based upon the recovery of actual operating expenses in excess of specified base amounts, sales volume or contractual increases as defined in the lease agreement. These contractual contingent rentals are not included in the table above.
The Account has ground leases for which the Account is the lessee. The leases do not contain material residual value guarantees or material restrictive covenants. The fair value of right-of-use assets and leases liabilities related to ground leases are reflected on the balance sheet within other assets and other liabilities, respectively.
The fair values and key terms of the right-of-use assets and lease liabilities related to the Account's ground leases are as follows (millions):
  As of
  March 31, 2020 December 31, 2019
  (Unaudited)  
Assets:    
  Right-of-use assets, at fair value $25.8
 $25.7
Liabilities:    
  Ground lease liabilities, at fair value $25.8
 $25.7
  As of
  March 31, 2020 December 31, 2019
Key Terms: (Unaudited)  
  Weighted-average remaining lease term (years) 83.9
 84.4
  Weighted-average discount rate(1)
 6.16% 6.15%
(1) Discount rates are reflective of the rates utilized during the most recent appraisal of the associated real estate investments.

16


For the three months ended March 31, 2020, operating lease costs related to ground leases were $0.4 million. These costs include variable lease costs, which are immaterial. Aggregate future minimum annual payments for ground leases held by the Account are as follows (millions):
  As of
Years Ended March 31, 2020 December 31, 2019
  (Unaudited)  
2020(1)
 $0.9
(1) 
$1.2
2021 1.2
 1.2
2022 1.2
 1.2
2023 1.2
 1.2
2024 1.3
 1.3
Thereafter 375.9
 375.9
Total $381.7
 $382.0
(1) Representative of minimum rents owed for the remaining months of the calendar year ending December 31, 2020.
Note 5—Assets and Liabilities Measured at Fair Value on a Recurring Basis
Valuation Hierarchy: The Account’s fair value measurements are grouped into three levels, as defined by the FASB. The levels are defined as follows:
Level 1 fair value inputs are quoted prices for identical items in active, liquid and visible markets such as stock exchanges.
Level 2 fair value inputs are observable information for similar items in active or inactive markets, and appropriately consider counterparty creditworthiness in the valuations.
Level 3 fair value inputs reflect our best estimate of inputs and assumptions market participants would use in pricing an asset or liability at the measurement date. The inputs are unobservable in the market and significant to the valuation estimate.
An investment’s categorization within the valuation hierarchy described above is based upon the lowest level of input that is significant to the fair value measurement. Real estate fund investments are excluded from the valuation hierarchy, as these investments are fair valued using their net asset value as a practical expedient since market quotations or values from independent pricing services are not readily available. See Note 1Organization and Significant Accounting Policies for further discussion regarding the use of a practical expedient for the valuation of real estate funds.
The Account’s determination of fair value is based upon quoted market prices, where available. If listed prices or quotes are not available, fair value is based upon vendor-provided, evaluated prices or internally developed models that primarily use market-based or independently sourced market data, including interest rate yield curves, market spreads, and currency rates. Valuation adjustments will be made to reflect changes in credit quality, a counterparty’s creditworthiness, the Account’s creditworthiness, liquidity, and other observable and unobservable inputs that are applied consistently over time.
The methods described above are considered to produce fair values that represent an estimate by management of what an unaffiliated buyer in the marketplace would pay to purchase the asset or would receive to transfer the liability. Since fair value calculations involve significant professional judgment in the application of both observable and unobservable attributes, actual realizable values or future fair values may differ from amounts reported. Furthermore, while the Account believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments, while reasonable, could result in different estimates of fair value at the reporting date. As discussed in Note 1Organization and Significant Accounting Policies in more detail, the Account generally obtains independent third party appraisals on a quarterly basis, and there may be circumstances in the interim in which the true realizable value of a property is not reflected in the Account’s daily net asset value calculation or in the Account’s periodic Consolidated Financial Statements. This

17


disparity may be more apparent when the commercial and/or residential real estate markets experience an overall and possibly dramatic decline (or increase) in property values in a relatively short period of time between appraisals.
The following tables show the major categories of assets and liabilities measured at fair value on a recurring basis as of March 31, 2020 (unaudited) and December 31, 2019, using unadjusted quoted prices in active markets for identical assets (Level 1); significant other observable inputs (Level 2); and significant unobservable inputs (Level 3); and fair value using the practical expedient (millions):
Description Level 1: Quoted Prices in Active Markets for Identical Assets Level 2: Significant Other Observable Inputs Level 3: Significant Unobservable Inputs Fair Value Using Practical Expedient Total at
March 31, 2020
Real estate properties $
 $
 $17,082.1
 $
 $17,082.1
Real estate joint ventures 
 
 6,237.4
 
 6,237.4
Real estate funds 
 
 
 354.1
 354.1
Marketable securities:          
Real estate-related 724.7
 
 
 
 724.7
Government agency notes 
 62.9
 
 
 62.9
United States Treasury securities 
 749.9
 
 
 749.9
Corporate bonds 
 526.7
 
 
 526.7
Municipal bonds 
 7.8
 
 
 7.8
Loans receivable(1)
 
 
 1,631.0
 
 1,631.0
Total Investments at
March 31, 2020
 $724.7
 $1,347.3
 $24,950.5
 $354.1
 $27,376.6
Loans payable $
 $
 $(2,605.6) $
 $(2,605.6)
Line of credit $
 $
 $(190.0) $
 $(190.0)
Description Level 1: Quoted Prices in Active Markets for Identical Assets Level 2: Significant Other Observable Inputs Level 3: Significant Unobservable Inputs Fair Value Using Practical Expedient Total at December 31, 2019
Real estate properties $
 $
 $15,835.0
 $
 $15,835.0
Real estate joint ventures 
 
 7,204.2
 
 7,204.2
Real estate funds 
 
 
 311.8
 311.8
Marketable securities:          
Real estate-related 825.7
 
 
 
 825.7
Government agency notes 
 259.6
 
 
 259.6
United States Treasury securities 
 2,589.1
 
 
 2,589.1
Corporate bonds 
 1,268.3
 
 
 1,268.3
Municipal bonds 
 33.2
 
 
 33.2
Loans receivable(1)
 
 
 1,572.1
 
 1,572.1
Total Investments at December 31, 2019 $825.7
 $4,150.2
 $24,611.3
 $311.8
 $29,899.0
Loans payable $
 $
 $(2,365.0) $
 $(2,365.0)
Line of credit $
 $
 $(250.0) $
 $(250.0)
(1) Amount shown is reflective of loans receivable and loans receivable with related parties.

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The following tables show the reconciliation of the beginning and ending balances for assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the three months ended March 31, 2020 and 2019 (millions, unaudited):
  Real Estate
Properties
 Real Estate
Joint Ventures
 
Loans
Receivable
(3)
 Total
Level 3
Investments
 Loans
Payable
 Line of Credit
For the three months ended March 31, 2020            
Beginning balance January 1, 2020 $15,835.0
 $7,204.2
 $1,572.1
 $24,611.3
 $(2,365.0) $(250.0)
Total realized and unrealized gains (losses) included in changes in net assets 137.5
 (156.4) (12.7) (31.6) 45.7
 
    Purchases(1)
 1,457.2
 20.6
 107.7
 1,585.5
 (289.6) (400.0)
    Sales (347.6) 
 
 (347.6) 
 
    Settlements(2)
 
 (831.0) (36.1) (867.1) 3.3
 460.0
Ending balance March 31, 2020 $17,082.1
 $6,237.4
 $1,631.0
 $24,950.5
 $(2,605.6) $(190.0)
  Real Estate
Properties
 Real Estate
Joint Ventures
 
Loans
Receivable
(3)
 Total
Level 3
Investments
 
Loans
Payable
 Line of Credit
For the three months ended March 31, 2019            
Beginning balance January 1, 2019 $15,531.1
 $6,356.6
 $913.0
 $22,800.7
 $(2,608.0) $
Total realized and unrealized gains included in changes in net assets 73.9
 7.1
 1.2
 82.2
 (29.6) 
    Purchases(1)
 366.7
 57.1
 74.4
 498.2
 
 
    Sales (3.1) 
 
 (3.1) 
 
    Settlements(2)
 
 (0.4) (21.3) (21.7) 4.7
 
Ending balance March 31, 2019 $15,968.6
 $6,420.4
 $967.3
 $23,356.3
 $(2,632.9) $
(1) 
Includes purchases, contributions for joint ventures, capital expenditures, lending for loans receivable and assumption of loans payable.
(2) 
Includes operating income for real estate joint ventures net of distributions, principal payments and payoffs of loans receivable, and principal payments and extinguishment of loans payable.
(3) 
Amount shown is reflective of loans receivable and loans receivable with related parties.

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The following table shows quantitative information about unobservable inputs related to the Level 3 fair value measurements as of March 31, 2020 (unaudited).
TypeAsset ClassValuation
Technique(s)
Unobservable
Inputs
Range (Weighted Average)
Real Estate Properties and Joint VenturesOfficeIncome Approach—Discounted Cash FlowDiscount Rate
Terminal Capitalization Rate
5.5% - 8.5% (6.6%)
4.0% - 7.5% (5.5%)
  Income Approach—Direct CapitalizationOverall Capitalization Rate3.9% - 7.0% (4.9%)
 IndustrialIncome Approach—Discounted Cash FlowDiscount Rate
Terminal Capitalization Rate
5.2% - 9.3% (6.7%)
4.3% - 8.3% (5.4%)
  Income Approach—Direct CapitalizationOverall Capitalization Rate3.5% - 7.7% (4.8%)
 ApartmentIncome Approach—Discounted Cash FlowDiscount Rate
Terminal Capitalization Rate
5.3% - 7.8% (6.4%)
4.3% - 6.8% (5.1%)
  Income Approach—Direct CapitalizationOverall Capitalization Rate3.8% - 6.0% (4.6%)
 RetailIncome Approach—Discounted Cash FlowDiscount Rate
Terminal Capitalization Rate
5.3% - 11.7% (6.7%)
5.0% - 9.4% (5.6%)
  Income Approach—Direct CapitalizationOverall Capitalization Rate4.0% - 11.0% (5.1%)
 HotelIncome Approach—Discounted Cash FlowDiscount Rate
Terminal Capitalization Rate
10.3% (10.3%) 7.8% (7.8%)
  Income Approach—Direct CapitalizationOverall Capitalization Rate7.8% (7.8%)
Loans PayableOffice and IndustrialDiscounted Cash FlowLoan to Value Ratio
Equivalency Rate
31.1% - 59.3% (45.8%)
3.2% - 4.3% (3.8%)
  Net Present ValueLoan to Value Ratio
Weighted Average Cost of Capital Risk Premium Multiple
31.1% - 59.3% (45.8%)
1.2 - 1.5 (1.3)
 ApartmentDiscounted Cash FlowLoan to Value Ratio
Equivalency Rate
30.0% - 69.0% (46.6%)
3.1% - 4.1% (3.7%)
  Net Present ValueLoan to Value Ratio
Weighted Average Cost of Capital Risk Premium Multiple
30.0% - 69.0% (46.6%)
1.2 - 1.6 (1.3)
 RetailDiscounted Cash FlowLoan to Value Ratio
Equivalency Rate
37.1% - 63.8% (44.2%)
3.1% - 4.5% (3.9%)
  Net Present ValueLoan to Value Ratio
Weighted Average Cost of Capital Risk Premium Multiple
37.1% - 63.8% (44.2%)
1.2 - 1.5 (1.3)
Loans Receivable, including those with related partiesApartment, Hotel, Industrial, Office, Retail and StorageDiscounted Cash FlowLoan to Value Ratio
Equivalency Rate
30.9% - 90.2% (73.0%)
3.1% - 10.3% (6.0%)





20


The following table shows quantitative information about unobservable inputs related to the Level 3 fair value measurements as of March 31, 2019 (unaudited).
TypeAsset ClassValuation
Technique(s)
Unobservable
Inputs
Range (Weighted Average)
Real Estate Properties and Joint VenturesOfficeIncome Approach—Discounted Cash FlowDiscount Rate
Terminal Capitalization Rate
5.5% - 8.6% (6.5%)
4.0% - 7.5% (5.5%)
  Income Approach—Direct CapitalizationOverall Capitalization Rate3.8% - 7.0% (4.8%)
 IndustrialIncome Approach—Discounted Cash FlowDiscount Rate
Terminal Capitalization Rate
5.3% - 9.3% (6.8%)
4.4% - 8.3% (5.5%)
  Income Approach—Direct CapitalizationOverall Capitalization Rate4.0% - 7.8% (4.9%)
 ApartmentIncome Approach—Discounted Cash FlowDiscount Rate
Terminal Capitalization Rate
5.5% - 7.8% (6.5%)
3.8% - 6.8% (5.0%)
  Income Approach—Direct CapitalizationOverall Capitalization Rate3.3% - 6.0% (4.5%)
 RetailIncome Approach—Discounted Cash FlowDiscount Rate
Terminal Capitalization Rate
5.0% - 10.7% (6.4%)
4.3% - 8.8% (5.3%)
  Income Approach—Direct CapitalizationOverall Capitalization Rate3.3% - 10.5% (4.7%)
Loans PayableOffice and IndustrialDiscounted Cash FlowLoan to Value Ratio
Equivalency Rate
36.0% - 62.4% (47.1%)
3.7% - 5.5% (4.2%)
  Net Present ValueLoan to Value Ratio
Weighted Average Cost of Capital Risk
Premium Multiple
36.0% - 62.4% (47.1%)
1.2 - 1.4 (1.3)
 ApartmentDiscounted Cash FlowLoan to Value Ratio
Equivalency Rate
31.1% - 62.3% (48.0%)
3.5% - 4.2% (4.0%)
  Net Present ValueLoan to Value Ratio
Weighted Average Cost of Capital Risk
Premium Multiple
31.1% - 62.3% (48.0%)
1.2 - 1.4 (1.3)
 RetailDiscounted Cash FlowLoan to Value Ratio
Equivalency Rate
31.9% - 55.9% (39.5%)
4.0% - 4.9% (4.2%)
  Net Present ValueLoan to Value Ratio
Weighted Average Cost of Capital Risk
Premium Multiple
31.9% - 55.9% (39.5%)
1.2 - 1.3 (1.2)
Loans ReceivableOffice, Retail and StorageDiscounted Cash FlowLoan to Value Ratio
Equivalency Rate
70.8% - 79.2% (75.6%)
6.0% - 8.3% (7.1%)

Real Estate Properties and Joint Ventures: The significant unobservable inputs used in the fair value measurement of the Account’s real estate property and joint venture investments are the selection of certain investment rates (Discount Rate, Terminal Capitalization Rate, and Overall Capitalization Rate). Significant increases (decreases) in any of those inputs in isolation would result in significantly lower (higher) fair value measurements, respectively.
Loans Payable: The significant unobservable inputs used in the fair value measurement of the Account’s loans payable are the loan to value ratios and the selection of certain credit spreads and weighted average cost of capital risk premiums. Significant increases (decreases) in any of those inputs in isolation would result in a significantly lower (higher) fair value, respectively.
Loans Receivable: The significant unobservable inputs used in the fair value measurement of the Account’s loans receivable are the loan to value ratios and the selection of certain credit spreads. Significant increases (decreases) in any of those inputs in isolation would result in a significantly lower (higher) fair value, respectively.
During the three months ended March 31, 2020 and 2019, there were no transfers between Levels 1, 2 or 3.

21


The amount of total net unrealized gains (losses) included in changes in net assets attributable to the change in net unrealized gains (losses) relating to Level 3 investments and loans payable using significant unobservable inputs still held as of the reporting date is as follows (millions, unaudited):
 
Real Estate
Properties
 
Real Estate
Joint
Ventures
 
Loans
Receivable(1)
 
Total
Level 3
Investments
 

Loans
Payable
For the three months ended March 31, 2020$147.7
 $(62.6) $(11.1) $74.0
 $45.7
For the three months ended March 31, 2019$73.9
 $2.5
 $1.2
 $77.6
 $(29.6)
(1) Amount shown is reflective of loans receivable and loans receivable with related parties.
Note 6—Investments in Joint Ventures
The Account owns interests in several real estate properties through joint ventures and receives distributions and allocations of profits and losses from the joint ventures based on the Account’s ownership interest in those investments. Several of these joint ventures have loans payable collateralized by the properties owned by the aforementioned joint ventures. At March 31, 2020, the Account held investments in joint ventures with ownership interest percentages that ranged from 33.3% to 98.0%. Certain joint ventures are subject to adjusted distribution percentages when earnings in the investment reach a pre-determined threshold.
A condensed summary of the results of operations of the joint ventures are shown below (millions, unaudited):
 For the Three Months Ended March 31,
 2020 2019
Operating Revenue and Expenses   
Revenues$285.5
 $266.1
Expenses154.6
 145.3
Excess of revenues over expenses$130.9
 $120.8
Note 7—Investments in Real Estate Funds
The Account has ownership interests in real estate funds (each a "Fund", and collectively the "Funds"). The Funds are setup as limited partnerships or entities similar to a limited partnership, and as such, meet the definition of a VIE as the limited partners collectively lack the power, through voting or similar rights, to direct the activities of the Fund that most significantly impact the Fund's economic performance. Management has determined that the Account is not the primary beneficiary for any of the Funds, as the Account lacks the power to direct the activities of each Fund that most significantly impact the respective Fund's economic performance, and the Account further lacks substantive kick-out rights to remove the entity with these powers. Refer to Note 1—Organization and Significant Accounting Policies for a description of the methodology used to determine the primary beneficiary of a VIE.
No financial support (such as loans or financial guarantees) was provided to the Funds during the three months ended March 31, 2020. The Account is contractually obligated to make additional capital contributions in certain Funds in future years. These commitments are identified in Note 13—Commitments and Contingencies.

22


The carrying amount and maximum exposure to loss relating to VIEs in which the Company holds a significant variable interest but is not the primary beneficiary and which have not been consolidated were as follows at March 31, 2020 (in millions, unaudited):
Fund NameCarrying Amount Maximum Exposure to Loss Liquidity Provisions Investment Strategy
LCS SHIP Venture I, LLC (90.0% Account Interest)$212.8
 $212.8
 Redemptions prohibited prior to liquidation. To invest in senior housing properties.
     Liquidation estimated to begin no earlier than 2025. 
     The Account is permitted to sell or transfer its interest in the fund, subject to consent and approval of the manager. 
SP V - II, LLC (79.2% Account Interest)$28.2
 $28.2
 Redemptions prohibited prior to liquidation. To invest in medical office properties in the U.S.
     Liquidation estimated to begin no earlier than 2022. 
     The Account is permitted to sell or transfer its interest in the fund, subject to consent and approval of the manager. 
Taconic New York City GP Fund, LP (60.0% Account Interest)$29.8
 $29.8
 Redemptions prohibited prior to liquidation. To invest in real estate and real estate-related assets in the New York City metropolitan statistical area ("MSA").
     Liquidation estimated to begin no earlier than 2024. 
     The Account is permitted to sell its interest in the fund, subject to consent and approval of the general partner. 
Veritas - Trophy VI, LLC (92.1% Account Interest)$42.7
 $42.7
 Redemptions prohibited prior to liquidation. To invest in multi-family properties primarily in the San Francisco Bay and Los Angeles MSA.
     The Account is not permitted to sell or transfer its interest in the fund until August 2022. After this date, the Account can sell or transfer its interest in the fund with the consent and approval of the manager. 
      
IDR - Core Property Index Fund, LLC (2.0% Account Interest)$25.0
 $25.0
 Redemptions are permitted for a full calendar quarter and upon at least 90 days prior written notice, subject to fund availability. To invest primarily in open-ended funds that fall within the NFI-ODCE Index and are actively managed.
      
     The Account is permitted to sell its interest in the fund, subject to consent and approval of the manager. 
Grubb Southeast Real Estate Fund VI, LLC (66.7% Account Interest)$13.4
 $13.4
 Redemptions prohibited prior to liquidation. 
To acquire office investments across the Southeast.

