FORM 10-K

|(Mark One)
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|[x]       
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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.)

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 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 ____
|------ |  | -------

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]  Not Applicable

Indicate by check mark whether the registrant is an accelerated filer (as defined by Rule 12b-2 of the Act)

|YES ____ |  | NO X
|-------- |  | ----

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

Documents Incorporated by Reference: None

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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, when TIAA contributed
$100 million of seed money to the Account (all of which has been repaid by the Account), and interests in the Account were first offered to eligible participants on October 2, 1995.

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.

Investment Strategy. The Account seeks to invest between 70 percent to 95 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 will invest the remaining portion of its assets in government and corporate debt securities, money market instruments and other cash equivalents, and, at times, stock of companies that
dont 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.

2

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Net Assets and Portfolio Investments. As of December 31, 2004, the Accounts net assets totaled $7,245,549,986. At December 31, 2004, the Account held a total
of 102 real estate properties (including its interests in thirteen real estate-related joint ventures), representing 86.06% of the Accounts total investment portfolio. As of that date, the Account also held investments in real estate equity
securities, representing 4.25% of the portfolio, collateralized mortgage backed securities (CMBSs), representing 0.54% of the portfolio, real estate limited partnerships, representing 0.40% of the portfolio, and commercial paper and government
bonds, representing 8.75% of the portfolio.

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 Committee, 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 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, any 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.

ITEM 2. PROPERTIES.

THE PROPERTIESIN GENERAL

In the table below you will find general information about each of the Accounts portfolio properties as of December 31, 2004.

|                           |  |                   |  |                           |  |      |           |         |              |    |         |   |            | Annual Avg. |          |             |             |    
|-------------------------- |  | ----------------- |  | ------------------------- |  | ---- | --------- | ------- | ------------ | -- | ------- | - | ---------- | ----------- | -------- | ----------- | ----------- | ---
|                           |  |                   |  |                           |  |      |           |         | Rentable     |    |         |   |            | Base Rent   |          |             |             |    
|                           |  |                   |  | Year                      |  |      | Year      |         | Area         |    | Percent |   | Per Leased |             | Market   |            
|Property                   |  | Location          |  | Built                     |  |      | Purchased |         | (Sq. ft.)(1) |    | Leased  |   | Sq. Ft.(2) |             | Value(3) |            
|                           |  |                   |  |                           |  |      |           |         |              |    |         |   |            |             |          |             |            
|OFFICE PROPERTIES          |  |                   |  |                           |  |      |           |         |              |    |         |   |            |             |          |             |             |    
|1001 Pennsylvania Ave      |  | Washington, DC    |  | 1987                      |  |      | 2004      |         | 802,390      |    | 99      | % |            | $33.26      |          | $           | 466,424,940 | (4)
|IDX Tower                  |  | Seattle, WA       |  | 2002                      |  |      | 2004      |         | 845,533      |    | 95      | % |            | $34.51      |          | $           | 347,978,282 | (4)
|50 Fremont Street          |  | San Francisco, CA |  | 1983                      |  |      | 2004      |         | 817,412      |    | 90      | % |            | $41.11      |          | $           | 323,264,602 | (4)
|Four Oaks Place            |  | Houston, TX       |  | 1983                      |  |      | 2004      |         | 1,762,616    |    | 90      | % |            | $21.61      |          | $           | 255,357,238 |    
|Colorado Center(5)         |  | Santa Monica, CA  |  | 1984                      |  |      | 2004      |         | 1,082,952    |    | 89      | % |            | $25.16      |          | $           | 222,702,820 |    
|1900 K Street              |  | Washington, DC    |  | 1996                      |  |      | 2004      |         | 342,884      |    | 100     | % |            | $37.19      |          | $           | 219,453,706 |    
|780 Third Avenue           |  | New York, NY      |  | 1984                      |  |      | 1999      |         | 487,501      |    | 86      | % |            | $40.35      |          | $           | 197,000,000 |    
|701 Brickell               |  | Miami, FL         |  | 1986(6)                   |  | 2002 |           | 677,667 |              | 91 | %       |   | $25.83     |             | $        | 177,000,000 |            
|161 North Clark Street(7)  |  | Chicago, IL       |  | 1992                      |  |      | 2003      |         | 1,010,520    |    | 98      | % |            | $15.62      |          | $           | 157,282,972 |    
|Ten & Twenty               |  |                   |  |                           |  |      |           |         |              |    |         |   |            |             |          |             |             |    
|Westport Road              |  | Wilton, CT        |  | 1974(6);
            2001 |  |      | 2001      |         | 538,840      |    | 100     | % |            | $26.67      |          | $           | 148,000,000 |    
|Mellon Financial Center at |  |                   |  |                           |  |      |           |         |              |    |         |   |            |             |          |             |             |    
|One Boston Place(8)        |  | Boston, MA        |  | 1970(6)                   |  |      | 2002      |         | 785,415      |    | 92      | % |            | $31.65      |          | $           | 139,382,943 |    
|Treat Towers(7)            |  | Walnut Creek, CA  |  | 1999                      |  |      | 2003      |         | 367,313      |    | 100     | % |            | $29.94      |          | $           | 88,524,364  |    

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|                              |  |                      |  |               |  |  |            |  |              |  |         |   |            | Annual Avg. |          |   |               | 
|----------------------------- |  | -------------------- |  | ------------- |  |  | ---------- |  | ------------ |  | ------- | - | ---------- | ----------- | -------- | - | ------------- | 
|                              |  |                      |  |               |  |  |            |  | Rentable     |  |         |   |            | Base Rent   |          |   |               | 
|                              |  |                      |  | Year          |  |  | Year       |  | Area         |  | Percent |   | Per Leased |             | Market   |  
|Property                      |  | Location             |  | Built         |  |  | Purchased  |  | (Sq. ft.)(1) |  | Leased  |   | Sq. Ft.(2) |             | Value(3) |  
|                              |  |                      |  |               |  |  |            |  |              |  |         |   |            |             |          |   |              
|Morris Corporate Center III   |  | Parsippany, NJ       |  | 1990          |  |  | 2000       |  | 525,154      |  | 85      | % |            | $18.70      |          | $ | 82,300,000    | 
|Prominence in Buckhead(7)     |  | Atlanta, GA          |  | 1999          |  |  | 2003       |  | 424,309      |  | 95      | % |            | $26.84      |          | $ | 80,618,771    | 
|88 Kearny Street              |  | San Francisco, CA    |  | 1986          |  |  | 1999       |  | 228,470      |  | 75      | % |            | $31.54      |          | $ | 69,026,718    | 
|Oak Brook Regency Towers      |  | Oakbrook, IL         |  | 1977(6)       |  |  | 2002       |  | 402,318      |  | 77      | % |            | $11.62      |          | $ | 68,400,000    | 
|Corporate Boulevard           |  | Rockville, MD        |  | 1984-1989     |  |  | 2002       |  | 339,786      |  | 92      | % |            | $21.55      |          | $ | 65,038,710    | 
|Centerside I                  |  | San Diego, CA        |  | 1982          |  |  | 2004       |  | 205,137      |  | 89      | % |            | $25.00      |          | $ | 65,037,900    | 
|1015 15th Street              |  | Washington, DC       |  | 1978(6)       |  |  | 2001       |  | 184,825      |  | 90      | % |            | $27.18      |          | $ | 59,000,134    | 
|Sawgrass Office Portfolio     |  | Sunrise, FL          |  | 1997-2000     |  |  | 1997,      |  | 344,009      |  | 92      | % |            | $12.45      |          | $ | 52,000,000    | 
|                              |  |                      |  |               |  |  | 1999-2000  |  |              |  |         |   |            |             |          |   |               | 
|West Lake North               |  |                      |  |               |  |  |            |  |              |  |         |   |            |             |          |   |               | 
|Business Park                 |  | Westlake Village, CA |  | 2000          |  |  | 2004       |  | 198,558      |  | 100     | % |            | $24.88      |          | $ | 50,021,000    | 
|Parkview Plaza(9)             |  | Oakbrook, IL         |  | 1990          |  |  | 1997       |  | 263,912      |  | 96      | % |            | $19.56      |          | $ | 48,700,000    | 
|The Farragut Building         |  | Washington, DC       |  | 1962(6)       |  |  | 2002       |  | 144,296      |  | 52      | % |            | $21.87      |          | $ | 46,500,000    | 
|One Virginia Square           |  | Arlington, VA        |  | 1999          |  |  | 2004       |  | 117,967      |  | 100     | % |            | $31.81      |          | $ | 42,500,000    | 
|Capitol Place                 |  | Sacramento, CA       |  | 1988(6)       |  |  | 2003       |  | 151,803      |  | 93      | % |            | $26.04      |          | $ | 42,400,000    | 
|3 Hutton Centre               |  | Santa Ana, CA        |  | 1985
	    (6) |  |  | 2003       |  | 197,817      |  | 94      | % |            | $20.56      |          | $ | 41,106,333    | 
|The Pointe on Tampa Bay       |  | Tampa, FL            |  | 1982(6)       |  |  | 2002       |  | 249,215      |  | 91      | % |            | $20.48      |          | $ | 40,551,310    | 
|Monument Place                |  | Fairfax, VA          |  | 1990          |  |  | 1999       |  | 221,538      |  | 92      | % |            | $21.13      |          | $ | 37,000,000    | 
|Maitland Promenade One        |  | Maitland, FL         |  | 1999          |  |  | 2000       |  | 227,814      |  | 96      | % |            | $20.51      |          | $ | 36,053,639    | 
|BISYS Fund Services           |  |                      |  |               |  |  |            |  |              |  |         |   |            |             |          |   |               | 
|Building(10)                  |  | Eaton, OH            |  | 1995; 2002    |  |  | 1999; 2002 |  | 238,641      |  | 100     | % |            | $14.54      |          | $ | 34,751,940    | 
|Biltmore Commerce Center      |  | Phoenix, AZ          |  | 1985          |  |  | 1999       |  | 259,792      |  | 94      | % |            | $18.84      |          | $ | 34,104,182    | 
|4200 West Cypress Street      |  | Tampa, FL            |  | 1989          |  |  | 2003       |  | 220,579      |  | 99      | % |            | $20.85      |          | $ | 33,900,000    | 
|Columbia Centre III           |  | Rosemont, IL         |  | 1989          |  |  | 1997       |  | 238,696      |  | 69      | % |            | $14.93      |          | $ | 28,900,000    | 
|Fairgate at Ballston(9)       |  | Arlington, VA        |  | 1988          |  |  | 1997       |  | 137,117      |  | 54      | % |            | $13.87      |          | $ | 28,500,017    | 
|Tysons Executive Plaza II(11) |  | McLean, VA           |  | 1988          |  |  | 2000       |  | 259,614      |  | 88      | % |            | $19.76      |          | $ | 27,894,742    | 
|10 Waterview Boulevard        |  | Parsippany, NJ       |  | 1984          |  |  | 1999       |  | 209,553      |  | 64      | % |            | $14.00      |          | $ | 26,400,000    | 
|9 Hutton Centre               |  | Santa Ana, CA        |  | 1990          |  |  | 2001       |  | 148,265      |  | 81      | % |            | $17.87      |          | $ | 23,169,449    | 
|Columbus Portfolio            |  |                      |  |               |  |  |            |  | 259,626      |  | 77      | % |            | $7.72       |          | $ | 21,500,000    | 
|Metro South Building          |  | Dublin, OH           |  | 1997          |  |  | 1999       |  | 90,726       |  | 67      | % |            |             |          |   |              | 
|Vision Service Plan Building  |  | Eaton, OH            |  | 1997          |  |  | 1999       |  | 50,000       |  | 100     | % |            |             |          |   |              | 
|One Metro Place               |  | Dublin, OH           |  | 1998          |  |  | 2001       |  | 118,900      |  | 77      | % |            |             |          |   |              | 
|Needham Corporate Center      |  | Needham, MA          |  | 1987          |  |  | 2001       |  | 138,684      |  | 100     | % |            | $14.38      |          | $ | 15,030,046    | 
|Five Centerpointe(9)          |  | Lake Oswego, OR      |  | 1988          |  |  | 1997       |  | 113,910      |  | 86      | % |            | $16.62      |          | $ | 14,500,000    | 
|Batterymarch Park II          |  | Quincy, MA           |  | 1986          |  |  | 2001       |  | 104,718      |  | 69      | % |            | $13.06      |          | $ | 10,700,000    | 
|371 Hoes Lane                 |  | Piscataway, NJ       |  | 1986          |  |  | 1997       |  | 136,084      |  | 78      | % |            | $9.44       |          | $ | 10,666,570    | 
|                              |  |                      |  |               |  |  |            |  |              |  |         |   |            |             |          |   |               | 
|SubtotalOffice Properties    |  |                      |  |               |  |  |            |  |              |  |         |   |            |             |          | $ | 3,978,643,328 | 
|                              |  |                      |  |               |  |  |            |  |              |  |         |   |            |             |          |   |               | 

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|                             |  |                   |  |           |  |  |             |  |              |  |         |   |            | Annual Avg. |          |   |             |    
|---------------------------- |  | ----------------- |  | --------- |  |  | ----------- |  | ------------ |  | ------- | - | ---------- | ----------- | -------- | - | ----------- | ---
|                             |  |                   |  |           |  |  |             |  | Rentable     |  |         |   |            | Base Rent   |          |   |             |    
|                             |  |                   |  | Year      |  |  | Year        |  | Area         |  | Percent |   | Per Leased |             | Market   |  
|Property                     |  | Location          |  | Built     |  |  | Purchased   |  | (Sq. ft.)(1) |  | Leased  |   | Sq. Ft.(2) |             | Value(3) |  
|                             |  |                   |  |           |  |  |             |  |              |  |         |   |            |             |          |   |            
|                            
|INDUSTRIAL PROPERTIES        |  |                   |  |           |  |  |             |  |              |  |         |   |            |             |          |   |             |    
|Ontario Industrial Portfolio |  |                   |  |           |  |  |             |  | 3,584,769    |  | 100     | % |            | $3.58       |          | $ | 187,079,256 | (4)
|Timberland Building          |  | Ontario, CA       |  | 1998      |  |  | 1998        |  | 414,435      |  |         |   |            |             |          |   |            |    
|5200 Airport Drive           |  | Ontario, CA       |  | 1997      |  |  | 1998        |  | 404,500      |  |         |   |            |             |          |   |            |    
|1200 S. Etiwanda Ave.        |  | Ontario, CA       |  | 1998      |  |  | 1998        |  | 223,170      |  |         |   |            |             |          |   |            |    
|Park Mira Loma West          |  | Mira Loma, CA     |  | 1998      |  |  | 1998        |  | 557,500      |  |         |   |            |             |          |   |            |    
|Wineville Center Buildings   |  | Mira Loma, CA     |  | 1999      |  |  | 2000        |  | 1,099,112    |  |         |   |            |             |          |   |            |    
|Harrell Street               |  | Mira Loma, CA     |  | 1998      |  |  | 2004        |  | 886,052      |  |         |   |            |             |          |   |            |    
|Dallas Industrial Portfolio  |  | Dallas and        |  | 1997-     |  |  | 2000-       |  | 3,763,886    |  | 80      | % |            | $2.39       |          | $ | 138,500,000 |    
|(formerly Parkwest Center)   |  | Coppell, TX       |  | 2001      |  |  | 2002        |  |              |  |         |   |            |             |          |   |             |    
|Southern California          |  |                   |  |           |  |  |             |  |              |  |         |   |            |             |          |   |             |    
|RA Industrial Portfolio      |  | Los Angeles, CA   |  | 1982      |  |  | 2004        |  | 920,028      |  | 94      | % |            | $6.92       |          | $ | 89,097,299  |    
|Chicago Industrial Portfolio |  | Chicago and       |  | 1997-     |  |  | 1998;       |  | 1,452,974    |  | 90      | % |            | $3.40       |          | $ | 70,002,239  |    
|(consolidation of Rockrun,   |  | Joliet, IL        |  | 2000      |  |  | 2000        |  |              |  |         |   |            |             |          |   |             |    
|Glen Pointe and Woodcreek    |  |                   |  |           |  |  |             |  |              |  |         |   |            |             |          |   |             |    
|Business Parks)              |  |                   |  |           |  |  |             |  |              |  |         |   |            |             |          |   |             |    
|IDI National Portfolio(12)   |  | Various, U.S.     |  | 1999-2004 |  |  | 2004        |  | 3,655,671    |  | 89      | % |            | $2.38       |          | $ | 64,041,442  |    
|Cabot Industrial Portfolio   |  | Rancho            |  | 2000-2002 |  |  | 2000; 2001; |  | 1,214,475    |  | 100     | % |            | $3.44       |          | $ | 60,600,000  |    
|                             |  | Cucamonga, CA     |  |           |  |  | 2002; 2004  |  |              |  |         |   |            |             |          |   |             |    
|Northern California          |  |                   |  |           |  |  |             |  |              |  |         |   |            |             |          |   |             |    
|RA Industrial Portfolio      |  | Oakland, CA       |  | 1981      |  |  | 2004        |  | 741,456      |  | 94      | % |            | $5.20       |          | $ | 59,169,642  |    
|Rainier Corporate Park       |  | Fife, WA          |  | 1991-1997 |  |  | 2003        |  | 1,104,646    |  | 99      | % |            | $3.52       |          | $ | 56,035,878  |    
|IDI Kentucky Portfolio       |  |                   |  |           |  |  |             |  |              |  |         |   |            |             |          |   |             |    
|(formerly, Parkwest Intl)   |  |                   |  |           |  |  |             |  | 1,437,022    |  | 100     | % |            | $3.40       |          | $ | 49,000,000  |    
|Building C                   |  | Hebron, KY        |  | 1998      |  |  | 1998        |  | 520,000      |  |         |   |            |             |          |   |            |    
|Building D                   |  | Hebron, KY        |  | 1998      |  |  | 1998        |  | 184,800      |  |         |   |            |             |          |   |            |    
|Building E                   |  | Hebron, KY        |  | 2000      |  |  | 2000        |  | 207,222      |  |         |   |            |             |          |   |            |    
|Building J                   |  | Hebron, KY        |  | 2000      |  |  | 2000        |  | 525,000      |  |         |   |            |             |          |   |            |    
|Memphis CALEast              |  |                   |  |           |  |  |             |  |              |  |         |   |            |             |          |   |             |    
|Industrial Portfolio         |  | Memphis, TN       |  | 1996-1997 |  |  | 2003        |  | 1,600,232    |  | 94      | % |            | $2.22       |          | $ | 47,400,000  |    
|Northpointe                  |  |                   |  |           |  |  |             |  |              |  |         |   |            |             |          |   |             |    
|Commerce Center              |  | Fullerton, CA     |  | 1990-1994 |  |  | 2000        |  | 612,023      |  | 81      | % |            | $4.56       |          | $ | 46,000,000  |    
|Chicago CALEast              |  | Chicago, IL       |  | 1974-1999 |  |  | 2003        |  | 834,549      |  | 96      | % |            | $3.47       |          | $ | 42,000,000  |    
|Industrial Portfolio         |  |                   |  |           |  |  |             |  |              |  |         |   |            |             |          |   |             |    
|New Jersey CALEast           |  | Cranbury, NJ      |  | 1982-1989 |  |  | 2003        |  | 807,773      |  | 100     | % |            | $4.39       |          | $ | 39,300,000  |    
|Industrial Portfolio         |  |                   |  |           |  |  |             |  |              |  |         |   |            |             |          |   |             |    
|Atlanta Industrial Portfolio |  | Lawrenceville, GA |  | 1996-99   |  |  | 2000        |  | 1,145,693    |  | 83      | % |            | $1.81       |          | $ | 37,750,840  |    
|South River Road Industrial  |  | Cranbury, NJ      |  | 1999      |  |  | 2001        |  | 626,071      |  | 100     | % |            | $4.68       |          | $ | 34,900,000  |    
|Northeast RA Industrial      |  |                   |  |           |  |  |             |  |              |  |         |   |            |             |          |   |             |    
|Portfolio                    |  | Boston, MA        |  | 2000      |  |  | 2004        |  | 384,000      |  | 100     | % |            | $6.50       |          | $ | 33,110,903  |    
|Centre Pointe and            |  | Los Angeles       |  | 1965-1989 |  |  | 2004        |  | 307,685      |  | 97      | % |            | $4.50       |          | $ | 25,329,023  |    
|Valley View                  |  | County, CA        |  |           |  |  |             |  |              |  |         |   |            |             |          |   |             |    
|Summit Distribution Center   |  | Memphis, TN       |  | 2002      |  |  | 2003        |  | 708,532      |  | 100     | % |            | $2.52       |          | $ | 23,800,000  |    
|East North Central           |  |                   |  |           |  |  |             |  |              |  |         |   |            |             |          |   |             |    
|RA Industrial Portfolio      |  | Chicago, IL       |  | 1978      |  |  | 2004        |  | 375,664      |  | 82      | % |            | $3.99       |          | $ | 23,734,331  |    
|Konica Photo Imaging         |  |                   |  |           |  |  |             |  |              |  |         |   |            |             |          |   |             |    
|Headquarters                 |  | Mahwah, NJ        |  | 1999      |  |  | 1999        |  | 168,000      |  | 100     | % |            | $10.61      |          | $ | 21,200,000  |    

