TIAA REAL ESTATE ACCOUNT - 10-Q Quarterly Report

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10 - Q

(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2005

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________________________ to ________________________

Commission File Numbers 33-92990, 333-13477, 333-22809, 333-59778, 333-83964,
333-113602, and 333-121493

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
(IRS Employer Identification No.)

C/O TEACHERS INSURANCE AND
ANNUITY ASSOCIATION OF AMERICA
730 THIRD AVENUE
NEW YORK, NEW YORK
(address of principal executive offices)

10017-3206
(Zip code)

(212) 490-9000
(Registrant’s telephone number including area code)

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 [X] No [ ]

PART I. FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

INDEX TO UNAUDITED FINANCIAL STATEMENTS
OF THE TIAA REAL ESTATE ACCOUNT
MARCH 31, 2005

Page

Statements of Assets and Liabilities 3

Statements of Operations 4

Statements of Changes in Net Assets 5

Statements of Cash Flows 6

Notes to Financial Statements 7

Statement of Investments 13

TIAA REAL ESTATE ACCOUNT
STATEMENTS OF ASSETS AND LIABILITIES

March 31, 2005 December 31, 2004

(Unaudited)

ASSETS

      Investments, at value:

            Real estate properties

                  (cost: $5,404,413,289 and $5,315,565,355) $5,508,509,875 $5,391,469,250

            Real estate joint ventures and limited partnerships

                  (cost: $1,028,956,749 and $1,085,720,475) 1,251,462,282 1,288,715,399

            Marketable securities:

                  Real estate related

                        (cost: $377,123,617 and $326,109,979) 389,389,692 369,744,168

                  Other

                        (cost: $1,212,839,495 and $676,124,265) 1,212,643,031 675,989,673

                  Total investments

                        (cost: $8,023,333,151 and $7,403,520,074) 8,362,004,880 7,725,918,490

      Cash 379,576 —

      Due from investment advisor 8,443,416 4,185,034

      Other 107,683,019 113,876,400

TOTAL ASSETS 8,478,510,891 7,843,979,924

LIABILITIES

      Mortgage notes payable—Note 5 499,434,728 499,479,256

      Amount due to bank — 231,476

      Payable for securities transactions 65,749,790 —

      Accrued real estate property level expenses 76,102,092 84,959,882

      Security deposits held 13,898,219 13,759,324

TOTAL LIABILITIES 655,184,829 598,429,938

NET ASSETS

      Accumulation Fund 7,578,119,916 7,015,717,162

      Annuity Fund 245,206,146 229,832,824

TOTAL NET ASSETS $7,823,326,062 $7,245,549,986

NUMBER OF ACCUMULATION UNITS

      OUTSTANDING—Notes 6 and 7 35,470,750 33,337,597

NET ASSET VALUE, PER ACCUMULATION UNIT—Note 6 $213.64 $210.44

See notes to financial statements.

TIAA REAL ESTATE ACCOUNT
STATEMENTS OF OPERATIONS (Unaudited)

For the For the

Three Months Three Months

Ended Ended

March 31, 2005 March 31, 2004

(Restated)

INVESTMENT INCOME

Real estate income net:

            Rental income $140,079,278 $90,364,773

            Real estate property level expenses and taxes:

                  Operating expenses 34,258,151 24,509,019

                  Real estate taxes 19,475,830 12,788,019

                  Interest expense 8,015,610 —

Total real estate property level

expenses and taxes 61,749,591 37,297,038

Real estate income, net 78,329,687 53,067,735

Income from real estate joint ventures and limited partnerships 16,201,553 10,052,991

Interest 5,874,621 1,772,803

Dividends 4,743,394 3,954,036

TOTAL INCOME 105,149,255 68,847,565

Expenses—Note 2:

      Investment advisory charges 4,014,442 3,154,486

      Administrative and distribution charges 5,956,858 4,027,093

      Mortality and expense risk charges 1,295,537 867,062

      Liquidity guarantee charges 581,341 371,598

TOTAL EXPENSES 11,848,178 8,420,239

INVESTMENT INCOME, NET
93,301,077 60,427,326

NET REALIZED AND UNREALIZED
      GAIN (LOSS) ON INVESTMENTS

      Net realized gain on investments:

            Real estate properties (16,269) —

            Marketable securities 4,953,534 13,957,043

            Total realized gain on investments: 4,937,265 13,957,043

      Net change in unrealized appreciation on:

            Real estate properties 28,192,691 (13,583,646)

            Real estate joint ventures and limited partnerships 19,510,609 27,293,840

            Marketable securities (31,429,986) 11,527,670

Net change in unrealized

appreciation on investments 16,273,314 25,237,864

NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS
21,210,579 39,194,907

NET INCREASE IN NET ASSETS RESULTING

FROM OPERATIONS $114,511,656 $99,622,233

See notes to financial statements.

TIAA REAL ESTATE ACCOUNT
STATEMENTS OF CHANGES IN NET ASSETS (Unaudited)

For the For the

Three Months Three Months

Ended Ended

March 31, 2005 March 31, 2004

(Restated)

FROM OPERATIONS

      Investment income, net $ 93,301,077 $ 60,427,326

      Net realized gain on investments 4,937,265 13,957,043

      Net change in unrealized appreciation on investments 16,273,314 25,237,864

NET INCREASE IN NET ASSETS

RESULTING FROM OPERATIONS
114,511,656 99,622,233

FROM PARTICIPANT TRANSACTIONS

      Premiums 225,790,274 164,850,645

      Net transfers from (to) TIAA 36,120,606 20,273,584

      Net transfers from (to) CREF Accounts 261,485,235 160,584,984

      Net transfers from (to) TIAA-CREF Institutional Mutual Funds 1,160,928 —

      Annuity and other periodic payments (8,849,926) (6,225,263)

      Withdrawals and death benefits (52,442,697) (25,126,733)

NET INCREASE IN NET ASSETS RESULTING

FROM PARTICIPANT TRANSACTIONS
463,264,420 314,357,217

NET INCREASE IN NET ASSETS
577,776,076 413,979,450

NET ASSETS

      Beginning of period 7,245,549,986 4,793,422,161

      End of period $7,823,326,062 $5,207,401,611

See notes to financial statements.

TIAA REAL ESTATE ACCOUNT
STATEMENTS OF CASH FLOWS (Unaudited)

For the For the

Three Months Three Months

Ended Ended

March 31, 2005 March 31, 2004

(Restated)

CASH FLOWS FROM OPERATING ACTIVITIES

      Net increase in net assets resulting from operations $   114,511,656 $ 99,622,233

      Adjustments to reconcile net increase in net assets resulting

            from operations to net cash used in operating activities:

            Purchase of real estate properties (18,386,458) (11,231,717)

            Capital improvements on real estate properties (19,549,674) (9,267,944)

            Proceeds from sale of real estate properties 3,825,000 —

            Increase in other investments (580,764,679) (454,347,277)

            (Increase) decrease in other assets 1,934,999 (31,802,403)

            (Decrease) increase in amounts due to bank. (231,476) 1,007,092

            (Decrease) increase in accrued real estate property level expenses (8,857,790) 12,052,461

            Increase in security deposits held 138,895 289,645

            Increase in other liabilities 65,705,262 118,515,600

            Net realized gain on total investments (4,937,265) (13,957,043)

            Unrealized gain on total investments (16,273,314) (25,237,864)

NET CASH USED IN

OPERATING ACTIVITIES
(462,884,844) (314,357,217)

CASH FLOWS FROM PARTICIPANT TRANSACTIONS

      Premiums 225,790,274 164,850,645

      Net transfers from TIAA 36,120,606 20,273,584

      Net transfers from CREF Accounts 261,485,235 160,584,984

      Net transfers from (to) TIAA-CREF Institutional Mutual Funds 1,160,928 —

      Annuity and other periodic payments (8,849,926) (6,225,263)

      Withdrawals and death benefits (52,442,697) (25,126,733)

NET CASH PROVIDED BY

PARTICIPANT TRANSACTIONS
463,264,420 314,357,217

NET INCREASE IN CASH
379,576 —

CASH

      Beginning of period — —

      End of period $ 379,576 $ —

      Supplemental disclosure: Cash paid for interest $ 8,015,610 $ —

See notes to financial statements.

TIAA REAL ESTATE ACCOUNT
NOTES TO FINANCIAL STATEMENTS (Unaudited)

Note 1—Significant Accounting Policies

The TIAA Real Estate Account (“Account”) is a segregated investment account of Teachers Insurance and Annuity Association of America (“TIAA”) and was established by resolution of TIAA’s Board of Trustees 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 investment objective of the Account is a favorable long-term rate of return primarily through rental income and capital appreciation from real estate investments owned by the Account. The Account holds real estate properties directly and through wholly-owned subsidiaries. The Account also holds interests in real estate joint ventures and limited partnerships in which the Account does not hold a controlling interest. Such joint ventures and limited partnerships are not consolidated for financial statement purposes. The Account also invests in publicly-traded securities and other instruments to maintain adequate liquidity for operating expenses, capital expenditures and to make benefit payments. The financial statements were prepared in accordance with U.S. generally accepted accounting principles which may require the use of estimates made by management. Actual results may vary from those estimates. The following is a summary of the significant accounting policies of the Account.

Basis of Presentation: The accompanying financial statements include the Account and those subsidiaries wholly-owned by TIAA for the benefit of the Account. All significant intercompany accounts and transactions have been eliminated in consolidation.

Valuation of Real Estate Properties: Investments in real estate properties are stated at fair value, as determined in accordance with procedures approved by the Investment Committee of the TIAA Board of Trustees and in accordance with the responsibilities of the Board as a whole; accordingly, the Account does not record depreciation. Fair value for real estate properties is defined as the most probable price for which a property will sell in a competitive market under all conditions requisite to a fair sale. Determination of fair value involves subjective judgement because the actual market value of real estate can be determined only by negotiation between the parties in a sales transaction. Real estate properties owned by the Account are initially valued at their respective purchase prices (including acquisition costs). Subsequently, independent appraisers value each real estate property at least once a year. The independent fiduciary, The Townsend Group, must approve all independent appraisers used by the Account. The independent fiduciary can also require additional appraisals if it believes that a property’s value has changed materially or otherwise to assure that the Account is valued correctly. TIAA’s appraisal staff performs a valuation review of each real estate property on a quarterly basis and updates the property value if it believes that the value of the property has changed since the previous valuation review or appraisal. Real estate properties subject to a mortgage are generally valued as described; however, the value of the property may be adjusted if it is determined that the fair value of the outstanding debt could have a material effect on the equity investment value of the property. The independent fiduciary reviews and approves any such valuation adjustments which exceed certain prescribed limits before such adjustments are recorded by the Account. The Account continues to use the revised value to calculate the Account’s net asset value until the next valuation review or appraisal.

Valuation of Real Estate Joint Ventures and Limited Partnerships: Real estate joint ventures and limited partnerships are stated at the Account’s equity in the net assets of the underlying entities, which value their real estate holdings and mortgage notes payable at fair value.