     Liquidation estimated to begin no earlier than 2026. 
     The Account is not permitted to sell or transfer its interest in the fund until June 2021. After this date, the Account can sell or transfer its interest in the fund with the consent and approval of the manager. 
JCR Capital - REA Preferred Equity Parallel Fund (49.2% Account Interest)$2.2
 $2.2
 Redemptions prohibited prior to liquidation. To invest primarily in multi-family properties.
     Liquidation estimated to begin no earlier than 2026. 
     The Account is prohibited from transferring its interest in the fund without consent by the general partner, which can be withheld in their sole discretion 
      
Total$354.1
 $354.1
    


23


Note 8—Loans Receivable
The Account’s loan receivable portfolio is primarily comprised of mezzanine loans secured by the borrower’s direct and indirect interests in commercial real estate. Mezzanine loans are subordinate to first mortgages on the underlying real estate collateral. The following property types represent the underlying real estate collateral for the Account's mezzanine loans (millions):
  March 31, 2020 December 31, 2019
  (Unaudited)      
  Principal Outstanding Fair Value % of Fair Value Principal Outstanding Fair Value % of Fair Value
Office(1)
 $825.2
 $821.0
 50.3% $769.3
 $768.0
 48.8%
Industrial 199.6
 199.6
 12.2% 199.6
 199.6
 12.7%
Retail 139.5
 139.5
 8.6% 158.5
 158.5
 10.1%
Storage 82.0
 77.9
 4.8% 82.0
 82.0
 5.2%
Apartments(1)
 262.2
 260.0
 15.9% 229.1
 228.8
 14.6%
Hotel 135.3
 133.0
 8.2% 135.3
 135.2
 8.6%
  $1,643.8
 $1,631.0
 100.0% $1,573.8
 $1,572.1
 100.0%
(1) Includes loans receivable with related parties.
The Account monitors the risk profile of the loan receivable portfolio with the assistance of a third-party rating service that models the loans and assigns risk ratings based on inputs such as loan-to-value ratios, yields, credit quality of the borrowers, property types of the collateral, geographic and local market dynamics, physical condition of the collateral, and the underlying structure of the loans. Ratings for loans are updated monthly. Assigned ratings can range from AAA to C, with a AAA designation representing debt with the lowest level of credit risk and C representing a greater risk of default or principal loss. Loans that are more than 90 days past due are classified as delinquent and assigned a D rating. Mezzanine debt in good health is typically reflective of a risk rating in the B range (e.g., BBB, BB, or B), as these ratings reflect borrowers' having adequate financial resources to service their financial commitments, but also acknowledging that adverse economic conditions, should they occur, would likely impede on a borrowers' ability to pay.
All borrowers of loans rated B or higher are current as of March 31, 2020. The following table presents the fair values of the Account's loan portfolio based on the risk ratings as of March 31, 2020 (in millions, unaudited), listed in order of the strength of the risk rating (from strongest to weakest):
  Number of Loans Fair Value % of Fair Value
BBB 10 $558.6
 34.2%
BB 8 452.7
 27.8%
B 7 473.3
 29.0%
D 1 77.9
 4.8%
NR(1)
 2 68.5
 4.2%
  28 $1,631.0
 100.0%
(1) "NR" designates loans not assigned an internal credit rating. As of March 31, 2020, this is comprised of two loans with related parties. The loans are collateralized by equity interests in real estate investments.
The following table represents loans receivable in nonaccrual status as of March 31, 2020 (in millions, unaudited). Loans are placed in nonaccrual status when a loan is more than 90 days in arrears or at any point when management believes the full collection of principal is doubtful.
Aging Number of Loans Principal Outstanding Fair Value
Past Due - 90 Days + 1 $82.0
 $77.9


24


Note 9—Loans Payable
At March 31, 2020, the Account had outstanding loans payable secured by the following assets (millions):
Property 
Annual Interest Rate and
Payment Frequency
(2)
 Principal
Amounts Outstanding as of
 Maturity
March 31, 2020 December 31, 2019 
    (Unaudited)    
Red Canyon at Palomino Park(4)
 5.34% paid monthly $27.1
 $27.1
 August 1, 2020
Green River at Palomino Park(4)
 5.34% paid monthly 33.2
 33.2
 August 1, 2020
Blue Ridge at Palomino Park(4)
 5.34% paid monthly 33.4
 33.4
 August 1, 2020
Ashford Meadows Apartments 5.17% paid monthly 44.6
 44.6
 August 1, 2020
The Knoll(1)
 3.98% paid monthly 16.2
 16.4
 December 5, 2020
Ascent at Windward 3.51% paid monthly 34.6
 34.6
 January 1, 2022
The Palatine(1)
 4.25% paid monthly 75.5
 75.9
 January 10, 2022
The Forum at Carlsbad(1)
 4.25% paid monthly 85.3
 85.7
 March 1, 2022
Fusion 1560 3.42% paid monthly 37.4
 37.4
 June 10, 2022
San Diego Office Portfolio(5)
 3.62% paid monthly 49.0
 48.2
 August 15, 2022
The Colorado(1)
 3.69% paid monthly 87.7
 88.1
 November 1, 2022
The Legacy at Westwood(1)
 3.69% paid monthly 44.7
 44.9
 November 1, 2022
Regents Court(1)
 3.69% paid monthly 37.9
 38.1
 November 1, 2022
1001 Pennsylvania Avenue(1)
 3.70% paid monthly 319.1
 320.7
 June 1, 2023
Biltmore at Midtown 3.94% paid monthly 36.4
 36.4
 July 5, 2023
Cherry Knoll 3.78% paid monthly 35.3
 35.3
 July 5, 2023
Lofts at SoDo 3.94% paid monthly 35.1
 35.1
 July 5, 2023
Pacific City 2.00% + LIBOR paid monthly 105.0
 
 October 1, 2023
Birkdale Village(1)
 4.30% paid monthly 78.3
 
 April 1, 2024
1401 H Street, NW 3.65% paid monthly 115.0
 115.0
 November 5, 2024
The District at La Frontera(1)
 3.84% paid monthly 39.1
 39.3
 December 1, 2024
The District at La Frontera(1)
 4.96% paid monthly 4.3
 4.4
 December 1, 2024
Circa Green Lake 3.71% paid monthly 52.0
 52.0
 March 5, 2025
Union - South Lake Union 3.66% paid monthly 57.0
 57.0
 March 5, 2025
Holly Street Village 3.65% paid monthly 81.0
 81.0
 May 1, 2025
Henley at Kingstowne 3.60% paid monthly 71.0
 71.0
 May 1, 2025
32 South State Street 4.48% paid monthly 24.0
 24.0
 June 6, 2025
Vista Station Office Portfolio(1)
 4.00% paid monthly 20.4
 20.5
 July 1, 2025
780 Third Avenue 3.55% paid monthly 150.0
 150.0
 August 1, 2025
780 Third Avenue 3.55% paid monthly 20.0
 20.0
 August 1, 2025
Vista Station Office Portfolio(1)
 4.20% paid monthly 44.5
 44.7
 November 1, 2025
701 Brickell Avenue 3.66% paid monthly 184.0
 184.0
 April 1, 2026
Marketplace at Mill Creek 3.82% paid monthly 39.6
 
 September 11, 2027
Overlook At King Of Prussia 3.82% paid monthly 40.8
 
 September 11, 2027
Winslow Bay 3.82% paid monthly 25.8
 
 September 11, 2027
1900 K Street, NW 3.93% paid monthly 163.0
 163.0
 April 1, 2028
99 High Street 3.90% paid monthly 277.0
 277.0
 March 1, 2030
Total Principal Outstanding   $2,624.3
 $2,338.0
  
Fair Value Adjustment(3)
   (18.7) 27.0
  
Total Loans Payable   $2,605.6
 $2,365.0
  
(1) 
The mortgage is adjusted monthly for principal payments.
(2) 
All interest rates are fixed except for Pacific City, which has a variable interest rate based on a spread above the one month London Interbank Offered Rate, as published by ICE Benchmark Administration Limited. Some mortgages held by the Account are structured to begin principal and interest payments after an initial interest only period.
(3) 
The fair value adjustment consists of the difference (positive or negative) between the principal amount of the outstanding debt and the fair value of the outstanding debt. See Note 1—Organization and Significant Accounting Policies.
(4) 
Represents mortgage loans on individual properties held within the Palomino Park portfolio.
(5) 
The loan is collateralized by a mezzanine loan receivable. The mezzanine loan receivable is collateralized by the property reflected within the table above.

25


Note 10—Line of Credit
On September 20, 2018, the Account entered into a $500.0 million unsecured revolving credit agreement (“Line of Credit”) syndicated across four national banks (each a “Lender”, and collectively the "Lenders"), with each Lender providing a $125.0 million commitment. Access to the Line of Credit expires on September 20, 2021, with an option to extend the Line of Credit for two consecutive twelve months terms at the Account’s election. The Account may request an additional $250.0 million in commitments from the Lenders at any time; however, this request is subject to approval at the sole discretion of the Lenders and is not a guarantee that an expansion beyond the original $500.0 million commitment will be granted. Draws against the Line of Credit can take the form of Eurodollar Loans or Alternate Base Rate Loans (“ABR Loans”). Eurodollar Loans and ABR Loans both require a minimum funding of $5.0 million. The Account is charged a fee of 0.20% per annum on the unused portion of the Line of Credit. For the three months ended March 31, 2020, $0.8 million was charged to the Account for expenses related to the Line of Credit.
Eurodollar Loans are issued for a term of twelve months or less and bear interest during the period (“Interest Period”) at a rate equal to the Adjusted London Interbank Offered Rate (“Adjusted LIBOR”) plus a spread ranging between 0.85%-1.05% per annum (the “Applicable Rate”), with the spread dependent upon the leverage ratio of the Account. The Adjusted LIBOR rate is calculated by multiplying the Statutory Reserve Rate, as determined by the Federal Reserve Board for Eurodollar liabilities, by the LIBOR rate, as determined by the Intercontinental Exchange on the date of issuance that corresponds to the length of the Interest Period of the Eurodollar Loan. The Account may prepay Eurodollar Loans at any time during the life of the loan without penalty. The Account is limited to five active Eurodollar Loans through the Line of Credit; however, the Account may retire and initiate new Eurodollar Loans without restriction so long as the total number of loans in active status never exceeds the limit.
ABR Loans are issued for a specific length of time and bear interest at a rate equal to the highest rate among the following calculations plus the Applicable Rate: (i) the Prime Rate on the date of issuance, with the Prime Rate being defined as the rate of interest last quoted by the Wall Street Journal as the Prime Rate; (ii) the Federal Reserve Bank of New York (“NYFRB”) rate as provided by the NYFRB on the date of issuance plus 0.5%; or (iii) the Adjusted LIBOR rate plus 1.0%. The Account may prepay ABR Loans at any time during the life of the loan without penalty.
As of March 31, 2020, the Account had $190.0 million outstanding on the Line of Credit and was in compliance with all covenants required by the Line of Credit.

26


Note 11—Financial Highlights
Selected condensed financial information for an Accumulation Unit of the Account is presented below. Per Accumulation Unit data is calculated on average units outstanding.
 For the Three Months Ended March 31, 2020 Years Ended December 31,
2019 2018 2017
 (Unaudited)      
Per Accumulation Unit Data:       
Rental income$5.054
 $18.165
 $17.757
 $17.132
Real estate property level expenses and taxes2.422
 8.734
 8.548
 7.722
Real estate income, net2.632
 9.431
 9.209
 9.410
Other income1.724
 6.752
 6.162
 4.762
Total income4.356
 16.183
 15.371
 14.172
Expense charges(1)
0.894
 3.439
 3.161
 3.318
Investment income, net3.462
 12.744
 12.210
 10.854
Net realized and unrealized gain on investments and loans payable(2.992) 10.262
 6.877
 5.839
Net increase in Accumulation Unit Value0.470
 23.006
 19.087
 16.693
Accumulation Unit Value:       
Beginning of period440.422
 417.416
 398.329
 381.636
End of period$440.892
 $440.422
 $417.416
 $398.329
Total return(3)
0.11% 5.51% 4.79% 4.37%
Ratios to Average net assets(2):
       
Expenses(1)
0.78% 0.78% 0.76% 0.83%
Investment income, net3.04% 2.90% 2.95% 2.72%
Portfolio turnover rate(3):
       
Real estate properties(4)
5.7% 7.8% 11.8% 2.7%
Marketable securities(5)
74.0% 28.7% 5.1% 5.7%
Accumulation Units outstanding at end of period (millions)57.8
 60.8
 60.7
 61.3
Net assets end of period (millions)$26,015.1
 $27,307.9
 $25,842.6
 $24,942.6
(1) 
Expense charges per Accumulation Unit and the Ratio of Expenses to average net assets reflect the year to date Account level expenses and exclude real estate property level expenses which are included in real estate income, net.
(2) 
Percentages for the three months ended March 31, 2020 are annualized.
(3) 
Percentages for the three months ended March 31, 2020 are not annualized.
(4) 
Real estate investment portfolio turnover rate is calculated by dividing the lesser of purchases or sales of real estate property investments (including contributions to, or return of capital distributions received from, existing real estate joint ventures and fund investments) by the average value of the portfolio of real estate investments held during the period.
(5) 
Marketable securities portfolio turnover rate is calculated by dividing the lesser of purchases or sales of securities, excluding securities having maturity dates at acquisition of one year or less, by the average value of the portfolio securities held during the period.


27


Note 12—Accumulation Units
Changes in the number of Accumulation Units outstanding were as follows (in millions):
 For the Three Months Ended March 31, 2020 For the Year Ended December 31, 2019
 (Unaudited)  
Outstanding:   
Beginning of period60.8
 60.7
Credited for premiums1.6
 6.2
Annuity, other periodic payments, withdrawals and death benefits(4.6) (6.1)
End of period57.8
 60.8
Note 13—Commitments and Contingencies
Commitments—As of March 31, 2020 and December 31, 2019, the Account had the following immediately callable commitments to purchase additional interests in its real estate funds or provide additional funding through its loans receivable investments:
  Commitment Expiration March 31, 2020 December 31, 2019
    (Unaudited)  
Real Estate Funds(1)
     
 Taconic New York City GP Fund11/2020 $11.4
 $11.4
 LCS SHIP Venture I, LLC12/2020 28.1
 28.1
 
Veritas Trophy VI, LLC(2)
08/2022 42.6
 35.8
 SP V - II, LLC09/2022 70.1
 74.9
 Grubb Southeast Real Estate Fund VI, LLC06/2021 86.6
 86.6
 JCR Capital - REA Preferred Equity Parallel Fund12/2022 97.8
 100.0
 Townsend Strategic Ventures LP03/2021 250.0
 250.0
 Silverpeak NRE Fund Co, LLC01/2021 100.0
 
 TREA Flagler Venture, LLC08/2020 100.0
 
    786.6
 586.8
Loans Receivable(3)
     
 311 South Wacker Mezzanine06/2020 $6.0
 $7.6
 Rosemont Towson Mezzanine09/2022 1.2
 1.2
 1330 Broadway Mezzanine09/2022 14.0
 14.0
 SCG Oakland Portfolio Mezzanine03/2021 6.9
 7.0
 BREP VIII Industrial Mezzanine03/2026 14.1
 14.1
 San Diego Office Portfolio Senior Loan08/2022 9.2
 10.0
 San Diego Office Portfolio Mezzanine08/2022 3.1
 3.3
 
MRA Hub 34 Holding, LLC

09/2022 1.5
 1.5
 Liberty Park Mezzanine11/2023 5.0
 5.0
 Colony New England Hotel Portfolio Senior Loan11/2022 14.1
 14.1
 Colony New England Hotel Portfolio Mezzanine11/2022 4.7
 4.7
 Exo Apartments Senior Loan06/2020 7.1
 7.1
 Exo Apartments Mezzanine06/2020 2.4
 2.4
 Five Oak Senior Loan03/2023 7.3
 
 Five Oak Mezzanine03/2023 2.4
 
    99.0
 92.0
       
 TOTAL COMMITMENTS  $885.6
 $678.8

28


(1) 
Additional capital can be called during the commitment period at any time. The commitment period can only be extended by the manager with the consent of the Account. The commitment expiration date is reflective of the most recent signed agreement between the Account and the fund manager, including any side letter agreements.
(2) 
The fund manager is granted 18 months from the initial contribution date, August 2019, to make its first capital call. If none have occurred, the Account's commitment will be reduced by $15.0 million. If a capital call occurs during the initial 18 month window, the commitment period will be modified to three years from the first capital call date.
(3) 
Additional advances from the Account can be requested during the commitment period at any time. The commitment expiration date is reflective of the most recent signed agreement between the Account and the borrower, including any side letter agreements. Certain loans contain extension clauses on the term of the loan that do not require the Account's prior consent. If elected, the Account's commitment may be extended through the extension term.
Contingencies—In the normal course of business, the Account may be named, from time to time, as a defendant or may be involved in various legal actions, including arbitrations, class actions and other litigation.
The Account establishes an accrual for all litigation and regulatory matters when it believes it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. Once established, accruals are adjusted, as appropriate, in light of additional information. The amount of loss ultimately incurred in relation to those matters may be higher or lower than the amounts accrued for those matters.
As of the date of this report, management of the Account does not believe that the results of any such claims or litigation, individually or in the aggregate, will have a material effect on the Account’s business, financial position or results of operations.

29

TIAA REAL ESTATE ACCOUNT
CONSOLIDATED SCHEDULES OF INVESTMENTS
(Dollar values shown in millions)


REAL ESTATE PROPERTIES—62.4% and 53.0%
Location/Description Type Fair Value at
March 31, 2020 December 31, 2019
    (Unaudited)   
Alabama:        
River Ridge Retail $32.1
(9) 
 $
 
Riverchase Village Retail 40.9
  40.3
 
Arizona:        
Camelback Center Office 49.5

 49.0
 
Riverside 202 Industrial Industrial 29.7
  29.6
 
California:        
88 Kearny Street Office 221.6

 221.0
 
101 Pacific Coast Highway Office 96.4
  96.1
 
200 Middlefield Road Office 68.0

 68.0
 
30700 Russell Ranch Office 38.4

 39.0
 
Allure at Camarillo Apartments 64.5

 63.9
 
Almond Avenue Land 10.3
  9.5
 
BLVD63 Apartments 158.0

 158.0
 
Bridgepointe Shopping Center Retail 130.6

 129.0
 
Centre Pointe and Valley View Industrial 61.2

 60.7
 
Cerritos Industrial Park Industrial 165.3

 164.0
 
Charleston Plaza Retail 102.0

 100.0
 
Creekside at Alta Loma Apartments 85.2

 85.2
 
Frontera Industrial Business Park Industrial 92.9

 90.0
 
Great West Industrial Portfolio Industrial 206.4

 203.0
 
Holly Street Village Apartments 159.0
(1) 
 158.1
(1) 
Larkspur Courts Apartments 154.0

 155.0
 
Northern CA RA Industrial Portfolio Industrial 111.6

 111.9
 
Oakmont IE West Portfolio Industrial 113.3

 109.2
 
Oceano at Warner Center Apartments 94.5

 94.4
 
Ontario Industrial Portfolio Industrial 508.3

 506.9
 
Ontario Mills Industrial Portfolio Industrial 69.8

 65.4
 
Otay Mesa Industrial Portfolio Industrial 34.4
  33.7
 
Pacific City Retail 181.0
(1)(10) 
 
 
Pacific Plaza Office 113.3

 112.7
 
Rancho Cucamonga Industrial Portfolio Industrial 89.4

 88.3
 
Rancho Del Mar Apartments 94.8
  94.7
 
Regents Court Apartments 108.0
(1) 
 105.0
(1) 
Southern CA RA Industrial Portfolio Industrial 157.7

 151.8
 
Stella Apartments 176.2

 175.1
 
Stevenson Point Industrial 74.4

 66.6
 
Terra House Apartments 146.0
  146.0
 
The Forum at Carlsbad Retail 224.0
(1) 
 224.0
(1) 
The Legacy at Westwood Apartments 149.0
(1) 
 149.1
(1) 
West Lake North Business Park Office 63.0

 62.3
 
Westcreek Apartments 56.2

 57.1
 
Westwood Marketplace Retail 150.0

 150.0
 
Wilshire Rodeo Plaza Office 335.4

 336.4
 
Colorado:        
1600 Broadway Office 120.0
  116.0
 
Palomino Park Apartments 358.0
(1) 
 361.0
(1) 

30

TIAA REAL ESTATE ACCOUNT
CONSOLIDATED SCHEDULES OF INVESTMENTS
(Dollar values shown in millions)


Location/Description Type Fair Value at
March 31, 2020 December 31, 2019
    (Unaudited)   
South Denver Marketplace Retail $72.4

 $71.2
 
Connecticut:        
Wilton Woods Corporate Campus Office 106.0

 112.1
 
Florida:        
5 West Apartments 62.5
  62.3
 
701 Brickell Avenue Office 427.1
(1) 
 406.6
(1) 
Boca Arbor Club Apartments 63.3
  62.9
 
Broward Industrial Portfolio Industrial 68.4

 67.7
 
Casa Palma Apartments 101.0

 102.0
 
Cypress Trace Retail 34.8
(9) 
 
 
Fusion 1560 Apartments 81.3
(1) 
 84.1
(1) 
Lakepointe at Jacaranda Apartments 49.4
  48.8
 
Lofts at SoDo Apartments 65.3
(1) 
 64.7
(1) 
Market Square Retail 20.9
(9) 
 
 
Orion on Orpington Apartments 52.5

 52.4
 
Publix at Weston Commons Retail 73.6

 74.5
 
Seneca Industrial Park Industrial 128.3

 126.7
 
Shoppes at Lake Mary Retail 20.4
(9) 
 
 
Sole at Brandon Apartments 79.0

 79.0
 
Sole at City Center Apartments 104.0
  
 
The Manor Apartments Apartments 51.5

 51.5
 
The Manor at Flagler Village Apartments 138.0

 138.1
 
The Residences at the Village of Merrick Park Apartments 70.7

 72.3
 
Weston Business Center Industrial 75.1

 75.0
 
Georgia:        
Ascent at Windward Apartments 69.5
(1) 
 68.4
(1) 
Atlanta Industrial Portfolio Industrial 41.2

 41.0
 
Biltmore at Midtown Apartments 73.5
(1) 
 73.5
(1) 
Eisenhower Crossing Retail 15.9
(9) 
 
 
Fayette Pavilion Retail 107.7
(9) 
 
 
Glen Lake Apartments 57.0
  55.3
 
Heritage Pavilion Retail 41.5
(9) 
 
 
Marketplace at Mill Creek Retail 78.5
(1)(9) 
 
 
Newnan Pavilion Retail 42.0
(9) 
 
 
Shawnee Ridge Industrial Portfolio Industrial 100.7
  99.9
 
Woodstock Square Retail 33.5
(9) 
 
 
Illinois:        
32 South State Street Retail 50.4
(1) 
 51.4
(1) 
803 Corday Apartments 94.3

 93.8
 
Chicago Caleast Industrial Portfolio Industrial 86.4

 85.6
 
Chicago Industrial Portfolio Industrial 32.5

 30.1
 
Village Crossing Retail 153.4
(9) 
 
 
Maryland:        
Cherry Knoll Apartments 59.8
(1) 
 60.1
(1) 
Landover Logistics Center Industrial 47.5

 44.7
 
The Shops at Wisconsin Place Retail 71.6

 65.6
 
Massachusetts:        
99 High Street Office 563.3
(1) 
 543.7
(1) 

31

TIAA REAL ESTATE ACCOUNT
CONSOLIDATED SCHEDULES OF INVESTMENTS
(Dollar values shown in millions)


Location/Description Type Fair Value at
March 31, 2020 December 31, 2019
    (Unaudited)   
350 Washington Retail $134.0
  $134.0
 
Fort Point Creative Exchange Portfolio Office 276.2

 275.0
 
Northeast RA Industrial Portfolio Industrial 43.4

 43.5
 
One Beeman Road Industrial 34.7

 34.6
 
Minnesota:        
The Bridges Apartments 68.0

 67.2
 
The Knoll Apartments 39.3
(1) 
 37.3
(1) 
New Jersey:        
10 New Maple Avenue Industrial 22.3

 21.9
 
200 Milik Street Industrial 57.2

 56.4
 
Marketfair Retail 107.1

 106.2
 
South River Road Industrial Industrial 133.2

 133.5
 
New York:        
21 Penn Plaza Office 333.4

 334.9
 
250 North 10th Street Apartments 

 138.1
 
780 Third Avenue Office 393.5
(1) 
 389.1
(1) 
837 Washington Street Office 232.0

 232.0
 
The Colorado Apartments 258.0
(1) 
 259.0
(1) 
North Carolina:        
Alexander Place Retail 42.0
(9) 
 
 
Birkdale Village Retail 120.0
(1)(9) 
 
 
Birkdale Village - Residential Apartments 75.0
(9) 
 
 
Centric Gateway Apartments 75.2
  75.0
 
Winslow Bay Commons Retail 50.0
(9) 
 
 
Oregon:        
The Cordelia Apartments 43.2

 43.2
 
Pennsylvania:        
1619 Walnut Street Retail 23.5

 23.0
 
Overlook at King of Prussia Retail 64.0
(1)(9) 
 
 
Rhode Island:        
Warwick Shopping Center Retail 19.7
(9) 
 
 
South Carolina:        
Columbiana Station Retail 50.4
(9) 
 
 
Greene Crossing Apartments 79.7

 79.7
 
Tennessee:        
Bellevue Place Retail 8.8
(9) 
 
 
Pavilion at Turkey Creek Retail 53.4
(9) 
 
 
Southside at McEwen Retail 49.5
  49.2
 
Town and Country Retail 34.4
(9) 
 
 
Texas:        
3131 McKinney Office 45.8

 46.4
 
Beltway North Commerce Center Industrial 

 30.2
 
Carrington Park Apartments 67.3

 67.3
 
Churchill on the Park Apartments 73.1

 73.0
 
Cliffs at Barton Creek Apartments 47.5

 47.2
 
Dallas Industrial Portfolio Industrial 240.8

 237.9
 
District on La Frontera Apartments 77.2
(1) 
 76.6
(1) 
Houston Apartment Portfolio Apartments 162.4

 162.3
 

32

TIAA REAL ESTATE ACCOUNT
CONSOLIDATED SCHEDULES OF INVESTMENTS
(Dollar values shown in millions)


Location/Description Type Fair Value at
March 31, 2020 December 31, 2019
    (Unaudited)   
Lincoln Centre Office $421.4