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|                               |  |                     |  |          |  |  |           |  |              |      |  |         |   |            | Annual Avg. |               |   |               | 
|------------------------------ |  | ------------------- |  | -------- |  |  | --------- |  | ------------ | ---- |  | ------- | - | ---------- | ----------- | ------------- | - | ------------- | 
|                               |  |                     |  |          |  |  |           |  | Rentable     |      |  |         |   |            | Base Rent   |               |   |               | 
|                               |  |                     |  | Year     |  |  | Year      |  | Area         |      |  | Percent |   | Per Leased |             | Market        |  
|Property                       |  | Location            |  | Built    |  |  | Purchased |  | (Sq. ft.)(1) |      |  | Leased  |   | Sq. Ft.(2) |             | Value(3)      |  
|                               |  |                     |  |          |  |  |           |  |              |      |  |         |   |            |             |               |   |              
|Northwest RA Industrial        |  |                     |  |          |  |  |           |  |              |      |  |         |   |            |             |               |   |               | 
|Portfolio                      |  | Seattle, WA         |  | 1996     |  |  | 2004      |  | 312,321      |      |  | 100     | % |            | $4.54       |               | $ | 19,438,852    | 
|Eastgate Distribution Center   |  | San Diego, CA       |  | 1996     |  |  | 1997      |  | 200,000      |      |  | 100     | % |            | $6.68       |               | $ | 18,800,000    | 
|Mideast RA Industrial          |  |                     |  |          |  |  |           |  |              |      |  |         |   |            |             |               |   |               | 
|Portfolio                      |  | Wilmington, DE      |  | 1989     |  |  | 2004      |  | 266,141      |      |  | 82      | % |            | $5.65       |               | $ | 16,543,121    | 
|UPS Distribution Facility      |  | Fernley, NV         |  | 1998     |  |  | 1998      |  | 256,000      |      |  | 100     | % |            | $4.07       |               | $ | 12,900,000    | 
|Landmark at Salt Lake City     |  |                     |  |          |  |  |           |  |              |      |  |         |   |            |             |               |   |               | 
|Building #4                    |  | Salt Lake City, UT  |  | 2000     |  |  | 2000      |  | 328,508      |      |  | 100     | % |            | $3.57       |               | $ | 12,500,000    | 
|FEDEX Distribution Facility    |  | Crofton, MD         |  | 1998     |  |  | 1998      |  | 110,842      |      |  | 100     | % |            | $7.18       |               | $ | 8,200,000     | 
|Interstate Crossing            |  | Eagan, MN           |  | 1995     |  |  | 1996      |  | 131,380      |      |  | 89      | % |            | $4.63       |               | $ | 7,300,000     | 
|Mountain RA Industrial         |  |                     |  |          |  |  |           |  |              |      |  |         |   |            |             |               |   |               | 
|Portfolio                      |  | Phoenix, AZ         |  | 1989     |  |  | 2004      |  | 136,704      |      |  | 100     | % |            | $3.46       |               | $ | 5,513,947     | 
|Butterfield Industrial Park    |  | El Paso, TX         |  | 1980-81  |  |  | 1995      |  | 183,510      |      |  | 100     | % |            | $3.06       |               | $ | 4,600,000     | 
|River Road Distribution        |  |                     |  |          |  |  |           |  |              |      |  |         |   |            |             |               |   |               | 
|Center                         |  | Fridley, MN         |  | 1995     |  |  | 1995      |  | 100,456      |      |  | 100     | % |            | $2.03       |               | $ | 4,600,000     | 
|                               |  |                     |  |          |  |  |           |  |              |      |  |         |   |            |             |               |   |               | 
|SubtotalIndustrial Properties |  |                     |  |          |  |  |           |  |              |      |  |         |   |            |             |               | $ | 1,258,446,773 | 
|                               |  |                     |  |          |  |  |           |  |              |      |  |         |   |            |             |               |   |               | 
|RETAIL PROPERTIES              |  |                     |  |          |  |  |           |  |              |      |  |         |   |            |             |               |   |               | 
|The Florida Mall(13)           |  | Orlando, FL         |  | 1986(6)  |  |  | 2002      |  | 921,370      | (14) |  | 98      | % |            | $35.05      |               | $ | 162,632,565   | 
|West Town Mall(13)             |  | Knoxville, TN       |  | 1972(6)  |  |  | 2002      |  | 684,777      | (14) |  | 98      | % |            | $19.16      |               | $ | 107,452,790   | 
|Mazza Gallerie                 |  | Washington, DC      |  | 1975     |  |  | 2004      |  | 293,935      |      |  | 94      | % |            | $35.85      |               | $ | 81,000,000    | 
|Westwood Marketplace           |  | Los Angeles, CA     |  | 1950(15) |  |  | 2002      |  | 202,201      |      |  | 100     | % |            | $26.97      |               | $ | 80,019,410    | 
|Miami International Mall(13)   |  | Miami, FL           |  | 1982(6)  |  |  | 2002      |  | 290,299      | (14) |  | 95      | % |            | $28.44      |               | $ | 61,577,256    | 
|The Market at Southpark        |  | Littleton, CO       |  | 1988     |  |  | 2004      |  | 190,080      |      |  | 94      | % |            | $10.84      |               | $ | 33,522,400    | 
|Rolling Meadows                |  | Rolling Meadows, IL |  | 1957(6)  |  |  | 1997      |  | 130,909      |      |  | 100     | % |            | $10.70      |               | $ | 15,750,000    | 
|Plantation Grove               |  | Ocoee, FL           |  | 1995     |  |  | 1995      |  | 73,655       |      |  | 99      | % |            | $10.76      |               | $ | 11,200,000    | 
|                               |  |                     |  |          |  |  |           |  |              |      |  |         |   |            |             |               |   |               | 
|SubtotalRetail Properties     |  |                     |  |          |  |  |           |  |              |      |  |         |   |            |             |               | $ | 553,154,421   | 
|                               |  |                     |  |          |  |  |           |  |              |      |  |         |   |            |             |               |   |               | 
|SubtotalCommercial Properties |  |                     |  |          |  |  |           |  |              |      |  |         |   |            | $           | 5,790,244,522 |  
|                               |  |                     |  |          |  |  |           |  |              |      |  |         |   |            |             |               |  
|RESIDENTIAL PROPERTIES(16)     |  |                     |  |          |  |  |           |  |              |      |  |         |   |            |             |               |  
|The Legacy at Westwood         |  |                     |  |          |  |  |           |  |              |      |  |         |   |            |             |               |   |               | 
|Apartments                     |  | Los Angeles, CA     |  | 2001     |  |  | 2002      |  | NA           |      |  | 97      | % |            | NA          |               | $ | 90,750,000    | 
|Longwood Towers                |  | Brookline, MA       |  | 1926(6)  |  |  | 2002      |  | NA           |      |  | 89      | % |            | NA          |               | $ | 82,500,000    | 
|Ashford Meadows                |  |                     |  |          |  |  |           |  |              |      |  |         |   |            |             |               |   |               | 
|Apartments                     |  | Herndon, VA         |  | 1998     |  |  | 2000      |  | NA           |      |  | 91      | % |            | NA          |               | $ | 68,000,000    | 
|Larkspur Courts                |  | Larkspur, CA        |  | 1991     |  |  | 1999      |  | NA           |      |  | 96      | % |            | NA          |               | $ | 66,000,000    | 
|The Colorado                   |  | New York, NY        |  | 1987     |  |  | 1999      |  | NA           |      |  | 98      | % |            | NA          |               | $ | 58,156,056    | 
|Regents Court Apartments       |  | San Diego, CA       |  | 2001     |  |  | 2002      |  | NA           |      |  | 92      | % |            | NA          |               | $ | 56,700,000    | 
|South Florida Apartment        |  | Boca Raton and      |  | 1986     |  |  | 2001      |  | NA           |      |  | 96      | % |            | NA          |               | $ | 47,700,000    | 
|Portfolio                      |  | Plantation, FL      |  |          |  |  |           |  |              |      |  |         |   |            |             |               |   |               | 
|Alexan Buckhead                |  | Atlanta, GA         |  | 2002     |  |  | 2002      |  | NA           |      |  | 97      | % |            | NA          |               | $ | 37,500,000    | 
|The Lodge at Willow Creek      |  | Denver, CO          |  | 1997     |  |  | 1997      |  | NA           |      |  | 87      | % |            | NA          |               | $ | 32,201,274    | 

6

---



|                                |  |                      |  |           |  |           |  |              |  |         |   |            | Annual Avg. |             |   |               | 
|------------------------------- |  | -------------------- |  | --------- |  | --------- |  | ------------ |  | ------- | - | ---------- | ----------- | ----------- | - | ------------- | 
|                                |  |                      |  |           |  |           |  | Rentable     |  |         |   |            | Base Rent   |             |   |               | 
|                                |  |                      |  | Year      |  | Year      |  | Area         |  | Percent |   | Per Leased |             | Market      |  
|Property                        |  | Location             |  | Built     |  | Purchased |  | (Sq. ft.)(1) |  | Leased  |   | Sq. Ft.(2) |             | Value(3)    |  
|                                |  |                      |  |           |  |           |  |              |  |         |   |            |             |             |   |              
|Lincoln Woods Apartments        |  | Lafayette Hill, PA   |  | 1991      |  | 1997      |  | NA           |  | 90      | % |            | NA          |             | $ | 31,472,870    | 
|Golfview Apartments             |  | Lake Mary, FL        |  | 1998      |  | 1998      |  | NA           |  | 97      | % |            | NA          |             | $ | 28,543,437    | 
|Westcreek Apartments            |  | Westlake Village, CA |  | 1988      |  | 1997      |  | NA           |  | 95      | % |            | NA          |             | $ | 28,161,865    | 
|Kenwood Mews Apartments         |  | Burbank, CA          |  | 1991      |  | 2001      |  | NA           |  | 99      | % |            | NA          |             | $ | 27,700,000    | 
|The Legends at Chase Oaks       |  | Plano, TX            |  | 1997      |  | 1998      |  | NA           |  | 94      | % |            | NA          |             | $ | 27,051,851    | 
|Monte Vista                     |  | Littleton, CO        |  | 1995      |  | 1996      |  | NA           |  | 97      | % |            | NA          |             | $ | 22,501,650    | 
|Royal St. George                |  | W. Palm Beach, FL    |  | 1995      |  | 1996      |  | NA           |  | 44      | % |            | NA          |             | $ | 19,400,000    | 
|Quiet Waters at                 |  |                      |  |           |  |           |  |              |  |         |   |            |             |             |   |               | 
|Coquina Lakes                   |  | Deerfield Beach, FL  |  | 1995      |  | 2001      |  | NA           |  | 97      | % |            | NA          |             | $ | 19,200,000    | 
|Indian Creek Apartments         |  | Farmington Hills, MI |  | 1988      |  | 1998      |  | NA           |  | 96      | % |            | NA          |             | $ | 18,825,000    | 
|The Fairways of Carolina        |  | Margate, FL          |  | 1993      |  | 2001      |  | NA           |  | 99      | % |            | NA          |             | $ | 18,100,000    | 
|The Greens at Metrowest         |  | Orlando, FL          |  | 1990      |  | 1995      |  | NA           |  | 98      | % |            | NA          |             | $ | 14,623,330    | 
|Apartments                      |  |                      |  |           |  |           |  |              |  |         |   |            |             |             |   |               | 
|Bent Tree Apartments            |  | Columbus, OH         |  | 1987      |  | 1998      |  | NA           |  | 91      | % |            | NA          |             | $ | 13,600,000    | 
|                                |  |                      |  |           |  |           |  |              |  |         |   |            |             |             |   |               | 
|SubtotalResidential Properties |  |                      |  |           |  |           |  |              |  |         |   |            | $           | 808,687,333 |  
|                                |  |                      |  |           |  |           |  |              |  |         |   |            |             |             |  
|OTHER COMMERCIAL PROPERTIES     |  |                      |  |           |  |           |  |              |  |         |   |            |             |             |  
|Storage Portfolio I(17)         |  | Various, U.S.        |  | 1972-1990 |  | 2003      |  | 2,226,549    |  | 78      | % |            | $12.64      |             | $ | 50,430,399    | 
|                                |  |                      |  |           |  |           |  |              |  |         |   |            |             |             |   |               | 
|TotalAll Properties            |  |                      |  |           |  |           |  |              |  |         |   |            |             |             | $ | 6,649,362,254 | 
|                                |  |                      |  |           |  |           |  |              |  |         |   |            |             |             |   |               | 

|(1)  | The square footage is an approximate measure and is
subject to periodic remeasurement.                                                                                                                                                                                         
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    
|(2)  | Based on total contractual rent on leases existing
as of December 31, 2004. For those properties purchased in fourth quarter of
2004, the rent is based on the existing leases as of the date of purchase.                                                                     
|    
|(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.                                                                                                              
|    
|(4)  | Market value shown represents the Accounts interest
gross of debt.                                                                                                                                                                                                            
|    
|(5)  | Property held in 50%/50% joint venture with Equity
Office Portfolio Trust.                                                                                                                                                                                                     
|    
|(6)  | Undergone extensive renovations since original construction.                                                                                                                                                                                                                   
|    
|(7)  | Each property held in a 75%/25% joint venture with
Equity Office Properties. Market value shown reflects the value of the Accounts
interest in the joint venture.                                                                                                             
|    
|(8)  | 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.
|    
|(9)  | Purchased through Light Street Partners, L.P. (now
100% owned by the Account).                                                                                                                                                                                                 
|    
|(10) | Property held in 96%/4% joint venture with Georgetown
BISYS Phase II LLC. Phase II was purchased in 2002. Market value shown reflects
the value of the Accounts interest in the joint venture.                                                                                
|    
|(11) | Property held in 50%/50% joint venture with Tennessee
Consolidated Retirement System. Market value shown reflects the value of the
Accounts interest in the joint venture.                                                                                                    
|    
|(12) | Property held in 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.                                                                                           
|    
|(13) | Each property is held in a 50%/50% joint venture with
the Simon Property Group. Market value shown reflects the value of the Accounts
interest in the joint venture, net of debt.                                                                                             
|    
|(14) | Reflects the square footage owned by the joint venture.                                                                                                                                                                                                                        
|    
|(15) | Total renovation completed in 2001.                                                                                                                                                                                                                                            
|    
|(16) | For the average unit size and annual average rent per
unit for each residential property, see Residential Properties below.                                                                                                                                                  
|    
|(17) | 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.                                                                                                                    
|    

7

---



In General. At December 31, 2004, the Account held 81 commercial (non-residential) properties in its portfolio. Thirteen of these properties are held through joint
ventures, five of which are subject to mortgages. Although the terms vary under each lease, certain expenses, such as real estate taxes and other operating expenses are paid or reimbursed by the tenants.

The Accounts portfolio is well diversified by both property type, as well as geographic location. The portfolio consists of: 42 office properties containing approximately 16.5 million square
feet located in 15 states and the District of Columbia; 30 industrial properties containing 27.5 million square feet located in 15 states, including a 60% interest in a portfolio of industrial properties located throughout the United States; and 8
retail properties containing approximately 2.8 million square feet located in 5 states and the District of Columbia. In addition, the Account has a 75% interest in a portfolio of storage facilities located throughout the United States containing
approximately 2.2 million square feet.

As of December 31, 2004, the overall occupancy rate of Accounts commercial real estate portfolio was 91% on a weighted average basis. Office properties were 90% leased with 1,350 leases,
industrial properties were 93% leased with 365 leases, and retail properties were 97% leased with 537 leases. No single tenant accounts for more than 2.3% of the total rentable area of the Accounts commercial properties.

The Accounts residential property portfolio currently consists of 21 first class or luxury multi-family garden apartment complexes, mid-rise and high rise apartment buildings. The portfolio
contains approximately 5,355 units located in 11 states, and is 92% leased overall. None 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 use of 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 the properties.

8

---



The table below provides additional information regarding the residential properties in the Accounts portfolio as of December 31, 2004.