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 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 exchange. Debt securities, other than money market instruments, are valued at the most recent bid price or the equivalent quoted yield for such securities (or those of comparable maturity, quality and type). Money market instruments, with maturities of one year or less, are valued in the same manner as debt securities or derived from a pricing matrix that has various types of money market instruments along one axis and various

maturities along the other. Portfolio securities and limited partnership interests for which market quotations are not readily available are valued at fair value as determined in good faith under the direction of the Investment Committee of the TIAA Board of Trustees and in accordance with the responsibilities of the Board as a whole.

Accounting for Investments: Real estate transactions are accounted for as of the date on which the purchase or sale transactions for the real estate properties close (settlement date). Rent from real estate properties consists of all amounts earned under tenant operating 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 as soon as actual operating results are determined.

Income from real estate joint ventures and limited partnerships is recorded based on the Account’s proportional interest in the income earned by the joint venture or partnership that has been distributed from the joint venture to the Account.

Securities transactions are accounted for as of the date the securities are purchased or sold (trade date). Interest income is recorded as earned and includes accrual of discount and amortization of premium. Dividend income is recorded on the ex-dividend date or as soon as the Account is informed of the dividend. Realized gains and losses on securities transactions are accounted for on the specific identification method.

Federal Income Taxes: Based on provisions of the Internal Revenue Code, the Account is taxed as a segregated asset account of TIAA. The Account should incur no material federal income tax attributable to the net investment experience of the Account.

Restatement and Reclassifications: In prior years’ financial statements, the Account had consolidated joint ventures in which it held a majority financial interest and had joint control over significant decisions with its minority partner. It was determined that such investments should not have been consolidated because the Account did not have a majority of the voting rights to control significant decisions. As a result, the Account has restated its interim 2004 financial statements to conform to the treatment used at December 31, 2004, which reflects the Account’s equity in net assets and operations of the underlying entities. This restatement did not affect the Account’s total net assets, net asset value per accumulation unit, net increase in net assets resulting from operations nor the Account’s total return, as previously reported in the Account’s interim 2004 financial statements. In addition, the Account changed the presentation of operating results in its interim 2004 financial statements to eliminate discontinued operations reporting, which more appropriately reflects the Account’s business activities.

Note 2—Management Agreements

Investment advisory services for the Account are provided by TIAA employees, under the direction of TIAA’s Board of Trustees and its Investment Committee, pursuant to investment management procedures adopted by TIAA for the Account. TIAA’s investment management decisions for the Account are also subject to review by the Account’s independent fiduciary. TIAA also provides all portfolio accounting and related services for the Account.

Distribution and administrative services for the Account are provided by TIAA-CREF Individual & Institutional Services, Inc. (“Services”) pursuant to a Distribution and Administrative Services Agreement with the Account. Services, a wholly-owned subsidiary of TIAA, is a registered broker-dealer and member of the National Association of Securities Dealers, Inc.

The services provided by TIAA and Services are provided at cost. TIAA and Services receive payments from the Account on a daily basis according to formulas established each year with the objective of keeping the payments as close as possible to the Account’s actual expenses. Any differences between actual expenses and the amounts paid are adjusted quarterly.

TIAA also provides a liquidity guarantee to the Account, for a fee, to ensure that sufficient funds are available to meet participant transfer and cash withdrawal requests in the event that the Account’s cash flows and liquid investments are insufficient to fund such requests. TIAA also receives a fee for assuming certain mortality and expense risks.

Note 3—Leases

The Account’s real estate properties are leased to tenants under operating lease agreements which expire on various dates through 2104. Aggregate minimum annual rentals for the properties owned, excluding short-term residential and storage facility leases, are as follows:

Year Ending

December 31,

2005 $ 545,179,699

2006 507,231,587

2007 457,633,440

2008 400,543,014

2009 347,283,132

2010-2104 1,109,876,800

Total $3,367,747,672

Certain leases provide for additional rental amounts based upon the recovery of actual operating expenses in excess of specified base amounts.

Note 4—Investment in Unconsolidated Real Estate Joint Ventures

The Account owns several real estate properties through unconsolidated joint ventures and receives distributions and allocations of profits and losses from the joint ventures based on the Account’s ownership interest percentages. Several of these joint ventures have mortgage notes payable on the properties owned. The Account’s allocated portion of the mortgage notes payable at March 31, 2005 is $344,745,544. The Accounts’ equity in the joint ventures at March 31, 2005, net of any debt, is $1,220,017,769. A condensed summary of the financial position and results of operations of the joint ventures is shown below.

March 31, 2005 December 31, 2004

Assets

Real estates properties $ 2,732,431,238 $ 2,760,426,300

Other assets 79,388,213 55,021,655

            Total assets $ 2,811,819,451 $ 2,815,447,955

Liabilities and Equity

Mortgage notes payable,
      including accrued interest $ 617,991,089 $ 618,773,569

Other liabilities 66,309,598 47,389,201

            Total liabilities 684,300,687 666,162,770

Equity 2,127,518,764 2,149,285,185

            Total liabilities and equity $ 2,811,819,451 $ 2,815,447,955

Three Months Ended Three Months Ended

March 31, 2005 March 31, 2004

(Restated)

Operating Revenues and Expenses

      Revenues $ 62,278,968 $ 55,283,807

      Expenses 34,919,401 27,570,075

            Excess of revenues over expenses $ 27,359,567 $27,713,732

Note 5—Mortgage Notes Payable

Property Interest Rate Amount Due

Ontario Industrial Portfolio 7.24% paid monthly $ 9,434,728 May 01, 2011*

50 Freemont 6.40% paid monthly 135,000,000 August 21, 2013

IDX Tower 6.40% paid monthly 145,000,000 August 21, 2013

1001 Pennsylvania Ave 6.40% paid monthly 210,000,000 August 21, 2013

Total $499,434,728

* Principal payments due monthly with balloon payment of $8,127,115 due on May 1, 2011.

Principal on mortgage notes payable is due as follows:

Amount

2005 $ 128,833

2006 186,862

2007 201,415

2008 215,163

2009 233,858

Thereafter 498,468,597

Total $499,434,728

Note 6—Condensed Financial Information

Selected condensed financial information for an Accumulation Unit of the Account is presented below.

For the

Three Months

Ended

March 31, For the Years Ended December 31,

2005 (1) 2004 2003 2002 2001 2000

(Unaudited) (Restated) (Restated) (Restated) (Restated)

Per Accumulation Unit Data:

      Rental income $ 3.999 $ 13.422 $ 15.584 $ 14.225 $ 14.862 $ 14.530

      Real estate property

            level expenses 1.763 5.331 5.890 4.819 4.754 4.674

Real estate income, net
2.236 8.091 9.694 9.406 10.108 9.856

      Income from real estate joint ventures

            and limited partnerships 0.462 1.935 1.379 0.807 0.130 0.056

      Dividends and interest 0.303 1.406 0.839 1.249 1.950 2.329

Total income
3.001 11.432 11.912 11.462 12.188 12.241

      Expense charges (1) 0.338 1.241 1.365 1.101 0.995 0.998

Investment income, net
2.663 10.191 10.547 10.361 11.193 11.243

      Net realized and unrealized
            gain (loss) on investments 0.537 13.314 2.492 (4.621) (1.239) 3.995

      Net increase in

            Accumulation Unit Value 3.200 23.505 13.039 5.740 9.954 15.238

      Accumulation Unit Value:

            Beginning of year 210.444 186.939 173.900 168.160 158.206 142.968

            End of period $213.644 $210.444 $186.939 $173.900 $168.160 $158.206

      Total return 1.52% 12.57% 7.50% 3.41% 6.29% 10.66%

      Ratios to Average Net Assets:

            Expenses (2) 0.16% 0.63% 0.76% 0.67% 0.61% 0.67%

            Investment income, net 1.24% 5.17% 5.87% 5.65% 6.81% 7.50%

      Portfolio turnover rate:

            Real estate properties 0.06% 2.32% 5.12% 0.93% 4.61% 3.87%

            Marketable securities 11.90% 143.47% 71.83% 52.08% 40.62% 32.86%

      Thousands of Accumulation Units

            Outstanding at end of period 35,471 33,338 24,724 20,347 18,456 14,605

      Net assets end of period

            (in thousands) $7,823,326 $7,245,550 $4,793,422 $3,675,989 $3,213,667 $2,387,122

(1) The percentages shown for this period are not annualized.

(2)
Expense charges per Accumulation Unit and the Ratio of Expenses to Average Net Assets exclude real estate property level expenses. If the real estate property level expenses were included, the expense charge per Accumulation Unit for the three months ended March 31, 2005 would be $2.101 ($6.572, $7.255, $5.920, $5.749 and $5.672 for the years ended December 31, 2004, 2003, 2002, 2001 and 2000, respectively), and the Ratio of Expenses to Average Net Assets for the three months ended March 31, 2005 would be 0.98% (3.33%, 4.04%, 3.61%, 3.50% and 3.79% for the years ended December 31, 2004, 2003, 2002, 2001 and 2000, respectively).

Note 7—Accumulation Units

Changes in the number of Accumulation Units outstanding were as follows:

For the For the

Three Months Year

Ended Ended

March 31, 2005 December 31, 2004

(Unaudited)

Accumulation Units:

      Credited for premiums 1,087,716 3,746,093

      Credited for transfers, net disbursements
            and amounts applied to the Annuity Fund 1,045,437 4,867,321

      Outstanding:

            Beginning of year 33,337,597 24,724,183

            End of period 35,470,750 33,337,597

Note 8—Commitments

During the normal course of business, the Account enters into discussions and agreements to purchase or sell real estate properties. As of March 31, 2005, the Account had no outstanding commitments to purchase or sell any properties.

