10-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

(Mark One)
x	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the fiscal year ended December 31, 2007
	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; 333-141513

TIAA REAL ESTATE ACCOUNT
(Exact name of registrant as specified in its charter)

New York	Not Applicable
(State or other jurisdiction	(I.R.S. Employer
of incorporation or organization)	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

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

YES o   NO x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act:

YES o            NO x

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 o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K: x   o Not Applicable

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.

Large accelerated filer      Accelerated filer      Non-accelerated filer x      Smaller Reporting Company

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

YES o            NO x

Aggregate market value of voting stock held by non-affiliates: Not Applicable

Documents Incorporated by Reference: None

TABLE OF CONTENTS

	Item		Page
Part I
	Item 1.	Business	2
	Item 1A.	Risk Factors	4
	Item 1B.	Unresolved Staff Comments	14
	Item 2.	Properties	14
	Item 3.	Legal Proceedings	23
	Item 4.	Submission of Matters to a Vote of Security Holders	23
Part II
	Item 5.	Market for Registrant’s Common Stock, Related Stockholder Matters, and Issuer Purchases of Equity Securities	24
	Item 6.	Selected Financial Data	25
	Item 7.	Management’s Discussion and Analysis of Account’s Financial Condition and Operating Results	27
	Item 7A.	Quantitative and Qualitative Disclosures about Market Risk	49
	Item 8.	Financial Statements and Supplementary Data	51
	Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	87
	Item 9A.	Controls and Procedures	87
Part III

Items 10 and 11. Directors, Executive Officers, and Corporate Governance of the Registrant; Executive Compensation 89

	Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	92
	Item 13.	Certain Relationships and Related Transactions, and Director Independence	92
	Item 14.	Principal Accountant Fees and Services	93
Part IV
	Item 15.	Exhibits and Financial Statement Schedules	94
Signatures			95

PART I

ITEM 1. BUSINESS.

          General. The TIAA Real Estate Account (the “Real Estate Account”, the “Account” or the “Registrant”) was established on February 22, 1995, as a separate investment account of Teachers Insurance and Annuity Association of America (“TIAA”), a New York insurance company, by resolution of TIAA’s Board of Trustees. The Account, which invests mainly in real estate and real estate-related investments, is a variable annuity investment option offered through individual, group and tax-deferred annuity contracts available to employees of educational and research institutions. The Account commenced operations on July 3, 1995, 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.

          The Account is designed as an option for retirement and tax-deferred savings plans for employees of nonprofit institutions. TIAA offers the Account under the following annuity contracts:

• RA and GRAs (Retirement Annuities and Group Retirement Annuities)

• SRAs (Supplemental Retirement Annuities)

• GSRAs (Group Supplemental Retirement Annuities)

• Retirement Choice and Retirement Choice Plus Annuity

• GAs (Group Annuities) and Institutionally-Owned GSRAs

• Classic and Roth IRAs (Individual Retirement Annuities) including SEP IRAs (Simplified Employee Pension Plans)

• Keoghs

• ATRAs (After-Tax Retirement Annuities)

          Investors should note that state regulatory approval may be pending for certain of these contracts and they may not currently be available in every state.

          Investment Objective. The Real Estate Account seeks favorable long-term returns primarily through rental income and appreciation of real estate investments owned by the Account. The Account also invests in publicly-traded securities and other investments that are easily converted to cash to make redemptions, purchase or improve properties, or cover expenses.

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          Investment Strategy. The Account intends to invest between 75 percent and 85 percent of its assets directly in real estate or real estate-related investments. The Account’s principal strategy is to purchase direct ownership interests in income-producing real estate, such as office, industrial, retail, and multi-family residential properties. The Account can also invest in other real estate or real estate-related investments through joint ventures, real estate partnerships or real estate equity securities. To a limited extent, the Account can also invest in conventional mortgage loans, participating mortgage loans, common or preferred stock of companies whose operations involve real estate (i.e., that primarily own or manage real estate), and collateralized mortgage obligations, including commercial mortgage-backed securities and other similar instruments. The Account may also make foreign investments, which are expected to comprise no more than 25% of the Account’s total assets.

          The Account will invest the remaining portion of its assets in government and corporate debt securities, money market instruments, and, at times, stock of companies that do not primarily own or manage real estate. In some circumstances, the Account can increase the portion of its assets invested in debt securities or money market instruments. This could happen if the Account receives a large inflow of money in a short period of time, there is a lack of attractive real estate investments available on the market, or the Account anticipates a need to have more cash available.

          The amount the Account invests in real estate and real estate-related investments at a given time will vary depending on market conditions and real estate prospects, among other factors.

          More detailed information concerning the composition of the Account’s properties, including the Account’s foreign investments and information regarding significant tenants in the Account’s properties, is contained below under the heading “Item 2. Properties.”

          Net Assets and Portfolio Investments. As of December 31, 2007, the Account’s net assets totaled $ 17,660,536,799. At December 31, 2007, the Account held a total of 111 real estate property investments (including its interests in 12 real estate-related joint ventures) and one remaining equity interest in a joint venture in which the Account sold its real estate investment during the third quarter of 2007, representing 77.91% of the Account’s total investment portfolio (“Total Investments”). As of that date, the Account also held investments in a mortgage loan receivable, representing 0.38% of Total Investments, real estate equity securities, representing 2.24% of Total Investments, real estate limited partnerships, representing 1.74% of Total Investments, commercial paper representing 9.23% of Total Investments, certificates of deposit, representing 2.22% of Total Investments, variable notes, representing 0.26% of Total Investments, bankers acceptance, representing 0.20% of Total Investments, and government agency bonds, representing 5.82% of Total Investments.

          Risk Factors. The Account’s assets and income can be affected by a variety of risk factors. These risks are more fully described under Item 1A of this report and in the Account’s prospectus (as supplemented from time to time).

          Personnel and Management. The Real Estate Account does not directly employ any persons nor does the Account have its own management or board of directors. Rather, TIAA employees, under the direction and control of TIAA’s Board of Trustees and Investment

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Committee thereof, manage the investment of the Account’s assets pursuant to investment management procedures adopted by TIAA for the Account. TIAA and TIAA-CREF Individual & Institutional Services, LLC (“Services”), a wholly-owned subsidiary of TIAA, provide all portfolio accounting, custodial, distribution, administrative and related services for the Account at cost.

          Available Information. The Account’s annual report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, and any amendments to those reports, filed by the Account with the Securities and Exchange Commission on or after the date hereof, can be accessed free of charge at www.tiaa-cref.org. Information contained on this website is expressly not incorporated by reference into this Annual Report on Form 10-K.

ITEM 1A. RISK FACTORS.

          The value of an investment in the Account will fluctuate based on the value of the Account’s assets and the income the assets generate. The Account’s assets and income can be affected by many factors, and investors should consider the specific risks presented below, among others, before investing in the Account. Investors can lose money by investing in the Account and there is risk associated with an investor attempting to “time” an investment in the Account’s units, or effecting a redemption of an investor’s units. In this section, the Account is sometimes referred to as “we” and “our.” Please refer to the section entitled “Statements Regarding Forward-Looking Information,” which is contained in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Risks of Real Estate Investing

          General Risks of Acquiring and Owning Real Property: The Account is subject to the risks inherent in acquiring and owning real property, including in particular the following:

• Economic Conditions. The economic conditions in the markets where the Account’s properties are located may be adversely impacted by factors which include:

• general global economic conditions;

• a weak market for real estate generally and/or in specific locations;

• availability of financing;

• an oversupply of, or a reduced demand for, certain types of real estate properties;

• business closings, and industry slowdowns, employment losses and related factors;

• natural disasters, terrorist attacks and/or other man-made events;

• decline in population or shifting demographics.

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	The incidence of some or all of these factors could reduce occupancy or rental rates and the market value of the Account’s real properties. Further, the Account may experience periods in which its investments are geographically concentrated, either regionally or in certain markets with similar demographics. Also, the Account may experience periods in which its tenant base is concentrated within a particular industry sector. In these events, the Account’s income and performance may be adversely impacted disproportionately by deteriorating economic conditions in those areas or industry sectors in which the Account’s investments are concentrated.
•	Competition. The Account may face competition for real estate investments from multiple sources, including individuals, corporations, insurance companies or other insurance company separate accounts, as well as real estate limited partnerships, real estate investment funds, commercial developers, pension plans, other institutional and foreign investors and other entities engaged in real estate investment activities. Some of these competitors may have similar financial and other resources as the Account, and/or they may have investment strategies that allow them to compete more aggressively for real estate investment opportunities, which could result in the Account paying higher prices for investments, experiencing delays in acquiring investments or failing to consummate such purchases. Any resulting delays in the acquisition of investments, or the failure to consummate acquisitions the Account deems desirable, may increase the Account’s costs or otherwise adversely affect the Account’s investment results.
	In addition, the Account’s properties may be located close to properties that are owned by other real estate investors and that compete with the Account for tenants. These competing properties may be better located and more suitable for tenants than our properties, resulting in a competitive advantage for these other properties. We may also face similar competition from other properties that may be developed in the future. This competition may limit the Account’s ability to lease space, increase its costs of securing tenants, limit our ability to maximize our rents and/or require the Account to make capital improvements it otherwise would not, in order to make its properties more attractive to prospective tenants.
•	Leasing Risk. A number of factors could cause the Account’s rental income, a key source of the Account’s revenue, to decline, which would adversely impact the Account’s results and investment returns. These factors include:
	•	A property may be unable to attract or retain tenants. This situation could be exacerbated if a concentration of lease expirations occurred during any one time period.
	•	The Account could lose revenue if tenants do not pay rent when contractually obligated, or if the Account is forced to terminate a lease for nonpayment.
	•	Tenants may default under a lease at one of the Acccount’s properties, and in the event of any such default, we may experience a delay in, or an inability to effect, the

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		enforcement of our rights against that tenant. Further, any disputes with tenants could involve costly litigation.
	•	In the event a tenant vacates its space at an Account property, whether as a result of a default, the expiration of the lease term or otherwise, we may not be able to release the vacant space for as much as the rent payable under the previous lease or not at all. Also, we may not be able to re-lease such space without incurring substantial expenditures for tenant improvements and other lease-up related costs, while still being obligated for any mortgage payments, real estate taxes and other expenditures related to the property.
	•	In some instances, our properties may be specifically suited to and/or outfitted for the particular needs of a certain tenant based on the type of business the tenant operates. For example, many companies desire space with an open floor plan. We may have difficulty obtaining a new tenant for any vacant space in our properties, particularly if the floor plan limits the types of businesses that can use the space without major renovation, which may require us to incur substantial expense in replanning the space.
	•	The Account owns and operates retail properties, which, in addition to the risks listed above, are subject to specific risks, including variations in rental revenues due to customary “percentage rent” clauses which may be in place for retail tenants and the insolvency and/or closing of an anchor tenant. Under certain circumstances, the leases may allow other tenants in a retail property to terminate their leases or reduce or withhold rental payments. The insolvency and/or closing of an anchor tenant may also cause such tenants to fail to renew their leases at expiration.
•	Operating Costs. A property’s cash flow could decrease if operating costs, such as property taxes, utilities, maintenance and insurance costs that are not reimbursed by tenants increase in relation to gross rental income, or if the property needs unanticipated repairs and renovations.
•	Terrorism and Acts of War and Violence. Terrorist attacks may harm our property investments and therefore your investment return. The Account cannot assure you that there will not be further terrorist attacks against the United States, U.S. businesses or elsewhere in the world. These attacks or armed conflicts may directly or indirectly impact the value of the property we own or that secure our loans. Losses resulting from these types of events may be uninsurable or not insurable to the full extent of the loss suffered. Moreover, any of these events could cause consumer confidence and spending to decrease or result in increased volatility in the United States and worldwide financial markets and economy. Such events could also result in economic uncertainty in the United States or abroad. Adverse economic conditions resulting from terrorist activities could reduce demand for space in the Account’s properties and thereby reduce the value of the Account’s properties.

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          General Risks of Selling Real Estate Investments: Among the risks of selling real estate investments are:

• The sale price of an Account property might differ from its estimated or appraised value, leading to losses or reduced profits to the Account.

• Due to the cyclical nature of real estate, general economic conditions impacting the location of the property, potential disruption in the credit markets and the availability of financing on favorable terms or at all, and the supply of and demand for available tenant space, among other reasons, the Account might not be able to sell a property at a particular time for its full value. This might make it difficult to raise cash quickly and also could lead to Account losses.

• The Account may need to provide financing to a purchaser if no cash buyers are available.

• For any particular property, the Account may be required to make expenditures for improvements to, or to correct defects in, the property before the Account is able to market and/or sell the property.

          Appraisal Risks: Real estate appraisals are estimates of property values based on a professional’s opinion and may not be accurate predictors of the amount the Account would actually receive if it sold a property. Appraisals can be subjective in certain respects and rely on a variety of assumptions and conditions at that property or in the market (including, without limitation, a potential lack of recent transaction activity in such market) in which the property is located, which may change materially after the appraisal is conducted. If an appraisal is too high, the Account’s value could go down upon reappraisal or if the property is sold for a lower price than the appraisal. If an appraisal is too low, those who redeem prior to an adjustment to the valuation or a property sale will have received less than their pro rata share of the value of the Account’s assets. Further, as the Account generally obtains appraisals on a quarterly basis, there may be circumstances in the interim in which the true value of a property is not reflected in the Account’s daily net asset value calculation or in the Account’s periodic financial statements. This disparity may be more apparent in times when the commercial and/or residential real estate markets experience an overall and possibly dramatic decline in property values in a relatively short period of time between appraisals.

          Risks of Borrowing: The Account acquires some of its properties subject to existing financing or by borrowing new funds at the time of purchase, and may from time to time place new leverage on, or increase the leverage already placed on, existing properties the Account owns. The Account may borrow, in the aggregate, either directly or through its joint venture investments, an amount up to 30% of the Account’s Total Net Assets, and the Account may borrow up to 70% of the then-current value of a particular property. Among the risks of borrowing money and investing in a property subject to a mortgage are:

• Regardless of the quality of the Account’s property for which financing is sought, general economic conditions, or the market conditions then in effect in the real estate finance industry may hinder the Account’s ability to obtain financing for its property investments on favorable terms or at all. Such unfavorable terms might

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	include high interest rates, increased fees and costs and restrictive covenants applicable to the Account’s operation of the property.
•	The Account may be unable to make its loan payments, which could result in a default on its loan. The lender then could foreclose on the underlying property and the Account would lose the value of its investment in the foreclosed property.
•	If the Account obtains a mortgage loan that involves a balloon payment, there is a risk that the Account may not be able to make the lump sum principal payment due under the loan at the end of the loan term, or otherwise obtain adequate refinancing on terms commercially acceptable to the Account or at all. The Account then may be forced to sell the property or other properties under unfavorable market conditions or default on its mortgage, resulting in the lender exercising its remedies, which may include repossession of the property.
•	If the Account takes out variable-rate loans, the Account’s returns may be volatile when interest rates are volatile. Further, to the extent that the Account takes out fixed-rate loans and interest rates subsequently decline, this may cause the Account to pay interest at above-market rates for a significant period of time.
•	The market valuation of mortgage loans payable could have an adverse impact on the Account’s performance.

          A general disruption in the credit markets, such as the credit markets have been recently experiencing, may aggravate some or all of these risks.

          Investment Risk Associated with Participant Transactions. The amount we have available to invest in new properties and other real estate related assets will depend, in large part, on the level of participant premiums coming into the Account, as well as the level of net participant transfers into or out of the Account. If the amount of such premiums and/or net participant transfers into the Account were to experience a significant decline for a period of time, we may not have enough available funds to pursue, or consummate, every new investment opportunity presented to us that is otherwise attractive to the Account. This, in turn, could harm the Account’s returns.

          Regulatory Risks: Government regulation at the federal, state and local levels, including, without limitation, zoning laws, rent control or rent stabilization laws, laws regulating housing on the Account’s multifamily residential properties, the Americans with Disabilities Act, property taxes and fiscal, accounting, environmental or other government policies, could operate or change in a way that adversely affects the Account and its properties. For example, these regulations could raise the cost of owning, improving or maintaining properties, present barriers to otherwise desirable investment opportunities or make it harder to sell, rent, finance, or refinance properties either on economically desirable terms, or at all, due to the increased costs associated with regulatory compliance.

          Environmental Risks: The Account may be liable for damage to the environment or injury to individuals caused by hazardous substances used or found on its properties. Under various environmental regulations, the Account may also be liable, as a current or previous property owner

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or mortgagee, for the cost of removing or cleaning up hazardous substances found on a property, even if it didn’t know of and wasn’t responsible for the hazardous substances. If any hazardous substances are present or the Account doesn’t properly clean up any hazardous substances, or if the Account fails to comply with regulations requiring it to actively monitor the business activities on its premises, the Account may have difficulty selling or renting a property or be liable for monetary penalties. Further, environmental laws may impose restrictions on the manner in which a property may be used, the tenants which may be allowed, or the manner in which businesses may be operated, which may require the Account to expend funds, and such laws may also cause the most ideal use of the property to differ from that originally contemplated and as a result could impair the Account’s returns. The cost of any required cleanup relating to a single real estate investment (including remediating contaminated property) and the Account’s potential liability for environmental damage, including paying personal injury claims and performing under indemnification obligations to third parties, could exceed the value of the Account’s investment in a property, the property’s value, or in an extreme case, a significant portion of the Account’s assets.

          Uninsurable Losses: Certain catastrophic losses (e.g., from earthquakes, wars, terrorist acts, nuclear accidents, floods or environmental or industrial hazards or accidents) may be uninsurable or so expensive to insure against that it is economically disadvantageous to buy insurance for them. If a disaster that we haven’t insured against occurs, or if the insurance contains a high deductible, the Account could lose both its original investment and any future profits from the property affected. In addition, some leases may permit a tenant to terminate its obligations in certain situations, regardless of whether those events are fully covered by insurance. In that case, the Account would not receive rental income from the property while that tenant’s space is vacant.

          Risks of Developing Real Estate or Buying Recently Constructed Properties: If the Account chooses to develop a property or buys a recently constructed property, it may face the following risks:

• In developing real estate, there may be delays or unexpected increases in the cost of property development and construction due to strikes, bad weather, material shortages, increases in material and labor costs or other events.

• Because external factors may have changed from when the project was originally conceived (e.g., slower growth in local economy, higher interest rates, or overbuilding in the area), the property may not operate at the income and expense levels first projected or may not be developed in the way originally planned.

          Risks of Joint Ownership: Investing in joint venture partnerships or other forms of joint property ownership may involve special risks.

• The co-venturer may have interests or goals inconsistent with those of the Account.

• If a co-venturer doesn’t follow the Account’s instructions or adhere to the Account’s policies, the jointly-owned properties, and consequently the Account, might be exposed to greater liabilities than expected.

• The Account may have limited rights pursuant to the terms of the joint venture, including the right to operate, manage or dispose of a property.

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• A co-venturer can make it harder for the Account to transfer its property interest, particularly if the co-venturer has the right to decide whether and when to sell the property.

• The co-venturer may be unable to fulfill its obligations (such as to fund its pro rata share of expenditures or guarantee obligations of the venture) during the term of such agreement or may become insolvent or bankrupt, either of which could expose the Account to greater liabilities than expected.

          Risks with Purchase-Leaseback Transactions: The major risk of purchase leaseback transactions is that the third party lessee will be unable to make required payments to the Account. If the leaseback interest is subordinate to other interests in the real property, such as a first mortgage or other lien, the risk to the Account increases because the lessee may have to pay the senior lienholder to prevent foreclosure before it pays the Account. If the lessee defaults or the leaseback is terminated prematurely, the Account might not recover its investment unless the property is sold or leased on favorable terms.

RISKS OF MAKING MORTGAGE LOAN INVESTMENTS

          General Risks of Mortgage Loans: The Account will be subject to the risks inherent in making mortgage loans, including:

• The borrower may default on the loan, requiring that the Account foreclose on the underlying property to protect the value of its mortgage loan. Since its mortgage loans are usually non-recourse, the Account must rely solely on the value of a property for its security.

• The larger the mortgage loan compared to the value of the property securing it, the greater the loan’s risk. Upon default, the Account may not be able to sell the property for its estimated or appraised value. Also, certain liens on the property, such as mechanic’s or tax liens, may have priority over the Account’s security interest.

• A deterioration in the financial condition of tenants, which could be caused by general or local economic conditions or other factors beyond the control of the Account, or the bankruptcy or insolvency of a major tenant, may adversely affect the income of a property, which could increase the likelihood that the borrower will default under its obligations.

• The borrower may be unable to make a lump sum principal payment due under a mortgage loan at the end of the loan term, unless it can refinance the mortgage loan with another lender.

• If interest rates are volatile during the loan period, the Account’s variable-rate mortgage loans could have volatile yields. Further, to the extent the Account makes mortgage loans with fixed interest rates, it may receive lower yields than that which is then available in the market if interest rates rise generally.

• Prepayment Risks: The Account’s mortgage loan investments will usually be subject to the risk that the borrower repays a loan early. Also, we may be unable to reinvest the proceeds at as high an interest rate as the original mortgage loan rate.

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• Interest Limitations: The interest rate we charge on mortgage loans may inadvertently violate state usury laws that limit rates, if, for example, state law changes during the loan term. If this happens, we could incur penalties or may be unable to enforce payment of the loan.

• Risks of Participations: Participating mortgages are subject to the following additional risks:

• The participation feature, in tying the Account’s returns to the performance of the underlying asset, might generate insufficient returns to make up for the higher interest rate the loan would have obtained without the participation feature.

• In very limited circumstances, a court may characterize the Account’s participation interest as a partnership or joint venture with the borrower and the Account could lose the priority of its security interest or become liable for the borrower’s debts.

RISKS OF INVESTING IN REAL ESTATE INVESTMENT TRUST (“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 property owned by the trust, while mortgage REITs may be affected by the quality of any credit extended. In addition to these risks, because REIT investments are securities, 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.

          In addition, REITs are tax regulated entities established to invest in real estate-related assets. REITs do not pay federal income taxes if they distribute most of their earnings to their shareholders and meet other tax requirements. As a result, REITs are subject to tax risk in continuing to qualify as a REIT.

RISKS OF MORTGAGE-BACKED SECURITIES

          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. In particular, these types of investments may be 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 prepayments 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 prepayments depends on a variety of geographic, social and other functions, including prevailing market interest rates and general economic factors.

          Importantly, the market value of these securities is also highly sensitive to changes in interest rates, liquidity of the secondary market and economic conditions impacting financial institutions and the credit markets generally. Note that the potential for appreciation, which could otherwise be expected to result from a decline in interest rates, may be limited by any

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increased prepayments. Further, volatility and disruption in the mortgage market and credit markets generally (such as has recently been the case) may cause there to be a very limited secondary market for these securities and they may be harder to sell than other securities. Further, the underlying mortgage loans may experience defaults with greater frequency than originally projected when such mortgages were originally underwritten, which would impact the values of these securities, and could hamper our ability to sell such securities.

CONFLICTS OF INTEREST WITHIN TIAA

          TIAA and its affiliates (including Teachers Advisors, Inc., its wholly owned subsidiary) have interests in other real estate programs and accounts and also engage in other business activities and as such, they will have conflicts of interest in allocating their time between the Account’s business and these other activities. Also, the Account may be buying properties at the same time as TIAA affiliates that may have similar investment objectives to those of the Account. There is also a risk that TIAA will choose a property that provides lower returns to us than a property purchased by TIAA and its affiliates. Further, the Account will likely acquire properties in geographic areas where TIAA and its affiliates own properties. In addition, the Account may desire to sell a property at the same time another TIAA affiliate is selling a property in an overlapping market. Conflicts could also arise because some properties owned by TIAA and its affiliates may compete with the Account’s properties for tenants. Among other things, if one of the TIAA entities attracts a tenant that we are competing for, we could suffer a loss of revenue due to delays in locating another suitable tenant. TIAA has adopted allocation policies and procedures applicable to the purchasing conflicts scenario, but the resolution of such conflicts may be economically disadvantageous to the Account. As a result of TIAA’s and its affiliates’ obligations to other current and potential TIAA-sponsored investment vehicles with similar objectives to those of the Account, we cannot assure you that the Account will be able to take advantage of every attractive investment opportunity that otherwise is in accordance with the Account’s investment objectives.

RISKS OF LIQUID INVESTMENTS

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

• Financial Risk — The risk, for debt securities, that the issuer will not be able to pay principal and interest when due and, for 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 Risk — The risk that the Account’s investments will experience price volatility due to changing conditions in the financial markets and, particularly for debt securities, changes in overall interest rates.

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

          Further, to the extent that a significant portion of the Account’s net assets at any particular time are comprised of cash, cash equivalents and marketable securities, the

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Account’s returns may suffer as compared to the return that could have been generated by more profitable investments.

RISKS OF FOREIGN INVESTMENTS

          In addition to other investment risks noted above, foreign investments present the following special risks:

• The value of foreign investments or rental income can increase or decrease due to changes in currency rates, currency exchange control regulations, possible expropriation or confiscatory taxation, political, social, and economic developments, and foreign regulations.

• Foreign real estate markets may have different liquidity and volatility attributes than U.S. markets.

• It may be more difficult to obtain and collect a judgment on foreign investments than on domestic investments, and the costs associated with contesting claims relating to foreign investments may exceed those costs associated with a similar claim on domestic investments.

• The Account may, but is not required to, seek to hedge its exposure to changes in currency rates, which could involve extra costs. Further, any hedging activities might not be successful.

NO OPPORTUNITY FOR PRIOR REVIEW OF PURCHASE

          Investors do not have the opportunity to evaluate the economic or financial merit of the purchase of a property or other investment before the Account completes the purchase, so investors will need to rely solely on TIAA’s judgment and ability to select investments consistent with the Account’s investment objective and policies. Further, the Account may change its investment objective and pursue specific investments without the consent of the Account’s investors.

RISKS OF REGISTRATION UNDER THE INVESTMENT COMPANY ACT OF 1940

          The Account has not registered, and management intends to continue to operate the Account so that it will not have to register, as an “investment company” under the Investment Company Act of 1940, as amended (the “Investment Company Act”). Generally, a company is an “investment company” and required to register under the Investment Company Act if, among other things, it holds itself out as being engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting or trading in securities, or it is engaged or proposes to engage in the business of investing, reinvesting, owning, holding or trading in securities and owns or proposes to acquire investment securities having a value exceeding 40% of the value of such company’s total assets (exclusive of government securities and cash items) on an unconsolidated basis.

13

          If the Account were obligated to register as an investment company, the Account would have to comply with a variety of substantive requirements under the Investment Company Act that impose, among other things, limitations on capital structure, restrictions on certain investments, compliance with reporting, record keeping, voting and proxy disclosure requirements and other rules and regulations that could significantly increase its operating expenses and reduce its operating flexibility. To maintain compliance with the exemptions from the Investment Company Act, the Account may be unable to sell assets it would otherwise want to sell and may be unable to purchase securities it would otherwise want to purchase, which might materially adversely impact the Account’s performance.

ITEM 1B. UNRESOLVED STAFF COMMENTS.

          None

ITEM 2. PROPERTIES.

THE PROPERTIES—IN GENERAL

          In the table below you will find general information about each of the Account’s property investments as of December 31, 2007. The Account’s property investments include both properties that are wholly-owned by the Account and properties owned by the Account’s joint venture investments. Certain property investments are comprised of a portfolio of properties.

OFFICE PROPERTY INVESTMENTS

Property	Location	Year Built		Year Purchased	Rentable Area (Sq. ft.)(1)	Percent Leased		Annual Avg. Base Rent Per Leased Sq. Ft.(2)		Market Value (3)
1001 Pennsylvania Ave	Washington, DC	1987		2004	756,603	100	%	$	37.15	$	640,149,632	(4)
Fourth & Madison(5)	Seattle, WA	2002		2004	845,533	98	%		27.53		487,000,000	(4)
50 Fremont Street	San Francisco, CA	1983		2004	817,412	97	%		30.25		478,000,000	(4)
1 & 7 Westferry Circus	London, UK	1992, 1993		2005	386,206	81	%		64.08		436,127,130	(4)(6)
Four Oaks Place	Houston, TX	1983		2004	1,754,334	96	%		18.73		419,270,107
The Newbry	Boston, MA	1940-1961	(7)	2006	607,424	100	%		26.47		389,880,008
780 Third Avenue	New York, NY	1984		1999	487,566	95	%		50.01		375,000,000
Yahoo! Center(8)	Santa Monica, CA	1984		2004	1,087,952	92	%		32.66		369,402,407
99 High Street	Boston, MA	1971		2005	731,204	96	%		29.99		344,688,328	(4)
Lincoln Centre	Dallas, TX	1984		2005	1,638,132	87	%		16.95		305,000,000	(4)
1900 K Street	Washington, DC	1996		2004	333,098	100	%		44.27		285,000,000
701 Brickell	Miami, FL	1986	(9)	2002	677,667	94	%		29.60		275,941,582
275 Battery(10)	San Francisco, CA	1988		2005	472,261	90	%		34.73		271,917,498
Mellon Financial Center at One Boston Place(11)	Boston, MA	1970	(9)	2002	804,444	95	%		38.74		246,440,493
Wilshire Rodeo Plaza	Beverly Hills, CA	1935, 1984		2006	261,932	98	%		46.81		230,439,415	(4)
1401 H Street NW	Washington, D.C.	1992		2006	350,635	100	%		41.20		224,576,156	(4)
Ten & Twenty Westport Road	Wilton, CT	1974(9), 2001		2001	538,840	100	%		30.07		183,006,040

14

OFFICE PROPERTY INVESTMENTS (continued)

Property	Location	Year Built		Year Purchased	Rentable Area (Sq. ft.)(1)	Percent Leased		Annual Avg. Base Rent Per Leased Sq. Ft.(2)		Market Value(3)
980 9th Street and 1010 8th Street(12)	Sacramento, CA	1992		2005	447,865	95	%	$	23.66	$	178,000,000
Millennium Corporate Park	Redmond, VA	1999, 2000		2006	536,884	100	%		13.80		158,000,000
Urban Centre	Tampa, FL	1984, 1987		2005	547,979	91	%		21.16		135,577,463
Pacific Plaza	San Diego, CA	2000, 2002		2007	215,758	87	%		26.48		127,130,076	(4)
Inverness Center	Birmingham, AL	1980-1985		2005	903,857	100	%		12.27		125,521,529
88 Kearny Street	San Francisco, CA	1986		1999	228,358	94	%		41.48		123,822,200
Morris Corporate Center III	Parsippany, NJ	1990		2000	526,052	78	%		20.06		119,600,001
Treat Towers(13)	Walnut Creek, CA	1999		2003	367,313	85	%		23.39		118,997,021
Prominence in Buckhead(13)	Atlanta, GA	1999		2003	423,916	95	%		27.68		115,427,071
The Ellipse at Ballston	Arlington, VA	1989		2006	194,914	100	%		32.81		92,504,000
Oak Brook Regency Towers	Oakbrook, IL	1977	(9)	2002	402,318	78	%		13.09		86,891,650
Camelback Center	Phoenix, AZ	2001		2007	231,345	94	%		24.38		80,000,000
West Lake North Business Park	Westlake Village, CA	2000		2004	198,558	93	%		27.58		68,621,818
Centerside I	San Diego, CA	1982		2004	202,913	67	%		19.06		67,500,000
The North 40 Office Complex	Boca Raton, FL	1983, 1984		2006	350,000	93	%		10.44		67,003,544
Parkview Plaza	Oakbrook, IL	1990		1997	264,461	95	%		15.98		66,066,513
3 Hutton Centre	Santa Ana, CA	1985	(9)	2003	197,819	96	%		20.04		64,200,000
8270 Greensboro Drive	McLean, VA	2000		2005	158,110	100	%		35.93		63,500,000
The Pointe on Tampa Bay	Tampa, FL	1982	(9)	2002	250,357	97	%		23.93		60,971,897
One Virginia Square	Arlington, VA	1999		2004	116,077	100	%		17.18		59,538,690
Capitol Place	Sacramento, CA	1988	(9)	2003	167,920	96	%		26.72		53,539,218
Wellpoint	Westlake Village, CA	1986, 1998		2006	216,751	100	%		12.93		51,000,000
Park Place on Turtle Creek	Dallas, TX	1986		2006	177,169	93	%		22.43		48,282,785
4200 West Cypress Street	Tampa, FL	1989		2003	219,815	100	%		22.36		48,043,650
Preston Sherry Plaza	Dallas, TX	1986		2007	147,008	95	%		24.03		45,500,000
Tysons Executive Plaza II(14)	McLean, VA	1988		2000	259,614	81	%		23.50		44,178,210
Creeksides at Centerpoint	Kent, WA	1985		2006	218,712	84	%		12.30		42,000,000
Needham Corporate Center	Needham, MA	1987		2001	138,259	87	%		20.00		33,275,228
Columbus Portfolio	Various, OH	1997-1998		1999, 2001	259,686	92	%		9.90		26,314,686
Subtotal—Office Property Investments						94	%			$	8,332,846,046
INDUSTRIAL PROPERTY INVESTMENTS
Ontario Industrial Portfolio(15)	Various, CA	1997-1998		1998, 2000,	3,981,894	100	%		3.08		355,398,714	(4)
				2004
Dallas Industrial Portfolio(16)(17)	Dallas and
	Coppell, TX	1997-2001		2000-2002	3,684,941	96	%		2.98		154,055,892
Rancho Cucamonga	Rancho
Industrial Portfolio(18)	Cucamonga, CA	2000-2002		2000, 2001,	1,490,235	100	%		3.31		133,000,000
				2002, 2004
Seneca Industrial Park	Pembroke Park, FL	1999-2001		2007	882,182	96	%		5.62		122,334,422

15

INDUSTRIAL PROPERTY INVESTMENTS (continued)

Property	Location	Year Built	Year Purchased	Rentable Area (Sq. ft.)(1)	Percent Leased		Annual Avg. Base Rent Per Leased Sq. Ft.(2)		Market Value (3)
Southern California RA
Industrial Portfolio	Los Angeles, CA	1982	2004	920,078	98	%	$	6.44	$	110,718,042
Chicago Industrial
Portfolio(17)	Chicago and	1997-2000	1998; 2000	1,427,699	100	%		3.94		86,420,886
	Joliet, IL
Rainier Corporate Park	Fife, WA	1991-1997	2003	1,104,646	100	%		3.52		81,160,792
Chicago CALEast Industrial
Portfolio(17)	Chicago, IL	1974-2005	2003	1,280,784	100	%		3.62		77,642,826
Shawnee Ridge
Industrial Portfolio	Atlanta, GA	2000-2005	2005	1,422,922	100	%		3.19		76,742,231
IDI National Portfolio(19)	Various, U.S.	1999-2004	2004	3,655,671	100	%		3.50		76,536,044
Regal Logistics Campus	Seattle, WA	1999-2004	2005	968,535	100	%		4.15		71,000,000
Northern California RA
Industrial Portfolio(17)	Oakland, CA	1981	2004	657,602	98	%		4.11		69,601,997
Atlanta Industrial Portfolio(17)	Lawrenceville, GA	1996-1999	2000	1,295,440	95	%		2.64		58,300,000
South River Road Industrial	Cranbury, NJ	1999	2001	858,957	53	%		2.57		53,400,000
GE Appliance East Coast
Distribution Facility	Perryville, MD	2003	2005	1,004,000	100	%		2.82		48,000,000
Pinnacle Industrial/DFW
Trade Center	Grapevine, TX	2003, 2004,
		2006	2006	899,200	100	%		3.47		46,700,000
New Jersey CALEast
Industrial Portfolio	Cranbury, NJ	1982-1989	2003	807,773	50	%		2.23		42,225,000
East North Central RA
Industrial Portfolio	Chicago, IL	1978	2004	541,266	98	%		4.25		38,016,397
Broadlands Business Park	Elkton, MD	2006	2006	756,600	100	%		2.85		35,500,000
Centre Pointe and Valley	Los Angeles
View	County, CA	1965-1989	2004	307,685	58	%		4.62		34,142,741
Northeast RA Industrial
Portfolio	Boston, MA	2000	2004	384,000	88	%		5.71		33,300,000
Summit Distribution Center	Memphis, TN	2002	2003	708,532	100	%		2.52		27,500,000
Airways Distribution Center	Memphis, TN	2005	2006	556,600	100	%		3.20		24,300,000
Konica Photo Imaging
Headquarters	Mahwah, NJ	1999	1999	168,000	100	%		2.87		23,500,000
Northwest RA Industrial
Portfolio	Seattle, WA	1996	2004	312,321	100	%		3.21		23,401,540
UPS Distribution Facility	Fernley, NV	1998	1998	256,000	100	%		3.39		15,900,000
FEDEX Distribution Facility	Crofton, MD	1998	1998	110,842	100	%		2.99		9,900,000
Subtotal—Industrial Property Investments					96	%			$	1,928,697,524