 $413.2
 
Lincoln Centre - Hilton Dallas Hotel 70.2
  76.5
 
Northwest Houston Industrial Portfolio Industrial 76.2

 77.2
 
Park 10 Distribution Industrial 11.5

 11.1
 
Park Creek Apartments Apartments 42.2
  
 
Pinnacle Industrial Portfolio Industrial 67.9

 66.7
 
Pinto Business Park Industrial 154.0

 154.1
 
The Maroneal Apartments 56.3

 56.4
 
Utah:        
Vista Station Office Portfolio Office 119.9
(1) 
 115.4
(1) 
Virginia:        
8270 Greensboro Drive Office 48.6

 49.6
 
Ashford Meadows Apartments Apartments 105.1
(1) 
 105.3
(1) 
Creeks at Virginia Center Retail 49.2
(9) 
 
 
Henley at Kingstowne Apartments 103.0
(1) 
 103.0
(1) 
Plaza America Retail 114.7

 113.3
 
The Ellipse at Ballston Office 83.5

 82.2
 
The Palatine Apartments 127.1
(1) 
 128.0
(1) 
Washington:        
Circa Green Lake Apartments 100.0
(1) 
 102.0
(1) 
Northwest RA Industrial Portfolio Industrial 49.6

 49.7
 
Pacific Corporate Park Industrial 65.0

 62.5
 
Prescott Wallingford Apartments Apartments 70.0

 70.6
 
Rainier Corporate Park Industrial 164.0

 161.3
 
Regal Logistics Campus Industrial 131.0

 121.0
 
Union - South Lake Union Apartments 115.0
(1) 
 115.0
(1) 
Washington D.C.:        
1001 Pennsylvania Avenue Office 787.4
(1) 
 798.4
(1) 
1401 H Street, NW Office 216.6
(1) 
 211.4
(1) 
1900 K Street, NW Office 333.2
(1) 
 335.4
(1) 
Mass Court Apartments 172.0

 169.0
 
The Ashton Apartments 30.2

 30.6
 
The Louis at 14th Apartments 162.8

 164.2
 
The Woodley Apartments 

 180.3
 
Various:        
Colony Industrial Portfolio Industrial 139.3
(3)  
 135.9
(3) 
TOTAL REAL ESTATE PROPERTIES       
(Cost $14,098.9 and $13,048.5)   $17,082.1
  $15,835.0
 
REAL ESTATE JOINT VENTURES AND FUNDS—24.1% and 25.1%
REAL ESTATE JOINT VENTURES—22.8% and 24.1%
Location/Description Type Fair Value at
March 31, 2020 December 31, 2019
    (Unaudited)   
California:      
CA—Colorado Center LP
Colorado Center (50% Account Interest)
 Office $391.6
(2) 
 $384.5
(2) 

33

TIAA REAL ESTATE ACCOUNT
CONSOLIDATED SCHEDULES OF INVESTMENTS
(Dollar values shown in millions)


Location/Description Type Fair Value at
March 31, 2020 December 31, 2019
    (Unaudited)   
PC Borrower, LLC
Pacific City (70% Account Interest)
 Retail $
(10) 
 $62.2
(2) 
TREA GM Industrial Road Investor Member LLC
150 Industrial Road (98% Account Interest)
 Office 99.8
  98.0
 
TREA 9625 Towne Center, LLC
9625 Towne Centre Drive (49.9% Account Interest)
 Office 54.7

 53.1
 
TREA Campus Pointe 1, LLC
Campus Pointe 1 (45% Account Interest)
 Office 165.8

 163.5
 
TREA Campus Pointe 2 & 3, LLC
Campus Pointe 2 & 3 (45% Account Interest)
 
Office (5)
 144.9

 143.6
 
TREA Campus Pointe 4, LLC
Campus Pointe 4 (45% Account Interest)
 Office 10.0

 9.6
 
TREA Campus Pointe 5, LLC
Campus Pointe 5 (45% Account Interest)
 Office 39.5
  37.4
 
ARE-SD Regions NO. 58, LLC
Campus Pointe 6 (45% Account Interest)
 Office 122.5
  116.6
 
T-C 1500 Owens, LLC
1500 Owens Street (49.9% Account Interest)
 Office 83.4

 81.5
 
T-C Foundry Square II Venture LLC
Foundry Square II (50.1% Account Interest)
 Office 323.2

 318.4
 
T-C Illinois Street, LLC
409-499 Illinois Street (40% Account Interest)
 Office 243.9

 237.5
 
Valencia Town Center Associates LP
Valencia Town Center (50% Account Interest)
 Retail 130.8
(2) 
 136.4
(2) 
Florida:      
Florida Mall Associates, Ltd
The Florida Mall (50% Account Interest)
 Retail 748.3
(2) 
 748.3
(2) 
TREA Florida Retail, LLC
Florida Retail Portfolio (80% Account Interest)
 Retail 156.3

 158.4
 
West Dade County Associates
Miami International Mall (50% Account Interest)
 Retail 133.6
(2) 
 157.5
(2) 
Maryland:      
WP Project Developer
The Shops at Wisconsin Place (33.33% Account Interest)
 Retail 24.0

 29.9
 
Massachusetts:      
One Boston Place REIT
One Boston Place (50.25% Account Interest)
 Office 251.3

 246.8
 
T-C 225 Binney, LLC
225 Binney Street (70% Account Interest)
 Office 231.5

 231.5
 
T-C 501 Boylston Street Member, LLC
501 Boylston (50.1% Account Interest)
 Office 215.1
(2) 
 206.9
(2) 
Nevada:        
Fashion Show Holding I, LLC
Fashion Show (50% Account Interest)
 Retail 600.4
(2) 
 706.9
(2) 
New York:      
401 West 14th Street, LLC
401 West 14th Street (42.19% Account Interest)
 Retail 38.6
(2) 
 44.8
(2) 
440 Ninth Avenue Owner, LLC
440 Ninth Avenue (88.52% Account Interest)
 Office 137.9
(2) 
 133.1
(2) 
817 Broadway Owner, LLC
817 Broadway (61.46% Account Interest)
 Office 35.9
(2) 
 33.7
(2) 

34

TIAA REAL ESTATE ACCOUNT
CONSOLIDATED SCHEDULES OF INVESTMENTS
(Dollar values shown in millions)


Location/Description Type Fair Value at
March 31, 2020 December 31, 2019
    (Unaudited)   
MRA Hub 34 Holding, LLC
The Hub (95% Account Interest)
 Office $75.8
(2) 
 $74.8
(2) 
RGM 42, LLC
MiMA (70% Account Interest)
 Apartments 106.6
(2) 
 113.0
(2) 
North Carolina:        
CC 101 North Tryon, LLC 101 N. Tryon Street (85% Account Interest) Office 48.2
(2) 
 47.9
(2) 
Tennessee:      
West Town Mall, LLC
West Town Mall (50% Account Interest)
 Retail 144.6
(2) 
 144.0
(2) 
Texas:      
Four Oaks Venture LP
Four Oaks Place LP (51% Account Interest)
 Office 342.6
(2) 
 352.8
(2) 
TREA I-35 Logistics Investor Member, LLC I-35 Logistics Center (95% Account Interest) Land 10.1

 6.9
 
Washington:        
TREA 4th and Madison Investor Member, LLC
Fourth and Madison (51% Account Interest)
 Office 171.7
(2) 
 167.3
(2) 
Various:      
DDRTC Core Retail Fund, LLC
SITE Centers Joint Venture (85% Account Interest)
 Retail 12.4
(9) 
 878.0
(2,3) 
Simpson Housing LLP
Simpson Housing Portfolio (80% Account Interest)
 Apartments 454.4
(2,3) 
 431.2
(2,3) 
THP Student Housing, LLC
THP Student Housing Portfolio (97% Account Interest)
 Apartments 193.2
(2,3) 
 186.8
(2,3) 
Storage Portfolio I, LLC
Storage Portfolio I (66.02% Account Interest)
 Storage 99.6
(2,3) 
 93.6
(2,3) 
Storage Portfolio II, LLC
Storage Portfolio II (90% Account Interest)
 Storage 141.3
(2,3) 
 130.5
(2,3) 
Storage Portfolio III, LLC
Storage Portfolio III (90% Account Interest)
 Storage 53.9
(3) 
 37.3
(3) 
TOTAL REAL ESTATE JOINT VENTURES
(Cost $4,728.6 and $5,971.1)
   $6,237.4
  $7,204.2
 
         
REAL ESTATE FUNDS—1.3% and 1.0%    
LCS SHIP Venture I, LLC (90.0% Account Interest) $212.8
  $216.1
 
SP V - II, LLC (79.2% Account Interest) 28.2
  23.3
 
Taconic New York City GP Fund, LP (60.0% Account Interest) 29.8
  29.8
 
Veritas - Trophy VI, LLC (92.1% Account Interest) 42.7
  4.2
 
IDR - Core Property Index Fund, LLC (2.0% Account Interest) 25.0
  25.0
 
Grubb Southeast Real Estate Fund VI, LLC (66.7% Account Interest) 13.4
  13.4
 
JCR Capital (49.2% Account Interest) 2.2
  
 
TOTAL REAL ESTATE FUNDS
(Cost $313.4 and $273.3)
   $354.1
  $311.8
 
TOTAL REAL ESTATE JOINT VENTURES AND FUNDS
(Cost $5,042.0 and $6,244.4)
 $6,591.5
  $7,516.0
 

35

TIAA REAL ESTATE ACCOUNT
CONSOLIDATED SCHEDULES OF INVESTMENTS
(Dollar values shown in millions)


MARKETABLE SECURITIES—7.5% and 16.7%
REAL ESTATE-RELATED MARKETABLE SECURITIES—2.6% and 2.8%
Shares Issuer Fair Value at
March 31, 2020 December 31, 2019
2020 2019 
      (Unaudited)   
33,051
 25,333
 Acadia Realty Trust $0.4

 $0.7
 
88,392
 77,213
 Agree Realty Corporation 5.5

 5.4
 
26,366
 20,424
 Alexander & Baldwin, Inc. 0.3

 0.4
 
919
 635
 Alexander's, Inc. 0.3

 0.2
 
128,406
 114,902
 Alexandria Real Estate Equities, Inc. 17.6

 18.6
 
18,539
 14,387
 American Assets Trust, Inc. 0.5

 0.7
 
53,740
 40,898
 American Campus Communities, Inc. 1.5

 1.9
 
41,166
 31,822
 American Financial Trust, Inc. 0.3
  0.4
(7) 
265,201
 241,918
 American Homes 4 Rent 6.2

 6.3
 
339,068
 298,037
 American Tower Corp. 73.8

 68.5
 
264,879
 247,312
 Americold Realty Trust 9.0

 8.7
 
57,574
 44,204
 Apartment Investment and Management Company 2.0

 2.3
 
81,095
 62,827
 Apple Hospitality Inc. 0.7

 1.0
 
22,044
 15,666
 Armada Hoffler Properties Inc. 0.2

 0.3
 

 26,793
 Ashford Hospitality Trust, Inc. 

 0.1
 
119,484
 106,486
 Avalonbay Communities, Inc. 17.6

 22.3
 
14,403
 7,650
 Bluerock Residential Growth, Inc. 0.1

 0.1
 
120,292
 106,065
 Boston Properties, Inc. 11.1

 14.6
 

 8,938
 Braemar Hotels & Resorts, Inc. 

 0.1
 
66,738
 52,132
 Brandywine Realty Trust 0.7

 0.8
 
114,234
 88,801
 Brixmore Property Group Inc 1.1

 1.9
 
25,497
 19,539
 Brookfield Property REIT 0.2
(7) 
 0.4
 
6,389
 
 BRT Apartments Corp. 0.1

 
 
36,377
 27,796
 Camden Property Trust 2.9

 2.9
 
36,764
 28,420
 CareTrust REIT Inc. 0.5

 0.6
 
19,068
 14,592
 Catchmark Timber Trust, Inc. 0.1

 0.2
 

 50,454
 CBL & Associates Properties, Inc. 
  0.1
(7) 
54,621
 25,522
 Cedar Shopping Centers, Inc. 0.1

 0.1
 
23,661
 13,659
 Chatham Lodging Trust 0.1

 0.3
 
20,171
 15,789
 City Office REIT Inc. 0.1

 0.2
 

 5,192
 Clipper Realty, Inc. 

 0.1
 
295,388
 492,974
 Colony Capital, Inc. 0.5

 2.3
 
43,247
 34,825
 Columbia Property Trust Inc. 0.5

 0.7
 
7,392
 5,492
 Community Healthcare Trust, Inc. 0.3

 0.2
 
48,055
 35,462
 CoreCivic, Inc. 0.5

 0.6
 
4,974
 3,830
 Corenergy Infrastructure Trust, Inc. 0.1

 0.2
 
16,534
 11,903
 Corepoint Lodging, Inc. 0.1
  0.1
 
14,635
 11,149
 CoreSite Realty Corporation 1.7

 1.3
 
44,555
 33,505
 Corporate Office Properties Trust 1.0

 1.0
 
57,140
 43,565
 Cousins Properties, Inc. 1.7

 1.8
 
287,381
 248,664
 Crown Castle International Corporation 41.5

 35.3
 
75,054
 57,474
 Cubesmart 2.0

 1.8
 
85,743
 60,485
 CyrusOne Inc. 5.3

 4.0
 
78,263
 59,944
 DiamondRock Hospitality Company 0.4

 0.7
 
147,130
 94,906
 Digital Realty Trust, Inc. 20.4

 11.4
 
101,339
 
 Diversified Healthcare Trust 0.4

 
 

36

TIAA REAL ESTATE ACCOUNT
CONSOLIDATED SCHEDULES OF INVESTMENTS
(Dollar values shown in millions)


Shares Issuer Fair Value at
March 31, 2020 December 31, 2019
2020 2019 
      (Unaudited)   
64,649
 49,622
 Douglas Emmett, Inc. $2.0

 $2.2
 
278,259
 244,465
 Duke Realty Corporation 9.0

 8.5
 
29,684
 22,034
 Easterly Government Properties, Inc. 0.7

 0.5
 
45,015
 41,238
 EastGroup Properties, Inc. 4.7

 5.5
 
57,899
 44,235
 Empire State Realty Trust 0.5

 0.6
 
30,148
 23,023
 EPR Properties 0.7

 1.6
 
71,789
 60,851
 Equinix Inc. 44.8

 35.5
 
317,599
 256,618
 Equity Lifestyle Properties, Inc. 18.3

 18.1
 
323,143
 283,999
 Equity Residential 19.9

 23.0
 
235,836
 188,894
 Essential Properties Realty 3.1

 4.7
 
53,531
 54,492
 Essex Property Trust, Inc. 11.8

 16.4
 
114,007
 107,410
 Extra Space Storage, Inc. 10.9

 11.3
 
17,184
 8,142
 Farmland Partners, Inc. 0.1
  0.1
 
29,121
 66,222
 Federal Realty Investment Trust 2.2

 8.5
 
49,077
 37,538
 First Industrial Realty Trust, Inc. 1.6

 1.6
 
27,799
 20,389
 Four Corners Property Trust 0.5

 0.6
 
39,353
 30,896
 Franklin Street Properties Corp. 0.2

 0.3
 
19,073
 14,739
 Front Yard Residential Corp. 0.2

 0.2
 
219,462
 180,230
 Gaming and Leisure Properties, Inc. 6.1

 7.8
 
115,000
 160,000
 GDS Holdings LTD ADR 1.2

 4.0
(7) 
47,655
 35,427
 GEO Group Inc./The 0.6
  0.6
 
12,666
 9,933
 Getty Realty Corp. 0.3

 0.3
 
14,133
 9,121
 Gladstone Commercial Corporation 0.2

 0.2
 
11,856
 6,226
 Gladstone Land Corporation 0.1

 0.1
 
14,936
 9,380
 Global Medical REIT, Inc. 0.2

 0.1
 
34,574
 26,663
 Global Net Lease, Inc. 0.5

 0.5
 
51,455
 39,221
 Healthcare Realty Trust Inc. 1.4

 1.3
 
83,942
 60,957
 Healthcare Trust of America 2.0

 1.8
 
497,952
 496,493
 Healthpeak Properties, Inc. 11.9

 17.1
 
21,711
 10,385
 Hersha Hospitality Trust 0.1

 0.2
 
40,166
 30,535
 Highwoods Properties, Inc. 1.4

 1.5
 
277,410
 661,737
 Host Hotels & Resorts, Inc. 3.1

 12.3
 
254,709
 275,440
 Hudson Pacific Properties, Inc. 6.5

 10.4
 
34,733
 26,784
 Independence Realty Trust, Inc. 0.3

 0.4
 
26,421
 19,292
 Industrial Logics Properties 0.5

 0.4
 
150,000
 134,775
 Interxion Holding NV 8.7

 7.0
 
4,837
 3,467
 Investors Real Estate Trust 0.3

 0.3
 
648,451
 559,204
 Invitation Homes, Inc. 13.9
  16.8
 
111,023
 84,852
 Iron Mountain Inc. 2.6

 2.7
 
15,000
 163,782
 iShares Dow Jones US Real Estate Index Fund 1.0
(7) 
 15.2
(7) 
47,791
 36,559
 JBG Smith Properties 1.5

 1.5
 
105,462
 95,936
 Kilroy Realty Corporation 6.7
  8.0
 
161,366
 120,171
 Kimco Realty Corporation 1.6

 2.5
 
31,614
 24,663
 Kite Realty Group Trust 0.3

 0.5
 
33,218
 25,456
 Lamar Advertising Corporation 1.7

 2.3
 
95,047
 71,595
 Lexington Realty Trust 0.9

 0.8
 

 46,357
 Liberty Property Trust 

 2.8
 
18,167
 13,885
 Life Storage, Inc. 1.7

 1.5
 
15,071
 11,718
 LTC Properties, Inc. 0.5

 0.5
 

37

TIAA REAL ESTATE ACCOUNT
CONSOLIDATED SCHEDULES OF INVESTMENTS
(Dollar values shown in millions)


Shares Issuer Fair Value at
March 31, 2020 December 31, 2019
2020 2019 
      (Unaudited)   
33,124
 25,783
 Mack-Cali Realty Corporation $0.5

 $0.6
 
199,747
 152,801
 Medical Properties Trust, Inc. 3.5

 3.2
 
300,000
 220,000
 Megaport, LTD 1.8

 1.7
 
85,000
 85,000
 MGM Growth Properties, L.L.C. 2.0

 2.6
 
120,258
 103,823
 Mid-America Apartment Communities, Inc. 12.4

 13.7
 
37,474
 27,502
 Monmouth Real Estate Investment Corporation 0.5

 0.4
 
16,334
 12,615
 National Health Investors, Inc. 0.8

 1.0
 
66,810
 50,907
 National Retail Properties, Inc. 2.2

 2.7
 
23,725
 17,663
 National Storage Affiliates Trust 0.7

 0.6
 
52,386
 24,918
 New Senior Investment Group 0.1

 0.2
 
8,263
 5,632
 Nexpoint Residential Trust, Inc. 0.2

 0.3
 
18,251
 14,200
 Office Properties Income Trust, Inc. 0.5

 0.5
 
88,291
 64,786
 Omega Healthcare Investors, Inc. 2.3

 2.7
 
9,893
 4,628
 One Liberty Properties, Inc. 0.1
  0.1
 
54,973
 42,727
 Outfront Media Inc. 0.7

 1.1
 
74,454
 58,127
 Paramount Group Inc. 0.7

 0.8
 
96,202
 71,359
 Park Hotels & Resorts, Inc. 0.8
  1.8
 
50,172
 38,713
 Pebblebrook Hotel Trust 0.5

 1.0
 
20,989
 20,665
 Pennsylvania Real Estate Investment Trust 0.1
(7) 
 0.1
(7) 
74,369
 55,271
 Physicians Realty Trust 1.0

 1.0
 
49,178
 37,274
 Piedmont Office Realty Trust, Inc. 0.9
  0.8
 
8,246
 3,863
 Plymouth Industrial REIT, Inc. 0.1

 0.1
 
25,420
 19,688
 Potlatch Corporation 0.8

 0.9
 
17,820
 13,220
 Preferred Apartment Communities, Inc. 0.1

 0.2
 
621,905
 472,201
 ProLogis 50.0

 42.1
 
7,921
 5,958
 PS Business Parks, Inc. 1.1

 1.0
 
95,952
 82,126
 Public Storage, Inc. 19.1

 17.5
 
110,580
 105,041
 QTS Realty Trust, Inc. 6.4

 5.7
 
51,072
 38,741
 Rayonier, Inc. 1.2

 1.3
 
242,246
 197,129
 Realty Income Corporation 12.1

 14.4
 
174,883
 159,520
 Regency Centers Corporation 6.7

 10.1
 
44,354
 33,519
 Retail Opportunity Investment 0.4

 0.6
 
83,972
 63,727
 Retail Properties of America 0.4

 0.9
 
9,455
 4,440
 Retail Value, Inc. 0.1

 0.2
 
379,102
 282,611
 Rexford Industrial Realty Inc. 15.5

 12.8
 
64,936
 50,071
 RLJ Lodging Trust 0.5

 0.9
 
30,156
 23,246
 RPT Realty 0.2

 0.3
 
19,088
 13,660
 Ryman Hospitality Properties 0.7

 1.2
 
188,570
 167,181
 Sabra Health Care REIT Inc. 2.1

 3.6
 
4,938
 3,168
 Safe Hold, Inc. 0.3

 0.1
 
4,559
 3,537
 Saul Centers, Inc. 0.1
  0.2
 
90,374
 76,914
 SBA Communications Corporation 24.4

 18.5
 

 70,465
 Senior Housing Properties Trust 

 0.6
 
63,399
 48,715
 Service Properties Trust 0.3

 1.2
 
170,053
 200,628
 Simon Property Group, Inc. 9.3

 29.9
 
509,244
 394,633
 Site Centers Corporation 2.7

 5.5
 
75,126
 115,766
 SL Green Realty Corp. 3.2

 10.6
 
38,285
 29,513
 Spirit Realty Capital Inc. 1.0

 1.5
 
58,138
 39,632
 Stag Industrial, Inc. 1.3

 1.3
 

38

TIAA REAL ESTATE ACCOUNT
CONSOLIDATED SCHEDULES OF INVESTMENTS
(Dollar values shown in millions)


Shares Issuer Fair Value at
March 31, 2020 December 31, 2019
2020 2019 
      (Unaudited)   
194,193
 228,776
 STORE Capital Corporation $3.5

 $8.5
 
40,889
 30,813
 Summit Hotel Properties, Inc. 0.2

 0.4
 
158,289
 123,951
 Sun Communities, Inc. 19.8

 18.6
 
86,249
 66,821
 Sunstone Hotel Investors, L.L.C. 0.8

 0.9
 
38,131
 27,198
 Tanger Factory Outlet Centers, Inc. 0.2
(7) 
 0.4
(7) 
23,104
 39,475
 Taubman Centers, Inc. 1.0

 1.2
 
145,788
 139,538
 Terreno Realty Corporation 7.5

 7.6
 
54,805
 42,266
 The Macerich Company 0.3

 1.1
(7) 
113,119
 86,400
 UDR, Inc. 4.1
  4.0
 
13,835
 10,668
 UMH Properties, Inc. 0.2
  0.2
 
224,924
 150,082
 UNITI Group, Inc. 1.4
  1.2
(7) 
4,923
 3,816
 Universal Health Realty Income Trust 0.5