TIAA REAL ESTATE ACCOUNT
STATEMENT OF INVESTMENTS
March 31, 2005

REAL ESTATE PROPERTIES—65.87% and 69.78% Value

Location / Description 3/31/05 12/31/04

Arizona: (Unaudited)

               Biltmore Commerce Center—Office building $ 35,303,567 $ 34,104,182

               Mountain RA Industrial Portfolio—Industrial building 5,653,221 5,513,947

California:

               3 Hutton Centre Drive—Office building 42,768,858 41,106,333

               9 Hutton Centre—Office building 23,500,000 23,169,449

               50 Fremont—Office building 325,800,000⁽¹⁾ 323,264,602⁽¹⁾

               88 Kearny Street—Office building 69,501,053 69,026,718

               Cabot Industrial Portfolio—Industrial building 63,500,000 —

               Capitol Place—Office building 42,424,645 42,400,000

               Centerside I—Office building 62,500,000 65,037,900

               Centre Pointe and Valley View—Industrial building 25,600,000 25,329,023

               Eastgate Distribution Center—Industrial building 19,000,000 18,800,000

               Kenwood Mews—Apartments 28,200,000 27,700,000

               Larkspur Courts—Apartments 65,000,000 66,000,000

               The Legacy at Westwood—Apartments 94,000,000 90,750,000

               Northpoint Commerce Center—Industrial building 47,000,000 46,000,000

               Ontario Industrial Portfolio—Industrial building 186,134,728⁽¹⁾ 187,079,256⁽¹⁾

               Regents Court—Apartments 56,000,000 56,700,000

               Northern CA RA Industrial Portfolio—Industrial building 58,302,904 59,169,642

               Southern CA RA Industrial Portfolio—Industrial building 82,922,730 89,097,299

               Westcreek—Apartments 28,150,000 28,161,865

               West Lake North Business Park—Office building 50,025,793 50,021,000

               Westwood Marketplace—Shopping center 82,500,000 80,019,410

Colorado:

               The Lodge at Willow Creek—Apartments 32,300,000 32,201,274

               The Market at Southpark—Shopping center 33,017,350 33,522,400

               Monte Vista—Apartments 22,544,214 22,501,650

Connecticut:

               Ten & Twenty Westport Road—Office building 152,300,000 148,000,000

Delaware:

               Mideast RA Industrial Portfolio- Industrial building 13,500,000 16,543,121

Florida:

               701 Brickell—Office building 179,159,569 177,000,000

               4200 West Cypress Street—Office building 34,002,000 33,900,000

               Golfview—Apartments 28,325,000 28,543,437

               The Fairways of Carolina—Apartments 18,000,000 18,100,000

               The Greens at Metrowest—Apartments 13,500,000 14,623,330

               Maitland Promenade One—Office building 36,102,991 36,053,639

               Plantation Grove—Shopping center 11,800,000 11,200,000

               Pointe on Tampa Bay—Office building 42,387,992 40,551,310

               Quiet Waters at Coquina Lakes—Apartments 19,200,000 19,200,000

               Royal St. George—Apartments 19,400,000 19,400,000

               Sawgrass Office Portfolio—Office building 54,000,000 52,000,000

               South Florida Apartment Portfolio—Apartments 47,700,000 47,700,000

Georgia:

               Alexan Buckhead—Apartments 36,000,000 37,500,000

               Atlanta Industrial Portfolio—Industrial building 36,082,465 37,750,840

See notes to financial statements.

TIAA REAL ESTATE ACCOUNT
STATEMENT OF INVESTMENTS
March 31, 2005

Value

Location / Description 3/31/05 12/31/04

Illinois: (Unaudited)

               Chicago Caleast Industrial Portfolio—Industrial building $ 42,543,300 $ 42,000,000

               Chicago Industrial Portfolio—Industrial building 70,006,050 70,002,239

               Columbia Center III—Office building 27,800,000 28,900,000

               Oak Brook Regency Towers—Office building 72,100,000 68,400,000

               Parkview Plaza—Office building 48,700,000 48,700,000

               East North Central RA Industrial Portfolio—Industrial building 37,000,000 23,734,331

               Rolling Meadows—Shopping center 16,700,000 15,750,000

Kentucky:

               IDI Kentucky Portfolio—Industrial building 52,400,000 49,000,000

Maryland:

               Corporate Boulevard—Office building 60,047,838 65,038,710

               FEDEX Distribution Facility—Industrial building 8,500,000 8,200,000

Massachusetts:

               Batterymarch Park II—Office building 10,701,278 10,700,000

               Longwood Towers—Apartments 92,000,000 82,500,000

               Needham Corporate Center—Office building 15,000,000 15,030,046

               Northeast RA Industrial Portfolio—Industrial building 27,700,000 33,110,903

Michigan:

               Indian Creek—Apartments 17,250,000 18,825,000

Minnesota:

               Interstate Crossing—Industrial building 7,100,000 7,300,000

               River Road Distribution Center—Industrial building 4,680,000 4,600,000

Nevada:

               UPS Distribution Facility—Industrial building 12,800,000 12,900,000

New Jersey:

               10 Waterview Boulevard—Office building 26,400,000 26,400,000

               371 Hoes Lane—Office building 10,700,000 10,666,570

               Konica Photo Imaging Headquarters—Industrial building 21,200,000 21,200,000

               Morris Corporate Center III—Office building 82,300,000 82,300,000

               NJ Caleast Industrial Portfolio—Industrial building 40,000,000 39,300,000

               South River Road Industrial—Industrial building 36,000,000 34,900,000

New York:

               780 Third Avenue—Office building 197,000,000 197,000,000

               The Colorado—Apartments 58,500,000 58,156,056

Ohio:

               Bent Tree—Apartments 12,600,000 13,600,000

               Columbus Portfolio—Office building 22,100,000 21,500,000

Oregon:

               Five Centerpointe—Office building 15,000,000 14,500,000

Pennsylvania:

               Lincoln Woods—Apartments 31,500,180 31,472,870

Tennessee:

               Memphis Caleast Industrial Portfolio—Industrial building 49,300,000 47,400,000

               Summit Distribution Center—Industrial building 24,800,000 23,800,000

See notes to financial statements.

TIAA REAL ESTATE ACCOUNT
STATEMENT OF INVESTMENTS
March 31, 2005

Value

Location / Description 3/31/05 12/31/04

Texas: (Unaudited)

               Butterfield Industrial Park—Industrial building $ 4,600,000 $ 4,600,000⁽²⁾

               Dallas Industrial Portfolio—Industrial building 138,500,000 138,500,000

               Four Oaks Place—Office building 257,579,409 255,357,238

               The Legends at Chase Oaks—Apartments 27,000,000 27,051,851

Utah:

               Landmark at Salt Lake City (Building #4)—Industrial building 12,800,000 12,500,000

Virginia:

               Ashford Meadows—Apartments 76,900,000 68,000,000

               Fairgate at Ballston—Office building 29,579,175 28,500,017

               Monument Place—Office building 40,000,000 37,000,000

               One Virginia Square—Office building 43,000,000 42,500,000

Washington:

               Rainier Corporate Park– Industrial building 57,000,000 56,035,878

               Northwest RA Industrial Portfolio—Industrial building 17,124,862 19,438,852

               IDX Tower—Office building 353,000,000⁽¹⁾ 347,978,282⁽¹⁾

Washington DC:

               1001 Pennsylvania Avenue—Office building 467,208,456⁽¹⁾ 466,424,940⁽¹⁾

               1015 15th Street—Office building 63,180,247 59,000,134

               1900 K Street—Office building 219,000,000 219,453,706

               Mazza Gallerie—Shopping center 80,500,000 81,000,000

               The Farragut Building—Office building 48,000,000 46,500,000

               TOTAL REAL ESTATE PROPERTIES

                     (Cost $5,404,413,289 and $5,315,565,355) 5,508,509,875 5,391,469,250

REAL ESTATE JOINT VENTURES AND LIMITED PARTNERSHIPS—
      14.97% and 16.68%

REAL ESTATE JOINT VENTURES—14.59% and 16.28%

               Teachers REA LLC, which owns

                     Cabot Industrial Portfolio (96% Account Interest) — 60,600,000

               Bisys Crossings I, LLC

                     BISYS Fund Services Building (96% Account Interest) 37,132,584 34,751,940

               GA-Buckhead LLC

                     Prominence in Buckhead (75% Account Interest) 85,558,729 80,618,771

               IL-161 North Clark Street LLC

                     161 North Clark Street (75% Account Interest) 156,182,803 157,282,972

               Mellon Financial Center at One Boston Place

                     One Boston Place (50.25% Account Interest) 138,810,067 139,382,942

               Storage Portfolio⁽³⁾ I LLC

                     Storage Portfolio (75% Account Interest) 50,096,024⁽⁴⁾ 50,430,399⁽⁴⁾

               CA-Treat Towers LP

                     Treat Towers (75% Account Interest) 88,443,400 88,524,364

               IDI Nationwide Industrial Portfolio

                     IDI Nationwide Portfolio⁽³⁾ (60% Account Interest) 66,088,647⁽⁴⁾ 64,041,442⁽⁴⁾

               CA-Colorado Center Limited Partnership

                     Yahoo Center (50% Account Interest) 233,163,242 222,702,820

               Florida Mall Association, Ltd.

                     The Florida Mall (50% Account Interest) 163,764,241⁽⁴⁾ 162,632,565⁽⁴⁾

               Teachers REA IV, LLC, which owns

                     Tyson’s Executive Plaza II (50% Account Interest) 28,320,826 27,894,742

See notes to financial statements.

TIAA REAL ESTATE ACCOUNT
STATEMENT OF INVESTMENTS
March 31, 2005

Value

Location / Description 3/31/05 12/31/04

               West Dade County Associates (Unaudited)

                     Miami International Mall (50% Account Interest) $ 64,384,482⁽⁴⁾ $ 61,577,257⁽⁴⁾

               West Town Mall Joint Venture

                     West Town Mall (50% Account Interest) 108,072,724⁽⁴⁾ 107,452,790⁽⁴⁾

               TOTAL REAL ESTATE JOINT VENTURES

                     (Cost $1,003,068,444 and 1,060,788,630) 1,220,017,769 1,257,893,004

LIMITED PARTNERSHIPS— 0.38% and 0.40%

               Essex Apartment Value Fund, LP (10% Account Interest) 10,484,495 11,434,495

               Heitman Value Part Fund (8.43% Account Interest) 3,766,214 3,766,214

               MONY/Transwestern Fund II (16.66% Account Interest) 7,075,763 3,134,952

               MONY/Transwestern Mezzanine Realty Partners LP

                     (19.75% Account Interest) 10,118,041 12,486,734

               TOTAL LIMITED PARTNERSHIPS

                     (Cost $25,888,305 and $24,931,845) 31,444,513 30,822,395

TOTAL REAL ESTATE JOINT VENTURES AND LIMITED PARTNERSHIPS

                     (Cost $1,028,956,749 and $1,085,720,475) 1,251,462,282 1,288,715,399

MARKETABLE SECURITIES—19.16% and 13.54%

REAL ESTATE RELATED—4.66% and 4.79%

REAL ESTATE EQUITY SECURITIES—4.19% and 4.25%

Shares

3/31/05 12/31/04 Issuer

200,000 — Aames Investment Corp. 1,640,000 —

70,000 70,000 Acadia Realty Trust 1,125,600 1,141,000

550,000 550,000 Affordable Residential Communities 6,957,500 7,892,500

36,685 36,685 AMB Property Corp. 1,386,693 1,481,707

— 446,100 American Campus Communities — 10,032,789

140,000 140,000 Amli Residential Properties 3,834,600 4,480,000

46,000 46,000 Archstone-Smith Trust 1,569,060 1,761,800

232,900 232,900 Ashford Hospitality Trust 2,375,580 2,531,623

40,000 — Avalonbay Communities Inc. 2,675,600 —

150,000 150,000 Boston Properties Inc. 9,034,500 9,700,500

— 150,000 Brandywine Realty Trust — 4,408,500

51,800 35,000 BRE Properties 1,828,540 1,410,850

60,000 60,000 Capital Lease Funding Inc. 663,000 750,000

241,000 — Catellus Development Corp. 6,422,650 —

45,848 — CB Richard Ellis Group Inc. 1,604,222 —

100,000 60,000 Centerpoint Properties Trust. 4,100,000 2,873,400

143,000 143,000 Corporate Office Properties 3,786,640 4,197,050

100,000 — Cousins Properties Inc. 2,587,000 —

434,000 434,000 Developers Diversified Realty 17,251,500 19,256,580

419,600 1,072,990 Digital Realty Trust Inc. 6,029,652 14,453,175

252,300 — Duke Realty Corp. 7,531,155 —

700,000 — ECC Capital Corp. 4,200,000 —

150,000 — Equity Inns Inc. 1,654,500 —

17,000 31,875 Equity Lifestyle Properties 599,250 1,139,532

See notes to financial statements.