16

RETAIL PROPERTY INVESTMENTS

Property	Location	Year Built		Year Purchased	Rentable Area (Sq. ft.)(1)		Percent Leased		Annual Avg. Base Rent Per Leased Sq. Ft.(2)		Market Value (3)
DDR Joint Venture(20)	Various, U.S.	Various		2007	16,183,158		95	%	$	11.46	$	1,028,297,460
The Florida Mall(21)	Orlando, FL	1986	(9)	2002	1,061,308	(22)	99	%		41.99		296,486,153
Printemps de l’Homme	Paris, France	1930		2007	142,363		100	%		84.73		279,077,542	(6)
Florida Retail Portfolio(23)	Various, FL	1974-2005		2006	1,259,554		95	%		15.63		260,879,060
Miami International Mall(21)	Miami, FL	1982	(9)	2002	296,746	(22)	98	%		36.41		109,944,638
Mazza Gallerie	Washington, DC	1975		2004	293,935		99	%		19.84		97,000,019
Westwood Marketplace	Los Angeles, CA	1950	(9)	2002	202,201		100	%		29.93		96,562,192
Marketfair	West Windsor, NJ	1987		2006	244,469		99	%		23.04		95,500,000
West Town Mall(21)	Knoxville, TN	1972	(9)	2002	759,447	(22)	97	%		21.10		75,826,066
Publix at Weston Commons	Weston, FL	2005		2006	126,922		96	%		23.98		55,200,000	(4)
Plainsboro Plaza	Plainsboro, NJ	1987		2005	206,503		87	%		10.67		51,000,000
South Frisco Village	Frisco, TX	2002		2006	227,175		99	%		13.85		48,500,000	(4)
The Market at Southpark	Littleton, CO	1988		2004	190,104		98	%		10.16		35,800,000
Suncrest Village	Orlando, FL	1987		2005	93,358		98	%		10.89		19,500,000
Champlin Marketplace	Champlin, MN	1998-1999,
		2005		2007	88,577		100	%		13.47		18,375,000
Plantation Grove	Ocoee, FL	1995		1995	73,655		99	%		11.82		15,400,000
Subtotal—Retail Property Investments							97	%			$	2,583,348,130
RESIDENTIAL PROPERTY INVESTMENTS(24)
Houston Apartment
Portfolio(25)	Houston, TX	1984-2004		2006	NA		93	%		NA		296,241,497
Palomino Park Apartments	Denver, CO	1996-2001		2005	NA		92	%		NA		194,001,036
Kierland Apartment
Portfolio(26)	Scottsdale, AZ	1996-2000		2006	NA		97	%		NA		170,084,494
Phoenix Apartment	Greater Phoenix
Portfolio(27)	Area, AZ	1995-1998		2006	NA		96	%		NA		156,109,517
The Legacy at Westwood
Apartments	Los Angeles, CA	2001		2002	NA		79	%		NA		126,579,694
The Colorado	New York, NY	1987		1999	NA		98	%		NA		113,033,240
Larkspur Courts	Larkspur, CA	1991		1999	NA		94	%		NA		97,000,000
Ashford Meadows
Apartments	Herndon, VA	1998		2000	NA		96	%		NA		94,059,776
1050 Lenox Park	Atlanta, GA	2001		2005	NA		97	%		NA		85,500,000
Regents Court Apartments	San Diego, CA	2001		2002	NA		99	%		NA		69,000,000
South Florida Apartment	Boca Raton and
Portfolio	Plantation, FL	1986		2001	NA		92	%		NA		68,248,605
The Caruth	Dallas, TX	1999		2005	NA		88	%		NA		65,427,458
Glenridge Walk	Atlanta, GA	1996, 2001		2005	NA		94	%		NA		52,900,000
The Reserve at Sugarloaf	Duluth, GA	2000		2005	NA		92	%		NA		52,000,000	(4)
The Lodge at Willow Creek	Denver, CO	1997		1997	NA		97	%		NA		43,500,000
The Maroneal	Houston, TX	1998		2005	NA		97	%		NA		40,033,822

17

RESIDENTIAL PROPERTY INVESTMENTS (continued)

Property	Location	Year Built	Year Purchased	Rentable Area (Sq. ft.)(1)	Percent Leased		Annual Avg. Base Rent Per Leased Sq. Ft.(2)		Market Value (3)
Westcreek Apartments	Westlake Village, CA	1988	1997	NA	87	%		NA	$	39,189,673
Lincoln Woods Apartments	Lafayette Hill, PA	1991	1997	NA	95	%		NA		37,917,165
The Fairways of Carolina	Margate, FL	1993	2001	NA	96	%		NA		27,207,661
Royal St. George	W. Palm Beach, FL	1995	1996	NA	96	%		NA		27,000,000
Quiet Water at Coquina Lakes	Deerfield Beach, FL	1995	2001	NA	97	%		NA		26,204,860
Subtotal—Residential Property Investments					94	%			$	1,881,238,498
OTHER COMMERCIAL PROPERTY INVESTMENTS
Storage Portfolio I(28)	Various, U.S.	1972-1990	2003	2,301,187	84	%	$	9.83	$	81,943,321
Subtotal—Commercial Property Investments									$	12,926,835,021
Total—All Property Investments									$	14,808,073,519

(1)	The square footage is an approximate measure and is subject to periodic remeasurement.
(2)	Based on total contractual rent for leases existing as of December 31, 2007. For those properties purchased in fourth quarter of 2007 the rent is based on the existing leases as of the date of purchase. The contractual rent can be either on a gross or net basis, depending on the terms of the leases.
(3)	Market value reflects the value determined in accordance with the procedures described in the Account’s prospectus and as stated in the Statement of Investments. The account joint venture interest in 161 North Clark Street was sold on August 24, 2007. A residual value of $3.15 million remains in the statement of investments but not on the property list.
(4)	Market value shown represents the Account’s interest gross of debt.
(5)	Formerly known as “IDX Tower”.
(6)	1 & 7 Westferry Circus is located in the United Kingdom, and the market value reflects the Account’s interest gross of debt. Printemps de l’Homme is located in France. The market value of each property is converted from local currency to U.S. Dollars at the exchange rate as of December 31, 2007.
(7)	This property was substantially renovated in 1961, 2004 and 2006.
(8)	Formerly known as “Colorado Center”, this property is held in a 50%/50% joint venture with Equity Office Properties Trust. Market value shown reflects the value of the Account’s interest in the joint venture, net of debt.
(9)	Undergone extensive renovations since original construction.
(10)	Formerly known as “Embarcadero Plaza.”
(11)	The Account purchased a 50.25% interest in a private REIT, which owns this property. A 49.70% interest is owned by Societe Immobiler Trans-Quebec, and .05% is owned by 100 individuals. Market value shown reflects the value of the Account’s interest in the joint venture.
(12)	Formerly known as “U.S. Bank Plaza.”
(13)	This investment property is held in a 75%/25% joint venture with Equity Office Properties Trust. Market value shown reflects the value of the Account’s interest in the joint venture.
(14)	This investment property is held in a 50%/50% joint venture with Tennessee Consolidated Retirement System. Market value shown reflects the value of the Account’s interest in the joint venture.
(15)	The Ontario Industrial Portfolio contains six investment properties, including one portfolio which consists of 1.1 million square feet located in Mira Loma, California. As of January 30, 2007, 1900 South Burgundy Place was added to the Ontario Industrial Portfolio.
(16)	The Dallas Industrial Portfolio contains ten warehouse distribution properties located in Dallas and Coppell, Texas.
(17)	A portion of this portfolio was sold on June 27, 2007.
(18)	Formerly known as “Cabot Industrial Portfolio”. As of January 31, 2007 the Weber Distribution property was consolidated into the existing Rancho Cucamonga Industrial Portfolio.
(19)	Property held in a 60%/40% joint venture with Industrial Development International. Market value shown reflects the value of the Account’s interest in the joint venture, net of debt.

18

(20)	This property investment consists of 65 properties located in 13 states and is held in a 85%/15% joint venture with Developers Diversified Realty Corporation. Market Value shown reflects the value of the Account’s interest in the joint venture, net of debt.
(21)	These property investments are held in 50%/50% joint ventures with the Simon Property Group. Market values shown reflect the value of the Account’s interest in the joint ventures, net of debt.
(22)	Reflects the square footage owned by the joint venture.
(23)	This investment property is held in a 80%/20% joint venture with Weingarten Realty Investors. Market value shown reflects the value of the Account’s interest in the joint venture net of debt. This portfolio contains seven neighborhood and/or community shopping centers located in the Ft. Lauderdale, Miami, Orlando and Tampa, Florida areas.
(24)	For the average unit size and annual average rent per unit for each residential property, see “Residential Properties” below.
(25)	The Houston Apartment Portfolio contains 11 properties that are a mix of two and three-story luxury garden style apartments and are located in Houston, Texas.
(26)	The Kierland Apartment Portfolio contains three properties that are a mix of two and three-story luxury garden style apartments and are located in Scottsdale, Arizona.
(27)	The Phoenix Apartment Portfolio contains four properties that are a mix of two and three-story luxury garden style apartments and are located in the greater Phoenix area in Arizona.
(28)	Property held in 75%/25% joint venture with Storage USA. Market value shown reflects the value of the Account’s interest in the joint venture, net of debt.

19

Commercial (Non-Residential) Properties

          At December 31, 2007, the Account held 90 commercial (non-residential) property investments in its portfolio, including a portfolio of storage facilities located throughout the United States. Twelve of these property investments were held through joint ventures, and 19 were subject to mortgages (including seven joint venture property investments). Although the terms vary under each lease, certain expenses, such as real estate taxes and other operating expenses, are paid or reimbursed in whole or in part by the tenants.

          Management believes that the Account’s portfolio is diversified by both property type and geographic location. The portfolio consists of: 46 office properties containing approximately 21 million square feet located in 14 states, the District of Columbia and the United Kingdom; 27 industrial properties containing approximately 30 million square feet located in 11 states, including a 60% interest in a portfolio of industrial properties located throughout the United States; and 16 retail properties containing approximately 21.4 million square feet located in eight states, the District of Columbia, the United Kingdom, and Paris, France. One of the retail property investments is an 85% interest in a portfolio containing 65 individual retail shopping centers located throughout the East and Southeast states. In addition, the Account has a 75% interest in a portfolio of storage facilities located throughout the United States containing approximately 2.3 million square feet.

          As of December 31, 2007, the average overall occupancy rate of the Account’s commercial real estate portfolio was 95%. On a weighted average basis, the Account’s office properties were 94% leased, industrial properties were 96% leased, retail properties were 97% leased, and the storage portfolio was 84% leased.

          Major Tenants: The following tables list the Account’s major commercial tenants based on the total space they occupied as of December 31, 2007, in the Account’s properties.

MAJOR OFFICE TENANTS	Occupied Square Feet		Percentage of Total Rentable Area of Account’s Office Properties			Percentage of Total Rentable Area of Account’s Non- Residential Properties
Deloitte & Touche		517,855		2.5	%		0.7	%
BHP Petroleum		463,734		2.2	%		0.6	%
Mellon (Boston Co)		457,248		2.2	%		0.6	%
Southern Company Services, Inc		456,235		2.2	%		0.6	%
Yahoo!		448,147		2.1	%		0.6	%
Microsoft		361,527		1.7	%		0.5	%
Crowell & Moring		320,539		1.5	%		0.4	%
ATMOS Energy		293,835		1.4	%		0.4	%
Fourth & Madison		284,630		1.3	%		0.4	%
Kirkpatrick & Lockhart Preston Gates Ellis		248,982		1.2	%		0.3	%

20

MAJOR INDUSTRIAL TENANTS	Occupied Square Feet		Percentage of Total Rentable Area of Account’s Industrial Properties			Percentage of Total Rentable Area of Account’s Non- Residential Properties
Meiko America		1,115,000		3.7	%		1.5	%
Walmart		1,099,112		3.6	%		1.5	%
General Electric		1,004,000		3.3	%		1.4	%
Priority Fulfillment		993,120		3.3	%		1.4	%
Regal West		968,535		3.2	%		1.3	%
Covidien (FKA Tyco)		800,000		2.6	%		1.1	%
Michelin (TNT)		756,600		2.5	%		1.0	%
Hewlett-Packard		708,532		2.3	%		1.0	%
Del Monte		689,660		2.3	%		0.9	%
RR Donnelley		659,157		2.2	%		0.9	%

MAJOR RETAIL TENANTS	Occupied Square Feet		Percentage of Total Rentable Area of Account’s Retail Properties			Percentage of Total Rentable Area of Account’s Non- Residential Properties
Walmart		944,437		4.4	%		1.3	%
Kohl’s		609,529		2.8	%		0.8	%
Goody’s		589,392		2.7	%		0.8	%
Publix Super Markets		565,187		2.6	%		0.8	%
Ross		564,927		2.6	%		0.8	%
Dick’s Sporting Goods		522,486		2.4	%		0.7	%
PetSmart		496,595		2.3	%		0.7	%
Michael’s		492,636		2.3	%		0.7	%
Bed, Bath & Beyond		455,510		2.1	%		0.6	%
Linens ‘N Things		426,523		2.0	%		0.6	%

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          The following tables list the rentable area subject to expiring leases during the next five years, and an aggregate figure for expirations in 2013 and thereafter, in the Account’s commercial (non residential) properties.

OFFICE PROPERTIES Year of Lease Expiration	Rentable Area Subject to Expiring Leases (sq. ft.)		Percentage of Total Rentable Area of Account’s Office Properties Represented by Expiring Leases
2008		2,025,032		9.6	%
2009		1,841,797		8.7	%
2010		2,254,954		10.7	%
2011		2,673,274		12.7	%
2012		1,731,962		8.2	%
2013 and thereafter		8,606,526		40.9	%
Total		19,133,545		90.8	%

INDUSTRIAL PROPERTIES Year of Lease Expiration	Rentable Area Subject to Expiring Leases (sq. ft.)		Percentage of Total Rentable Area of Account’s Industrial Properties Represented by Expiring Leases
2008		4,373,313		14.4	%
2009		4,120,869		13.5	%
2010		4,570,510		15.0	%
2011		4,336,083		14.2	%
2012		1,542,068		5.1	%
2013 and thereafter		9,800,725		32.2	%
Total		28,743,568		94.4	%

RETAIL PROPERTIES Year of Lease Expiration	Rentable Area Subject to Expiring Leases (sq. ft.)		Percentage of Total Rentable Area of Account’s Retail Properties Represented by Expiring Leases
2008		1,325,407		6.2	%
2009		1,244,001		5.8	%
2010		1,789,246		8.3	%
2011		2,224,269		10.4	%
2012		2,289,812		10.7	%
2013 and thereafter		11,315,396		52.7	%
Total		20,188,131		94.1	%

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Residential Properties

          The Account’s residential property portfolio currently consists of 21 property investments comprised of first class or luxury multi-family, garden, mid-rise, and high-rise apartment buildings. The portfolio contains approximately 10,560 units located in nine states and has a 94% average occupancy rate. One of the residential properties in the portfolio is subject to a mortgage. The complexes generally contain one- to three-bedroom apartment units with a range of amenities, such as patios or balconies, washers and dryers, and central air conditioning. Many of these apartment communities have on-site fitness facilities, including some with swimming pools. Rents on each of the properties tend to be comparable with competitive communities and are not subject to rent regulation. The Account is responsible for the expenses of operating its residential properties.

          The table below contains detailed information regarding the apartment complexes in the Account’s portfolio as of December 31, 2007.

Property	Location	Number of Units		Average Unit Size (Square Feet)		Avg. Rent Per Unit/ Per Month
Houston Apartment Portfolio	Houston, TX		2,295		1,351		$1,341
Palomino Park	Highlands Ranch, CO		1,184		1,095		$1,153
Kierland Apartment Portfolio	Scottsdale, AZ		1,000		1,047		$1,260
Phoenix Apartment Portfolio	Greater Phoenix Area, AZ		1,176		1,094		$1,122
Legacy at Westwood	Los Angeles, CA		187		1,181		$4,212
The Colorado	New York, NY		256		617		$3,173
Larkspur Courts	Larkspur, CA		248		1,001		$2,382
Ashford Meadows	Herndon, VA		440		1,057		$1,493
1050 Lenox Park	Atlanta, GA		407		1,023		$1,386
Regents Court	San Diego, CA		251		884		$2,208
South Florida Apartment Portfolio	Boca Raton and Plantation, FL		550		906		$1,109
Caruth at Lincoln Park	Dallas, TX		338		1,168		$1,723
Glenridge Walk	Atlanta, GA		296		1,142		$1,409
The Reserve at Sugarloaf	Duluth, GA		333		1,222		$1,175
The Lodge at Willow Creek	Denver, CO		316		996		$1,082
The Maroneal	Houston, TX		309		926		$1,224
Westcreek Apartments	Westlake Village, CA		126		951		$2,019
Lincoln Woods Apartments	Lafayette Hill, PA		216		774		$1,264
Fairways at Carolina	Margate, FL		208		1,026		$1,181
The Royal St. George Apartments	West Palm Beach, FL		224		870		$1,094
Quiet Waters Apartments	Deerfield Beach, FL		200		1,048		$1,241

ITEM 3.          LEGAL PROCEEDINGS. The Account is party to various claims and routine litigation arising in the ordinary course of business. 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 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. Not applicable.

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PART II

ITEM 5. MARKET FOR THE REGISTRANT’S SECURITIES, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES.

          (a) Market Information. There is no established public trading market for participating interests in the TIAA Real Estate Account. Accumulation units in the Account are sold to eligible participants at the Account’s current accumulation unit value, which is based on the value of the Account’s then current net assets. For the period from January 1, 2007 to December 31, 2007, the high and low accumulation unit values for the Account were $311.4142 and $273.5860, respectively. For the period January 1, 2006 to December 31, 2006, the high and low accumulation unit values for the Account were $273.6530 and $239.9535, respectively.

          Approximate Number of Holders. The number of contract owners at December 31, 2007 was 1,050,000.

          Dividends. Not applicable.

          (b) Use of Proceeds: Not applicable.

          (c) Purchases of Equity Securities by Issuer: Not applicable.

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ITEM 6. SELECTED FINANCIAL DATA.

          The following selected financial data should be considered in conjunction with the Account’s financial statements and notes provided in this report.

	Years Ended December 31,
	2007		2006		2005		2004		2003
Investment income:
Real estate income, net	$	529,412,759	$	444,782,843	$	340,089,550	$	239,429,500	$	224,938,080
Income from real estate joint ventures and limited partnerships		93,724,569		60,788,998		71,826,443		71,390,397		31,989,569
Dividends and interest		141,913,253		135,407,210		70,999,212		27,508,560		19,461,931
Total investment income		765,050,581		640,979,051		482,915,205		338,328,457		276,389,580
Expenses		140,294,447		83,448,664		56,100,197		36,728,425		31,654,065
Investment income, net		624,756,134		557,530,387		426,815,008		301,600,032		244,735,515
Net realized and unrealized gain on investments and mortgage loans payable		1,438,434,738		1,056,670,295		765,970,272		414,580,303		58,837,371
Net increase in net assets resulting from operations		2,063,190,872		1,614,200,682		1,192,785,280		716,180,335		303,572,886
Participant transactions		1,464,653,415		1,969,780,728		2,110,375,836		1,735,947,490		813,860,715
Net increase in net assets	$	3,527,844,287	$	3,583,981,410	$	3,303,161,116	$	2,452,127,825	$	1,117,433,601

	Years Ended December 31,
	2007		2006		2005		2004		2003
Total assets	$	19,232,767,244	$	15,759,961,333	$	11,685,426,413	$	7,843,979,924	$	4,867,089,727
Total liabilities		1,572,230,445		1,627,268,821		1,136,715,311		598,429,938		73,667,566
Total net assets	$	17,660,536,799	$	14,132,692,512	$	10,548,711,102	$	7,245,549,986	$	4,793,422,161
Number of accumulation units outstanding		55,105,718		50,146,354		42,623,491		33,337,597		24,724,183
Net asset value, per accumulation unit	$	311.41	$	273.65	$	239.95	$	210.44	$	186.94
Mortgage loans payable	$	1,392,092,982	$	1,437,149,148	$	973,502,186	$	499,479,256	$	—

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Quarterly Selected Financial Information

          The following selected unaudited financial data for each full quarter of 2007 and 2006 are derived from the financial statements of the Account for the years ended December 31, 2007 and 2006. Certain amounts below have been reclassified in accordance with the reclassifications discussed in Note 1 of the Notes to Financial Statements.

		2007
	For the Three Months Ended												Year Ended
	March 31			June 30			September 30			December 31			December 31
Investment income, net	$	142,720,924		$	158,634,655		$	155,766,287		$	167,634,268		$	624,756,134
Net realized and unrealized gain on investments and mortgage loans payable		436,763,627			355,602,333			442,916,313			203,152,465			1,438,434,738
Net increase in net assets resulting from operations	$	579,484,551		$	514,236,988		$	598,682,600		$	370,786,733		$	2,063,190,872
Total return		4.02	%		3.31	%		3.66	%		2.15	%		13.80	%

	2006
	For the Three Months Ended												Year Ended
	March 31			June 30			September 30			December 31			December 31
Investment income, net	$	118,718,422		$	135,473,310		$	149,429,649		$	153,909,006		$	557,530,387
Net realized and unrealized gain on investments and mortgage loans payable		228,328,042			411,291,318			290,628,996			126,421,939			1,056,670,295
Net increase in net assets resulting from operations	$	347,046,464		$	546,764,628		$	440,058,645		$	280,330,945		$	1,614,200,682
Total return		3.21	%		4.69	%		3.43	%		2.04	%		14.04	%

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ITEM 7. 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 and with consideration to the sub-section entitled “Forward-Looking Statements,” which begins below, and the section entitled “Item 1A. Risk Factors,” which begins on page 4. The past performance of the Account is not indicative of future results.

Forward-Looking Statements

          Some statements in this Form 10-K 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 underlying these forward-looking statements, and are based on current expectations, estimates and projections about the real estate industry, markets in which the Account operates, management’s beliefs, assumptions made by management and the transactions described in this Form 10-K. 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. Forward-looking statements involve risks and uncertainties, some of which are referenced in the section of the Form 10-K entitled “Item 1A. Risk Factors” and in this report below and also in the section entitled “Item 7A. Quantitative and Qualitative Disclosures About Market Risk,” that could cause actual results to differ materially from historical experience or management’s present expectations.

          Caution should be taken not to place undue reliance on management’s forward-looking statements, which represent management’s views only as of the date that this report is filed. Neither management nor the Account undertake any obligation to update publicly or revise any forward-looking statement, whether as a result of new information, changed assumptions, future events or otherwise.

2007 Overview

          The TIAA Real Estate Account (the “Account”) invests primarily in high quality, core commercial 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. The Account does not directly invest in either single-family residential real estate or residential mortgage-backed securities. Performance of commercial real estate during 2007 was positive as U.S. economic growth continued to support real estate market fundamentals. Investor demand for commercial real estate remained strong through much of the year. According to Real Capital Analytics, a primary source of commercial real estate transaction data, transactional volume reached a record $430 billion in 2007, a 34% increase over the $322 billion recorded in 2006. Large transactions which contributed to 2007’s record breaking results included the privatization of Archstone Smith and Equity Office Properties. While sales were strong for the year as a whole, sales slowed dramatically in the fourth quarter as capital markets uncertainties

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escalated. Sales activity in the quarter declined by roughly 33% compared with the fourth quarter of 2006.

          The shift in capital market conditions that materialized in the summer and fall of 2007 was the conclusion of a capital markets cycle phase characterized by plentiful capital, inexpensive and abundant debt, and increasingly aggressive risk pricing for all asset types. As deteriorating credit in sub-prime residential mortgages became evident in 2007, the value of structured securities containing those mortgages plunged and effectively closed down demand for new issues of such securities. The loss of confidence in this sector of the market ignited, in turn, a re-evaluation of risk pricing through-out the capital markets. Credit spreads on corporate debt, conventional commercial mortgages and commercial mortgage-backed securities (CMBS) have widened to levels not seen since the last recession. CMBS new issuances have all but halted as a loss of confidence spilled over from sub-prime residential mortgages. Various specialty instruments have withered as well, also largely the result of this loss of confidence. The risk repricing brought the long phase of commercial real estate capitalization rate compression to a halt. By year end 2007, cap rates showed slight widening across certain property types though based on very few transactions. The slowing in transactions probably reflects both heightened uncertainty as market participants wait out the capital markets volatility and the constraining effect of less available and more expensive commercial mortgage financing.

          In the public sector, REITs performed poorly during most of 2007, despite healthy real estate market fundamentals. After a seven year run of above-average returns, REIT returns as indicated by the Dow Jones Wilshire Real Estate Securities Index were a negative 17.7% for the year as compared with a gain of 5.5% for the S&P 500. Several REITs were taken private during the year at what turned out to be peak prices; those that remained public saw their share prices decline. Because of their liquidity, REIT returns have historically been more volatile than commercial property returns, as stock market investors will often move money between sectors based on swings in sentiment and other factors. While the Account does invest in REITs, these holdings amount to less than 5% of the total value of the Account as of December 31, 2007.

          The U.S. economy continued to expand in 2007; however, growth slowed measurably over the course of the year due in large part to the slowdown in the housing market. Home prices declined across the nation, and the number of residential mortgage delinquencies increased, particularly among borrowers who bought homes with adjustable rate mortgages. Housing construction dropped sharply over the course of the year as inventories of unsold homes increased and mortgage lenders tightened lending standards.

          Historically, there has not been a direct link between the performance of commercial real estate and single-family housing due to the different market fundamentals that drive each. In its January 2008 “Beige Book”, which reports on economic conditions in the 12 Federal Reserve Districts, the Federal Reserve characterized commercial real estate activity at year-end 2007 as generally stable, with some markets reporting little to no change while others reported a slight easing. By comparison, according to the Beige Book, “residential real estate conditions continued to be weak in all districts”.

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          Nonetheless, the performance of the single-family housing market has had an indirect impact on commercial real estate markets. For example, bankruptcies of subprime mortgage lenders have negatively affected office space demand in Orange County, California, where several of the largest subprime lenders were headquartered. The Account has minimal exposure to the Orange County market, with one investment totaling $64 million, or 0.3% of total Account value. Similarly, job losses in the financial services sector can affect retail market conditions since financial services jobs are among the most highly paid. While retail sales softened nationally in 2007, the impact has been minimal in the Account’s primary retail markets to date.

          During the second half of 2007, as the national economy continued to weaken and the housing market downturn deepened, the Federal Open Market Committee (“FOMC”) cut the federal funds rate three times, first by 50 basis points (0.50%) in September, and then by another 25 basis points (0.25%) in both October and December. In early-2008, the Federal Reserve lowered the federal funds rate two more times by a total of 125 basis points (1.25%). Cuts in interest rates are designed to spur economic activity by increasing consumer spending and business borrowing. The effects of cuts in the federal funds rate and other Federal Reserve actions often take 6-9 months to become evident, and the Federal Reserve will be watching for signs that its cuts have stimulated economic activity. While credit markets remain constrained as of early 2008, the Federal Reserve’s efforts to stimulate economic activity through cuts in the federal funds rate give management reason to believe that the economic and capital markets environment will provide fundamental support for U.S. commercial real estate markets in 2008.

Investments as of December 31, 2007

          As of December 31, 2007, the Account had total net assets in the amount of $17,660,536,799, a 3% increase from the end of the third quarter of 2007 and a 25% increase from year-end 2006. The growth in net assets was due to the continued positive inflow of premiums and net transfers into the Account, combined with a 12% increase in net investment income and capital appreciation on the Account’s investment portfolio during the year ended December 31, 2007, as compared to 2006.

          As of December 31, 2007, the Account owned a total of 111 real estate property investments (99 of which were wholly-owned, 12 of which were held in joint ventures) and one remaining equity interest in a joint venture, which sold its real estate investments during the third quarter of 2007, representing 77.9% of the Account’s total investment portfolio. The real estate portfolio included 46 office properties (5 of which were held in joint ventures and one located in London, England), 27 industrial properties (including one held in a joint venture), 21 apartment complexes, 16 retail properties (including five held in joint ventures and one located in Paris, France), and a 75% joint venture interest in a portfolio of storage facilities. Of the 111 real estate property investments, 20 are subject to debt (including seven joint venture property investments). Total debt on the Account’s wholly-owned real estate portfolio as of December 31, 2007 was $1,392,092,982 representing 7.9% of Total Net Assets. The Account’s share of joint venture debt is netted out in determining the joint venture values shown in the Statement of Investments, but, when that debt is also considered, total debt on the Account’s portfolio as of December 31, 2007 was $3,383,875,582 representing 19.2% of Total Net Assets. The Account currently has no fund-level debt.

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          During 2007, the Account purchased 7 property investments, one of which was a joint venture interest in a portfolio containing 65 retail properties, for a total net equity investment of $1.7 billion. These purchases were diversified by both location (16 states and Paris, France) and by sector. The properties are listed in the chart below:

Property Investments Acquired in 2007
Property Name	Property Type	City	State	Net Acquisition Cost		Joint Venture/ % Interest	Third Party Debt		Gross Acquisition Cost
Camelback Center	Office	Phoenix	AZ	$	75,743,245	No	$	—	$	75,743,245
DDR Retail Portfolio	Retail	various	various		1,043,213,518	Yes - 85%		1,531,873,092		2,575,086,610
Printemps de l’Homme	Retail	Paris	France		259,842,066	No		—		259,842,066
Preston Sherry Plaza	Office	Dallas	TX		45,211,077	No		—		45,211,077
Champlin Marketplace	Retail	Champlin	MN		18,352,263	No		—		18,352,263
Pacific Plaza	Office	San Diego	CA		118,221,017	No		8,922,033		127,143,050
Seneca Industrial Park	Industrial	Pembroke Park	FL		122,334,422	No		—		122,334,422
Total				$	1,682,917,608		$	1,540,795,125	$	3,223,712,733

          The Account also sold 15 property investments and 5 properties from larger portfolios for approximately $801.8 million. We believe that these properties had either maximized in value, under-performed, or represented properties needing significant capital infusions in the future, which could have had a negative impact on the Account’s overall performance. The properties sold had a cumulative realized gain of approximately $199.1 million. The properties are listed below:

Property Investments Sold in 2007
Property Name	Property Type	City	State		Net Sales Price (less selling exp)
Greens at Metrowest	Apartment	Orlando	FL	$	21,656,260
Eastgate Distribution Center	Industrial	San Diego	CA		31,800,127
Woodcreek III-Chicago Industrial (1)	Industrial	Bollingbrook	IL		6,717,149
IDI Kentucky	Industrial	Hebron	KY		66,981,460
Corporate Lakes-Atlanta Industrial (1)	Industrial	Atlanta	GA		30,653,575
Landmark at Salt Lake City	Industrial	Salt Lake City	UT		16,176,540
2101 Design Road-Dallas Industrial Portfolio (1)	Industrial	Arlington	TX		9,279,890
1155 Harvester-Chicago CalEast Portfolio (1)	Industrial	West Chicago	IL		8,727,620
Memphis Portfolio	Industrial	Memphis	TN		61,485,333
Mideast RA Industrial Portfolio	Industrial	New Castle	DE		15,207,210
Mountain RA Industrial Portfolio	Industrial	Phoenix	AZ		9,014,952
Sabre Street-Northern CA RA Industrial (1)	Industrial	Hayward	CA		6,547,463
Batterymarch Park II	Office	Quincy	MA		17,291,200
161 N. Clark Street (75% Account Interest)	Office	Chicago	IL		239,493,750
Butterfield Industrial Park	Industrial	El Paso	TX		5,035,162
Legends at Chase Oaks	Apartment	Plano	TX		36,631,000
Sawgrass Office Portfolio	Office	Sunrise	FL		85,656,950
10 Waterview	Office	Parsippany	NJ		36,633,763
9 Hutton Centre	Office	Santa Ana	CA		36,535,781
One Monument Place	Office	Fairfax	VA		60,263,855
Total				$	801,789,040

(1) Partial sale of a single building which was part of an existing portfolio

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          In addition to the acquisition and sales activity, the Account entered into a commitment to purchase a limited partnership interest in the amount of $50 million in a real estate fund providing mezzanine financing on commercial real estate, and refinanced the debt on West Town Mall, reducing the interest rate from 6.90% to 6.34%, and increasing the amount of its share in the loan from $38 million to $105 million.

          Management believes that the Account’s real estate portfolio is diversified by location and property type. The largest investment, DDR Joint Venture, consists of 65 properties in 13 states, represents 5.41% of Total Investments and 6.94% of its total real estate investments. No single property investment represented more than 3.37% of Total Investments or more than 4.32% of total real estate investments, based on the values of such assets. The following charts reflect the diversification of the Account’s real estate assets by region and property type, list its ten largest holdings, and list its top five overall market exposures by metropolitan statistical area. All information is based on the values of the properties at December 31, 2007.

Diversification by Market Value
	East (27)			West (36)			South (36)			Midwest (7)		Various* (3)		Foreign** (2)		Total (111)
Office (46)		20.9	%		20.1	%		11.1	%	1.2	%	0.0	%	2.9	%		56.2	%
Apartment (21)		1.7	%		6.1	%		5.0	%	0.0	%	0.0	%	0.0	%		12.8	%
Industrial (27)		1.7	%		6.0	%		3.4	%	1.4	%	0.5	%	0.0	%		13.0	%
Retail (16)		1.6	%		0.9	%		6.0	%	0.1	%	6.9	%	1.9	%		17.4	%
Other (1)***		0.0	%		0.0	%		0.0	%	0.0	%	0.6	%	0.0	%		0.6	%
Total (111)		25.9	%		33.1	%		25.5	%	2.7	%	8.0	%	4.8	%		100.0	%

( )	Number of property investments in parentheses.
*	Represents a portfolio of storage facilities, a portfolio of industrial properties, and a portfolio of retail properties located in various regions across the U.S.
**	Represents real estate investments in the United Kingdom and France.
***	Represents a portfolio of storage facilities.
Properties in the “East” region are located in: ME, NH, VT, MA, RI, CT, NY, NJ, PA, DE, MD, DC, WV, VA, NC, SC, KY
Properties in the “Midwest” region are located in: WI, MI, OH, IN, IL, MN, IA, MO, KS, NE, ND, SD
Properties in the “South” region are located in: TN, MS, AL, GA, FL, OK, AR, LA, TX
Properties in the “West” region are located in: MT, ID, WY, CO, NM, AZ, UT, NV, WA, OR, CA, AK, HI

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Top Ten Largest Real Estate Property Investments
Property Name	City	State/ Country	Property Type	Market Value ($M)(a)				% of Total Real Estate Portfolio (b)		% of Total Investments
DDR Joint Venture	Various	USA	Retail		$	1,028.3	(c)	6.94	%	5.41	%
1001 Pennsylvania Avenue	Washington	DC	Office		$	640.1	(d)	4.32	%	3.37	%
Fourth and Madison	Seattle	WA	Office		$	487.0	(e)	3.29	%	2.56	%
50 Fremont	San Francisco	CA	Office		$	478.0	(f)	3.23	%	2.51	%
1 & 7 Westferry Circus	London	UK	Office		$	436.1	(g)	2.94	%	2.29	%
Four Oaks Place	Houston	TX	Office		$	419.3		2.83	%	2.21	%
The Newbry	Boston	MA	Office		$	389.9		2.63	%	2.05	%
780 Third Avenue	New York City	NY	Office		$	375.0		2.53	%	1.97	%
Yahoo! Center	Santa Monica	CA	Office		$	369.4		2.49	%	1.94	%
Ontario Industrial Portfolio	Ontario	CA	Industrial		$	355.4	(h)	2.40	%	1.87	%

(a)	Value as reported in the December 31, 2007 Statement of Investments. Investments owned 100% by TIAA are reported based on market value. Investments in joint ventures are reported based on the equity method of accounting.
(b)	Total Real Estate Portfolio excludes the mortgage loan receivable.
(c)	This property is held in a 85%/15% joint venture with Developers Diversified Realty Corporation (DDR), and consists of 65 retail properties located in 13 states.
(d)	This property is shown gross of debt. The value of the Account’s interest less leverage is $428.8M.
(e)	This property is shown gross of debt. The value of the Account’s interest less leverage is $339.8M.
(f)	This property is shown gross of debt. The value of the Account’s interest less leverage is $341.0M.
(g)	This property is shown gross of debt. The value of the Account’s interest less leverage is $180.6M.
(h)	This property is held in a 50%/50% joint venture with Equity Office Properties Trust.
(i)	This property is shown gross of debt. The value of the Account’s interest less leverage is $346.0M.

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Top Five Overall Market Exposure
Metropolitan Statistical Area (MSA)	% Leased		# of Investments	% Total Investments
Washington-Arlington-Alexandria DC-VA-MD-WV	99.2	%	9	8.42	%
Los Angeles-Long Beach-Glendale CA	92.5	%	8	5.72	%
Boston-Quincy MA	96.7	%	5	5.51	%
San Francisco-San Mateo-Redwood City CA	94.4	%	4	5.11	%
Seattle-Bellevue-Everett WA	97.9	%	5	4.11	%

          As of December 31, 2007, the Account also held investments in real estate limited partnerships, representing 1.74% of Total Investments, real estate equity securities, representing 2.24% of Total Investments, a mortgage loan receivable representing 0.38% of Total Investments, certificates of deposit representing 2.22% of Total Investments, commercial paper representing 9.23% of Total Investments, government bonds, representing 5.82% of Total Investments, variable notes representing 0.26% of Total Investments, and bankers acceptance representing 0.20% of Total Investments.

Real Estate Market Update By Property Type

          (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 year ended December 31, 2007 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.)

          In 2007 the United States economy grew steadily for the first seven months and then at a pace which slowed measurably from August to the end of 2007. Employment growth, which is a crucially important influence on the demand side of commercial property markets, slowed with the economy. An estimated 1.7 million jobs were added during 2007, down significantly from 2.5 million in 2006. While the service sector expanded, job losses were concentrated in the construction (primarily residential building) and manufacturing sectors. The unemployment rate began to increase during the second half of the year, ending at 5.0%, as compared to 4.4% at the end of 2006. Despite weaker economic activity, commercial real estate fundamentals remained healthy, although varied from market to market and by property sectors during the year. In general, vacancy rates across most property types remained at or below equilibrium levels and rents grew in most markets.