 0.4
 
44,280
 34,264
 Urban Edge Properties 0.4
  0.7
 
11,141
 8,803
 Urstadt Biddle Properties, Inc. 0.2

 0.2
 
85,000
 85,000
 Vanguard Real Estate ETF 5.9
(7) 
 7.9
 
240,398
 190,949
 Ventas, Inc. 6.4

 11.0
 
416,400
 318,132
 VEREIT, Inc. 2.0

 2.9
 
460,023
 377,486
 Vici Properties, Inc. 7.7

 9.6
 
67,374
 51,469
 Vornado Realty Trust 2.4

 3.4
 
99,275
 55,611
 Washington Prime Group, Inc. 0.1
(7) 
 0.2
(7) 
32,774
 23,876
 Washington Real Estate Investment Trust 0.8

 0.7
 
46,617
 36,198
 Weingarten Realty Investors 0.7

 1.1
 
340,746
 300,767
 Welltower Inc. 15.7

 24.5
 
455,479
 386,918
 Weyerhaeuser Company 7.7

 11.7
 
24,163
 11,404
 Whitestone Real Estate Investment Trust B 0.1
  0.2
 
66,696
 50,897
 WP Carey Inc. 3.9
  4.1
 
43,615
 33,741
 Xenia Hotels & Resorts, Inc. 0.4

 0.7
 
TOTAL REAL ESTATE-RELATED MARKETABLE SECURITIES
(Cost $800.4 and $686.0)
 $724.7
  $825.7
 
OTHER MARKETABLE SECURITIES—4.9% and 13.9%
U.S. GOVERNMENT AGENCY NOTES—0.0% and 0.7%
Principal Issuer 
Yield(4)
 
Maturity
Date
 Fair Value at
March 31, 2020 December 31, 2019
2020 2019 
          (Unaudited)  
$
 $65.4
 Federal Home Loan Bank 1.734% 11/19/2021 $
 $65.5

 50.0
 Federal Home Loan Bank 1.700% 12/20/2021 
 50.0

 4.8
 Federal Home Loan Bank Discount Notes 1.521%-1.572% 1/6/2020 
 4.8

 21.2
 Federal Home Loan Bank Discount Notes 1.680% 1/10/2020 
 21.2

 26.0
 Federal Home Loan Bank Discount Notes 1.700% 1/15/2020 
 26.0

 43.0
 Federal Home Loan Bank Discount Notes 1.575%-1.593% 1/31/2020 
 42.9
TOTAL U.S. GOVERNMENT AGENCY NOTES
(Cost $0.0 and $210.2)
 $
 $210.4

39

TIAA REAL ESTATE ACCOUNT
CONSOLIDATED SCHEDULES OF INVESTMENTS
(Dollar values shown in millions)


FOREIGN GOVERNMENT AGENCY NOTES— 0.2% and 0.2%
Principal Issuer 
Yield(4)
 
Maturity
Date
 Fair Value at
March 31, 2020 December 31, 2019
2020 2019 
          (Unaudited)  
$49.3
 $49.3
 Japan Bank for International Cooperation 1.625% 10/17/2022 $50.3
 $48.9
12.1
 
 Japan Bank for International Cooperation 1.750% 1/23/2023 12.3
 
0.2
 0.2
 Korea Development Bank 1.908% 10/1/2022 0.3
 0.3
TOTAL FOREIGN GOVERNMENT AGENCY NOTES
(Cost $61.6 and $49.5)
$62.9
 $49.2
UNITED STATES TREASURY SECURITIES—2.7% and 8.7%
Principal Issuer 
Yield / Coupon Rate(4)
 
Maturity
Date
 Fair Value at
March 31, 2020 December 31, 2019
2020 2019 
           (Unaudited)  
$
 $11.9
 United States Treasury Bills 1.540%  1/2/2020 $
 $11.9

 40.0
 United States Treasury Bills 1.537%  1/14/2020 
 40.0

 238.3
 United States Treasury Bills 1.530%  1/21/2020 
 238.3

 10.1
 United States Treasury Bills 1.629%  1/23/2020 
 10.1

 26.1
 United States Treasury Bills 1.526%  1/30/2020 
 26.1

 39.9
 United States Treasury Bills 1.538%  2/4/2020 
 39.9

 20.0
 United States Treasury Bills 1.550%  2/6/2020 
 20.0

 149.7
 United States Treasury Bills 1.503%  2/11/2020 
 149.8

 49.9
 United States Treasury Bills 1.575%  2/13/2020 
 49.9

 13.0
 United States Treasury Bills 1.554%  2/20/2020 
 13.0

 49.9
 United States Treasury Bills 1.583%  2/27/2020 
 49.9

 46.1
 United States Treasury Bills 1.515%  3/5/2020 
 46.1

 54.5
 United States Treasury Bills 1.576%  3/12/2020 
 54.5

 44.8
 United States Treasury Bills 1.780%  3/19/2020 
 44.9

 38.9
 United States Treasury Bills 1.515%  4/2/2020 
 38.8
250.0
 
 United States Treasury Bills 0.010%  4/14/2020 250.0
 
250.0
 
 United States Treasury Bills 0.010%  6/9/2020 250.0
 
250.0
 
 United States Treasury Bills 0.010%  6/11/2020 249.9
 

 99.8
 United States Treasury Notes 1.375%  5/31/2020 
 99.9

 100.4
 United States Treasury Notes 2.625%  7/31/2020 
 100.6

 249.5
 United States Treasury Notes 1.500%  8/15/2020 
 249.8

 653.1
 United States Treasury Notes 2.625%  8/15/2020 
 653.9

 100.8
 United States Treasury Notes 2.250%  4/30/2021 
 100.8

 199.4
 United States Treasury Notes 1.625%  6/30/2021 
 200.0

 99.9
 United States Treasury Notes 1.750%  7/31/2021 
 100.2

 49.6
 United States Treasury Notes 1.250%  10/31/2021 
 49.7

 100.0
 United States Treasury Notes 1.750%  7/15/2022 
 100.3

 100.7
 United States Treasury Notes 1.875%  7/31/2022 
 100.7
TOTAL UNITED STATES TREASURY SECURITIES
(Cost $750.0 and $2,586.3)
 $749.9
 $2,589.1

40

TIAA REAL ESTATE ACCOUNT
CONSOLIDATED SCHEDULES OF INVESTMENTS
(Dollar values shown in millions)


CORPORATE BOND SECURITIES—1.9% and 4.2%
Principal Issuer Coupon Rate 
Credit Rating(8)
 
Maturity
Date
 Fair Value at
March 31, 2020 December 31, 2019
2020 2019 
            (Unaudited)  
$11.5
 $11.5
 Air Lease Corporation 2.250% BBB 1/15/2023 $9.6
 $11.5
13.8
 13.8
 American Honda Finance 1.700% A 9/9/2021 13.5
 13.7
19.7
 19.7
 American Honda Finance 2.050% A 1/10/2023 19.4
 19.7
7.7
 27.7
 Apple, Inc. 1.700% AA+ 9/11/2022 7.8
 27.7

 29.2
 Banco Santander SA 3.500% A- 4/11/2022 
 30.0

 12.0
 Bank of America Corporation 2.369% A- 7/21/2021 
 12.0

 21.6
 Bank of America Corporation 2.503% A- 10/21/2022 
 21.8
14.5
 29.5
 Bank of New York Mellon Corporation 1.950% A 8/23/2022 14.6
 29.6
8.1
 8.1
 BB+T Corporation 2.150% A- 2/1/2021 8.1
 8.1

 3.5
 Berkshire Hathaway Energy 2.400% A- 2/1/2020 
 3.5
10.0
 10.0
 Boeing Co. 1.650% BBB 10/30/2020 9.8
 10.0
28.9
 28.9
 Boeing Co. 2.300% BBB 8/1/2021 27.9
 29.0

 10.9
 BPCE SA 2.750% A+ 12/2/2021 
 11.0

 8.0
 Canadian National Railway 2.400% A 2/3/2020 
 8.0

 21.8
 Capital One, NA 2.150% BBB+ 9/6/2022 
 21.8
4.8
 4.8
 Caterpillar Financial Service 1.850% A 9/4/2020 4.7
 4.7
42.5
 42.5
 Caterpillar Financial Service 1.299% A 3/8/2021 41.7
 42.6
10.0
 
 Caterpillar Financial Service 1.913% A 11/12/2021 9.8
 
10.0
 
 Caterpillar Financial Service 1.950% A 11/18/2022 10.0
 

 12.0
 Centerpoint Energy Resource 4.500% BBB+ 1/15/2021 
 12.2

 32.9
 Citigroup, Inc. 2.312% BBB+ 11/4/2022 
 32.9

 27.0
 Columbia Pipeline Group 3.300% A3 6/1/2020 
 27.1

 24.5
 Diageo Capital PLC 4.828% A- 7/15/2020 
 24.9

 19.6
 DTE Energy Corporation 2.250% BBB 11/1/2022 
 19.6

 34.5
 Exxon Mobil Corporation 1.902% AA+ 8/16/2022 
 34.7
14.0
 14.0
 Fifth Third Bank 2.875% BBB+ 7/27/2020 13.9
 14.1

 5.0
 Fifth Third Bank 2.250% A- 6/14/2021 
 5.0
4.0
 4.0
 General Dynamics Corporation 2.875% A 5/11/2020 4.0
 4.0

 2.3
 Georgia Power Company 2.000% A- 3/30/2020 
 2.3

 15.0
 Georgia Power Company 2.000% A- 9/8/2020 
 15.0
8.0
 8.0
 Georgia Power Company 2.400% A- 4/1/2021 8.0
 8.0

 7.5
 Goldman Sachs Group, Inc. 2.600% BBB+ 4/23/2020 
 7.5

 12.2
 Goldman Sachs Group, Inc. 2.600% BBB+ 12/27/2020 
 12.2
25.0
 25.0
 Goldman Sachs Group, Inc. 2.350% BBB+ 11/15/2021 25.0
 25.1

 10.5
 HSBC Bank USA, NA 4.875% A 8/24/2020 
 10.7
11.6
 
 Huntington National Bank 1.800% A- 2/3/2023 11.4
 

 11.7
 John Deere Capital Corporation 1.950% A 6/13/2022 
 11.7

 25.0
 JP Morgan Chase Bank, NA 2.604% A+ 2/1/2021 
 25.0
20.0
 20.0
 JP Morgan Chase Bank, NA 3.086% A+ 4/26/2021 20.0
 20.1

 65.0
 Mitsubishi UFJ Financial Group 2.190% A- 9/13/2021 
 65.2

 9.2
 Morgan Stanley 2.650% BBB+ 1/27/2020 
 9.2

 20.0
 Morgan Stanley 2.800% BBB+ 6/16/2020 
 20.1

 8.3
 Morgan Stanley 2.500% BBB+ 4/21/2021 
 8.4

 7.0
 Morgan Stanley 2.625% BBB+ 11/17/2021 
 7.1
39.5
 
 Morgan Stanley 1.874% BBB+ 1/20/2023 36.7
 
18.4
 18.4
 MPLX LP 1.899% BBB 9/9/2021 17.4
 18.5
20.0
 20.0
 MUFG Union Bank, NA 2.100% A 12/9/2022 19.7
 20.0

41

TIAA REAL ESTATE ACCOUNT
CONSOLIDATED SCHEDULES OF INVESTMENTS
(Dollar values shown in millions)


Principal Issuer Coupon Rate 
Credit Rating(8)
 
Maturity
Date
 Fair Value at
March 31, 2020 December 31, 2019
2020 2019 
            (Unaudited)  
$
 $50.8
 Nextera Energy Capital 2.403% BBB+ 9/1/2021 $
 $51.2

 20.0
 Occidental Petroleum Corporation 2.854% BBB 2/8/2021 
 20.1

 14.9
 Occidental Petroleum Corporation 2.600% BBB 8/13/2021 
 15.0

 31.1
 Occidental Petroleum Corporation 2.700% BBB 8/15/2022 
 31.4

 35.0
 Omnicom GP/Omnicom CAP 4.450% BBB+ 8/15/2020 
 35.5
20.0
 20.0
 Oracle Corporation 1.900% A+ 9/15/2021 20.1
 20.0
11.6
 11.6
 Paccar Financial Corporation 2.000% A+ 9/26/2022 11.4
 11.7

 19.3
 Paypal Holdings, Inc. 2.200% BBB+ 9/26/2022 
 19.4

 20.0
 PNC Bank, NA 2.315% A 12/9/2022 
 20.0

 20.0
 PNC Bank, NA 2.028% A 12/9/2022 
 20.0
20.0
 20.0
 Skandinaviska Enskilda 1.875% A+ 9/13/2021 19.8
 19.9

 5.0
 Sumitomo Mitsui Financial Group 2.934% A- 3/9/2021 
 5.1

 5.0
 Sumitomo Mitsui Financial Group 2.058% A- 7/14/2021 
 5.0
101.4
 101.4
 Swedish Export Credit 1.625% AA+ 11/14/2022 103.0
 101.0
23.0
 23.0
 The Walt Disney Company 1.830% A 9/1/2021 22.1
 23.1

 17.1
 Toronto Dominion Bank 2.500% AA- 12/14/2020 
 17.2

 14.5
 Toronto Dominion Bank 2.170% A 3/17/2021 
 14.5

 10.0
 Toronto Dominion Bank 1.900% A 12/1/2022 
 10.0
5.0
 
 Truist Bank 1.339% A 3/9/2023 4.5
 

 20.0
 United Technologies Corporation 1.900% BBB+ 5/4/2020 
 20.0
12.8
 12.8
 Wells Fargo Bank, NA 3.325% A+ 7/23/2021 12.8
 12.9

 30.0
 Wells Fargo Bank, NA 2.082% A+ 9/9/2022 
 30.0
TOTAL CORPORATE BOND SECURITIES
(Cost $535.1 and $1,265.4)
 $526.7
 $1,268.3
MUNICIPAL BOND SECURITIES—0.1% and 0.1%
Principal         Fair Value at
 Issuer Coupon Rate 
Credit Rating(8)
 
Maturity
Date
 March 31, 2020 December 31, 2019
2020 2019 
            (Unaudited)  
$
 $0.7
 Broward County Florida Airport System Revenue 1.844% A+ 10/1/2020 $
 $0.6

 0.6
 Broward County Florida Airport System Revenue 1.874% A+ 10/1/2021 
 0.5
0.6
 0.6
 Broward County Florida Airport System Revenue 1.936% A+ 10/1/2022 0.6
 0.6

 2.0
 California State Health Facilities Financing Authority 1.896% AA- 6/1/2021 
 2.0
1.0
 1.0
 California State Health Facilities Financing Authority 1.893% AA- 6/1/2022 1.0
 1.0

 1.3
 Colorado State Health Facilities Authority HOS 2.075% A+ 11/1/2020 
 1.2
0.8
 0.8
 Colorado State Health Facilities Authority HOS 2.185% A+ 11/1/2021 0.8
 0.8
1.1
 1.1
 Colorado State Health Facilities Authority HOS 2.237% A+ 11/1/2022 1.1
 1.1

 0.8
 Florida State Municipal Power Agency 1.966% A2 10/1/2020 
 0.8

 1.1
 Florida State Municipal Power Agency 1.986% A2 10/1/2021 
 1.2

 1.0
 Florida State Municipal Power Agency 2.064% A2 10/1/2022 
 1.0
0.6
 0.6
 Hamilton County Ohio Healthcare Facilities 2.135% AA 6/1/2020 0.6
 0.6

42

TIAA REAL ESTATE ACCOUNT
CONSOLIDATED SCHEDULES OF INVESTMENTS
(Dollar values shown in millions)


Principal         Fair Value at
 Issuer Coupon Rate 
Credit Rating(8)
 
Maturity
Date
 March 31, 2020 December 31, 2019
2020 2019 
            (Unaudited)  
$0.9
 $0.9
 Harris County Texas Cultural Education Facilities 2.015% AA- 5/15/2020 $0.9
 $0.9
1.3
 1.3
 Harris County Texas Cultural Education Facilities 2.065% AA- 5/15/2021 1.3
 1.3
1.3
 1.3
 Harris County Texas Cultural Education Facilities 2.102% AA- 5/15/2022 1.3
 1.3

 0.5
 Indiana State Finance Authority 2.242% AA- 3/1/2020 
 0.5

 1.1
 Lansing Michigan Board of Water and Light Utility System 1.952% AA- 7/1/2022 
 1.2

 7.1
 Massachusetts State Water Resources 1.661% AA+ 8/1/2020 
 7.1

 1.2
 Massachusetts State Water Resources 1.702% AA+ 8/1/2021 
 1.2

 2.9
 Massachusetts State Water Resources 1.734% AA+ 8/1/2022 
 2.9

 0.3
 Matanuska-Susitna Borough Alaska 2.016% AA+ 3/1/2023 
 0.3

 0.5
 Midland County Texas Fresh Water Supply 1.872% AA- 9/15/2021 
 0.5

 0.5
 Midland County Texas Fresh Water Supply 1.910% AA- 9/15/2022 
 0.5
0.2
 0.2
 Park Creek Metropolitan District Revenue 2.292% AA 12/1/2022 0.2
 0.2

 0.2
 Stockton California Public Financing Authority 1.942% AA 10/1/2020 
 0.2

 0.2
 Stockton California Public Financing Authority 2.048% AA 10/1/2021 
 0.2

 0.1
 Stockton California Public Financing Authority 2.145% AA 10/1/2022 
 0.1

 0.7
 Texas State University System Revenue Finance 1.760% Aa2 3/15/2020 
 0.7

 0.5
 Texas State University System Revenue Finance 1.810% Aa2 3/15/2021 
 0.5

 1.7
 Texas State University System Revenue Finance 1.839% Aa2 3/15/2022 
 1.7

 0.5
 University of Akron 1.976% A1 1/1/2021 
 0.5
TOTAL MUNICIPAL BOND SECURITIES
(Cost $7.7 and $33.3)
 $7.8
 $33.2
TOTAL OTHER MARKETABLE SECURITIES
(Cost $1,354.4 and $4,144.7)
 $1,347.3
 $4,150.2
TOTAL MARKETABLE SECURITIES
(Cost $2,154.8 and $4,830.7)
 $2,072.0
 $4,975.9


43

TIAA REAL ESTATE ACCOUNT
CONSOLIDATED SCHEDULES OF INVESTMENTS
(Dollar values shown in millions)


LOANS RECEIVABLE—5.7% and 5.0%
  Borrower Property Type 
Interest Rate(6)
 Maturity Date Fair Value at
Principal     March 31, 2020 December 31, 2019
2020 2019      
            (Unaudited)
  
$
 $6.3
 DJM Capital Partners Mezzanine Retail 5.00% 3/9/2020 $
 $6.3
89.1
 87.5
 311 South Wacker Mezzanine Office 4.70% + LIBOR 6/7/2020 85.8
 86.8
79.5
 92.2
 Blackstone RioCan Retail Portfolio Mezzanine Retail 4.65% + LIBOR 6/9/2021 79.5
 92.2
60.0
 60.0
 River North Point Junior Mezzanine Office 4.30% + LIBOR 7/9/2020 60.0
 60.0
128.6
 128.6
 Project Glacier Mezzanine Industrial 4.40% + LIBOR 11/9/2020 128.6
 128.6
53.9
 53.8
 SCG Oakland Portfolio Office 4.25% + LIBOR 3/1/2021 54.1
 53.8

 20.0
 Crest at Las Colinas Station Mezzanine Apartments 5.11% + LIBOR 5/10/2021 
 20.0
60.0
 60.0
 SoNo Collection Mezzanine Retail 6.75% + LIBOR 8/6/2021 60.0
 60.0
14.7
 14.7
 Liberty Park Office 6.08% 11/9/2021 14.7
 14.7
125.0
 125.0
 State Street Financial Center Mezzanine Office 6.500% 11/10/2021 124.4
 124.4
20.0
 20.0
 Modera Observatory Park Mezzanine Apartments 4.34% + LIBOR 6/10/2022 19.9
 20.0
16.3
 16.2
 San Diego Office Portfolio Mezzanine Office 2.45% + LIBOR 8/9/2022 15.1
 16.1
49.0
 48.2
 San Diego Office Portfolio Senior Loan Office 2.45% + LIBOR 8/9/2022 49.5
 48.2
20.8
 20.8
 Rosemont Towson Mezzanine Apartments 4.15% + LIBOR 9/9/2022 20.5
 20.8
33.8
 33.8
 Colony New England Hotel Portfolio Mezzanine Hotel 2.80% + LIBOR 11/9/2022 31.7
 33.8
101.4
 101.4
 Colony New England Hotel Portfolio Senior Loan Hotel 2.80% + LIBOR 11/9/2022 101.3
 101.4
33.9
 33.9
 Exo Apartments Mezzanine Apartments 2.30% + LIBOR 1/9/2023 31.6
 33.9
101.6
 101.6
 Exo Apartments Senior Loan Apartments 2.30% + LIBOR 1/9/2023 103.1
 101.6
13.3
 
 Five Oak Mezzanine Office 2.35% + LIBOR 4/9/2023 13.3
 
40.0
 
 Five Oak Senior Loan Office 2.35% + LIBOR 4/9/2023 40.0
 
27.5
 27.5
 1330 Broadway Mezzanine Office 5.01% + LIBOR 8/10/2023 27.5
 27.5
82.0
 82.0
 Great Value Storage Portfolio Mezzanine Storage 7.88% 12/6/2023 77.9
 82.0
85.0
 85.0
 Park Avenue Tower Mezzanine Office 4.35% + LIBOR 3/9/2024 85.0
 85.0
71.0
 71.0
 BREP VIII Industrial Loan Facility Mezzanine Industrial 5.00% + LIBOR 3/9/2026 71.0
 71.0
20.0
 20.0
 Aspen Lake Office Portfolio Mezzanine Office 8.25% 3/10/2028 20.0
 20.0
95.0
 95.0
 Merritt on the River Office Portfolio Mezzanine Office 8.00% 8/1/2028 95.0
 95.0
100.0
 100.0
 Charles River Plaza North Mezzanine Office 6.08% 4/6/2029 100.0
 100.0
53.0
 
 Sol y Luna Apartments 6.55% 1/6/2030 53.0
 
TOTAL LOANS RECEIVABLE
(Cost $1,574.5 and $1,504.5)
    $1,562.5
 $1,503.1

44

TIAA REAL ESTATE ACCOUNT
CONSOLIDATED SCHEDULES OF INVESTMENTS
(Dollar values shown in millions)


LOANS RECEIVABLE WITH RELATED PARTIES—0.3% and 0.2%
  Related Party Property Type 
Interest Rate(6)
 Maturity Date Fair Value at
Principal     March 31, 2020 December 31, 2019
2020 2019      
            (Unaudited)
  
$36.5
 $36.5
 MRA Hub 34 Holding, LLC Office 2.50% + LIBOR 9/1/2022 $36.5
 $36.5
32.8
 32.8
 THP Student Housing, LLC Apartment 3.20% 9/1/2024 32.0
 32.5
TOTAL LOANS RECEIVABLE WITH RELATED PARTIES
(Cost $69.3 and $69.3)
    $68.5
 $69.0
TOTAL INVESTMENTS
(Cost $22,939.5 and $25,697.4)
    $27,376.6
 $29,899.0
(1) 
The investment has a loan payable outstanding, as indicated in Note 9Loans Payable.
(2) 
The fair value reflects the Account’s interest in the joint venture and is net of debt.
(3) 
Properties within this investment are located throughout the United States.
(4) 
For zero-coupon securities issued at a discount or premium to par, yield represents the annualized yield to maturity. For all other securities, the coupon rate is presented.
(5) 
A portion of this investment consists of land currently under development.
(6) 
Fixed interest rate loans are represented with a single rate. Variable interest rate loans are presented with their base spread and the corresponding index rate. All variable interest loans currently held by the Account use the one month LIBOR rate on U.S. dollar deposits as the index rate, as published by ICE Benchmark Administration Limited.
(7) 
All or a portion of these securities are out on loan. The aggregate value of securities on loan March 31, 2020 and December 31, 2019 were $2.4 million and $25.2 million, respectively.
(8) 
Credit ratings are sourced from S&P Global Ratings ("S&P"), Moody's Investors Services or Fitch Ratings, Inc.
(9) 
On February 19, 2020, the Account purchased the 15% ownership interest of SITE Centers Corp in DDRTC Core Retail Fund, LLC, a joint venture between the Account and SITE Centers Corp. All properties and associated debt formerly held within DDRTC Core Retail Fund, LLC are now wholly-owned by the Account.
(10) 
On March 9, 2020, the Account purchased the 30% ownership interest of DJM Capital Partners ("DJM Capital") in PC Borrower, LLC, a joint venture between the Account and DJM Capital. The retail property and associated debt formerly held within PC Borrower, LLC is now wholly-owned by the Account.