TIAA REAL ESTATE ACCOUNT
STATEMENT OF INVESTMENTS
March 31, 2005

Shares Value

3/31/05

12/31/04
Issuer 3/31/05 12/31/04

(Unaudited)

— 147,518 Equity Office Properties Trust $ — $ 4,295,724

180,000 180,000 Equity Residential 5,797,800 6,512,400

550,000 594,500 Extra Space Storage Inc. 7,425,000 7,924,685

— 413,873 Falcon Financial Investment — 2,897,111

1,367,000 1,367,000 Feldman Mall Properties 16,554,370 17,784,670

110,000 110,000 General Growth Properties 3,751,000 3,977,600

— 75,000 Glenborough Realty Trust Inc. — 1,596,000

912,000 912,000 GMH Communities Trust 10,679,520 12,859,200

1,800 38,818 Gramercy Capital Corp. 35,100 799,651

— 72,550 Great Wolf Resorts Inc. — 1,620,767

75,000 75,000 HealthCare Realty Trust Inc. 2,733,000 3,052,500

400,000 350,000 Hersha Hospitality Trust 3,988,000 4,007,500

150,000 — Hilton Hotels Corp. 3,352,500 —

236,600 168,000 Home Properties Inc. 9,180,080 7,224,000

300,000 325,000 Homebanc Corp/Ga 2,652,000 3,146,000

50,000 74,257 Impac Mortgage Holdings Inc. 959,000 1,683,406

150,000 — Innkeepers USA Trust 1,936,500 —

300,000 300,000 Interstate Hotels & Resorts 1,446,000 1,608,000

1,908,000 1,908,000 Jameson Inns Inc. 2,804,760 3,758,760

54,000 54,000 Kimco Realty Corp. 2,910,600 3,131,460

324,443 324,443 Kite Realty Group Trust 4,671,979 4,957,489

150,000 — Lasalle Hotel Properties 4,357,500 —

— 215,078 Lexington Corporate Properties Trust — 4,856,461

1,266,660 1,266,660 Lodgian Inc. 12,983,265 15,579,918

162,000 162,000 LTC Properties Inc. 2,810,700 3,225,420

150,000 150,000 Macerich Company/The 7,992,000 9,420,000

30,420 30,420 Mack-Cali Realty Corp. 1,288,287 1,400,233

40,000 40,000 Mills Corp/The 2,116,000 2,550,400

150,000 150,000 Mission West Properties 1,590,000 1,596,000

138,900 — NewCastle Investment Corp. 4,111,440 —

— 270,000 New York Mortgage Trust Inc. — 3,024,000

100,000 100,000 Northstar Realty Finance Corp. 968,000 1,145,000

173,622 — Novastar Financial Inc. 6,252,128 —

525,000 525,000 Origen Financial Inc. 3,627,750 3,927,000

157,500 70,700 Parkway Properties 7,355,250 3,588,025

75,000 75,000 Prentiss Properties Trust 2,562,000 2,865,000

363,400 200,000 Prologis Trust 13,482,140 8,666,000

682,353 507,000 Reckson Associates Realty Corp. 20,948,237 16,634,670

83,636 45,000 Regency Centers Corp. 3,983,583 2,493,000

255,721 255,900 Simon Property Group Inc. 15,491,578 16,549,053

200,000 — Spirit Finance Corp. 2,172,000 —

134,869 — Starwood Hotels & Resorts 8,096,186 —

303,820 303,820 Sunset Financial Resources 2,965,283 3,162,766

314,500 315,000 Sunstone Hotel Investors Inc. 6,746,025 6,545,700

268,200 268,200 Thomas Properties Group 3,320,316 3,416,868

See notes to financial statements.

TIAA REAL ESTATE ACCOUNT
STATEMENT OF INVESTMENTS
March 31, 2005

Shares Value

3/31/05

12/31/04
    Issuer 3/31/05 12/31/04

(Unaudited)

1,400,000 1,500,000 Trizec Properties Inc. $ 26,600,000 $ 28,380,000

100,000 100,000 United Dominion Realty Trust 2,087,000 2,480,000

160,000 77,558 Ventas Inc. 3,993,600 2,125,865

150,000 50,000 Vornado Realty Trust 10,390,500 3,806,500

175,231 — Windrose Medical Properties 2,402,417 —

TOTAL REAL ESTATE EQUITY SECURITIES
      (Cost $338,267,055 and $284,166,107 )
350,427,636

327,785,808

COMMERCIAL MORTGAGE BACKED SECURITIES—0.47% and 0.54%

Principal

3/31/05

12/31/04

Issuer, Current Rate and Maturity Date

$10,000,000 $10,000,000 Bear Stearns CMS

3.170% 05/14/16 10,003,900 10,006,950

6,912,810 10,000,000 COMM 2004 HTL1 A1

3.194% 07/15/16 6,919,371 10,013,820

10,000,000 10,000,000 GSMS 2001—Rock A2FL

3.230% 05/03/18 10,174,430 10,070,610

10,000,000 10,000,000 MSDWC 2001—280 A2F

3.260% 02/03/16 9,913,950 9,915,150

1,940,947 1,940,947 Trize 2001—TZHA A3FL

3.324% 03/15/13 1,950,405 1,951,830

TOTAL COMMERCIAL MORTGAGE BACKED SECURITIES

      (Cost $38,856,562 and $41,943,872)
38,962,056

41,958,360

TOTAL REAL ESTATE RELATED

      (Cost $377,123,617 and $326,109,979 )
389,389,692

369,744,168

OTHER—14.50% and 8.75%

COMMERCIAL PAPER—9.50% and 4.51%

11,440,000 — Abbey National North America, LLC

2.760% 04/19/05 11,423,215 —

20,000,000 — ABN AMRO North America Finance, Inc.

2.740% 05/09/05 19,938,250 —

6,090,000 25,000,000 American Honda Finance, Corp.

2.630% 04/19/05 6,081,065 24,981,667

18,000,000 — American Honda Finance, Corp.

2.660% 04/13/05 17,981,995 —

20,000,000 — Bank of Nova Scotia

2.750% 05/11/05 19,935,083 —

15,000,000 10,000,000 Beta Finance, Inc.

2.770% 05/19/05 14,940,587 9,991,445

1,200,000 15,000,000 Beta Finance, Inc.

2.980% 06/20/05 1,191,900 14,980,050

20,000,000 18,100,000 BMW US Capital Corp.

2.750% 05/16/05 19,925,633 18,077,073

4,970,000 13,000,000 CC (USA), Inc.

2.530% 04/08/05 4,966,941 12,988,878

2,205,000 — CC (USA), Inc.

2.560% 04/01/05 2,204,826 —

See notes to financial statements.

TIAA REAL ESTATE ACCOUNT
STATEMENT OF INVESTMENTS
March 31, 2005

Principal Value

3/31/05

12/31/04
Issuer, Current Rate and Maturity Date 3/31/05 12/31/04

(Unaudited)

$ 5,065,000 $ — CC (USA), Inc.

2.940% 06/02/05 $ 5,038,808 $ —

11,000,000 — CC (USA), Inc.

2.650% 04/11/05 10,990,690 —

5,190,000 3,100,000 Ciesco LP

2.640% 04/25/05 5,179,980 3,097,537

15,695,000 — Ciesco LP

2.830% 05/13/05 15,641,571 —

10,000,000 — Citicorp

2.700% 04/28/05 9,978,378 —

10,435,000 — Coca Cola Co

2.700% 04/28/05 10,412,437 —

15,695,000 25,000,000 Corporate Asset Funding Corp, Inc.

2.620% 04/14/05 15,678,093 24,949,625

9,000,000 — Corporate Asset Funding Corp, Inc.

2.820% 05/09/05 8,972,212 —

3,055,000 — Delaware Funding Corp.

2.650% 04/08/05 3,053,119 —

20,000,000 — Dexia Bank

2.470% 04/04/05 19,999,326 —

5,000,000 — Dexia Bank

2.735% 05/17/05 4,998,344 —

13,585,000 — Dorada Finance Inc.

2.540% 04/11/05 13,573,502 —

11,000,000 — Dorada Finance Inc.

2.800% 05/16/05 10,959,098 —

15,000,000 — Edison Asset Securitization, LLC

2.670% 04/22/05 14,974,517 —

25,000,000 — FCAR Owner Trust I

2.820% 05/12/05 24,916,875 —

20,000,000 2,670,000 Fortune Brands

2.850% 05/10/05 19,936,667 2,668,205

3,615,000 — Fortune Brands

2.850% 05/11/05 3,603,266 —

20,000,000 — General Electric Capital Corp.

2.880% 06/07/05 19,888,367 —

9,191,000 15,000,000 Govco Inc.

2.600% 04/19/05 9,177,515 14,990,833

5,000,000 10,000,000 Govco Inc.

2.780% 05/11/05 4,983,771 9,986,700

— 25,000,000 Greyhawk Funding, LLC

2.140% 02/01/05 — 24,948,000

— 10,750,000 Harley—Davidson Funding Corp.

2.230% 02/14/05 — 10,718,556

4,330,000 — Harrier Finance Funding (US), LLC

2.660% 04/25/05 4,321,641 —

15,000,000 — Harrier Finance Funding (US), LLC

2.570% 04/06/05 14,993,075 —

See notes to financial statements.

TIAA REAL ESTATE ACCOUNT
STATEMENT OF INVESTMENTS
March 31, 2005

Principal Value

3/31/05

12/31/04
Issuer, Current Rate and Maturity Date 3/31/05 12/31/04

(Unaudited)

$ 2,140,000 $ — Harrier Finance Funding (US), LLC

2.820% 05/20/05 $ 2,131,351 $ —

10,000,000 9,565,000 Kitty Hawk Funding Corp.

2.740% 04/12/05 9,990,767 9,550,461

15,000,000 15,000,000 Kitty Hawk Funding Corp.

2.790% 04/26/05 14,969,883 14,975,300

25,000,000 — Links Finance LLC

2.520% 04/05/05 24,990,382 —

25,000,000 — McGraw—Hill, Inc.