          Payroll employment grew in all of the Account’s primary metropolitan areas in 2007. The Account’s top five markets based on the net equity value of the Account’s property investments were Washington, D.C., Los Angeles, Boston, San Francisco, and Seattle. Employment growth was strongest in Seattle, where the number of jobs increased by 2.8% in 2007. Payroll growth was also positive in San Francisco (2.2%), Boston (1.7%), and Washington, D.C (1.5%). Employment growth in Los Angeles registered a more modest 1.0% gain during the year. In comparison, payroll employment in the U.S. grew by 1.3%.

          Office market conditions, particularly in the primary markets, were stable over the course of 2007. Torto Wheaton Research, an independent subsidiary of CB Richard Ellis and a widely-used source of real estate market data, reported that U.S. office vacancies averaged

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12.5% as of year-end 2007 as compared to 12.6% at year-end 2006. In comparison, at year-end 2007, the vacancy rate of the Account’s portfolio was 5.2%, which was well below the national average. The office market remained stable despite job losses in financial activities, a key office using sector. The downturn of the housing market and collapse of several of the largest subprime mortgage lenders contributed to the loss of around 21,000 jobs in the financial activities sector in the latter half of 2007. “Credit intermediation”, a category which includes subprime lenders, lost 75,000 jobs, most of which occurred during the third and fourth quarters. However, job losses in financial services were more than offset by larger gains in the professional and business services sector, which generated 314,000 jobs over the course of the year.

          Office market fundamentals remained positive in the Account’s top office markets during 2007. All of the Account’s top office markets enjoyed vacancy rates below the national average. In Washington, D.C., where the largest proportion of the Account’s office investments are concentrated, the year-end 2007 vacancy rate was 10.0%, which is below the national average but marginally above the market’s vacancy rate of 9.1% at year-end 2006. By comparison, the average vacancy rate for the Account’s Washington, D.C. properties was 0.6% at year-end 2007. Similarly, the table below shows that the average vacancy rate of the Account’s property investments is well below that of their respective markets in Boston, San Francisco, Los Angeles, and Seattle.

Sector	Metropolitan Statistical Area (MSA)	Total Sector By MSA ($M)			% of Total Investments	Account Weighted Average Vacancy	MSA Vacancy (*)		National Average (*)
Office						5.7%			12.5%
1	Washington-Arlington-Alexandria DC-VA-MD-WV		$	1,409	7.4%	0.6%	10.0	%
2	Boston-Quincy MA		$	1,014	5.3%	3.0%	10.8	%
3	San Francisco-San Mateo-Redwood City CA		$	874	4.6%	5.6%	9.1	%
4	Los Angeles-Long Beach-Glendale CA		$	719	3.8%	5.4%	10.0	%
5	Seattle-Bellevue-Everett WA		$	687	3.6%	3.6%	9.5	%

* Source: Torto Wheaton Research

          Industrial space demand is influenced by a number of factors including the national business cycle, industrial production, international trade, as well as employment growth in the manufacturing, wholesale trade and transportation and warehousing industries. Gross Domestic Product (GDP), a basic indicator of the national economic activity, grew an estimated 2.2% in 2007, as compared with 2.9% in 2006 and 3.1% in 2005. GDP growth was especially weak in the fourth quarter of 2007 at 0.6% (a preliminary estimate), which many economists believe will remain similarly weak in the first half of 2008. Nonetheless, industrial market conditions were stable in 2007. According to Torto Wheaton Research, industrial market vacancies in the U.S. averaged 9.4% as of year-end 2007, unchanged from year-end 2006. In comparison, the average vacancy rate of the Account’s portfolio of industrial properties was 4.3% as of year-end 2007, below the national average. The average vacancy rates of the Account’s properties in its top industrial markets are as follows:

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Sector	Metropolitan Statistical Area (MSA)	Total Sector By MSA ($M)			% of Total Investments	Account Weighted Average Vacancy		MSA Vacancy (*)		National Average (*)
Industrial						4.3	%			9.4%
1	Riverside-San Bernardino-Ontario CA		$	488	2.6%	0.0	%	9.1	%
2	Chicago-Naperville-Joliet IL		$	202	1.1%	0.4	%	10.4	%
3	Dallas-Plano-Irving TX		$	201	1.1%	3.7	%	10.6	%
4	Los Angeles-Long Beach-Glendale CA		$	145	0.8%	11.4	%	4.6	%
5	Atlanta-Sandy Springs-Marietta GA		$	135	0.7%	2.2	%	12.9	%

* Source: Torto Wheaton Research

          Riverside, California, where the largest concentration of the Account’s industrial assets is located, had a year-end 2007 vacancy rate of 9.1%, slightly below the 9.4% national average. Riverside is the nation’s top industrial market due to its proximity to the Ports of Los Angeles and Long Beach where approximately 40% of the nation’s imports enter the U.S. The Account’s industrial properties in Riverside are fully leased and occupied. Although vacancy rates in Chicago and Dallas were above the national average, both markets saw vacancies decline over the course of 2007. The Account’s industrial properties in Chicago and Dallas had a vacancy rate of 0.4% and 3.7%, respectively, as of year-end 2007, which are well below their respective market averages. Vacancy rates in Atlanta averaged 12.9% as of year-end 2007, virtually unchanged from year-end 2006. In comparison, the Account’s industrial properties in Atlanta had a vacancy rate of 2.2% at year-end 2007. The only market in which the Account’s properties have a higher vacancy rate than the market average is Los Angeles, where vacancies in the Account’s industrial properties averaged 11.4% as of year-end 2007 versus the 4.6% market average. The higher vacancy rate in the Account’s properties is due to two tenants moving to other buildings following expiration of their leases.

          The rental apartment market remained relatively healthy in 2007, despite the downturn in the housing market, which resulted in increasing competition from unsold condominiums and single-family rentals being offered for rent. Preliminary data from Torto Wheaton Research indicates that vacancy rates in U.S. apartment markets averaged 4.7% as of year-end as compared with 4.8% at year-end 2006. While national vacancies were largely unchanged, markets that experienced a boom of single family and condominium construction in 2005-2006 generally experienced an increase in vacancies. These markets include Phoenix and much of Florida (e.g., Orlando, Ft. Lauderdale and Miami). The average vacancy rate for the Account’s apartment holdings was 6.5% at the end of 2007. The average vacancy rates of properties in the Account’s top apartment markets are shown below:

Sector	Metropolitan Statistical Area (MSA)	Total Sector By MSA ($M)			% of Total Investments	Account Weighted Average Vacancy		MSA Vacancy (*)	National Average (*)
Apartment						6.5	%		4.7%
1	Houston-Bay Town-Sugar Land TX		$	336	1.8%	6.5	%	6.9%
2	Phoenix-Mesa-Scottsdale AZ		$	326	1.7%	3.5	%	6.7%
3	Denver-Aurora CO		$	238	1.2%	7.1	%	4.6%
4	Atlanta-Sandy Springs-Marietta GA		$	190	1.0%	5.2	%	6.0%
5	Los Angeles-Long Beach-Glendale CA		$	127	0.7%	21.0	%	2.6%

* Source: Torto Wheaton Research

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          As shown above, with the exception of the Account’s apartment properties in Denver and Los Angeles, the average vacancy rates of its apartment properties were generally similar to or modestly lower than their respective market averages. In Los Angeles, the Account’s single property has experienced direct competition from new rental projects. In Denver, one property has a 3% vacancy while the second property has a vacancy of 8% due to direct competition from lower priced properties.

          Retail markets weakened modestly during 2007 despite healthy consumer spending during much of the year. Preliminary data from the U.S. Department of Commerce indicated that retail and food service sales (excluding autos and auto parts) increased 5.7% in the fourth quarter of 2007 as compared to the fourth quarter of 2006. (Year-over-year comparisons are necessary to account for seasonal sales patterns.) However, a number of major retailers reported that sales were very soft during December, leading many economists to speculate that slower job growth, elevated energy prices and declining home prices has caused consumers to cut back on discretionary spending. According to Torto Wheaton Research, vacancies in neighborhood and community centers averaged 9.8% at year-end 2007, up from 8.7% at year-end 2006. In comparison, the average vacancy rate as of December 31, 2007 for the Account’s entire retail portfolio as well as its neighborhood and community centers was much lower at 2.5%, and lower than this same time in 2006 at 3.0%.

          Overall, Management believes real estate markets are at or close to equilibrium. The consistent declines in vacancy rates that occurred on a quarterly basis in recent years appear to have ended. Similarly, rent growth has slowed or leveled off in a number of markets. Management believes that this reaction of the real estate market activity is consistent with the slowing of the overall U.S. economic activity and job growth. Fortunately, markets remained balanced, and the level of construction of new commercial real estate has been moderate, and generally in-line with anticipated demand. Torto Wheaton Research projects approximately 73 million square feet of multi-tenant office space to be built in 2008, a total which is below the average of 93 million square feet that were built during the 1999-2001 construction peak. Similarly, in the industrial market, Torto Wheaton Research expects around 170 million square feet to be built in 2008, as compared with an average of nearly 250 million square feet in 1999-2001. Apartment construction is expected to total 215,000 units in 2008, which is essentially similar to the 1999-2001 average, but below the 225,000 unit average built in 2006-2007. However, Torto Wheaton’s forecast of apartment construction may ultimately prove too high given the 9% decline in permits issued for new multi-family buildings (an indicator of future construction) in 2007. Construction of new neighborhood and community centers is expected to total just over 20 million square feet in 2008, down from 36 million square feet in 2007, which is consistent with announcements by several major retailers that plan to reduce their new store openings in 2008.

Outlook for 2008

          While commercial real estate fundamentals have remained positive to date despite the capital markets turmoil of recent months, Management expects these fundamentals to weaken to some degree in the months ahead as a result of a weak economic growth environment. There is little disagreement among economic forecasters with regard to the first half of 2008;

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expectations of sub-par growth are unanimous. Some forecasters are expecting mildly negative GDP growth during the first half while others are expecting weakly positive growth. While the difference might well determine whether this period is actually deemed to be a “recession”, the impact on commercial real estate will probably not differ much one way or the other. The larger question is whether economic growth will rebound materially in the second half of the year. Here, Management shares the view among more optimistic forecasters which calls for a return to near–trend growth in the third and fourth quarters largely as a result of the Federal Reserve’s interest rate cuts that began in September. This view is shared by the Federal Open Market Committee which is the policy setting arm of the Federal Reserve. As reported by Chairman Bernanke in his February 2008 Semiannual Monetary Policy Report to Congress, the FOMC members believe that GDP growth in 2008 will amount to 1.3% to 2.0% with a rebound “close to or a little above its longer-term trend” in 2009 and 2010. They also expect inflation will be “moderate” from its 2007 pace.

          With slow growth or mild recession in the first half of 2008, growth in tenant demand for office, industrial and retail space will likely slip, rent growth will likely slow or flatten out, and vacancy rates may inch up. The degree of commercial real estate market weakening will be mitigated by the generally balanced conditions that currently prevail in many if not most metro area markets. In addition, the credit market constraints now in play will likely constrain new commercial real estate construction activity in 2009. Constrained additions to supply along with the expected rebound in economic growth will set the stage for a rapid repair of fundamentals in 2009.

          Commercial real estate pricing in the near term will be largely determined by a combination of factors including the level and uncertainty associated with Treasury rates and inflation, and the general pricing of risk across all asset types. Assuming that the period of economic weakness is short-lived, Treasury rates should achieve a cycle low in the first half of the year and then slowly rebound as the economy recovers. Low Treasury rates would cushion the impact of wider cap rate spreads which, for commercial real estate, are approaching their long-term norms. Finally, pricing pressures have so far been concentrated on properties that are in less attractive locations or have less attractive investment characteristics; Management believes that such distinctions will continue in light of the ongoing strong investor demand for the most attractive properties. Nonetheless, in light of less available and more expensive commercial mortgage debt, it is possible that the number of investors pursuing commercial real estate will be smaller in 2008 than in prior years, contributing to some easing of pricing across the quality spectrum.

          Management believes that its property investments are diversified by both sector and geographic location, which will allow it to weather a continued slowdown of economic and real estate market conditions. The Account will continue to balance these fundamentals against pricing pressures when executing its core investment strategy. However, market conditions affecting real estate investments at any given time cannot be predicted, and any downturn in one or a number of the markets in which the Account invests could significantly and adversely impact the Account’s returns.

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Results of Operations

Year Ended December 31, 2007 Compared to Year Ended December 31, 2006

          Performance

          The Account’s total return was 13.80% for the year ended December 31, 2007, 24 basis points lower than the 2006 annual return of 14.04%. The Account’s overall performance on a year-to-year basis reflects the continued strong performance of the Account’s real estate property investments, including investments owned in joint ventures. This strong performance was offset by the substantial decrease in performance of its marketable securities (described in Net Realized and Unrealized Gains and Losses on Investments and Mortgage Loans Payable).

          Commercial real estate has continued to experience historically high pricing in 2007 as capital has continued to flow into the asset class. While this increase in property pricing has positively impacted the Account’s net realized and unrealized gains on its real estate assets and joint venture holdings, the underlying property values are subject to decline prospectively, if capital or real estate market conditions experience adverse changes. Real estate as an investment should be considered from a long-term perspective. The Account’s total return (after expenses) over the past three, five and 10 years ended December 31, 2007 was 13.96%, 12.35% and 9.79%. The respective returns for the year ended December 31, 2006 were 13.53%, 10.22% and 9.43%.

          The Account’s total net assets grew 25.0% from December 31, 2006 to December 31, 2007. The primary drivers of this growth were a significant increase in the Account’s net realized and unrealized gains on its real estate investments including joint ventures and funds, net positive participant transactions, and an increase in the Account’s net investment income from its investment portfolio over the last twelve months. Management believes that the continued significant realized and unrealized gains on the real estate investments, including joint ventures, is due to the positive real estate market fundamentals, and the core property investment strategy upon which the Account is based. Management also believes that the continued positive net participant transfers into the Account are due to its strong long-term historic performance and its historically low return volatility relative to other available investment options.

          Income and Expenses

          The Account’s net investment income, after deduction of all expenses, was 12% higher for the year ended December 31, 2007, as compared to 2006. This increase was due to a 23% increase in net income from the Account’s real estate properties, including joint venture holdings and limited partnerships, augmented by a 5% increase in income from marketable securities, all of which was partially offset by a 68% increase in Account level expenses for the year ended 2007 as compared to 2006.

          The Account’s real estate holdings, including real estate joint ventures and limited partnerships, generated approximately 81% and 79% of the Account’s total investment income (before deducting Account level expenses) during 2007 and 2006, respectively. The 23% increase

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in the Account’s total investment income was derived from its investment in real estate, joint ventures and limited partnerships. The remaining portion of the Account’s total investment income was generated by investments in marketable securities, including real estate equity securities, commercial paper, government bonds, and an investment in a commercial mortgage loan receivable.

          Gross real estate rental income increased approximately 18% during the year ended December 31, 2007, as compared to the same period in 2006. This increase was primarily due to income derived from properties acquired in 2006 and 2007, which included properties with larger income streams due to their relative size. Income from real estate joint ventures and limited partnerships was $93,724,569 for the year ended December 31, 2007, as compared with $60,788,998 for the year ended December 31, 2006. This 54% increase was primarily due to an increase in gross rental income from the properties owned in joint ventures, which increased substantially with the acquisition of a joint venture interest in 65 retail properties in the first quarter of 2007. Total investment income on the Account’s investments in all marketable securities increased by 5%, from $135,407,210 for the year ended December 31, 2006 to $141,913,253 for the comparable period in 2007. This change was due to an increase in the Account’s investment income from other marketable securities, which was partially offset by a decrease in the Account’s investment income from REIT securities due to their poor performance in 2007.

          Total real estate property level expenses and taxes for wholly-owned property investments for the years ended December 31, 2007 and 2006 were $458,021,539 and $389,672,945, respectively. In 2007, operating expenses and real estate taxes represented 54% and 28% of the total real estate property level expenses and taxes, respectively, with the remaining 18% representing interest payments on mortgages. In comparison, operating expenses, real estate taxes, and interest expenses similarly represented 53%, 28% and 19% of total property level expenses, respectively, in 2006. Overall, property level expenses increased by only 18% from 2006 to 2007. The majority of this increase (83%) was due to increases in operating expenses and real estate taxes associated with the Account’s larger portfolio of wholly-owned property investments. The increase in the interest expense paid on properties subject to a mortgage accounted for 17% of the overall increase. As of year-end 2007, there were 13 wholly-owned properties subject to debt, as compared to 12 properties at year-end 2006. Three of the thirteen properties with debt as of December 31, 2007 were added to the Account’s real estate portfolio in the second half of 2006; and one was added in fourth quarter 2007.

          The Account incurred overall Account level expenses for the year ended December 31, 2007 of $140,294,447, which was a 68% increase from expenses of $83,448,664 for the year ended December 31, 2006. The overall change in expenses was primarily due to the growth of the Account’s total net assets (which increased by approximately 25% from December 31, 2006 to December 31, 2007), increased actual expenses associated with managing the Account, due in part to adjustments made to the allocation methodology, and increases in certain of the Account’s expense deduction rates effective May 1, 2007. Investment advisory charges grew to $49,239,366 for the year ended December 31, 2007 as compared to $26,899,307 for the year ended December 31, 2006. This increase was primarily the result of higher operational costs (including personnel and other infrastructure costs) due to the Account’s increasing diversity of assets and associated costs due to increased property asset management activities. Further, a component of this increase (approximately $5.2 million) was the result of reconciliation, during the twelve month period ended December 31, 2007 and in accordance with the Account’s procedures, of the difference between actual and estimated expenses

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of the Account. In addition, the direct investment advisory charges associated with the Account increased with the continued growth of the Account’s total net assets. Total administrative and distribution expenses increased to $63,593,008 for the year ended December 31, 2007 as compared to $45,712,473 for the year ended December 31, 2006. Administrative and distribution expenses increased due to adjustments made to the Account’s expense base, in accordance with the Account’s procedures, for any difference between actual and estimated expenses. This increase in expenses primarily resulted from larger allocated operational expenses including costs associated with new technology investments. In addition, the direct administrative and distribution charges associated with the Account increased with the continued growth of the Account’s total net assets. Finally, liquidity guarantee expenses increased to $19,409,759 for the year ended December 31, 2007 as compared to $3,905,051 for the year ended December 31, 2006, due to an increase in the liquidity guarantee expense deduction rate, which increased from 0.035% of annual net assets to 0.160% of annual net assets as of May 1, 2007.

          Net Realized and Unrealized Gains and Losses on Investments and Mortgage Loans Payable

          The Account had net realized and unrealized gains on investments and mortgage loans payable of $1,438,434,738 for the year ended December 31, 2007, as compared with net realized and unrealized gains on investments and mortgage loans payable of $1,056,670,295 for the year ended December 31, 2006, a 36% year over year increase. The overall increase was primarily driven by the increase in net realized and unrealized gains on the Account’s real estate joint ventures and limited partnerships to $462,098,173 for 2007 from $217,360,271 for the year ended December 31, 2006. In addition, the Account had a strong increase in net realized and unrealized gains on the real estate properties to $1,026,007,574 for the year ended December 31, 2007 from $735,507,509 for 2006. The increase in net realized and unrealized gains on the Account’s property investments, including those held in joint ventures, was due to the solid real estate market fundamentals and continued liquidity in the commercial real estate markets. The effect of these positive conditions was to increase the value of the Account’s existing real estate assets, as reflected in the unrealized gains on the real estate properties of $898,172,653 and the realized gains on the sales of real estate properties of $127,834,921. During the year ended December 31, 2007, the Account sold nineteen wholly-owned properties, which included two apartments, five office buildings and a portfolio of several industrial properties for total net proceeds of $562.3 million, and recognized a cumulative net gain of $127.8 million. The Account also sold one joint venture, a 75% equity interest in the 161 N. Clark Street joint venture for total net proceeds of $239.5 million, and recognized a net gain of $69.9 million. The Account posted a net realized and unrealized loss on its marketable securities of $101,479,347 for the year ended December 31, 2007, as compared to a net realized and unrealized gain of $130,710,746 in the same period of 2006. The losses on the Account’s marketable securities in the year ended December 31, 2007 were primarily due to the Account’s investments in real estate equity securities (REITs). The U.S. REIT market struggled through a volatile 2007 and ended the year down by more than 17%, as compared to the strong 2006 performance where the market increased by 35%. We believe that the volatility in the REIT market was a reaction to a perceived fear of an overall slowdown in the real estate markets due to the continued problems of the subprime market, and the subsequent credit crunch.

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Year Ended December 31, 2006 Compared to Year Ended December 31, 2005

          Performance

          The Account’s total return was 14.04% for the year ended December 31, 2006, two basis points higher than the 2005 annual return of 14.02%. The Account’s overall performance on a year-to-year basis reflected the continued strong performance of the Account’s real estate property investments and an increase in interest rates on its marketable securities.

          As of December 31, 2006 the Account’s total return (after expenses) over the prior three, five and 10 years ended December 31, 2006 was 13.53%, 10.22% and 9.43%, respectively.

          The Account’s total net assets grew 34% from December 31, 2005 to December 31, 2006. The primary drivers of this growth were significant net participant transactions, the Account’s net investment income from its investment portfolio and the Account’s realized and unrealized gains on its investments over the prior year. Management believes that the net participant transfers into the Account were due to its positive historical performance and its low return volatility relative to other available investment options.

          Income and Expenses

          The Account’s net investment income, after deduction of all expenses, was 30.6% higher for the year ended December 31, 2006, as compared to 2005. This increase was related to the increase in total net assets, which included a 35.1% increase in the Account’s real estate properties, joint venture holdings and limited partnerships.

          The Account’s real estate holdings, including real estate joint ventures and limited partnerships, generated approximately 79% and 85% of the Account’s total investment income (before deducting Account level expenses) during 2006 and 2005, respectively. The remaining portion of the Account’s total investment income was generated by investments in marketable securities, including real estate equity securities, commercial paper, government bonds, and an investment in a commercial mortgage loan receivable. The decline in the percentage of the Account’s total investment income derived from its real estate holdings was primarily due to an increase in the Account’s interest income from its marketable securities and mortgage loan receivable.

          Gross real estate rental income increased approximately 35% in the year ended December 31, 2006, as compared to 2005. This increase was primarily due to the increased number and size of the Account’s wholly-owned property investments (98 at December 31, 2005 compared to 109 at December 31, 2006). Income from real estate joint ventures and limited partnerships was $60,788,998 for the year ended December 31, 2006, as compared with $71,826,443 for the year ended December 31, 2005. This 15% decrease was due to the timing of distributions from the joint venture partners. Investment income on the Account’s investments in marketable securities increased by 91%, from $70,999,212 in 2005 to $135,407,210 in 2006. This increase was due to an increase in the number of marketable securities investments and higher interest rates in 2006.

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          Total property level expenses for wholly-owned property investments for the years ended December 31, 2006 and 2005 were $389,672,945 and $278,544,030, respectively. In 2006, operating expenses and real estate taxes represented 53% and 28% of the total property level expenses, respectively, with the remaining 19% representing interest payments on mortgages. In comparison, operating expenses, real estate taxes, and interest expense represented 54%, 32% and 14% of total property level expenses, respectively, in 2005. Overall, property level expenses increased by 40% from 2005 to 2006. The majority of this increase (71%) was due to increases in operating expenses and real estate taxes associated with the Account’s larger portfolio of wholly-owned property investments. The increase in the interest expense paid on properties subject to a mortgage accounted for 29% of the overall increase. As of year-end 2006, there were 12 wholly-owned properties subject to debt, as compared to seven leveraged properties at year-end 2005.

          The Account also incurred expenses for the years ended December 31, 2006 and 2005 for investment advisory services ($26,899,307 and $19,603,225, respectively), administrative and distribution services ($45,712,473 and $27,130,406, respectively), and mortality, expense risk and liquidity guarantee charges ($10,836,884 and $9,366,566 respectively). The total 49% increase in these expenses was a result of the larger net asset base in the Account, on which the fees are calculated, and the increased costs associated with managing and administering the Account.

          Net Realized and Unrealized Gains and Losses on Investments and Mortgage Loans Payable

          The Account had net realized and unrealized gains on investments and mortgage loans payable of $1,056,670,295 for the year ended December 31, 2006, as compared with net realized and unrealized gains on investments and mortgage loans payable of $765,970,272 for the year ended December 31, 2005. The overall increase was partially driven by the increase in net realized and unrealized gains on the Account’s real estate properties to $735,507,509 for the year ended December 31, 2006 from $610,734,011 for 2005. The Account also posted substantial net realized and unrealized gains on its marketable securities of $130,710,746 for the year ended 2006, as compared to $8,770,726 in 2005. In addition, the Account had unrealized gains on its real estate joint ventures and limited partnership holdings of $217,360,271 for the year ended December 31, 2006, as compared to unrealized gains of $175,619,683 for 2005. The increase in net realized and unrealized gains on the Account’s property investments, including those held in joint ventures, was due to the positive effect of the strong inflow of capital into the real estate market from investors, combined with improved real estate market fundamentals, which had the effect of increasing the value of the Account’s existing real estate assets. This trend was also evidenced by the net realized gains on the properties sold in 2006. During the year ended December 31, 2006, the Account sold nine properties for total net proceeds, after selling expenses, of $381.9 million, for a cumulative net gain of $76.1 million, based on the properties’ capitalized costs. The unrealized gains on the Account’s marketable securities in 2006 were primarily associated with the Account’s investments in real estate equity securities.

Liquidity and Capital Resources

          At year-end 2007 and 2006, the Account’s liquid assets (i.e., cash and marketable securities) had a value of $3,804,639,841 and $2,747,445,678, respectively. The increase in the

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Account’s liquid assets was primarily due to an increase in its net investment income and the continued net positive inflow from participant transfers and premiums into the Account.

          In 2007, the Account received $1,186,870,080 in premiums and $934,307,324 in net participant transfers from TIAA, CREF Accounts and affiliated mutual funds, while, for 2006, the Account received $1,085,057,614 in premiums and $1,354,697,847 in net participant transfers. The Account’s net investment income increased from $557,530,387 for the year ended December 31, 2006 to $624,756,134 for the year ended December 31, 2007.

          The Account’s liquid assets continue to be available to purchase additional suitable real estate properties and to meet the Account’s expense needs and participant 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 participant transfer or cash withdrawal requests, TIAA’s general account will purchase accumulation units (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 (as supplemented from time to time), may borrow money and assume or obtain a mortgage on a property (i.e., 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 the loan with one or more of its properties. The Account’s total borrowings may not exceed 30% of the Account’s Total Net Assets. In calculating this limit, only the Account’s actual percentage interest in any borrowings is included, and not that of any joint venture partner. Further, the Account may only borrow up to 70% of the then-current value of a property, although construction loans may be for 100% of the costs incurred in developing a property.

Contractual Obligations

          The following table sets forth a summary regarding our known contractual obligations, including required interest payments for those items that are interest bearing, at December 31, 2007:

	Amounts Due During Years Ending December 31,
	2008		2009		2010		2011		2012		Thereafter		Total
Mortgage Loans Payable:
Principal Payments	$	736,371	$	788,911	$	2,161,722	$	10,241,993	$	269,313,872	$	1,144,614,574	$	1,427,857,443
Interest Payments(1)		83,561,479		83,440,048		83,353,568		82,863,631		80,543,446		124,780,243		538,542,415
Total Mortgage Loans Payable		84,297,850		84,228,959		85,515,290		93,105,624		349,857,318		1,269,394,817		1,966,399,858
Commitment to Purchase Leasehold Interest(2)		42,728,299		—		—		—		—		—		42,728,299
Other Commitments(3)		87,562,894		—		—		—		—		—		87,562,894
Total Contractual Obligations	$	214,589,043	$	84,228,959	$	85,515,290	$	93,105,624	$	349,857,318	$	1,269,394,817	$	2,096,691,051

(1)	These amounts represent interest payments due on mortgage loans payable based on the stated rates and, where applicable, the foreign currency exchange rates at December 31, 2007.
(2)	The Account purchased this leasehold interest on February 12, 2008.
(3)	This includes the Account’s commitment to purchase interest in six limited partnerships and to purchase shares in a private real estate equity investment trust.

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Effects of Inflation and Increasing Operating Expenses

          Inflation, along with increased insurance, taxes, utilities and security costs, may increase property operating expenses in the future. These increases in operating expenses are generally billed to tenants either through contractual lease provisions in office, industrial, and retail properties or through rent increases in apartment complexes. The Account remains responsible for the expenses for unleased space in a property as well as expenses which may not be reimbursed under the terms of an existing lease.

Critical Accounting Policies

          The financial statements of the Account are prepared in conformity with accounting principles generally accepted in the United States of America.

          In preparing the Account’s financial statements, management is required to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. Management bases its estimates on historical experience and assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

          Management believes that the following policies related to the valuation of the Account’s assets reflected in the Account’s historical financial statements affect the significant judgments, estimates and assumptions used in preparing its historical financial statements:

          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 judgment 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, the properties are valued on a quarterly cycle with an independent appraisal value completed for each real estate property at least once a year. An independent fiduciary, Real Estate Research Corporation, has been appointed by a special subcommittee of TIAA’s Board of Trustees. The independent fiduciary must approve all independent appraisers used by the Account. TIAA’s appraisal staff performs the other quarterly valuations for each real estate property and updates the property value as appropriate. The appraisals are performed in accordance with Uniform Standards of Professional Appraisal Practices (USPAP), 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. The independent fiduciary can also require additional appraisals if a property’s value has changed materially and such change is not reflected in the quarterly

44

valuation review, or otherwise to ensure that the Account is valued appropriately. The independent fiduciary must also approve any valuation change 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 month. When a real estate property is subject to a mortgage, the mortgage is valued independently of the property and its fair value is reported separately. The independent fiduciary reviews and approves mortgage valuation adjustments which exceed certain prescribed limits 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 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 and, for the joint ventures, are adjusted to value their real estate holdings and mortgage notes payable at fair value. 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, that occurs prior to the dissolution of the investee entity.

          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.

          Mortgage Loans Receivable

          Mortgage loans receivable are initially valued at the face amount of the mortgage loan funding as representative of fair value. Subsequently, mortgage loans receivable are valued quarterly based on market factors, such as market interest rates and spreads for comparable loans, and the performance of the underlying collateral.

45

          Mortgage Loans Payable

          Mortgage loans payable are stated at fair value. Estimated market values of mortgage loans payable are based on the amount at which the liability could be settled (either transferred or paid back) in a current transaction exclusive of direct transaction costs. Different assumptions or changes in future market conditions could significantly affect estimated market value. At times, the Account may assume debt in connection with the purchase of real estate. For debt assumed, the Account allocates a portion of the purchase price to the below- or above-market debt and amortizes the premium or discount over the remaining life of the debt.

          Foreign currency transactions and translation

          Portfolio investments and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars at the exchange rates prevailing at the end of the period. Purchases and sales of securities, income receipts and expense payments made in foreign currencies are translated into U.S. dollars at the exchange rates prevailing on the respective dates of the transactions. The effects of any changes in foreign currency exchange rates on portfolio investments and mortgage loans payable are included in the net realized and unrealized gains and losses on investments and mortgage loans payable. Net realized gains and losses on foreign currency transactions include maturities of forward foreign currency contracts, disposition of foreign currencies, and currency gains and losses between the accrual and receipt dates of portfolio investment income and between the trade and settlement dates of portfolio investment transactions.

          Accumulation and Annuity Fund

          The Accumulation Fund represents the net assets attributable to participants in the accumulation phase of their investment. The Annuity Fund represents the net assets attributable to the participants currently receiving annuity payments. The net increase or decrease in net assets from investment operations is apportioned between the accounts based upon their relative daily net asset values. Once an Account participant begins receiving lifetime annuity income benefits, monthly payment levels cannot be reduced as a result of the Account’s adverse mortality experience. In addition, the contracts are required to stipulate the maximum expense charge that can be assessed, which is equal to 2.50% of average net assets per year. The Account pays a fee to TIAA to assume the mortality and expense risks.

          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). The Account recognizes a gain on the sale of a real estate property to the extent that the contract sales price exceeds the cost-to-date of the property being sold. A loss occurs when the cost-to-date exceeds the sales price. Any accumulated unrealized gains and losses are reversed in the calculation of realized gains and losses.

46

          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.

          The Account has limited ownership interests in various real estate funds (limited partnerships and one limited liability corporation) and a private REIT (collectively, the “limited partnerships”). The Account records its contributions as increases to the investments, and distributions from the investments are treated as either income or return of capital, as determined by the management of the limited partnerships. Unrealized gains and losses are calculated and recorded quarterly when the Account’s accounting records are compared to the financial statements of the limited partnerships.

          Income from joint ventures is recorded based on the Account’s proportional interest of the income distributed by the joint venture. Income earned by the joint venture, but not yet distributed to the Account by the joint venture investment, is recorded as unrealized gains and losses on real estate joint ventures.

          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 and includes accrual of discount and amortization of premium as applicable. 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.

          New Accounting Pronouncements

          In June 2006, the Financial Accounting Standards Board (“FASB”) issued FASB Interpretation (“FIN”) 48, an interpretation of FASB Statement No. 109, “Accounting for Income Taxes.” FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and is effective for fiscal years beginning after December 31, 2006. The adoption of FIN 48 did not have a significant impact on the Account’s financial position and results of operations.

          In September 2006, FASB issued Statement No. 157, “Fair Value Measurements.” This Statement defines fair value, establishes a framework for measuring fair value under generally accepted accounting principles in the United States, and requires additional disclosures about fair value measurements. This Statement does not require any new fair value measurements, but the application of this Statement could change current practices in determining fair value. This statement is effective January 1, 2008 for the Account. The Account has assessed the impact of Statement No. 157 and determined that it will not significantly change the Account’s financial position and results of operations at the effective date.

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          In February 2007, FASB issued Statement No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities.” This Statement permits entities to choose to measure financial instruments and certain other items at fair value and is expected to expand the use of fair value measurement when warranted. The Account effectively adopted Statement 159 on January 1, 2008 and plans to report all existing and future Mortgage Loans Payable at fair value using this Statement. Historically, the Account recorded Mortgage Loans Payable at fair value. The Account has assessed the impact of Statement 159 in comparison to historical reporting and determined that it will not significantly change the Account’s financial position and results of operations.

          In June 2007, the Accounting Standards Executive Committee (“ACSEC”) of the American Institute of Certified Public Accountants (“AICPA”) issued Statement of Position (SOP) 07-1, Clarification of the Scope of the Audit and Accounting Guide Investment Companies and Accounting by Parent Companies and Equity Method Investors for Investments in Investment Companies. The SOP clarifies which entities are required to apply the provisions of the Investment Companies Audit and Accounting Guide (“Guide”) and provides guidance on accounting by parent companies and equity method investors for investments in investment companies. The SOP is effective for fiscal years beginning on or after December 15, 2007. In February 2008, FASB issued Staff Position (“FSP”) SOP 07-1-1 indefinitely delaying the effective date of SOP 07-1 to allow FASB time to consider significant issues related to the implementation of SOP 07-1. Management of the Account will continue to monitor FASB developments and will evaluate the financial reporting implications to the Account, as necessary.

          In December 2007, FASB issued Statement No. 141(R), “Business Combinations,” which establishes principles and requirements for how the acquirer shall recognize and measure in its financial statements the identifiable assets acquired, liabilities assumed, any noncontrolling interest in the acquiree and goodwill acquired in a business combination or a gain from a bargain purchase. This Statement is effective for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. The Account is currently assessing the impact that Statement No. 141(R) will have on its financial position and results of operations.

          In December 2007, FASB issued Statement No. 160, “Noncontrolling Interests in Consolidated Financial Statements – an Amendment of ARB No. 51,” which establishes and expands accounting and reporting standards for minority interests, which will be recharacterized as noncontrolling interests, in a subsidiary and the deconsolidation of a subsidiary. This Statement is effective for fiscal years beginning on or after December 15, 2008. The Account is currently assessing the potential impact that Statement No. 160 will have on its financial position and results of operations.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

          The Account’s real estate holdings, including real estate joint ventures and limited partnerships, which, as of December 31, 2007 represented 79.7% 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, or changing supply and demand for certain types of properties;

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

• Risk Relating to Property Sales — The risk that the Account might not be able to sell a property at a particular time for its full value, particularly in a poor market. This might make it difficult to raise cash quickly and also could lead to Account losses;

• Risks of Borrowing — The risk that interest rate changes may impact Account returns if the Account takes out a mortgage on a property or buys a property subject to a mortgage; 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 changes, if undertaken by the Account, may entail additional costs and be unsuccessful.

          As of December 31, 2007, 20.3% of the Account’s total investments were in market risk sensitive instruments, comprised of marketable securities and an adjustable rate mortgage loan receivable. Marketable securities include real estate equity securities, commercial mortgage-backed securities (CMBS), 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 general financial terms of these instruments, along with their fair values, 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 and mortgage loans receivable are subject to the following general risks:

• Financial Risk — The risk, for debt securities, that the issuer will not be able to pay principal and interest when due and, for 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.

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• Market Risk — The risk that the Account’s investments will experience price volatility due to changing conditions in the financial markets and, particularly for debt securities, changes in overall interest rates.

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

          In addition, mortgage-backed 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 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. These securities may be harder to sell than other securities.