45


ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of the Account’s financial condition and results of operations should be read together with the Consolidated Financial Statements and notes contained in this report and with consideration to the sub-section entitled “Forward-Looking Statements,” which begins below, and the section of the Account’s Annual Report on Form 10-K for the year ended December 31, 2019 (the “Form 10-K”) entitled “Item 1A. Risk Factors.” The past performance of the Account is not indicative of future results.
Forward-looking Statements
Some statements in this Form 10-Q which are not historical facts may be “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements about management’s expectations, beliefs, intentions or strategies for the future, include the assumptions and beliefs underlying these forward-looking statements, and are based on current expectations, estimates and projections about the real estate industry, domestic and global economic conditions, including conditions in the credit and capital markets, the sectors, and markets in which the Account invests and operates, and the transactions described in this Form 10-Q. While management believes the assumptions underlying any of its forward-looking statements and information to be reasonable, such information may be subject to uncertainties and may involve certain risks which may be difficult to predict and are beyond management’s control. These risks and uncertainties could cause actual results to differ materially from those contained in any forward-looking statement. These risks and uncertainties include, but are not limited to, the risks associated with the following:
General Risks of Acquiring and Owning Real Property. The risks associated with acquiring and owning real property, including general economic and real estate market conditions, the availability of, and economic cost associated with, financing the Account’s properties, the risk that the Account’s properties become too concentrated (whether by geography, sector or by tenant mix), competition for acquiring real estate properties, leasing risk (including tenant defaults) and the risk of uninsured losses at properties (including due to terrorism, natural disasters, and acts of violence);
COVID-19 Risks. In response to the COVID-19 pandemic, governmental authorities throughout the world, including the United States, have taken significant measures to inhibit the spread of the disease, such as prohibiting people from congregating in heavily populated areas, instituting localized quarantines, restricting nonessential travel, issuing “stay-at-home” orders, closing schools, and most notably, restricting the types of businesses that may continue to operate. The restrictions have had an adverse impact on economic and market conditions across the United States. It is possible that public health officials and governmental authorities in the markets in which we own properties may impose additional restrictions in an effort to further slow the spread of the COVID-19 pandemic or may relax or revoke existing restrictions too quickly, which could, in either case, exacerbate the severity of adverse impacts on the economy. The COVID-19 pandemic, including these responsive measures, will likely have an adverse effect on the Account. For example, the negative impact of the COVID-19 pandemic on our tenants may include an immediate reduction in cash flow available to pay rent under our leases which, in turn, could adversely affect our own liquidity, and there can be no guarantee that additional liquidity will be readily available or available on favorable terms and could result in the Account exercising the liquidity guarantee. Moreover, the market volatility and economic uncertainty surrounding the COVID-19 pandemic may negatively impact our liquid investments, such as those in real estate investment trusts ("REIT") securities and mortgage backed securities ("MBS"). These and other consequences of the COVID-19 pandemic are expected to have an adverse effect on the Account’s business and results of operations;
General Risks of Selling Real Estate Investments. The risk that the sales price of a property might differ, perhaps significantly, from its estimated or appraised value, leading to losses or reduced profits to the Account, the risk that the Account might not be able to sell a property at a particular time for a price which management believes represents its fair or full value, the risk of a lack of availability of financing (for potential purchasers of the Account’s properties), risks associated with disruptions in the credit and capital markets, and the risk that the Account may be required to make significant expenditures before the Account is able to market and/or sell a property;

46


Valuation and Appraisal Risk. The risks associated with property valuations, including the fact that appraisals can be subjective in a number of respects and the fact that the Account’s appraisals are generally obtained on a quarterly basis and there may be periods in between appraisals of a property during which the value attributed to the property for purposes of the Account’s daily accumulation unit value may be more or less than the actual realizable value of the property;
Borrowing Risk. Risks associated with financing the Account’s properties, including the risk of default on loans secured by the Account’s properties (which could lead to foreclosure), the risk of default under unsecured lines of credit or credit facilities underwritten by third-party lenders, the risk associated with high loan-to-value ratios on the Account’s properties (including the fact that the Account may have limited, or zero net value in such a property), the risk that significant sums of cash could be required to make principal and interest payments on the loans and the risk that the Account may not have the ability to obtain financing or refinancing on favorable terms (or at all), which may be aggravated by general disruptions in credit and capital markets;
Investment and Cash Management Risks Associated with Participant Transactions. Investment risk associated with participant transactions, in particular that (i) significant net participant transfers out of the Account may impair our ability to pursue or consummate new investment opportunities that are otherwise attractive to the Account and/ or may result in sales of real estate-related assets to generate liquidity, (ii) significant net participant transfers into the Account may result, on a temporary basis, in our cash holdings and/or holdings in liquid non-real estate-related investments exceeding our long-term targeted holding levels and (iii) high levels of cash and liquid non-real estate-related investments in the Account during times of appreciating real estate values can impair the Account’s overall return;
Joint Venture Investment Risk. The risks associated with joint ventures and real estate funds, including the risk that a co-venturer or fund manager may have interests or goals inconsistent with that of the Account, the risk that a co-venturer or fund manager may have financial difficulties, and the risk that the Account may have limited rights with respect to operation of the property and transfer of the Account’s interest;
Real Estate Regulatory Risk. Uncertainties associated with environmental liability and regulations and other governmental regulatory matters such as zoning laws, rent control laws, and property taxes;
Environmental Risk. The risks that the Account may be liable for damage to the environment or injury to individuals caused by hazardous substances used or found on its properties. Federal and state environmental laws may also impose restrictions on the manner in which a property may be used, impose significant costs for environmental clean-up relating to certain real property investments (including remediating contaminated property), and require the Account to acquire third-party insurance related to environmental risks, all of which could adversely impact the Account’s investment returns;
Uninsurable Loss Risk. Certain catastrophic losses (e.g., from earthquakes, wars, terrorist acts, nuclear accidents, hurricanes, tsunamis, high winds, wildfires, inland or coastal floods, rising sea levels or environmental or industrial hazards or accidents) may be uninsurable or so expensive to insure against that it is economically disadvantageous for the Account to buy insurance to cover such losses. In such an event, the catastrophic losses could adversely impact the Account’s investment returns;
Physical Climate Change Related Financial Risk. Many of the Account’s commercial real estate assets are located within geographical regions in the United States and foreign jurisdictions that currently are, and in the future will continue to be, adversely impacted by increasingly severe and adverse weather conditions across the globe, including, among others, earthquakes, hurricanes, tsunamis, high winds, wildfires, inland or coastal flooding, and rising sea levels. Any resulting losses from such climate-related changes and hazards could adversely impact the Account’s investment returns;
Global Economic Risks. National and regional economies and financial markets have become increasingly interconnected, which has increased the probability that conditions in one country, region or market might adversely impact issuers in a different country, region or market. Events such as war, terrorism, natural and environmental disasters and the spread of infectious illnesses, pandemics or other public health emergencies may adversely affect the global economy and the securities, local commercial real estate markets and issuers in which the Account invests. Recent examples of such events include the COVID-19 pandemic that was first detected in Wuhan, China in December 2019 and has since spread worldwide, resulting in government imposed shutdowns across the globe. These events have and could continue to reduce consumer demand and economic output, result in market closure,

47


travel restrictions or quarantines, and generally have a significant impact on the economy, and, as a result, have an adverse effect on the Account’s business;
ESG Criteria Risk. The risks that the Account’s utilization of environmental, social and governance ("ESG") criteria in its commercial real estate underwriting may result in the Account foregoing some commercial real estate market opportunities that could be beneficial to the Account. Consequently, the Account may underperform other investment vehicles that do not utilize such ESG criteria in selecting portfolio properties;
Foreign Real Property Investment Risk. Foreign commercial real properties, foreign real estate loans, and foreign debt investments may experience unique risks such as changes in currency exchange rates, imposition of market controls or currency exchange controls, seizure, expropriation or nationalization of assets, political, social or diplomatic events or unrest, regulatory and taxation risks and risks associated with enforcing judgments in foreign countries that could cause the Account to lose money. The risks described above often increase in countries with emerging markets;
Risk of Investing in REIT Securities. Investments in REIT securities are subject to many of the same general risks associated with direct real property ownership. In particular, equity REITs may be affected by changes in the value of the underlying properties owned by the entity, while mortgage REITs may be affected by the quality of any credit extended. In addition to these risks, because REIT investments are securities and generally publicly traded, they may be exposed to market risk and potentially significant price volatility due to changing conditions in the financial markets and, in particular, changes in overall interest rates, regardless of the value of the underlying real estate such REIT may own;
Risks of Mortgage-Backed Securities. The Account from time to time has invested in mortgage-backed securities and may in the future invest in such securities. Mortgage-backed securities, such as commercial mortgage-backed securities ("CMBS") and residential mortgage-backed securities ("RMBS"), are subject to many of the same general risks inherent in real estate investing, making mortgage loans and investing in debt securities. The underlying mortgage loans may experience defaults, are subject to prepayment risk or extension risk and are highly sensitive to changes in interest rates, liquidity of the secondary market, economic conditions impacting financial institutions and the credit markets generally, and changes in governmental policies impacting Fannie Mae and Freddie Mac and/or U.S. Government programs related to mortgages that may be implemented in the future;
Risks of Investing in Mortgage Loans and Related Investments. Because the Account’s investment strategy includes investments in mortgage loans (i.e., the Account serving as lender), the Account will be subject to the risks inherent in making mortgage loans, including, among others, (i) borrower default, bankruptcy and insolvency that results in the Account being unable to recover some or all of its original investment, (ii) mechanic’s or tax liens that may have priority over the Account’s security interest, (iii) a deterioration in the financial condition of tenants, (iv) changes in interest rates for the Account’s variable-rate mortgage loans and other debt instruments that may increase or decrease the investment’s yield, (v) the risk that borrowers pay off their mortgage loans earlier or later than expected resulting in a decline in income, and (vii) the costs of hedging strategies for domestic and foreign loans or securities that may increase the Account’s transactions costs and reduce its performance;
Risks of U.S. Government and Government Agency Securities.Risks associated with investment securities issued by U.S. Government agencies and U.S. Government-sponsored entities, including the risk that the issuer may not have their securities backed by the full faith and credit of the U.S. Government, which could adversely affect the pricing and value of such securities. Such securities are also subject market movements, regulatory changes, changes in political or economic conditions or downgrades or threatened downgrades of the credit rating for U.S. Government obligations generally that could negatively impact the value of the securities and the Account’s ability to dispose of the security at a favorable time. U.S. Government securities generally present limited credit risk compared to other types of debt securities but are not free from risk;
Risks of Corporate Obligations. The Account’s investment in corporate obligations (such as commercial paper and other types of corporate debt) may be subject to general dislocations in the finance or credit markets, fluctuations in transaction activity that could impair the Account’s ability to dispose of a corporate debt security at a favorable time, and the risk that the credit quality of the corporate issuer will deteriorate, any of which could have a negative impact on the value of the investment; and

48


Risks of Liquid, Fixed-Income Investments and Other Securities. Risks associated with investments in liquid, fixed-income investments and real estate-related liquid assets (which could include, from time to time, registered or unregistered REIT securities and CMBS), and non-real estate-related liquid assets, including:
Issuer Risk (Financial risk)-The risk that the issuer will not be able to pay principal and interest when due or that the issuer’s earnings will fall;
Credit Risk (a type of Issuer Risk)-The risk that the issuer of fixed-income investments may not be able or willing to meet interest or principal payments when the payments become due;
Credit Spread Risk-The risk that credit spreads (i.e., the difference in yield between securities that is due to differences in each security’s respective credit quality) may increase when market participants believe that bonds or other fixed-income securities generally have a greater risk of default, which could result in a decline in the market values of the Account’s debt or other fixed-income securities;
Market Volatility, Liquidity and Valuation Risk (types of Market Risk)-The risk that the changing conditions in financial markets may cause the Account’s investments to experience price volatility;
Interest Rate Risk (a type of Market Risk)-The risk that interest rate volatility may affect the Account’s current income from an investment or the pricing of that investment. In general, changing interest rates could have unpredictable effects on the markets and may expose markets to heightened volatility;
Downgrade Risk-The risk that securities are subsequently downgraded should TIAA and/or rating agencies believe the issuer’s business outlook or creditworthiness has deteriorated;
Income Volatility Risk-The risk that the level of current income from a portfolio of fixed-income investments may decline in certain interest rate environments;
Call Risk-The risk that, during periods of falling interest rates, an issuer may call (or repay) a fixed-income security prior to maturity, resulting in a decline in the Account’s income;
Prepayment Risk-The risk that, during periods of falling interest rates, borrowers may pay off their loans sooner than expected, forcing the Account to reinvest the unanticipated proceeds at lower interest rates and resulting in a decline in income;
Extension Risk-The risk that, during periods of rising interest rates, borrowers may pay off their mortgage and other loans later than expected, preventing the Account from reinvesting principal proceeds at higher interest rates and resulting in less income than potentially available;
U.S. Government Securities Risk-Securities issued by the U.S. Government or one of its agencies or instrumentalities may receive varying levels of support from the U.S. Government, which could affect the Account’s ability to recover should they default. To the extent the Account invests significantly in securities issued or guaranteed by the U.S. Government or its agencies or instrumentalities, any market movements, regulatory changes or changes in political or economic conditions that affect the securities of the U.S. Government or its agencies or instrumentalities in which the Account invests may negatively impact the Account’s performance;
State and Municipal Investment Risk-The risk that events affecting states and municipalities, including severe financial difficulties and continued budget deficits, may adversely impact the Account’s investments and its performance;
Foreign Securities Risk-Foreign securities investments may experience unique risks such as changes in currency exchange rates, imposition of market controls or currency exchange controls, seizure, expropriation or nationalization of assets, and political, social or diplomatic events or unrest that could cause the Account to lose money. The risks described above often increase in countries with emerging markets;
Emerging and Frontier Markets Risk-The risk of foreign investment often increases in countries with emerging markets. For example, these countries may have more unstable governments than developed countries, and their economies may be based on only a few industries. Because their financial markets may be very small, share prices of financial instruments in emerging market countries may be volatile and difficult to determine. Financial instruments of issuers in these countries may be less liquid than those of issuers in more developed countries. In addition, foreign investments are subject to a variety of special restrictions in many emerging market countries. Frontier markets are those emerging markets that are

49


considered to be among the smallest, least mature and least liquid, and as a result, the risks of investing in emerging markets are magnified in frontier markets;
Fixed-Income Foreign Investment Risk-Investment in fixed-income securities or financial instruments of foreign issuers involves increased risks due to adverse issuer, political, regulatory, currency, market or economic developments. These developments may impact the ability of a foreign debt issuer to make timely and ultimate payments on its debt obligations to the Account or impair the Account’s ability to enforce its rights against the foreign debt issuer. These risks are heightened in emerging or developing markets. Foreign fixed-income investments may also be less liquid and more difficult to value than fixed-income investments in U.S. issuers;
Sovereign Debt Risk-The risk that the issuer of non-U.S. sovereign debt or the governmental authorities that control the repayment of such debt may be unable or unwilling, due to social, political or economic factors, to repay principal or interest when due, resulting in losses to the Account;
Supranational Debt Risk-The risk that the issuer of multinational or supranational foreign debt (e.g., the European Union or the International Monetary Fund (IMF)) that controls the repayment of such debt may be unable or unwilling, due to social, political or economic factors such as the sudden or gradual disintegration of the multinational or supranational organization, to repay principal or interest when due, resulting in losses to the Account;
Active Management Risk-The risk that the Account’s investment strategy, investment selection or trading execution may cause the Account to underperform relative to a comparison index or accounts or issuers with similar investment objectives;
Currency Risk-The risk that foreign (non-U.S.) currencies may decline in value relative to the U.S. dollar and adversely affect the value of the Account’s investments in foreign currencies, securities denominated in foreign currencies or derivative instruments that provide exposure to foreign currencies;
Derivatives Risk-The risks associated with investing in derivatives and other types of hedging strategies may be different and greater than the risks associated with directly investing in the underlying securities and other instruments. The Account may use futures, options, or forwards, and the Account may also use more complex derivatives such as swaps that might present liquidity, credit and counterparty risk. When investing in derivatives, the Account may lose more than the principal amount invested;
Currency Management Strategies Risk-Currency management strategies, including the use of forward currency contracts and other derivatives, may substantially change the Account’s exposure to currencies and currency exchange rates and could result in losses to the Account if currencies do not perform as anticipated;
Counterparty and Third Party Risk-The Account’s transactions involving a counterparty to a derivative or other instrument, or to a third party responsible for servicing the instrument, are subject to the credit risk of the counterparty or third party, and to the counterparty’s or third party’s ability to perform in accordance with the terms of the transaction;
Regulation S and Rule 144A Securities Risk-The risk that SEC Regulation S and Rule 144A securities may be less liquid, and have less disclosure and investor protections, than publicly traded securities. Such securities may involve a high degree of business and financial risk and may result in losses to the Account;
Illiquid Investments Risk-The risk that illiquid investments may be difficult for the Account to sell for the value at which they are carried, if at all, or at any price within the desired time frame; and
Deposit/Money Market Risk-The risk that the Account could experience losses if banks fail.
More detailed discussions of certain of these risk factors are contained in the section of the Form 10-K entitled “Item 1A. Risk Factors” and "Part II, Item 1A, Risk Factors" in this Report and also in the section below entitled “Quantitative and Qualitative Disclosures About Market Risk.” These risks could cause actual results to differ materially from historical experience or management’s present expectations.
Caution should be taken not to place undue reliance on management’s forward-looking statements, which represent management’s views only as of the date that this report is filed. Neither management nor the Account undertake any

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obligation to update publicly or revise any forward-looking statement, whether as a result of new information, changed assumptions, future events or otherwise.
Commercial real estate market statistics discussed in this section are obtained by the Account from sources that management considers reliable, but some of the data are preliminary for the period ended March 31, 2020 and may be subsequently revised. Prior period data may have been adjusted to reflect updated calculations. Investors should not rely exclusively on the data presented below in forming a judgment regarding the current or prospective performance of the commercial real estate market generally.
ABOUT THE TIAA REAL ESTATE ACCOUNT
The Account was established, under the laws of New York, in February 1995 as a separate account of TIAA and interests in the Account were first offered to eligible participants on October 2, 1995. The Account offers individual and group accumulating annuity contracts (with contributions made on a pre-tax or after-tax basis), as well as individual lifetime and term-certain variable payout annuity contracts (including the payment of death benefits to beneficiaries). Investors are entitled to transfer funds to or from the Account under certain circumstances. Funds invested in the Account for each category of contract are expressed in terms of units, and unit values will fluctuate depending on the Account’s performance.
Investment Objective and Strategy
The Account seeks to generate favorable total returns primarily through the rental income and appreciation of a diversified portfolio of directly held, private real estate investments and real estate-related investments, while offering investors guaranteed, daily liquidity.
Real Estate-Related Investments. The Account intends to have between 75% and 85% of its net assets invested directly in real estate or real estate-related investments with the goal of producing favorable long-term returns primarily through rental income and appreciation. These investments may consist of:
Direct ownership interests in domestic and foreign real estate;
Direct ownership of real estate through interests in joint ventures; or
Indirect interests in real estate through real estate-related securities, such as:
public and/or privately placed, domestic and foreign, registered and unregistered equity investments in REITs, which investments may consist of registered or unregistered common or preferred stock interests;
private real estate limited partnerships and limited liability companies (collectively, "real estate funds");
investments in equity or debt securities of domestic and foreign companies whose operations involve real estate (i.e., that primarily own, develop or manage real estate) which may not be REITs; and
domestic or foreign loans, including conventional commercial mortgage loans, participating mortgage loans, secured domestic and foreign (including U.K.) mezzanine loans, subordinated loans and collateralized mortgage obligations, including CMBS and other similar investments.
The Account’s principal investment strategy is to purchase direct ownership interests in income-producing real estate, primarily office, industrial, retail and multi-family properties. The Account is targeted to hold between 65% and 85% of the Account’s net assets in such direct ownership interests.
In addition, the Account is authorized to hold up to 25% of its net assets in liquid real estate-related securities, including publicly traded REITs and CMBS. Management intends that the Account will not hold more than 10% of net assets in such securities on a long-term basis. As of March 31, 2020, publicly traded REIT securities comprised approximately 2.8% of the Account’s net assets, and the Account held no CMBS as of such date.
In making commercial real estate investments within the Account, TIAA seeks to make investments that are suitable from a financial perspective and whose activities are generally consistent with industry recognized ESG criteria. The Account intends to promote awareness of these criteria to its joint venture partners, vendors and other stakeholders in connection with portfolio related activity involving commercial real estate transactions. TIAA believes awareness, and, as appropriate, implementation of ESG criteria in commercial real estate holdings is beneficial to total long-term returns for the Account. In its evaluation of commercial real estate opportunities, the Account will take ESG