---

---

|                                   |  |                               |  |          |  | Average       | Avg. Rent
|---------------------------------- |  | ----------------------------- |  | -------- |  | ------------- | ---------
|                                   |  |                               |  | Number   |  | Unit Size     | Per Unit/
|Property                           |  | Location                      |  | of Units |  | (Square Feet) | Per Month
|                                   |  |                               |  |          |  |              
|The Legacy at Westwood Apartments  |  | Los Angeles, CA               |  | 187      |  | 1,181         |          
|Longwood Towers                    |  | Brookline, MA                 |  | 268      |  | 938           |          
|Ashford Meadows                    |  | Herndon, VA                   |  | 440      |  | 1,050         |          
|The Colorado                       |  | New York, NY                  |  | 256      |  | 622           |          
|Larkspur Courts                    |  | Larkspur, CA                  |  | 248      |  | 1,001         |          
|Regents Court Apartments           |  | San Diego, CA                 |  | 251      |  | 886           |          
|South Florida Apartment Portfolio  |  | Boca Raton and Plantation, FL |  | 550      |  | 889           |          
|Alexan Buckhead                    |  | Atlanta, GA                   |  | 231      |  | 990           |          
|The Lodge at Willow Creek          |  | Denver, CO                    |  | 316      |  | 996           |          
|Golfview Apartments                |  | Lake Mary, FL                 |  | 276      |  | 1,149         |          
|The Legends at Chase Oaks          |  | Plano, TX                     |  | 346      |  | 972           |          
|Lincoln Woods Apartments           |  | Lafayette Hill, PA            |  | 216      |  | 774           |          
|Kenwood Mews Apartments            |  | Burbank, CA                   |  | 141      |  | 942           |          
|Monte Vista                        |  | Littleton, CO                 |  | 219      |  | 888           |          
|Westcreek Apartments               |  | Westlake Village, CA          |  | 126      |  | 951           |          
|Indian Creek Apartments            |  | Farmington Hills, MI          |  | 196      |  | 1,139         |          
|Quiet Waters at Coquina Lakes      |  | Deerfield Beach, FL           |  | 200      |  | 1,048         |          
|Royal St. George                   |  | West Palm Beach, FL           |  | 224      |  | 870           |          
|The Fairways of Carolina           |  | Margate, FL                   |  | 208      |  | 1,026         |          
|The Greens at Metrowest Apartments |  | Orlando, FL                   |  | 200      |  | 920           |          
|Bent Tree Apartments               |  | Columbus, OH                  |  | 256      |  | 928           |          

---

---

ITEM 3. LEGAL PROCEEDINGS.There are no material pending legal proceedings.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.Not applicable.

9

---



PART II

ITEM 5. MARKET FOR THE REGISTRANTS SECURITIES AND RELATED STOCKHOLDER MATTERS.

(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, 2004 to December 31,
2004, the high and low accumulation unit values for the Account were $210.4446 and $186.9917, respectively. For the period January 1, 2003 to December 31, 2003, the high and low accumulation unit values for the Account were $186.9585 and
$174.0058, respectively.

(b)Approximate Number of Holders. The number of contract owners at January 31, 2005 was 784,136.

(c)Dividends. Not applicable.

10

---



ITEM 6.SELECTEDFINANCIALDATA.

Thefollowingselectedfinancialdata should
beconsideredinconjunctionwith theAccountsfinancialstatementsand notesprovidedin this report. TheAccountrestatedits 2003 and 2002consolidatedfinancialstatementsrelated to certaininvestmentsin jointventures(seeFinancialStatementsand Notes theretoincludedin Item 8,FinancialStatementsandSupplementaryData). Thecolumnsin thefollowingtable for the years ending before 2004 have beenadjustedfor thischange,but therestatementdid not affect theAccountstotal net assets,accumulationunit value nor theAccountsnetincreasein net assets, aspreviouslypresentedin thefollowingtable.

|                               |  |   |               |  |   |               |  |   | Restated      |   |  |   |              
|------------------------------ |  | - | ------------- |  | - | ------------- |  | - | ------------- | - |  | - | -------------
|                               |  |   |               |  |   |               |  |   |               |   |  |   |              
|                               |  |   | Year Ending   |  |   | Year Ending   |  |   | Year Ending   |   |  |   | Year Ended   
|                               |  |   | December 31,  |  |   | December 31,  |  |   | December 31,  |   |  |   | December 31, 
|                               |  |   | 2004          |  |   | 2003          |  |   | 2002          |   |  |   | 2001         
|Investment income:             |  |   |               |  |   |               |  |   |               |   |  |   |              
|Real estate income, net        |  | $ | 239,429,500   |  | $ | 224,938,080   |  | $ | 198,998,685   |   |  | $ | 180,752,326  
|Income from real estate        |  |   |               |  |   |               |  |   |               |   |  |   |              
|joint ventures                 |  |   | 57,275,242    |  |   | 31,989,569    |  |   | 17,077,072    |   |  |   | 1,580,805    
|Dividends and interest         |  |   | 41,623,715    |  |   | 19,461,931    |  |   | 26,437,901    |   |  |   | 33,687,343   
|                               |  |   |               |  |   |               |  |   |               |   |  |   |              
|Total investment income        |  |   | 338,328,457   |  |   | 276,389,580   |  |   | 242,513,658   |   |  |   | 216,020,474  
|Expenses                       |  |   | 36,728,425    |  |   | 31,654,065    |  |   | 23,304,336    |   |  |   | 17,191,929   
|                               |  |   |               |  |   |               |  |   |               |   |  |   |              
|Investment income, net         |  |   | 301,600,032   |  |   | 244,735,515   |  |   | 219,209,322   |   |  |   | 198,828,545  
|Net realized and unrealized    |  |   |               |  |   |               |  |   |               |   |  |   |              
|gain on investments            |  |   | 414,580,303   |  |   | 58,837,371    |  |   | (102,967,284  | ) |  |   | (29,609,560  
|                               |  |   |               |  |   |               |  |   |               |   |  |   |              
|Net increase in net assets     |  |   |               |  |   |               |  |   |               |   |  |   |              
|resulting from operations      |  |   | 716,180,335   |  |   | 303,572,886   |  |   | 116,242,038   |   |  |   | 169,218,985  
|Participant transactions       |  |   | 1,735,947,490 |  |   | 813,860,715   |  |   | 346,079,345   |   |  |   | 657,326,121  
|                               |  |   |               |  |   |               |  |   |               |   |  |   |              
|Net increase in net assets     |  | $ | 2,452,127,825 |  | $ | 1,117,433,601 |  | $ | 462,321,383   |   |  | $ | 826,545,106  
|                               |  |   |               |  |   |               |  |   |               |   |  |   |              
|                              
|                               |  |   |               |  |   |               |  |   | December 31,  |   |  |   |              
|                               |  |   |               |  |   |               |  |   |               |   |  |   |              
|                               |  |   | 2004          |  |   | 2003          |  |   | 2002          |   |  |   | 2001         
|Total assets                   |  | $ | 7,843,979,924 |  | $ | 4,867,089,727 |  | $ | 3,731,503,245 |   |  | $ | 3,262,648,457
|Total liabilities interest     |  |   | 598,429,938   |  |   | 73,667,566    |  |   | 55,514,685    |   |  |   | 48,981,280   
|                               |  |   |               |  |   |               |  |   |               |   |  |   |              
|Total net assets               |  | $ | 7,245,549,986 |  | $ | 4,793,422,161 |  | $ | 3,675,988,560 |   |  | $ | 3,213,667,177
|                               |  |   |               |  |   |               |  |   |               |   |  |   |              
|                              
|Accumulation units outstanding |  |   | 33,337,597    |  |   | 24,724,183    |  |   | 20,346,696    |   |  |   | 18,456,445   
|                               |  |   |               |  |   |               |  |   |               |   |  |   |              
|Accumulation unit value        |  | $ | 210.44        |  | $ | 186.94        |  | $ | 173.90        |   |  | $ | 168.16       
|                               |  |   |               |  |   |               |  |   |               |   |  |   |              
|Mortgate notes payable         |  | $ | 499,429.256   |  |   |              |  |   |              |   |  |   |             
|                               |  |   |               |  |   |               |  |   |               |   |  |   |              

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Quarterly Selected Financial Information(Unaudited)

The following selected financial
data for each full quarter of 2004 and 2003 are derived from the audited financial
statements of the Account for the years ended December 31, 2004 and 2003. The
 Account restated its 2003 consolidated financial statements related to certain
investments in joint ventures (see Financial Statements and Notes thereto included
in Item 8, Financial Statements and Supplementary Data). The restatement did
not affect  any of the Accounts 2003 net data that was previously presented
in the following table.

|                           |  |   |            |   |  |   | 2004                       |   |  |   |              | 
|-------------------------- |  | - | ---------- | - |  | - | -------------------------- | - |  | - | ------------ | 
|                           |  |   |            |   |  |   | For the Three Months Ended |   |  |   |              | 
|                           |  |   | March 31   |   |  |   | June 30                    |   |  |   | September 30 | 
|Investment income, net     |  | $ | 60,427,326 |   |  | $ | 69,917,576                 |   |  | $ | 81,063,054   | 
|Net realized gain          |  |   |            |   |  |   |                            |   |  |   |              | 
|on marketable securities   |  |   | 13,957,043 |   |  |   | 6,937,958                  |   |  |   | 12,050,272   | 
|Net unrealized gain        |  |   |            |   |  |   |                            |   |  |   |              | 
|on investments             |  |   | 25,237,864 |   |  |   | 41,478,561                 |   |  |   | 175,720,751  | 
|                           |  |   |            |   |  |   |                            |   |  |   |              | 
|Net increase in net assets |  |   |            |   |  |   |                            |   |  |   |              | 
|resulting from operations  |  | $ | 99,622,233 |   |  | $ | 118,334,095                |   |  | $ | 268,834,077  | 
|                           |  |   |            |   |  |   |                            |   |  |   |              | 
|Total return               |  |   | 2.01%      |   |  |   | 2.17%                      |   |  |   | 4.48%        | 
|                           |  |   |            |   |  |   |                            |   |  |   |              | 
|                          
|                           |  |   |            |   |  |   | 2003- Restated             |   |  |   |              | 
|                           |  |   |            |   |  |   | For the Three Months Ended |   |  |   |              | 
|                           |  |   | March 31   |   |  |   | June 30                    |   |  |   | September 30 | 
|Investment income, net     |  | $ | 59,014,854 |   |  | $ | 63,177,083                 |   |  | $ | 60,543,239   | 
|Net realized gain (loss)   |  |   |            |   |  |   |                            |   |  |   |              | 
|on marketable securities   |  |   | (1,169,146 | ) |  |   | (441,873                   | ) |  |   | 30,306,749   | 
|Net unrealized gain (loss) |  |   |            |   |  |   |                            |   |  |   |              | 
|on investments             |  |   | (6,288,819 | ) |  |   | 5,253,520                  |   |  |   | 20,251,377   | 
|                           |  |   |            |   |  |   |                            |   |  |   |              | 
|Net increase in net assets |  |   |            |   |  |   |                            |   |  |   |              | 
|resulting from operations  |  | $ | 51,556,889 |   |  | $ | 67,988,730                 |   |  | $ | 111,101,365  | 
|                           |  |   |            |   |  |   |                            |   |  |   |              | 
|Total return               |  |   | 1.38%      |   |  |   | 1.72%                      |   |  |   | 2.62%        | 
|                           |  |   |            |   |  |   |                            |   |  |   |              | 

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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.

As of December 31, 2004, the
TIAA Real Estate Account had total net assets in the amount of $7,245,549,986,
a 51.16% increase over the 2003 year end total net assets. The Account closed
29  transactions in 2004. It purchased 21 properties: nine office properties,
including one joint venture, ten industrial properties, including one joint venture,
and two retail properties for a total of approximately $2.5 billion. Additional
 transactions included the purchase of an additional 20% joint venture interest
(for a total of 100%) in an existing joint venture (a total amount of $11.2
million), and a commitment to purchase interests in two real estate-related funds
 totaling $65 million. In 2004, the Account also closed on the sale of five
 properties: two retail properties for the approximate sales price of $15.8
 million, the sale of two office properties for the approximate sales price of $29.0
  million and the sale of one apartment property for the approximate sales price
 of $69.0 million.

As of December 31, 2004, the Account owned a total of 102 real estate properties, representing 86.06% of the Accounts total investment portfolio (thirteen of which are held in joint ventures).
The real estate portfolio includes 42 office properties (seven of which are held in joint ventures), 30 industrial properties (including two joint ventures), 21 apartment complexes, 8 retail properties (including three joint ventures), and a 75%
joint venture partnership interest in a portfolio of storage facilities.

The following charts reflect the diversification of the Accounts real estate assets by region and property type as well as its ten largest holdings. All information is based on the values of the
properties as stated in the financial statements as of December 31, 2004.

|                 |  | Diversification of Accounts Real Estate
        Assets
|---------------- |  | -------------------------------------------------------
|                 |  |                                                        
|                 |  | East                                                   
|                 |  | (29)                                                   
|                 |  |                                                        
|Office (42)      |  | 24.4                                                   
|Industrial (30)  |  | 3.0                                                    
|Residential (21) |  | 3.6                                                    
|Retail (8)       |  | 1.2                                                    
|Other (1)**      |  | 0.0                                                    
|                 |  |                                                        
|TOTAL (102)      |  | 32.2                                                   

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

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|                             |  | Top Ten Real Estate Holdings
|---------------------------- |  | ----------------------------
|                             |  |                             
|                             |  |                             
|                             |  |                             
|Property Name                |  | State                       
|                             |  |                             
|1001 Pennsylvania Avenue     |  | DC                          
|IDX Tower                    |  | WA                          
|50 Fremont Street            |  | CA                          
|Four Oaks Place              |  | TX                          
|Colorado Center              |  | CA                          
|1900 K Street                |  | DC                          
|780 Third Avenue             |  | NY                          
|Ontario Industrial Portfolio |  | CA                          
|701 Brickell                 |  | FL                          
|The Florida Mall             |  | FL                          

|(1) | Value as reported in the 12/31/04 Statement of Investments.                                                                                                                             
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) | This property is subject to debt. The value of the
Accounts interest less leverage is $256.4, representing 3.86% of the
Total Real Estate Portfolio and 3.32% of the Total Investments.
|   
|(3) | This property is subject to debt. The value of the
Accounts interest less leverage is $203.0, representing 3.05% of the
Total Real Estate Portfolio and 2.63% of the Total Investments.
|   
|(4) | This property is subject to debt. The value of the
Accounts interest less leverage is $188.3, representing 2.83% of the
Total Real Estate Portfolio and 2.44% of the Total Investments.
|   
|(5) | Value represents the Accounts Joint Venture interest
in the property.                                                                                                                  
|   
|(6) | This property is subject to debt. The value of the
Accounts interest less leverage is $177.6, representing 2.67% of the
Total Real Estate Portfolio and 2.30% of the Total Investments.
|   
|(7) | Value represents the Accounts Joint Venture interest
net of debt.                                                                                                                      
|   

As of December 31, 2004, the Account also held investments in real estate limited partnerships, representing 0.40% of the portfolio, real estate equity securities, representing 4.25% of the portfolio,
commercial mortgage-backed securities (CMBS), representing 0.54% of the portfolio, and commercial paper representing 4.51% of the portfolio and government bonds, representing 4.24% of the portfolio.

Payroll employment grew by roughly 2.2 million during 2004 with gains in all industry sectors. Key office-using sectors such as financial services and professional and business services added 140,000
and 546,000 jobs, respectively. The only lagging sector was manufacturing which added 74,000 jobs during the year, but nearly all the gain occurred early in the year. The improvement in the national economy was reflected in commercial real estate
market conditions as vacancies declined in all property sectors over the course of the year.

Office market conditions improved during 2004. In the fourth quarter of 2004, office market vacancies declined for the sixth consecutive quarter, falling to 15.4% compared with 16.8% as of the fourth
quarter of 2003. The positive momentum has carried over into 2005 as the Federal Reserves January 2005 Beige Book reported that Commercial real estate conditions strengthened in most districts in December and early January.
Construction has also been constrained. During 2004, 36 million square feet were completed and another 44 million square feet were under construction as of year-end 2004. By comparison, an average of 90

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million square feet was complete annually during the 1999-2002 period. On-going improvements in U.S. payrolls combined with modest construction should continue to improve supply/demand fundamentals for the office markets.

In the fourth quarter of 2004, industrial market vacancies declined for the third consecutive quarter, falling to 10.8% compared with 11.7% as of the fourth quarter of 2003. Absorption or the net
change in occupied space, totaled 175 million square feet in 2004, which was well above the 20 million square feet absorbed in 2003. New construction of industrial space has also been moderate. During 2004, 115 million square feet were completed,
and another 110 million square feet are expected to be built in 2005. By comparison, an average of 200 million square feet was completed annually during the 1999-2002 period. Historically, there has been a positive correlation between growth in the
U.S. economy, as indicated by GDP growth, and industrial space demand. The U.S. Gross Domestic Product has now grown for twelve consecutive quarters, and continued growth would bode well for industrial market prospects.

Apartment market conditions
improved in 2004. As reported by M/PF Research, vacancies in institutional-grade
apartments declined to 6.4% as of fourth quarter of 2004 and as compared to 7.4%
as of fourth quarter of 2003. While concessions, such as free Internet service,
remained commonplace, effective rents increased 1.7% nationally over the course
of the year. The gains were broad-based, with effective rents increasing in 43
of the 58 major metropolitan areas tracked by M/PF Research.

Sustained consumer spending during 2004 benefited both the U.S. economy and retail markets. Reis, Inc. reported that vacancies in regional shopping malls fell to 5.3% (the lowest level in
three-and-a-half years) and rents increased by 0.8% during the fourth quarter of 2004. Vacancies in neighborhood and community centers were 6.8% in the fourth quarter of 2004 compared with 6.9% in the fourth quarter of 2003. Absorption during the
fourth quarter totaled nine million square feet, the highest in four years. In addition, rents increased 0.7% during the fourth quarter and a total of 2.9% over the course of 2004. While the Federal Reserves January 2005 Beige Book reported
that retail sales in a number of districts during the 2004 holiday season were above 2003 levels, there is some uncertainty ahead for the retail sector as the results of these activities amongst the major retailers could be reflected in large blocks
of retail space becoming available. In particular, there has been a surge in mergers and acquisition activity among certain major retailers, including Federated Department Stores, Kmart and Sears. The results of these activities among the major
retailers could be reflected in large blocks of retail space becoming available.

Prospects for commercial real estate markets in 2005 appear promising given the improvement in the U.S. economy during 2004. Many economists are projecting further improvements in the economy in 2005
as well. One positive indicator for the coming year is the increase in corporate profits, which along with corporations large cash positions and healthy balance sheets bode well for new hiring and investment in new offices, factories and
equipment. However, consumer spending, which accounts for roughly two-thirds of U.S. economic activity,

15

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is expected to be more modest. Consumers are expected to become more cautious about their spending because of relatively high debt burdens, increases in energy prices, and a slowdown in home equity borrowing. In addition, the
effect of increasing interest rates may also have a dampening effect on real estate market conditions. While prospects for 2005 on the whole are encouraging, near-term fluctuations in economic activity are not predictable, and changes in real estate
market conditions often lag changes in economic conditions.