          In addition to these risks, real estate equity securities 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.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

INDEX TO FINANCIAL STATEMENTS

TIAA REAL ESTATE ACCOUNT

	Page
Report of Management Responsibility	52
Report of the Audit Committee	53
Audited Financial Statements:
Statements of Assets and Liabilities	54
Statements of Operations	55
Statements of Changes in Net Assets	56
Statements of Cash Flows	57
Notes to Financial Statements	58
Statements of Investments	67
Report of Independent Registered Public Accounting Firm	86

51

REPORT OF MANAGEMENT RESPONSIBILITY

To the Participants of the
   TIAA Real Estate Account:

The accompanying financial statements of the TIAA Real Estate Account (“Account”) of Teachers Insurance and Annuity Association of America (“TIAA”) are the responsibility of TIAA’s management. They have been prepared in accordance with accounting principles generally accepted in the United States of America and have been presented fairly and objectively in accordance with such principles.

TIAA has established and maintains an effective system of internal controls over financial reporting designed to provide reasonable assurance that assets are properly safeguarded, that transactions are properly executed in accordance with management’s authorization, and to carry out the ongoing responsibilities of management for reliable financial statements. In addition, TIAA’s internal audit personnel provide regular reviews and assessments of the internal controls and operations of the Account, and the Senior Vice President of Internal Audit regularly reports to the Audit Committee of the TIAA Board of Trustees.

The independent registered public accounting firm of PricewaterhouseCoopers LLP has audited the accompanying financial statements for the years ended December 31, 2007, 2006 and 2005. To maintain auditor independence and avoid even the appearance of a conflict of interest, it continues to be the Account’s policy (consistent with TIAA’s specific auditor independence policies, which are designed to avoid such conflicts) that any management advisory or consulting services would be obtained from a firm other than the independent accounting firm. The independent auditors’ report expresses an independent opinion on the fairness of presentation of the Account’s financial statements.

The Audit Committee of the TIAA Board of Trustees, comprised entirely of independent, non-management trustees, meets regularly with management, representatives of the independent registered public accounting firm and internal audit group personnel to review matters relating to financial reporting, internal controls and auditing. In addition to the annual independent audit of the Account’s financial statements, the New York State Insurance Department and other state insurance departments regularly examine the operations and financial statements of the Account as part of their periodic corporate examinations.

March 20, 2008	/s/ Herbert M. Allison, Jr.
	Herbert M. Allison, Jr.
	Chairman, President and
	Chief Executive Officer
	/s/ Georganne C. Proctor
	Georganne C. Proctor
	Executive Vice President and
	Chief Financial Officer

52

REPORT OF THE AUDIT COMMITTEE

To the Participants of the
   TIAA Real Estate Account:

The TIAA Audit Committee (“Committee”) oversees the financial reporting process of the TIAA Real Estate Account (“Account”) on behalf of TIAA’s Board of Trustees. The Committee operates in accordance with a formal written charter (copies of which are available upon request) which describes the Audit Committee’s responsibilities. All members of the Committee are independent, as defined under the listing standards of the New York Stock Exchange.

Management has the primary responsibility for the Account’s financial statements, development and maintenance of a strong system of internal controls and disclosure controls, and compliance with applicable laws and regulations. In fulfilling its oversight responsibilities, the Committee reviewed and approved the audit plans of the internal audit group and the independent registered public accounting firm in connection with their respective audits of the Account. The Committee also meets regularly with the internal audit group and the independent registered public accounting firm, both with and without management present, to discuss the results of their examinations, their evaluation of internal controls, and the overall quality of financial reporting. As required by its charter, the Committee will evaluate rotation of the independent registered public accounting firm whenever circumstances warrant, but in no event will the evaluation be later than between their fifth and tenth years of service.

The Committee reviewed and discussed the accompanying audited financial statements with management, including a discussion of the quality and appropriateness of the accounting principles and financial reporting practices followed, the reasonableness of significant judgments, and the clarity and completeness of disclosures in the financial statements. The Committee has also discussed the audited financial statements with PricewaterhouseCoopers LLP, the independent registered public accounting firm responsible for expressing an opinion on the conformity of these audited financial statements with accounting principles generally accepted in the United States of America.

The discussion with PricewaterhouseCoopers LLP focused on their judgments concerning the quality and appropriateness of the accounting principles and financial reporting practices followed by the Account, the clarity and completeness of the financial statements and related disclosures, and other significant matters, such as any significant changes in accounting policies, internal controls, management judgments and estimates, and the nature of any uncertainties or unusual transactions. In addition, the Committee discussed with PricewaterhouseCoopers LLP the auditors’ independence from management and the Account, and has received a written disclosure regarding such independence, as required by the Securities and Exchange Commission.

Based on the review and discussions referred to above, the Committee has approved the release of the accompanying audited financial statements for publication and filing with appropriate regulatory authorities.

Rosalie J. Wolf, Audit Committee Chair
Glenn A. Britt, Audit Committee Member
Donald K. Peterson, Audit Committee Member
David L. Shedlarz, Audit Committee Member

March 20, 2008

53

TIAA REAL ESTATE ACCOUNT
STATEMENTS OF ASSETS AND LIABILITIES

	December 31, 2007		December 31, 2006
ASSETS
Investments, at value:
Real estate properties (cost: $9,804,488,802 and $9,462,471,032)	$	11,983,715,574	$	10,743,487,689
Real estate joint ventures and limited partnerships (cost: $2,260,919,575 and $1,413,322,924)		3,158,870,373		1,948,028,002
Marketable securities:
Real estate-related (cost: $439,154,248 and $569,326,795)		426,630,212		704,922,323
Other (cost: $3,371,895,300 and $2,038,681,194)		3,371,865,684		2,038,938,210
Mortgage loans receivable (cost: $75,000,000 and $75,000,000)		72,519,684		74,660,626
Total investments (cost: $15,951,457,925 and $13,558,801,945)		19,013,601,527		15,510,036,850
Cash		6,143,945		3,585,145
Due from investment advisor		11,195,734		8,461,793
Other		201,826,038		237,877,545
TOTAL ASSETS		19,232,767,244		15,759,961,333
LIABILITIES
Mortgage loans payable—Note 5 (principal outstanding: $1,427,857,443 and $1,415,032,586)		1,392,092,982		1,437,149,148
Payable for securities transactions		866,209		1,219,323
Accrued real estate property level expenses		154,638,976		169,657,402
Security deposits held		24,632,278		19,242,948
TOTAL LIABILITIES		1,572,230,445		1,627,268,821
NET ASSETS
Accumulation Fund		17,160,703,167		13,722,700,176
Annuity Fund		499,833,632		409,992,336
TOTAL NET ASSETS	$	17,660,536,799	$	14,132,692,512
NUMBER OF ACCUMULATION UNITS OUTSTANDING—Notes 6 and 7		55,105,718		50,146,354
NET ASSET VALUE, PER ACCUMULATION UNIT—Note 6	$	311.41	$	273.65

See notes to the financial statements.

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TIAA REAL ESTATE ACCOUNT
STATEMENTS OF OPERATIONS

	Years Ended December 31,
	2007			2006			2005
INVESTMENT INCOME
Real estate income, net:
Rental income	$	987,434,298		$	834,455,788		$	618,633,580
Real estate property level expenses and taxes:
Operating expenses		247,473,125			207,452,982			150,501,136
Real estate taxes		126,925,585			110,059,852			88,014,264
Interest expense		83,622,829			72,160,111			40,028,630
Total real estate property level expenses and taxes		458,021,539			389,672,945			278,544,030
Real estate income, net		529,412,759			444,782,843			340,089,550
Income from real estate joint ventures and limited partnerships		93,724,569			60,788,998			71,826,443
Interest		129,473,616			118,621,441			54,114,448
Dividends		12,439,637			16,785,769			16,884,764
TOTAL INCOME		765,050,581			640,979,051			482,915,205
Expenses—Note 2:
Investment advisory charges		49,239,366			26,899,307			19,603,225
Administrative and distribution charges		63,593,008			45,712,473			27,130,406
Mortality and expense risk charges		8,052,314			6,931,833			6,196,549
Liquidity guarantee charges		19,409,759			3,905,051			3,170,017
TOTAL EXPENSES		140,294,447			83,448,664			56,100,197
INVESTMENT INCOME, NET		624,756,134			557,530,387			426,815,008
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND MORTGAGE LOANS PAYABLE
Net realized gain (loss) on:
Real estate properties		127,834,921			76,137,064			76,164,380
Real estate joint ventures and limited partnerships		70,765,537			—			8,599,762
Marketable securities		47,179,736			10,257,108			36,871,417
Total realized gain on investments		245,780,194			86,394,172			121,635,559
Net change in unrealized appreciation (depreciation) on:
Real estate properties		898,172,653			659,370,445			534,569,631
Real estate joint ventures and limited partnerships		391,332,636			217,360,271			167,019,921
Marketable securities		(148,659,083	)		120,453,638			(28,100,691	)
Mortgage loan receivable		(2,140,942	)		(339,374	)		—
Mortgage loans payable		53,949,280			(26,568,857	)		(29,154,148	)
Net change in unrealized appreciation on investments and mortgage loans payable		1,192,654,544			970,276,123			644,334,713
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND MORTGAGE LOANS PAYABLE		1,438,434,738			1,056,670,295			765,970,272
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	2,063,190,872		$	1,614,200,682		$	1,192,785,280

See notes to the financial statements.

55

TIAA REAL ESTATE ACCOUNT
STATEMENTS OF CHANGES IN NET ASSETS

	Years Ended December 31,
	2007			2006			2005
FROM OPERATIONS
Investment income, net	$	624,756,134		$	557,530,387		$	426,815,008
Net realized gain on investments		245,780,194			86,394,172			121,635,559
Net change in unrealized appreciation on investments and mortgage loans payable		1,192,654,544			970,276,123			644,334,713
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS		2,063,190,872			1,614,200,682			1,192,785,280
FROM PARTICIPANT TRANSACTIONS
Premiums		1,186,870,080			1,085,057,614			968,189,436
Net transfers from TIAA		153,136,947			215,893,898			172,305,147
Net transfers from CREF Accounts		832,782,037			1,154,122,836			1,238,160,587
Net transfers from (to) TIAA-CREF Institutional Mutual Funds		(51,611,660	)		(15,318,887	)		24,967,250
Annuity and other periodic payments		(95,776,359	)		(65,192,000	)		(44,487,142	)
Withdrawals and death benefits		(560,747,630	)		(404,782,733	)		(248,759,442	)
NET INCREASE IN NET ASSETS RESULTING FROM PARTICIPANT TRANSACTIONS		1,464,653,415			1,969,780,728			2,110,375,836
NET INCREASE IN NET ASSETS		3,527,844,287			3,583,981,410			3,303,161,116
NET ASSETS
Beginning of period		14,132,692,512			10,548,711,102			7,245,549,986
End of period	$	17,660,536,799		$	14,132,692,512		$	10,548,711,102

See notes to the financial statements.

56

TIAA REAL ESTATE ACCOUNT
STATEMENTS OF CASH FLOWS

	Years Ended December 31,
	2007			2006			2005
CASH FLOWS FROM OPERATING ACTIVITIES
Net increase in net assets resulting from operations	$	2,063,190,872		$	1,614,200,682		$	1,192,785,280
Adjustments to reconcile net increase in net assets resulting from operations to net cash used in operating activities:
Purchase of real estate properties		(639,704,090	)		(2,016,229,061	)		(1,864,646,776	)
Amortization of discount on debt		530,626			461,761			170,352
Capital improvements on real estate properties		(133,714,188	)		(117,041,456	)		(83,150,771	)
Proceeds from sale of real estate properties		568,120,000			387,290,000			511,500,399
Net increase in other investments		(1,904,858,906	)		(836,478,000	)		(1,313,958,742	)
Increase in mortgage loan receivable		—			(74,660,626	)		—
Decrease (increase) in other assets		33,317,566			(47,865,701	)		(80,412,203	)
Decrease in amounts due to bank		—			—			(231,476	)
Increase (decrease) in accrued real estate property level expenses and taxes		(15,018,427	)		23,868,125			60,829,395
Increase in security deposits held		5,389,330			2,812,909			2,670,715
Increase (decrease) in other liabilities		(353,114	)		225,514			(1,162,347	)
Net realized gain on investments		(245,780,194	)		(86,394,172	)		(121,635,559	)
Net unrealized gain on investments and mortgage loans payable		(1,192,654,544	)		(970,276,123	)		(644,334,713	)
NET CASH USED IN OPERATING ACTIVITIES		(1,461,535,069	)		(2,120,086,148	)		(2,341,576,446	)
CASH FLOWS FROM FINANCING ACTIVITIES
Mortgage loan acquired		—			153,000,000			232,585,341
Principal payments on mortgage loans payable		(559,546	)		(320,805	)		(173,361	)
Premiums		1,186,870,080			1,085,057,614			968,189,436
Net transfers from TIAA		153,136,947			215,893,898			172,305,147
Net transfers from CREF Accounts		832,782,037			1,154,122,836			1,238,160,587
Net transfers from (to) TIAA-CREF Institutional Mutual Funds		(51,611,660	)		(15,318,887	)		24,967,250
Annuity and other periodic payments		(95,776,359	)		(65,192,000	)		(44,487,142	)
Withdrawals and death benefits		(560,747,630	)		(404,782,733	)		(248,759,442	)
NET CASH PROVIDED BY FINANCING ACTIVITIES		1,464,093,869			2,122,459,923			2,342,787,816
NET INCREASE IN CASH		2,558,800			2,373,775			1,211,370
CASH
Beginning of period		3,585,145			1,211,370			—
End of period	$	6,143,945		$	3,585,145		$	1,211,370
SUPPLEMENTAL DISCLOSURES:
Cash paid for interest	$	83,063,017		$	68,034,179		$	38,267,618
Debt assumed in acquisition of properties	$	8,922,033		$	288,950,559		$	211,400,000

See notes to the financial statements.

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TIAA REAL ESTATE ACCOUNT
NOTES TO FINANCIAL STATEMENTS

Note 1—Organization and Significant Accounting Policies

Business: 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; as such, they are not consolidated for financial statement purposes. The Account also invests in mortgage loans receivable collateralized by commercial real estate properties. The Account also invests in publicly-traded securities and other instruments to maintain adequate liquidity for operating expenses, capital expenditures and benefit payments.

The financial statements were prepared in accordance with accounting principles generally accepted in the United States of America 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.

Reclassifications: During 2007, the Account determined that its pro rata share of 2006 undistributed earnings from joint venture investments totaling approximately $24 million was reported as income from real estate joint ventures and limited partnerships for the year ended December 31, 2006 when the Account should have reported this amount as unrealized appreciation on real estate joint ventures and limited partnerships. Accordingly, the Statement of Operations for the year ended December 31, 2006 has been adjusted to reflect a reclassification of these undistributed earnings to unrealized appreciation on real estate joint ventures and limited partnerships equal to this amount. There is no impact to the Account’s total assets, total net assets or net asset value per accumulation unit for the periods presented as a result of this reclassification.

Certain other prior period amounts have been reclassified to conform to the current presentation. These reclassifications did not affect the total assets, total net assets or net increase in net assets previously reported.

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 judgment 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, the properties are valued on a quarterly cycle with an independent appraisal value completed for each real estate property at least once a year. An independent fiduciary, Real Estate Research Corporation, has been appointed by a special subcommittee of TIAA’s Board of Trustees. The independent fiduciary must approve all independent appraisers used by the Account. TIAA’s appraisal staff performs the other quarterly valuations for each real estate property and updates the property value as appropriate. The appraisals are performed in accordance with Uniform Standards of Professional Appraisal Practices (USPAP), 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. The independent fiduciary can also require additional appraisals if a property’s value has changed materially and such change is not

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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 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 month. When a real estate property is subject to a mortgage, the mortgage is valued independently of the property and its fair value is reported separately. The independent fiduciary reviews and approves mortgage valuation adjustments which exceed certain prescribed limits 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 and Limited Partnerships: Real estate joint ventures and certain limited partnerships are stated at the Account’s equity in the net assets of the underlying entities, and for the joint ventures, are adjusted to value their real estate holdings and mortgage notes payable at fair value. 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, that occurs prior to the dissolution of the investee entity.

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 certain 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.

Mortgage Loans Receivable: Mortgage loans receivable are initially valued at the face amount of the mortgage loan funding as representive of fair value. Subsequently, mortgage loans receivable are valued quarterly based on market factors, such as market interest rates and spreads for comparable loans, and the performance of the underlying collateral.

Mortgage Loans Payable: Mortgage loans payable are stated at fair value. Estimated market values of mortgage loans payable are based on the amount at which the liability could be settled (either transferred or paid back) in a current transaction exclusive of direct transaction costs. Different assumptions or changes in future market conditions could significantly affect estimated market value. At times, the Account may assume debt in connection with the purchase of real estate. For debt assumed, the Account allocates a portion of the purchase price to the below- or above-market debt and amortizes the premium or discount over the remaining life of the debt.

Foreign currency transactions and translation: Portfolio investments and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars at the exchange rates prevailing at the end of the period. Purchases and sales of securities, income receipts and expense payments made in foreign currencies are translated into U.S. dollars at the exchange rates prevailing on the respective dates of the transactions. The effect of any changes in foreign currency exchange rates on portfolio investments and mortgage loans payable is included in the net realized and unrealized gains and losses on investments and mortgage loans payable. Net realized gains and losses on foreign currency transactions include maturities of forward foreign currency contracts, disposition of foreign currencies, and currency gains and losses between the accrual and receipt dates of portfolio investment income and between the trade and settlement dates of portfolio investment transactions.

Accumulation and Annuity Funds: The Accumulation Fund represents the net assets attributable to participants in the accumulation phase of their investment. The Annuity Fund represents the net assets attributable to the participants currently receiving annuity payments. The net increase or decrease in net assets from investment operations is apportioned between the accounts based upon their relative daily net asset values. Once an Account participant begins

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receiving lifetime annuity income benefits, monthly payment levels cannot be reduced as a result of the Account’s adverse mortality experience. In addition, the contracts are required to stipulate the maximum expense charge that can be assessed, which is equal to 2.50% of average net assets per year. The Account pays a fee to TIAA to assume these mortality and expense risks.

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). The Account recognizes a gain on the sale of a real estate property to the extent that the contract sales price exceeds the cost-to-date of the property being sold. A loss occurs when the cost-to-date exceeds the sales price. Any accumulated unrealized gains and losses are reversed in the calculation of realized gains and losses.

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 when actual operating results are determined.

The Account has limited ownership interests in various real estate funds (limited partnerships and one limited liability corporation) and a private real estate investment trust (“REIT”) (collectively, the “limited partnerships”). The Account records its contributions as increases to the investments, and distributions from the investments are treated as either income or return of capital, as determined by the management of the limited partnerships. Unrealized gains and losses are calculated and recorded when the financial statements of the limited partnerships are received by the Account.

Income from real estate joint ventures is recorded based on the Account’s proportional interest of the income distributed by the joint venture. Income earned by the joint venture, but not yet distributed to the Account by the joint venture investment, is recorded as unrealized gains and losses on real estate joint ventures.

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 and includes accrual of discount and amortization of premium as applicable. 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, Section 817, the Account is taxed as a segregated asset account of TIAA and as such, the Account should incur no material federal income tax attributable to the net investment activity of the Account.

Note 2—Management Agreements and Arrangements

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 subject to review by the Account’s independent fiduciary. TIAA also provides all portfolio accounting and related services for the Account.

Through December 31, 2007, administrative and distribution services for the Account are provided by TIAA-CREF Individual & Institutional Services, LLC (“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 a member of the Financial Industry Regulatory Authority.

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TIAA and Services provide their services 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 expenses actually incurred. Any differences between actual expenses and the amounts paid by the Account 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 would fund any such transfer and withdrawal requests by purchasing accumulation units in the Account. TIAA also receives a fee for assuming certain mortality and expense risks.

The expenses for the services noted above that are provided to the Account by TIAA and Services are identified in the accompanying Statements of Operations and are reflected in the Condensed Financial Information disclosed in Note 6.

Effective January 1, 2008, the Account entered into a Distribution Agreement for the Contracts Funded by the TIAA Real Estate Account (the “New Distribution Agreement”), dated as of January 1, 2008, by and among TIAA, for itself and on behalf of the Account, and Services.

Pursuant to the New Distribution Agreement, 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) providing assistance in designing, installing and providing administrative services for contract owners or institutions, will be performed by Services. The New Distribution Agreement is terminable by either party upon 60 days written notice and terminates automatically upon any assignment thereof.

Effective January 1, 2008, the administrative functions previously performed for the Account by Services, which include, among other things, (i) computing the Account’s daily unit value, (ii) maintaining accounting records and performing accounting services, (iii) receiving and allocating premiums, (iv) calculating and making annuity payments, (v) processing withdrawal requests, (vi) providing regulatory compliance and reporting services, (vii) maintaining the Account’s records of contract ownership, and (viii) otherwise assisting generally in all aspects of the Account’s operations, will be performed by TIAA.

Both distribution services (pursuant to the New Distribution Agreement) and administrative services will continue to be provided to the Account by Services and TIAA, as applicable, on an at cost basis.

Note 3—Leases

The Account’s real estate properties are leased to tenants under operating lease agreements which expire on various dates through 2058. Aggregate minimum annual rentals for the properties owned, excluding short-term residential and storage facility leases, are as follows:

Years Ending December 31,
2008	$	975,895,973
2009		906,194,738
2010		797,243,797
2011		659,462,763
2012		549,590,444
2013-2058		1,934,542,421
Total	$	5,822,930,136

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

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Note 4—Investment in Joint Ventures and Limited Partnerships

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 percentages. Several of these joint ventures have mortgage notes payable on the properties owned. At December 31, 2007, the Account held 12 joint venture investments with non-controlling ownership interest percentages that ranged from 50% to 85%. The Account’s allocated portion of the mortgage notes payable was $1,991,782,600 and $472,167,225 at December 31, 2007 and December 31, 2006, respectively. The Account’s equity in the joint ventures at December 31, 2007 and December 31, 2006 was $2,827,508,939 and $1,668,744,951, respectively. A condensed summary of the financial position and results of operations of the joint ventures is shown below.

	December 31, 2007		December 31, 2006
Assets
Real estate properties, at value	$	7,001,687,137	$	3,650,902,513
Other assets		99,798,401		63,839,503
Total assets	$	7,101,485,538	$	3,714,742,016
Liabilities and Equity
Mortgage loans payable, at value	$	2,707,160,513	$	875,560,195
Other liabilities		64,738,173		47,949,271
Total liabilities		2,771,898,686		923,509,466
Equity		4,329,586,852		2,791,232,550
Total liabilities and equity	$	7,101,485,538	$	3,714,742,016

	Year Ended December 31, 2007		Year Ended December 31, 2006		Year Ended December 31, 2005
Operating Revenues and Expenses
Revenues	$	534,468,876	$	299,078,956	$	270,519,206
Expenses		315,076,922		157,806,671		142,782,169
Excess of revenues over expenses	$	219,391,954	$	141,272,285	$	127,737,037

The Account invests in limited partnerships that own real estate properties and receives distributions from the limited partnerships based on the Account’s non-controlling ownership interest percentages. At December 31, 2007, the Account held five limited partnership investments with non-controlling ownership interest percentages that ranged from 5.27% to 18.45%. The Account’s investment in limited partnerships was $331,361,434 and $279,283,051 at December 31, 2007 and December 31, 2006, respectively.

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Note 5—Mortgage Loans Payable

At December 31, 2007, the Account had outstanding mortgage loans payable on the following properties:

Property	Interest Rate Percentage and Payment Frequency		Amount December 31, 2007				Due
50 Fremont		6.40 paid monthly		$	135,000,000			August 21, 2013
Ontario Industrial Portfolio (a,b)		7.42 paid monthly			8,917,619			May 1, 2011
Fourth & Madison		6.40 paid monthly			145,000,000			August 21, 2013
1001 Pennsylvania Ave		6.40 paid monthly			210,000,000			August 21, 2013
99 High Street		5.52 paid monthly			185,000,000			November 11, 2015
Reserve at Sugarloaf (a)		5.49 paid monthly			25,891,337			June 1, 2013
1 & 7 Westferry Circus		5.40 paid quarterly (c)			267,188,869			November 15, 2012
Lincoln Centre		5.51 paid monthly			153,000,000			February 1, 2016
Wilshire Rodeo Plaza (b)		5.28 paid monthly			112,700,000			April 11, 2014
1401 H Street (b)		5.97 paid monthly			115,000,000			December 7, 2014
South Frisco Village (b)		5.85 paid monthly			26,250,559			June 1, 2013
Pacific Plaza (a)		5.55 paid monthly			8,909,059			September 1, 2013
Publix at Weston Commons (b)		5.08 paid monthly			35,000,000			January 1, 2036
Total principal outstanding					1,427,857,443
Unamortized discount					(4,746,752	)
Amortized principal					1,423,110,691
Fair value adjustment					3,585,820
Cumulative foreign currency translation					(34,603,529	)
Total mortgage loans payable				$	1,392,092,982

(a)	The mortgage is adjusted monthly for principal payments.
(b)	The mortgage was acquired at a discount which is amortized monthly.
(c)	The mortgage is denominated in British pounds and the principal has been converted to U.S. dollars using the exchange rate as of December 31, 2007. The quarterly payments are interest only, with a balloon payment at maturity. The interest rate is fixed.

Principal on mortgage loans payable is due as follows:

	Amount
2008	$	736,371
2009		788,911
2010		2,161,722
2011		10,241,993
2012		269,313,872
Thereafter		1,144,614,574
Total maturities	$	1,427,857,443

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Note 6—Condensed Financial Information

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

	Years Ended December 31,
	2007			2006			2005			2004			2003
Per Accumulation Unit data:
Rental income	$	17.975		$	16.717		$	15.604		$	13.422		$	15.584
Real estate property level expenses and taxes		8.338			7.807			7.026			5.331			5.890
Real estate income, net		9.637			8.910			8.578			8.091			9.694
Other income		4.289			3.931			3.602			3.341			2.218
Total income		13.926			12.841			12.180			11.432			11.912
Expense charges (1)		2.554			1.671			1.415			1.241			1.365
Investment income, net		11.372			11.170			10.765			10.191			10.547
Net realized and unrealized gain (loss) on investments and mortgage loans payable		26.389			22.530			18.744			13.314			2.492
Net increase in Accumulation Unit Value		37.761			33.700			29.509			23.505			13.039
Accumulation Unit Value:
Beginning of year		273.653			239.953			210.444			186.939			173.900
End of year	$	311.414		$	273.653		$	239.953		$	210.444		$	186.939
Total return		13.80	%		14.04	%		14.02	%		12.57	%		7.50	%
Ratios to Average Net Assets:
Expenses (1)		0.87	%		0.67	%		0.63	%		0.63	%		0.76	%
Investment income, net		3.88	%		4.49	%		4.82	%		5.17	%		5.87	%
Portfolio turnover rate:
Real estate properties		5.59	%		3.62	%		6.72	%		2.32	%		5.12	%
Marketable securities		13.03	%		51.05	%		77.63	%		143.47	%		71.83	%
Accumulation Units outstanding at end of year (in thousands)		55,105			50,146			42,623			33,338			24,724
Net assets end of year (in thousands)	$	17,660,537		$	14,132,693		$	10,548,711		$	7,245,550		$	4,793,422

(1) Expense charges per Accumulation Unit and the Ratio of Expenses to Average Net Assets reflect Account-level expenses and exclude real estate property level expenses which are included in net real estate income. If the real estate property level expenses were included, the expense charge per Accumulation Unit for the year ended December 31, 2007 would be $10.892 ($9.478, $8.441, $6.572, and $7.255 for the years ended December 31, 2006, 2005, 2004, and 2003, respectively), and the Ratio of Expenses to Average Net Assets for the year ended December 31, 2007 would be 3.71% (3.81%, 3.78%, 3.33%, and 4.04% for the years ended December 31, 2006, 2005, 2004, and 2003, respectively).

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Note 7—Accumulation Units

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

	For the Years Ended December 31,
		2007	2006	2005
Credited for premiums		3,795,126	4,056,196	4,335,121
Net units credited for transfers, net disbursements and amounts applied to the Annuity Fund		1,164,238	3,466,667	4,950,773
Outstanding:
Beginning of year		50,146,354	42,623,491	33,337,597
End of year		55,105,718	50,146,354	42,623,491

Note 8—Commitments and Subsequent Events

During the normal course of business, the Account enters into discussions and agreements to purchase or sell real estate properties. As of December 31, 2007, the Account had an outstanding commitment to purchase a leasehold interest in approximately 40,000 square feet of retail space located in an apartment property owned by the Account in New York and has subsequently purchased for approximately $42.7 million.

As of December 31, 2007, the Account entered into a commitment to purchase an interest in a limited partnership in the amount of $50 million. Together with the Account’s outstanding commitments to purchase interests in five other limited partnerships and to purchase shares in a private real estate equity investment trust, as of December 31, 2007, $87.6 million remains to be funded under these commitments.

The Account is party to various other claims and routine litigation arising in the ordinary course of business. 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.

Effective March 3, 2008, the Account has entered into an agreement with State Street Bank and Trust Company (“State Street”) to serve as the Account’s service provider to perform certain custodial functions, as well as investment accounting, recordkeeping, and valuation functions relating to portfolio transactions in securities made through the Account, and to provide other data and information as described in the agreement.

Note 9—New Accounting Pronouncements

In June 2006, the Financial Accounting Standards Board (“FASB”) issued FASB Interpretation (“FIN”) 48, an interpretation of FASB Statement No. 109, “Accounting for Income Taxes.” FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and is effective for fiscal years beginning after December 31, 2006. The adoption of FIN 48 did not have a significant impact on the Account’s financial position and results of operations.

In September 2006, FASB issued Statement No. 157, “Fair Value Measurements.” This Statement defines fair value, establishes a framework for measuring fair value under generally accepted accounting principles in the United States, and requires additional disclosures about fair value measurements. This Statement does not require any new fair value measurements, but the application of this Statement could change current practices in determining fair value. This Statement is effective January 1, 2008 for the Account. The Account has assessed the impact of Statement No. 157 and determined that it will not significantly change the Account’s financial position and results of operations at the effective date.

In February 2007, FASB issued Statement No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities.” This Statement permits entities to choose to measure financial instruments and certain other items at fair

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value and is expected to expand the use of fair value measurement when warranted. The Account effectively adopted Statement 159 on January 1, 2008 and plans to report all existing and future Mortgage Loans Payable at fair value using this Statement. Historically, the Account recorded Mortgage Loans Payable at fair value. The Account has assessed the impact of Statement 159 in comparison to historical reporting and determined that it will not significantly change the Account’s financial position and results of operations.

In June 2007, the Accounting Standards Executive Committee (“ACSEC”) of the American Institute of Certified Public Accountants (“AICPA”) issued Statement of Position (SOP) 07-1, Clarification of the Scope of the Audit and Accounting Guide Investment Companies and Accounting by Parent Companies and Equity Method Investors for Investments in Investment Companies. The SOP clarifies which entities are required to apply the provisions of the Investment Companies Audit and Accounting Guide (“Guide”) and provides guidance on accounting by parent companies and equity method investors for investments in investment companies. The SOP is effective for fiscal years beginning on or after December 15, 2007. In February 2008, FASB issued Staff Position (“FSP”) SOP 07-1-1 indefinitely delaying the effective date of SOP 07-1 to allow FASB time to consider significant issues related to the implementation of SOP 07-1. Management of the Account will continue to monitor FASB developments and will evaluate the financial reporting implications to the Account, as necessary.

In December 2007, FASB issued Statement No. 141(R), “Business Combinations,” which establishes principles and requirements for how the acquirer shall recognize and measure in its financial statements the identifiable assets acquired, liabilities assumed, any noncontrolling interest in the acquiree and goodwill acquired in a business combination or a gain from a bargain purchase. This Statement is effective for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. The Account is currently assessing the impact that Statement No. 141(R) will have on its financial position and results of operations.

In December 2007, FASB issued Statement No. 160, “Noncontrolling Interests in Consolidated Financial Statements – an Amendment of ARB No. 51,” which establishes and expands accounting and reporting standards for minority interests, which will be recharacterized as noncontrolling interests, in a subsidiary and the deconsolidation of a subsidiary. This Statement is effective for fiscal years beginning on or after December 15, 2008. The Account is currently assessing the potential impact that Statement No. 160 will have on its financial position and results of operations.