2.750% 04/28/05 24,945,945 —

20,000,000 — Morgan Stanley

2.790% 04/06/05 19,990,767 —

20,000,000 10,000,000 Paccar Financial Corp.

2.710% 04/14/05 19,978,456 9,984,800

20,000,000 — Park Avenue Receivables Corp.

2.650% 04/07/05 19,989,228 —

20,000,000 — Pfizer, Inc.

2.900% 05/31/05 19,899,858 —

16,000,000 — Pitney Bowes Inc.

2.750% 04/11/05 15,986,458 —

21,342,000 — Preferred Receivables Funding Corp.

2.790% 04/21/05 21,307,390 —

19,000,000 10,000,000 Private Export Funding Corp.

3.170% 08/29/05 18,740,993 9,992,667

5,555,000 — Proctor & Gamble

2.940% 06/20/05 5,517,504 —

18,401,000 25,000,000 Rabobank USA Financial Corp.

2.560% 04/01/05 18,399,548 24,946,375

3,275,000 — Rabobank USA Financial Corp.

2.780% 05/03/05 3,266,444 —

— 23,135,000 Royal Bank of Canada

1.960% 01/18/05 — 23,108,626

25,000,000 16,430,000 Royal Bank of Scotland PLC

2.690% 05/02/05 24,936,667 16,393,690

10,190,000 — Scaldis Capital LLC

2.950% 06/15/05 10,125,463 —

— 2,000,000 Sherwin—Williams Co.

2.240% 01/20/05 — 1,997,467

10,490,000 — Sigma Finance Inc.

2.640% 04/12/05 10,480,314 —

14,000,000 15,000,000 Sigma Finance Inc.

2.660% 04/20/05 13,978,378 14,965,875

15,000,000 — Societe Generale North America, Inc.

2.770% 04/19/05 14,977,992 —

7,235,000 — Societe Generale North America, Inc.

2.780% 04/04/05 7,232,773 —

20,000,000 — Suntrust Bank

2.680% 05/03/05 19,995,293 —

See notes to financial statements.

TIAA REAL ESTATE ACCOUNT
STATEMENT OF INVESTMENTS
March 31, 2005

Principal Value

3/31/05

12/31/04
Issuer, Current Rate and Maturity Date 3/31/05 12/31/04

(Unaudited)

$20,000,000 $25,000,000 Toronto Dominion Bank

3.160% 09/14/05 $ 19,982,078 $ 24,977,213

10,000,000 25,000,000 UBS Finance, (Delaware) Inc.

2.790% 05/03/05 9,973,875 24,990,500

15,000,000 — UBS Finance, (Delaware) Inc.

2.770% 04/25/05 14,971,042 —

23,210,000 — Variable Funding Capital Corp.

2.930% 05/23/05 23,110,564 —

15,036,000 — Yorktown Capital, LLC

2.780% 04/19/05 15,013,939 —

TOTAL COMMERCIAL PAPER
(Cost $794,877,468 and $348,329,276 )
794,744,099

348,261,543

GOVERNMENT AGENCY BONDS—5.00% and 4.24%

— 9,380,000 Federal Farm Credit Bank

1.780% 03/15/05 — 9,334,882

— 8,603,000 Federal Farm Credit Bank

1.220% 01/07/05 — 8,599,403

7,860,000 7,860,000 Federal Home Loan Bank

2.620% 04/21/05 7,847,667 7,798,928

3,865,000 18,000,000 Federal Home Loan Bank

2.940% 08/24/05 3,816,095 17,992,475

22,190,000 22,825,000 Federal Home Loan Bank

2.640% 04/27/05 22,145,232 22,795,841

30,000,000 20,700,000 Federal Home Loan Bank

2.700% 04/15/05 29,966,375 20,636,761

11,070,000 11,245,000 Federal Home Loan Bank

2.740% 05/13/05 11,033,242 11,227,214

14,110,000 8,510,000 Federal Home Loan Bank

2.780% 05/18/05 14,056,570 8,471,280

15,300,000 20,000,000 Federal Home Loan Mortgage Corp.

2.800% 04/05/05 15,294,348 19,995,222

13,745,000 15,000,000 Federal Home Loan Mortgage Corp.

2.800% 04/26/05 13,718,296 14,993,546

27,659,000 15,540,000 Federal Home Loan Mortgage Corp.

2.990% 07/12/05 27,418,428 15,516,366

14,500,000 — Federal Home Loan Mortgage Corp.

2.725% 05/04/05 14,461,929 —

12,300,000 — Federal Home Loan Mortgage Corp.

2.620% 04/19/05 12,282,537 —

16,160,000 — Federal Home Loan Mortgage Corp.

2.840% 06/27/05 16,043,863 —

25,900,000 — Federal Home Loan Mortgage Corp.

2.930% 06/20/05 25,728,672 —

13,055,000 — Federal Home Loan Mortgage Corp.

2.700% 05/06/05 13,018,707 —

See notes to financial statements.

TIAA REAL ESTATE ACCOUNT
STATEMENT OF INVESTMENTS
March 31, 2005

Principal Value

3/31/05

12/31/04
    Issuer, Current Rate and Maturity Date 3/31/05 12/31/04

(Unaudited)

$ 9,775,000 $ — Federal Home Loan Mortgage Corp.

2.700% 05/05/05 $ 9,748,580 $ —

25,030,000 — Federal Home Loan Mortgage Corp.

2.810% 05/24/05 24,923,372 —

600,000 — Federal Home Loan Mortgage Corp.

2.850% 06/13/05 596,436 —

22,280,000 22,280,000 Federal National Mortgage Association

2.480% 04/29/05 22,231,721 22,094,408

75,000,000 50,000,000 Federal National Mortgage Association

2.600% 04/01/05 74,994,458 49,942,208

12,070,000 25,000,000 Federal National Mortgage Association

2.680% 05/04/05 12,038,309 24,980,590

21,600,000 31,925,000 Federal National Mortgage Association

2.670% 04/20/05 21,567,720 31,919,281

25,000,000 32,184,000 Federal National Mortgage Association

2.600% 04/18/05 24,966,375 32,174,390

— 9,270,000 Federal National Mortgage Association

2.270% 01/26/05 — 9,255,335

TOTAL GOVERNMENT AGENCY BONDS
      (Cost $417,962,027 and $327,794,989)
417,898,932

327,728,130

TOTAL OTHER
      (Cost $1,212,839,495 and $676,124,265)
1,212,643,031

675,989,673

TOTAL MARKETABLE SECURITIES
      (Cost $1,589,963,112 and $1,002,234,244)
1,602,032,723

1,045,733,841

TOTAL INVESTMENTS—100.00%
      (Cost $8,023,333,150 and $7,403,520,074)
$8,362,004,880

$7,725,918,490

(1) The property has a mortgage note payable outstanding, as indicated in Note 5.

(2) Leasehold interest only.

(3) Located throughout the U.S.

(4) The market value reflects the Account’s interest in the joint venture, net of any debt.

See notes to financial statements.

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF ACCOUNT’S FINANCIAL CONDITION AND OPERATING RESULTS.

The following discussion and analysis of our financial condition and results of operations should be read together with our financial statements and notes contained in this report.

As of March 31, 2005, the TIAA Real Estate Account owned a total of 102 real estate properties, representing 80.46% of the Account’s total investment portfolio (12 of which were held in joint ventures). This real estate portfolio included 42 office properties (seven of which are held in joint ventures), 30 industrial properties (including one joint venture), 21 apartment complexes, 8 retail properties (including three held in joint ventures), and a 75% joint venture partnership interest in a portfolio of storage facilities.

During the first quarter of 2005, the Account purchased one industrial property for approximately $18.4 million and sold one industrial property for approximately $3.8 million. Since the end of the First Quarter 2005, the Account has closed on three transactions: the purchase of two office buildings (including one subject to debt) for a total net investment of approximately $148.6 million and the purchase of one retail property for the approximate amount of $15.0 million.

The following two charts below reflect the diversification of the Account’s real estate assets by region and property type as well as its ten largest holdings. All information is based on the value of each property as stated in the Account’s financial statements as of March 31, 2005.

Real Estate Asset Diversification by Value

East (29) Midwest (14) South (24) West (33) Various* (2) TOTAL (102)

Office (42) 24.25% 5.41% 10.24% 19.93% 0.00% 59.83%

Industrial (30) 2.97% 2.40% 3.77% 8.73% 0.98% 18.85%

Apartment (21) 3.84% 0.44% 3.11% 4.85% 0.00% 12.24%

Retail (8) 1.20% 0.25% 5.17% 1.72% 0.00% 8.34%

Other (1) ** 0.00% 0.00% 0.00% 0.00% 0.74% 0.74%

TOTAL 32.26% 8.50% 22.29% 35.23% 1.72% 100.00%

( ) Number of properties in parentheses.

* Represents a portfolio of storage facilities and a portfolio of industrial properties located in various regions across the U.S.

** Represents a portfolio of storage facilities located in various regions across the U.S.

Top Ten Real Estate Holdings

% of

Value⁽¹⁾

Real Estate

% of Total

Property Name

State

Property Type

(000,000)

Investments

1001 Pennsylvania Avenue

Washington, D.C.

Office

$467.2⁽²⁾

6.94%

5.59%

IDX Tower

Office

$353.0⁽³⁾

5.25%

4.22%

50 Fremont

Office

$325.8⁽⁴⁾

4.84%

3.90%

Four Oaks Place

Office

$257.6

3.83%

3.08%

Yahoo Center

Office

$233.2

3.47%

2.79%

1900 K Street

Washington, D.C.

Office

$219.0

3.25%

2.62%

780 Third Avenue

Office

$197.0

2.93%

2.36%

Ontario Industrial Portfolio

Industrial

$186.1⁽⁵⁾

2.77%

2.23%

701 Brickell

Office

$179.2

2.66%

2.14%

The Florida Mall

Retail

$163.8

2.43%

1.96%

⁽¹⁾ Value as reported in the 03/31/05 Statement of Investments. Investments owned 100% are reported based on market value. Investments in joint ventures are reported based on the equity method of accounting.

⁽²⁾ This property has a mortgage note payable outstanding. The value of the Account’s interest, net of the mortgage note payable, is $257.2, representing 3.82% of the Total Real Estate Investments and 3.08% of Total Investments.

⁽³⁾ This property has a mortgage note payable outstanding. The value of the Account’s interest, net of the mortgage note payable, is $208.0, representing 3.09% of the Total Real Estate Investments and 2.49% of Total Investments.

⁽⁴⁾ This property has a mortgage note payable outstanding. The value of the Account’s interest, net of the mortgage note payable, is $190.8, representing 2.84% of the Total Real Estate Investments and 2.28% of Total Investments.

⁽⁵⁾ This property has a mortgage note payable outstanding. The value of the Account’s interest, net of the mortgage note payable, is $176.7, representing 2.63% of the Total Real Estate Investments and 2.11% of Total Investments.

