Concentrations of Risk

The outbreak of the novel coronavirus (commonly known as “COVID-19”) and the subsequent global pandemic began significantly impacting the U.S. and global financial markets and economies during the quarter ended March 31, 2020. The worldwide spread of the COVID-19 pandemic has created significant uncertainty in the global economy. At this time the Account reasonably expects tenants will request certain rent relief and lease modifications as a result of the pandemic; however, such requests have not been significant as of March 31, 2020. The duration and extent of COVID-19 over the long-term cannot be reasonably estimated at this time. The ultimate impact of the COVID-19 pandemic and the extent to which the COVID-19 pandemic impacts the Account’s business, results of operations, investments, and cash flows will depend on future developments, which are highly uncertain and difficult to predict.

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

As of March 31, 2020, the Account had no significant concentrations of tenants as no single tenant had annual contract rent that made up more than 4% of the rental income of the Account. Moreover, the Account's tenants have no notable concentration present in any one industry. There are no significant lease expirations scheduled to occur over the next twelve months.

The Account’s wholly-owned real estate investments and investments in joint ventures are located in the United States. The following table represents the diversification of the Account’s portfolio by region and property type as of March 31, 2020 (unaudited):



Diversification by Fair Value⁽¹⁾
	West		East		South		Midwest		Total
Office	13.2	%	18.7	%	5.3	%	—	%	37.2	%
Apartment	10.0	%	6.6	%	8.1	%	1.0	%	25.7	%
Retail	6.8	%	3.9	%	8.0	%	0.9	%	19.6	%
Industrial	9.1	%	1.6	%	4.6	%	0.5	%	15.8	%
Other⁽²⁾	0.6	%	0.5	%	0.6	%	—	%	1.7	%
Total	39.7	%	31.3	%	26.6	%	2.4	%	100.0	%


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


⁽²⁾	Represents interests in Storage Portfolio investments, a hotel investment and land.

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

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

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

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