Year Ended December 31, 2004 Compared to Year Ended December 31, 2003

The Accounts total return was 12.57% for the year ended December 31, 2004 and 7.50% for 2003. The substantial increase in the Accounts overall performance on a year-to-year basis reflects
the strong performance of the Accounts real estate properties and real estate-related (real estate equity securities, CMBS and limited partnerships) investments. The market value of the Accounts real estate portfolio increased
substantially in 2004, as did the value of its real estate equity securities holdings. These increases in the real estate and real estate-related assets were due to the significant amount of capital which flowed into the real estate market from
institutional investors as well as foreign investors increasing the price of core real estate investments.

The Accounts net investment income after deduction of all expenses was 23% higher for the year ended December 31, 2004 compared to the same period in 2003. This increase was primarily due to a
51% increase in total net assets, which included a 66% increase in the Accounts real estate holdings, including joint ventures and limited partnerships, over the same period.

The Accounts real estate holdings, including joint venture investments, generated approximately 88% and 93% of the Accounts total investment income (before deducting Account level
expenses) during 2004 and 2003, respectively. The remaining portion of the Accounts total investment income was generated by marketable securities investments.

Gross real estate rental income increased approximately 10% in the year ended December 31, 2004 as compared to the same period in 2003. This increase was due to the increased number of properties
owned by the Account. Income from the real estate joint ventures was $57,275,242 for the year ending December 31, 2004 as compared with $31,989,569 for the year ending December 31, 2003. This increase in joint venture income was due to an
increase in leasing at certain retail properties as well as the purchase of an additional joint venture interest in an existing office property, and the addition of two joint venture investments in 2004. Interest income on the Accounts
marketable securities investments increased from $7,221,765 in 2003 to $15,055,451 in 2004 due to the increase in the amount of non-real estate assets held by the Account as well as a slight increase in short term rates from 2003 to 2004.
Dividend income on the Accounts real estate equity securities and limited partnership investments increased from $12,240,166 for the year ended December 31, 2003 to $26,568,264 for the year ended December 31, 2004. This increase was
due to the strong

16

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performance of the real estate market reflecting the increased inflow of capital into real estate-related investments.

Total property level expenses for the year ended December 31, 2004 and 2003 were $157,768,776, and $136,678,570, respectively. This 15% increase in property level expenses reflected the
increased number of real estate properties owned by the Account from 2003 to 2004. In addition, during 2004, the Account incurred interest expense of $830,361 related to the mortgages.

The Account also incurred expenses for the years ended December 31, 2004 and 2003 of $14,393,388 and $12,751,191 respectively, for investment advisory services, $16,372,446 and
$14,786,580 respectively, for administrative and distribution services and $5,962,591 and $4,116,294 respectively, for mortality, expense risk and liquidity guarantee charges. The overall 16% increase in expenses is a result of the
larger net asset base in the Account, and the increased costs associated with managing and administering the Account.

Net Realized and Unrealized Gains and Losses on Investments

The Account had a 136% increase in net assets resulting from operations ($303,572,866 in December 2003 as compared to $716,180,335 in December 2004). The increase is due to the substantial
realized and unrealized gains on the Accounts real estate and joint venture properties.

The Account had net realized and unrealized gains on investments of $414,580,303 for the year ended December 31, 2004, as compared with net realized and unrealized gains on investments of
$58,837,371 for the year ended December 31, 2003. The increase in net realized and unrealized gains is primarily due to the substantial net unrealized gain on the Accounts real estate properties of $170,703,978 for the year ended
December 31, 2004 as compared to net unrealized losses for the year ended December 31, 2003 of $37,639,368. In addition, the Account had an unrealized gain on its joint venture holdings of $161,584,369 for the year ended December 31, 2004 as
compared to unrealized gain of $23,914,271 for the year ended December 31, 2003. The substantial net gains in the year ending December 31, 2004 are due to the increase in market value of its real estate portfolio, particularly in the value of
three regional malls in which the Account owns joint venture interests. The Accounts marketable securities for the year ended December 31, 2004 had net realized and unrealized gains totaling $68,464,524 as compared with net realized and
unrealized gains of $39,963,920 for the year ended December 31, 2003.

During 2004, the Account sold five properties. Proceeds of sale were $113,765,000 and cost at the time of sale was $99,937,568, resulting in a realized gain of $13,827,432. During 2003,
the Account sold two properties. Proceeds of sale were $187,225,000 and cost at the time of sale was $154,626,452, resulting in a realized gain of $32,598,548.

17

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Year Ended December 31, 2003 Compared to Year Ended December 31, 2002

The Accounts total return was 7.50% for the year ended December 31, 2003 and 3.41% for 2002. The substantial increase in the Accounts overall performance on a year-to-year basis reflects
the strong performance of the Accounts real estate properties and real estate equity securities holdings. The 2003 total return on the Accounts real estate holdings was significantly higher than the 2002 annual total return. Many of the
Accounts real estate properties increased in value in 2003, as compared to the substantial declines in value experienced by the Accounts real estate assets in 2002, which enhanced its strong income returns. This difference can be
attributed to the strength of the institutional investors interest in real estate as an asset class, notwithstanding the challenges to the underlying fundamentals posed by the overall economic conditions. The strong performance of the
Accounts real estate equity securities holdings also added to the total return.

The Accounts net investment income after deduction of all expenses was 12% higher for the year ended December 31, 2003 compared to the same period in 2002 primarily due to a 30% increase in
total net assets, which included a 19% increase in the Accounts real estate holdings, including joint ventures and limited partnerships.

The Accounts real estate holdings, including joint venture investments, generated approximately 93% and 89% of the Accounts total investment income (before deducting Account level
expenses) during 2003 and 2002, respectively. The remaining portion of the Accounts total investment income was generated by marketable securities investments.

Gross real estate rental income increased approximately 20% in the year ended December 31, 2003 over the same period in 2002. This was primarily due to the increased number of properties owned by the
Account as of December 31, 2003 as compared to the properties owned as of December 31, 2002. Income from real estate joint ventures was $31,989,569 for the year ended December 31, 2003 as compared with $17,077,072 for the year ended December
31, 2002. The increase in joint venture income was due to the increase in the number of joint ventures from 2002 to 2003. Interest income on the Accounts marketable securities investments decreased from $13,546,694 in 2002 to
$7,221,765 in 2003 due to a decline in short-term rates from 2002 to 2003. Dividend income on the Accounts real estate equity securities investments decreased slightly from $12,891,207 for the year ended December 31, 2002, to
$12,240,166 for the year ended December 31, 2003.

Total property level expenses for the year ended December 31, 2003 and 2002 were $136,678,570 and $101,962,973, respectively. This 34% increase in property level expenses during 2003 reflected
the increased number of properties in the Account, as well as an increase in certain operating expenses including insurance and security costs.

The Account also incurred expenses for the years ended December 31, 2003 and 2002 of $12,751,191 and $9,495,736 respectively, for investment advisory services, $14,786,580 and
$10,390,705 respectively, for administrative and distribution services and $4,116,294 and $3,417,895 respectively, for the mortality, expense risk and liquidity guarantee charges. The

18

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overall 36% increase in expenses is a result of the larger net asset base in the Account, and the increased costs associated with managing and administering the Account.

Net Realized and Unrealized Gains and Losses on Investments

The Account had a 161% increase in net increase in net assets resulting from operations ($303,572,866 for 2003 as compared to $116,242,038 for 2002). The increase is due to the
realization of substantial gains on the two properties sold in 2003, as well as substantial realized and unrealized gains on the Accounts marketable securities and joint venture properties. The strong 2003 performance can also be attributed to
the decrease in the magnitude of unrealized losses on the Accounts real estate holdings in 2003 as compared to 2002.

The Account had net realized and unrealized gains on investments of $58,837,371 for the year ended December 31, 2003, as compared with net realized and unrealized losses on investments of
$102,967,284 for the year ended December 31, 2002. The increase in net realized and unrealized gains for the Account in 2003 was a reflection of the improving economic market conditions. The Account had unrealized gains on its joint venture
holdings of $23,914,271 during the year ended December 31, 2003, as compared with losses of $5,781,360 during the same period in 2002, which can be attributed primarily to the increase in value of three regional malls in which the Account
owns a joint venture interest. The decrease in unrealized losses on the Accounts real estate holdings can be attributed to a decrease in the number of properties affected by declines in value during the year ended December 31, 2003, as
compared with the same period in 2002. The Accounts marketable securities for the year ended December 31, 2003 had net realized and unrealized gains totaling $39,963,920 as compared with net realized and unrealized losses of $6,195,855
for the year ended December 31, 2002. The net gains on the Accounts marketable securities for the year ended December 31, 2003 were due primarily to the strong performance of the real estate equity securities markets during the
period.

During 2003, the Account sold two properties. Proceeds of sale were $187,225,000 and cost at time of sale was $154,626,452, resulting in a realized gain of $32,598,548. During 2002, the
Account sold two properties. Proceeds of sale were $26,050,000 and cost at time of sale was $22,592,804, resulting in a realized gain of $3,457,196.

Liquidity and Capital Resources

At year end 2004 and 2003, the Accounts liquid assets (i.e., its real estate equity securities, CMBSs, commercial paper, government securities and cash) had a value of $1,045,733,841 and
$753,971,810, respectively. The increase in the Accounts liquid assets was primarily due to the net positive inflow of transfers and premiums into the Account and an increase in the value of its real estate equity securities holdings.

In 2004, the Account received $738,048,183 in premiums and $1,188,465,203 in net participant transfers from TIAA, CREF Accounts and affiliated mutual funds, while for 2003 the Account received
$515,435,665 in premiums and $433,792,602 in net participants transfers. Real estate acquisitions totaling approximately $2.5 billion and $753.3 million were made during 2004 and 2003, respectively. In 2004, the Account also received approximately

19

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$113.8 million in proceeds from the sale of two office properties, two retail properties and one apartment property. The
Accounts liquid assets will continue to be available to purchase additional suitable real estate properties and to meet expense needs and redemption requests (i.e., cash withdrawals or transfers). In the unlikely event that the Accounts
liquid assets and its cash flow from operating activities and participant transactions are not sufficient to meet its cash needs, including redemption requests, TIAAs general account will purchase liquidity units in accordance with TIAAs
liquidity guarantee to the Account.

The Account, under certain conditions more fully described in the Accounts prospectus, may borrow money and assume or obtain a mortgage on a property  i.e., 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 20% of the
Accounts total net asset value.

Effects of Inflation and Increasing Operating Expenses

Inflation, along with increased insurance 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. However, depending on how long any vacant space in a property remains unleased, the Account may not be able to
recover the full amount of such increases in operating expenses.

Critical Accounting Policies

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

In preparing the Accounts consolidated 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
financial statements affect the significant judgments, estimates and assumptions
used in preparing its 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. Fair value for real estate properties is defined as the most probable price for which a property will sell in a competitive market under all conditions requisite to a fair sale. Determination of
fair value involves subjective judgment because the actual market value of real estate can be determined only by negotiation between the parties in a sales transaction. The Accounts properties are initially valued at their respective purchase

20

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prices (including acquisition costs). Subsequently, independent appraisers value each real estate property at least once a year.
TIAAs appraisal staff performs a valuation of each real estate property on a quarterly basis and updates the property value if it believes that the value of the property has changed since the previous valuation or appraisal. 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.



Valuation of Marketable Securities:Equity securities listed or traded on any United States national securities 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. Short-term money market instruments are stated at market value. 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 Board of Trustees and in accordance with
the responsibilities of the Board as a whole.

Accounting for Investments: Real estate transactions are accounted for as of the date on which the purchase or sale transactions for the real estate properties close (settlement date). Rent from real estate properties consists
of all amounts earned under tenant operating leases, including base rent, recoveries of real estate taxes and other expenses and charges for miscellaneous services provided to tenants. Rental income is recognized in accordance with the billing terms
of the lease agreements. The Account bears the direct expenses of the real estate properties owned. These expenses include, but are not limited to, fees to local property management companies, property taxes, utilities, maintenance, repairs,
insurance and other operating and administrative costs. An estimate of the net operating income earned from each real estate property is accrued by the Account on a daily basis and such estimates are adjusted as soon as actual operating results are
determined.

Income from joint ventures is recorded based on the Accounts proportional interest in the income earned by the joint venture that has been distributed from the joint venture to the Account.

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

21

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Some statements in this report which are not historical facts may be forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 and the Private
Securities Litigation Reform Act of 1995. Forward-looking statements include statements about our expectations, beliefs, intentions or strategies for the future, and the assumptions underlying these forward-looking statements. Forward-looking
statements involve risks and uncertainties 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 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, future events or otherwise.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Accounts real estate and real estate-related investments, which as of December 31, 2004 represented 86.46% of the Accounts investments (not including real estate equity securities),
expose the Account to a variety of risks. These risks include, but are not limited to:

- General Real Estate Risk  The risk that the Accounts property values or rental and occupancy rates could go down due to general economic conditions, a weak market for real estate generally, and 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; and
- 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.

As of December 31, 2004, 13.54% of the Accounts investments were in market risk sensitive instruments, comprised entirely of marketable securities. These include real estate equity securities,
commercial mortgage-backed securities (CMBSs), and high-quality short-term debt instruments (i.e., commercial paper and government agency instruments). The Consolidated Statement of Investments for the Account sets forth the terms of
these instruments, along with their fair value, as determined in accordance with procedures described in Note 1 to the Accounts financial statements. Note that the Account does not currently invest in derivative financial
instruments.

22

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

- financial risk  for debt securities, the possibility that the issuer wont be able to pay principal and interest when due, and for common or preferred stock, the possibility that the issuers current earnings will fall or that its overall financial soundness will decline, reducing the securitys value.
- market risk  price volatility due to changing conditions in the financial markets and, particularly for debt securities, changes in overall interest rates.
- interest rate volatility, which may affect current income from an investment.

In addition, mortgage-backed securities are subject to prepayment risk  i.e., the risk that borrowers will repay the loans early. If the underlying mortgage assets experience greater than
anticipated payments of principal, the Account could fail to recoup some or all of its initial investment in these securities. The market value of these securities is also highly sensitive to changes in interest rates. Note that the potential for
appreciation, which could otherwise be expected to result from a decline in interest rates, may be limited by any increased prepayments.

In addition to these risks, 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.

23

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

---



|                                                         |  | Page
|-------------------------------------------------------- |  | ----
|Report of Management Responsibility                      |  | 25  
|Report of Audit Committee                                |  | 26  
|                                                        
|Audited Financial Statements:                            |  |     
|Statements of Assets and Liabilities                     |  | 27  
|Statements of Operations                                 |  | 28  
|Statements of Changes in Net Assets                      |  | 29  
|Statements of Cash Flows                                 |  | 30  
|Notes to Financial Statements                            |  | 31  
|Statements of Investments                                |  | 37  
|Report of Independent Registered Public Accounting Firm. |  | 47  

24

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REPORT OF MANAGEMENT RESPONSIBILITY

To the Participants of theTIAA 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 U.S. generally accepted accounting principles and have been presented fairly and objectively in accordance with such principles.

TIAA has established and maintains a sound system of
internal controls and disclosure controls designed to provide reasonable assurance
that assets are properly safeguarded and 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 a continuing review of the internal controls  and operations
of the Account, and the chief audit executive regularly reports to the Committee
of the TIAA Board of Trustees.

The accompanying financial statements have been audited by the independent registered public accounting firm of Ernst & Young LLP. To maintain auditor independence and avoid any conflict of interest, it continues to be
the Accounts policy that any management advisory or consulting services be obtained from a firm other than the external financial audit firm. The report of the independent registered public accounting firm, which follows the statements of
investments, expresses an independent opinion on the fairness of presentation of these financial statements.

The Audit Committee of the TIAA Board of Trustees, consisting entirely of trustees who are not officers of TIAA, meets regularly with management, representatives of Ernst & Young LLP and internal audit personnel to
review matters relating to financial reporting, internal controls and auditing. In addition to the annual audit of the Accounts financial statements by the independent registered public accounting firm, the New York State Insurance Department
and other state insurance departments perform periodic examinations of the Accounts operations.

See note 1 of the financial statements
          and section 9A of this form 10-K for disclosure relating to the Accounts
          restated accounting for joint ventures.





| | /s/ Herbert M. Allison, Jr. 
| | ----------------------------
| |                             
| | Herbert M. Allison, Jr.     
| | Chairman, President and     
| | Chief Executive Officer     
| |                             
| |                             
| | /s/ Elizabeth A. Monrad     
| |                             
| | Elizabeth A. Monrad         
| | Executive Vice President and
| | Chief Financial Officer     

25

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REPORT OF THE AUDIT COMMITTEE

To the Participants of theTIAA 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 auditing group and the independent auditing firm in connection with their respective audits of the Account. The Committee
also meets regularly with the internal and 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 external financial audit 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 Ernst & Young LLP, the independent
registered public accounting firm responsible for expressing an opinion on the conformity of these audited financial statements with U.S. generally accepted accounting principles.

The discussion with Ernst & Young 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 Ernst & Young LLP the auditors independence from management and the Account, and has received a written disclosure regarding such independence, as required by the Independence
Standards Board.

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.

26

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|                                                    |  | December 31, |               | December 31,
|--------------------------------------------------- |  | ------------ | ------------- | ------------
|                                                    |  | 2004         |               | 2003        
|                                                    |  |              |               |             
|                                                    |  |              |               |             
|ASSETS                                              |  |              |               |             
|Investments, at value:                              |  |              |               |             
|Real estate properties                              |  |              |               |             
|(cost: $5,315,565,355 and $3,189,651,612)           |  | $            | 5,391,469,250 |             
|Real estate joint ventures and limited partnerships |  |              |               |             
|(cost: $1,084,222,416 and $887,567,089)             |  |              | 1,288,715,399 |             
|Marketable securities:                              |  |              |               |             
|Real estate related                                 |  |              |               |             
|(cost: $326,109,979 and $295,835,312)               |  |              | 369,744,168   |             
|Other                                               |  |              |               |             
|(cost: $676,124,265 and $435,725,426)               |  |              | 675,989,673   |             
|                                                    |  |              |               |             
|Total investments                                   |  |              |               |             
|(cost: $7,402,022,015 and $4,808,779,439)           |  |              | 7,725,918,490 |             
|Due from investment advisor                         |  |              | 4,185,034     |             
|Other                                               |  |              | 113,876,400   |             
|                                                    |  |              |               |             
|TOTAL ASSETS                                        |  |              | 7,843,979,924 |             
|                                                    |  |              |               |             
|LIABILITIES                                         |  |              |               |             
|                                                    |  |              |               |             
|Mortgage notes payable (Note 6)                     |  |              | 499,479,256   |             
|                                                    |  |              |               |             
|Amounts due to bank                                 |  |              | 231,476       |             
|                                                    |  |              |               |             
|Accrued real estate property level expenses         |  |              | 84,959,882    |             
|                                                    |  |              |               |             
|Security deposits held                              |  |              | 13,759,324    |             
|                                                    |  |              |               |             
|TOTAL LIABILITIES                                   |  |              | 598,429,938   |             
|                                                    |  |              |               |             
|NET ASSETS                                          |  |              |               |             
|                                                    |  |              |               |             
|Accumulation Fund                                   |  |              | 7,015,717,162 |             
|                                                    |  |              |               |             
|Annuity Fund                                        |  |              | 229,832,824   |             
|                                                    |  |              |               |             
|TOTAL NET ASSETS                                    |  | $            | 7,245,549,986 |             
|                                                    |  |              |               |             
|NUMBER OF ACCUMULATION UNITS                        |  |              |               |             
|OUTSTANDINGNotes 7 and 8                           |  |              | 33,337,597    |             
|                                                    |  |              |               |             
|NET ASSET VALUE, PER ACCUMULATION UNITNote 7       |  | $            | 210.44        |             
|                                                    |  |              |               |             

See notes to financial statements.