As of March 31 2005, the Account also held investments in real estate limited partnerships representing 0.38% of the Total Investments portfolio, real estate equity securities, representing 4.19% of the portfolio, commercial mortgage backed securities (CMBS), representing 0.47% of the portfolio, commercial paper representing 9.50% of the portfolio, and government agency bonds, representing 5.00% of the portfolio.

Real Estate Market Outlook in General

The Bureau of Labor Statistics (BLS) reported in March that payroll employment rose by a modest 110,000, but by an average of 159,000 during the first quarter of 2005. While the national economy is expanding at a moderate pace, rising energy prices and steady increases in short term interest rates by the Federal Reserve have resulted in recent declines in consumer confidence and a dip in consumer spending. Nonetheless, the Federal Reserve’s April 2005 “Beige Book” reported that “...business activity continued to expand in all twelve Federal Reserve Districts from late February through early April.”

While real estate market conditions have generally improved for each of the sectors, the March 2005 “Beige Book” described the commercial real estate markets as “varied”, with the New York, Richmond and San Francisco Districts reporting the strongest results. Office vacancies declined for the seventh consecutive month, reflecting the growth in payroll employment. Torto Wheaton Research reported that office market

vacancies averaged 15.1% as of the end of the first quarter of 2005 as compared to 16.7% as of the same period in 2004. Similarly, the industrial market conditions continued to improve, with vacancies declining for three consecutive quarters. Torto Wheaton Research reported that the industrial market vacancies averaged 10.9% as of the end of the first quarter of 2005, compared to 11.7% as of the first quarter of 2004.

Apartment markets also showed modest improvement. M/PF Research reported that vacancy rates in institutional investment grade apartments averaged 5.6% as of the fourth quarter 2004, compared with 6.4% for the fourth quarter of 2003. (Data for the first quarter 2005 is not yet available. Because of seasonality in leasing, it is best to compare available data with data for the same quarter in the prior year.) The improvement over the course of the year was evidenced by four consecutive quarters of rent growth, including a 1.7% increase in the fourth quarter of 2004, The improvement in apartment markets was notable given that new and existing home sales were strong throughout the year, a pattern which continued during the first quarter of 2005.

Nationally, retail sales slowed during the first quarter of 2005. The April 2005 “Beige Book” reported that most districts reported improving retail sales overall, with several showing flat or disappointing results. This sluggish performance was generally attributed to weather and/or rising energy and gasoline prices. Available data, however, suggest that retail markets are well positioned to weather a modest decline in spending. Reis, Inc. reported that vacancies in shopping malls fell to 5.3% in the fourth quarter of 2004, which is the lowest level in three-and-a-half years. (Data for the first quarter of 2005 is not yet available.) Vacancies in neighborhood and community centers were 6.8% in the fourth quarter of 2004 compared with 6.9% in the 4th quarter of 2003. Absorption of available retail space during the fourth quarter of 2004 totaled nine million sq. ft., the highest in four years.

Results of Operations

Three Months Ended March 31, 2005 Compared to Three Months Ended March 31, 2004

Performance

In total dollars the Account had a 15% net increase in net assets resulting from operations, $114,511,656 as of the end of the first quarter 2005, as compared to $99,622,233 as of the end of the first quarter 2004. The primary reason for this was a net increase in real estate income as a result of real estate acquisitions over the period.

For the three months ended March 31, 2005, the Account’s total net return was 1.52%. This was 49 basis points lower than the return of 2.01% for the three months ending March 31, 2004. The returns were lower in the 2005 period as compared to the same time in 2004 primarily due to a significant increase in the total net assets of the Acount, as well as the dampening effect of volatility experienced by its real estate equity securities holdings.

Income and Expenses

The Account’s net investment income, after deduction of all expenses, increased by 54% for the three months ended March 31, 2005 compared to the same period in 2004. This increase was due to a 50% increase in total net assets, which included a 57% increase in the Account’s real estate holdings, including joint ventures.

The Account’s real estate holdings including income from real estate joint ventures and limited partnerships generated approximately 90% of the Account’s total investment income (before deducting Account level expenses) during the three months ended March 31, 2005, as compared to 92% for the three month period ended March 31, 2004. The remaining portion of the Account’s total investment income was generated by investments in marketable securities.

Gross real estate rental income increased 55% in the three months ended March 31, 2005 compared with the same period in 2004. The higher real estate income for the three months ended March 31, 2005 was due primarily to the increase in the number of properties owned by the Account. Income from real estate joint ventures and limited partnerships was $16,201,553 and $10,052,991 for the three months ended March 31, 2005 and March 31, 2004, respectively. This 61% increase in joint venture income was primarily due to the timing of receipt of additional income from joint venture interests purchased in the fourth quarter of 2004, as well as increased leasing activity in several existing joint venture interests. Interest income on the Account’s marketable securities investments for the three months ended March 31, 2005 and 2004 totaled $5,874,621 and $1,772,803, respectively. This increase was due to a increase in the amount of non-real estate assets held by the Account. Dividend income on the Account’s investments in real estate equity securities increased to $4,743,394 from $3,954,036 for the three months ended March 31, 2005 and March 31, 2004, respectively.

Total property level expenses for the three months ended March 31, 2005 and 2004 were $61,749,591 and $37,297,038, respectively. The 65% increase in property level expenses during the three months ended March 31, 2005 reflected the increased number of properties held in the Account. In addition, in 2005 the Account incurred interest expense of $8,015,610 for mortgages on several of its real estate holdings.

The Account also incurred expenses for the three months ended March 31, 2005 and 2004 of $4,014,442 and $3,154,486, respectively, for investment advisory services, $5,956,858 and $4,027,093 respectively, for administrative and distribution services and $1,876,878 and $1,238,660, respectively, for the mortality, expense risk and liquidity guarantee charges. The 41% increase in these expenses is a result of the larger net asset base of the Account and the increased costs associated with managing the Account.

Net Realized and Unrealized Gains and Losses on Investments

The Account had net realized and unrealized gains of $21,210,579 and $39,194,907 for the three months ended March 31, 2005 and 2004, respectively. The decrease in net realized and unrealized gains was primarily due to net realized and unrealized losses on the Account’s marketable securities during the period ended March 31, 2005 of $26,476,452 compared to substantial net realized and unrealized gains on its marketable

securities in the three-months ended March 31, 2004 of $25,484,713. The Account posted net realized and unrealized gains of $28,176,422 and losses of $13,583,646 on its real estate investments for the three months ended March 31, 2005 and 2004, respectively. The increase in net realized and unrealized gain for the real estate is due to the significant inflow of capital into the real estate market from institutional and other investors which has increased the pricing of real estate investments. The Account had unrealized gains on its real estate joint venture and limited partnership holdings of $19,510,609 for the three months ended March 31, 2005, as compared to unrealized gains of $27,293,840 for the same period in 2004. The decline in unrealized gains on the Account’s joint venture and limited partnership holdings is primarily due to a moderation in the appreciation of the real estate owned by the underlying entities.

During the three months ended March 31, 2005, the Account sold one property for $3,825,000.

Liquidity and Capital Resources

At March 31, 2005 and December 31, 2004, the Account’s liquid assets (i.e., its real estate equity securities, CMBSs, commercial paper, government securities and cash) had a value of $1,602,412,299 and $1,045,733,841, respectively. The increase in the Account’s liquid assets is primarily due to net positive inflow of transfers and premiums into the Account.

During the three months ended March 31, 2005, the Account received $225,790,274 in premiums and $298,766,769 in net participant transfers from TIAA, the CREF Accounts and affiliated mutual funds, while for the same period in 2004, the Account received $164,850,645 in premiums and $180,858,568 in net participant transfers. The Account’s liquid assets, exclusive of the REITs, will continue to be available to purchase additional suitable real estate properties and to meet expense needs and redemption requests (i.e., cash withdrawals, benefits or transfers). In the unlikely event that the Account’s liquid assets and its cash flow from operating activities and participant transactions are not sufficient to meet its cash needs, including redemption requests, TIAA’s general account will purchase liquidity units in accordance with TIAA’s liquidity guarantee to the Account.

The Account, under certain conditions more fully described in the Account’s prospectus, may borrow money and assume or obtain a mortgage on a property — i.e., to make leveraged real estate investments. Also, to meet any short-term cash needs, the Account may obtain a line of credit whose terms may require that the Account secure a loan with one or more of its properties. The Account’s total borrowings may not exceed 20% of the Account’s total net assets.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

As of March 31, 2005, 19.16% of the Account’s investments were in market risk sensitive instruments, comprised entirely of marketable securities. These include real estate equity securities, commercial mortgage backed securities (CMBSs), and high-quality short-term debt instruments (i.e., commercial paper and government agency bonds). The Statement of Investments for the Account sets forth the terms of these instruments, along with their fair value, as determined in accordance with procedures described in Note 1 to the Account’s financial statements. Note that the Account does not currently invest in derivative financial instruments.

The Account’s investments in marketable securities are subject to the following general risks:

• financial risk — for debt securities, the possibility that the issuer won’t be able to pay principal and interest when due, and for common or preferred stock, the possibility that the issuer’s current earnings will fall or that its overall financial soundness will decline, reducing the security’s value.

• market risk — price volatility due to changing conditions in the financial markets and, particularly for debt securities, changes in overall interest rates.

• interest rate volatility, which may affect current income from an investment.

In addition, mortgage-backed securities are subject to prepayment risk (i.e., the risk that borrowers will repay the loans early). If the underlying mortgage assets experience greater than anticipated payments of principal, the Account could fail to recoup some or all of its initial investment in these securities. The market 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.

In addition to these risks, REITs and mortgage-backed securities are subject to many of the same general risks inherent in real estate investing, making mortgage loans and investing in debt securities. For more information on the risks associated with all of the Account’s investments, see the Account’s most recent prospectus.

Item 4. CONTROLS AND PROCEDURES.

(a) Evaluation of disclosure controls and procedures. The registrant maintains a system of disclosure controls and procedures that are designed to ensure 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 the registrant’s Chief Executive Officer (“CEO”) and the Chief Financial Officer (“CFO”), as appropriate, to allow timely decisions regarding required disclosure. Under the supervision and partici-

pation of the registrant’s management, including the registrant’s CEO and CFO, 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, 2005. Based upon the management’s review, the CEO and the CFO concluded that the registrant’s disclosure controls and procedures were effective as of March 31, 2005, except as noted below.

The registrant had previously consolidated its investments in certain joint ventures prior to December 31, 2004, as a result of the registrant’s majority financial interest in, and shared control of, those joint ventures. Based on consultations with Ernst & Young LLP in connection with its audit of the registrant’s 2004 financial statements, it was determined that the investments in certain joint ventures that had previously been treated as consolidated subsidiaries in 2003 and 2002 should instead be treated as investments in unconsolidated joint ventures, despite the fact that the registrant owned a majority financial interest in the entities. Ernst & Young LLP audited both the registrant’s 2003 and 2002 consolidated financial statements. The registrant’s 2003 and 2002 financial statements were restated in the registrant’s 2004 Form 10-K, filed in April 2005, to show the treatment of these investments consistently with the 2004 treatment, which reflected the registrant’s equity in the net assets and operations of the underlying entities. The interim 2004 financial statements contained herein have been restated to conform to the 2004 treatment. This restatement did not affect the registrant’s total net assets, net asset value per accumulation unit, net increase in net assets resulting from operations nor the Account’s total return, as previously reported in the Account’s interim 2004 financial statements.