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TIAA REAL ESTATE ACCOUNT
STATEMENTS OF INVESTMENTS
December 31, 2007 and December 31, 2006

	Value
Location / Description	2007			2006
REAL ESTATE PROPERTIES—63.04% and 69.27%
Alabama:
Inverness Center - Office building	$	125,521,529		$	112,256,914
Arizona:
Camelback Center - Office building		80,000,000			—
Kierland Apartment Portfolio - Apartments		170,084,494			206,100,000
Mountain RA Industrial Portfolio - Industrial building		—			6,605,429
Phoenix Apartment Portfolio - Apartments		156,109,517			182,900,000
California:
3 Hutton Centre Drive - Office building		64,200,000			59,011,323
9 Hutton Centre - Office building		—			29,000,000
50 Fremont - Office building		478,000,000	(1)		421,000,000	(1)
88 Kearny Street - Office building		123,822,200			90,310,024
275 Battery - Office building		271,917,498			231,000,000
980 9th Street and 1010 8th Street - Office building		178,000,000			168,000,000
Rancho Cucamonga Industrial Portfolio - Industrial building		133,000,000			109,000,000
Capitol Place - Office building		53,539,218			50,331,828
Centerside I - Office building		67,500,000			67,000,000
Centre Pointe and Valley View - Industrial building		34,142,741			32,385,980
Eastgate Distribution Center - Industrial building		—			25,558,962
Larkspur Courts - Apartments		97,000,000			93,043,346
Northern CA RA Industrial Portfolio - Industrial building		69,601,997			71,317,741
Ontario Industrial Portfolio - Industrial building		355,398,714	(1)		298,045,226	(1)
Pacific Plaza - Office building		127,130,076	(1)		—
Regents Court - Apartments		69,000,000			67,800,000
Southern CA RA Industrial Portfolio - Industrial building		110,718,042			97,558,473
The Legacy at Westwood - Apartments		126,579,694			110,231,593
Wellpoint - Office building		51,000,000			49,000,000
Westcreek - Apartments		39,189,673			35,300,000
West Lake North Business Park - Office building		68,621,818			61,000,000
Westwood Marketplace - Shopping center		96,562,192			91,467,954
Wilshire Rodeo Plaza - Office building		230,439,415	(1)		204,084,734	(1)
Colorado:
Palomino Park - Apartments		194,001,036			184,000,000
The Lodge at Willow Creek - Apartments		43,500,000			39,501,399
The Market at Southpark - Shopping center		35,800,000			35,800,000
Connecticut:
Ten & Twenty Westport Road - Office building		183,006,040			175,000,000
Delaware:
Mideast RA Industrial Portfolio - Industrial building		—			16,014,758
Florida:
701 Brickell - Office building		275,941,582			231,239,379
4200 West Cypress Street - Office building		48,043,650			43,100,425
Plantation Grove - Shopping center		15,400,000			15,010,406
Pointe on Tampa Bay - Office building		60,971,897			50,573,824
Publix at Weston Commons - Shopping center		55,200,000	(1)		54,411,436	(1)

67

TIAA REAL ESTATE ACCOUNT
STATEMENTS OF INVESTMENTS
December 31, 2007 and December 31, 2006

	Value
Location / Description	2007			2006
Quiet Waters at Coquina Lakes - Apartments	$	26,204,860		$	24,006,100
Royal St. George - Apartments		27,000,000			25,000,000
Sawgrass Office Portfolio - Office building		—			72,000,000
Seneca Industrial Park - Industrial building		122,334,422			—
South Florida Apartment Portfolio - Apartments		68,248,605			65,099,785
Suncrest Village - Shopping center		19,500,000			17,009,378
The Fairways of Carolina - Apartments		27,207,661			25,309,965
The Greens at Metrowest - Apartments		—			21,011,825
The North 40 Office Complex - Office building		67,003,544			63,500,000
Urban Centre - Office building		135,577,463			121,000,000
France:
Printemps De L’Homme - Shopping center		279,077,542			—
Georgia:
1050 Lenox Park - Apartments		85,500,000			79,470,836
Atlanta Industrial Portfolio - Industrial building		58,300,000			77,863,416
Glenridge Walk - Apartments		52,900,000			48,710,574
Reserve at Sugarloaf - Apartments		52,000,000	(1)		49,500,000	(1)
Shawnee Ridge Industrial Portfolio - Industrial building		76,742,231			76,117,193
Illinois:
Chicago Caleast Industrial Portfolio - Industrial building		77,642,826			74,999,590
Chicago Industrial Portfolio - Industrial building		86,420,886			89,104,640
East North Central RA Industrial Portfolio - Industrial building		38,016,397			37,503,284
Oak Brook Regency Towers - Office building		86,891,650			83,200,000
Parkview Plaza - Office building		66,066,513			59,400,000
Kentucky:
IDI Kentucky Portfolio - Industrial building		—			66,552,034
Maryland:
Broadlands Business Park - Industrial building		35,500,000			35,002,731
FEDEX Distribution Facility - Industrial building		9,900,000			8,500,000
GE Appliance East Coast Distribution Facility - Industrial building		48,000,000			48,000,000
Massachusetts:
99 High Street - Office building		344,688,328	(1)		291,806,564	(1)
Batterymarch Park II - Office building		—			13,234,314
Needham Corporate Center - Office building		33,275,228			22,712,550
Northeast RA Industrial Portfolio - Industrial building		33,300,000			30,900,000
The Newbry - Office building		389,880,008			370,745,525
Minnesota:
Champlin Marketplace - Shopping center		18,375,000			—
Nevada:
UPS Distribution Facility - Industrial building		15,900,000			15,000,000
New Jersey:
10 Waterview Boulevard - Office building		—			32,100,000
Konica Photo Imaging Headquarters - Industrial building		23,500,000			23,100,000
Marketfair - Shopping center		95,500,000			94,058,427
Morris Corporate Center III - Office building		119,600,001			114,857,104
NJ Caleast Industrial Portfolio - Industrial building		42,225,000			41,920,988

68

TIAA REAL ESTATE ACCOUNT
STATEMENTS OF INVESTMENTS
December 31, 2007 and December 31, 2006

	Value
Location / Description	2007			2006
Plainsboro Plaza - Shopping center	$	51,000,000		$	50,900,000
South River Road Industrial - Industrial building		53,400,000			60,600,000
New York:
780 Third Avenue - Office building		375,000,000			298,000,000
The Colorado - Apartments		113,033,240			100,000,000
Ohio:
Columbus Portfolio - Office building		26,314,686			24,600,000
Pennsylvania:
Lincoln Woods - Apartments		37,917,165			37,781,555
Tennessee:
Airways Distribution Center - Industrial building		24,300,000			24,857,278
Memphis Caleast Industrial Portfolio - Industrial building		—			52,500,000
Summit Distribution Center - Industrial building		27,500,000			26,300,000
Texas:
Butterfield Industrial Park - Industrial building		—			5,100,000	(2)
Dallas Industrial Portfolio - Industrial building		154,055,892			153,210,519
Four Oaks Place - Office building		419,270,107			306,200,984
Houston Apartment Portfolio - Apartments		296,241,497			306,042,523
Lincoln Centre - Office building		305,000,000	(1)		270,000,000	(1)
Park Place on Turtle Creek - Office building		48,282,785			44,573,669
Pinnacle Industrial /DFW Trade Center - Industrial building		46,700,000			45,874,807
Preston Sherry Plaza - Office building		45,500,000			—
South Frisco Village - Shopping center		48,500,000	(1)		47,014,065	(1)
The Caruth - Apartments		65,427,458			60,007,237
The Legends at Chase Oaks - Apartments		—			29,025,236
The Maroneal - Apartments		40,033,822			39,113,694
United Kingdom:
1 & 7 Westferry Circus - Office building		436,127,130	(1)		428,574,628	(1)
Utah:
Landmark at Salt Lake City (Building #4) - Industrial building		—			16,509,871
Virginia:
8270 Greensboro Drive - Office building		63,500,000			62,000,000
Ashford Meadows - Apartments		94,059,776			89,091,341
Monument Place - Office building		—			58,600,000
One Virginia Square - Office building		59,538,690			53,000,000
The Ellipse at Ballston - Office building		92,504,000			85,439,350
Washington:
Creeksides at Centerpoint - Office building		42,000,000			40,508,139
Fourth & Madison - Office building		487,000,000	(1)		398,990,017	(1)
Millennium Corporate Park - Office building		158,000,000			139,107,181
Northwest RA Industrial Portfolio - Industrial building		23,401,540			20,684,499
Rainier Corporate Park - Industrial building		81,160,792			69,362,219
Regal Logistics Campus - Industrial building		71,000,000			66,000,000

69

TIAA REAL ESTATE ACCOUNT
STATEMENTS OF INVESTMENTS
December 31, 2007 and December 31, 2006

	Value
Location / Description	2007			2006
Washington DC:
1001 Pennsylvania Avenue - Office building	$	640,149,632	(1)	$	552,502,209	(1)
1401 H Street, NW - Office building		224,576,156	(1)		207,806,286	(1)
1900 K Street - Office building		285,000,000			255,002,226
Mazza Gallerie - Shopping center		97,000,018			86,350,179
TOTAL REAL ESTATE PROPERTIES (Cost $9,804,488,802 and $9,462,471,032)		11,983,715,574			10,743,487,689
OTHER REAL ESTATE-RELATED INVESTMENTS—16.61% and 12.56%
REAL ESTATE JOINT VENTURES—14.87% and 10.76%
CA - Colorado Center LP Yahoo! Center (50% Account Interest)		369,402,407	(3)		187,766,625	(3)
CA -Treat Towers LP Treat Towers (75% Account Interest)		118,997,021			94,023,131
GA -Buckhead LLC Prominence in Buckhead (75% Account Interest)		115,427,071			107,256,320
Florida Mall Associates, Ltd. The Florida Mall (50% Account Interest)		296,486,153	(3)		237,919,775	(3)
IL -161 Clark Street LLC 161 North Clark Street (75% Account Interest)		3,150,995	(4)		189,183,793
MA -One Boston Place REIT One Boston Place (50.25% Account Interest)		246,440,493			177,900,327
DDR TC LLC DDR Joint Venture -Various (85% Account Interest)		1,028,297,460	(3,5)		—
Storage Portfolio I, LLC Storage Portfolio (75% Account Interest)		81,943,321	(3,5)		74,864,074	(3,5)
Strategic Ind Portfolio I, LLC IDI Nationwide Industrial Portfolio (60% Account Interest)		76,536,044	(3,5)		70,348,753	(3,5)
Teachers REA IV, LLC Tyson’s Executive Plaza II (50% Account Interest)		44,178,210			40,570,382
TREA Florida Retail, LLC Florida Retail Portfolio (80% Account Interest)		260,879,060			265,396,677
West Dade Associates Miami International Mall (50% Account Interest)		109,944,638	(3)		97,300,131	(3)
West Town Mall, LLC West Town Mall (50% Account Interest)		75,826,066	(3)		126,214,963	(3)
TOTAL REAL ESTATE JOINT VENTURES (Cost $2,005,340,226 and $1,168,027,179)		2,827,508,939			1,668,744,951
LIMITED PARTNERSHIPS—1.74% and 1.80%
Cobalt Industrial REIT (10.998% Account Interest)		32,840,031			26,506,381
Colony Realty Partners LP (5.27% Account Interest)		32,505,008			26,382,659
Heitman Value Partners Fund (8.43% Account Interest)		24,488,535			24,578,388
Lion Gables Apartment Fund (18.45% Account Interest)		205,162,203			179,013,211

70

TIAA REAL ESTATE ACCOUNT
STATEMENTS OF INVESTMENTS
December 31, 2007 and December 31, 2006

	Value
Location / Description	2007		2006
MONY/Transwestern Mezzanine Fund RP (19.75% Account Interest)	$	—	$	454,319
MONY/Transwestern Mezz RP II (16.67% Account Interest)		36,365,657		22,348,093
TOTAL LIMITED PARTNERSHIPS (Cost $255,579,349 and $245,295,745)		331,361,434		279,283,051
TOTAL REAL ESTATE JOINT VENTURES AND LIMITED PARTNERSHIPS (Cost $2,260,919,575 and $1,413,322,924)		3,158,870,373		1,948,028,002
MARKETABLE SECURITIES—19.97% and 17.69%
REAL ESTATE-RELATED MARKETABLE SECURITIES—2.24% and 4.54%
REAL ESTATE EQUITY SECURITIES—2.24% and 3.99%

Shares			Value
2007	2006	Issuer	2007		2006
51,200	53,300	Acadia Realty Trust		1,311,232		1,333,566
—	68,700	Affordable Residential Communities LP		—		800,355
—	68,700	Affordable Residential Communities LP share rights (expired 1/23/07)		—		16,488
3,300	3,800	Alexander’s Inc.		1,165,725		1,594,670
53,100	54,400	Alexandria Real Estate Equities Inc.		5,398,677		5,461,760
164,585	166,985	AMB Property Corp.		9,473,513		9,786,991
45,100	42,500	American Campus Communities Inc.		1,210,935		1,209,975
214,600	244,900	American Financial Realty Trust		1,721,092		2,801,656
159,700	181,500	Apartment Investment & Management Co.		5,546,381		10,167,630
—	408,900	Archstone-Smith Trust		—		23,802,069
200,000	118,500	Ashford Hospitality Trust Inc.		1,438,000		1,475,325
27,500	33,300	Associated Estates Realty Corp.		259,600		457,542
132,200	138,900	AvalonBay Communities Inc.		12,445,308		18,063,945
109,100	122,400	BioMed Realty Trust Inc.		2,527,847		3,500,640
198,600	217,200	Boston Properties Inc.		18,233,466		24,300,336
148,100	171,500	Brandywine Realty Trust		2,655,433		5,702,375
86,500	94,200	BRE Properties Inc.		3,505,845		6,124,884
341,650	220,300	Brookfield Properties Corp.		6,576,763		8,664,399
93,500	105,200	Camden Property Trust		4,502,025		7,769,020
110,900	121,500	CBL & Associates Properties Inc.		2,651,619		5,267,025
74,900	74,900	Cedar Shopping Centers Inc.		766,227		1,191,659
75,400	87,600	Colonial Properties Trust		1,706,302		4,106,688
79,500	80,600	Corporate Office Properties Trust		2,504,250		4,067,882
71,100	75,500	Cousins Properties Inc.		1,571,310		2,662,885
—	179,000	Crescent Real Estate Equities Company		—		3,535,250
281,100	—	DCT Industrial Trust Inc.		2,617,041		—
205,000	204,000	Developers Diversified Realty Corp.		7,849,450		12,841,800
157,000	125,500	DiamondRock Hospitality Co.		2,351,860		2,260,255
99,000	84,100	Digital Realty Trust Inc.		3,798,630		2,878,743
164,400	123,500	Douglas Emmett Inc.		3,717,084		3,283,865

71

TIAA REAL ESTATE ACCOUNT
STATEMENTS OF INVESTMENTS
December 31, 2007 and December 31, 2006

Shares			Value
2007	2006	Issuer	2007		2006
243,000	252,100	Duke Realty Corp.	$	6,337,440	$	10,310,890
51,700	—	Dupont Fabros Technology		1,013,320		—
39,400	42,900	EastGroup Properties Inc.		1,648,890		2,297,724
49,900	49,900	Education Realty Trust Inc.		560,876		737,023
—	103,400	Equity Inns Inc.		—		1,650,264
37,300	38,800	Equity Lifestyle Properties Inc.		1,703,491		2,111,884
—	654,500	Equity Office Properties Trust		—		31,527,265
60,800	69,900	Equity One Inc.		1,400,224		1,863,534
452,300	544,300	Equity Residential		16,495,381		27,623,225
42,000	43,600	Essex Property Trust Inc.		4,094,580		5,635,300
108,700	120,200	Extra Space Storage Inc.		1,553,323		2,194,852
93,700	103,200	Federal Realty Investment Trust		7,697,455		8,772,000
101,300	115,300	FelCor Lodging Trust Inc.		1,579,267		2,518,152
74,700	84,300	First Industrial Realty Trust Inc.		2,584,620		3,952,827
41,600	41,600	First Potomac Realty Trust		719,264		1,210,976
384,500	423,600	General Growth Properties Inc.		15,833,710		22,124,628
62,700	69,600	Glimcher Realty Trust		895,983		1,859,016
64,200	73,800	GMH Communities Trust		354,384		749,070
360,900	—	HCP Inc		12,552,102		—
141,700	—	Health Care REIT Inc		6,332,573		—
84,600	—	Healthcare Realty Trust Inc		2,147,994		—
70,900	59,500	Hersha Hospitality Trust		673,550		674,730
—	107,500	Highland Hospitality Corp.		—		1,531,875
96,300	101,700	Highwoods Properties Inc.		2,829,294		4,145,292
55,500	64,000	Home Properties Inc.		2,489,175		3,793,280
155,800	147,900	Hospitality Properties Trust		5,019,876		7,029,687
869,070	973,570	Host Hotels & Resorts Inc.		14,808,953		23,901,143
375,400	396,700	HRPT Properties Trust		2,901,842		4,899,245
95,300	116,700	Inland Real Estate Corp.		1,349,448		2,184,624
—	84,800	Innkeepers USA Trust		—		1,314,400
54,100	59,400	Kilroy Realty Corp.		2,973,336		4,633,200
365,921	409,521	Kimco Realty Corp.		13,319,524		18,407,969
47,600	55,300	Kite Realty Group Trust		726,852		1,029,686
66,600	75,000	LaSalle Hotel Properties		2,124,540		3,438,750
151,900	167,000	Liberty Property Trust		4,376,239		8,206,380
121,000	135,900	Macerich Co./The		8,598,260		11,764,863
111,900	118,700	Mack-Cali Realty Corp.		3,804,600		6,053,700
59,900	81,000	Maguire Properties Inc.		1,765,253		3,240,000
42,300	44,000	Mid-America Apartment Communities		1,808,325		2,518,560
—	100,200	Mills Corp./The		—		2,004,000
155,200	—	Nationwide Health Properties Inc.		4,868,624		—
—	198,000	New Plan Excel Realty Trust		—		5,441,040
25,400	25,100	Parkway Properties Inc./Md		939,292		1,280,351
65,900	69,500	Pennsylvania Real Estate Investment Trust		1,955,912		2,736,910
72,200	79,300	Post Properties Inc.		2,535,664		3,624,010
427,900	462,500	Prologis		27,120,302		28,106,125

72

TIAA REAL ESTATE ACCOUNT
STATEMENTS OF INVESTMENTS
December 31, 2007 and December 31, 2006

Shares			Value
2007	2006	Issuer	2007		2006
26,900	30,200	PS Business Parks Inc.	$	1,413,595	$	2,135,442
214,614	241,114	Public Storage Inc.		15,754,814		23,508,615
31,500	28,500	Ramco-Gershenson Properties		673,155		1,086,990
—	157,000	Reckson Associates Realty Corp.		—		7,159,200
115,100	129,300	Regency Centers Corp.		7,422,799		10,107,381
19,300	20,600	Saul Centers Inc.		1,031,199		1,136,914
139,600	—	Senior Housing Properties Trust		3,166,128		—
373,221	412,821	Simon Property Group Inc.		32,417,976		41,814,639
98,507	86,300	SL Green Realty Corp.		9,206,464		11,458,914
36,500	33,500	Sovran Self Storage Inc.		1,463,650		1,918,880
124,300	134,700	Strategic Hotels & Resorts Inc.		2,079,539		2,935,113
27,800	30,900	Sun Communities Inc.		585,746		999,924
98,200	109,400	Sunstone Hotel Investors Inc.		1,796,078		2,924,262
52,300	58,300	Tanger Factory Outlet Centers		1,972,233		2,278,364
88,800	98,400	Taubman Centers Inc.		4,368,072		5,004,624
224,000	—	UDR, Inc.		4,446,400		—
—	250,400	United Dominion Realty Trust Inc.		—		7,960,216
17,000	—	Universal Health Realty Income Trust		602,480		—
78,500	95,400	U-Store-It Trust		719,060		1,960,470
221,800	—	Ventas Inc.		10,036,450		—
237,100	245,800	Vornado Realty Trust		20,852,945		29,864,700
77,700	85,500	Washington Real Estate Investment		2,440,556		3,420,000
133,000	148,500	Weingarten Realty Investors		4,181,520		6,847,335
—	44,700	Winston Hotels Inc.		—		592,275
TOTAL REAL ESTATE EQUITY SECURITIES (Cost $439,154,248 and $484,071,757)				426,630,212		619,342,386
COMMERCIAL MORTGAGE-BACKED SECURITIES—0.00% and 0.55%

Principal			Value
2007	2006	Issuer, Interest Rate and Maturity Date	2007		2006
—	10,000,000	Commercial Mortgage Pass 5.450% 12/15/20		—		10,000,000
—	3,389,773	Credit Suisse Mortgage Company 5.470% 4/15/21		—		3,390,255
—	10,000,000	GS Mortgage Securities Co 5.682% 5/3/18		—		10,186,930
—	8,780,566	GS Mortgage Securities Co 5.420% 6/6/20		—		8,782,059
—	9,996,970	JP Morgan Chase Commercial 5.440% 11/15/18		—		9,996,970
—	9,298,609	Lehman Brothers Floating 5.430% 9/15/21		—		9,298,971
—	9,143,864	Morgan Stanley Capital 5.440% 7/15/19		—		9,144,605

73

TIAA REAL ESTATE ACCOUNT
STATEMENTS OF INVESTMENTS
December 31, 2007 and December 31, 2006

Principal			Value
2007	2006	Issuer, Interest Rate and Maturity Date	2007		2006
—	10,000,000	Morgan Stanley Dean Witter 5.712% 2/3/16	$	—	$	10,137,150
—	14,642,368	Wachovia Bank Commercial 5.440% 9/15/21		—		14,642,997
TOTAL COMMERCIAL MORTGAGE-BACKED SECURITIES (Cost $0 and $85,255,038)				—		85,579,937
TOTAL REAL ESTATE-RELATED MARKETABLE SECURITIES (Cost $439,154,248 and $569,326,795)				426,630,212		704,922,323
OTHER MARKETABLE SECURITIES—17.73% and 13.15%
CERTIFICATES OF DEPOSIT—2.22% and .86%
—	10,000,000	American Express Bank, FSB 5.565% 1/8/07		—		10,000,235
—	1,500,000	American Express Bank, FSB 5.290% 1/12/07		—		1,499,996
—	24,000,000	American Express Bank, FSB 5.280% 1/18/07		—		23,999,578
25,000,000	—	American Express Centurion Bank 4.750% 2/4/08		25,001,875		—
20,000,000	—	American Express Centurion Bank 4.750% 2/5/08		20,001,556		—
—	25,000,000	American Express Centurion Bank 5.290% 1/3/07		—		24,999,988
—	19,165,000	American Express Centurion Bank 5.290% 1/8/07		—		19,164,962
—	20,000,000	American Express Centurion Bank 5.290% 1/9/07		—		19,999,954
10,000,000	—	Bank of Montreal 5.030% 2/14/08		10,004,439		—
45,000,000	—	Bank of Montreal 5.100% 3/7/08		45,031,437		—
25,000,000	—	Bank of Nova Scotia 5.060% 1/16/08		25,003,988		—
25,000,000	—	Barclays Bank 4.990% 2/27/08		25,012,510		—
10,000,000	—	Calyon 4.820% 1/31/08		10,001,100		—
50,000,000	—	Calyon 5.050% 3/12/08		50,032,645		—
25,000,000	—	Deutsche Bank 4.950% 1/24/08		25,004,197		—
—	3,000,000	Deutsche Bank 5.290% 1/9/07		—		2,999,962

74

TIAA REAL ESTATE ACCOUNT
STATEMENTS OF INVESTMENTS
December 31, 2007 and December 31, 2006

Principal			Value
2007	2006	Issuer, Interest Rate and Maturity Date	2007		2006
—	30,000,000	Deutsche Bank 5.300% 1/22/07	$	—	$	29,999,154
32,000,000	—	Dexia Banque SA 4.990% 3/10/08		32,016,554		—
20,000,000	—	Dexia Banque SA 4.880% 3/25/08		20,008,286		—
30,000,000	—	Rabobank Nederland 5.020% 3/5/08		30,016,305		—
30,000,000	—	Royal Bank of Canada 5.060% 1/25/08		30,007,494		—
20,000,000	—	SunTrust Banks, Inc. 4.845% 1/28/08		19,998,920		—
40,000,000	—	Toronto Dominion Bank 5.300% 1/22/08		40,014,108		—
15,000,000	—	Toronto Dominion Bank 5.040% 2/26/08		15,008,718		—
TOTAL CERTIFICATES OF DEPOSIT (Cost $422,007,080 and $132,665,429)				422,164,132		132,663,829
COMMERCIAL PAPER—9.23% and 9.81%
		Issuer, Yield(6) and Maturity Date
10,000,000	—	Abbey National North America LLC 4.670% 1/8/08		9,989,577		—
20,000,000	—	Abbey National North America LLC 4.930% 1/9/08		19,976,550		—
—	25,000,000	Abbey National North America LLC 5.260% 1/17/07		—		24,945,207
50,000,000	—	American Express Credit Corp. 4.510% 1/14/08		49,908,220		—
32,490,000	—	American Honda Finance Corp. 4.50-4.510% 1/29/08		32,369,946		—
2,137,000	—	American Honda Finance Corp. 4.380% 1/4/08		2,135,879		—
15,438,000	—	American Honda Finance Corp. 4.310% 2/11/08		15,355,978		—
7,050,000		American Honda Finance Corp. 4.250% 2/28/08		6,996,781		—
—	50,000,000	American Honda Finance Corp. 5.210-5.240% 1/22/07		—		49,853,055
—	17,475,000	American Honda Finance Corp. 5.240% 2/9/07		—		17,377,605
—	10,000,000	Anheuser - Busch Co. 5.250% 1/19/07		—		9,975,019
20,000,000	—	Bank of America Corp 4.970% 1/15/08		19,960,666		—

75

TIAA REAL ESTATE ACCOUNT
STATEMENTS OF INVESTMENTS
December 31, 2007 and December 31, 2006

Principal			Value
		Issuer, Yield(6) and Maturity Date
2007	2006		2007		2006
13,200,000	—	Bank of America Corp 4.780% 3/6/08	$	13,087,663	$	—
30,000,000	—	Bank of America Corp 4.800% 4/8/08		29,604,246		—
27,400,000	—	Bank of Scotland 4.710% 2/26/08		27,200,523		—
34,525,000	—	Bank of Scotland 4.720% 2/29/08		34,259,731		—
—	25,000,000	Barclay’s U.S. Funding Corp. 5.240% 1/26/07		—		24,912,383
—	20,000,000	BMW US Capital Corp. 5.210% 2/7/07		—		19,894,400
—	23,050,000	BMW US Capital Corp. 5.240% 2/9/07		—		22,921,533
20,000,000	—	Canadian Imperial Holdings, Inc. 4.703% 1/29/08		19,926,098		—
—	25,000,000	Ciesco LP 5.250% 1/9/07		—		24,973,942
—	14,000,000	Ciesco LP 5.260% 1/25/07		—		13,952,299
40,000,000	—	Citigroup Funding Inc. 4.850% 1/23/08		39,880,984		—
25,000,000	—	Citigroup Funding Inc. 4.650% 2/12/08		24,864,937		—
25,000,000	—	Citigroup Funding Inc. 4.650% 2/7/08		24,880,483		—
—	50,000,000	Citigroup Funding Inc. 5.250% 1/11/07		—		49,934,060
—	35,825,000	Citigroup Funding Inc. 5.260% 2/5/07		—		35,647,365
5,255,000	—	Coca Cola Co. 4.200% 2/15/08		5,224,421		—
20,000,000	—	Coca Cola Co. 4.430% 2/19/08		19,873,054		—
13,000,000	—	Coca Cola Co. 4.390% 2/25/08		12,907,098		—
—	6,000,000	Corporate Asset Funding Corp, Inc. 5.260% 1/22/07		—		5,982,193
—	8,760,000	Corporate Asset Funding Corp, Inc. 5.250% 1/29/07		—		8,725,048
—	25,000,000	Corporate Asset Funding Corp, Inc. 5.250% 2/7/07		—		24,867,250
—	54,000,000	Corporate Asset Funding Corp, Inc. 5.260% 2/8/07		—		53,705,295

76

TIAA REAL ESTATE ACCOUNT
STATEMENTS OF INVESTMENTS
December 31, 2007 and December 31, 2006

Principal			Value
		Issuer, Yield(6) and Maturity Date
2007	2006		2007		2006
30,000,000	—	Danske Corp. 4.920% 3/6/08	$	29,746,338	$	—
—	7,000,000	Dorada Finance Inc. 5.230% 1/9/07		—		6,992,704
20,000,000	—	Edison Asset Securitization, LLC 4.740% 3/11/08		19,789,840		—
—	24,000,000	Edison Asset Securitization, LLC 5.240% 1/19/07		—		23,939,287
—	10,000,000	Edison Asset Securitization, LLC 5.240% 2/1/07		—		9,955,666
—	32,900,000	Fairway Finance Company, LLC 5.260% 1/17/07		—		32,826,521
20,460,000	—	General Electric Capital Corp. 4.510% 2/19/08		20,330,987		—
15,340,000	—	General Electric Capital Corp. 4.550% 2/20/08		15,241,250		—
30,000,000	—	General Electric Capital Corp. 4.580% 4/8/08		29,606,721		—
—	23,760,000	General Electric Capital Corp. 5.250% 1/18/07		—		23,704,454
—	13,155,000	General Electric Capital Corp. 5.240% 2/8/07		—		13,084,017
—	30,000,000	General Electric Capital Corp. 5.240% 2/15/07		—		29,807,499
30,540,000	—	General Electric Co 4.540% 3/4/08		30,290,195		—
13,200,000	—	Goldman Sachs Group Inc 5.200% 1/08/08		13,186,155		—
12,000,000	—	Govco Incorporated 4.680% 1/28/08		11,948,442		—
20,000,000	—	Govco Incorporated 5.400% 2/12/08		19,869,924		—
37,860,000	—	Govco Incorporated 5.100% 2/20/08		37,570,693		—
29,000,000	—	Govco Incorporated 4.850% 3/13/08		28,687,505		—
—	25,700,000	Govco Incorporated 5.230% 3/8/07		—		25,454,668
—	50,000,000	Govco Incorporated 5.330% 1/5/07		—		49,977,665
35,140,000	—	Greenwich Capital Holding 4.850% 4/14/08		34,649,576		—
—	33,000,000	Greyhawk Funding LLC 5.260% 2/6/07		—		32,829,314
6,990,000	—	Harley-Davidson Funding 4.480% 2/21/08		6,943,777		—

77

TIAA REAL ESTATE ACCOUNT
STATEMENTS OF INVESTMENTS
December 31, 2007 and December 31, 2006

Principal			Value
		Issuer, Yield(6) and Maturity Date
2007	2006		2007		2006
—	8,415,000	HBOS Treasury Srvcs PLC 5.250% 3/21/07	$	—	$	8,319,680
30,000,000	—	HSBC Finance Corporation 4.700% 2/21/08		29,757,135		—
—	40,000,000	HSBC Finance Corporation 5.250% 1/26/07		—		39,859,012
25,000,000	—	IBM Capital Inc 4.250% 3/10/08		24,773,325		—
—	22,200,000	IBM Capital Inc. 5.220% 3/16/07		—		21,963,166
10,000,000	—	IBM International Group 4.725% 1/14/08		9,981,644		—
18,900,000	—	IBM International Group 4.725% 1/15/08		18,862,829		—
20,000,000	—	IBM International Group 4.220% 2/27/08		19,851,712		—
5,420,000	—	IBM (International Business Machines Corp.) 4.230% 1/3/08		5,417,868		—
—	19,000,000	IBM (International Business Machines Corp.) 5.250% 1/10/07		—		18,966,750
20,000,000	—	ING (US) Finance 4.730% 1/30/08		19,924,332		—
25,000,000	—	ING (US) Finance 4.820% 2/22/08		24,832,460		—
—	25,000,000	ING (US) Finance 5.240% 3/27/07		—		24,695,265
—	24,000,000	Johnson & Johnson 5.270% 1/2/07		—		24,000,000
—	25,000,000	Johnson & Johnson 5.200% 1/18/07		—		24,941,555
—	20,259,000	Kimberly-Clark Worldwide, Inc. 5.230% 1/29/07		—		20,179,184
22,904,000	—	Kitty Hawk Funding Corp 5.030% 3/14/08		22,653,437		—
—	10,000,000	Links Finance L.L.C. 5.250% 1/16/07		—		9,979,190
—	30,000,000	Morgan Stanley Dean Witter 5.240% 2/12/07		—		29,819,598
20,000,000	—	Nestle Capital Corp 4.740% 2/6/08		19,906,862		—
14,500,000	—	Nestle Capital Corp 5.090% 3/11/08		14,367,337		—
20,000,000	—	Nestle Capital Corp 5.210% 3/5/08		19,833,636		—

78

TIAA REAL ESTATE ACCOUNT
STATEMENTS OF INVESTMENTS
December 31, 2007 and December 31, 2006

Principal			Value
2007	2006	Issuer, Yield(6) and Maturity Date	2007		2006
9,300,000	—	Paccar Financial Corp 4.730% 1/14/08	$	9,283,038	$	—
10,000,000	—	Paccar Financial Corp 4.490% 2/11/08		9,947,220		—
15,300,000	—	Paccar Financial Corp 4.500% 2/28/08		15,185,256		—
10,000,000	—	Park Avenue Receivables 4.650% 3/18/08		9,884,430		—
19,645,000	—	Pfizer Inc 4.410% 5/15/08		19,285,726		—
—	11,601,000	Pitney Bowes Inc. 5.300% 1/4/07		—		11,597,578
28,000,000	—	Private Export Funding Corporation 4.640-4.750% 1/30/08		27,893,365		—
1,500,000	—	Private Export Funding Corporation 4.530% 1/31/08		1,494,098		—
10,000,000	—	Private Export Funding Corporation 4.680% 2/11/08		9,946,870		—
20,000,000	—	Private Export Funding Corporation 4.740% 2/5/08		19,908,760		—
10,000,000	—	Private Export Funding Corporation 4.680% 3/3/08		9,919,045		—
—	20,500,000	Private Export Funding Corporation 5.220% 1/3/07		—		20,496,976
—	1,845,000	Private Export Funding Corporation 5.260% 1/11/07		—		1,842,553
—	23,000,000	Private Export Funding Corporation 5.22-5.23% 1/18/07		—		22,945,922
—	6,000,000	Private Export Funding Corporation 5.220% 1/23/07		—		5,981,485
—	15,000,000	Private Export Funding Corporation 5.230% 2/15/07		—		14,903,199
—	14,120,000	Private Export Funding Corporation 5.230% 3/6/07		—		13,989,828
—	25,000,000	Procter & Gamble Co 5.230% 1/12/07		—		24,963,380
—	25,000,000	Procter & Gamble International S.C. 5.250% 2/1/07		—		24,890,625
—	50,000,000	Procter & Gamble International S.C. 5.250% 2/14/07		—		49,686,455
10,000,000	—	Procter & Gamble International S.C. 4.740% 1/16/08		9,979,155		—
10,000,000	—	Procter & Gamble International S.C. 4.750% 1/18/08		9,976,550		—
10,000,000	—	Procter & Gamble International S.C. 4.200% 1/31/08		9,960,914		—

79

TIAA REAL ESTATE ACCOUNT
STATEMENTS OF INVESTMENTS
December 31, 2007 and December 31, 2006

Principal			Value
2007	2006	Issuer, Yield(6) and Maturity Date	2007		2006
4,665,000	—	Procter & Gamble International S.C. 4.750% 1/4/08	$	4,662,569	$	—
30,000,000	—	Procter & Gamble International S.C. 4.740% 2/14/08		29,830,500		—
17,000,000	—	Procter & Gamble International S.C. 4.600% 2/1/08		16,931,441		—
8,000,000	—	Procter & Gamble International S.C. 4.350% 3/12/08		7,925,696		—
9,000,000	—	Procter & Gamble International S.C. 4.190% 3/14/08		8,913,882		—
12,000,000	—	Ranger Funding Company LLC 5.110% 1/10/08		11,981,685		—
31,573,000	—	Ranger Funding Company LLC 5.080-5.580% 1/18/08		31,486,411		—
—	10,000,000	Ranger Funding Company LLC 5.260% 1/24/07		—		9,967,385
—	20,000,000	Ranger Funding Company LLC 5.260% 1/25/07		—		19,931,856
—	23,760,000	Ranger Funding Company LLC 5.300% 2/12/07		—		23,616,311
25,000,000	—	Royal Bank of Scotland 4.740% 2/8/08		24,877,365		—
—	10,000,000	Scaldis Capital LLC 5.250% 1/10/07		—		9,988,068
—	25,000,000	Sheffield Receivables Corporation 5.240% 1/12/07		—		24,962,735
—	35,750,000	Sheffield Receivables Corporation 5.260% 1/17/07		—		35,670,156
10,000,000	—	Shell International Financial 4.470% 3/28/08		9,884,402		—
20,000,000	—	Societe Generale North America, Inc. 5.155% 1/10/08		19,973,944		—
15,000,000	—	Societe Generale North America, Inc. 4.780% 2/1/08		14,939,506		—
25,000,000	—	Societe Generale North America, Inc. 4.830% 3/26/08		24,718,170		—
17,420,000	—	Societe Generale North America, Inc. 4.640% 4/4/08		17,201,414		—
—	7,850,000	Societe Generale North America, Inc. 5.250% 1/10/07		—		7,836,262
—	25,000,000	Societe Generale North America, Inc. 5.250% 1/19/07		—		24,937,902
—	20,000,000	SunTrust Banks, Inc. 5.245% 5/1/07		—		20,001,700
18,505,000	—	Svensk Exportkredit AB 4.720-4.820% 01/14/08		18,471,249		—

80

TIAA REAL ESTATE ACCOUNT
STATEMENTS OF INVESTMENTS
December 31, 2007 and December 31, 2006

Principal			Value
2007	2006	Issuer, Yield(6) and Maturity Date	2007		2006
17,800,000	—	Svensk Exportkredit AB 4.860% 1/15/08	$	17,765,215	$	—
36,000,000	—	Svensk Exportkredit AB 4.740% 1/17/08		35,920,267		—
16,000,000	—	Svensk Exportkredit AB 4.370% 3/12/08		15,851,392		—
10,000,000	—	Svensk Exportkredit AB 4.720% 04/09/08		9,867,500		—
—	14,675,000	Swedish Export Credit Corp. 5.240% 1/10/07		—		14,657,788
—	33,895,000	Swedish Export Credit Corp. 5.24-5.26% 1/16/07		—		33,825,624
—	30,000,000	Swedish Export Credit Corp. 5.240% 2/13/07		—		29,816,250
—	5,800,000	The Concentrate Manufacturing Company of Ireland 5.260% 1/9/07		—		5,790,695
10,000,000	—	Toronto-Dominion Holdings 5.060% 01/31/08		9,960,914		—
25,000,000	—	Toronto-Dominion Holdings 4.710% 2/11/08		24,868,050		—
19,000,000	—	Toyota Motor Credit Corp. 4.520% 1/8/08		18,980,196		—
30,000,000	—	Toyota Motor Credit Corp. 4.880% 2/15/08		29,826,579		—
30,000,000	—	Toyota Motor Credit Corp. 4.740% 2/25/08		29,787,012		—
20,000,000	—	Toyota Motor Credit Corp. 4.530% 2/28/08		19,850,008		—
—	50,000,000	Toyota Motor Credit Corp. 5.230% 1/23/07		—		49,846,580
—	30,000,000	Toyota Motor Credit Corp. 5.230% 1/25/07		—		29,899,221
20,000,000	—	UBS Finance, (Delaware) Inc. 5.030% 2/13/08		19,889,486		—
17,215,000	—	UBS Finance, (Delaware) Inc. 5.000% 2/21/08		17,101,908		—
25,000,000	—	UBS Finance, (Delaware) Inc. 4.910% 4/7/08		24,675,782		—
—	17,500,000	UBS Finance, (Delaware) Inc. 5.250% 2/20/07		—		17,375,018
3,970,000	—	Unilever Capital Corp 4.230% 1/11/08		3,964,274		—
10,000,000	—	United Parcel Service Inc 4.300% 3/18/08		9,898,686		—
30,000,000	—	United Parcel Service Inc 4.400% 3/31/08		29,640,321		—

81

TIAA REAL ESTATE ACCOUNT
STATEMENTS OF INVESTMENTS
December 31, 2007 and December 31, 2006

Principal			Value
2007	2006	Issuer, Yield(6) and Maturity Date	2007		2006
20,000,000	—	United Parcel Service Inc 4.340% 4/28/08	$	19,680,880	$	—
20,000,000	—	United Parcel Service Inc 4.340% 4/29/08		19,678,000		—
20,000,000	—	United Parcel Service Inc 4.380% 4/1/08		19,757,426		—
7,831,000	—	Variable Funding Capital Corporation 4.640% 4/15/08		7,694,387		—
—	34,530,000	Variable Funding Capital Corporation 5.250% 2/2/07		—		34,371,217
—	30,000,000	Variable Funding Capital Corporation 5.250% 2/5/07		—		29,848,698
—	25,000,000	Variable Funding Capital Corporation 5.250% 2/6/07		—		24,870,208
30,000,000	—	Yorktown Capital, LLC 4.875% 4/15/08		29,527,943		—
—	23,415,000	Yorktown Capital, LLC 5.260% 1/4/07		—		23,408,027
TOTAL COMMERCIAL PAPER                     (Cost $1,755,527,807 and $1,520,729,804)				1,755,075,702		1,520,881,551
GOVERNMENT AGENCY BONDS—5.82% and 2.36%
		Issuer, Interest Rate and Maturity Date
—	17,700,000	Federal Home Loan Banks 5.130% 1/5/07		—		17,694,938
—	19,745,000	Federal Home Loan Banks 5.180% 1/12/07		—		19,719,628
—	39,969,000	Federal Home Loan Banks 5.200% 1/19/07		—		39,877,711
—	23,753,000	Federal Home Loan Banks 5.180% 2/28/07		—		23,563,451
25,000,000	—	Federal Home Loan Banks 4.450% 1/2/08		25,000,000		—
25,000,000	—	Federal Home Loan Banks 4.450% 1/3/08		24,997,275		—
28,850,000	—	Federal Home Loan Banks 4.661% 1/4/08		28,843,711		—
34,945,000	—	Federal Home Loan Banks 4.450% 1/7/08		34,925,990		—
41,450,000	—	Federal Home Loan Banks 4.260-4.900% 1/11/08		41,409,379		—
77,800,000	—	Federal Home Loan Banks 4.280-4.290% 1/16/08		77,681,433		—
32,500,000	—	Federal Home Loan Banks 4.260% 1/25/08		32,418,620		—

82

TIAA REAL ESTATE ACCOUNT
STATEMENTS OF INVESTMENTS
December 31, 2007 and December 31, 2006