27

---



|                                                                    |  |   | Years Ended December 31, | 
|------------------------------------------------------------------- |  | - | ------------------------ | 
|                                                                    |  |   |                          | 
|                                                                    |  |   | 2004                     | 
|                                                                    |  |   |                          | 
|                                                                    |  |   |                          | 
|                                                                   
|INVESTMENT INCOME                                                   |  |   |                          | 
|Real estate income, net:                                            |  |   |                          | 
|Rental income                                                       |  | $ | 397,198,276              | 
|                                                                    |  |   |                          | 
|Real estate property level expenses and taxes:                      |  |   |                          | 
|Operating expenses                                                  |  |   | 100,991,997              | 
|Real estate taxes                                                   |  |   | 55,946,418               | 
|Interest expense                                                    |  |   | 830,361                  | 
|                                                                    |  |   |                          | 
|Total real estate property level expenses                           |  |   | 157,768,776              | 
|                                                                    |  |   |                          | 
|Real estate income, net                                             |  |   | 239,429,500              | 
|Income from real estate joint ventures                              |  |   | 57,275,242               | 
|Dividends                                                           |  |   | 26,568,264               | 
|Interest                                                            |  |   | 15,055,451               | 
|                                                                    |  |   |                          | 
|TOTAL INCOME                                                        |  |   | 338,328,457              | 
|                                                                    |  |   |                          | 
|ExpensesNote 2:                                                    |  |   |                          | 
|Investment advisory charges                                         |  |   | 14,393,388               | 
|Administrative and distribution charges                             |  |   | 16,372,446               | 
|Mortality and expense risk charges                                  |  |   | 4,093,858                | 
|Liquidity guarantee charges                                         |  |   | 1,868,733                | 
|                                                                    |  |   |                          | 
|TOTAL EXPENSES                                                      |  |   | 36,728,425               | 
|                                                                    |  |   |                          | 
|INVESTMENT INCOME, NET                                              |  |   | 301,600,032              | 
|                                                                    |  |   |                          | 
|REALIZED AND UNREALIZED                                             |  |   |                          | 
|GAIN (LOSS) ON INVESTMENTS                                          |  |   |                          | 
|Realized gain on:                                                   |  |   |                          | 
|Real estate properties                                              |  |   | 13,827,432               | 
|Marketable securities                                               |  |   | 47,375,999               | 
|                                                                    |  |   |                          | 
|Total realized gain on investments                                  |  |   | 61,203,431               | 
|                                                                    |  |   |                          | 
|Net change in unrealized appreciation (depreciation) on:            |  |   |                          | 
|Real estate properties                                              |  |   | 170,703,978              | 
|Real estate joint ventures and limited partnerships                 |  |   | 161,584,369              | 
|Marketable securities                                               |  |   | 21,088,525               | 
|                                                                    |  |   |                          | 
|Net change in unrealized appreciation (depreciation) on investments |  |   | 353,376,872              | 
|                                                                    |  |   |                          | 
|NET REALIZED AND UNREALIZED                                         |  |   |                          | 
|GAIN (LOSS) ON INVESTMENTS                                          |  |   | 414,580,303              | 
|                                                                    |  |   |                          | 
|NET INCREASE IN NET ASSETS                                          |  |   |                          | 
|RESULTING FROM OPERATIONS                                           |  | $ | 716,180,335              | 
|                                                                    |  |   |                          | 

See notes to financial statements.

28

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|                                                     |  |   | Years Ended December 31, |  
|---------------------------------------------------- |  | - | ------------------------ | -
|                                                     |  |   |                          |  
|                                                     |  |   | 2004                     |  
|                                                     |  |   |                          |  
|                                                     |  |   |                          |  
|FROM OPERATIONS                                      |  |   |                          |  
|                                                     |  |   |                          |  
|Investment income, net                               |  | $ | 301,600,032              |  
|                                                     |  |   |                          |  
|Net realized gain on investments                     |  |   | 61,203,431               |  
|                                                     |  |   |                          |  
|Net change in unrealized appreciation (depreciation) |  |   |                          |  
|on investments                                       |  |   | 353,376,872              |  
|                                                     |  |   |                          |  
|NET INCREASE IN NET ASSETS                           |  |   |                          |  
|RESULTING FROM OPERATIONS                            |  |   | 716,180,335              |  
|                                                     |  |   |                          |  
|                                                    
|FROM PARTICIPANT TRANSACTIONS                        |  |   |                          |  
|                                                     |  |   |                          |  
|Premiums                                             |  |   | 738,048,183              |  
|                                                     |  |   |                          |  
|Net transfers from (to) TIAA                         |  |   | 147,340,801              |  
|                                                     |  |   |                          |  
|Net transfers from CREF Accounts                     |  |   | 1,041,124,402            |  
|                                                     |  |   |                          |  
|Annuity and other periodic payments                  |  |   | (30,761,316              | )
|                                                     |  |   |                          |  
|Withdrawals and death benefits                       |  |   | (159,804,580             | )
|                                                     |  |   |                          |  
|NET INCREASE IN NET ASSETS RESULTING                 |  |   |                          |  
|FROM PARTICIPANT TRANSACTIONS                        |  |   | 1,735,947,490            |  
|                                                     |  |   |                          |  
|NET INCREASE IN NET ASSETS                           |  |   | 2,452,127,825            |  
|                                                    
|NET ASSETS                                           |  |   |                          |  
|                                                     |  |   |                          |  
|Beginning of year                                    |  |   | 4,793,422,161            |  
|                                                     |  |   |                          |  
|End of year                                          |  | $ | 7,245,549,986            |  
|                                                     |  |   |                          |  

See notes to financial statements.

29

---



|                                                              |  |   | Years Ended December 31, |  
|------------------------------------------------------------- |  | - | ------------------------ | -
|                                                              |  |   |                          |  
|                                                              |  |   | 2004                     |  
|                                                              |  |   |                          |  
|                                                              |  |   |                          |  
|CASH FLOWS FROM OPERATING ACTIVITIES                          |  |   |                          |  
|Net increase in net assets resulting from operations          |  | $ | 716,180,335              |  
|Adjustments to reconcile net increase in net assets resulting |  |   |                          |  
|from operations to net cash used in operating activities:     |  |   |                          |  
|Purchases of real estate properties                           |  |   | (1,690,454,136           | )
|Capital improvements on real estate properties                |  |   | (37,811,864              | )
|Proceeds from sale of real estate properties                  |  |   | 113,765,000              |  
|Decrease (increase) in other investments                      |  |   | (648,107,782             | )
|Increase in other assets                                      |  |   | (30,270,749              | )
|Increase (decrease) in amounts due from bank                  |  |   | (783,869                 | )
|Increase in accrued real estate property level expenses       |  |   | 25,445,331               |  
|Increase in security deposits held                            |  |   | 621,654                  |  
|Decrease in other liabilities                                 |  |   |                         |  
|Net realized gain on real estate properties                   |  |   | (13,827,432              | )
|Unrealized (gain) loss on real estate properties              |  |   | (170,703,978             | )
|                                                              |  |   |                          |  
|NET CASH USED IN                                              |  |   |                          |  
|OPERATINGACTIVITIES                                           |  |   | (1,735,947,490           | )
|                                                              |  |   |                          |  
|CASH FLOWS FROM PARTICIPANT TRANSACTIONS                      |  |   |                          |  
|Premiums                                                      |  |   | 738,048,183              |  
|Net transfers from (to) TIAA                                  |  |   | 147,340,801              |  
|Net transfers from CREF Accounts                              |  |   | 1,041,124,402            |  
|Annuity and other periodic payments                           |  |   | (30,761,316              | )
|Withdrawals and death benefits                                |  |   | (159,804,580             | )
|                                                              |  |   |                          |  
|NET CASH PROVIDED BY                                          |  |   |                          |  
|PARTICIPANT TRANSACTIONS                                      |  |   | 1,735,947,490            |  
|                                                              |  |   |                          |  
|                                                             
|NET INCREASE (DECREASE) IN CASH                               |  |   |                         |  
|CASH                                                          |  |   |                          |  
|Beginning of year                                             |  |   |                         |  
|                                                              |  |   |                          |  
|End of year                                                   |  | $ |                         |  
|                                                              |  |   |                          |  
|Supplemental disclosure: Cash paid for interest               |  | $ | 121,408                  |  
|                                                              |  |   |                          |  
|Noncash activity: Debt assumed upon purchase of real estate  |  | $ | 499,479,256              |  
|                                                              |  |   |                          |  

See notes to financial statements.

30

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TIAA REAL ESTATE ACCOUNTNOTES TO FINANCIAL STATEMENTS

Note 1Significant Accounting Policies

The TIAA Real Estate Account (Account)
is a segregated investment account of Teachers Insurance and Annuity Association
of America (TIAA) and was established by resolution of TIAAs
Board of  Trustees on February 22, 1995, under the insurance laws of the State
of New York, for the purpose of funding variable annuity contracts issued by
TIAA. The investment objective of the Account is a favorable long-term rate of
return primarily through  rental income and capital appreciation from real estate
investments owned by the Account. The Account holds real estate properties directly
and through wholly-owned subsidiaries. The Account also holds
interests in joint ventures and limited partnerships that own real estate. The
Account also invests in publicly-traded securities and other instruments to maintain
adequate liquidity for operating expenses, capital expenditures and to make benefit
payments. The financial statements were prepared in accordance with U.S. generally
accepted accounting principles which may require the use of estimates made by
management. Actual results may vary from those estimates. The following is a
summary of the significant accounting policies of the Account.

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

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

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

Valuation of Marketable Securities:Equity securities listed or traded on any national market or exchange are valued at the last sale price as of the close of the principal securities
exchange on which such securities are traded or, if there is no sale, at the mean of the last bid and asked prices on such exchange. Debt securities, other than money market instruments, are valued at the most recent bid price or the equivalent
quoted yield for such securities (or those of comparable maturity, quality and type). Money market instruments, with maturities of one year or less, are valued in the same manner as debt securities or

31

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Accounting for Investments:Real estate transactions are accounted for as of the date on which the purchase or sale transactions for the real estate properties close (settlement
date). Rent from real estate properties consists of all amounts earned under tenant operating leases, including base rent, recoveries of real estate taxes and other expenses and charges for miscellaneous services provided to tenants. Rental income
is recognized in accordance with the billing terms of the lease agreements. The Account bears the direct expenses of the real estate properties owned. These expenses include, but are not limited to, fees to local property management companies,
property taxes, utilities, maintenance, repairs, insurance and other operating and administrative costs. An estimate of the net operating income earned from each real estate property is accrued by the Account on a daily basis and such estimates are
adjusted as soon as actual operating results are determined.

Income from joint ventures is recorded based on the Accounts' proportional interest in the income earned by the joint venture
 that has been distributed from the joint venture to the Account.

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

Change in Accounting Policy:Effective January 1, 2003, the Account changed the method by which realized gains and losses on securities transactions are calculated from the average
cost method to the specific identification method. This change was made in order to conform more closely with industry standards. For the Account, the effect of this change for the year ended December 31, 2003 was to increase net realized gain by
$391,221 and decrease net unrealized gain by $391,221. There was no impact on investment income-net and no impact on the increase in net assets resulting from operations or on total net assets.

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

Restatement and Reclassifications:In
               prior years financial statements, the Account had consolidated
               joint ventures in which it held a majority financial interest
               and had joint  control over significant decisions with its minority
               partner. It was determined that such investments should not have
               been consolidated because the Account did not have a majority
               of the voting rights to control significant decisions. As a result,
                the Account has restated its 2003 and 2002 financial statements
               to conform to the 2004 treatment, which reflects the Accounts
               equity in the net assets and operations of the underlying entities.
               This restatement did not affect the  Accounts total net
               assets, net asset value per accumulation unit, net increase in
               net assets resulting from operations nor the Accounts total
               return, as previously reported in the Accounts 2003 and
               2002 financial statements, but  did result in a reduction in (a)
               total assets of approximately $299 million, (b) liabilities
               of $9 million, and (c) minority interest of $290
million as of December 31, 2003.  In addition,
               the Account changed the presentation of operating results to eliminate
               discontinued operations reporting, which more appropriately reflects
               the Accounts business
 activities. Other certain amounts
 in the 2003 and 2002 financial statements have been reclassified to conform
 to the 2004 presentation.

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

32

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Distribution and administrative 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 member of the National Association of Securities Dealers, Inc.

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

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

Had the Accounts real estate properties that
were purchased during the year ended December 31, 2004 been acquired at the beginning
of the year (January 1, 2004), rental income and real estate property level expenses
for the year ended December 31, 2004 would have increased by approximately $213,430,000
(unaudited) and $107,023,000 (unaudited), respectively. Accordingly, the
total proforma effect on the Accounts net investment income for the year
ended December 31, 2004 would have been an increase of approximately $106,407,000
(unaudited), if the real estate properties acquired during the year ended December
31, 2004 had been acquired at the beginning of 2004.

Had the Accounts real estate properties that
were purchased during the years ended December 31, 2004 and 2003 been acquired
at the beginning of the year (January 1, 2003), rental income and real estate
property level expenses for the year ended December 31, 2003 would have increased
by approximately $341,466,000 (unaudited) and $158,647,000 (unaudited),
respectively. Accordingly, the total proforma effect on the Accounts net
investment income for the year ended December 31, 2003 would have been an increase
of approximately $182,819,000 (unaudited),
if the real estate properties acquired during the year ended December 31, 2004
and 2003 had been acquired at the beginning of 2003.

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

|Years Ending |  |   |              
|------------ |  | - | -------------
|December 31, |  |   |              
|             |  |   |              
|2005         |  | $ | 399,730,000  
|2006         |  |   | 366,340,000  
|2007         |  |   | 326,901,000  
|2008         |  |   | 283,956,000  
|2009         |  |   | 238,290,000  
|2010-2104    |  |   | 766,612,000  
|             |  |   |              
|            
|Total        |  | $ | 2,381,829,000
|             |  |   |              

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



---



The Account owns 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. The Accounts allocated portion of the mortgage notes payable at
December 31, 2004 is $345,136,785. The Accounts equity in the joint
ventures at  December 31, 2004 and 2003 was $1,257,893,004 and $888,244,865,
respectively. A condensed summary of the financial position and results of operations
of the joint ventures is shown below.

|                                  |  | December 31, 2004 |               | December 31, 2003 |  | December 31, 2002
|--------------------------------- |  | ----------------- | ------------- | ----------------- |  | -----------------
|                                  |  |                   |               |                   |  |                  
|                                  |  |                   |               |                   |  |                  
|Assets                            |  |                   |               |                   |  |                  
|Real estates properties, at value |  | $                 | 2,760,426,300 |                   |  | $                
|Other assets                      |  |                   | 55,021,655    |                   |  |                  
|                                  |  |                   |               |                   |  |                  
|Total assets                      |  | $                 | 2,815,447,955 |                   |  | $                
|                                  |  |                   |               |                   |  |                  
|Liabilities and Equity            |  |                   |               |                   |  |                  
|Mortgages notes payable           |  | $                 | 618,773,569   |                   |  | $                
|Other liabilities                 |  |                   | 47,389,201    |                   |  |                  
|                                  |  |                   |               |                   |  |                  
|Total liabilities                 |  |                   | 666,162,770   |                   |  |                  
|Equity                            |  |                   | 2,149,285,185 |                   |  |                  
|                                  |  |                   |               |                   |  |                  
|Total liabilities and equity      |  | $                 | 2,815,447,955 |                   |  | $                
|                                  |  |                   |               |                   |  |                  
|                                 
|                                  |  | Year Ended        |               | Year Ended        |  | Year Ended       
|                                  |  | December 31, 2004 |               | December 31, 2003 |  | December 31, 2002
|                                  |  |                   |               |                   |  |                  
|                                  |  |                   |               |                   |  |                  
|Operating Revenues and Expenses   |  |                   |               |                   |  |                  
|Revenues                          |  | $                 | 250,697,181   |                   |  | $                
|Expenses                          |  |                   | 122,017,640   |                   |  |                  
|                                  |  |                   |               |                   |  |                  
|Excess of revenues over expenses  |  | $                 | 128,679,541   |                   |  | $                
|                                  |  |                   |               |                   |  |                  

Note 6Mortgage Notes Payable

At December 31, 2004, the Account had mortgage notes
payable on four properties as follows:

|                             |  | Interest               |  |        |             |     |  |                
|---------------------------- |  | ---------------------- |  | ------ | ----------- | --- |  | ---------------
|Property                     |  | Rate                   |  | Amount |             | Due
|                             |  |                        |  |        |             |     |  |                
|50 Fremont                   |  | 6.40% paid monthly     |  | $      | 135,000,000 |     |  | August 21, 2013
|Ontario Industrial Portfolio |  | 7.42% paid monthly     |  |        | 9,479,256   | *   |  | May 1, 2011    
|IDX Tower                    |  | 6.40%
    paid monthly |  |        | 145,000,000 |     |  | August 21, 2013
|1001 Pennsylvania Ave        |  | 6.40% paid monthly     |  |        | 210,000,000 |     |  | August 21, 2013
|                             |  |                        |  |        |             |     |  |                
|Total                        |  |                        |  | $      | 499,479,256 |     |  |                
|                             |  |                        |  |        |             |     |  |                

|* | Principal payments due monthly
          with balloon payment of $8,127,115 due on May 1, 2011. Principal
    on mortgage notes payable is due as follows:
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------
| 

|           |  | Amount
|---------- |  | ------
|           |  |       
|2005       |  | $     
|2006       |  |       
|2007       |  |       
|2008       |  |       
|2009       |  |       
|Thereafter |  |       
|           |  |       
|Total      |  | $     
|           |  |       