Ernst & Young LLP determined, in connection with its audit of the registrant’s 2004 financial statements, that pursuant to Public Company Accounting Oversight Board’s Auditing Standard No. 2, a restatement of the registrant’s previously issued financial statements indicated a material weakness, notwithstanding the fact that the adjustment had no net impact on net assets and operations. This determination was reported to the registrant’s Audit Committee.

Subsequent to the review of its disclosure controls, the registrant revised its controls related to the presentation of joint ventures. The CEO and the CFO have concluded that the disclosure controls and procedures that are now in place at the registrant are effective to ensure compliance with the Exchange Act.

Management believes that this matter has been adequately addressed by the corrective action summarized herein.

(b) Changes in internal controls over financial reporting. There have been no significant changes in the registrant’s internal controls over financial reporting that occurred during the registrant’s last fiscal quarter that materially affected, or is reasonably likely to materially affect, the registrant’s internal controls over financial reporting, except as noted in Item 4(a) above.

PART II. OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS.

There are no material current or pending legal proceedings that the Account is a party to, or to which the Account’s assets are subject.

Item 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.

Not applicable.

Item 3. DEFAULTS UPON SENIOR SECURITIES.

Not applicable.

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS.

Not applicable.

Item 5. OTHER INFORMATION.

Departure of Directors or Principal Officers; Election of Directors;
Appointment of Principal Officers.

On May 10, 2005, TIAA-CREF issued a press release announcing that Elizabeth A. Monrad, Executive Vice President and Chief Financial Officer of Teachers Insurance and Annuity Association of America (“TIAA”), has requested, and been granted, an unpaid leave of absence without day-to-day responsibility at the company. On May 9, 2005, Russell Noles, currently Vice President, Internal Audit for TIAA, was appointed to serve as acting Chief Financial Officer during Ms. Monrad’s leave of absence. The text of the press release is included as Exhibit 99 to this Form 10-Q. Mr. Noles, age 46, has served as Vice President, Internal Audit for TIAA since July 2004. From November 2001 to June 2004, he was Vice President of Internal Audit for the St. Paul Companies (which became St. Paul Travelers Company, upon a merger with Travelers Property & Casualty, in April 2004). Prior to that, he was Vice President of Internal Audit for US WEST Inc./Qwest, where he was employed since 1984.

Item 6. EXHIBITS AND REPORTS ON FORM 8-K.

(a) EXHIBITS

(3) (A) Charter of TIAA (as amended) ¹

(B) Bylaws of TIAA (as amended) ¹

(4) (A) Forms of RA, GRA, GSRA, SRA, IRA Real Estate Account Endorsements,³ Keogh Contract,⁴ Retirement Select and Retirement

(4) (A) Select Plus Contracts and Endorsements² and Retirement Choice and Retirement Choice Plus Contracts. ⁴

(B) Forms of Income-Paying Contracts ³

(10) (A) Independent Fiduciary Agreement by and among TIAA, the Registrant, and The Townsend Group,⁵ as
amended ⁶

(B) Custodial Services Agreement by and between TIAA and Morgan Guaranty Trust Company of New York with respect to the Real Estate Account (Agreement assigned to Bank of New York, January 1996) ³

(C) Distribution and Administrative Services Agreement by and between TIAA and TIAA-CREF Individual & Institutional Services, Inc. (as amended) (filed previously as Exhibit (1)) ²

(31) Rule 13a-15(e)/15d-15(e) Certifications

(32) Section 1350 Certifications

(99) Press Release

¹ - 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 December 22, 2004 (File No. 333-121493).

² - 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 April 29, 2004 (File No. 333-113602).

³ - Previously filed and incorporated herein by reference to Post-Effective Amendment No. 2 to the Account’s Registration Statement on Form S-1 filed April 30, 1996 (File No. 33-92990).

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

⁵ - Previously filed and incorporated herein by reference to Post-Effective Amendment No. 6 to the Account’s Registration Statement on Form S-1 filed April 26, 2000 (File No. 333-22809).

⁶ - Previously filed and incorporated herein by reference to the Account’s Post-Effective Amendment No. 2 to the Registration statement on Form S-1 filed April 29, 2003 (File No. 333-83964).

(b) REPORTS ON 8-K. The Account filed a report on Form 8-K on March 3, 2005 under Items 4.01 and 9.01 of the form with respect to a change in the Account’s certifying accountant. After the end of the quarter, the Account filed a report on Form 8-K on May 6, 2005 under Items 4.01 and 9.01 of the form with respect to appointment and engagement of the Account’s certifying accountant.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

DATE: May 13, 2005

TIAA REAL ESTATE ACCOUNT

By: TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA

By: /s/ Herbert M. Allison, Jr.

Herbert M. Allison, Jr.

Chairman of the Board, President

and Chief Executive Officer

DATE: May 13, 2005

By: /s/ Russell Noles

Russell Noles

Vice President and

Acting Chief Financial Officer

				Page

Statements of Assets and Liabilities				3
Statements of Operations				4
Statements of Changes in Net Assets				5
Statements of Cash Flows				6
Notes to Financial Statements				7
Statement of Investments				13

		March 31, 2005	December 31, 2004

		(Unaudited)
ASSETS
Investments, at value:
Real estate properties
(cost: $5,404,413,289 and $5,315,565,355)		$5,508,509,875	$5,391,469,250
Real estate joint ventures and limited partnerships
(cost: $1,028,956,749 and $1,085,720,475)		1,251,462,282	1,288,715,399
Marketable securities:
Real estate related
(cost: $377,123,617 and $326,109,979)		389,389,692	369,744,168
Other
(cost: $1,212,839,495 and $676,124,265)		1,212,643,031	675,989,673

Total investments
(cost: $8,023,333,151 and $7,403,520,074)		8,362,004,880	7,725,918,490
Cash		379,576	—
Due from investment advisor		8,443,416	4,185,034
Other		107,683,019	113,876,400

	TOTAL ASSETS	8,478,510,891	7,843,979,924

LIABILITIES
Mortgage notes payable—Note 5		499,434,728	499,479,256
Amount due to bank		—	231,476
Payable for securities transactions		65,749,790	—
Accrued real estate property level expenses		76,102,092	84,959,882
Security deposits held		13,898,219	13,759,324

	TOTAL LIABILITIES	655,184,829	598,429,938

NET ASSETS
Accumulation Fund		7,578,119,916	7,015,717,162
Annuity Fund		245,206,146	229,832,824

	TOTAL NET ASSETS	$7,823,326,062	$7,245,549,986

NUMBER OF ACCUMULATION UNITS
OUTSTANDING—Notes 6 and 7		35,470,750	33,337,597

NET ASSET VALUE, PER ACCUMULATION UNIT—Note 6		$213.64	$210.44

		For the	For the
		Three Months	Three Months
		Ended	Ended
		March 31, 2005	March 31, 2004

			(Restated)
INVESTMENT INCOME
Real estate income net:
Rental income		$140,079,278	$90,364,773

Real estate property level expenses and taxes:
Operating expenses		34,258,151	24,509,019
Real estate taxes		19,475,830	12,788,019
Interest expense		8,015,610	—

	Total real estate property level
	expenses and taxes	61,749,591	37,297,038

	Real estate income, net	78,329,687	53,067,735
Income from real estate joint ventures and limited partnerships		16,201,553	10,052,991
Interest		5,874,621	1,772,803
Dividends		4,743,394	3,954,036

	TOTAL INCOME	105,149,255	68,847,565

Expenses—Note 2:
Investment advisory charges		4,014,442	3,154,486
Administrative and distribution charges		5,956,858	4,027,093
Mortality and expense risk charges		1,295,537	867,062
Liquidity guarantee charges		581,341	371,598

	TOTAL EXPENSES	11,848,178	8,420,239

INVESTMENT INCOME, NET		93,301,077	60,427,326

NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on investments:
Real estate properties		(16,269)	—
Marketable securities		4,953,534	13,957,043

Total realized gain on investments:		4,937,265	13,957,043

Net change in unrealized appreciation on:
Real estate properties		28,192,691	(13,583,646)
Real estate joint ventures and limited partnerships		19,510,609	27,293,840
Marketable securities		(31,429,986)	11,527,670

	Net change in unrealized
	appreciation on investments	16,273,314	25,237,864

NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS		21,210,579	39,194,907

NET INCREASE IN NET ASSETS RESULTING
	FROM OPERATIONS	$114,511,656	$99,622,233

Year Ending
December 31,

2005	$ 545,179,699
2006	507,231,587
2007	457,633,440
2008	400,543,014
2009	347,283,132
2010-2104	1,109,876,800

Total	$3,367,747,672

Property	Interest Rate	Amount	Due

Ontario Industrial Portfolio	7.24% paid monthly	$ 9,434,728	May 01, 2011*
50 Freemont	6.40% paid monthly	135,000,000	August 21, 2013
IDX Tower	6.40% paid monthly	145,000,000	August 21, 2013
1001 Pennsylvania Ave	6.40% paid monthly	210,000,000	August 21, 2013

Total		$499,434,728

	Amount

2005	$ 128,833
2006	186,862
2007	201,415
2008	215,163
2009	233,858
Thereafter	498,468,597

Total	$499,434,728

(1)		The percentages shown for this period are not annualized.

(2)		Expense charges per Accumulation Unit and the Ratio of Expenses to Average Net Assets exclude real estate property level expenses. If the real estate property level expenses were included, the expense charge per Accumulation Unit for the three months ended March 31, 2005 would be $2.101 ($6.572, $7.255, $5.920, $5.749 and $5.672 for the years ended December 31, 2004, 2003, 2002, 2001 and 2000, respectively), and the Ratio of Expenses to Average Net Assets for the three months ended March 31, 2005 would be 0.98% (3.33%, 4.04%, 3.61%, 3.50% and 3.79% for the years ended December 31, 2004, 2003, 2002, 2001 and 2000, respectively).