Principal			Value
2007	2006	Issuer, Interest Rate and Maturity Date	2007		2006
43,830,000	—	Federal Home Loan Banks 4.300% 1/28/08	$	43,705,917	$	—
2,000,000	—	Federal Home Loan Banks 4.480% 2/1/08		1,993,134		—
25,000,000	—	Federal Home Loan Banks 4.200% 2/13/08		24,879,825		—
23,694,000	—	Federal Home Loan Banks 4.250% 3/12/08		23,504,638		—
30,000,000	—	Federal Home Loan Banks 4.270% 3/17/08		29,743,140		—
20,000,000	—	Federal Home Loan Banks 4.270% 3/19/08		19,824,180		—
85,900,000	—	Federal Home Loan Banks 4.260% 3/24/08		85,095,804		—
15,000,000	—	Federal Home Loan Bank Systems 4.700% 11/20/08		14,991,900		—
—	13,654,000	Federal Home Loan Mortgage Corporation 5.110% 1/2/07		—		13,654,000
—	22,250,000	Federal Home Loan Mortgage Corporation 5.130% 1/16/07		—		22,208,704
—	43,400,000	Federal Home Loan Mortgage Corporation 5.150% 1/24/07		—		43,269,887
—	50,000,000	Federal Home Loan Mortgage Corporation 5.130% 1/30/07		—		49,807,250
—	33,675,000	Federal Home Loan Mortgage Corporation 5.150% 1/31/07		—		33,540,367
—	30,000,000	Federal National Mortgage Association 5.150% 2/6/07		—		29,854,650
—	23,768,000	Federal National Mortgage Association 5.150% 1/8/07		—		23,751,029
—	50,000,000	Federal National Mortgage Association 5.160% 3/21/07		—		49,452,450
32,465,000	—	Fannie Mae Discount Notes 4.330% 1/4/08		32,457,922		—
18,990,000	—	Fannie Mae Discount Notes 4.230% 2/15/08		18,894,366		—
20,000,000	—	Fannie Mae Discount Notes 4.200% 2/19/08		19,890,140		—
16,600,000	—	Fannie Mae Discount Notes 4.280% 2/21/08		16,505,015		—
25,000,000	—	Fannie Mae Discount Notes 4.270% 2/22/08		24,854,075		—
23,725,000	—	Fannie Mae Discount Notes 4.170% 3/5/08		23,554,345		—
44,000,000	—	Fannie Mae Discount Notes 4.260% 3/6/08		43,678,492		—

83

TIAA REAL ESTATE ACCOUNT
STATEMENTS OF INVESTMENTS
December 31, 2007 and December 31, 2006

Principal			Value
2007	2006	Issuer, Interest Rate and Maturity Date	2007		2006
29,045,000	—	Fannie Mae Discount Notes 4.190-4.280% 3/20/08	$	28,786,354	$	—
30,000,000	—	Fannie Mae Discount Notes 4.280% 3/21/08		29,729,430		—
12,840,000	—	Fannie Mae Discount Notes 4.285% 3/26/08		12,716,864		—
22,518,000	—	Fannie Mae Discount Notes 4.190-4.240% 3/27/08		22,299,485		—
17,890,000	—	Fannie Mae Discount Notes 4.270% 3/28/08		17,714,356		—
30,000,000	—	Fannie Mae Discount Notes 4.220% 4/24/08		29,613,930		—
41,650,000	—	Fannie Mae Discount Notes 4.150-4.180% 4/30/08		41,085,518		—
31,901,000	—	Fannie Mae Discount Notes 4.100% 5/28/08		31,359,658		—
30,000,000	—	Freddie Mac Discount Note 4.330% 1/24/08		29,928,120		—
32,470,000	—	Freddie Mac Discount Note 4.320% 1/31/08		32,367,460		—
22,400,000	—	Freddie Mac Discount Note 4.220% 2/14/08		22,289,770		—
25,487,000	—	Freddie Mac Discount Note 4.210% 2/20/08		25,344,069		—
10,000,000	—	Freddie Mac Discount Note 4.320% 2/21/08		9,942,780		—
8,500,000	—	Freddie Mac Discount Note 4.240% 3/3/08		8,440,806		—
17,925,000	—	Freddie Mac Discount Note 4.120% 3/31/08		17,737,868		—
26,735,000	—	Freddie Mac Discount Note 4.145% 4/10/08		26,433,563		—
20,817,000	—	Freddie Mac Discount Note 4.175% 4/18/08		20,563,324		—
10,795,000	—	Freddie Mac Discount Note 4.180% 4/25/08		10,654,849		—
TOTAL GOVERNMENT AGENCY BONDS (Cost $1,105,524,756 and $366,282,560)				1,105,857,505		366,394,065
VARIABLE NOTES—0.26% and 0.12%
—	19,000,000	US Bank NA 5.735% 12/5/07		—		18,998,765
25,000,000	—	Wells Fargo Bank 4.600% 1/7/08		24,999,308		—

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TIAA REAL ESTATE ACCOUNT
STATEMENTS OF INVESTMENTS
December 31, 2007 and December 31, 2006

Principal				Value
2007		2006	Issuer, Interest Rate and Maturity Date	2007		2006
25,000,000		—	Wells Fargo Bank 4.600% 1/8/08	$	24,999,210	$	—
	TOTAL VARIABLE NOTES (Cost $50,000,000 and $19,003,401)				49,998,518		18,998,765
BANKERS ACCEPTANCE—0.20% and 0.00%
4,359,000		—	JPMorgan Chase Bank 4.400% 1/18/08		4,349,127		—
10,000,000		—	Wachovia Bank 4.380% 4/21/08		9,850,480		—
25,000,000		—	Wachovia Bank 4.300% 5/7/08		24,570,220		—
	TOTAL BANKERS ACCEPTANCE (Cost $38,835,657 and $0)				38,769,827		—
	TOTAL OTHER MARKETABLE SECURITIES (Cost $3,371,895,300 and $2,038,681,194)				3,371,865,684		2,038,938,210
	TOTAL MARKETABLE SECURITIES (Cost $3,811,049,548 and $2,608,007,989)				3,798,495,896		2,743,860,533
MORTGAGE LOAN RECEIVABLE—0.38% and 0.48%
75,000,000		75,000,000	Klingle Corporation 6.17% 07/10/11		72,519,684		74,660,626
	TOTAL MORTGAGE LOAN RECEIVABLE (Cost $75,000,000 and $75,000,000)				72,519,684		74,660,626
	TOTAL INVESTMENTS (Cost $15,951,457,925 and $13,558,801,945)			$	19,013,601,527	$	15,510,036,850

(1)	The investment has a mortgage loan payable outstanding, as indicated in Note 5.
(2)	Leasehold interest only.
(3)	The market value reflects the Account’s interest in the joint venture, net of any debt.
(4)	The market value reflects the final settlement due the Account. The investment was sold on 8/24/07.
(5)	Located throughout the U.S.
(6)	Yield represents the annualized yield at the date of purchase.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Participants of the TIAA Real Estate Account and the
Board of Trustees of Teachers Insurance and Annuity Association of America:

In our opinion, the accompanying statements of assets and liabilities, including the statements of investments, and the related statements of operations, changes in net assets and cash flows, present fairly, in all material respects, the financial position of the TIAA Real Estate Account (the “Account”) at December 31, 2007 and December 31, 2006 and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2007 in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Account’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

/s/ PricewaterhouseCoopers LLP
New York, New York
March 20, 2008

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ADDITIONAL INFORMATION

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

          Not applicable.

ITEM 9A. CONTROLS AND PROCEDURES.

          (a) The registrant maintains a system of disclosure controls and procedures that are designed to provide reasonable assurance that 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 and the Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

          Under the supervision and participation 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 December 31, 2007. Based upon the management’s review, the CEO and the CFO concluded that the registrant’s disclosure controls and procedures were effective as of December 31, 2007.

          (b) Management’s Report on Internal Control over Financial Reporting. Management is responsible for establishing and maintaining adequate internal control over financial reporting for the Account. The Account’s internal control over financial reporting is a process designed under the supervision of the Account’s Chief Executive Officer and Chief Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Account’s financial statements for external purposes in accordance with U.S. generally accepted accounting principles.

          Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

          Management has made a comprehensive review, evaluation, and assessment of the Account’s internal control over financial reporting as of December 31, 2007. In making its assessment of internal control over financial reporting, management used the criteria issued by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework. Based on that assessment, management concluded that, as of December 31, 2007, the Account’s internal control over financial reporting is effective.

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          This annual report does not include an attestation report of the registrant’s independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Registrant’s independent registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the company to provide only management's report in this annual report.

          (c) Changes in internal controls over financial reporting. There have been no changes in the registrant’s internal controls 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 controls over financial reporting.

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PART III

ITEMS 10 AND 11. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE OF THE REGISTRANT; EXECUTIVE COMPENSATION.

          The Real Estate Account has no officers or directors and no TIAA trustee or executive officer receives compensation from the Account. The Trustees and certain principal executive officers of TIAA as of March 1, 2008, their dates of birth, and their principal occupations during the last five years, are as follows:

Trustees

Elizabeth E. Bailey, 11/26/38
John C. Hower Professor of Public Policy and Management, Wharton School, University of Pennsylvania. Director, CSX Corporation and Altria Group, Inc. Chair, National Bureau of Economic Research. Honorary Trustee, The Brookings Institution.

Glenn A. Britt, 3/6/49
Chief Executive Officer, Time Warner Cable, since 2001, where he has held several positions since 1972. Executive Committee of National Cable & Telecommunications Association, Director of Walter Kaitz Foundation and Xerox Corporation; Trustee of Polytechnic University.

Robert C. Clark, 2/26/44
Harvard University Distinguished Service Professor and Austin Wakeman Scott Professor of Law, Harvard Law School, Harvard University; Formerly Dean and Royall Professor of Law, Harvard Law School from 1989 to 2003. Director, Collins & Aikman Corporation, Time Warner, Inc. and Omnicom Group.

Edward M. Hundert, M.D., 10/1/56
Senior lecturer in Medical Ethics, Harvard Medical School. President, Case Western Reserve University from 2002 to 2006. Formerly, Dean, 2000-2002, University of Rochester School of Medicine and Dentistry, Professor of Medical Humanities and Psychiatry, 1997-2002. Board Member, Rock and Roll Hall of Fame.

Marjorie Fine Knowles, 7/4/39
Professor of Law, Georgia State University College of Law.

Donald K. Peterson, 8/13/49
Former Chairman and Chief Executive Officer, Avaya Inc. from 2002 to 2006 and President and Chief Executive Officer from 2000-01 Formerly, Executive Vice President and Chief Financial Officer, Lucent Technologies. Chairman, Board of Trustees, Worcester Polytechnic Institute. Director, Sanford C. Bernstein Fund Inc. and Emerj Inc.

Sidney A. Ribeau, 12/3/47
President, Bowling Green University. Director, The Andersons, Convergys and Worthington Industries.

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Dorothy K. Robinson, 2/18/51
Vice President and General Counsel, Yale University since 1986. Trustee, Newark Public Radio Inc., Youth Rights Media, Inc. and Friends of New Haven Legal Assistance.

David L. Shedlarz, 4/17/48
Retired Vice Chairman of Pfizer Inc. from 2006 to 2007, Executive Vice President from 1999 to 2005 and Chief Financial Officer from 1995 to 2005. Director, Pitney Bowes Inc. Trustee of International Accounting Standards Committee Foundation and member of J.P. Morgan Chase & Co. National Advisory Board. Chairman of the Board, Multiple Sclerosis Society of New York.

David F. Swensen, 1/26/54
Chief Investment Officer, Yale University, and adjunct professor of investment strategy. Trustee, The Brookings Institution, Wesleyan University; Member, University of Cambridge Investment Board.

Ronald L. Thompson, 6/17/49
Former Chairman and Chief Executive Officer, Midwest Stamping and Manufacturing Company through 2005. Director, Washington University in St. Louis.

Marta Tienda, 8/10/50
Maurice P. During ’22 Professor of Demographic Studies, Princeton University. Director, Office of Population Research, Princeton University, 1998-2002. Director, Corporation of Brown University, Sloan Foundation, Jacobs Foundation and RAND Corporation.

Rosalie J. Wolf, 5/8/41
Managing Partner, Botanica Capital Partners LLC. Formerly, Senior Advisor and Managing Director, Offit Hall Capital Management LLC and its predecessor company, Laurel Management Company LLC from 2001 to 2003; formerly, Treasurer and Chief Investment Officer, The Rockefeller Foundation. Director, North European Oil Royalty Trust; Chairman, Sanford C. Bernstein Fund, Inc.

Officer—Trustees

Herbert M. Allison, Jr., 8/2/43
Chairman, President and Chief Executive Officer, TIAA. President and Chief Executive Officer, CREF. Formerly, President, Chief Operating Officer and Member of the Board of Directors of Merrill Lynch & Co., Inc., 1997-1999 and President and Chief Executive Officer of Alliance for LifeLong Learning, 2000-2002. Advisory Board, Stanford Business School and Yale School of Management; Chair, Business-Higher Education Forum; Director, The Conference Board; Trustee, The Economic Club of New York.

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Other TIAA Executive Officers

Georganne C. Proctor, 10/25/56
Executive Vice President and Chief Financial Officer, TIAA and CREF since 2006. Executive Vice President of Finance for Golden West Financial Corporation, the holding company of World Savings Bank, from 2003 through 2005. From 1994 through 2002, served as Senior Vice President, Chief Financial Officer and a member of the board of directors of Bechtel Group, Inc. Director of Redwood Trust, Inc. and Kaiser Aluminum Corporation.

Scott C. Evans, 5/11/59
Executive Vice President of TIAA since 1999 and Head of Asset Management since 2006 of TIAA and CREF, the TIAA-CREF Mutual Funds, the TIAA-CREF Institutional Mutual Funds, the TIAA-CREF Life Funds and TIAA Separate Account VA-1 (collectively, the “TIAA-CREF Funds”). Also served as Chief Investment Officer of TIAA between 2004 and 2006 and the TIAA-CREF Funds between 2003 and 2006.

Mary (Maliz) E. Beams, 3/29/56
Executive Vice President of TIAA and the TIAA-CREF Funds since 2007. President and Chief Executive Officer, TIAA-CREF Individual & Institutional Services, LLC since 2007. Senior Managing Director and Head of Wealth Management Group of TIAA since 2004. Partner, Spyglass Investments from 2002 to 2003.

Gary Chinery, 11/28/49
Vice President and Treasurer, TIAA and CREF.

Marjorie M. Pierre-Merritt, 5/28/66
Vice President of TIAA and Acting Corporate Secretary of TIAA and the TIAA-CREF Funds since 2007; Assistant Corporate Secretary of TIAA from 2006-2007. Assistant Corporate Secretary of The Dun & Bradstreet Corporation from 2003 to 2006. Counsel, The New York Times Company from 2001 to 2003.

Portfolio Management Team

Margaret A. Brandwein, 11/26/46
Managing Director and Portfolio Manager, TIAA Real Estate Account since 2004. From 2001 to 2004, Head of Commercial Mortgages—West Coast for TIAA.

Thomas C. Garbutt, 10/12/58
Managing Director and Head of Global Real Estate Equity Division, TIAA.

Philip J. McAndrews, 12/15/58
Managing Director and Head of Real Estate Portfolio Management, TIAA-CREF Global Real Estate since 2005. Between 2003 and 2005, portfolio manager for the Real Estate Account. Between 1997 and 2003, Head of the Real Estate Acquisitions and Joint Ventures group for TIAA.

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Audit Committee Financial Expert

On August 20, 2003, the Board of Trustees of TIAA determined that Rosalie J. Wolf was qualified and would serve as the audit committee financial expert on TIAA’s audit committee. Ms. Wolf is independent (as that term is used in Item 7(d)(3)(iv) of Schedule 14A under the Securities Exchange Act of 1934) and has not accepted, directly or indirectly, any consulting, advisory or other compensatory fee from TIAA, other than in her capacity as Trustee.

Code of Ethics

The Board of Trustees of TIAA has a code of ethics for senior financial officers, including its principal executive officer, principal financial officer, principal accounting officer, or controller, and persons performing similar functions, in conformity with rules promulgated under the Sarbanes-Oxley Act of 2002. The code of ethics is filed as an exhibit to this annual report.

During the reporting period, there were no implicit or explicit waivers granted by the Registrant from any provision of the code of ethics.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

          Not applicable.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

          TIAA’s general account plays a significant role in operating the Real Estate Account, including providing a liquidity guarantee, and investment advisory and other services. In addition, Services, a wholly-owned subsidiary of TIAA, provides administration and distribution services for the Account.

          Liquidity Guarantee. If the Account’s liquid assets and its cash flow from operating activities and participant transactions are insufficient to fund redemption requests, TIAA’s general account has agreed to purchase liquidity units. TIAA thereby guarantees that a participant can redeem accumulation units at their then-current daily net asset value. For the year ended December 31, 2007, the Account expensed $19,409,759 for this liquidity guarantee from TIAA through a daily deduction from the net assets of the Account.

          Investment Advisory and Administrative Services/Certain Risks Borne by TIAA.

Deductions are made each valuation day from the net assets of the Account for various services required to manage investments, administer the Account and distribute the contracts. These services are performed at cost by TIAA and Services. Deductions are also made each valuation day to cover mortality and expense risks borne by TIAA.

92

          For the year ended December 31, 2007, the Account expensed $49,239,366 for investment advisory services and $8,052,314 for mortality and expense risks provided/borne by TIAA. For the same period, the Account expensed $63,593,008 for administrative and distribution services provided by Services.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

          PricewaterhouseCoopers LLP (“PwC”) performs independent audits of the registrant’s financial statements. To maintain auditor independence and avoid even the appearance of conflicts of interest, the registrant, as a policy, does not engage PwC for management advisory or consulting services.

          Audit Fees. PwC’s fees for professional services rendered for the audits of the Registrant’s annual financial statements for the years ended December 31, 2007, 2006, and 2005 and review of financial statements included in the registrant’s quarterly reports were $654,000, $665,000, and $989,300, respectively.

          Tax Fees. PwC had no tax fees for the years ended December 31, 2007, 2006 and 2005.

          All Other Fees. Other than as set forth above, there were no additional fees with respect to registrant.

          Preapproval Policy. In June of 2003, TIAA’s audit committee (“Audit Committee”) adopted a Preapproval Policy for External Audit Firm Services (the “Policy”). The Policy describes the types of services that may be provided by the independent auditor to the registrant without impairing the auditor’s independence. Under the Policy, the Audit Committee is required to preapprove services to be performed by the registrant’s independent auditor in order to ensure that such services do not impair the auditor’s independence.

          The Policy requires the Audit Committee to: (i) appoint the independent auditor to perform the financial statement audit for the registrant and certain of its affiliates, including approving the terms of the engagement and (ii) preapprove the audit, audit-related and tax services to be provided by the independent auditor and the fees to be charged for provision of such services from year to year.

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PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a)		1.	Financial Statements. See Item 8 for required financial statements.
		2.	Financial Statement Schedules. See Item 8 for required financial statements.
(b)			Exhibits.
(1)		(A)	Distribution Agreement for the Contracts Funded by the TIAA Real Estate
			Account, dated as of January 1, 2008, by and among Teachers Insurance and
			Annuity Association of America, for itself and on behalf of the Account, and
			TIAA-CREF Individual & Institutional Services, LLC.7
(3)		(A)	Charter of TIAA (as amended)1
		(B)	Bylaws of TIAA (as amended)6
(4)		(A)	Forms of RA, GRA, GSRA, SRA, IRA Real Estate Account Endorsements3,
			Keogh Contract,4 Retirement Select and Retirement Select Plus Contracts and
			Endorsements2 and Retirement Choice and Retirement Choice Plus Contracts.4
		(B)	Forms of Income-Paying Contracts3
(10)		(A)	Independent Fiduciary Agreement, dated February 22, 2006, by and among
			TIAA, the Registrant, and Real Estate Research Corporation5
		(B)*	Custodian Agreement, dated as of March 3, 2008, by and between TIAA, on
			behalf of the Registrant, and State Street Bank and Trust Company, N.A.
(14)	*		Code of Ethics of TIAA
(31)	*		Rule 13a-15(e)/15d-15(e) Certifications
(32)	*		Section 1350 Certifications

*	Filed herewith.
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 21, 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 the Account’s Post-Effective Amendment No. 2 to the 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 Exhibit 10.(a) to the Annual Report on Form 10-K of the Account filed on March 15, 2006.
6	Previously filed and incorporated herein by reference to Exhibit 3(B) to the Account’s Quarterly Report on Form 10-Q for the period ended September 30, 2006 and filed with the Commission on November 14, 2006.
7	Previously filed and incorporated herein by reference to the Account’s Current Report on Form 8-K, filed with the Commission on January 7, 2008.

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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 20th day of March, 2008.

TIAA REAL ESTATE ACCOUNT
By: TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA
By:	/s/ Herbert M. Allison, Jr.
	Herbert M. Allison, Jr.
	Chairman, President and
	Chief Executive Officer

          Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Report has been signed by the following trustees and officers of Teachers Insurance and Annuity Association of America, in the capacities and on the dates indicated.

Signature	Title	Date
/s/ Herbert M. Allison, Jr.	Chairman, President and Chief Executive	3/20/08
	Officer (Principal Executive Officer) and Trustee
Herbert M. Allison, Jr.
/s/ Georganne C. Proctor	Executive Vice President and Chief Financial	3/20/08
	Officer (Principal Financial and Accounting
Georganne C. Proctor	Officer)

95

Signature of Trustee	Title		Date
/s/ Elizabeth E. Bailey	Trustee	3/20/08
Elizabeth E. Bailey
/s/ Glenn A Britt	Trustee	3/20/08
Glenn A Britt
/s/ Robert C. Clark	Trustee	3/20/08
Robert C. Clark
/s/ Edward M. Hundert, M.D.	Trustee	3/20/08
Edward M. Hundert, M.D.
/s/ Marjorie Fine Knowles	Trustee	3/20/08
Marjorie Fine Knowles
/s/ Donald K. Peterson	Trustee	3/20/08
Donald K. Peterson
/s/ Sidney A. Ribeau	Trustee	3/20/08
Sidney A. Ribeau
/s/ Dorothy K. Robinson	Trustee	3/20/08
Dorothy K. Robinson
/s/ David L. Shedlarz	Trustee	3/20/08
David L. Shedlarz
/s/ David F. Swensen	Trustee	3/20/08
David F. Swensen
/s/ Ronald L. Thompson	Trustee	3/20/08
Ronald L. Thompson
/s/ Marta Tienda	Trustee	3/20/08
Marta Tienda
/s/ Rosalie J. Wolf	Trustee	3/20/08
Rosalie J. Wolf

96

SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED
PURSUANT TO SECTION 15(D) OF THE ACT BY REGISTRANTS WHICH HAVE NOT
REGISTERED SECURITIES PURSUANT TO SECTION 12 OF THE ACT

          Because the Registrant has no voting securities, nor its own management or board of directors, no annual report or proxy materials will be sent to contractowners holding interests in the Account.

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EX-10.(B)

Exhibit 10(B)

Custodian Agreement

          This Custodian Agreement (“Agreement”) is made as of the 3rd day of March, 2008 by and between STATE STREET BANK AND TRUST COMPANY, N.A., a national banking association organized under the laws of The United States of America and located at 225 Liberty Street, 25^th Floor, New York, New York 10281 (the “Custodian”) and TEACHERSINSURANCEANDANNUITYASSOCIATIONOFAMERICA, a life insurance company organized and existing under the laws of New York and located at 730 Third Avenue, New York, New York 10017 (“Insurance Company”) on behalf of the TIAA Real Estate Account (the “Account”).

RECITALS:

          WHEREAS, the Account is an insurance company separate account of the Insurance Company that is not registered with the United States Securities and Exchange Commission (the “SEC”) as an investment company under the Investment Company Act of 1940, as amended (“1940 Act”), because it is not operated, and in the future is not expected to operate, such that it would be deemed an “investment company” for purposes of the 1940 Act; and

          WHEREAS, the Account is designed to invest primarily in a diversified portfolio of real estate and real estate related assets; and

          WHEREAS, the Account also may invest in investment securities and hold monies in furtherance of its investment strategy; and

          WHEREAS, the Insurance Company, on behalf of the Account, desires to appoint the Custodian as the custodian of the Account and wishes to contract with the Custodian to act as custodian of certain investment securities, monies and other assets held on behalf of the Account in one or more accounts in places within or outside of the United States (the Account’s “Assets”); and

          WHEREAS, the Custodian is willing to accept such appointment on the terms and conditions hereinafter set forth.

          NOW,THEREFORE, for and in consideration of the mutual promises contained herein, the parties hereto, intending to be legally bound, mutually covenant and agree as follows:

SECTION 1.     APPOINTMENT AND EMPLOYMENT OF CUSTODIAN AND PROPERTY TO BE HELD BY IT

The Insurance Company, on behalf of the Account, hereby appoints and employs the Custodian to serve as custodian of the Assets, including securities which the Insurance Company, on behalf of the Account, desires to be held in places within the United States (“domestic securities”) and securities it desires to be held outside the United States (“foreign securities”). The Insurance Company, on behalf of the Account, agrees to deliver to the Custodian such securities and other Assets of the Account as the Insurance Company intends for Custodian to hold hereunder, and all payments of income, payments of principal or capital distributions received by it with respect thereto. The Custodian shall not be responsible for any property of the Account which is not received by it or which is delivered out in accordance with Proper Instructions (as such term is defined in Section 5

hereof) including, without limitation, Account property (i) held by brokers, private bankers or other entities on behalf of the Account (each a “Local Agent”), (ii) held by Special Sub-Custodians (as such term is defined in Section 4A hereof), (iii) held by entities which have advanced monies to or on behalf of the Account and which have received Account property as security for such advance(s) (each a “Pledgee”), or (iv) delivered or otherwise removed from the custody of the Custodian (a) in connection with any Free Trade (as such term is defined in Sections 2.2(15) and 2.6(5) hereof) or (b) pursuant to Special Instructions (as such term is defined in Section 5 hereof). With respect to uncertificated shares or units, as appropriate (the “Underlying Shares”), of investment companies that are registered under the 1940 Act and insurance company separate accounts (hereinafter sometimes referred to as the “Underlying Portfolios”), the holding of confirmation statements that identify such shares as being recorded in the Custodian’s name on behalf of the Account will be deemed custody for purposes hereof.

Upon receipt of Proper Instructions (as such term is defined in Section 5 hereof), the Custodian shall on behalf of the Account from time to time employ one or more sub-custodians located in the United States, but only as duly authorized by the Insurance Company on behalf of the Account, and provided that the Custodian shall have no more or less responsibility or liability to the Insurance Company on account of any actions or omissions of any sub-custodian so employed than any such sub-custodian has to the Custodian. The Custodian may place and maintain the Account’s foreign securities with foreign banking institution sub-custodians employed by the Custodian and/or foreign securities depositories, all as designated in Schedule A and Schedule B attached hereto, but only in accordance with the applicable provisions of Section 3 hereof.

SECTION 2.      DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF THE ACCOUNT TO BEHELD BY THE CUSTODIAN IN THE UNITED STATES

          SECTION 2.1     HOLDING SECURITIES. The Custodian shall hold and physically segregate for the account of the Account all investment securities held by it in the United States and delivered to the Custodian, including all such domestic securities owned by the Account other than (a) securities which are maintained pursuant to Section 2.9 in a clearing agency which acts as a securities depository or in a book-entry system authorized by the U.S. Department of the Treasury (each, a “U.S. Securities System”), and (b) Underlying Shares owned by the Account which are maintained pursuant to Section 2.11 hereof in an account with the transfer agent or entity performing such services for the Underlying Portfolio and with respect to which the Custodian is provided Proper Instructions (“Underlying Transfer Agent”). Certificated securities shall be held separate from all other securities or in a fungible bulk. The Custodian shall hold all Assets of the Account subject to Proper Instructions from the Insurance Company, on behalf of the Account, and the assets shall be withdrawable on the demand of the Insurance Company, on behalf of the Account.

          SECTION 2.2     DELIVERY OF SECURITIES. The Custodian shall release and deliver domestic securities owned by the Account and held by the Custodian, in a U.S. Securities System account of the Custodian or in an account at the Underlying Transfer Agent, only upon receipt of Proper Instructions on behalf of the Account, which may be continuing instructions when deemed appropriate by the parties, and only in the following cases:

1)           Upon sale of such securities for the account of the Account in accordance with customary or established market practices and procedures, including, without

	limitation, delivery to the purchaser thereof or to a dealer therefor (or an agent of such purchaser or dealer) against expectation of receiving later payment;
2)	Upon the receipt of payment in connection with any repurchase agreement related to such securities entered into by the Insurance Company on behalf of the Account;
3)	In the case of a sale effected through a U.S. Securities System, in accordance with the provisions of Section 2.9 hereof;
4)	To the depository agent in connection with tender or other similar offers for securities of the Account;
5)	To the issuer thereof, or its agent, when such securities are called, redeemed, retired or otherwise become payable; provided that, in any such case, the cash or other consideration is to be delivered to the Custodian;
6)	To the issuer thereof, or its agent, for transfer into the name of the Insurance Company on behalf of the Account or into the name of any nominee or nominees of the Custodian or into the name or nominee name of any agent appointed pursuant to Section 2.8 or into the name or nominee name of any sub-custodian appointed pursuant to Section 1; or for exchange for a different number of bonds, certificates or other evidence representing the same aggregate face amount or number of units; provided that, in any such case, the new securities are to be delivered to the Custodian;
7)	Upon the sale of such securities for the account of the Account, to the broker or its clearing agent, against a receipt, for examination in accordance with “street delivery” custom; provided that in any such case, the Custodian shall have no responsibility or liability for any loss arising from the delivery of such securities prior to receiving payment for such securities, except as may arise from the Custodian’s own negligence, bad faith, or willful misconduct;
8)	For exchange or conversion pursuant to any plan of merger, consolidation, recapitalization, reorganization or readjustment of the securities of the issuer of such securities, or pursuant to provisions for conversion contained in such securities, or pursuant to any deposit agreement; provided that, in any such case, the new securities and cash, if any, are to be delivered to the Custodian;
9)	In the case of warrants, rights or similar securities, the surrender thereof in the exercise of such warrants, rights or similar securities or the surrender of interim receipts or temporary securities for definitive securities; provided that, in any such case, the new securities and cash, if any, are to be delivered to the Custodian;
10)	For delivery in connection with any loans of securities made by the Insurance Company on behalf of the Account, but only against receipt of collateral as agreed upon from time to time by the Insurance Company on behalf of the Account, except that in connection with any loans for which collateral is to be credited to the

	Custodian’s account in the book-entry system authorized by the U.S. Department of the Treasury, the Custodian will not be held liable or responsible under this Agreement for the delivery of securities owned by the Account prior to the receipt of such collateral, except as may arise from the Custodian’s own negligence, bad faith, or willful misconduct;
11)	For delivery in connection with any loans of securities made by the Insurance Company on behalf of the Account to a third party lending agent, or the lending agent’s custodian, in accordance with written Proper Instructions (which may not provide for the receipt by the Custodian of collateral therefor) agreed upon from time to time by the Custodian and the Insurance Company on behalf of the Account;
12)	For delivery as security in connection with any borrowing by the Insurance Company on behalf of the Account requiring a pledge of assets by the Insurance Company on behalf of the Account, but only against receipt of amounts borrowed;
13)	For delivery in accordance with the provisions of any agreement among the Insurance Company on behalf of the Account, the Custodian and a broker-dealer registered under the Securities Exchange Act of 1934, as amended from time to time (the “Exchange Act”) and a member of The Financial Industry Regulatory Authority (“FINRA”), or its successor, relating to compliance with the rules of The Options Clearing Corporation, the Fixed Income Clearing Corporation and of any registered national securities exchange, or of any similar organization or organizations, regarding escrow or other arrangements in connection with transactions by the Insurance Company on behalf of the Account;
14)	For delivery in accordance with the provisions of any agreement among the Insurance Company on behalf of the Account, the Custodian, and a futures commission merchant registered under the Commodity Exchange Act, relating to compliance with the rules of the Commodity Futures Trading Commission (“CFTC”) and/or any contract market, or any similar organization or organizations, regarding account deposits in connection with transactions by the Insurance Company on behalf of the Account;
15)	Upon the sale or other delivery of such investments (including, without limitation, to one or more (a) Special Sub-Custodians or (b) additional custodians appointed by the Insurance Company on behalf of the Account, and communicated to the Custodian from time to time via a writing duly executed by an authorized officer of the Insurance Company, for the purpose of engaging in repurchase agreement transactions(s), each, a “Repo Custodian”), and prior to receipt of payment therefor, as set forth in written Proper Instructions (such delivery in advance of payment, along with payment in advance of delivery made in accordance with Section 2.6(5), as applicable, shall each be referred to herein as a “Free Trade”), provided that such Proper Instructions shall set forth (a) the securities of the Account to be delivered and (b) the entity or entities to whom delivery of such securities shall be made;

16)	In the case of a sale processed through the Underlying Transfer Agent of Underlying Shares, in accordance with Section 2.11 hereof;
17)	For delivery as initial or variation margin in connection with futures or options on futures contracts entered into by the Insurance Company on behalf of the Account; and
18)	For any other purpose, but only upon receipt of Proper Instructions from the Insurance Company on behalf of the Account specifying (a) the securities of the Account to be delivered and (b) the person or persons to whom delivery of such securities shall be made.

          SECTION 2.3     REGISTRATION OF SECURITIES. Domestic securities held by the Custodian for the Account (other than bearer securities) shall be registered in the name of the Account or in the name of any nominee of the Account or of any nominee of the Custodian which nominee shall be assigned exclusively to the Account, or in the name or nominee name of any agent appointed pursuant to Section 2.8 or in the name or nominee name of any sub-custodian appointed pursuant to Section 1. All securities accepted by the Custodian on behalf of the Account under the terms of this Agreement shall be in “street name” or other good delivery form. If, however, the Insurance Company directs the Custodian to maintain the Account’s securities in “street name,” the Custodian shall utilize its best efforts only to timely collect income due the Account on such securities and to notify the Insurance Company on a best efforts basis of relevant corporate actions including, without limitation, pendency of calls, maturities, tender or exchange offers.

          SECTION 2.4     BANK ACCOUNTS. The Custodian shall open and maintain a separate bank account or accounts in the United States in the name of the Account, subject only to draft or order by the Custodian acting pursuant to the terms of this Agreement, and shall hold in such account or accounts, subject to the provisions hereof, all cash received by it from or for the Account. Funds held by the Custodian for the Account may be deposited by the Custodian to its credit as Custodian in the banking department of the Custodian or in such other banks or trust companies as it may in its discretion deem necessary or desirable. Such monies shall be deposited by the Custodian in its capacity as custodian and shall be withdrawable by the Custodian only in that capacity.

          SECTION 2.5     COLLECTION OF INCOME. Except with respect to Account property released and delivered pursuant to Section 2.2(15) or purchased pursuant to Section 2.6(5), and subject to the provisions of Section 2.3, the Custodian shall collect on a timely basis all income and other payments with respect to registered domestic securities held hereunder to which the Account shall be entitled either by law or pursuant to custom in the securities business, and shall collect on a timely basis all income and other payments with respect to bearer domestic securities if, on the date of payment by the issuer, such securities are held by the Custodian or its agent. Without limiting the generality of the foregoing, the Custodian shall detach and present for payment all coupons and other income items requiring presentation as and when they become due and shall collect interest when due on securities held hereunder. The Custodian shall credit income to the Account as such income is received or in accordance with Custodian’s then current payable date income schedule. Any credit to the Account in advance of receipt may be reversed when the Custodian reasonably determines that payment will not occur in due course and the Account may be charged at the Custodian’s applicable rate for time credited. Income due to the Account on securities loaned pursuant to the provisions of

Section 2.2 (10) and (11) shall be the responsibility of the Insurance Company. The Custodian will have no duty or responsibility in connection therewith, other than to provide the Insurance Company with such information or data as may be necessary to assist the Insurance Company in arranging for the timely delivery to the Custodian of the income to which the Account is properly entitled.

          SECTION 2.6     PAYMENT OF ACCOUNT MONIES. The Custodian shall pay out monies of the Account upon receipt of Proper Instructions on behalf of the Account, which may be continuing instructions when deemed appropriate by the parties, and only in the following cases:

1)	Upon the purchase of domestic securities, options, futures contracts or options on futures contracts for the account of the Account but only (a) in accordance with customary or established market practices and procedures, including, without limitation, delivering money to the seller thereof or to a dealer therefor (or an agent for such seller or dealer) against expectation of receiving later delivery of such securities or evidence of title to such options, futures contracts or options on futures contracts to the Custodian (or any bank, banking firm or trust company doing business in the United States or abroad which has been designated by the Custodian as its agent for this purpose) registered in the name of the Account or in the name of a nominee of the Account or Custodian referred to in Section 2.3 hereof or in proper form for transfer; (b) in the case of a purchase effected through a U.S. Securities System, in accordance with the conditions set forth in Section 2.9 hereof; (c) in the case of a purchase of Underlying Shares, in accordance with the conditions set forth in Section 2.11 hereof; (d) in the case of repurchase agreements entered into between the Insurance Company on behalf of the Account and the Custodian, or another bank, or a broker-dealer which is a member of FINRA, (i) against delivery of the securities either in certificated form or through an entry crediting the Custodian’s account at the Federal Reserve Bank with such securities or (ii) against delivery of the receipt evidencing purchase by the Account of securities owned by the Custodian along with written evidence of the agreement by the Custodian to repurchase such securities from the Account; or (e) for transfer to a time deposit account of the Insurance Company in any bank, whether domestic or foreign; such transfer may be effected prior to receipt of a confirmation from a broker and/or the applicable bank pursuant to Proper Instructions from the Insurance Company as defined herein;
2)	In connection with conversion, exchange or surrender of securities owned by the Account as set forth in Section 2.2 hereof;
3)	For the payment of any expense or liability incurred by the Account, including but not limited to the following payments for the Account: interest, taxes, management, accounting, legal fees, and operating expenses of the Account whether or not such expenses are to be in whole or part capitalized or treated as deferred expenses;
4)	For payment of the amount of dividends received in respect of securities sold short;
5)	Upon the purchase of domestic investments including, without limitation, repurchase agreement transactions involving delivery of Account monies to Repo Custodian(s), and prior to receipt of such investments, as set forth in written Proper Instructions

	(such payment in advance of delivery, along with the delivery in advance of payment made in accordance with Section 2.2(15), as applicable, shall each be referred to herein as a “Free Trade”), provided that such Proper Instructions shall also set forth (a) the amount of such payment and (b) the person(s) to whom such payment is made;
6)	For payment as initial or variation margin in connection with futures or options on futures contracts entered into by the Insurance Company on behalf of the Account; and
7)	For any other purpose, but only upon receipt of Proper Instructions from the Insurance Company on behalf of the Account specifying (a) the amount of such payment and (b) the person or persons to whom such payment is to be made.