34

---



Note 7Condensed Financial Information

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

|                                        |  |   |         |   |  |   | Years Ended December 31, |   |  |   |          |  
|--------------------------------------- |  | - | ------- | - |  | - | ------------------------ | - |  | - | -------- | -
|                                        |  |   |         |   |  |   |                          |   |  |   |          |  
|                                        |  |   | 2004    |   |  |   | 2003                     |   |  |   | 2002     |  
|                                        |  |   |         |   |  |   |                          |   |  |   |          |  
|                                        |  |   |         |   |  |   | Restated                 |   |  |   | Restated |  
|Per Accumulation Unit data:             |  |   |         |   |  |   |                          |   |  |   |          |  
|Rental income                           |  | $ | 13.422  |   |  | $ | 15.584                   |   |  | $ | 14.225   |  
|Real estate property level expenses     |  |   | 5.331   |   |  |   | 5.890                    |   |  |   | 4.819    |  
|                                        |  |   |         |   |  |   |                          |   |  |   |          |  
|Real estate income, net                 |  |   | 8.091   |   |  |   | 9.694                    |   |  |   | 9.406    |  
|Income from real estate joint ventures  |  |   | 1.935   |   |  |   | 1.379                    |   |  |   | 0.807    |  
|Dividends and interest                  |  |   | 1.406   |   |  |   | 0.839                    |   |  |   | 1.249    |  
|                                        |  |   |         |   |  |   |                          |   |  |   |          |  
|Total income                            |  |   | 11.432  |   |  |   | 11.912                   |   |  |   | 11.462   |  
|Expense charges (1)                     |  |   | 1.241   |   |  |   | 1.365                    |   |  |   | 1.101    |  
|                                        |  |   |         |   |  |   |                          |   |  |   |          |  
|Investment income, net                  |  |   | 10.191  |   |  |   | 10.547                   |   |  |   | 10.361   |  
|Net realized and unrealized             |  |   |         |   |  |   |                          |   |  |   |          |  
|gain (loss) on investments              |  |   | 13.314  |   |  |   | 2.492                    |   |  |   | (4.621   | )
|                                        |  |   |         |   |  |   |                          |   |  |   |          |  
|Net increase in Accumulation Unit Value |  |   | 23.505  |   |  |   | 13.039                   |   |  |   | 5.740    |  
|Accumulation Unit Value:                |  |   |         |   |  |   |                          |   |  |   |          |  
|Beginning of year                       |  |   | 186.939 |   |  |   | 173.900                  |   |  |   | 168.160  |  
|                                        |  |   |         |   |  |   |                          |   |  |   |          |  
|End of year                             |  | $ | 210.444 |   |  | $ | 186.939                  |   |  | $ | 173.900  |  
|                                        |  |   |         |   |  |   |                          |   |  |   |          |  
|Total return                            |  |   | 12.57   | % |  |   | 7.50                     | % |  |   | 3.41     | %

|Expenses (1)                    |  |  | 0.63   | % |  |  | 0.76   | % |  |  | 0.67   | % |  |  | 0.61   | % |  |  | 0.67   | %
|------------------------------- |  |  | ------ | - |  |  | ------ | - |  |  | ------ | - |  |  | ------ | - |  |  | ------ | -
|Investment income, net          |  |  | 5.17   | % |  |  | 5.87   | % |  |  | 5.65   | % |  |  | 6.81   | % |  |  | 7.50   | %
|Portfolio turnover rate:        |  |  |        |   |  |  |        |   |  |  |        |   |  |  |        |   |  |  |        |  
|Real estate properties          |  |  | 2.32   | % |  |  | 5.12   | % |  |  | 0.93   | % |  |  | 4.61   | % |  |  | 3.87   | %
|Securities                      |  |  | 143.47 | % |  |  | 71.83  | % |  |  | 52.08  | % |  |  | 40.62  | % |  |  | 32.86  | %
|Thousands of Accumulation Units |  |  |        |   |  |  |        |   |  |  |        |   |  |  |        |   |  |  |        |  
|outstanding at end of year      |  |  | 33,338 |   |  |  | 24,724 |   |  |  | 20,347 |   |  |  | 18,456 |   |  |  | 14,605 |  

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Expense charges per Accumulation
          Unit and the Ratio of Expenses to Average Net Assets exclude real estate
          property level expenses. If the real estate property level
          expenses were included, the expense charge per Accumulation
          Unit for the year ended December 31, 2004 would be $6.572 ($7.255, $5.920, $5.749 and $5.672
          for the years ended December 31, 2003, 2002, 2001 and 2000, respectively),
          and the Ratio of Expenses to Average Net Assets for the year ended
          December 31, 2004 would be 3.33% (4.04%, 3.61%, 3.50% and 3.79% for
    the years ended December 31, 2003, 2002, 2001 and 2000, respectively).
|   

35

---



Note 8Accumulation Units

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

|                                                      |  | For the Years Ended December 31,
|----------------------------------------------------- |  | --------------------------------
|                                                      |  |                                 
|                                                      |  | 2004                            
|                                                      |  |                                 
|Accumulation Units:                                   |  |                                 
|Credited for premiums                                 |  | 3,746,093                       
|Credited (cancelled) for transfers, net disbursements |  |                                 
|and amounts applied to the Annuity Fund               |  | 4,867,321                       
|Outstanding:                                          |  |                                 
|Beginning of year                                     |  | 24,724,183                      
|                                                      |  |                                 
|End of year                                           |  | 33,337,597                      
|                                                      |  |                                 

Note 9Commitments

During the normal course of business, the Account enters into discussions and agreements to purchase or sell real estate properties. As of December 31, 2004, the Account had one outstanding commitment to purchase an
industrial property for approximately $18 million and another commitment to sell an industrial property for approximately $3.5
million.

At December 31, 2004, the Account had commitments to
invest in three limited partnerships over the next three years totalling approximately $51
million.

36

---



REAL ESTATE PROPERTIES69.78% and 64.76%

|                                                                  |  | Value
|----------------------------------------------------------------- |  | -----
|                                                                  |  |      
|Location / Description                                            |  | 2004 
|                                                                  |  |      
|                                                                  |  |      
|Arizona:                                                          |  |      
|Biltmore Commerce Center - Office building                        |  | $    
|Mountain RA Industrial Portfolio - Industrial building            |  |      
|California:                                                       |  |      
|3 Hutton Centre Drive - Office building                           |  |      
|9 Hutton Centre - Office building                                 |  |      
|50 Fremont - Office building                                      |  |      
|88 Kearny Street - Office building                                |  |      
|Capitol Place - Office building                                   |  |      
|Centerside I - Office building                                    |  |      
|Center Pointe and Valley View - Industrial building               |  |      
|Eastgate Distribution Center - Industrial building                |  |      
|Kenwood Mews - Apartments                                         |  |      
|Larkspur Courts - Apartments                                      |  |      
|The Legacy at Westwood - Apartments                               |  |      
|Northern California RA Industrial Portfolio - Industrial building |  |      
|Northpoint Commerce Center - Industrial building                  |  |      
|Ontario Industrial Portfolio - Industrial building                |  |      
|Regents Court - Apartments                                        |  |      
|Southern California RA Industrial Portfolio - Industrial building |  |      
|Westcreek - Apartments                                            |  |      
|West Lake North Business Park - Office building                   |  |      
|Westwood Marketplace - Shopping center                            |  |      
|Colorado:                                                         |  |      
|The Lodge at Willow Creek - Apartments                            |  |      
|The Market at Southpark - Shopping center                         |  |      
|Monte Vista - Apartments                                          |  |      
|Connecticut:                                                      |  |      
|Ten & Twenty Westport Road - Office building                      |  |      
|Delaware:                                                         |  |      
|Mideast RA Industrial Portfolio - Industrial building             |  |      
|Florida:                                                          |  |      
|701 Brickell - Office building                                    |  |      
|4200 West Cypress Street - Office building                        |  |      
|Doral Pointe - Apartments                                         |  |      
|Golfview - Apartments.                                            |  |      
|The Fairways of Carolina - Apartments                             |  |      
|The Greens at Metrowest - Apartments                              |  |      
|Maitland Promenade One - Office building                          |  |      
|Plantation Grove - Shopping center                                |  |      
|Pointe on Tampa Bay - Office building                             |  |      
|Quiet Waters at Coquina Lakes - Apartments                        |  |      
|Royal St. George - Apartments                                     |  |      
|Sawgrass Office Portfolio - Office building                       |  |      
|South Florida Apartment Portfolio - Apartments                    |  |      
|Georgia:                                                          |  |      
|Alexan Buckhead - Apartments                                      |  |      
|Atlanta Industrial Portfolio - Industrial building                |  |      

37

---



|                                                                 |  | Value
|---------------------------------------------------------------- |  | -----
|                                                                 |  |      
|Location / Description                                           |  | 2004 
|                                                                 |  |      
|                                                                 |  |      
|Illinois:                                                        |  |      
|Chicago Caleast Industrial Portfolio - Industrial building       |  | $    
|Chicago Industrial Portfolio - Industrial building               |  |      
|Columbia Center III - Office building                            |  |      
|East North Central RA Industrial Portfolio - Industrial building |  |      
|Oak Brook Regency Towers - Office building                       |  |      
|Parkview Plaza - Office building                                 |  |      
|Rolling Meadows - Shopping center                                |  |      
|Kentucky:                                                        |  |      
|IDI Kentucky Portfolio - Industrial building                     |  |      
|Maryland:                                                        |  |      
|Corporate Boulevard - Office building                            |  |      
|FEDEX Distribution Facility - Industrial building                |  |      
|Longview Executive Park - Office building                        |  |      
|Massachusetts:                                                   |  |      
|Batterymarch Park II - Office building                           |  |      
|Longwood Towers - Apartments                                     |  |      
|Needham Corporate Center - Office building                       |  |      
|Northeast RA Industrial Portfolio - Industrial building          |  |      
|Michigan:                                                        |  |      
|Indian Creek - Apartments                                        |  |      
|Minnesota:                                                       |  |      
|Interstate Crossing - Industrial building                        |  |      
|River Road Distribution Center - Industrial building             |  |      
|Nevada:                                                          |  |      
|UPS Distribution Facility - Industrial building                  |  |      
|New Jersey:                                                      |  |      
|10 Waterview Boulevard - Office building                         |  |      
|371 Hoes Lane - Office building                                  |  |      
|Konica Photo Imaging Headquarters - Industrial building          |  |      
|Morris Corporate Center III - Office building                    |  |      
|NJ Caleast Industrial Portfolio - Industrial building            |  |      
|South River Road Industrial - Industrial building                |  |      
|New York:                                                        |  |      
|780 Third Avenue - Office building                               |  |      
|The Colorado - Apartments                                        |  |      
|North Carolina:                                                  |  |      
|The Lynnwood Collection - Shopping center                        |  |      
|The Millbrock Collection - Shopping center                       |  |      
|Ohio:                                                            |  |      
|Bent Tree - Apartments                                           |  |      
|Columbus Portfolio - Office building                             |  |      
|Northmark Business Center I - Office building                    |  |      
|Oregon:                                                          |  |      
|Five Centerpointe - Office building                              |  |      
|Pennsylvania:                                                    |  |      
|Lincoln Woods - Apartments                                       |  |      
|Tennessee:                                                       |  |      
|Memphis Caleast Industrial Portfolio - Industrial building       |  |      
|Summit Distribution Center - Industrial building                 |  |      

38

---



|                                                                       |  | Value
|---------------------------------------------------------------------- |  | -----
|                                                                       |  |      
|Location / Description                                                 |  | 2004 
|                                                                       |  |      
|                                                                       |  |      
|Texas:                                                                 |  |      
|Butterfield Industrial Park - Industrial building (B)                  |  | $    
|Dallas Industrial Portfolio - Industrial building                      |  |      
|Four Oaks Place - Office building                                      |  |      
|The Legends at Chase Oaks - Apartments                                 |  |      
|Utah:                                                                  |  |      
|Landmark at Salt Lake City (Building #4) - Industrial building         |  |      
|Virginia:                                                              |  |      
|Ashford Meadows - Apartments                                           |  |      
|Fairgate at Ballston - Office building                                 |  |      
|Monument Place - Office building                                       |  |      
|One Virginia Square - Office building                                  |  |      
|Washington:                                                            |  |      
|Northwest RA Industrial Portfolio - Industrial building                |  |      
|Rainier Corporate Park - Industrial building                           |  |      
|IDX Tower - Office building                                            |  |      
|Washington DC:                                                         |  |      
|1001 Pennsylvania Avenue - Office building                             |  |      
|1015 15th Street - Office building                                     |  |      
|1900 K Street - Office building                                        |  |      
|Mazza Gallerie - Shopping center                                       |  |      
|The Farragut Building - Office building                                |  |      
|                                                                       |  |      
|                                                                      
|TOTAL REAL ESTATE PROPERTIES                                           |  |      
|(Cost $5,315,565,355 and $3,189,651,612)                               |  |      
|                                                                       |  |      
|                                                                      
|REAL ESTATE JOINT VENTURES AND LIMITED PARTNERSHIPS16.68% and 19.47%  |  |      
|                                                                      
|REAL ESTATE JOINT VENTURES(C)16.28% and 18.59%                        |  |      
|Bisys Crossings I, LLC which owns                                      |  |      
|BISYS Fund Services Building - (96% Account interest)                  |  |      
|CA - Treat Towers LP which owns                                        |  |      
|Treat Towers (75% Account interest)                                    |  |      
|Teachers REA LLC which owns Cabot Industrial Portfolio                 |  |      
|(100% Account interest in 2004, 80% in 2003)                           |  |      
|Colorado Center Limited Partnership which owns                         |  |      
|Colorado Center (50% Account interest)                                 |  |      
|Florida Mall Association, Ltd. which owns                              |  |      
|The Florida Mall (50% Account interest)                                |  |      
|GA - Buckhead LLC which owns                                           |  |      
|Prominence in Buckhead (75% Account interest)                          |  |      
|IL - 161 Clark Street LLC which owns                                   |  |      
|161 North Clark Street (75 % Account interest)                         |  |      
|One Boston Place Real Estate Investment Trust which owns               |  |      
|Mellon Financial Center at One Boston Place                            |  |      
|(50.25% Account interest)                                              |  |      
|Storage Portfolio I, LLC which owns                                    |  |      
|Storage Portfolio I located throughout the U.S. (75% Account interest) |  |      
|Strategic Industrial Properties I, LLC which owns                      |  |      
|IDI National Portfolio located throughout the U.S.                     |  |      
|(60% Account interest)                                                 |  |      
|Teachers REA IV, LLC, which owns                                       |  |      
|Tysons Executive Plaza II (50% Account interest)                      |  |      

39

---



|                                                                              |  | Value
|----------------------------------------------------------------------------- |  | -----
|                                                                              |  |      
|Location / Description                                                        |  | 2004 
|                                                                              |  |      
|                                                                              |  |      
|West Dade County Associates which owns                                        |  |      
|Miami International Mall (50% Account interest)                               |  | $    
|West Town Mall Joint Venture which owns                                       |  |      
|West Town Mall (50% Account interest)                                         |  |      
|                                                                              |  |      
|                                                                             
|TOTAL REAL ESTATE JOINT VENTURE                                               |  |      
|(Cost $1,060,788,631 and $845,228,277)                                        |  |      
|                                                                              |  |      
|LIMITED PARTNERSHIPS 0.40% and 0.88%                                         |  |      
|Essex Apartment Value Fund, L.P. (10% Account Interest)                       |  |      
|Heitman
 Value Partners, LP (8.43% Account Interest)                          |  |      
|MONY/Transwestern
 Mezzanine Realty Partners II LLC (16.10% Account Interest) |  |      
|MONY/Transwestern Mezzanine Realty Partners L.P.                              |  |      
|(19.76% Account Interest)                                                     |  |      
|                                                                              |  |      
|TOTAL LIMITED PARTNERSHIP                                                     |  |      
|(Cost $24,931,845 and $42,338,812)                                            |  |      
|                                                                              |  |      
|                                                                             
|TOTAL REAL ESTATE JOINT VENTURES AND LIMITED PARTNERSHIPS                     |  |      
|(Cost $1,084,222,416 and $887,567,089)                                        |  |      
|                                                                              |  |      
|                                                                             
|MARKETABLE SECURITIES13.54% and 15.77%                                       |  |      
|                                                                             
|REAL ESTATE RELATED4.79% and 6.65%                                           |  |      
|                                                                             
|REAL ESTATE EQUITY SECURITIES4.25% and 5.54%                                 |  |      

|Shares    |  |         |  |                                       |  |  |            |  | 
|--------- |  | ------- |  | ------------------------------------- |  |  | ---------- |  | 
|          |  |         |  |                                       |  |  |            |  | 
|2004      |  | 2003    |  | Issuer                                |  |  |            |  | 
|          |  |         |  |                                       |  |  |            |  | 
|70,000    |  |        |  | Acadia Realty Trust                   |  |  | 1,141,000  |  | 
|550,000   |  |        |  | Affordable Residential Communities    |  |  | 7,892,500  |  | 
|36,685    |  |        |  | AMB Property Corp                     |  |  | 1,481,707  |  | 
|446,100   |  |        |  | American Campus Communities           |  |  | 10,032,789 |  | 
|140,000   |  |        |  | Amli Residential Properties           |  |  | 4,480,000  |  | 
|         |  | 30,000  |  | Apartment Investment & Management Co. |  |  |           |  | 
|46,000    |  | 120,325 |  | Archstone-Smith Trust                 |  |  | 1,761,800  |  | 
|232,900   |  | 560,000 |  | Ashford Hospitality Trust             |  |  | 2,531,623  |  | 
|         |  | 115,000 |  | Avalon Bay Communities Inc.           |  |  |           |  | 
|150,000   |  | 206,800 |  | Boston Properties Inc                 |  |  | 9,700,500  |  | 
|150,000   |  |        |  | Brandywine Realty Trust               |  |  | 4,408,500  |  | 
|35,000    |  | 315,000 |  | BRE Properties                        |  |  | 1,410,850  |  | 
|60,000    |  |        |  | Capital Lease Funding Inc             |  |  | 750,000    |  | 
|         |  | 440,000 |  | Cedar Shopping Centers Inc.           |  |  |           |  | 
|60,000    |  |        |  | Centerpoint Properties Trust          |  |  | 2,873,400  |  | 
|         |  | 40,000  |  | Chelsea Property Group Inc.           |  |  |           |  | 
|143,000   |  |        |  | Corporate Office Properties           |  |  | 4,197,050  |  | 
|434,000   |  |        |  | Developers Diversified Realty         |  |  | 19,256,580 |  | 
|1,072,990 |  |        |  | Digital Realty Trust Inc              |  |  | 14,453,175 |  | 
|         |  | 200,000 |  | Entertainment Properties Trust        |  |  |           |  | 
|31,875    |  |        |  | Equity Lifestyle Properties           |  |  | 1,139,532  |  | 
|147,518   |  | 300,000 |  | Equity Office Properties Trust        |  |  | 4,295,724  |  | 
|         |  | 300,000 |  | Equity One Inc.                       |  |  |           |  | 
|180,000   |  | 203,800 |  | Equity Residential                    |  |  | 6,512,400  |  | 
|         |  | 40,000  |  | Essex Property Trust Inc.             |  |  |           |  | 