REAL ESTATE PROPERTIES—65.87% and 69.78%	Value

Location / Description	3/31/05	12/31/04

Arizona:	(Unaudited)
Biltmore Commerce Center—Office building	$ 35,303,567	$ 34,104,182
Mountain RA Industrial Portfolio—Industrial building	5,653,221	5,513,947
California:
3 Hutton Centre Drive—Office building	42,768,858	41,106,333
9 Hutton Centre—Office building	23,500,000	23,169,449
50 Fremont—Office building	325,800,000⁽¹⁾	323,264,602⁽¹⁾
88 Kearny Street—Office building	69,501,053	69,026,718
Cabot Industrial Portfolio—Industrial building	63,500,000	—
Capitol Place—Office building	42,424,645	42,400,000
Centerside I—Office building	62,500,000	65,037,900
Centre Pointe and Valley View—Industrial building	25,600,000	25,329,023
Eastgate Distribution Center—Industrial building	19,000,000	18,800,000
Kenwood Mews—Apartments	28,200,000	27,700,000
Larkspur Courts—Apartments	65,000,000	66,000,000
The Legacy at Westwood—Apartments	94,000,000	90,750,000
Northpoint Commerce Center—Industrial building	47,000,000	46,000,000
Ontario Industrial Portfolio—Industrial building	186,134,728⁽¹⁾	187,079,256⁽¹⁾
Regents Court—Apartments	56,000,000	56,700,000
Northern CA RA Industrial Portfolio—Industrial building	58,302,904	59,169,642
Southern CA RA Industrial Portfolio—Industrial building	82,922,730	89,097,299
Westcreek—Apartments	28,150,000	28,161,865
West Lake North Business Park—Office building	50,025,793	50,021,000
Westwood Marketplace—Shopping center	82,500,000	80,019,410
Colorado:
The Lodge at Willow Creek—Apartments	32,300,000	32,201,274
The Market at Southpark—Shopping center	33,017,350	33,522,400
Monte Vista—Apartments	22,544,214	22,501,650
Connecticut:
Ten & Twenty Westport Road—Office building	152,300,000	148,000,000
Delaware:
Mideast RA Industrial Portfolio- Industrial building	13,500,000	16,543,121
Florida:
701 Brickell—Office building	179,159,569	177,000,000
4200 West Cypress Street—Office building	34,002,000	33,900,000
Golfview—Apartments	28,325,000	28,543,437
The Fairways of Carolina—Apartments	18,000,000	18,100,000
The Greens at Metrowest—Apartments	13,500,000	14,623,330
Maitland Promenade One—Office building	36,102,991	36,053,639
Plantation Grove—Shopping center	11,800,000	11,200,000
Pointe on Tampa Bay—Office building	42,387,992	40,551,310
Quiet Waters at Coquina Lakes—Apartments	19,200,000	19,200,000
Royal St. George—Apartments	19,400,000	19,400,000
Sawgrass Office Portfolio—Office building	54,000,000	52,000,000
South Florida Apartment Portfolio—Apartments	47,700,000	47,700,000
Georgia:
Alexan Buckhead—Apartments	36,000,000	37,500,000
Atlanta Industrial Portfolio—Industrial building	36,082,465	37,750,840


Shares

3/31/05	12/31/04	Issuer

200,000	—	Aames Investment Corp.	1,640,000	—
70,000	70,000	Acadia Realty Trust	1,125,600	1,141,000
550,000	550,000	Affordable Residential Communities	6,957,500	7,892,500
36,685	36,685	AMB Property Corp.	1,386,693	1,481,707
—	446,100	American Campus Communities	—	10,032,789
140,000	140,000	Amli Residential Properties	3,834,600	4,480,000
46,000	46,000	Archstone-Smith Trust	1,569,060	1,761,800
232,900	232,900	Ashford Hospitality Trust	2,375,580	2,531,623
40,000	—	Avalonbay Communities Inc.	2,675,600	—
150,000	150,000	Boston Properties Inc.	9,034,500	9,700,500
—	150,000	Brandywine Realty Trust	—	4,408,500
51,800	35,000	BRE Properties	1,828,540	1,410,850
60,000	60,000	Capital Lease Funding Inc.	663,000	750,000
241,000	—	Catellus Development Corp.	6,422,650	—
45,848	—	CB Richard Ellis Group Inc.	1,604,222	—
100,000	60,000	Centerpoint Properties Trust.	4,100,000	2,873,400
143,000	143,000	Corporate Office Properties	3,786,640	4,197,050
100,000	—	Cousins Properties Inc.	2,587,000	—
434,000	434,000	Developers Diversified Realty	17,251,500	19,256,580
419,600	1,072,990	Digital Realty Trust Inc.	6,029,652	14,453,175
252,300	—	Duke Realty Corp.	7,531,155	—
700,000	—	ECC Capital Corp.	4,200,000	—
150,000	—	Equity Inns Inc.	1,654,500	—
17,000	31,875	Equity Lifestyle Properties	599,250	1,139,532

Principal			Value

3/31/05	12/31/04	Issuer, Current Rate and Maturity Date	3/31/05	12/31/04

			(Unaudited)
$ 5,065,000	$ —	CC (USA), Inc.
		2.940% 06/02/05	$ 5,038,808	$ —
11,000,000	—	CC (USA), Inc.
		2.650% 04/11/05	10,990,690	—
5,190,000	3,100,000	Ciesco LP
		2.640% 04/25/05	5,179,980	3,097,537
15,695,000	—	Ciesco LP
		2.830% 05/13/05	15,641,571	—
10,000,000	—	Citicorp
		2.700% 04/28/05	9,978,378	—
10,435,000	—	Coca Cola Co
		2.700% 04/28/05	10,412,437	—
15,695,000	25,000,000	Corporate Asset Funding Corp, Inc.
		2.620% 04/14/05	15,678,093	24,949,625
9,000,000	—	Corporate Asset Funding Corp, Inc.
		2.820% 05/09/05	8,972,212	—
3,055,000	—	Delaware Funding Corp.
		2.650% 04/08/05	3,053,119	—
20,000,000	—	Dexia Bank
		2.470% 04/04/05	19,999,326	—
5,000,000	—	Dexia Bank
		2.735% 05/17/05	4,998,344	—
13,585,000	—	Dorada Finance Inc.
		2.540% 04/11/05	13,573,502	—
11,000,000	—	Dorada Finance Inc.
		2.800% 05/16/05	10,959,098	—
15,000,000	—	Edison Asset Securitization, LLC
		2.670% 04/22/05	14,974,517	—
25,000,000	—	FCAR Owner Trust I
		2.820% 05/12/05	24,916,875	—
20,000,000	2,670,000	Fortune Brands
		2.850% 05/10/05	19,936,667	2,668,205
3,615,000	—	Fortune Brands
		2.850% 05/11/05	3,603,266	—
20,000,000	—	General Electric Capital Corp.
		2.880% 06/07/05	19,888,367	—
9,191,000	15,000,000	Govco Inc.
		2.600% 04/19/05	9,177,515	14,990,833
5,000,000	10,000,000	Govco Inc.
		2.780% 05/11/05	4,983,771	9,986,700
—	25,000,000	Greyhawk Funding, LLC
		2.140% 02/01/05	—	24,948,000
—	10,750,000	Harley—Davidson Funding Corp.
		2.230% 02/14/05	—	10,718,556
4,330,000	—	Harrier Finance Funding (US), LLC
		2.660% 04/25/05	4,321,641	—
15,000,000	—	Harrier Finance Funding (US), LLC
		2.570% 04/06/05	14,993,075	—

(1)		The property has a mortgage note payable outstanding, as indicated in Note 5.

(2)		Leasehold interest only.

(3)		Located throughout the U.S.

(4)		The market value reflects the Account’s interest in the joint venture, net of any debt.

	Real Estate Asset Diversification by Value

	East (29)	Midwest (14)	South (24)	West (33)	*Various (2)**	TOTAL (102)
Office (42)	24.25%	5.41%	10.24%	19.93%	0.00%	59.83%
Industrial (30)	2.97%	2.40%	3.77%	8.73%	0.98%	18.85%
Apartment (21)	3.84%	0.44%	3.11%	4.85%	0.00%	12.24%
Retail (8)	1.20%	0.25%	5.17%	1.72%	0.00%	8.34%
Other (1) **	0.00%	0.00%	0.00%	0.00%	0.74%	0.74%

TOTAL	32.26%	8.50%	22.29%	35.23%	1.72%	100.00%

( )		Number of properties in parentheses.
*		Represents a portfolio of storage facilities and a portfolio of industrial properties located in various regions across the U.S.
**		Represents a portfolio of storage facilities located in various regions across the U.S.

⁽¹⁾		Value as reported in the 03/31/05 Statement of Investments. Investments owned 100% are reported based on market value. Investments in joint ventures are reported based on the equity method of accounting.

⁽²⁾		This property has a mortgage note payable outstanding. The value of the Account’s interest, net of the mortgage note payable, is $257.2, representing 3.82% of the Total Real Estate Investments and 3.08% of Total Investments.

⁽³⁾		This property has a mortgage note payable outstanding. The value of the Account’s interest, net of the mortgage note payable, is $208.0, representing 3.09% of the Total Real Estate Investments and 2.49% of Total Investments.

⁽⁴⁾		This property has a mortgage note payable outstanding. The value of the Account’s interest, net of the mortgage note payable, is $190.8, representing 2.84% of the Total Real Estate Investments and 2.28% of Total Investments.

⁽⁵⁾		This property has a mortgage note payable outstanding. The value of the Account’s interest, net of the mortgage note payable, is $176.7, representing 2.63% of the Total Real Estate Investments and 2.11% of Total Investments.


•		financial risk — for debt securities, the possibility that the issuer won’t be able to pay principal and interest when due, and for common or preferred stock, the possibility that the issuer’s current earnings will fall or that its overall financial soundness will decline, reducing the security’s value.

•		market risk — price volatility due to changing conditions in the financial markets and, particularly for debt securities, changes in overall interest rates.

•		interest rate volatility, which may affect current income from an investment.

(3)	(A)	Charter of TIAA (as amended) ¹
	(B)	Bylaws of TIAA (as amended) ¹

(4)	(A)	Forms of RA, GRA, GSRA, SRA, IRA Real Estate Account Endorsements,³ Keogh Contract,⁴ Retirement Select and Retirement


(4)	(A)	Select Plus Contracts and Endorsements² and Retirement Choice and Retirement Choice Plus Contracts. ⁴
	(B)	Forms of Income-Paying Contracts ³

(10)	(A)	Independent Fiduciary Agreement by and among TIAA, the Registrant, and The Townsend Group,⁵ as amended ⁶
	(B)	Custodial Services Agreement by and between TIAA and Morgan Guaranty Trust Company of New York with respect to the Real Estate Account (Agreement assigned to Bank of New York, January 1996) ³
	(C)	Distribution and Administrative Services Agreement by and between TIAA and TIAA-CREF Individual & Institutional Services, Inc. (as amended) (filed previously as Exhibit (1)) ²

(31)	Rule 13a-15(e)/15d-15(e) Certifications

(32)	Section 1350 Certifications

(99)	Press Release

	TIAA REAL ESTATE ACCOUNT

	By:		TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF AMERICA

	By:		/s/ Herbert M. Allison, Jr.

			Herbert M. Allison, Jr.
			Chairman of the Board, President
			and Chief Executive Officer

	By:		/s/ Russell Noles

			Russell Noles
			Vice President and
			Acting Chief Financial Officer