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considerations into account as part of the financial assessment of a commercial real estate portfolio asset, and not to achieve a desired outcome or as an investment qualification or screen. Ultimately, the Account will make an investment decision that incorporates ESG criteria only to the extent that the criteria is reasonably expected to enhance the ability to achieve desired returns for the Account.
Liquid, Fixed-Income Investments. The Account will invest the remaining portion of its assets (targeted to be between 15% and 25% of its net assets) in the following types of liquid, fixed income investments;
U.S. Treasury or U.S. Government agency securities;
Intermediate-term or long-term government related instruments, such as bond or other fixed-income securities issued by U.S. Government agencies, U.S. States or municipalities or U.S. Government-sponsored entities as well as foreign governments and their agencies (including those in emerging markets) and supranational or multinational organizations (e.g., the European Union);
Intermediate-term or long-term non-government related instruments, such as corporate debt securities or asset-backed securities (“ABS”) issued by domestic or foreign entities, including domestic or foreign mezzanine or other debt, MBS, RMBS, debt securities of foreign governments, and collateralized debt (“CDO”), collateralized bond (“CBO”) and collateralized loan (“CLO”) obligations, but only if such non-government related instruments are investment-grade securities;
Money market instruments and other cash equivalents. These will usually be high-quality, short-term debt instruments, including U.S. Government or government agency securities, commercial paper, certificates of deposit, bankers’ acceptances, repurchase agreements, interest-bearing time deposits, and corporate debt securities; and
To a limited extent, privately issued (or non-publicly traded) debt securities, including Rule 144A securities, issued by domestic and foreign companies that do not primarily own or manage real estate, but only if such domestic and foreign privately issued debt securities are investment-grade securities.
The Account’s liquid, fixed-income investments may comprise less than 15% (and possibly less than 10%) of its assets (on a net basis), especially during and immediately following periods of significant net participant outflows. In addition, the Account, from time to time and on a temporary basis, may hold in excess of 25% of its net assets in liquid, fixed-income investments, particularly during times of significant inflows into the Account and/or a lack of attractive real estate-related investments available in the market.
Liquid Securities Generally. Primarily due to management’s need to manage fluctuations in cash flows, in particular during and immediately following periods of significant participant net transfer activity into or out of the Account, the Account may, on a temporary basis (i) exceed the upper end of its targeted holdings (currently 35% of the Account’s net assets) in liquid securities of all types, including both publicly traded non-real estate-related liquid investments and liquid real estate-related securities, such as REITs, ABS, RMBS, CMBS and MBS, or (ii) be below the low end of its targeted holdings in such liquid securities (currently 15% of the Account’s net assets).
The portion of the Account’s net assets invested in liquid investments of all types may exceed the upper end of its target, for example, if (i) the Account receives a large inflow of money in a short period of time, in particular due to significant participant transfer activity into the Account, (ii) the Account receives significant proceeds from sales or financings of direct real estate assets, (iii) there is a lack of attractive direct real estate investments available on the market, and/or (iv) the Account anticipates more near-term cash needs, including to acquire or improve direct real estate investments, pay expenses or repay indebtedness.
Foreign Investments. The Account may also make foreign real estate and foreign real estate-related investments and foreign liquid, fixed-income investments. Under the Account’s investment guidelines, investments in direct foreign real estate and real estate loans, together with foreign real estate-related securities and foreign liquid, fixed-income investments may not comprise more than 25% of the Account’s net assets. However, management doesn't intend such foreign investments, in the aggregate, to exceed 10% of the Account's net assets. As of March 31, 2020, the Account did not hold any foreign real estate investments.
In managing any domestic or foreign mezzanine debt or other domestic or foreign loans or securities, the Account may enter into certain derivatives transactions (including forward currency contracts and swaps, futures contracts, put and call options and other hedging transactions) in order to hedge against the risks of exchange rate uncertainties, interest

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rate uncertainties and foreign currency or market fluctuations impacting the Account’s domestic or foreign investments. The Account does not intend to speculate in such transactions.
FIRST QUARTER 2020 U.S. ECONOMIC AND COMMERCIAL REAL ESTATE OVERVIEW
The Account invests primarily in high-quality, core real estate in order to meet its investment objective of obtaining favorable long-term returns through rental income and the appreciation of its real estate holdings.
Economic Overview and Outlook
Key Macro Economic IndicatorsActuals Forecast
2019 1Q20 2020 2021
Economy(1)
       
Gross Domestic Product ("GDP")2.3% (4.8)% (4.5)% 3.7%
Employment Growth (Thousands)2,112 (381) (3,180) 2,160
Unemployment Rate3.7% 4.4% 9.3% 6.9%
Interest Rates(2)
   ��   
10 Year Treasury2.1% 0.7% 0.9% 1.4%
Sources: Bloomberg, BEA, Bureau of Labor Statistics, Federal Reserve and Moody’s Analytics
*Data subject to revision
(1) 
GDP growth rates are annual rates. Quarterly unemployment rates are the reported value for the final month of the quarter while annual values represent a twelve-month average.
(2) 
Treasury rates are an average over the stated period.
According to the Bureau of Labor Statistics, the U.S. economy began the year strong, adding 214,000 and 275,000 jobs during January and February, respectively. However, the arrival of COVID-19 rapidly changed the economic outcome of the first quarter. On March 11, 2020, the World Health Organization announced that COVID-19 had become a pandemic. As the COVID-19 pandemic spread across the U.S. in March, many state governors instituted "stay-at-home" orders which temporarily required all non-essential businesses to work remotely or temporarily curtail operations. These orders, designed to help moderate the severity of the outbreak and its immediate impact on healthcare resources, ultimately had a substantial impact on the U.S. economy. The U.S. economy lost 870,000 jobs in the month of March. The increase of unemployment claims filed in April suggest that job losses in April will be more severe than the March decline.
In March 2020, the Federal Reserve enacted multiple emergency actions in response to the economic disruption caused by the COVID-19 pandemic. These actions, such as lowering the federal funds to 0.00%-0.25% and committing to purchase an unlimited amount of Treasury bonds and agency MBS, have kept the credit markets functioning. The broad array of actions aggregate to the largest fiscal stimulus in history, constituting over 10% of U.S. GDP. The Federal Reserve has consistently signaled that it will continue to take aggressive measures to support the U.S. economy through the COVID-19 pandemic.
Real Estate Market Conditions and Outlook
Commercial real estate conditions began to show the impact of the COVID-19 pandemic in first quarter of 2020, though results are largely insulated by strong performance carried forward from previous quarters. According to CB Richard Ellis Econometric Advisors ("CBRE-EA"), markets with a sizable public sector or an established technology presence will best absorb the shocks to their local economies, while tourism hubs like Orlando and Las Vegas are most likely to have a longer lasting negative impact from the COVID-19 pandemic.
Real estate market conditions are expected to deteriorate in the near term. Real estate transactions are expected to slow significantly until the long-term impact of the COVID-19 pandemic on the U.S. economy is fully understood and economic conditions stabilize. As the root causes of the decline are not considered structural, there is cautious optimism that conditions may recover at a quicker pace than after the financial crisis of 2007-2009.
While real estate across the country is likely to undergo distress in the near-term, the Account benefits from its ample liquidity resources, which allow the Account to weather economic downturns without liquidating properties at

53


suboptimal pricing. Property pricing as calculated by the Green Street Advisor Commercial Property Price Index (“CPPI”) decreased by 1.4% from the prior quarter. For the quarter ending March 31, 2020, the Account’s directly held real estate assets generated a return of 1.10%.

chart-ff6fe8eae10558d492e.jpg
The outbreak of the COVID-19 pandemic and the subsequent global pandemic began significantly impacting the U.S. and global financial markets and economies during the quarter ended March 31, 2020. The worldwide spread of the COVID-19 pandemic has created significant uncertainty in the global economy. At this time the Account reasonably expects tenants will request certain rent relief and lease modifications as a result of the pandemic; however, such requests have not been significant as of March 31, 2020. The duration and extent of COVID-19 over the long-term cannot be reasonably estimated at this time. The ultimate impact of the COVID-19 pandemic and the extent to which the COVID-19 pandemic impacts the Account’s business, results of operations, investments, and cash flows will depend on future developments, which are highly uncertain and difficult to predict.
Data for the Account’s top five markets in terms of market value as of March 31, 2020 are provided below. The five markets presented below represent 43.2% of the Account’s total real estate portfolio. Across all markets, the Account’s properties are 91.6% leased.
Top 5 Metro Areas by Fair Market Value(1)
Account % Leased Fair Value Weighted(2)
Number of Property Investments
Metro Area Fair Value as a % of Total RE Portfolio(3)
Metro Area Fair Value as a % of Total Investments
Washington-Arlington-Alexandria, DC-VA-MD-WV82.0%1710.9%9.3%
Los Angeles-Long Beach-Glendale, CA93.8%1610.4%8.9%
New York-Jersey City-White Plains, NY-NJ81.0%127.8%6.7%
Boston-Cambridge-Newton, MA-NH89.5%87.6%6.5%
San Francisco-Oakland-Hayward, CA85.6%106.5%5.5%
(1) 
The table above has been standardized to depict metropolitan statistical area ("MSA") definitions. Prior iterations of this table presented metropolitan divisions, which represent a subset of the larger MSA.
(2) 
Weighted by fair value, which differs from the calculations provided for market comparisons to CBRE-EA data and are used here to reflect the fair value of the Account’s monetary investments in those markets.
(3) 
Wholly-owned properties are represented at fair value and gross of any debt, while joint venture properties are represented at the net equity value.



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Office
As the COVID-19 pandemic spread across the country, many state and local governments instituted "stay-at-home" orders requiring employees to work remotely. The rapid onset of the outbreak caused companies to significantly reduce the number of on-site employees in a matter of days. Social distancing efforts are likely to continue across the country in the second quarter, especially in gateway cities such as New York and Los Angeles. Moreover, even as government restrictions are eased, employers will likely be cautious in returning employees to offices, especially if telecommuting proves an effective alternative. As of March 31, 2020, the Account's rents from office tenants were not materially affected, but the duration of the COVID-19 pandemic remains unknown, and its continued effect on the economy significantly increases the likelihood that tenants will undergo financial distress.
The impact of the COVID-19 pandemic on vacancies is not likely to be observed until the latter half of 2020. Vacancy nationwide increased from 12.1% in the fourth quarter of 2019 to 12.3% in the first quarter of 2020, as reported by CBRE-EA. Vacancies have risen most notably in geographic locations with significant exposure to oil and gas (e.g,. Houston, Dallas). The vacancy rate of the Account’s office portfolio increased to 14.0% in the first quarter as compared to 11.9% in the prior quarter, driven primarily by a large scheduled lease expiration at one of the Account's properties in the San Francisco metro area. The vacant space is already under contract with the new lease beginning in May 2020. The increase in the Boston vacancy rate was also caused by a scheduled lease expiration. Demand for office space in the Boston metro area has been strong over the last several quarters, but the COVID-19 pandemic introduces an unknown variable into the leasing environment that could cause the lease-up process to slow. The above-average vacancy rate in the New York metro area is driven by two properties currently undergoing redevelopment to increase the long term value of the properties. The vacancy rate in the New York metro will remain elevated over the near term as legacy tenants fully vacate the properties and redevelopment efforts continue. Moreover, as the New York metro area was severely impacted by the COVID-19 pandemic, vacancy rates in the region may remain elevated for a longer duration depending on the continued effects of the COVID-19 pandemic.
      Account Square
Foot Weighted
Average Vacancy
 
Market
Vacancy
(2)
Top 5 Office Metropolitan Areas(1)
 Total Sector
by Metro Area
($M)
 % of Total
Investments
 Q1 2020 Q4 2019 Q1 2020 Q4 2019
Account / Nation     14.0% 11.9% 12.3% 12.1%
Boston-Cambridge-Newton, MA-NH $1,537.4
 5.6% 12.0% 8.6% 9.0% 8.8%
Washington-Arlington-Alexandria, DC-VA-MD-WV 1,469.1
 5.4% 12.8% 12.8% 14.6% 13.8%
New York-Jersey City-White Plains, NY-NJ 1,208.5
 4.4% 32.8% 28.2% 8.7% 8.7%
San Francisco-Redwood City-South San Francisco, CA 1,039.9
 3.8% 13.8% 1.1% 5.8% 5.2%
Los Angeles-Long Beach-Glendale, CA 886.4
 3.2% 4.0% 2.9% 11.8% 11.5%
(1) 
The table above has been standardized to depict metropolitan statistical area ("MSA") definitions. Prior iterations of this table presented metropolitan divisions, which represent a subset of the larger MSA.
(2) 
Source: CBRE-EA. Market vacancy is the percentage of space available for rent. Account vacancy is the square foot-weighted percentage of unleased space.
Industrial
Industrial market conditions are primarily influenced by GDP growth, international trade, and consumer spending, all of which have been negatively impacted by the COVID-19 pandemic. Economists are projecting that U.S. GDP will likely suffer a large contraction in the second quarter of 2020. Declines in consumer spending as a result of job losses and government "stay-at-home" orders have caused and will continue to cause industrial production to slow. There is some optimism that the economy will rebound quickly after reaching its trough (commonly known as a "V" shaped recovery), but the possibility of a long duration recession (commonly known as a "U" shaped recovery) exists. Despite an unfavorable near-term outlook, when compared to the four core real estate sectors, the industrial sector is best positioned to weather the economic volatility. Demand for industrial space was robust coming into 2020, and while

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new supply has likewise been strong, vacancy was continuing to decline due to excess demand. Additionally, the COVID-19 pandemic is accelerating the long-term shift to e-commerce, which has been a key factor driving industrial demand over the last several years. As of March 31, 2020, the Account's rents from industrial tenants were not materially affected, but the duration of the COVID-19 pandemic remains unknown, and its continued effect on the economy increases the likelihood that some tenants may undergo financial distress.
The impact of the COVID-19 pandemic on vacancies is not likely to be observed until the latter half of 2020. The national industrial availability rate increased from 7.2% in the prior quarter to 7.3% in the first quarter of 2020, as reported by CBRE-EA.Vacancies are highest in geographic locations with significant exposure to oil and gas (e.g,. Houston, Dallas). The average vacancy rate of the Account’s industrial properties increased to 6.1% in the first quarter of 2020 from 4.7% in the previous quarter, primarily driven by space coming available at one of the Account's properties in the Washington, DC metro area. Capital improvements are taking place at the property to increase the value of the space to potential tenants. Elevated vacancy in the Houston metro area is likely to persist over the near term, as depressed oil prices have caused a stall in the local leasing environment.
      Account Square
Foot Weighted
Average Vacancy
 
Market
Vacancy
(2)
Top 5 Industrial Metropolitan Areas(1)
 Total Sector
by Metro Area
($M)
 % of Total
Investments
 Q1 2020 Q4 2019 Q1 2020 Q4 2019
Account / Nation     6.1% 4.7% 7.3% 7.2%
Riverside-San Bernardino-Ontario, CA $987.2
 3.6% 0.0% 0.0% 6.2% 6.2%
Seattle-Tacoma-Bellevue, WA 409.6
 1.5% 3.3% 2.9% 5.2% 5.3%
Los Angeles-Long Beach-Anaheim, CA 384.2
 1.4% 4.5% 5.1% 5.3% 4.5%
Dallas-Fort Worth-Arlington, TX 337.3
 1.2% 8.8% 8.5% 8.5% 8.2%
Houston-The Woodlands-Sugar Land, TX 273.2
 1.0% 19.7% 16.0% 10.4% 9.7%
(1) 
The table above has been standardized to depict MSA definitions. Prior iterations of this table presented metropolitan divisions, which represent a subset of the larger MSA.
(2) 
Source: CBRE-EA. Market vacancy is the percentage of space available for rent. Account vacancy is the square foot-weighted percentage of unleased space.
Multi-Family
Apartment demand is driven by a combination of economic and demographic forces including job growth, household formations, and changes in the U.S. homeownership rate. The COVID-19 pandemic resulted in an economic shock to some U.S. renters in the first quarter, especially those employed by non-essential businesses with limited abilities to telecommute. Job losses and furloughs quickly accelerated across the country in March and April as some companies were forced to temporarily suspend or significantly limit operations to slow the outbreak. The economic shock has been most pronounced on low and middle-income renters, who are less likely to have savings or access to credit to soften the blow when income from employment is lost. The federal government funded several programs in the first quarter to partially offset the financial impact of the COVID-19 pandemic, the most notable actions to low and middle-income renters being a one-time direct payment of $1,200 to every qualifying taxpayer (with an additional $500 for every child) and an emergency increase of $600 per week to those collecting unemployment benefits. While these actions have partially offset some of the negative impact of the COVID-19 pandemic, renters that find themselves out of work or underemployed will continue to be financially challenged so long as businesses remain closed. As of March 31, 2020, the Account's rents from multifamily tenants were not materially affected by the COVID-19 pandemic; however, the duration of the COVID-19 pandemic remains unknown, and its continued effect on the economy increases the likelihood that some tenants may undergo financial distress.
The impact of the COVID-19 pandemic on vacancies is not likely to be observed until the latter half of 2020. The national apartment vacancy rate increased from 4.3% in the prior quarter to 4.5% in first quarter of 2020, as reported by RealPage, Inc. The sector has long benefited from strong fundamentals, such as a tight labor market and a long-term trend of first-time buyers delaying home ownership and renting for longer than historical precedent. However,

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the COVID-19 pandemic is causing the labor market to change rapidly, and multifamily demand will likely cool over the next several months and rising vacancies are expected. Student housing properties may be especially challenged until universities authorize students returning to campus. The vacancy rate of the Account’s apartment properties increased to 7.3% in the first quarter of 2020 as compared to 7.0% in the prior quarter. Renovations are proceeding at several properties in the Account's portfolio, including some in the Washington, Los Angeles and Denver metro areas. The renovation efforts are expected to enhance the long-term value of the impacted properties, but vacancy in these metro areas may persist above the market averages in the near-term while renovations continue.
      Account Units Weighted
Average Vacancy
 
Market
Vacancy
(2)
Top 5 Apartment Metropolitan Areas(1)
 Total Sector
by Metro Area
($M)
 % of Total
Investments
 Q1 2020 Q4 2019 Q1 2020 Q4 2019
Account / Nation     7.3% 7.0% 4.5% 4.3%
Washington-Arlington-Alexandria, DC-VA-MD-WV $760.0
 2.8% 6.7% 7.1% 4.1% 4.0%
Los Angeles-Long Beach-Anaheim, CA 699.1
 2.6% 8.0% 7.0% 3.9% 3.7%
Miami-Fort Lauderdale-West Palm Beach, FL 577.9
 2.1% 8.4% 7.4% 3.8% 3.8%
Denver-Aurora-Lakewood, CO 422.3
 1.5% 8.9% 7.0% 5.3% 5.1%
New York-Newark-Jersey City, NY-NJ-PA 364.6
 1.3% 0.7% 1.8% 2.3% 2.5%
(1) 
The table above has been standardized to depict MSA definitions. Prior iterations of this table presented metropolitan divisions, which represent a subset of the larger MSA.
(2) 
Source: RealPage. Market vacancy is the percentage of units vacant. The Account’s vacancy is the percentage of unleased units.
Retail
While all core real estate sectors have been negatively impacted by the COVID-19 pandemic, the impact to the retail sector has been especially pronounced. State governments across the country have caused all "non-essential" retail to close temporarily, and even retail outlets deemed essential must adhere to social distancing criteria that limit the amount of consumers in stores. Non-essential retail has varying definitions across the country, but the definition typically includes vendors of specialty merchandise (e.g., furniture, beauty, electronics), entertainment venues, dine-in restaurants, and bars. Non-essential retail outlets have attempted to find alternative ways to deliver products to customers through e-commerce solutions, but retail is still highly dependent on customer traffic in stores to generate revenue. As the COVID-19 pandemic continues to impose significant financial difficulties for traditional retailers, certain of our tenants may be unable to continue as going concerns, which would unfavorably impact our business and results of operations. Traditional retail was facing ongoing challenges from e-commerce platforms long before the COVID-19 pandemic, and the pandemic will only accelerate this shift in consumer preferences. If such a shift occurs, there may be a decrease in demand for traditional retail space. As of March 31, 2020, rents from the Account's retail tenants were not materially affected, but requests for relief were more common among retail tenants than other sectors. The duration of the COVID-19 pandemic remains unknown, and its continued effect on the economy increases the likelihood that retail tenants may undergo continued financial distress.
The Account's retail portfolio is composed primarily of high-end lifestyle shopping centers and regional malls in large metropolitan or tourist centers. The retail portfolio is managed to minimize significant exposure to any single retailer. The Account has over 1,100 retailers across its portfolio, with its largest retail exposure comprising less than 3.5% of total retail rentable area. The Account’s retail vacancy increased to 6.6% in the first quarter of 2020 from 6.1% in the prior quarter due to scheduled lease expirations. Redeployment of the vacated space may be challenging in the near term due to unfavorable market conditions caused by the COVID-19 pandemic.

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      Account Units Weighted
Average Vacancy
 
Market
Vacancy
(1)
  Total Exposure
($M)
 % of Total Investments Q1 2020 Q4 2019 Q1 2020 Q4 2019
All Retail     6.6% 6.1% 6.1% 6.1%
   Lifestyle & Mall $2,365.5
 8.6% 6.5% 5.3% 5.5% 5.4%
   Neighborhood, Community & Strip 1,580.4
 5.8% 7.0% 7.1% 8.7% 8.6%
   Power Center(2)
 628.8
 2.3% 3.9% 5.3% 6.9% 7.0%
(1) 
Source: CBRE-EA. Market vacancy is defined as the percentage of space available for rent. The Account’s vacancy is the square foot-weighted percentage of unleased space.
(2) 
The Power Center designation is reserved for properties with three or more anchor units. Anchor units are leased to large retailers such as department stores, home improvement stores and warehouse clubs. Properties with the Neighborhood, Community and Strip designation consist of two or less anchor units.