40

---



|Shares    |  |         |  | Value                               
|--------- |  | ------- |  | ------------------------------------
|          |  |         |  |                                     
|2004      |  | 2003    |  | Issuer                              
|          |  |         |  |                                     
|          |  |         |  |                                     
|594,500   |  |        |  | Extra Space Storage Inc             
|413,873   |  | 400,000 |  | Falcon Financial Investment         
|1,367,000 |  |        |  | Feldman Mall Properties             
|         |  | 70,000  |  | Gables Residential Trust            
|110,000   |  |        |  | General Growth Properties           
|75,000    |  |        |  | Glenborough Realty Trust Inc        
|912,000   |  |        |  | GMH Communities Trust               
|38,818    |  |        |  | Gramercy Capital Corp               
|72,550    |  |        |  | Great Wolf Resorts Inc              
|75,000    |  | 140,000 |  | Health Care Realty Trust Inc        
|350,000   |  |        |  | Hersha Hospitality Trust            
|         |  | 114,700 |  | Hilton Hotels Corp                  
|168,000   |  |        |  | Home Properties Inc                 
|325,000   |  |        |  | Homebanc Corp/Ga                    
|         |  | 822,800 |  | Host Marriott Corp                  
|74,257    |  |        |  | Impac Mortgage Holdings Inc         
|300,000   |  | 300,000 |  | Interstate Hotels & Resorts         
|         |  | 250,000 |  | Istar Financial Inc                 
|1,908,000 |  |        |  | Jameson Inns Inc                    
|         |  | 640,000 |  | Keystone Property Trust             
|54,000    |  | 100,000 |  | Kimco Realty Corp                   
|324,443   |  |        |  | Kite Realty Group Trust             
|215,078   |  | 640,000 |  | Lexington Corporate Properties Trust
|         |  | 230,000 |  | Liberty Property Trust              
|1,266,660 |  |        |  | Lodgian Inc                         
|162,000   |  |        |  | LTC Properties Inc                  
|         |  | 290,000 |  | LTC Properties 8.5%                 
|150,000   |  | 200,000 |  | Macerich Company/The                
|30,420    |  |        |  | Mack-Cali Realty Corp               
|         |  | 800,000 |  | Meristar Hospitality Trust          
|40,000    |  |        |  | Mills Corp/The                      
|150,000   |  | 200,000 |  | Mission West Properties             
|270,000   |  |        |  | New York Mortgage Trust Inc         
|100,000   |  |        |  | Northstar Realty Finance Corp       
|525,000   |  |        |  | Origen Financial Inc                
|70,700    |  |        |  | Parkway Properties                  
|         |  | 130,000 |  | Post Properties Inc                 
|75,000    |  | 250,000 |  | Prentiss Properties Trust           
|200,000   |  | 330,000 |  | Prologis Trust                      
|         |  | 285,000 |  | PS Business Parks Inc               
|         |  | 172,500 |  | Ramco-Gershenson Properties         
|507,000   |  |        |  | Reckson Associates Realty Corp      
|45,000    |  |        |  | Regency Centers Corp                
|255,900   |  | 235,900 |  | Simon Property Group Inc            
|         |  | 22,100  |  | Sun Communities Inc                 
|303,820   |  |        |  | Sunset Financial Resources          
|315,000   |  |        |  | Sunstone Hotel Investors Inc        
|         |  | 200,000 |  | Tanger Factory Outlet Center        
|268,200   |  |        |  | Thomas Properties Group             
|1,500,000 |  |        |  | Trizec Properties Inc               
|          |  |         |  |                                     
|         |  |         |  |                                     
|          |  |        |  |                                     
|          |  |        |  |                                     

41

---



|Shares                                                |  |      |             | Value                                 
|----------------------------------------------------- |  | ---- | ----------- | --------------------------------------
|                                                      |  |      |             |                                       
|2004                                                  |  | 2003 |             | Issuer                                
|                                                      |  |      |             |                                       
|                                                      |  |      |             |                                       
|100,000                                               |  |      | 800,000     |                                       
|                                                     |  |      | 260,000     |                                       
|77,558                                                |  |      |            |                                       
|50,000                                                |  |      |            |                                       
|                                                     |  |      | 131,300     |                                       
|                                                     |  |      | 85,000      |                                       
|                                                     |  |      | 17,000      |                                       
|                                                     |  |      | 306,300     |                                       
|                                                      |  |      |             |                                       
|                                                     
|TOTAL REAL ESTATE EQUITY SECURITIES                   |  |      |             |                                       
|(Cost $284,166,107 and $242,402,103)                  |  |      | 327,785,808 |                                       
|                                                      |  |      |             |                                       
|                                                     
|COMMERCIAL MORTGAGE BACKED SECURITIES0.54% and 1.11% |  |      |             |                                       
|Principal                                             |  |      |             |                                       
|                                                      |  |      |             |                                       
|2004                                                  |  | 2003 |             | Issuer, Current Rate and Maturity Date
|                                                      |  |      |             |                                       
|$10,000,000                                           |  |      | $           |                                      
|                                                      |  |      |             |                                       
|10,000,000                                            |  |      |             |                                      
|                                                      |  |      |             |                                       
|                                                     |  |      | 10,000,000  |                                       
|                                                      |  |      |             |                                       
|                                                     |  |      | 20,000,000  |                                       
|                                                      |  |      |             |                                       
|10,000,000                                            |  |      |             |                                      
|                                                      |  |      |             |                                       
|10,000,000                                            |  |      |             |                                      
|                                                      |  |      |             |                                       
|                                                     |  |      | 10,000,000  |                                       
|                                                      |  |      |             |                                       
|                                                     |  |      | 8,429,804   |                                       
|                                                      |  |      |             |                                       
|1,940,947                                             |  |      |             |                                      
|                                                      |  |      |             |                                       
|                                                     |  |      | 5,000,000   |                                       
|                                                      |  |      |             |                                       
|                                                      |  |      |             |                                       
|                                                     
|TOTAL COMMERCIAL MORTGAGE BACKED SECURITIES           |  |      |             |                                       
|(Cost $41,943,872 and $53,433,209, respectively)      |  |      | 41,958,360  |                                       
|                                                      |  |      |             |                                       
|                                                     
|TOTAL REAL ESTATE RELATED                             |  |      |             |                                       
|(Cost $326,109,979 and $295,835,312, respectively)    |  |      | 369,744,168 |                                       
|                                                      |  |      |             |                                       

42

---



|OTHER8.75% and 9.12%            |  |      |            |                                        |                                    |      |  
|-------------------------------- |  | ---- | ---------- | -------------------------------------- | ---------------------------------- | ---- | -
|                                
|COMMERCIAL PAPER4.51% and 4.75% |  |      |            |                                        |                                    |     
|Principal                        |  |      |            |                                        | Value                             
|                                 |  |      |            |                                        |                                    |      |  
|2004                             |  | 2003 |            | Issuer, Current Rate and Maturity Date |                                    | 2004 |  
|                                 |  |      |            |                                        |                                    |      |  
|                                 |  |      |            |                                        |                                    |      |  
|$25,000,000                      |  | $    |           |                                        | American Honda Finance, Corp       |      |  
|                                 |  |      |            |                                        | 2.280% 01/12/05                    |      | $
|10,000,000                       |  |      |           |                                        | Beta Finance, Inc                  |      |  
|                                 |  |      |            |                                        | 1.890%
        01/14/05            |      |  
|15,000,000                       |  |      |           |                                        | Beta Finance, Inc                  |      |  
|                                 |  |      |            |                                        | 1.970% 01/21/05                    |      |  
|18,100,000                       |  |      |           |                                        | BMW US Capital Corp                |      |  
|                                 |  |      |            |                                        | 2.280% 01/20/05                    |      |  
|                                |  |      | 25,000,000 |                                        | Canadian Imperial Bank of Commerce |      |  
|                                 |  |      |            |                                        | 1.060% 01/28/04                    |      |  
|                                |  |      | 2,215,000  |                                        | CC (USA), Inc                      |      |  
|                                 |  |      |            |                                        | 1.100% 02/10/04                    |      |  
|13,000,000                       |  |      |           |                                        | CC (USA), Inc                      |      |  
|                                 |  |      |            |                                        | 1.940%
        01/14/05            |      |  
|                                |  |      | 25,000,000 |                                        | Ciesco LP                          |      |  
|                                 |  |      |            |                                        | 1.080% 02/13/04                    |      |  
|3,100,000                        |  |      |           |                                        | Ciesco LP                          |      |  
|                                 |  |      |            |                                        | 2.180%
        01/13/05            |      |  
|                                |  |      | 18,000,000 |                                        | Corporate Asset Funding Corp, Inc  |      |  
|                                 |  |      |            |                                        | 1.090%
        01/14/04            |      |  
|25,000,000                       |  |      |           |                                        | Corporate Asset Funding Corp, Inc  |      |  
|                                 |  |      |            |                                        | 2.330%
        01/31/05            |      |  
|                                |  |      | 20,275,000 |                                        | Delaware Funding Corp              |      |  
|                                 |  |      |            |                                        | 1.080%
        01/22/04            |      |  
|2,670,000                        |  |      |           |                                        | Fortune Brands                     |      |  
|                                 |  |      |            |                                        | 2.060%
        01/11/05            |      |  
|                                |  |      | 9,800,000  |                                        | Govco Incorporated                 |      |  
|                                 |  |      |            |                                        | 1.040%        02/23/04             |      |  
|                                |  |      | 15,000,000 |                                        | Govco Incorporated                 |      |  
|                                 |  |      |            |                                        | 1.080%
        02/26/04            |      |  
|15,000,000                       |  |      |           |                                        | Govco Incorporated                 |      |  
|                                 |  |      |            |                                        | 1.990%
        01/10/05            |      |  
|10,000,000                       |  |      |           |                                        | Govco Incorporated                 |      |  
|                                 |  |      |            |                                        | 2.060%
        01/21/05            |      |  
|                                |  |      | 10,000,000 |                                        | Greyhawk Funding LLC               |      |  
|                                 |  |      |            |                                        | 1.100%
        01/20/04            |      |  
|25,000,000                       |  |      |           |                                        | Greyhawk Funding LLC               |      |  
|                                 |  |      |            |                                        | 2.140%
    02/01/05                |      |  
|10,750,000                       |  |      |           |                                        | Harley-Davidson Funding Corp       |      |  
|                                 |  |      |            |                                        | 2.230%
    02/14/05                |      |  
|15,000,000                       |  |      |           |                                        | Kitty Hawk Funding Corp            |      |  
|                                 |  |      |            |                                        | 2.340%
        01/26/05            |      |  
|9,565,000                        |  |      |           |                                        | Kitty Hawk Funding Corp            |      |  
|                                 |  |      |            |                                        | 2.340%
        01/24/05            |      |  
|                                |  |      | 25,000,000 |                                        | Kitty Hawk Funding Corp            |      |  
|                                 |  |      |            |                                        | 1.080%
        01/05/04            |      |  

43

---



|Principal                                                        |   |      |            |                                                    | Value                             
|---------------------------------------------------------------- | - | ---- | ---------- | -------------------------------------------------- | ----------------------------------
|                                                                 |   |      |            |                                                    |                                   
|2004                                                             |   | 2003 |            | Issuer, Current Rate and
            Maturity Date |                                   
|                                                                 |   |      |            |                                                    |                                   
|                                                                 |   |      |            |                                                    |                                   
|$                                                                |  |      | $          | 1,300,000                                          |                                   
|                                                                 |   |      |            |                                                    | 1.070% 02/17/04                   
|10,000,000                                                       |   |      |           |                                                    | Paccar Financial Corp             
|                                                                 |   |      |            |                                                    | 1.910%
        01/24/05           
|                                                                |   |      | 14,535,000 |                                                    | Park Avenue Receivables Corp      
|                                                                 |   |      |            |                                                    | 1.080%
        01/29/04           
|                                                                |   |      | 2,000,000  |                                                    | Private Export Funding Corporation
|                                                                 |   |      |            |                                                    | 1.090%
        02/19/04           
|10,000,000                                                       |   |      |           |                                                    | Private Export Funding Corporation
|                                                                 |   |      |            |                                                    | 1.960%
        01/12/05           
|25,000,000                                                       |   |      |           |                                                    | Rabobank USA Financial Corp       
|                                                                 |   |      |            |                                                    | 2.290%
        02/02/05           
|                                                                |   |      | 4,460,000  |                                                    | Receivables Capital Corp          
|                                                                 |   |      |            |                                                    | 1.050%
        01/05/04           
|                                                                |   |      | 19,285,000 |                                                    | Receivables Capital Corp          
|                                                                 |   |      |            |                                                    | 1.070%
        of 01/20/04        
|23,135,000                                                       |   |      |           |                                                    | Royal Bank of Canada              
|                                                                 |   |      |            |                                                    | 1.960%
        01/18/05           
|16,430,000                                                       |   |      |           |                                                    | Royal Bank of Scotland PLC        
|                                                                 |   |      |            |                                                    | 2.240%
        02/03/05           
|2,000,000                                                        |   |      |           |                                                    | Sherwin-Williams Co               
|                                                                 |   |      |            |                                                    | 2.240%
        01/20/05           
|                                                                |   |      | 25,000,000 |                                                    | Sigma Finance Inc                 
|                                                                 |   |      |            |                                                    | 1.090%
        01/06/04           
|15,000,000                                                       |   |      |           |                                                    | Sigma Finance Inc                 
|                                                                 |   |      |            |                                                    | 2.070%
        02/04/05           
|25,000,000                                                       |   |      |           |                                                    | Toronto Dominion Bank             
|                                                                 |   |      |            |                                                    | 2.015%
        03/10/05           
|                                                                |   |      | 10,000,000 |                                                    | UBS Finance, (Delaware) Inc       
|                                                                 |   |      |            |                                                    | 0.960%
        01/02/04           
|25,000,000                                                       |   |      |           |                                                    | UBS Finance, (Delaware) Inc       
|                                                                 |   |      |            |                                                    | 2.300%
        01/06/05           
|                                                                 |   |      |            |                                                    |                                   
|                                                                
|TOTAL COMMERCIAL PAPER(Amortized
          cost $348,329,276 and |   |      |            |                                                    |                                   
|$226,733,744,
          respectively)                            |   |      |            | 348,261,543                                        |                                   
|                                                                 |   |      |            |                                                    |                                   

44

---



|             |  |            |           |                                                    |                                      
|------------ |  | ---------- | --------- | -------------------------------------------------- | -------------------------------------
|Principal    |  |            |           |                                                    | Value                                
|             |  |            |           |                                                    |                                      
|2004         |  | 2003       |           | Issuer, Current Rate and
            Maturity Date |                                      
|             |  |            |           |                                                    |                                      
|             |  |            |           |                                                    |                                      
|$  9,380,000 |  | $          |          |                                                    | Federal Farm Credit Banks            
|             |  |            |           |                                                    | 1.780%
        03/15/05              
|8,603,000    |  |            |          |                                                    | Federal Farm Credit Banks            
|             |  |            |           |                                                    | 1.220%
        01/07/05              
|            |  | 13,905,000 |           | Federal Home Loan Mortgage Corp                    |                                      
|             |  |            |           |                                                    | 1.020%
        01/09/04              
|            |  | 37,980,000 |           | Federal Home Loan Mortgage Corp                    |                                      
|             |  |            |           |                                                    | 1.020%
        01/08/04              
|            |  | 10,715,000 |           | Federal Home Loan Mortgage Corp                    |                                      
|             |  |            |           |                                                    | 1.020%
        02/24/04              
|            |  | 10,000,000 |           | Federal Home Loan Mortgage Corp                    |                                      
|             |  |            |           |                                                    | 1.020%
        02/17/04              
|            |  | 30,000,000 |           | Federal National Mortgage Association              |                                      
|             |  |            |           |                                                    | 1.054%
        01/07/04              
|            |  | 50,000,000 |           | Federal National Mortgage Association              |                                      
|             |  |            |           |                                                    | 1.010%
        01/15/04              
|            |  |            | 6,500,000 |                                                    | Federal National Mortgage Association
|             |  |            |           |                                                    | 1.000%
        01/05/04              
|            |  | 50,000,000 |           | Federal National Mortgage Association              |                                      
|             |  |            |           |                                                    | 1.050%
        01/30/04              
|7,860,000    |  |            |          |                                                    | Federal Home Loan Banks              
|             |  |            |           |                                                    | 1.850%
        04/21/05              
|18,000,000   |  |            |          |                                                    | Federal Home Loan Banks              
|             |  |            |           |                                                    | 2.140%
        01/07/05              
|22,825,000   |  |            |          |                                                    | Federal Home Loan Banks              
|             |  |            |           |                                                    | 2.180%
        01/21/05              
|20,700,000   |  |            |          |                                                    | Federal Home Loan Banks              
|             |  |            |           |                                                    | 2.190%
        02/16/05              
|11,245,000   |  |            |          |                                                    | Federal Home Loan Banks              
|             |  |            |           |                                                    | 2.240%
        01/26/05              
|8,510,000    |  |            |          |                                                    | Federal Home Loan Banks              
|             |  |            |           |                                                    | 1.935%
        03/11/05              
|20,000,000   |  |            |          |                                                    | Federal Home Loan Mortgage Corp      
|             |  |            |           |                                                    | 2.000%
        01/04/05              
|15,000,000   |  |            |          |                                                    | Federal Home Loan Mortgage Corp      
|             |  |            |           |                                                    | 1.875%
        01/15/05              
|15,540,000   |  |            |          |                                                    | Federal Home Loan Mortgage Corp      
|             |  |            |           |                                                    | 2.265%
        01/25/05              
|22,280,000   |  |            |          |                                                    | Federal National Mortgage Association
|             |  |            |           |                                                    | 2.480%
        04/29/05              
|50,000,000   |  |            |          |                                                    | Federal National Mortgage Association
|             |  |            |           |                                                    | 2.250%
        01/19/05              
|25,000,000   |  |            |          |                                                    | Federal National Mortgage Association
|             |  |            |           |                                                    | 2.100%
        01/13/05              
|31,925,000   |  |            |          |                                                    | Federal National Mortgage Association
|             |  |            |           |                                                    | 1.140%
        01/03/05              
|32,184,000   |  |            |          |                                                    | Federal National Mortgage Association
|             |  |            |           |                                                    | 2.250%
        01/05/05              
|9,270,000    |  |            |          |                                                    |                                      
|             |  |            |           |                                                    |                                      
|             |  |            |           |                                                    |                                      

45

---



|          |           |      |   |                                                   
|--------- | --------- | ---- | - | --------------------------------------------------
|Principal |           |      |   | Value                                             
|          |           |      |   |                                                   
|2004      |           | 2003 |   | Issuer, Current Rate and
            Maturity Date
|          |           |      |   |                                                   
|          |           |      |   |                                                   
|$         | 9,270,000 |      | $ |                                                  
|          |           |      |   |                                                   
|          |           |      |   |                                                   

| |  | TOTAL GOVERNMENT AGENCIES                                     |  |   |               |  |   |              
| |  | ------------------------------------------------------------- |  | - | ------------- |  | - | -------------
| |  | (Amortized cost $327,794,989 and $208,991,682)                |  |   | 327,728,130   |  |   | 208,989,600  
| |  |                                                               |  |   |               |  |   |              
| |  | TOTAL OTHER(Cost $676,124,265 and $435,725,426)               |  |   | 675,989,673   |  |   | 435,720,073  
| |  |                                                               |  |   |               |  |   |              
| |  | TOTAL MARKETABLE SECURITIES(Cost $1,002,234,244
          and |  |   |               |  |   |              
| |  | $731,560,738)                                                 |  |   | 1,045,733,841 |  |   | 753,971,810  
| |  |                                                               |  |   |               |  |   |              
| |  | TOTAL INVESTMENTS100.00%(Cost $7,402,022,015
          and   |  |   |               |  |   |              
| |  | $4,808,779,439)                                               |  | $ | 7,725,918,490 |  | $ | 4,779,299,042
| |  |                                                               |  |   |               |  |   |              

|(A) | The market value reflects the Accounts interest
in the property gross of debt.                                                         
|--- | ----------------------------------------------------------------------------------------------------------------------------------------
|   
|(B) | Leasehold interest only.                                                                                                                
|   
|(C) | The market values reflect the value of the Accounts
interest in the joint ventures, net of any debt or joint venture partner interests.
|   

See notes to financial statements.