          SECTION 2.7     LIABILITY FOR PAYMENT IN ADVANCE OF RECEIPT OF SECURITIES PURCHASED.

          Except as specifically stated otherwise in this Agreement, in any and every case in which payment for purchase of domestic securities for the account of the Account is made by the Custodian on behalf of the Account in advance of receipt of the securities purchased, in the absence of specific written instructions from the Insurance Company, on behalf of the Account, to so pay in advance, the Custodian shall be absolutely liable to the Account for such securities to the same extent as if the securities had been received by the Custodian.

          SECTION 2.8     APPOINTMENT OF AGENTS. The Custodian may at any time or times in its discretion appoint (and may at any time remove) any other bank or trust company to act as a custodian, as its agent to carry out such of the provisions of this Section 2 as the Custodian may from time to time direct; provided, however, that the appointment of any agent shall not relieve the Custodian of its responsibilities or liabilities hereunderand each agreement pursuant to which Custodian appoints an agent shall subject the agent to the same liability for loss of securities as Custodian. If the agent is governed by laws that differ from the regulation of the Custodian, the Superintendent of Insurance of the State of New York (the “Superintendent”) may accept a standard of liability applicable to the agent that is different from the standard liability. The Underlying Transfer Agent shall not be deemed an agent or sub-custodian of the Custodian for purposes of this Section 2.8 or any other provision of this Agreement.

          SECTION 2.9     DEPOSIT OF ACCOUNT ASSETS IN U.S.SECURITIES SYSTEMS. The Custodian may deposit and/or maintain securities owned by the Account in a U.S. Securities System subject to the following provisions:

1.	The securities are represented in an account of the Custodian in the U.S. Securities System (“U.S. Securities System Account”) which account shall not include any assets of the Custodian other than assets held as a fiduciary, custodian or otherwise for customers;
2.	The records of the Custodian with respect to securities of the Account which are maintained in a U.S. Securities System shall identify by book entry those securities belonging to the Account;

3.	The Custodian shall pay for securities purchased for the Account upon the making of an entry on the records of the Custodian to reflect such payment and transfer for the Account. The Custodian shall transfer securities sold for the Account upon the making of an entry on the records of the Custodian to reflect such transfer and payment for the Account. Upon request, the Custodian shall furnish the Insurance Company confirmation of each transfer to or from the Account in the form of a written advice or notice and shall furnish to the Insurance Company copies of daily transaction sheets reflecting each day’s transactions in the U.S. Securities System with respect to the Account;
4.	At the election of the Insurance Company, it shall be entitled to be subrogated to the rights of the Custodian with respect to any claim against the U.S. Securities System or any other person which the Custodian may have as a consequence of any such loss or damage if and to the extent that the Account has not been made whole for any such loss or damage;
5.	The Custodian shall provide the Insurance Company with any report obtained by the Custodian on the U.S. Securities System’s accounting system, internal accounting control and procedures for safeguarding securities deposited in the U.S. Securities System.

          SECTION 2.10    SEGREGATED ACCOUNT. The Custodian shall upon receipt of Proper Instructions on behalf of the Account, establish and maintain a segregated account or accounts for and on behalf of the Account, into which account or accounts may be transferred cash and/or securities, including securities maintained in an account by the Custodian pursuant to Section 2.9 hereof (a) in accordance with the provisions of any agreement among the Insurance Company on behalf of the Account, the Custodian and a broker-dealer registered under the Exchange Act and which is a member of FINRA (or any futures commission merchant registered under the Commodity Exchange Act), relating to compliance with the rules of The Options Clearing Corporation and of any registered national securities exchange (or the CFTC or any registered contract market), or of any similar organization or organizations, regarding escrow or other arrangements in connection with transactions by the Account, (b) for purposes of segregating cash or government securities in connection with swap arrangements entered into by the Insurance Company on behalf of the Account, options purchased, sold or written by or on behalf of the Account or commodity futures contracts or options thereon purchased or sold by the Account, and (c) for any other purpose upon receipt of Proper Instructions from the Insurance Company on behalf of the Account.

          SECTION 2.11    DEPOSIT OF ACCOUNT ASSETS WITH THE UNDERLYING TRANSFER AGENT. Underlying Shares beneficially owned by the Account shall be deposited and/or maintained in an account or accounts maintained with an Underlying Transfer Agent and the Custodian’s only responsibilities with respect thereto shall be limited to the following:

1)           Underlying Shares owned by the Account shall be maintained in an account or accounts on the books and records of the Underlying Transfer Agent in the name of the Custodian as custodian for the Account.

2)	Upon receipt of a confirmation or statement from an Underlying Transfer Agent that such Underlying Transfer Agent is holding or maintaining Underlying Shares in the name of the Custodian (or a nominee of the Custodian) for the benefit of the Account, the Custodian shall identify by book-entry that such Underlying Shares are being held by it as custodian for the benefit of the Account.
3)	In respect of the purchase of Underlying Shares for the account of the Account, upon receipt of Proper Instructions, the Custodian shall pay out monies of the Account as so directed, and record such payment from the account of the Account on the Custodian’s books and records.
4)	In respect of the sale or redemption of Underlying Shares for the account of the Account, upon receipt of Proper Instructions, the Custodian shall transfer such Underlying Shares as so directed, record such transfer from the account of the Account on the Custodian’s books and records and, upon the Custodian’s receipt of the proceeds therefor, record such payment for the account of the Account on the Custodian’s books and records.

The Custodian shall not be liable to the Insurance Company for any loss or damage to the Insurance Company or the Account resulting from the maintenance of Underlying Shares with an Underlying Transfer Agent except for losses resulting directly from the negligence, bad faith, or willful misconduct of the Custodian or any of its agents or of any of its or their employees.

          SECTION 2.12    OWNERSHIP CERTIFICATES FOR TAX PURPOSES. The Custodian shall execute ownership and other certificates and affidavits for all federal and state tax purposes in connection with receipt of income or other payments with respect to domestic securities of the Account held by it and in connection with transfers of securities.

          SECTION 2.13    PROXIES. Except with respect to Account property released and delivered pursuant to Section 2.2(15), or purchased pursuant to Section 2.6(5), the Custodian shall, with respect to the domestic securities held by it hereunder, cause to be promptly executed by the registered holder of such securities, if the securities are registered otherwise than in the name of the Account or a nominee of the Account, all proxies, without indication of the manner in which such proxies are to be voted, and shall promptly deliver to the Insurance Company such proxies, all proxy soliciting materials and all notices received relating to such securities.

          SECTION 2.14    COMMUNICATIONS RELATING TO ACCOUNT SECURITIES. Except with respect to Account property released and delivered pursuant to Section 2.2(15), or purchased pursuant to Section 2.6(5) and subject to the provisions of Section 2.3, the Custodian shall transmit promptly to the Insurance Company all written information (including, without limitation, pendency of calls and maturities of domestic securities and expirations of rights in connection therewith and notices of exercise of call and put options written by or on behalf of the Account and the maturity of futures contracts purchased or sold by or on behalf of the Account) received by the Custodian from issuers of the securities being held for the Account. With respect to tender or exchange offers, the Custodian shall transmit promptly to the Insurance Company all written information received by the Custodian from issuers of the securities whose tender or exchange is sought and from the party (or its agents) making the tender or exchange offer. If the Insurance Company desires to take action

with respect to any tender offer, exchange offer or any other similar transaction relating to any security in the actual possession of the Custodian acting on behalf of the Account, the Insurance Company shall notify the Custodian with Proper Instructions at least two business days prior to the date on which the Custodian is to take such action. The Custodian also shall transmit promptly to the Insurance Company all written information received by the Custodian regarding any class action or other litigation in connection with Account securities or other assets issued in the United States and then held, or previously held, during the term of this Agreement by the Custodian for the account of the Account, including, but not limited to, opt-out notices and proof-of-claim forms.

          Additionally, upon receipt of Proper Instructions (as described in Section 5) regarding information necessary for proper filing of shareholder proposals with respect to positions in domestic securities held by the Custodian at any time during the term of this Agreement, the Custodian shall transmit promptly to the Insurance Company all information and documentation in Custodian’s possession requested by the Insurance Company on behalf of the Account. The Insurance Company shall limit such requests to only that information and documentation that is required of shareholders by the SEC for the proper filing of shareholder proposals. For avoidance of doubt, upon and after the effective date of any termination of this Agreement, the Custodian shall have no responsibility to so transmit any information under this Section 2.14.

          SECTION 2.15.    FEDERAL FUNDS. Upon agreement between the Insurance Company on behalf of the Account and the Custodian, the Custodian shall, upon receipt of Proper Instructions from the Insurance Company, make federal funds available to the Account as of specified times agreed upon from time to time by the Insurance Company and the Custodian in the amount of checks received by the Insurance Company on behalf of the Account which are deposited into the Account’s account.

SECTION 3.     DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF THE ACCOUNT TO BE HELDOUTSIDE THE UNITED STATES

          SECTION 3.1     DEFINITIONS. As used throughout this Agreement, the capitalized terms set forth below shall have the indicated meanings:

“Foreign Assets” means any of the Insurance Company’s investments on behalf of the Account (including foreign currencies) that are Assets and for which the primary market is outside the United States and such cash and cash equivalents as are reasonably necessary to effect the Insurance Company’s transactions in such investments on behalf of the Account.

“Foreign Securities System” means a securities depository listed on Schedule B hereto.

“Foreign Sub-Custodian” means a banking institution serving as an custodian in a country listed on Schedule A.

          SECTION3.2.   HOLDING SECURITIES. The Custodian shall identify on its books as belonging to the Account the foreign securities held by each Foreign Sub-Custodian or Foreign Securities System. The Custodian may hold foreign securities for all of its customers, including the Account, with any Foreign Sub-Custodian in an account that is identified as belonging to the Custodian for the benefit of its customers; provided, however, that (i) the records of the Custodian with respect to foreign securities of the Account which are maintained in such account shall identify those securities

as belonging to the Account and (ii) to the extent permitted and customary in the market in which the account is maintained, the Custodian shall require that securities so held by the Foreign Sub-Custodian be held separately from any assets of such Foreign Sub-Custodian or of other customers of such Foreign Sub-Custodian.

          SECTION3.3.    FOREIGN SECURITIES SYSTEMS. Foreign securities shall be maintained in a Foreign Securities System in a designated country through arrangements implemented by the Custodian or a Foreign Sub-Custodian, as applicable, in such country.

          SECTION 3.4.    TRANSACTIONS IN FOREIGN CUSTODY ACCOUNT.

                       3.4.1.   DELIVERY OF FOREIGN SECURITIES.The Custodian or a Foreign Sub-Custodian shall release and deliver foreign securities of the Account held by the Custodian or such Foreign Sub-Custodian, or in a Foreign Securities System account, only upon receipt of Proper Instructions, which may be continuing instructions when deemed appropriate by the parties, and only in the following cases:

(i)	upon the sale of such foreign securities for the Account in accordance with commercially reasonable market practice in the country where such foreign securities are held or traded, including, without limitation: (A) delivery against expectation of receiving later payment; or (B) in the case of a sale effected through a Foreign Securities System, in accordance with the rules governing the operation of the Foreign Securities System;
(ii)	in connection with any repurchase agreement related to foreign securities;
(iii)	to the depository agent in connection with tender or other similar offers for foreign securities of the Account;
(iv)	to the issuer thereof or its agent when such foreign securities are called, redeemed, retired or otherwise become payable;
(v)	to the issuer thereof, or its agent, for transfer into the name of the Custodian (or the name of the respective Foreign Sub-Custodian or of any nominee of the Custodian or such Foreign Sub-Custodian) or for exchange for a different number of bonds, certificates or other evidence representing the same aggregate face amount or number of units;
(vi)	to brokers, clearing banks or other clearing agents for examination or trade execution in accordance with market custom; provided that in any such case, the Foreign Sub- Custodian shall have no responsibility or liability for any loss arising from the delivery of such foreign securities prior to receiving payment for such foreign securities except as may arise from the Foreign Sub-Custodian’s own negligence or willful misconduct;
(vii)	for exchange or conversion pursuant to any plan of merger, consolidation, recapitalization, reorganization or readjustment of the securities of the issuer of such

	securities, or pursuant to provisions for conversion contained in such securities, or pursuant to any deposit agreement;
(viii)	in the case of warrants, rights or similar foreign securities, the surrender thereof in the exercise of such warrants, rights or similar securities or the surrender of interim receipts or temporary securities for definitive securities;
(ix)	for delivery as security in connection with any borrowing by the Insurance Company on behalf of a Account requiring a pledge of assets by the Insurance Company on behalf of the Account;
(x)	in connection with trading in options and futures contracts, including delivery as original margin and variation margin;
(xi)	upon the sale or other delivery of such foreign securities (including, without limitation, to one or more Special Sub-Custodians or Repo Custodians) as a Free Trade, provided that applicable Proper Instructions shall set forth (A) the foreign securities to be delivered and (B) the person or persons to whom delivery shall be made;
(xii)	for delivery in connection with any loans of foreign securities made by the Insurance Company on behalf of the Account, but only against receipt of adequate collateral as agreed upon from time to time by the Insurance Company, on behalf of the Account, and the Custodian;
(xiii)	for delivery in connection with any loans of foreign securities made by the Insurance Company to a third party lending agent, or the lending agent’s custodian, in accordance with written Proper Instructions (which may not provide for the receipt by the Custodian of collateral therefor) agreed upon from time to time by the Custodian and the Insurance Company on behalf of the Account; and
(xiv)	for any other purpose, but only upon receipt of Proper Instructions specifying (A) the foreign securities to be delivered and (B) the person or persons to whom delivery of such securities shall be made.

                       3.4.2.   PAYMENT OF ACCOUNT MONIES. Upon receipt of Proper Instructions, which may be continuing instructions when deemed appropriate by the parties, the Custodian shall pay out, or direct the respective Foreign Sub-Custodian or the respective Foreign Securities System to pay out, monies of the Account in the following cases only:

(i)           upon the purchase of foreign securities for the Account, unless otherwise directed by Proper Instructions, by (A) delivering money to the seller thereof or to a dealer therefor (or an agent for such seller or dealer) against expectation of receiving later delivery of such foreign securities; or (B) in the case of a purchase effected through a Foreign Securities System, in accordance with the rules governing the operation of such Foreign Securities System;

(ii)	in connection with the conversion, exchange or surrender of foreign securities of the Account;
(iii)	for the payment of any expense or liability of the Account, including but not limited to the following payments: interest, taxes, investment advisory fees, fees under this Agreement, legal fees, accounting fees, and other operating expenses;
(iv)	for the purchase or sale of foreign exchange or foreign exchange contracts for the Account, including transactions executed with or through the Custodian or its Foreign Sub-Custodians;
(v)	in connection with trading in options and futures contracts, including delivery as original margin and variation margin;
(vi)	upon the purchase of foreign investments including, without limitation, repurchase agreement transactions involving delivery of Account monies to Repo Custodian(s), as a Free Trade, provided that applicable Proper Instructions shall set forth (A) the amount of such payment and (B) the person or persons to whom payment shall be made;
(vii)	for payment of part or all of the dividends received in respect of securities sold short;
(viii)	in connection with the borrowing or lending of foreign securities; and
(ix)	For any other purpose, but only upon receipt of Proper Instructions specifying (A) the amount of such payment and (B) the person or persons to whom such payment is to be made.

                       3.4.3.   MARKET CONDITIONS. Notwithstanding any provision of this Agreement to the contrary, settlement and payment for Foreign Assets received for the account of the Account and delivery of Foreign Assets maintained for the account of the Account may be effected in accordance with the customary established securities trading or processing practices and procedures in the country or market in which the transaction occurs, including, without limitation, delivering Foreign Assets to the purchaser thereof or to a dealer therefor (or an agent for such purchaser or dealer) with the expectation of receiving later payment for such Foreign Assets from such purchaser or dealer.

The Custodian shall provide to the Insurance Company, or its designee, the information with respect to custody and settlement practices in countries in which the Custodian employs a Foreign Sub-Custodian described on Schedule C hereto at the time or times set forth on such Schedule. The Custodian may revise Schedule C from time to time, provided that no such revision shall result in the Insurance Company, or its designee, being provided with substantively less information than had been previously provided hereunder.

          SECTION3.5.     REGISTRATION OF FOREIGN SECURITIES. The foreign securities maintained in the custody of a Foreign Sub-Custodian (other than bearer securities) shall be registered in the name of the Account or in the name of the Custodian or in the name of any Foreign Sub-Custodian or in the name of any nominee of the foregoing, and the Insurance Company on behalf of the Account

agrees to hold any such nominee harmless from any liability as a holder of record of such foreign securities except to the extent that such liability results from the negligence, bad faith, or willful misconduct of the nominee. The Custodian or a Foreign Sub-Custodian shall not be obligated to accept securities on behalf of the Account under the terms of this Agreement unless the form of such securities and the manner in which they are delivered are in accordance with reasonable market practice.

          SECTION 3.6     BANK ACCOUNTS. The Custodian shall identify on its books as belonging to the Account cash (including cash denominated in foreign currencies) deposited with the Custodian. Where the Custodian is unable to maintain, or market practice does not facilitate the maintenance of, cash on the books of the Custodian, a bank account or bank accounts shall be opened and maintained outside the United States on behalf of the Account with a Foreign Sub-Custodian. All accounts referred to in this Section shall be subject only to draft or order by the Custodian (or, if applicable, such Foreign Sub-Custodian) acting pursuant to the terms of this Agreement to hold cash received by or from or for the account of the Account. Cash maintained on the books of the Custodian (including its branches, subsidiaries and affiliates), regardless of currency denomination, is maintained in bank accounts established under, and subject to the laws of, the Commonwealth of Massachusetts.

          SECTION3.7.    COLLECTION OF INCOME. The Custodian shall use reasonable commercial efforts to collect all income and other payments with respect to the Foreign Assets held hereunder to which the Account shall be entitled. In the event that extraordinary measures are required to collect such income, the Insurance Company and the Custodian shall consult as to such measures and as to the compensation and expenses of the Custodian relating to such measures. The Custodian shall credit income to the Account as such income is received or in accordance with Custodian’s then current payable date income schedule. Any credit to the Account in advance of receipt may be reversed when the Custodian determines that payment will not occur in due course and the Account may be charged at the Custodian’s applicable rate for time credited. Income on securities loaned other than from the Custodian’s securities lending program shall be credited as received.

          SECTION3.8     SHAREHOLDER RIGHTS. With respect to the foreign securities held pursuant to this Section 3, the Custodian shall use reasonable commercial efforts to facilitate the exercise of voting and other shareholder rights, subject always to the laws, regulations and practical constraints that may exist in the country where such securities are issued. The Insurance Company acknowledges that local conditions, including lack of regulation, onerous procedural obligations, lack of notice and other factors may have the effect of severely limiting the ability of the Insurance Company to exercise shareholder rights.

          SECTION3.9.    COMMUNICATIONS RELATING TO FOREIGN SECURITIES. The Custodian shall promptly transmit to the Insurance Company written information with respect to materials received by the Custodian via the Foreign Sub-Custodians from issuers of the foreign securities being held for the account of the Account (including, without limitation, pendency of calls, maturities of foreign securities and expirations of rights in connection therewith). Additionally, when requested by the Insurance Company, the Custodian shall use commercially reasonable efforts to promptly provide the Insurance Company with timely updates with respect to blocking and unblocking of foreign securities or other property of the Account held by the Custodian via a Foreign Sub-Custodian for the account of the Account. With respect to tender or exchange offers, the Custodian shall transmit

promptly to the Insurance Company written information with respect to materials so received by the Custodian from issuers of the foreign securities whose tender or exchange is sought or from the party (or its agents) making the tender or exchange offer.

          Absent negligence, bad faith, or willful misconduct on the part of the Custodian, the Custodian shall not be liable for any untimely exercise of any tender, exchange or other right or power in connection with foreign securities or other property of the Account at any time held by it unless (i) the Custodian or the respective Foreign Sub-Custodian is in actual possession or control of such foreign securities or property and (ii) the Custodian receives Proper Instructions with regard to the exercise of any such right or power, and both (i) and (ii) occur at least two business days prior to the date on which the Custodian is to take action to exercise such right or power, including, but not limited to, the date by which the Custodian must provide any necessary instructions or notices to the applicable Foreign Sub-Custodian. The Custodian shall also transmit promptly to the Insurance Company all written information received by the Custodian via the Foreign Sub-Custodians from issuers of the foreign securities being held for the account of the Account regarding any class action or other litigation in connection with foreign securities or other assets issued outside the United States and then held, or previously held, during the term of this Agreement by the Custodian via a Foreign Sub-Custodian for the account of the Account, including, but not limited to, opt-out notices and proof-of-claim forms.

          Additionally, upon receipt of Proper Instructions regarding information necessary for proper filing of shareholder proposals with respect to positions in foreign securities or property held, or previously held, during the term of this Agreement by the Custodian via a Foreign Sub-Custodian for the account of the Account, the Custodian shall transmit promptly to the Insurance Company all information and documentation in the Custodian’s possession requested by the Insurance Company. The Insurance Company shall limit such requests to only that information and documentation that is required of shareholders by applicable regulations for the proper filing of shareholder proposals within the applicable jurisdiction. For avoidance of doubt, upon and after the effective date of any termination of this Agreement, the Custodian shall have no responsibility to so transmit any information under this Section 3.9.

          SECTION3.10.  LIABILITY OF FOREIGN SUB-CUSTODIANS. Each agreement pursuant to which the Custodian employs a Foreign Sub-Custodian shall, to the extent possible, require the Foreign Sub-Custodian to exercise reasonable care in the performance of its duties, and to indemnify and hold harmless the Custodian from and against any loss, damage, cost, expense, liability or claim arising out of or in connection with the Foreign Sub-Custodian’s performance of such obligations, provided, however, that each such agreement shall subject the Foreign Sub-Custodian to the same liability for loss of securities as Custodian. If the Foreign Sub-Custodian is governed by laws that differ from the regulation of Custodian, the Superintendent may accept a standard of liability applicable to the Foreign Sub-Custodian that is different from the standard liability. At the Insurance Company’s election, the Insurance Company shall be subrogated on behalf of the Account to the rights of the Custodian with respect to any claims against a Foreign Sub-Custodian as a consequence of any such loss, damage, cost, expense, liability or claim if and to the extent that the Account has not been made whole for any such loss, damage, cost, expense, liability or claim. Notwithstanding the foregoing, any Foreign Sub-Custodian which is a branch or subsidiary of the Custodian will be held to the standard of care set forth in Section 13 for the Custodian.

          SECTION 3.11  TAX LAW. The Custodian shall have no responsibility or liability for any obligations now or hereafter imposed on the Insurance Company, the Account or the Custodian as custodian of the Account by the tax law of the United States or of any state or political subdivision thereof. It shall be the responsibility of the Insurance Company to notify the Custodian of the obligations imposed on the Insurance Company with respect to the Account or the Custodian as custodian of the Account by the tax law of countries other than those mentioned in the above sentence, including responsibility for withholding and other taxes, assessments or other governmental charges, certifications and governmental reporting. The sole responsibility of the Custodian with regard to such tax law shall be to use reasonable efforts to assist the Insurance Company with respect to any claim for exemption or refund under the tax law of countries for which the Insurance Company has provided such information.

          SECTION 3.12.  ACCESS OF INDEPENDENT ACCOUNTANTS OF THE INSURANCE COMPANY. Upon request of the Insurance Company, the Custodian will use commercially reasonable efforts to arrange for the independent accountants of the Insurance Company to be afforded access to the books and records of any foreign banking institution employed as a Foreign Sub-Custodian insofar as such books and records relate to the performance of such foreign banking institution under its contract with the Custodian.

SECTION 4.     CONTRACTUAL SETTLEMENT SERVICES (PURCHASE /SALES)

          SECTION 4.1      The Custodian shall, in accordance with the terms set out in this section, debit or credit the appropriate cash account of the Account in connection with (i) the purchase of securities for the Account, and (ii) proceeds of the sale of securities held on behalf of the Account, on a contractual settlement basis.

          SECTION4.2      The services described above (the “Contractual Settlement Services”) shall be provided for such instruments and in such markets as the Custodian may advise from time to time. The Custodian may terminate or suspend any part of the provision of the Contractual Settlement Services under this Agreement at its sole discretion immediately upon notice to the Insurance Company on behalf of the Account, including, without limitation, in the event of: (i) nationalization, expropriation, currency restrictions, acts of war, revolution, riots or terrorism, interruption, suspension or restriction of trading on or the closure of any securities market, power or other mechanical or technological failures or interruptions, computer viruses or communications disruptions, work stoppages, labor strikes, natural disasters, or similar events affecting settlement; (ii) any disorder in markets; or (iii) other changed external business circumstances affecting markets or the Insurance Company.

          SECTION4.3      The consideration payable in connection with a purchase transaction shall be debited from the appropriate cash account of the Account as of the time and date that monies would ordinarily be required to settle such transaction in the applicable market. The Custodian shall promptly recredit such amount at the time that the Insurance Company notifies the Custodian by Proper Instruction that such transaction has been canceled.

          SECTION4.4      With respect to the settlement of a sale of securities, a provisional credit of an amount equal to the net sale price for the transaction (the “Settlement Amount”) shall be made to the account of the Account as if the Settlement Amount had been received as of the close of business on

the date that monies would ordinarily be available in good funds in the applicable market. Such provisional credit will be conditioned upon (i) the Custodian having received Proper Instructions with respect to, or reasonable notice of, the transaction, as applicable and (ii) the Custodian or its agents having possession of the asset(s) (which shall exclude assets subject to any third party lending arrangement entered into by the Insurance Company on behalf of the Account) associated with the transaction in good deliverable form and not being aware of any facts which would lead them to believe that the transaction will not settle in the time period ordinarily applicable to such transactions in the applicable market.

          SECTION4.5      The Custodian shall have the right to reverse any provisional credit or debit given in connection with the Contractual Settlement Services at any time when the Custodian believes, in its reasonable judgment, that such transaction will not settle in accordance with its terms or amounts due pursuant thereto will not be collectable or where the Custodian has not been provided Proper Instructions with respect thereto, as applicable, and the Insurance Company, on behalf of the Account, shall be responsible for any reasonable costs or liabilities resulting from such reversal. Upon such reversal, a sum equal to the credited or debited amount shall become immediately payable by the Account to the Custodian and may be debited from any cash account held for benefit of the Account.

          SECTION4.6      In the event that the Custodian is unable to debit an account of the Account, and the Insurance Company fails to pay any amount due to the Custodian at the time such amount becomes payable in accordance with this Agreement, (i) the Custodian may charge the Account for reasonable costs and expenses associated with providing the provisional credit, including, without limitation, the reasonable cost of funds associated therewith, (ii) the amount of any accrued dividends, interest and other distributions with respect to assets associated with such transaction may be set off against the credited amount, (iii) the provisional credit and any such costs and expenses shall be considered an advance of cash for purposes of the Agreement and (iv) the Custodian shall have the right to setoff against any property and the discretion to sell, exchange, convey, transfer or otherwise dispose of any property at any time held for the account of the Account to the full extent necessary for the Custodian to make itself whole.

SECTION 4A.     SPECIAL SUB-CUSTODIANS

Upon receipt of Special Instructions (as such term is defined in Section 5 hereof), the Custodian shall, on behalf of the Account, appoint one or more banks, trust companies or other entities designated in such Special Instructions to act as a sub-custodian for the purposes of effecting such transaction(s) as may be designated by the Insurance Company in Special Instructions. Each such designated sub-custodian is referred to herein as a “Special Sub-Custodian.” Each such duly appointed Special Sub-Custodian shall be listed on Schedule D hereto, as it may be amended from time to time by the Insurance Company on behalf of the Account, with the acknowledgment of the Custodian. In connection with the appointment of any Special Sub-Custodian, and in accordance with Special Instructions, the Custodian shall enter into a sub-custodian agreement with the Insurance Company and the Special Sub-Custodian in form and substance approved by the Insurance Company, provided that such agreement shall in all events comply with the terms and provisions of this Agreement.

SECTION 5.      PROPER INSTRUCTIONS AND SPECIAL INSTRUCTIONS

“Proper Instructions” (excluding “Free of Payment” delivery of Account securities), which may also be “continuing instructions,” as such term is used throughout this Agreement, shall mean instructions received by the Custodian from the Insurance Company on behalf of the Account or, if applicable, the Account’s duly authorized investment manager or investment adviser, or a person or entity duly authorized by either of them. Such instructions may be in writing signed by two authorized persons or may be in a tested communication (e.g., a key pad or test key) or in a communication utilizing access codes effected between electro-mechanical or electronic devices or may be by such other means and utilizing such intermediary systems and utilities as may be agreed to from time to time by the Custodian and the person(s) or entity giving such instruction, provided that the Insurance Company has followed any security procedures agreed to from time to time by the Insurance Company and the Custodian including, but not limited to, the security procedures selected by the Insurance Company via the form of Funds Transfer Addendum attached hereto as Schedule E. Oral instructions (pursuant to procedures agreed to with Custodian in writing signed by the Insurance Company’s Treasurer) will be considered Proper Instructions if the Custodian reasonably believes them to have been given by a person authorized to provide such instructions with respect to the transaction involved. For purposes of this Section, Proper Instructions shall include instructions received by the Custodian pursuant to any multi-party agreement which requires a segregated asset account in accordance with Section 2.10 hereof.

“Proper Instructions--Free of Payment Delivery of Fund Securities (“Free of Payment”),” which may also be “continuing instructions,” as such term is used throughout this Agreement, shall mean instructions received by the Custodian from the Insurance Company on behalf of the Account or, if applicable, the Account’s duly authorized investment manager or investment adviser, or a person or entity duly authorized by either of them. Such instructions must be in writing manually signed by two authorized persons whose authority for authorizing “free of payment” instructions is specifically set forth in a writing signed by the (i) Executive Vice President and Chief Financial Officer of the Insurance Company or (ii) Treasurer of the Insurance Company or, in their absence, an Assistant Treasurer of the Insurance Company, when joined by (i) the Secretary of the Insurance Company or (ii) in the Secretary’s absence, an Assistant Secretary of the Insurance Company, in each case under corporate seal, provided, however, that the Insurance Company may specify to Custodian in writing an alternate list of officers of the Insurance Company who are authorized to carry out the purposes contemplated by this Section 5.

“Special Instructions,” as such term is used throughout this Agreement, means Proper Instructions countersigned or confirmed in writing by the Treasurer or any Assistant Treasurer of the Insurance Company or any other person designated in writing by the (i) Executive Vice President and Chief Financial Officer of the Insurance Company or (ii) Treasurer of the Insurance Company or, in their absence, an Assistant Treasurer of the Insurance Company, when joined by (i) the Secretary of the Insurance Company or (ii) in the Secretary’s absence, an Assistant Secretary of the Insurance Company, in each case under corporate seal, which countersignature or confirmation shall be (a) included on the same instrument containing the Proper Instructions or on a separate instrument clearly relating thereto and (b) delivered by hand, by facsimile transmission, or in such other manner as the Insurance Company and the Custodian agree in writing.

Concurrently with the execution of this Agreement, and from time to time thereafter, as appropriate, the Insurance Company shall deliver to the Custodian, duly certified by the (i) Executive Vice

President and Chief Financial Officer of the Insurance Company or (ii) Treasurer of the Insurance Company or, in their absence, an Assistant Treasurer of the Insurance Company, when joined by (i) the Secretary of the Insurance Company or (ii) in the Secretary’s absence, an Assistant Secretary of the Insurance Company, in each case under corporate seal, (except for Free of Payment as specified above) a certificate setting forth: (i) the names, titles, signatures and scope of authority of all persons authorized to give Proper Instructions or any other notice, request, direction, instruction, certificate or instrument on behalf of the Insurance Company; and (ii) the names, titles and signatures of those persons authorized to give Special Instructions. Such certificate may be accepted and relied upon by the Custodian as conclusive evidence of the facts set forth therein and shall be considered to be in full force and effect until receipt by the Custodian of a similar certificate to the contrary.

SECTION 6.     EVIDENCE OF AUTHORITY

The Custodian shall be protected in acting upon any instructions, notice, request, consent, certificate or other instrument or paper reasonably believed by it to be genuine and to have been properly executed by or on behalf of the Insurance Company on behalf of the Account. The Custodian may receive and accept a copy of a resolution certified by the (i) Executive Vice President and Chief Financial Officer of the Insurance Company or (ii) Treasurer of the Insurance Company or, in their absence, an Assistant Treasurer of the Insurance Company, when joined by (i) the Secretary of the Insurance Company or (ii) in the Secretary’s absence, an Assistant Secretary of the Insurance Company, in each case under corporate seal, as conclusive evidence (a) of the authority of any person to act in accordance with such resolution or (b) of any determination or of any action by the Insurance Company as described in such resolution, and such resolution may be considered as in full force and effect until receipt by the Custodian of written notice to the contrary.

SECTION 7.     ACTIONS PERMITTED WITHOUT EXPRESS AUTHORITY

The Custodian may in its discretion, without express authority from the Insurance Company on behalf of the Account:

	1)	Make payments to itself or others for minor expenses of handling securities or other similar items relating to its duties under this Agreement; provided that all such payments shall be properly and accurately accounted for to the Insurance Company;
	2)	Surrender securities in temporary form for securities in definitive form;
	3)	Endorse for collection, in the name of the Account, checks, drafts and other negotiable instruments; and
	4)	In general, attend to all non-discretionary details in connection with the sale, exchange, substitution, purchase, transfer and other dealings with the Assets of the Account, except as otherwise directed by the Insurance Company.
SECTION 8.		DUTIES OF CUSTODIAN WITH RESPECT TO THE BOOKS OF ACCOUNT ANDCALCULATION OF NET ASSET VALUE AND NET INCOME

The Custodian shall cooperate with and promptly supply necessary information from its records to the entity or entities appointed by the Insurance Company on behalf of the Account to perform investment accounting and recordkeeping functions for the assets of the Account and/or value the Assets held by the Account. The Insurance Company acknowledges and agrees that, with respect to investments maintained with the Underlying Transfer Agent, the Underlying Transfer Agent is the sole source of information on the number of shares of an Underlying Portfolio held by it on behalf of the Account and that the Custodian has the right to rely on holdings information furnished by the Underlying Transfer Agent to the Custodian in performing its duties under this Agreement, including without limitation, the duties set forth in this Section 8 and in Section 9 hereof; provided, however, that the Custodian shall be obligated to reconcile information as to purchases and sales of Underlying Shares contained in trade instructions and confirmations received by the Custodian and to report promptly any discrepancies to the Underlying Transfer Agent.

SECTION 9.     RECORDS

          SECTION 9.1      The Custodian shall with respect to the Account create and maintain the records relating to its activities and obligations under this Agreement that are listed in Schedule F, as well as any other accounts and records that can be readily produced from the Custodian’s computer systems without additional or modified functionality (“Supplemental Accounts and Records”) as the Insurance Company may instruct the Custodian to create and maintain, subject to consent by the Custodian, such consent not to be unreasonably withheld, for such compensation as the Custodian may reasonably request and to which the Insurance Company may reasonably agree, such agreement not to be unreasonably withheld. To the extent that certain information maintained by the Custodian is relied upon by the Insurance Company in the preparation of its annual statement and supporting schedules and the financial statements of the Account, the Custodian shall maintain records sufficient to verify information relating to the Assets that may be reported in the Insurance Company’s and Account’s annual or quarterly financial statements and supporting schedules as filed with regulatory authorities and/or delivered to contract holders of the Account. The Custodian acknowledges that all such accounts and records are the sole and exclusive property of the Insurance Company on behalf of and for the benefit of the Account, shall at all times during the normal business hours of the Custodian be open for inspection by duly authorized officers, employees or agents of the Insurance Company, the Insurance Company’s and Account’s (as applicable) independent registered public accounting firm (“Auditor”), employees and agents of the SEC, the U.S. Department of Labor, and any state securities or insurance regulatory authority, and will otherwise be delivered or made available to the Insurance Company for inspection or reproduction within a reasonable period of time, in each case upon the demand of the Insurance Company. The Custodian shall, at the Insurance Company’s request (including, but not limited to requests in connection with the preparation of the Account’s Registration Statement on Form S-1 (as amended from time to time, the “Registration Statement”), and including the prospectus, as supplemented from time to time, which comprises a part of such Registration Statement, and SEC Forms 10-K, 10-Q and 8-K), supply the Insurance Company with a tabulation of securities owned by the Account and held by the Custodian and shall, when requested to do so by the Insurance Company and for such compensation as shall be agreed upon between the Insurance Company and the Custodian, include certificate numbers in such tabulations. The Insurance Company acknowledges that, in creating and maintaining the records as set forth herein with respect to Account property released and delivered pursuant to Section 2.2(15), or purchased pursuant to Section 2.6(5) hereof, the Custodian is

authorized and instructed to rely upon information provided to it by the Insurance Company, the Insurance Company’s counterparty(ies), or the agents of either of them.