Hotel
The COVID-19 pandemic caused hotel revenues and occupancy to decline across the country at an unprecedented rate in the first quarter of 2020. As as result of government-imposed travel bans, business travel has been severely limited to those who must travel for essential reasons. As businesses begin to adapt to these restrictions and increasingly manage their affairs through virtual platforms, business travel may not reach levels seen before the COVID-19 pandemic in the near-term, which would continue to weigh on hotel demand and increase vacancy rates. Moroever, leisure travel is virtually nonexistent due to widespread nonessential travel bans instituted by state governments, and such travel many not recover until a vaccine or effective treatments are developed for the COVID-19 virus. Luxury hotels have been especially impacted by the COVID-19 pandemic, as they are also exposed to lost revenue from the absence of conferences and similar events (e.g., weddings). Hotel operators have been required to significantly reduce expenses until occupancy returns, which has resulted in additional layoffs, furloughs, and temporary hotel closures. The duration of the COVID-19 pandemic remains unknown, and its continued effect on the economy increases the likelihood that hotel revenues and occupancy rates will continue to decline.
The Account's exposure to the hotel sector is limited to one hotel in the Dallas metro area. Key metrics to track hotel performance include occupancy, the average daily rate ("ADR") and revenue per available room ("RevPAR"). For the quarter ended March 31, 2020, occupancy of the property declined significantly to 20.3% as compared to 65.2% in the previous quarter. ADR and RevPAR were $135.21 and $27.44, respectively, for the first quarter of 2020, as compared to $129.76 and $84.63, respectively, in the prior quarter.
INVESTMENTS
As of March 31, 2020, the Account held 85.2% of its total investments in real estate and real estate joint ventures. The Account also held investments in loans receivable including those with related parties representing 6.0% of total investments, U.S. Treasury securities representing 2.7% of total investments, real estate-related equity securities representing 2.6% of total investments, corporate bonds representing 1.9% of total investments, real estate funds representing 1.3% of total investments, government agency notes representing 0.2% of total investments and municipal bonds representing 0.1% of total investments.
The outstanding principal on loans payable on the Account’s wholly-owned real estate portfolio as of March 31, 2020 was $2.6 billion. The Account’s proportionate share of outstanding principal on loans payable within its joint venture investments was $2.9 billion, which is netted against the underlying properties when determining the joint venture investment’s fair value presented on the Consolidated Schedules of Investments. Total outstanding principal on the Account’s portfolio as of March 31, 2020, inclusive of loans payable within the joint venture investments and $0.2 billion of loans outstanding on the unsecured line of credit, was $5.7 billion, which represented a loan-to-value ratio of 17.9%.
Management believes that the Account’s real estate portfolio is diversified by location and property type. The Account does not intend to buy and sell its real estate investments simply to make short-term profits. Rather, the Account’s general strategy in selling real estate investments is to dispose of those assets that management believes (i) have

58


maximized in value, (ii) have underperformed or face deteriorating property-specific or market conditions, (iii) need significant capital infusions in the future, (iv) are appropriate to dispose of in order to remain consistent with the Account’s intent to diversify the Account by property type and geographic location (including reallocating the Account’s exposure to or away from certain property types in certain geographic locations), or (v) otherwise do not satisfy the investment objectives of the Account. Management, from time to time, will evaluate the need to manage liquidity in the Account as part of its analysis as to whether to undertake a particular asset sale. The Account may reinvest any sale proceeds that it does not need to pay operating expenses or to meet debt service or redemption requests (e.g., participant withdrawals or benefit payments).
The following table lists the Account's ten largest investments as of March 31, 2020. For information regarding the Account's diversification of real estate assets by region and property type, see Note 3—Concentrations of Risk.
Ten Largest Real Estate Investments
Property Investment Name Ownership Percentage City State Type 
Gross Real Estate Fair Value(1)
 
Debt Fair Value(2)
 
Net Real Estate Fair Value(3)
 
Property as a
% of Total
Real Estate
Portfolio
(4)
 
Property as a
% of Total
Investments
(5)
Fashion Show 50% Las Vegas NV Retail $1,006.0
 $417.9
 $588.1
 3.9% 3.3%
The Florida Mall 50% Orlando FL Retail 900.1
 155.8
 744.3
 3.5% 3.0%
Simpson Housing Portfolio 80% Various U.S.A. Apartment 826.8
 383.4
 443.4
 3.2% 2.7%
1001 Pennsylvania Avenue 100% Washington D.C. Office 787.4
 316.9
 470.5
 3.0% 2.6%
Colorado Center 50% Santa Monica CA Office 632.7
 269.9
 362.8
 2.4% 2.1%
99 High Street 100% Boston MA Office 563.3
 278.2
 285.1
 2.2% 1.9%
Ontario Industrial Portfolio 100% Ontario CA Industrial 508.3
 
 508.3
 1.9% 1.7%
701 Brickell Avenue 100% Miami FL Office 427.1
 179.1
 248.0
 1.6% 1.4%
Lincoln Centre 100% Dallas TX Office 421.4
 
 421.4
 1.6% 1.4%
Four Oaks Place 51% Houston TX Office 420.7
 81.8
 338.9
 1.6% 1.4%
(1) 
The Account's share of the fair value of the property investment, gross of debt.
(2) 
Debt fair values are presented at the Account's ownership interest.
(3) 
The Account's share of the fair value of the property investment, net of debt.
(4) 
Total real estate portfolio is the aggregate fair value of the Account's wholly-owned properties and the properties held within a joint venture, gross of debt.
(5) 
Total investments are the aggregate fair value of all investments held by the Account, gross of debt. Total investments, as calculated within this table, will vary from total investments, as calculated in the Account's Consolidated Schedule of Investments, as joint venture investments are presented in the Consolidated Schedules of Investments at their net equity position in accordance with previously defined GAAP.

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Results of Operations
Three months ended March 31, 2020 compared to three months ended March 31, 2019
Net Investment Income
The following table shows the results of operations for the three months ended March 31, 2020 and 2019 and the dollar and percentage changes for those periods (dollars in millions, unaudited).
  For the Three Months Ended March 31, Change
2020 2019 $ %
INVESTMENT INCOME        
Real estate income, net:        
Rental income $299.7
 $262.6
 $37.1
 14.1 %
Real estate property level expenses:        
Operating expenses 69.2
 59.2
 10.0
 16.9 %
Real estate taxes 50.1
 46.6
 3.5
 7.5 %
Interest expense 24.3
 25.7
 (1.4) (5.4)%
Total real estate property level expenses 143.6
 131.5
 12.1
 9.2 %
Real estate income, net 156.1
 131.1
 25.0
 19.1 %
Income from real estate joint ventures and funds 55.2
 49.7
 5.5
 11.1 %
Interest 42.5
 41.1
 1.4
 3.4 %
Dividends 4.5
 4.4
 0.1
 2.3 %
TOTAL INVESTMENT INCOME 258.3
 226.3
 32.0
 14.1 %
Expenses:        
Investment management charges 17.2
 19.5
 (2.3) (11.8)%
Administrative charges 11.7
 13.3
 (1.6) (12.0)%
Distribution charges 7.6
 7.9
 (0.3) (3.8)%
Mortality and expense risk charges 0.3
 0.3
 
  %
Liquidity guarantee charges 16.2
 12.9
 3.3
 25.6 %
TOTAL EXPENSES 53.0
 53.9
 (0.9) (1.7)%
INVESTMENT INCOME, NET $205.3
 $172.4
 $32.9
 19.1 %
The following table illustrates and compares rental income, operating expenses and real estate taxes for properties held by the Account for the three months ended March 31, 2020 and 2019. The comparative increases or decreases associated with the acquisition and disposition of properties made in either period is compared to "same property" (dollars in millions, unaudited).
  Rental Income Operating Expenses Real Estate Taxes
 Change  Change  Change
20202019$% 20202019$% 20202019$%
Same Property $248.1
$229.5
$18.6
8.1 % $56.0
$51.7
$4.3
8.3 % $43.4
$42.5
$0.9
2.1%
Properties Acquired 48.6
4.4
44.2
N/M
 12.6
1.0
11.6
N/M
 6.4
0.8
5.6
N/M
Properties Sold 3.0
28.7
(25.7)(89.5)% 0.6
6.5
(5.9)(90.8)% 0.3
3.3
(3.0)N/M
Impact of Properties Acquired/Sold 51.6
33.1
18.5
N/M
 13.2
7.5
5.7
N/M
 6.7
4.1
2.6
N/M
Total Property Portfolio $299.7
$262.6
$37.1
14.1 % $69.2
$59.2
$10.0
16.9 % $50.1
$46.6
$3.5
7.5%
N/M—Not meaningful

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Rental Income:
Rental income increased by $37.1 million, or 14.1%, due to net acquisition activity paired with rising market rents and reduced rental concessions, most notably across the office sector. Market rents in the office, industrial and apartment sectors have continued to trend upward over the last several consecutive quarters, but retail market rents have largely remained flat over the same period.
Operating Expenses:
Operating expenses increased $10.0 million, or 16.9%, primarily driven by net acquisition activity. Increases in operating expense were effectively flat across the portfolio; however, the office sector experienced a small increase over the comparable period of the prior year due to expenses for storm damage incurred at a property. Also, slight increases in the apartment sector expenses are attributed to rising prices for services rendered to maintain the properties.
Real Estate Taxes:
Real estate taxes increased $3.5 million, or 7.5%, due to net acquisition activity.
Interest Expense:
Interest expense decreased $1.4 million, or 5.4%, as a result of lower average outstanding principal balances on loans payable paired with lower interest rates, as compared to the same period in 2019.
Income from Real Estate Joint Ventures and Funds:
Income from real estate joint ventures and funds increased $5.5 million, or 11.1%, which was attributed to a larger average portfolio of joint ventures paired with a larger portfolio of real estate funds.
Interest and Dividend Income:
Interest income increased $1.4 million due to the Account's growing loans receivable portfolio, which was slightly offset by a reduction in interest income from short-term securities. Dividend income increased $0.1 million, remaining relatively flat when compared the first quarter of 2019.
Expenses:
Investment management, administrative and distribution costs are charged to the Account associated with managing the Account. Investment management charges are comprised primarily of fixed components, but fluctuate based on the size of the Account’s portfolio of investments, whereas administrative and distribution charges are comprised of more variable components that generally correspond with movements in net assets. Both distribution services (pursuant to the Distribution Agreement) and administrative services are provided to the Account by Services and TIAA, as applicable, on an at cost basis. These expenses decreased $4.2 million from the comparable period of 2019, as a result of reductions in expenses related to information technology.
Mortality and expense risk and liquidity guarantee expenses are contractual charges to the Account from TIAA for TIAA’s assumption of these risks and provision of the liquidity guarantee. The rate for these charges is established annually and are charged at a fixed rate based on the Account’s net assets. These expenses increased $3.3 million as a result of an increase in net assets of the Account from the comparative period paired with a four basis point increase to the expense charge for the liquidity guarantee which was effective August 1, 2019.

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Net Realized and Unrealized Gains and Losses on Investments and Loans Payable
The following table shows the net realized and unrealized gains and losses on investments and loans payable for the three months ended March 31, 2020 and 2019 and the dollar and percentage changes for those periods (dollars in millions, unaudited).
  For the Three Months Ended March 31, Change
2020 2019 $ %
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND LOANS PAYABLE        
Net realized gain (loss) on investments:        
Real estate properties $(59.2) $
 $(59.2) N/M
Real estate joint ventures and funds (460.3) 5.1
 (465.4) N/M
Marketable securities 35.2
 141.0
 (105.8) (75.0)%
Loans receivable (1.6) 
 (1.6) N/M
Total realized (loss) gain on investments: (485.9) 146.1
 (632.0) N/M
Net change in unrealized appreciation (depreciation) on:        
Real estate properties 196.7
 73.9
 122.8
 N/M
Real estate joint ventures and funds 300.5
 2.5
 298.0
 N/M
Marketable securities (230.8) 76.3
 (307.1) N/M
Loans receivable (10.6) 1.2
 (11.8) N/M
Loans receivable with related parties (0.5) 
 (0.5) N/M
Loans payable 45.7
 (29.6) 75.3
 N/M
Net change in unrealized appreciation on investments and loans payable 301.0
 124.3
 176.7
 N/M
NET REALIZED AND UNREALIZED (LOSS) GAIN ON INVESTMENTS AND LOANS PAYABLE $(184.9) $270.4
 $(455.3) N/M
N/M—Not meaningful
Real Estate Properties, Joint Ventures and Funds:
Net realized losses in the Account are primarily attributed to the transfer of investments from joint ventures to wholly-owned investments. See the Recent Transactions section herein for additional disclosure regarding the sale of the Account’s real estate property investments.
Real Estate Properties:
Wholly-owned real estate investments experienced net realized and unrealized gains of $137.5 million during the first quarter of 2020 compared to $73.9 million of unrealized gains during the comparable period of 2019. Appreciation in the first quarter was primarily driven by the office sector, most notably among investments in Miami, FL and Boston, MA.
Real Estate Joint Ventures and Funds:
Real estate joint ventures and funds experienced net realized and unrealized losses of $159.8 million during the first quarter of 2020, compared to $7.6 million of net realized and unrealized gains during the comparable period of 2019. Net losses in the first quarter of 2020 were primarily driven by the Account's retail joint venture investments. As market rent in the retail sector continues to flatten, capital improvement costs are increasing to maintain occupancy and attract new tenants. Such unfavorable factors continue to place pressure on retail market values.
Marketable Securities:
The Account’s marketable securities experienced net realized and unrealized losses of $195.6 million during the first quarter of 2020 compared to net realized and unrealized gains of $217.3 million during the comparable period of 2019, primarily attributed to the performance of the Account's real-estate related securities. The performance of the Account's

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REIT portfolio was in line with comparable REIT-based indexes in both periods. U.S. Treasuries, government agency notes and corporate bonds had a nominal impact in both periods due to the short and intermediate-term nature of these investments, respectively.
Loans Receivable, including those with related parties:
Loans receivable, including loans receivable with related parties, experienced net realized and unrealized losses of $12.7 million during the first quarter of 2020 compared to a $1.2 million unrealized gain during the comparable period of 2019. The losses can be attributed to uncertainty related to current market conditions, caused by the COVID-19 pandemic.
Loans Payable:
Loans payable experienced unrealized gains of $45.7 million during the first quarter of 2020 compared to a $29.6 million unrealized loss during the comparable period of 2019. The gains in the first quarter of 2020 were attributed to widening credit spreads during the quarter in response to the market instability introduced by the COVID-19 pandemic.
Liquidity and Capital Resources
As of March 31, 2020 and December 31, 2019, the Account’s cash and cash equivalents and non-real estate-related marketable securities had a value of $2.7 billion and $4.2 billion representing 10.3% and 15.2% of the Account’s net assets at such dates, respectively.
Net Income and Marketable Securities
The Account’s net investment income is a source of liquidity for the Account. Net investment income was $205.3 million for the three months ended March 31, 2020, as compared to $172.4 million for the comparable period of 2019. The increase in total net investment income is described more fully in the Results of Operations section.
The Account has a $500 million unsecured line of credit which had $310 million of availability as of March 31, 2020, accessible as needed to fund the Account's near-term objectives, as further described in Note 10—Line of Credit.
The Account may from time to time borrow money and assume or obtain a mortgage on a property to make leveraged real estate investments. The Account is authorized to borrow money in accordance with its investment guidelines. Under the Account’s current investment guidelines, the Account’s loan to value ratio (as described below) is to be maintained at or below 30% (measured at the time of incurrence and after giving effect thereto). Such incurrences of debt from time to time may include:
placing new debt on properties;
refinancing outstanding debt;
assuming debt on acquired properties or interests in the Account’s properties;
extending the maturity date of outstanding debt; and/or
an unsecured line of credit or credit facility.
As of March 31, 2020, the Account’s loan-to-value ratio was 17.9% The Account's loan-to-value ratio at any time is based on the outstanding principal amount of debt to the Account's total gross asset value, and excludes leverage, if any, employed by REITs and real estate funds in which the Account invests. The ratio will be measured at the time of any debt incurrence and will be assessed after giving effect thereto. The Account’s total gross asset value, for these purposes, is equal to the total fair value of the Account’s assets (including the fair value of the Account’s interest in joint ventures), with no reduction associated with any indebtedness on such assets. In calculating outstanding indebtedness, we include only the Account’s actual percentage interest in any borrowings on a joint venture investment and not that of any joint venture partner. Also, at the time the Account (or a joint venture in which the Account is a partner) enters into a revolving or other line of credit, management includes only amounts outstanding when calculating outstanding indebtedness.
The Account may only borrow up to 70% of the then-current value of a property, although construction loans may be for 100% of costs incurred in developing the property. Except for construction loans, any mortgage loans on a property will be non-recourse to the Account, meaning that if there is a default on a loan in respect to a specific property, the

63


lender will have recourse to (i.e., be able to foreclose on) only the property encumbered (or the joint venture owning the property), or to other specific Account properties that may have been pledged as security for the defaulted loan, but not to any other assets of the Account. When possible, the Account will seek to have loans mature at varying times to limit the risks of borrowing.
As of March 31, 2020, there are five mortgage obligations secured by real estate investments wholly-owned by the Account totaling $127.6 million maturing within the next twelve months. The Account has sufficient liquidity in the form of cash and cash equivalents and securities to meet its mortgage obligations.
Recent Transactions
The following describes transactions occurring during the first quarter of 2020 related to real estate properties, real estate joint ventures, real estate funds, loans receivable, and loans payable. Except as noted, expenses for operating the properties purchased are either borne or reimbursed, in whole or in part, by the property tenants, although the terms vary under each lease. Dollar amounts are shown in millions.
Real Estate Properties and Joint Ventures
Purchases
Property Name Purchase Date Ownership Percentage Sector Location 
Net Purchase Price (1)
Sole at City Center 01/15/2020 100.00% Apartments West Palm Beach, FL $103.6
Park Creek Apartments 02/10/2020 100.00% Apartments Fort Worth, TX 41.7
Warwick Shopping Center(2)
 02/19/2020 100.00% Retail Warwick, RI 11.1
Overlook at King of Prussia(2)
 02/19/2020 100.00% Retail King of Prussia, PA 55.1
Shoppes at Lake Mary(2)
 02/19/2020 100.00% Retail Lake Mary, FL 21.0
Winslow Bay Commons(2)
 02/19/2020 100.00% Retail Mooresville, NC 50.9
Bellevue Place(2)
 02/19/2020 100.00% Retail Nashville, TN 7.8
Eisenhower Crossing(2)
 02/19/2020 100.00% Retail Macon, GA 10.1
Pavilion at Turkey Creek(2)
 02/19/2020 100.00% Retail Knoxville, TN 49.9
Town and Country(2)
 02/19/2020 100.00% Retail Knoxville, TN 30.1
Creeks at Virginia Center(2)
 02/19/2020 100.00% Retail Glen Allen, VA 41.7
Alexander Place(2)
 02/19/2020 100.00% Retail Raleigh, NC 39.9
Market Square(2)
 02/19/2020 100.00% Retail Ft. Myers, FL 20.4
Cypress Trace(2)
 02/19/2020 100.00% Retail Ft. Myers, FL 39.7
Columbiana Station(2)
 02/19/2020 100.00% Retail Columbia, SC 43.8
Village Crossing(2)
 02/19/2020 100.00% Retail Skokie, IL 160.7
Birkdale Village(2)
 02/19/2020 100.00% Retail Huntersville, NC 128.9
Birkdale Village Apartments(2)
 02/19/2020 100.00% Apartments Huntersville, NC 70.8
River Ridge(2)
 02/19/2020 100.00% Retail Birmingham, AL 28.0
Woodstock Square(2)
 02/19/2020 100.00% Retail Woodstock, GA 33.7
Newnan Pavilion(2)
 02/19/2020 100.00% Retail Newnan, GA 39.7
Marketplace at Mill Creek(2)
 02/19/2020 100.00% Retail Buford, GA 71.5
Heritage Pavilion(2)
 02/19/2020 100.00% Retail Smyrna, GA 41.6
Fayette Pavilion(2)
 02/19/2020 100.00% Retail Fayetteville, GA 88.4
Pacific City(3)
 03/09/2020 100.00% Retail Huntington Beach, CA 153.9
Storage Portfolio III(4)
 03/16/2020 90.00% Storage Atlanta, GA 16.4
(1)  
The net purchase price represents the purchase price and closing costs.
(2) 
On February 19, 2020, the Account purchased the 15% ownership interest of SITE Centers Corp in DDRTC Core Retail Fund, LLC, a joint venture between the Account and SITE Centers Corp. All properties and associated debt formerly held within DDRTC Core Retail Fund, LLC are now wholly-owned by the Account.
(3) 
On March 9, 2020, the Account purchased the 30% ownership interest of DJM Capital in PC Borrower, LLC, a joint venture between the Account and DJM Capital. The retail property and associated debt formerly held within PC Borrower, LLC is now wholly-owned by the Account.
(4) 
Partial acquisition.

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Sales
Property Name Sales Date Ownership Percentage Sector Location 
Net Sales Price (1)
 
Realized Gain(Loss) on Sale(2)
The Woodley 01/08/2020 100.00% Apartments Washington, D.C. $176.7
 $(25.2)
Beltway North Commerce Center 01/14/2020 100.00% Industrial Houston, TX 29.8
 4.3
250 North 10th Street 01/15/2020 100.00% Apartments Brooklyn, NY 137.1
 (37.6)
DDRTC Core Retail Fund, LLC(3)
 02/19/2020 85.00% Retail Various, U.S.A. 932.8
 (422.2)
PC Borrower, LLC(4)
 03/09/2020 70.00% Retail Huntington Beach, CA 107.7
 (31.3)
(1)  
The net sales price represents the sales price, less selling expenses.
(2) 
Majority of the realized gain(loss) has been previously recognized as unrealized gains(losses) in the Account's Consolidated Statements of Operations.
(3) 
On February 19, 2020, the Account purchased the 15% ownership interest of SITE Centers Corp in DDRTC Core Retail Fund, LLC, a joint venture between the Account and SITE Centers Corp. All properties and associated debt formerly held within DDRTC Core Retail Fund, LLC are now wholly-owned by the Account.
(4) 
On March 9, 2020, the Account purchased the 30% ownership interest of DJM Capital in PC Borrower, LLC, a joint venture between the Account and DJM Capital. The retail property and associated debt formerly held within PC Borrower, LLC is now wholly-owned by the Account.
Real Estate Funds
Acquisitions
Fund Name Date of Initial Capital Contribution Amount of Initial Capital Contribution Total Commitment
JCR Capital - REA Preferred Equity Parallel Fund 03/23/2020 $2.2
 $100.0
Loans Receivable
Originations and purchases
Investment Name Transaction Date Interest Rate Sector Maturity Date Location Amount
Sol Y Luna Mezzanine 01/07/2020 6.55% Apartments 01/06/2030 Tucson, AZ $53.0
Five Oak Senior/Junior Mezzanine 03/26/2020 2.35% + LIBOR Office 04/09/2023 Portland, OR $53.3
Payoffs and sales
Investment Name Transaction Date Interest Rate Sector Maturity Date Location Amount
Crest at Las Colinas Station Mezzanine 01/30/2020 5.11% + LIBOR Apartments 05/10/2021 Irving, TX $20.0
DJM Capital Partners Mezzanine 03/09/2020 5.00% Retail 03/02/2020 Huntington Beach, CA 6.3
Financings
New financings and assumptions of debt
Property Name Transaction Date Ownership Percentage Interest Rate Sector Maturity Date Location Amount
Overlook at King of Prussia(1)
 02/19/2020 100.00% 3.82% Retail 09/11/2027 King of Prussia, PA $40.8
Winslow Bay Commons(1)
 02/19/2020 100.00% 3.82% Retail 09/11/2027 Mooresville, NC 25.8
Birkdale Village(1)
 02/19/2020 100.00% 4.30% Retail 04/01/2024 Huntersville, NC 78.4
Marketplace at Mill Creek(1)
 02/19/2020 100.00% 3.82% Retail 09/11/2027 Buford, GA 39.6
Pacific City(2)
 03/09/2020 100.00% 2.00% + LIBOR Retail 10/01/2023 Huntington Beach, CA 105.0

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Payoffs and assignments of debt
Property Name Transaction Date Ownership Percentage Interest Rate Sector Maturity Date Location Amount
DDRTC Core Retail Fund, LLC(1)
 02/19/2020 85.00% Various Retail Various Various, U.S.A. $156.8
PC Borrower, LLC(2)
 03/09/2020 70.00% 2.00% + LIBOR Retail 10/01/2023 Huntington Beach, CA 73.5
(1)  
On February 19, 2020, the Account purchased the 15% ownership interest of SITE Centers Corp in DDRTC Core Retail Fund, LLC, a joint venture between the Account and SITE Centers Corp. All properties and associated debt formerly held within DDRTC Core Retail Fund, LLC are now wholly-owned by the Account.
(2) 
On March 9, 2020, the Account purchased the 30% ownership interest of DJM Capital in PC Borrower, LLC, a joint venture between the Account and DJM Capital. The retail property and associated debt formerly held within PC Borrower, LLC is now wholly-owned by the Account.
Financings - Other
During the first quarter of 2020, the Account borrowed $400 million and paid off $460.0 million on the line of credit.
Marketable Securities
During the first quarter of 2020, the Account sold approximately $500 million in real estate-related securities.
Critical Accounting Policies
Management’s discussion and analysis of the Account’s financial condition and results of operations is based on the Account’s Consolidated Interim Financial Statements, which have been prepared by management in accordance with GAAP. The preparation of the Account’s financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the financial statements and disclosures. Some of these estimates and assumptions require application of difficult, subjective, and/or complex judgments about the effect of matters that are inherently uncertain and that may change in subsequent periods. Management evaluates its estimates and assumptions on an ongoing basis. Management bases its estimates on historical experience and on various other assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities of the Account that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
In the Form 10-K for the year ended December 31, 2019, management identified the critical accounting policies which affect its significant estimates and assumptions used in preparing the Account’s financial statements. Certain of these accounting policies are described in Note 1—Organization and Significant Accounting Policies in this Form 10-Q.
There have been no material changes to these accounting policies from those disclosed in the Account's Annual Report on Form 10-K for the year ended December 31, 2019.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Account’s real estate holdings, including real estate joint ventures, funds and loans receivable, which, as of March 31, 2020, represented 92.5% of the Account’s total investments, expose the Account to a variety of risks. These risks include, but are not limited to:
General Real Estate Risk—The risk that the Account’s property values or rental and occupancy rates could go down due to general economic conditions, a weak market for real estate generally and/or in specific locations where the Account may own property, including, among other reasons, as a result of an epidemic, pandemic or other health-related issue in one or more markets where the Account owns property, disruptions in the credit and/or capital markets, or changes in supply and demand for certain types of properties;
Appraisal Risk—The risk that the sale price of an Account property (i.e., the value that would be determined by negotiations between independent parties) might differ substantially from its estimated or appraised value, leading to losses or reduced profits to the Account upon sale;
Risk Relating to Property Sales—The risk that the Account might not be able to sell a property at a particular time for its full value, particularly in a poor market. This might make it difficult to raise cash quickly and also could lead to Account losses;