46

---



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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

We have audited the accompanying statements of assets
and liabilities, of the TIAA Real Estate Account (Account) of Teachers
Insurance and Annuity  Association of America (TIAA), including the
Statements of Investments, as of December 31, 2004 and 2003, and the related
statements of operations, changes in net assets and cash flows for each of the
three years in the period ended December 31, 2004. These financial
statements are the responsibility of TIAAs management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with the standards
of the Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit 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. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits provide
a reasonable basis for our opinion.

In our opinion, the financial statements referred to
above present fairly, in all material respects, the financial position of the
Account at December 31, 2004 and 2003, and the results of its operations,  changes
in its net assets and its cash flows for each of the three years in the period
ended December 31, 2004, in conformity with U.S. generally accepted accounting
principles.

As discussed in Note 1, the Account
          has restated its financial statements relating to the accounting for
          its investments in majority-owned real estate joint ventures and to
          change the presentation of its operating results.

Ernst & Young LLP

47

---



Mr. William H. Waltrip, a trustee of TIAA, and Professor Stephen A. Ross, a trustee of the TIAA-CREF registered investment companies (the Funds), resigned from their respective boards on
November 30, 2004.

On August 1, 2003, the valuation practice, a non-auditing practice of Ernst & Young, LLP (Ernst & Young), the independent auditor to TIAA and the Funds, entered into an agreement with a company
owned by the two trustees among others, a majority of which was owned by Professor Ross. The business relationship was created to develop intellectual property and related services to value corporate stock options. The aggregate amount paid by
Ernst & Young to the company under this agreement was approximately $1.33 million of which Professor Ross received, or will receive, approximately $335,000 (of which $60,000 represented reimbursement of expenses and $25,000 represented
repayment of a loan he made to the company). Mr. Waltrip has not received any payment from the company. The agreement and business activity thereunder was terminated on August 20, 2004 and a dissolution agreement was signed as of November 17,
2004.

Ernst & Young informed TIAA and the Funds that the business relationship between Ernst & Young and the company owned by the trustees was not in accordance with the auditor independence standards of
Regulation S-X and the Public Company Accounting Oversight Board. Ernst & Young also notified the SEC and the Audit Committees of TIAA and the Funds of this business relationship. The Audit Committees consist entirely of independent trustees having no
business relationships with TIAA, the Funds or Ernst & Young.

The Audit Committees of TIAA and the Funds, and Ernst & Young, each determined that the trustees business relationship with Ernst & Young did not compromise Ernst & Youngs independence from either TIAA or the
Funds or the integrity or objectivity of the respective audits for 2003 and 2004. This determination was based on, among other things, the fact that the Ernst & Young audit team was not aware of the business relationship when they issued the 2003 audit
opinions on the financial statements of TIAA and the Funds and the business activity under the agreement was ceased in 2004 upon identification of the matter. Professor Ross and Mr. Waltrip had no other functions or responsibilities as Board members
that would have caused them to have direct dealings with the Ernst & Young audit team. Professor Ross and Mr. Waltrip were not members of the Audit Committees.

TIAA and/or the Funds have taken steps to ensure that their respective trustees will identify promptly any business relationships that may bring the independence of the outside auditors into
question. These steps include revising their officers and trustees questionnaires, improving the questionnaire review process, receiving quarterly auditor independence certifications, and enhancing continuing education for all trustees regarding SEC
matters.

In November 2004, TIAA and the Funds initiated a request for proposal process to seek accounting firms with the requisite capacity and expertise to perform their respective 2005 audits, which
was recently completed.

On February 28, 2005, TIAA and the Funds determined and Ernst & Young agreed that the audit relationship between Ernst & Young and TIAA, and the Funds will cease. Ernst & Young will complete its audit work for
TIAA and the Funds for their respective 2004 audits.

At a meeting held on February 28, 2005, the Audit Committees of TIAA and the Funds, along with the respective Boards of Trustees, approved the appointment of PricewaterhouseCoopers LLP as the
independent registered public accounting firm for these entities for their 2005 audits effective upon completion of PricewaterhouseCoopers customary client acceptance procedures and execution of an engagement letter.

On December 6, 2004, the staff of the SEC informed TIAA and the Funds that it is conducting an informal inquiry into the E&Y auditor independence matter. TIAA and the Funds are fully
cooperating with the SEC staff in connection with the informal inquiry.

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

On February 28, 2005, TIAA and Ernst & Young LLP (Ernst & Young) agreed that the relationship between Ernst & Young and TIAA would cease. Ernst & Young agreed to complete the audit work for the Account
for its 2004 audit. In connection with its audits for the two most recent fiscal years and the subsequent interim period through February 28, 2005, of the Account (i) there were no disagreements with Ernst & Young on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Ernst & Young, would have caused them to make reference to the subject matter of the disagreements in connection with
its report on the financial statements for such fiscal years, and (ii) there were no more reportable events as defined in Item 304(a)(l)(v) of Regulation S-K. Please see the Accounts Form 8-K filed on March 3, 2005, for more
information.

(a) The registrant maintains a system of disclosure controls
          and procedures that are designed to ensure that information required
          to be disclosed in the registrants reports under the Securities
          Exchange Act of 1934, as amended (the "Exchange Act"), is recorded,
          processed, summarized and reported within the time periods specified
          in the SEC's rules and forms, and that such information is accumulated
          and communicated to management, including the registrant's Chief Executive
          Officer 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. 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, 2004, except as noted below.

The registrant had previously consolidated its investments
          in certain joint ventures during both 2003 and 2002, as a result of
          the registrants majority financial interest in, and shared control
          of, those joint ventures. Ernst & Young LLP audited both the registrants
          2003 and 2002 consolidated financial statements.

Based on consultations with Ernst & Young LLP in connection
          its audit of the registrants 2004 consolidated financial statements,
          however, it was determined that the investments in certain joint ventures
          that had previously been treated as consolidated subsidiaries in 2003
          and 2002 should instead be treated as investments in unconsolidated
          joint ventures, despite the fact that the registrant owned a majority
          financial interest in the entities. The registrants 2003 and
          2002 financial statements have been restated to show the treatment
          of these investments consistently with the 2004 treatment, which reflects
          the registrant's equity in the net assets and operations of the underlying
          entities.



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This restatement did not affect the registrant's total
          net assets, net asset value per accumulation value, net increase in
          net assets resulting from operations nor the registrant's total return,
          as previously reported in the registrant's 2003 and 2002 financial
          statements. See Note 1 to the registrants financial statements.

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

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

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

50

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PART III

ITEMS 10 AND 11. DIRECTORS AND EXECUTIVE OFFICERS 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 principal executive officers of TIAA, and their
principal occupations during the last five years, are as follows:

Elizabeth E. Bailey,66John C. Hower Professor of Public Policy and Management, Wharton School, University of Pennsylvania. Director, CSX Corporation and Altria Group, Inc.

Robert C. Clark,61Harvard
University Distinguished Service Professor and Austin Wakeman Scott Professor
of Law, Harvard Law School, Harvard University. Director, Collins & Aikman
Corporation, Time Warner Inc. and Omnicom Group.

Estelle A. Fishbein,70Vice President and General Counsel Emerita, Johns Hopkins University.

Marjorie Fine Knowles,65Professor of Law, Georgia State University College of Law.

Robert M. ONeil,70Professor of Law, University of Virginia and Director, Thomas Jefferson Center for the Protection of Free Expression.

Donald K. Peterson,55Chairman
and Chief Executive Officer, Avaya Inc. Formerly, Executive Vice President and
Chief Financial Officer, Lucent Technologies. Director, Reynolds & Reynolds
Co.

Sidney A. Ribeau,57President, Bowling Green University. Director, The Andersons, Convergys and Worthington Industries.

Leonard S. Simon,68Former Vice Chairman, Charter One Financial, Inc. Formerly, Chairman, President and Chief Executive Officer, RCSB Financial, Inc. and Chairman and Chief Executive Officer, Rochester Community Savings Bank. Director, Landmark
Technology Partners, Inc. and Integrated Nano-Technologies, LLC.

David F. Swensen,51Chief Investment Officer, Yale University. Director, Schroders plc.

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Ronald L. Thompson,55Chairman and Chief Executive Officer, Midwest Stamping and Manufacturing Company. Director, Interstate Bakeries and Ryerson Tull, Inc.

Paul R. Tregurtha,69Chairman and Chief Executive Officer, Mormac Marine Group, Inc. and Moran Transportation Company, Inc.; Vice Chairman, Interlake Steamship Company and Lakes Shipping Company; Formerly, Chairman, Meridian Aggregates, L.P. Director,
FPL Group, Inc.

Rosalie J. Wolf,63Managing Partner, Botanica Capital Partners LLC. Formerly, Managing Director, Offit Hall Capital Management LLC and its predecessor company, Laurel Management Company LLC; earlier, Treasurer and Chief Investment Officer, The
Rockefeller Foundation. Director, North European Oil Royalty Trust and Sanford C. Bernstein Fund, Inc.

OfficerTrustees

Herbert M. Allison, Jr.,61Chairman,
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, Inc., 1999 2002.
Director, New York Stock Exchange.

Other Officers

Portfolio Management Team

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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 the 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.

Not applicable.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

TIAAs general account plays a significant role in operating the Real Estate Account, including providing a liquidity guarantee, and investment management and other services.

Liquidity Guarantee.If the Accounts cash flow is insufficient to fund redemption requests, TIAAs general account has agreed to fund them by purchasing
accumulation 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, 2004, the Account paid TIAA $1,868,733 for this liquidity guarantee through
a daily deduction from the net assets of the Account.

Investment Management 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.

For the year ended December 31, 2004, the Account paid TIAA $14,393,388 for investment management services and $4,093,858 for mortality and expense risks. For the same period, the Account paid
Services $16,372,446 for its administrative and distribution services.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

Ernst & Young LLP (Ernst & Young) performs independent audits of the Registrants financial statements. To maintain auditor independence and avoid even the appearance
of

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conflicts of interest, the Registrant, as a policy, does not engage Ernst & Young for management advisory or consulting services.

Audit Fees.Ernst & Youngs fees for professional services rendered for the audit of the Registrants annual financial statements (including
Sarbanes-Oxley-related activities) for the fiscal years ended December 31, 2004 and December 31, 2003 and review of financial statements included in Registrants quarterly reports were $660,200 and $151,700, respectively.

Tax Fees.Ernst & Young had no tax fees for the fiscal years ended December 31, 2004 and 2003.

All Other Fees.Other than as set forth above, Ernst & Young had no additional fees with respect to Registrant.

Preapproval Policy.In June of 2003, the Registrants audit committee (AuditCommittee) 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.

Auditor Fees for Related Entities.The aggregate non-audit fees billed by Ernst & Young for services rendered to the Registrant and affiliates performing on-going
services to the Registrant, including TIAA, for the years ended December 31, 2004 and 2003 were $204,800 and $171,000, respectively.

Ernst & Youngs aggregate fees for professional services rendered in connection with the audit of financial statements for TIAA and the College Retirement Equities Fund (CREF) and their affiliated entities were $7,703,700 for the year ended December 31, 2004 and $3,955,300 for the year ended December 31, 2003. Ernst & Youngs
aggregate fees for audit related-services provided to TIAA and CREF and their affiliated entities were $204,800 for the year ended December 31, 2004 and $171,000 for the year ended December 31, 2003. Ernst & Youngs aggregate fees
for tax services provided to TIAA and CREF and their affiliated entities were $250,600 for the year ended December 31, 2004 and $229,900 for the year ended December 31, 2003. Ernst & Young had no additional aggregate fees for other
services provided to TIAA and CREF and their affiliated entities for the years ended December 31, 2004 and 2003.

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PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.

| | (a)  |  | 1.                                                                                           | Financial Statements. See Item 8 for required financial statements.   
| | ---- |  | -------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------
|
| | (a)  |  | 2.                                                                                           | Financial Statement Schedules.                                        
|
| | (a)  |  | 3.                                                                                           | Exhibits.                                                             
|
| | (1)  |  | Distribution and Administrative Services Agreement by and between TIAA and                  
| |      |  | TIAA-CREF Individual & Institutional
          Services, Inc. (as amended)*                 
|
| | (3)  |  | (A)                                                                                          | Charter of TIAA (as amended)****                                      
| |      |  | (B)                                                                                          | Bylaws of TIAA (as amended)**                                         
| | (4)  |  | (A)                                                                                          | Forms of RA, GRA, GSRA, SRA, and IRA Real Estate Account Contract     
| |      |  |                                                                                              | Endorsements*                                                         
| |      |  | (B)                                                                                          | Forms of Income-Paying Contracts*                                     
| | (10) |  | (A)                                                                                          | Independent Fiduciary Agreement by and among TIAA, the Registrant, and
| |      |  |                                                                                              | Institutional Property Consultants, Inc. (as amended)***              
| |      |  | (B)                                                                                          | Custodial Services Agreement by and between TIAA and Morgan Guaranty  
| |      |  |                                                                                              | Trust Company of New York with respect
    to the Real Estate Account*
| | (14) |  | Code of Ethics                                                                              
| | (31) |  | Rule 13a-15(e)/15d-15(e) Certifications                                                     
| | (32) |  | Section 1350 Certifications                                                                 
|
| | (b)  |  | Reports on 8-K. The Account filed a report on Form 8-K on December 3, 2004                  
| |      |  | under Items 5.01 and 9.01 of the form with respect to the announcement of the               
| |      |  | resignation of a member of TIAAs
          Board of Trustees. After the end of the quarter,
| |      |  | the Account filed a report on Form 8-K on March 3, 2005 under Items 4.01 and 9.01           
| |      |  | of the form with respect to a change
          in the Accounts certifying accountant.      

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

| |  | TIAA REAL ESTATE ACCOUNT          
| |  | ----------------------------------
|
| |  | By: TEACHERS INSURANCE AND ANNUITY
| |  | ASSOCIATION OF AMERICA            
|
| |  | By:                               
| |  |                                   
| |  |                                   
| |  |                                   
| |  |                                   
|
| |  |                                   
| |  |                                   
| |  |                                   

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed by the following persons, 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 of the Board, President, and Chief     |     
|                        |                         |       | Executive Officer (Principal Executive Officer) |     
|Herbert M. Allison, Jr. |                         |       |                                                 |     
|                       
|                       
|                       
|/s/                     | Elizabeth A. Monrad     |       | Executive Vice President (Principal Financial   |     
|                        |                         |       | and Accounting Officer)                         |     
|Elizabeth A. Monrad     |                         |       |                                                 |     

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|Signature of Trustee    |                         | Date |         | Signature of Trustee |     | Date              
|----------------------- | ----------------------- | ---- | ------- | -------------------- | --- | ------------------
|                       
|/s/                     | Herbert M. Allison, Jr. |      | 4/15/05 |                      | /s/ | Sidney A. Ribeau  
|                        |                         |      |         |                      |     |                   
|Herbert M. Allison, Jr. |                         |      |         | Sidney A. Ribeau     |     |                   
|                       
|                       
|/s/                     | Elizabeth E. Bailey     |      | 4/15/05 |                      | /s/ | Leonard S. Simon  
|                        |                         |      |         |                      |     |                   
|Elizabeth E. Bailey     |                         |      |         | Leonard S. Simon     |     |                   
|                       
|                       
|/s/                     | Robert C. Clark         |      | 4/15/05 |                      | /s/ | David F. Swensen  
|                        |                         |      |         |                      |     |                   
|Robert C. Clark         |                         |      |         | David F. Swensen     |     |                   
|                       
|                       
|/s/                     | Estelle A. Fishbein     |      | 4/15/05 |                      | /s/ | Ronald L. Thompson
|                        |                         |      |         |                      |     |                   
|Estelle A. Fishbein     |                         |      |         | Ronald L. Thompson   |     |                   
|                       
|                       
|/s/                     | Marjorie Fine Knowles   |      | 4/15/05 |                      | /s/ | Paul R. Tregurtha 
|                        |                         |      |         |                      |     |                   
|Marjorie Fine Knowles   |                         |      |         | Paul R. Tregurtha    |     |                   
|                       
|                       
|/s/                     | Robert M. ONeil        |      | 4/15/05 |                      | /s/ | Rosalie J. Wolf   
|                        |                         |      |         |                      |     |                   
|Robert M. ONeil        |                         |      |         | Rosalie J. Wolf      |     |                   
|                       
|                       
|/s/                     | Donald K. Peterson      |      | 4/15/05 |                      |     |                   
|                        |                         |      |         |                      |     |                   
|Donald K. Peterson      |                         |      |         |                      |     |                   

57

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SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED 
PURSUANT TO SECTION 15(D) OF THE ACT BY REGISTRANTS WHICH HAVE NOTREGISTERED 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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