          SECTION 9.2     The Insurance Company on behalf of the Account and the Custodian shall comply with the reasonable requests of the other party for information necessary to the requestor’s performance of its duties in connection with this Agreement, or compliance with applicable law, including, without limitation, requests by the Auditor or review of books and records of the Account in connection with this Agreement.

          SECTION 9.3      In addition to the obligations of Section 9.1, upon request of the Insurance Company (which shall include reasonable advance notice), Custodian shall grant reasonable access, during normal business hours, to the Insurance Company’s and Account’s (as applicable) duly authorized officers, employees, investment manager or adviser, agents and Auditor (with such officers, employees, agents and Auditor all being subject to compliance with Custodian’s confidentiality and security policies and procedures), to Custodian’s business facilities and personnel to the extent such facilities and personnel are used in connection with Custodian’s services to be provided hereunder, for the purposes of: (i) conducting a due diligence review of Custodian’s technology systems to be used in providing custodial services; (ii) performing an audit in accordance with the Insurance Company’s own business continuity program(s); (iii) complying with any regulatory requirements applicable to the Insurance Company or Account, including, without limitation, obligations of the Insurance Company on behalf of the Account to evaluate and report on its system of internal controls under Section 404(a) of the Sarbanes-Oxley Act of 2002, implementing rules and regulations, applicable interpretations and applicable standards of the Public Company Accounting Oversight Board (“PCAOB”), as well as all requirements and interpretations applicable to the Account with respect to the valuation of the Assets; and (iv) conducting an annual or other periodic compliance review or audit by, or under the supervision of, the Principal Executive Officer (“PEO”) and/or Principal Financial Officer (“PFO”) of the Account.

          SECTION 9.4     Notwithstanding the foregoing provisions, Custodian reserves the right to impose reasonable limitations on the number, frequency, timing and scope of audits and inspections requested by the Insurance Company or its Auditor so as to prevent or minimize any potential impairment or disruption of its operations, distraction of its personnel or breaches of security, policies, confidentiality or regulatory limitations or requirements; provided, however, that the Custodian may not limit the number, frequency or timing of audits and inspections in connection with any investigation or other action by any regulatory or governmental body with supervisory authority over the Insurance Company or Account.

SECTION 10.     OPINION OF INSURANCE COMPANY’S INDEPENDENT PUBLIC ACCOUNTANTS

The Custodian shall take all reasonable action, as the Insurance Company with respect to the Account may from time to time request, to obtain from year to year favorable opinions from the Auditor with respect to its activities hereunder in connection with the preparation of the Insurance Company’s annual or periodic reports to its regulatory authorities, the Account’s annual or quarterly financial statements, and the Registration Statement (including any prospectus or prospectus supplement comprising a part thereof), the SEC’s Form 10-K, Form 10-Q, Form 8-K or other annual or periodic reports to the SEC, and with respect to any other requirements thereof.

SECTION 11.     REPORTS TO INSURANCE COMPANY BY INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Custodian shall provide the Insurance Company, on behalf of the Account, a SAS 70 Level II report by an independent registered public accounting firm on the accounting system, internal accounting control and procedures for safeguarding securities, futures contracts and options on futures contracts, including securities deposited and/or maintained in a U.S. Securities System or a Foreign Securities System (either, a “Securities System”), relating to the services provided by the Custodian under this Agreement, and upon request a letter updating the Insurance Company on the matters addressed in the Custodian’s SAS 70 Level II as of the date of the relevant fiscal period of the Account, to the extent that the relevant fiscal period of the Account differs by a period of three (3) or more months from the date as of which the SAS 70 Level II report is prepared. Such reports shall be of sufficient scope and in sufficient detail as may reasonably be required by the Insurance Company to provide reasonable assurance that any material inadequacies would be disclosed by such examination, and, if there are no such inadequacies, the reports shall so state. Such SAS 70 Level II report shall be provided at least once a year, or at such greater frequency as such SAS 70 Level II report is prepared. The Custodian shall notify the Insurance Company in writing of (i) any change in frequency of provision of SAS 70 Level II reports and (ii) if a SAS 70 Level II report is to be dated as of a different date than such report was previously dated. The Custodian shall also provide the Insurance Company, for a fee and at such times as the Insurance Company may reasonably request, reports received by the Custodian from a clearing corporation or the Federal Reserve book-entry system which the clearing corporation or the Federal Reserve permits to be redistributed on their respective systems of internal control when such reports relate to the services provided by Custodian under this Agreement.

SECTION 12.     COMPENSATION OF CUSTODIAN

In consideration for its services hereunder, the Custodian shall be paid the compensation set forth in a separate fee schedule, incorporated herein by reference, as may be amended by mutual consent of the parties from time to time.

SECTION 13.     RESPONSIBILITY OF THE CUSTODIAN; STANDARD OF CARE

          SECTION 13.1    INDEMNIFICATION ANDSTANDARD OF CARE. The Custodian shall give the Account assets at least the same care it gives its own property of a similar nature.In addition, the Custodian shall be held to the exercise of reasonable care in carrying out the provisions of this Agreement; provided, however, that to the extent not prohibited by the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), as applicable, the Custodian is not responsible or liable for, and the Insurance Company will promptly indemnify and hold the Custodian harmless from and against, any and all direct costs, expenses, losses, damages, charges, reasonable counsel fees, payments and liabilities that are incurred by the Custodian or for which the Custodian is held to be liable, arising out of or attributable to the Custodian’s entrance into this Agreement, as a result of the Custodian following any Proper Instructions, or as a result of any other action or inaction of the Custodian in the performance of its duties under this Agreement; and provided, further, that such indemnity and hold harmless obligation shall not apply to any costs, expenses, losses, damages, charges, reasonable counsel fees, payments or liabilities to the extent arising out of the Custodian’s negligence, bad faith or willful misconduct.

          Custodian shall be entitled to rely on and may act upon advice of counsel (who may be counsel for the Insurance Company and/or the Account) on all matters, and shall be without liability for any action reasonably taken or omitted pursuant to such advice. So long as and to the extent that the Custodian exercises such reasonable care, the Custodian shall not be responsible for the title, validity or genuineness of any property or evidence of title thereto received by it or delivered by it pursuant to this Agreement and shall be held harmless in acting upon any notice, request, consent, certificate or other instrument reasonably believed by it to be genuine and to be signed by the proper party or parties, including any futures commission merchant acting pursuant to the terms of a three-party futures or options agreement.

          Notwithstanding anything herein to the contrary (but subject to the provisions of the second paragraph of this Section 13.1 and the provisions of Section 13.2 below), and except with respect to Foreign Sub-Custodians in certain countries set forth on a separate written schedule, incorporated herein by reference, as it may be amended by mutual consent of the parties from time to time, Custodian shall be liable to the Insurance Company and Account for any loss which shall occur as the result of the failure of the Custodian or a Foreign Sub-Custodian to exercise reasonable care and diligence with respect to the safekeeping of the Account’s assets to the same extent that the Custodian would be liable to the Insurance Company and Account if the Custodian were holding such assets in New York; provided, however, that regardless of whether assets are maintained in the custody of a Foreign Sub-Custodian or a Foreign Securities System, the Custodian shall not be liable for any loss, damage, cost, expense, liability or claim resulting from or caused by nationalization, expropriation, currency restrictions, acts of war, revolution, riots or terrorism where the Foreign Sub-Custodian has otherwise acted with reasonable care; and provided, further, that Custodian shall not be responsible for the insolvency of a Foreign Sub-Custodian which is not an affiliate or subsidiary of the Custodian unless such appointment was made negligently or in bad faith. As to the Foreign Sub-Custodians employed in the countries listed on such separate written schedule from time to time, the Custodian shall have no more or less responsibility or liability to the Insurance Company and Account on account of any actions or omissions of any such Foreign Sub-Custodian so employed than such Foreign Sub-Custodian has to the Custodian. At the request of the Insurance Company, provided that each such request is reasonable and in good faith, Custodian agrees to reasonably and in good faith re-evaluate the prevailing circumstances in the countries then listed on such separate written schedule to determine whether any such country should be removed from such schedule.

          SECTION 13.2   OTHER LIMITATIONS OF CUSTODIAN’S LIABILITY. Except as may arise from the Custodian’s own negligence, bad faith, or willful misconduct or the negligence, bad faith, or willful misconduct of a sub-custodian, nominee or agent, the Custodian shall be without liability to the Insurance Company for any loss, liability, claim or expense resulting from or caused by: (i) events or circumstances beyond the reasonable control of the Custodian or any sub-custodian or Securities System or any agent or nominee of any of the foregoing, including, without limitation, the interruption, suspension or restriction of trading on or the closure of any securities market, power or other mechanical or technological failures or interruptions, computer viruses or communications disruptions, work stoppages, labor strikes, natural disasters, or other similar events or acts or (ii) errors by the Insurance Company or, if applicable, the Account’s duly authorized investment manager or investment adviser in their instructions to the Custodian provided such instructions have been given in accordance with this Agreement; (iii) the insolvency of or acts or omissions by a

Securities System; (iv) any act or omission of a Special Sub-Custodian including, without limitation, reliance on reports prepared by a Special Sub-Custodian; (v) any delay or failure of any broker, agent or intermediary, central bank or other commercially prevalent payment or clearing system to deliver to the Custodian’s sub-custodian or agent securities purchased or in the remittance or payment made in connection with securities sold; (vi) any delay or failure of any company, corporation, or other body in charge of registering or transferring securities in the name of the Custodian, the Account, the Custodian’s sub-custodians, nominees or agents or any consequential losses arising out of such delay or failure to transfer such securities including non-receipt of bonus, dividends and rights and other accretions or benefits; (vii) delays or inability to perform its duties due to any disorder in market infrastructure with respect to any particular security or Securities System; and (viii) any provision of any present or future law or regulation or order of the United States of America, or any state thereof, or any other country, or political subdivision thereof or of any court of competent jurisdiction.

          If the Insurance Company requires the Custodian to take any action with respect to securities, which action involves the payment of money or which action may, in the reasonable opinion of the Custodian, result in the Custodian or its nominee assigned with respect to the Insurance Company or the Account being liable for the payment of money or incurring liability of some other form, the Insurance Company, as a prerequisite to requiring the Custodian to take such action, shall provide reasonable indemnity to the Custodian in an amount and form mutually agreed to between the Custodian and the Insurance Company.

          SECTION 13.3   LIEN ON ASSETS. If the Insurance Company on behalf of the Account requires the Custodian, its affiliates, subsidiaries or agents, to advance cash or securities for any purpose (including but not limited to securities settlements, foreign exchange contracts and assumed settlement) or in the event that the Custodian or its nominee shall incur or be assessed any taxes, charges, expenses, assessments, claims or liabilities in connection with the performance of this Agreement, except such as may arise from its or its nominee’s own negligent action, negligent failure to act, bad faith, or willful misconduct, any property at any time held for the account of the Account shall be security therefor and should the Account fail to repay the Custodian promptly, the Custodian shall be entitled to utilize available cash and to dispose of the Account’s assets to the extent necessary to obtain reimbursement.

          SECTION 13.4   INDEMNIFICATION OF THE INSURANCE COMPANY AND ACCOUNT BY CUSTODIAN. Custodian shall promptly indemnify and hold the Insurance Company and Account harmless from and against any and all direct costs, expenses, losses, damages, charges, reasonable counsel fees, payments and liabilities that are incurred by the Insurance Company or the Account or for which the Insurance Company or the Account is held to be liable, to the extent arising out of or attributable to the failure of Custodian to exercise the standard of care set forth in Section 13.1 above; provided, however, that such indemnity and hold harmless obligation shall not apply to any costs, expenses, losses, damages, charges, reasonable counsel fees, payments or liabilities to the extent arising out of the Insurance Company’s negligence, bad faith or willful misconduct. In addition, Custodian shall indemnify the Insurance Company and the Account for any loss of securities of the Account held by Custodian under this Agreement occasioned in undertaking the performance of its obligations under this Agreement by (a) the negligence or dishonesty of Custodian or Custodian’s officers or employees or (b) damage, destruction, burglary, robbery, holdup, theft or mysterious disappearance of any such securities when Custodian has physical

possession of such securities. In the event there is a loss of the securities for which Custodian is obligated to indemnify the Insurance Company or Account as provided in the immediately preceding sentence, Custodian shall promptly replace, at its option, either the security or the value thereof measured as of the date of such loss and the value of any loss of rights or privileges resulting from said loss of the security. If Custodian replaces or reimburses for the loss of securities, and is later exonerated from liability, the Insurance Company or Account shall reimburse Custodian for the cost of such replacement or reimbursement.

          SECTION 13.5  INDEMNIFICATION PROCEDURES. Promptly after receipt by the Insurance Company (or Account) or Custodian of notice of a matter that may be covered under the indemnification provisions of Section 13.1 or 13.4, as applicable (“Claim”), such party (“Claimant”) shall notify the other (“Indemnitor”); provided, however, that a delay by Claimant in notifying Indemnitor of a Claim shall not permit Indemnitor to avoid its indemnification obligations hereunder except to the extent Indemnitor is actually prejudiced by such delay. The Claimant shall, at its own expense, provide the Indemnitor with such complete details and pleadings as are requested by the Indemnitor concerning the Claim and shall cooperate fully and in good faith with the Indemnitor in investigating and defending the Claim. The Indemnitor will be entitled to participate at its own expense in the defense, or, if it so elects, to assume the defense of any suit brought to enforce any liability subject to the indemnifications provided in Section 13.1 or 13.4, as applicable. In the event the Indemnitor elects to assume the defense of any such suit and retain counsel, the Claimant and/or any of its affiliated persons named as defendant or defendants in the suit may retain additional counsel but shall bear the fees and expenses of such counsel unless the Indemnitor shall have specifically authorized the retaining of such counsel or if there is a conflict between the Indemnitor and the Claimant. The Claimant shall in no event confess any claim or settle or make any compromise in any case in which the Indemnitor may be required to indemnify the Claimant except with the Indemnitor’s prior written consent.

          SECTION 13.6.   LIMITATION OF DAMAGES. Notwithstanding any provision herein to the contrary, none of the parties hereto shall be liable for any indirect, consequential, incidental, exemplary, punitive or special damages, even if such party has been apprised of the likelihood of such damages occurring.

          SECTION 13.7.    ERISAMATTERS. The Insurance Company acknowledges that some assets of the Account are subject to certain provisions of ERISA by reason of the fact that some of the Assets in the Account are “plan assets” of various employee benefit plans subject to ERISA as defined in Department of Labor Regulation Section 2510.3 -101. The Insurance Company and Custodian agree that in connection therewith, Custodian is a service provider only and not a fiduciary of any plan or trust to which the assets are related. Custodian shall not be considered a party to any agreement the Insurance Company may have with any plan or trust that may invest in the Account, and the Insurance Company hereby assumes all responsibility to assure that any instructions that it issues under this Agreement with respect to the Account are in compliance with all applicable requirements of ERISA.

          This Agreement will be interpreted so as to be in compliance with ERISA Section 404(b) and the Department of Labor Regulations Section 2550.404b -1 concerning the maintenance of the indicia of ownership of plan assets outside of the jurisdiction of the district courts of the United States. The Insurance Company on behalf of Account represents that it meets the requirements of the

Department of Labor Regulations Section 2550.404b -1(a)(2)(i)(B). The Insurance Company further represents that the Insurance Company has been duly appointed to manage and control the assets of the Account with power to employ agents or delegates with respect to such duties; and that notwithstanding such employment of agents or delegates, the Insurance Company retains its responsibility and duty to manage and control the assets of such plans.

SECTION 14.    EFFECTIVE PERIOD,TERMINATION AND AMENDMENT

          SECTION 14.1    This Agreement shall become effective as of the date first above written. The initial term of this Agreement is for a period of one (1) year from the date hereof. Thereafter, either the Insurance Company or Custodian may terminate this Agreement by written notice to the other party that is received not less than one hundred twenty (120) days prior to the date upon which such termination will take effect, in the case of termination by the Custodian, and not less than sixty (60) days prior to the date upon which such termination will take effect, in the case of termination by the Insurance Company. This Agreement may be amended at any time by mutual agreement of the parties hereto; provided, however, that neither party shall amend or terminate this Agreement in contravention of any applicable federal or state regulations, or, in the case of the Insurance Company, any provision of the Insurance Company’s Articles of Incorporation, By-Laws and other governing documents of the Insurance Company or the Account (such organizational and governing documents, generally, “Governing Documents”); and further provided, that the Insurance Company on behalf of the Account may at any time (i) substitute another bank or trust company for the Custodian by giving notice as described above to the Custodian, or (ii) immediately terminate this Agreement in the event of the appointment of a conservator or receiver for the Custodian by the Comptroller of the Currency or upon the happening of a like event at the direction of an appropriate regulatory agency or court of competent jurisdiction.

          SECTION 14.2    Upon termination of the Agreement, the Custodian shall receive such compensation as may be due as of the date of such termination (unless it is subject to reasonable dispute) and shall likewise be reimbursed for its reasonable costs, expenses and disbursements associated with its provision of services hereunder to the Insurance Company and the Account.

          SECTION 14.3    To the extent required by the Superintendent, the Custodian shall provide written notification to the Superintendent if this Agreement is terminated or if one hundred per cent (100%) of the assets have been withdrawn from the Account. Such notification, if required, shall be provided to the Superintendent within three (3) business days of the aforementioned events.

SECTION 15.    SUCCESSOR CUSTODIAN

          SECTION 15.1    If a successor custodian for the Account shall be appointed by the Insurance Company, the Custodian shall, upon termination and receipt of Proper Instructions, deliver to such successor custodian at the office of the Custodian, duly endorsed and in the form for transfer, all securities of the Account then held by it hereunder and shall transfer to an account of the successor custodian all of the securities of the Account held in a Securities System or at the Underlying Transfer Agent pursuant to this Agreement.

          SECTION 15.2    If no such successor custodian shall be appointed, the Custodian shall, in like manner, upon receipt of Proper Instructions, deliver at the office of the Custodian and transfer such securities, funds and other properties in accordance with such resolution.

          SECTION 15.3    In the event that no Proper Instructions designating a successor custodian or alternative arrangements shall have been delivered to the Custodian on or before the date when such termination shall become effective, then the Custodian shall have the right to deliver to a bank or trust company of its own selection doing business in New York, New York, having an aggregate capital, surplus, and undivided profits, as shown by its last published report, of not less than $25,000,000, all securities, funds and other properties held by the Custodian on behalf of the Account and all instruments held by the Custodian relative thereto and all other property held by it under this Agreement on behalf of the Account, and to transfer to an account of such successor custodian all of the securities of the Account held in any Securities System or at the Underlying Transfer Agent. Thereafter, such bank or trust company shall be the successor of the Custodian under this Agreement.

          SECTION 15.4    In the event that securities, funds and other properties remain in the possession of the Custodian after the date of termination hereof owing to failure of the Insurance Company to provide Proper Instructions as aforesaid, the Custodian shall be entitled to fair compensation for its services during such period as the Custodian retains possession of such securities, funds and other properties and the provisions of this Agreement relating to the duties and obligations of the Custodian shall remain in full force and effect.

SECTION 16.    GENERAL

          SECTION 16.1   NEW YORK LAW TO APPLY.This Agreement shall be construed and the provisions thereof interpreted under and in accordance with laws of the State of New York.

          SECTION 16.2    PRIOR AGREEMENTS. This Agreement supersedes and terminates, as of the date hereof, all prior Agreements between the Insurance Company on behalf of the Account and the Custodian relating to the custody of the Account’s assets.

          SECTION 16.3    ASSIGNMENT. This Agreement may not be assigned by (a) the Insurance Company without the written consent of the Custodian or (b) by the Custodian without the written consent of the Insurance Company. The Custodian shall have the right to delegate and sub-contract for the performance of any or all of its duties hereunder, provided, however, that the Custodian shall remain responsible for the performance of such duties and all the terms and conditions hereof shall continue to apply as though the Custodian performed such duties itself. All terms and provisions hereof will be binding upon, inure to the benefit of and be enforceable by the parties hereto and their respective successors and permitted assigns.

          SECTION 16.4    INTERPRETIVE AND ADDITIONAL PROVISIONS. In connection with the operation of this Agreement, the Custodian and the Insurance Company may from time to time agree on such provisions interpretive of or in addition to the provisions of this Agreement as may in their joint opinion be consistent with the general tenor of this Agreement, provided that no such interpretive or additional provisions shall contravene any applicable laws or regulations or any provision of the

Governing Documents. Any agreement as to interpretive or additional provisions shall be in a writing signed by all parties. Unless such writing specifically provides otherwise, no interpretive or additional provisions made as provided above shall be deemed to be an amendment of this Agreement.

          SECTION 16.5    THE PARTIES;REPRESENTATIONS AND WARRANTIES.

                       SECTION 16.5.1 REPRESENTATIONS AND WARRANTIES OF THE INSURANCE COMPANY. The Insurance Company hereby represents, warrants, covenants and acknowledges to Custodian as follows:

(i)	It is duly organized and is validly existing in good standing in its jurisdiction of organization.
(ii)	It has the requisite power and authority under applicable law and its Governing Documents to enter into, and perform its obligations under, this Agreement.
(iii)	All requisite proceedings and actions have been taken to authorize it to enter into and perform this Agreement.
(iv)	This Agreement constitutes the legal, valid and binding obligation of the Insurance Company with respect to the Account, enforceable in accordance with its terms.
(v)	Its entrance into this Agreement shall not cause a material breach or be in material conflict with any other agreement or obligation of the Insurance Company with respect to the Account or any law or regulation applicable to it.
(vi)	The person executing this Agreement on behalf of the Insurance Company has the authority to execute this Agreement on behalf of the Insurance Company with respect to the Account.
(vii)	The Account is not registered with the SEC as an investment company under the 1940 Act because it is not operated, and in the future is not expected to operate, such that it would be deemed an “investment company” for purposes of the 1940 Act.

                       SECTION 16.5.2 REPRESENTATIONS AND WARRANTIES OF THE CUSTODIAN. Custodian hereby represents, warrants, covenants and acknowledges to the Insurance Company as follows:

(i)	It is duly organized and is validly existing in good standing in its jurisdiction of incorporation or organization.
(ii)	It has the requisite power and authority under applicable law and its Governing Documents to enter into, and perform its obligations under, this Agreement;
(iii)	All requisite proceedings and actions have been taken to authorize it to enter into and perform this Agreement;
(iv)	This Agreement constitutes the legal, valid and binding obligation of Custodian, enforceable in accordance with its terms.

(v)	Its entrance into this Agreement shall not cause a material breach or be in material conflict with any other agreement or obligation of the Custodian or any law or regulation applicable to it.
(vi)	The person executing this Agreement on behalf of Custodian has the authority to execute this Agreement on behalf of Custodian.
(vii)	The Custodian shall meet with the PEO and/or PFO or their designees semi-annually, and at such other times as the PEO and/or PFO may reasonably request, upon reasonable notice, to discuss the Custodian’s compliance controls, policies and procedures. The Custodian further shall: (i) provide promptly to the PEO and PFO such documentation as the PEO and PFO shall reasonably request from time to time (subject to the Custodian’s applicable internal confidentiality and other policy restrictions) and (ii) cooperate with other reasonable efforts of the PEO and PFO to assess the compliance by the Custodian with applicable laws, rules and regulations.
(viii)	The Custodian shall notify the PEO and PFO in writing as promptly as is reasonably practicable following discovery by the Custodian of any violation of the federal securities laws by the Custodian in connection with the activities contemplated by this Agreement.

SECTION 16.6    OTHER AGREEMENTS.

          SECTION 16.6.1 REMOTE ACCESS SERVICES AGREEMENT. The Custodian and the Insurance Company agree to be bound by the terms of the Master Remote Access Services Agreement of even date herewith by and between the Insurance Company and Custodian and attached hereto as Schedule G (the “Remote Access Addendum”).

          SECTION 16.6.2 MUTUAL CONFIDENTIALITY AGREEMENT.The Custodian and the Insurance Company agree to be bound by the terms of the Mutual Confidentiality Agreement attached hereto as Schedule H.

          SECTION 16.7    INSTRUCTIONS AND NOTICES.Each party hereto shall designate from time to time the person(s) and address(es) to which Proper Instructions, notices and other communications related to the daily operations must be sent. All other notices or other communications given hereunder (including, but not limited to, termination, breach, or default notices) may be delivered: (i) in person to the offices of the parties at the addresses of the parties set forth below during normal business hours: (ii) by prepaid, certified U.S. mail (in which case it shall be deemed to have been served at the expiration of five business days after posting) to the addresses of the parties set forth below; (iii) by telecopy to the numbers of the parties set forth below (in which case it shall be deemed to have been served on the business day after the receipt thereof; provided, however, that written confirmation of transmission from the transmitting equipment must be delivered to the receiving party promptly thereafter for notice to be effective); or (iv) by any other means mutually agreed upon in writing by the parties. Either the Insurance Company or Custodian may change its delivery information from time to time by written notice given as aforesaid to the other.

To the Insurance Company:	TEACHERS INSURANCE AND ANNUITY ASSOCIATION
	OF AMERICA

	Attention: Treasurer
	730 Third Avenue
	New York, New York 10017-3206
	Telephone: 212-916-4288
	Facsimile/Telecopy: 212-916-4699
	With a copy to:
	TEACHERS INSURANCE AND ANNUITY ASSOCIATION
	OF AMERICA
	General Counsel – Asset Management
	730 Third Avenue
	New York, New York 10017-3206
	Telephone: 212-490-9000
	Facsimile/Telecopy: 212-916-5760
To the Custodian:	STATE STREET BANK AND TRUST COMPANY, N.A.
	Two World Financial Center
	225 Liberty St., 25th Floor
	New York, New York 10281
	Attention: Frank Eipper
	Telephone: (917) 790-4158
	With a copy to:
	STATE STREET BANK AND TRUST COMPANY
	1776 Heritage Drive
	Quincy, MA 02171
	Attention: James M. Keenan
	Telephone: 617-985-9422
	Facsimile/Telecopy: 617-985-7575
	With a copy to:
	STATE STREET BANK AND TRUST COMPANY
	801 Pennsylvania
	Kansas City, MO 64105
	Attention: Managing Counsel
	Telephone: 816-871-4100
	Telecopy: 816-871-9675

          SECTION 16.8  COUNTERPARTS. This Agreement may be executed in several counterparts (including facsimile counterparts), each of which shall be deemed to be an original, and all of such counterparts, when taken together, shall constitute one and the same original Agreement.

          SECTION 16.9   SEVERABILITY. If any provision or provisions of this Agreement shall be held to be invalid, unlawful or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired.

          SECTION 16.10 REPRODUCTION OF DOCUMENTS. This Agreement and all schedules, addenda, exhibits, attachments and amendments hereto may be reproduced by any photographic, photostatic, microfilm, micro-card, miniature photographic or other similar process. The parties hereto agree that any such reproduction shall be admissible in evidence as the original itself in any judicial or administrative proceeding, whether or not the original is in existence and whether or not such reproduction was made by a party in the regular course of business, provided that such reproduction is a true and accurate representation of the original. In addition, any enlargement, facsimile or further reproduction of such reproduction shall likewise be admissible in evidence, provided that it is a true and accurate representation of the original.

          SECTION 16.11 SHAREHOLDER COMMUNICATIONS ELECTION. SEC Rule 14b-2 under the Exchange Act requires banks which hold securities for the account of customers to respond to requests by issuers of securities for the names, addresses and holdings of beneficial owners of securities of that issuer held by the bank unless the beneficial owner has expressly objected to disclosure of this information. In order to comply with the rule, the Custodian needs the Insurance Company to indicate whether it authorizes the Custodian to provide the Insurance Company’s name, address, and share position to requesting companies whose securities the Insurance Company owns. If the Insurance Company tells the Custodian “no,” the Custodian will not provide this information to requesting companies. If the Insurance Company tells the Custodian “yes” or does not check either “yes” or “no” below, the Custodian is required by the rule to treat the Insurance Company as consenting to disclosure of this information for all securities owned by the Insurance Company or any funds or accounts established by the Insurance Company. For the Insurance Company’s protection, the Rule prohibits the requesting company from using the Insurance Company’s name and address for any purpose other than corporate communications. Please indicate below whether the Insurance Company consents or objects by checking one of the alternatives below.

YES [  ]	The Custodian is authorized to release the Insurance Company’s name, address, and share positions.
NO [X]	The Custodian is not authorized to release the Insurance Company’s name, address, and share positions.

          SECTION 16.12 BUSINESS CONTINUITY PLAN. Custodian shall maintain a comprehensive business continuity plan that is commercially reasonable and complies with applicable law, rules and regulations. Custodian will provide an executive summary of such plan upon reasonable request of the Insurance Company. Custodian will test the adequacy of its business continuity plan at least annually and shall report orally to the Insurance Company all material information relating to the results of such testing upon reasonable request of the Insurance Company; provided, however, that Custodian shall not be required to disclose any information that it treats as confidential in the ordinary course of its business. In the event of business disruption that materially impacts Custodian’s provision of service under this Agreement, Custodian will notify the Insurance Company of the disruption and the steps being taken in response.

          SECTION 16.13 SURVIVAL. The indemnification and other provisions of Section 13 and 16.6.2 shall survive the expiration, termination or cancellation of this Agreement.

          SECTION 16.14 INSURANCE. Custodian shall have in force and maintain, for its own protection, insurance in form and amount necessary to comply with the requirements of Custodian’s banking regulator.

          SECTION 16.15 AFFIDAVITS. Custodian shall provide, upon written request from the Superintendent or from the Insurance Company on behalf of the Account, an affidavit, on a form prescribed by the Superintendent, with respect to the Assets held by Custodian, whether by possession or in book entry form.

[Remainder of page left intentionally blank]
[Signature page(s) follow]

SIGNATURE PAGE

          In Witness Whereof, each of the parties has caused this Custodian Agreement to be executed in its name and on its behalf by its duly authorized representative as of the date first above-written.

Signature Attested to By:		TEACHERS INSURANCE AND ANNUITY
		ASSOCIATION OF AMERICA, ON BEHALF
		OF THE TIAA REAL ESTATE ACCOUNT
By:	/s/ Jorge C. Gutierrez	By:	/s/ Georganne Proctor
Name:	Jorge C. Gutierrez	Name:	Georganne Proctor
Title:	Assistant Treasurer	Title:	Executive Vice President and Chief
			Financial Officer
By:	/s/ Jorge C. Gutierrez	By:	/s/ Gary Chinery
Name:	Jorge C. Gutierrez	Name:	Gary Chinery
Title:	Assistant Treasurer	Title:	Vice President and Treasurer
Signature Attested to By:		STATE STREET BANK AND TRUST
		COMPANY, N.A.
By:	/s/ Craig E. Both	By:	/s/ Kenneth A. Bergeron
Name:	Craig E. Both	Name:	Kenneth A. Bergeron
Title:	Vice President	Title:	Senior Vice President

EX-14

EXHIBIT 14

TIAA AND TIAA-CREF FUNDS
CODE OF ETHICS
FOR
SENIOR FINANCIAL OFFICERS

Introduction

As noted in TIAA-CREF’s Code of Business Conduct:

TIAA-CREF is committed to the highest level of legal, ethical, and moral standards in the conduct of our business. This extends to every action we take in working with participants, educational institutions, and other business or investment organizations. Moreover, upholding high standards in dealing with others requires that we, as associates, act ethically and responsibly among ourselves. At the heart of ethical conduct is a commitment to serve others fairly and well.

The honesty, integrity and sound judgment of the principal executive officers, principal financial officers, principal accounting officers or controllers of TIAA and of the TIAA-CREF Funds (referred to herein collectively as the “Senior Financial Officers”) is fundamental to our reputation and success. Thus, in addition to complying with the Code of Business Conduct, each Senior Financial Officer is subject to this Code of Ethics.

Specific Provisions

          Conflicts of Interest. Each Senior Finance Officer should avoid actual or apparent conflicts of interest between personal and professional relationships.

          A “conflict of interest” occurs when a Senior Financial Officer’s private interest interferes with the interests of TIAA-CREF. For example, the Officer should not cause TIAA-CREF to take action, or fail to take action, for the personal benefit of the officer rather than the benefit of TIAA-CREF. Other conflicts could occur from outside business activities that detract from an individual’s ability to devote appropriate time and attention to TIAA-CREF. Any questions relating to potential conflict of interest situations should be discussed with the General Counsel.

          Complete and Accurate Disclosures. Each Senior Financial Officer is required to be familiar, and comply, with TIAA-CREF’s disclosure controls and procedures so that TIAA-CREF’s documents filed with the SEC comply in all material respects with the applicable federal securities laws. In addition, each Senior Financial Officer having direct or supervisory authority regarding SEC filings or TIAA-CREF’s other public communications should, to the extent appropriate within his or her area of responsibility, consult with other TIAA-CREF officers and employees and take other appropriate steps regarding these disclosures with the goal of making full, fair, accurate, timely and understandable disclosure.

Each Senior Financial Officer must:
•	Familiarize himself or herself with the disclosure requirements applicable to TIAA-CREF as well as the business and financial operations of TIAA-CREF;
•	Not knowingly misrepresent, or cause others to misrepresent, facts about TIAA-CREF to others, whether within or outside TIAA-CREF, including to TIAA-CREF’s internal auditors, independent Trustees, independent auditors, and to governmental regulators and self-regulatory organizations; and
•	Adhere to the standards and restrictions imposed by applicable laws, rules and regulations, including those relating to affiliated transactions, accounting and auditing matters.
Reporting and Accountability. Each Senior Financial Officer must:
•	Upon receipt of this Code of Ethics, sign and submit to the General Counsel an acknowledgement stating that he or she has received, read, and understands the Code;
•	Annually thereafter submit a form to General Counsel confirming that he or she has received, read and understands the Code of Ethics and has complied with the requirements of the Code; and
•	Notify the General Counsel promptly if he or she becomes aware of any existing or potential violation of this Code. Failure to do so is itself a violation of this Code.

          Except as described otherwise below, the General Counsel is responsible for applying this Code to specific situations and has the authority to interpret this Code in any particular situation. The General Counsel shall take all action he considers appropriate to investigate any actual or potential violations reported to him.

          The TIAA and TIAA-CREF Funds Audit Committees shall have the sole discretionary authority to approve any deviation or waiver from this Code of Ethics for their respective Senior Financial Officers. Any waiver, including an implicit waiver, shall be promptly disclosed as required either through an SEC filing or through a posting on TIAA-CREF’s Internet website. Such disclosure shall include a brief description of the nature of the waiver, the name of the person to whom the waiver was granted, and the date of the waiver. For purposes of such disclosure, the term “waiver” means the approval by the TIAA and TIAA-CREF Funds Audit Committee(s) of a material departure from a provision of this Code of Ethics, and the term “implicit waiver” means the Audit Committee’s failure to take action within a reasonable period of time regarding a material departure from a provision of this Code of Ethics.

          TIAA-CREF will promptly disclose any amendment to this Code of Ethics as required in accordance with the SEC’s rules.

EX-31

EXHIBIT 31

CERTIFICATIONS

          I, Herbert M. Allison, Jr., certify that:

          1. I have reviewed this annual report on Form 10-K of the TIAA Real Estate Account;

          2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

          3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

          4. The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

          a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

          b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

          c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

          d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

          5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

          a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

          b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 20, 2008	/s/ Herbert M. Allison, Jr.
	Herbert M. Allison, Jr.
	Chairman of the Board, President and Chief
	Executive Officer, Teachers Insurance and
	Annuity Association of America

          I, Georganne C. Proctor, certify that:

          1. I have reviewed this annual report on Form 10-K of the TIAA Real Estate Account;

          2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

          3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

          4. The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

          a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

          b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

          c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

          d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

          5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

          a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

          b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 20, 2008	/s/ Georganne C. Proctor
	Georganne C. Proctor
	Executive Vice President and Chief Financial
	Officer, Teachers Insurance and Annuity
	Association of America

EX-32

EXHIBIT 32

CERTIFICATION
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

          Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code), each of the undersigned officers of Teachers Insurance and Annuity Association of America, do hereby certify, to such officer’s knowledge, that:

          The annual report on Form 10-K of the TIAA Real Estate Account (the “Account”) for the year ended December 31, 2007 (the “Form 10-K”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in the Form 10-K fairly presents, in all material respects, the financial condition and results of operations of the Account.

Dated: March 20, 2008	/s/ Herbert M. Allison, Jr.
	Herbert M. Allison, Jr.
	Chairman of the Board, President and Chief
	Executive Officer, Teachers Insurance and Annuity
	Association of America
Dated: March 20, 2008	/s/ Georganne C. Proctor
	Georganne C. Proctor
	Executive Vice President and Chief Financial
	Officer, Teachers Insurance and Annuity
	Association of America

          A signed original of this written statement required by Section 906 has been provided to the TIAA Real Estate Account and will be retained by the Account and furnished to the Securities and Exchange Commission or its staff upon request.