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Risks of Borrowing—The risk that interest rate changes may impact Account returns if the Account takes out a mortgage on a property, buys a property subject to a mortgage or holds a property subject to a mortgage, and hedging against such interest rate changes, if undertaken by the Account, may entail additional costs and be unsuccessful; and
Foreign Currency Risk—The risk that the value of the Account’s foreign investments, related debt, or rental income could increase or decrease due to changes in foreign currency exchange rates or foreign currency exchange control regulations, and hedging against such currency changes, if undertaken by the Account, may entail additional costs and be unsuccessful.
The Account believes the diversification of its real estate portfolio, both geographically and by sector, along with its quarterly valuation procedure, helps manage the real estate and appraisal risks described above.
As of March 31, 2020, 7.5% of the Account’s total investments were comprised of marketable securities. Marketable securities include high-quality debt instruments (i.e., government agency notes and corporate bond securities) and REIT securities. The Account's Consolidated Statements of Investments sets forth the general financial terms of these instruments, along with their fair values, as determined in accordance with procedures described earlier in Critical Accounting Policies section above and in Note 1–Organization and Significant Accounting Policies to the Account’s Consolidated Financial Statements included herewith. As of the date of this report, the Account does not invest in derivative financial investments, nor does the Account engage in any hedging activity, although it may do so in selected circumstances in the future.
The Account is also exposed to a variety of risks associated with investments in real estate-related liquid assets (which could include, from time to time, REIT securities and CMBS) and non-real estate-related liquid assets, including financial/credit risk, market volatility risk, interest rate volatility risk and deposit/money market risk. These risks have been heightened as a result of the COVID-19 pandemic.
Financial/Credit Risk—The risk, for debt securities, that the issuer will not be able to pay principal and interest when due (and/or declare bankruptcy or be subject to receivership) and, for equity securities such as common or preferred stock, that the issuer’s current earnings will fall or that its overall financial soundness will decline, reducing the security’s value.
Market Volatility Risk—The risk that the Account’s investments will experience price volatility due to changing conditions in the financial markets regardless of the credit quality or financial condition of the underlying issuer. This risk is particularly acute to the extent the Account holds equity securities, which have experienced significant short-term price volatility over the past year. Also, to the extent the Account holds debt securities, changes in overall interest rates can cause price fluctuations.
Interest Rate Volatility—The risk that interest rate volatility may affect the Account’s current income from an investment.
Deposit/Money Market Risk—The risk that, to the extent the Account’s cash held in bank deposit accounts exceeds federally insured limits as to that bank, the Account could experience losses if banks fail. The Account does not believe it has exposure to significant concentration of deposit risk. In addition, there is some risk that investments held in money market accounts can suffer losses.
In addition, to the extent the Account were to hold MBS (including CMBS) these securities are subject to prepayment risk or extension risk (i.e., the risk that borrowers will repay the loans earlier or later than anticipated). If the underlying mortgage assets experience faster than anticipated repayments of principal, the Account could fail to recoup some or all of its initial investment in these securities, since the original price paid by the Account was based in part on assumptions regarding the receipt of interest payments. If the underlying mortgage assets are repaid later than anticipated, the Account could lose the opportunity to reinvest the anticipated cash flows at a time when interest rates might be rising. The rate of prepayment depends on a variety of geographic, social and other functions, including prevailing market interest rates and general economic factors. The fair value of these securities is also highly sensitive to changes in interest rates. Note that the potential for appreciation, which could otherwise be expected to result from a decline in interest rates, may be limited by any increased prepayments. These securities may be harder to sell than other securities.

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In addition to these risks, real estate equity securities (such as REIT securities and MBS) would be subject to many of the same general risks inherent in real estate investing, making mortgage loans and investing in debt securities. For more information on the risks associated with all of the Account’s investments, see the "Risk Factors" section of the Account’s most recent prospectus.
ITEM 4. CONTROLS AND PROCEDURES
(a) The registrant maintains a system of disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in the registrant’s reports under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including TIAA’s Executive Vice President, and Chief Product Officer of TIAA Financial Solutions (Principal Executive Officer (“PEO”)) and TIAA’s Senior Vice President, Chief Accounting Officer and Corporate Controller (Principal Financial and Accounting Officer (“PFO”)), as appropriate, to allow timely decisions regarding required disclosure.
Under the supervision and participation of the registrant’s management, including the registrant’s PEO and PFO, the registrant conducted an evaluation of the effectiveness of the registrant’s disclosure controls and procedures as defined in Rule 13a-15(e) under the Exchange Act as of March 31, 2020. Based upon management’s review, the PEO and PFO concluded that the registrant’s disclosure controls and procedures provide reasonable assurance that material information required to be included in the Account's periodic reports is recorded, processed, summarized and reported within the time periods specified in the relevant SEC rules and forms.
(b) Changes in internal control over financial reporting. There have been no changes in the registrant’s internal control over financial reporting that occurred during the registrant’s last fiscal quarter that materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
In the normal course of business, the Account may be named, from time to time, as a defendant or may be involved in various legal actions, including arbitrations, class actions and other litigation.
The Account establishes an accrual for all litigation and regulatory matters when it believes it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. Once established, accruals are adjusted, as appropriate, in light of additional information. The amount of loss ultimately incurred in relation to those matters may be higher or lower than the amounts accrued for those matters.
As of the date of this report, management of the Account does not believe that the results of any such claims or litigation, individually or in the aggregate, will have a material effect on the Account’s business, financial position or results of operations.
ITEM 1A. RISK FACTORS.
Except as set forth below, there have been no material changes from the Account’s risk factors as previously reported in the Account’s Annual Report on Form 10-K for the year ended December 31, 2019.
COVID-19-related risks to the real property market
In December 2019, COVID-19 was first detected in Wuhan, China and began spending around the world. On March 11, 2020, the World Health Organization announced that the outbreak of COVID-19 had become a pandemic. In response to the COVID-19 pandemic, governmental authorities throughout the world, including the United States, have taken significant measures to inhibit the spread of the disease, such as prohibiting people from congregating in heavily populated areas, instituting localized quarantines, restricting nonessential travel, issuing “stay-at-home” orders, closing schools, and most notably, restricting the types of businesses that may continue to operate. The restrictions have had an adverse impact on economic and market conditions across the United States. It is possible that public health officials and governmental authorities in the markets in which we own properties may impose additional restrictions in an effort to further slow the spread of the COVID-19 pandemic or may relax or revoke existing restrictions too quickly, which could, in either case, exacerbate the severity of adverse impacts on the economy. Factors related to the COVID-19 pandemic that may have an adverse effect on our business and results of operations, include:
a complete or partial closure of, or other operational issues at, one or more of our properties resulting from government or tenant action, which could adversely affect our tenants, particularly those in geographic locations with significant exposure to oil and gas (e.g., Dallas, Houston) where the COVID-19 pandemic has exacerbated downward pressures on crude oil, natural gas and natural gas liquids;
reduced economic activity impacting the businesses, financial condition, and liquidity of our tenants has caused, and is expected to continue to cause, one or more of our tenants to be unable to meet their obligations to us, including their ability to make rental payments, in full or at all, or otherwise seek modifications of such obligations, such as rent concessions, deferrals, abatements, or even the termination of lease obligations through bankruptcy;
the impact of new or continued complete or partial shutdowns of the operations of one or more of our tenants' businesses, most notably within the office, hotel, and retail sectors;
temporary or long-term disruptions in our tenants' supply chains from domestic and international suppliers could force tenants to reduce, delay or eliminate offerings of their products and services, resulting in less revenue and cash flow, which may impact tenants' ability to satisfy rent obligations;
the extent to which COVID-19 decreases customers' willingness to visit tenants' businesses in the future, which may result in tenants' continued inability to satisfy rent obligations;
the extent to which actions taken to slow the spread of COVID-19 result in unemployment or underemployment, which may negatively affect the ability of residential tenants to generate sufficient income to satisfy rent obligations;
restrictions to slow the spread of COVID-19 may limit leasing activities at the properties, such as property tours, and may have an adverse impact on the time it requires to renew leases, rent vacant space, or redeploy available space as leases expire;

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increased safety accommodations for employees required to be on-site during a time of heightened health risks, which may increase our costs and make it more difficult to efficiently manage our properties;
the ability of our properties to continue to obtain necessary goods and services or provide adequate staffing, as well as to commence or continue construction, development, and redevelopment activities, which could result in delays, increased costs, and potentially missed deadlines; and
continued market turmoil may cause debt financing to be unavailable to the Account on attractive terms, or at all.
The full extent of the impact of the COVID-19 pandemic on our business is highly uncertain and difficult to predict, as information is rapidly evolving with respect to the duration and severity of the pandemic. The extent to which the COVID-19 pandemic ultimately impacts our business and results of operations will depend on numerous evolving factors, including: (i) the duration and scope of the pandemic; (ii) governmental, business, and individuals' actions taken in response to the pandemic; (iii) the impact on economic activity from the pandemic and actions taken in response; (iv) the effect of the pandemic on our tenants and their businesses; (v) the ability of tenants to pay their rental income and any closures of our tenants' facilities, including, without limitation, due to shutdowns and "shelter-in-place" orders that may be requested or mandated by governmental authorities; (vi) the effect of the pandemic on our construction, development, and redevelopment activities; and (vii) the impact of the pandemic on our employees and any other operational disruptions or difficulties we may face. Any of these factors and risks could adversely impact our business or results of operations. Any increased costs or lost revenue as a result of tenant financial difficulty, or their need to comply with executive orders and other governmental guidance, may not be fully recoverable under our leases or adequately covered by insurance, which could impact our profitability. Moreover, the inability of our tenants to pay their rents when due could adversely affect our own liquidity, and there can be no guarantee that additional liquidity will be readily available or available on favorable terms and could result in the Account exercising the liquidity guarantee.
The COVID-19 pandemic may also result in fundamental changes to several of the core real estate sectors in which we invest. For example, an office space is generally attractive to a business because it provides one central location for the business’ employees to conduct their work. As businesses establish the infrastructure necessary to support a telecommuting workforce in response to the COVID-19 pandemic, they may find that such work-from-home arrangements are more efficient or beneficial for their employees than a traditional office environment. Moreover, as “social distancing” practices become normalized, businesses may struggle to justify the requirement that a large number of on-site employees be present in the same location when telecommuting is a readily available alternative. This could reduce the need for large office spaces in the future or cause companies to be less willing to pay higher rents for such spaces, which would ultimately harm our business and results of operations. Similarly, government-imposed travel restrictions have severely limited business travel, which has resulted in decreased occupancy in hotels. As businesses begin to adapt to these restrictions and manage their affairs through virtual platforms, the demand for business travel may be reduced significantly in the future, which would reduce the demand for hotel services and increase vacancy rates.
The COVID-19 pandemic is also accelerating fundamental changes in the retail sector. Due to government “stay-at-home” orders and the required closure of non-essential businesses, there has been a drastic reduction in sales and foot traffic in the retail sector and many retail tenants have been forced to limit their operations or close their businesses for a period of time. In addition to the serious financial distress this has imposed on many of our tenants, it has also required consumers-even those who prefer a more traditional retail experience-to purchase goods and services through online websites and retailers. This could result in a permanent change to consumer preferences in favor of e-commerce and further reduce the already declining demand for brick and mortar retail. This long-term effect may result in current tenants being unable to pay their rent when due and potential tenants abandoning the need for a physical space altogether, which would in turn harm our business and results of operations.
Any prolonged economic downturn, escalation of the COVID-19 pandemic or disruption in the financial markets may also impact our ability to access capital markets to issue debt or equity securities and to complete real estate transactions at attractive pricing or at all.
The impact of the COVID-19 pandemic may also precipitate and/or aggravate the other risks discussed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, which could adversely affect our business and

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results of operations (including revenues and profitability). In addition, the COVID-19 pandemic may also affect our operating or financial results in a manner that is not presently known to us or that we do not consider to present significant risks to operations.
COVID-19-related risks to liquid securities
The Account also invests in liquid securities of all types, including both publicly traded non-real estate-related investments and liquid real estate securities. The U.S. capital markets have experienced extreme volatility and disruption following the COVID-19 pandemic. Some economists and investment banks have expressed concern that the continued spread of the virus globally could lead to a prolonged global economic downturn, which, in addition to effecting our investments in real property, would adversely impact our investments in our real-estate and non-real estate-related liquid assets. Disruptions in the capital markets have increased the spread between the yields realized on risk-free and higher risk securities, resulting in illiquidity in parts of the capital markets. Such disruptions may adversely affect our business and results of operations. For more information on the risks that may be especially exacerbated as a result of the COVID-19 pandemic, see Risks of Liquid, Fixed Income Investments of “Item 1A Risk Factors” in the Account’s Annual Report on Form 10-K for the year ended December 31, 2019.
Global economic risks
National and regional economies and financial markets have become increasingly interconnected, which increases the possibilities that conditions in one country, region or market might adversely impact issuers in a different country, region or market. Changes in legal, political, regulatory, tax and economic conditions may cause fluctuations in markets and securities and commercial real property prices around the world, which could negatively impact the value of the Account’s investments. For example, the United Kingdom’s referendum decision to leave the European Union resulted in the depreciation in value of the British pound, short term declines in the stock markets and ongoing economic and political uncertainty concerning the consequences of the exit. Similar major economic or political disruptions, particularly in large economies like China, may have global negative economic and market repercussions. Additionally, events such as war, terrorism, natural and environmental disasters and the spread of infectious illnesses, pandemics or other public health emergencies may adversely affect the global economy and the securities, local commercial real estate markets and issuers in which the Account invests. Recent examples of such events include the outbreak of the COVID-19 pandemic, resulting in government imposed shutdowns across the globe. These events have reduced and could continue to reduce consumer demand and economic output, result in market closures, travel restrictions or quarantines, and generally have a significant impact on the economy, including the commercial real estate sector. Governmental and quasi-governmental authorities and regulators throughout the world have responded to the current impact of the COVID-19 pandemic with a variety of significant fiscal and monetary policy changes, including, but not limited to, direct capital infusions into companies, new monetary programs and lower interest rates. An unexpected or quick reversal of these policies, or the ineffectiveness of these policies, could increase volatility in securities and commercial real estate markets, which could adversely affect the Account’s investments.
Cybersecurity and other business continuity risks
With the increased use of connected technologies to conduct business, the Account and its service providers (including, but not limited to, TIAA, Services, the Independent Fiduciary and the Account’s custodian and financial intermediaries) are susceptible to cybersecurity risks. In general, cybersecurity attacks can result from infection by computer viruses or other malicious software or from deliberate actions or unintentional events, including gaining unauthorized access through “hacking” or other means to digital systems, networks, or devices that are used to service the Account’s operations in order to misappropriate assets or sensitive information, corrupt data, or cause operational disruption. Cybersecurity attacks can also be carried out in a manner that does not require gaining unauthorized access, including by carrying out a “denial-of-service” attack on the Account or its service providers. In addition, authorized persons could inadvertently or intentionally release and possibly destroy confidential or proprietary information stored on the Account’s systems or the systems of its service providers.
Cybersecurity failures by the Account or any of its service providers, or the issuers of any portfolio securities in which the Account invests (e.g., issuers of REIT securities or debt securities), have the ability to result in disruptions to and impacts on business operations and may adversely affect the Account. Such disruptions or impacts may result in: (i) financial losses; (ii) interference with the processing of contract transactions, including the processing of orders from TIAA’s website; (iii) interfere with the Account’s ability to calculate AUVs; (iv) barriers to trading and order processing;

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(v) Account contract owners’ inability to transact business with the Account; (vi) violations of applicable federal and state privacy or other laws; (vii) regulatory fines, penalties, reputational damage, reimbursement or other compensation costs; or (viii) additional compliance costs. The Account may incur additional, incremental costs to prevent and mitigate the risks of cybersecurity attacks or incidents. The Account and its participants could be negatively impacted by such cybersecurity attacks or incidents. Although the Account has established business continuity plans and risk-based processes and controls to address such cybersecurity risks, there are inherent limitations in such plans and systems in part due to the evolving nature of technology and cybersecurity attack tactics. As a result, it is possible that the Account or the Account’s service providers will not be able to adequately identify or prepare for all cybersecurity attacks. In addition, the Account cannot directly control the cybersecurity plans or systems implemented by its service providers.
Other disruptive events, including, but not limited to, natural disasters and public health or pandemic crises (such as the COVID-19 pandemic), may adversely affect the Account’s ability to conduct business. Such adverse effects may include the inability of TIAA’s employees, or the employees of its affiliates and the Account’s service providers, to perform their responsibilities as a result of any such event. Any resulting disruptions to the Account’s business operations can interfere with our processing of contract transactions, including the processing of orders from our website, impact our ability to calculate AUVs or cause other operational issues.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
Not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
Not applicable.
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable.
ITEM 5. OTHER INFORMATION.
Not applicable.


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ITEM 6. EXHIBITS
(1)(A)
(3)(A)
 (B)
(4)(A)
 (B)
 (C)
 (D)
  
 (E)
  
 (F)
  
 (G)
 (H)
 (I)
 (J)
  
 (K)
 (L)
  
(10)(A)
 (B)
 
 
(101) The following financial information from the Quarterly Report on Form 10-Q for the period ended March 31, 2020 (Unaudited), formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Statements of Assets and Liabilities as of March 31, 2020 (Unaudited), (ii) the Consolidated Statements of Operations for the three months ended March 31, 2020 and 2019 (Unaudited) , (iii) the Consolidated Statements of Changes in Net Assets for the three ended March 31, 2020 and 2019 (Unaudited), (iv) the Consolidated Statements of Cash Flows for the three months ended March 31, 2020 and 2019 (Unaudited), and (v) the Notes to the Consolidated Financial Statements (Unaudited).**
*Filed herewith.
**Furnished electronically herewith.

(1) 
Previously filed and incorporated herein by reference to Exhibit 1(A) to the Account’s Registration Statement on Form S-1, filed with the Commission on March 15, 2013 (File No. 333-187309).
(2) 
Previously filed and incorporated herein by reference to Exhibit 3(A) to the Account’s Registration Statement on Form S-1, filed with the Commission on April 22, 2015 (File No. 333-202583).
(3) 
Previously filed and incorporated herein by reference to Exhibit 3(B) to the Account’s Registration Statement on Form S-1, filed with the Commission on April 22, 2015 (File No. 333-202583).

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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 with the Commission on April 30, 1996 (File No. 33-92990).
(5) 
Previously filed and incorporated herein by reference to Exhibit 4(A) to the Account’s Post-Effective Amendment No. 1 to the Registration Statement on Form S-1, filed with the Commission on May 2, 2005 (File No. 333-121493).
(6) 
Previously filed and incorporated herein by reference to the Account’s Pre-Effective Amendment No. 1 to the Registration Statement on Form S-1, filed with the Commission on April 29, 2004 (File No. 333-113602).
(7) 
Previously filed and incorporated by reference to Exhibit 4(C) to the Account’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2010 and filed with the Commission on November 12, 2010 (File No. 33-92990).
(8) 
Previously filed and incorporated herein by reference to Exhibit 10(B) to the Account's Annual Report on Form 10-K for the fiscal year ended December 31, 2012 and filed with the Commission on March 14, 2013 (File No. 33-92990).
(9) 
Previously filed and incorporated herein by reference to Exhibit 4(D)(1) and 4(D)(2) to the Account’s Registration Statement on Form S-1, filed with the Commission on March 21, 2017 (File No. 333-216849).
(10) 
Previously filed and incorporated herein by reference to Exhibit 4(E)(1) and 4(E)(2) to the Account’s Registration Statement on Form S-1, filed with the Commission on March 21, 2017 (File No. 333-216849).
(11) 
Previously filed and incorporated herein by reference to Exhibit 4(F)(1) and 4(F)(2) to the Account’s Registration Statement on Form S-1, filed with the Commission on March 21, 2017 (File No. 333-216849).
(12) 
Previously filed and incorporated herein by reference to Exhibit 4(G) to the Account’s Annual Report on Form 10-K, filed with the Commission on March 15, 2018 (File No. 333-216849).
(13) 
Previously filed and incorporated herein by reference to Exhibit 4(H) to the Account’s Annual Report on Form 10-K, filed with the Commission on March 15, 2018 (File No. 333-216849).
(14) 
Previously filed and incorporated herein by reference to Exhibit 4(I) to the Account’s Annual Report on Form 10-K, filed with the Commission on March 15, 2018 (File No. 333-216849).
(15) 
Previously filed and incorporated herein by reference to Exhibit 10.1 to the Account’s Current Report on Form 8-K, filed with the Commission on March 1, 2018 (File No. 33-92990).
(16) 
Previously filed and incorporated herein by reference to Exhibit 4(J)(1) and 4(J)(2) to the Account’s Current Report on Form 10-K, filed with the Commission on March 14, 2019 (File No. 33-92990).
(17) 
Previously filed and incorporated herein by reference to Exhibit 4(K) to the Account’s Current Report on Form 10-K, filed with the Commission on March 14, 2019 (File No. 33-92990).
(18) 
Previously filed and incorporated herein by reference to Exhibit 4(L)(1) and 4(L)(2) to the Account's Current Report on Form 10-K, filed with the Commission on March 12, 2020 (File No. 33-92990).



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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant, TIAA Real Estate Account, has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized, in New York, New York, on the 8th day of May 2020.
 TIAA REAL ESTATE ACCOUNT
    
 By: TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF AMERICA
    
May 8, 2020By: /s/ Carol W. Deckbar
   
Carol W. Deckbar
Executive Vice President, Chief Product Officer of TIAA Financial Solutions, Teachers Insurance and Annuity Association of America
(Principal Executive Officer)
    
May 8, 2020By: /s/ Oluseun S. Salami
   
Oluseun S. Salami
Senior Vice President, Chief Accounting Officer and Corporate Controller of Teachers Insurance and Annuity Association of America (Principal Financial and Accounting Officer)


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