FORM 10-K

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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.)

c/o Teachers Insurance and Annuity Association of America730 Third AvenueNew York, New York 10017-3206(Address of principal executive offices, including zip code)

Registrants telephone number, including area code: (212) 490-9000

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

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

Indicate by check mark 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, 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.

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Net Assets and Portfolio Investments. As of December 31, 2005, the Accounts net assets totaled $10,548,711,102. At December 31, 2005, the Account held a
total of 109 real estate properties (including its interests in eleven real estate-related joint ventures), representing 80.10% of the Accounts total investment portfolio (Total Investments). As of that date, the Account also held
investments in real estate equity securities, representing 3.72% of Total Investments, commercial mortgage backed securities (CMBSs), representing 0.19% of Total Investments, real estate limited partnerships, representing 1.71% of Total Investments,
and commercial paper representing 11.67% of Total Investments and government bonds, representing 2.61% of the Total Investments.

Risk Factors. The Accounts assets and income (particularly its real estate assets and rental income) can be affected by a variety of risk factors. These risks
are more fully described under Item 7A of this report and in the Accounts prospectus.

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, 2005.

|                          |  |  |                   |  |            |  |  |           |  |              |  |         |   |            | 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      | % |            | $32.69      |          | $ | 502,993,710 | (4)   
|1 & 7 Westferry Circus    |  |  | London, UK        |  | 1992, 1993 |  |  | 2005      |  | 395,784      |  | 82      | % |            | $25.73      |          |   | 373,116,817 | (4)(5)
|50 Fremont Street         |  |  | San Francisco, CA |  | 1983       |  |  | 2004      |  | 817,412      |  | 90      | % |            | $30.65      |          |   | 373,010,003 | (4)   
|IDX Tower                 |  |  | Seattle, WA       |  | 2002       |  |  | 2004      |  | 845,533      |  | 97      | % |            | $27.39      |          |   | 370,000,000 | (4)   
|Four Oaks Place           |  |  | Houston, TX       |  | 1983       |  |  | 2004      |  | 1,762,616    |  | 91      | % |            | $18.63      |          |   | 295,239,109 |       
|99 High Street            |  |  | Boston, MA        |  | 1971       |  |  | 2005      |  | 731,204      |  | 90      | % |            | $28.99      |          |   | 276,266,900 | (4)   
|Lincoln Centre            |  |  | Dallas, TX        |  | 1984       |  |  | 2005      |  | 1,635,352    |  | 85      | % |            | $16.32      |          |   | 255,311,299 |       
|780 Third Avenue          |  |  | New York, NY      |  | 1984       |  |  | 1999      |  | 487,501      |  | 88      | % |            | $41.60      |          |   | 230,000,000 |       
|1900 K Street             |  |  | Washington, DC    |  | 1996       |  |  | 2004      |  | 342,884      |  | 100     | % |            | $37.20      |          |   | 230,000,000 |       
|Embarcadero Center West   |  |  | San Francisco, CA |  | 1988       |  |  | 2005      |  | 472,261      |  | 87      | % |            | $33.91      |          |   | 205,965,261 |       
|701 Brickell              |  |  | Miami, FL         |  | 1986(6)    |  |  | 2002      |  | 677,667      |  | 91      | % |            | $27.59      |          |   | 201,173,724 |       
|161 North Clark Street(7) |  |  | Chicago, IL       |  | 1992       |  |  | 2003      |  | 1,010,520    |  | 94      | % |            | $16.14      |          |   | 175,578,714 |       

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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)
|                              |  |                      |  |                             |  |  |           |  |              |  |         |   |            |             |          |   |               | 
|U.S. Bank Plaza               |  | Sacramento, CA       |  | 1992                        |  |  | 2005      |  | 481,885      |  | 90      | % |            | $22.96      |          | $ | 159,000,000   | 
|Ten & Twenty Westport Road    |  | Wilton, CT           |  | 1974(6);
              2001 |  |  | 2001      |  | 538,840      |  | 100     | % |            | $27.84      |          |   | 157,000,000   | 
|Mellon Financial Center       |  |                      |  |                             |  |  |           |  |              |  |         |   |            |             |          |   |               | 
|at One Boston Place(8)        |  | Boston, MA           |  | 1970(6)                     |  |  | 2002      |  | 785,415      |  | 97      | % |            | $38.79      |          |   | 149,723,498   | 
|Yahoo! Center(9)              |  | Santa Monica, CA     |  | 1984                        |  |  | 2004      |  | 1,082,952    |  | 98      | % |            | $30.59      |          |   | 138,531,366   | 
|Urban Centre                  |  | Tampa, FL            |  | 1984, 1987                  |  |  | 2005      |  | 549,375      |  | 90      | % |            | $19.05      |          |   | 106,007,400   | 
|Inverness Center              |  | Birmingham, AL       |  | 1980-1985                   |  |  | 2005      |  | 903,857      |  | 94      | % |            | $10.87      |          |   | 98,090,987    | 
|Morris Corporate Center III   |  | Parsippany, NJ       |  | 1990                        |  |  | 2000      |  | 525,154      |  | 64      | % |            | $11.08      |          |   | 97,400,000    | 
|Prominence in Buckhead(7)     |  | Atlanta, GA          |  | 1999                        |  |  | 2003      |  | 424,309      |  | 97      | % |            | $27.01      |          |   | 97,142,406    | 
|Treat Towers(7)               |  | Walnut Creek, CA     |  | 1999                        |  |  | 2003      |  | 367,313      |  | 96      | % |            | $32.46      |          |   | 93,964,192    | 
|88 Kearny Street              |  | San Francisco, CA    |  | 1986                        |  |  | 1999      |  | 228,470      |  | 84      | % |            | $34.94      |          |   | 81,567,474    | 
|Oak Brook Regency Towers      |  | Oakbrook, IL         |  | 1977(6)                     |  |  | 2002      |  | 402,318      |  | 77      | % |            | $11.93      |          |   | 73,400,000    | 
|1015 15th Street              |  | Washington, DC       |  | 1978(6)                     |  |  | 2001      |  | 184,825      |  | 99      | % |            | $32.76      |          |   | 73,121,166    | 
|Centerside I                  |  | San Diego, CA        |  | 1982                        |  |  | 2004      |  | 205,137      |  | 77      | % |            | $23.15      |          |   | 66,000,000    | 
|8270 Greensboro Drive         |  | McLean, VA           |  | 2000                        |  |  | 2005      |  | 157,980      |  | 97      | % |            | $32.17      |          |   | 60,200,000    | 
|Sawgrass Office Portfolio     |  | Sunrise, FL          |  | 1997-2000                   |  |  | 1997,     |  |              |  |         |   |            |             |          |   |               | 
|                              |  |                      |  |                             |  |  | 1999-2000 |  | 344,009      |  | 93      | % |            | $13.35      |          |   | 59,700,000    | 
|West Lake North Business Park |  | Westlake Village, CA |  | 2000                        |  |  | 2004      |  | 198,558      |  | 100     | % |            | $26.26      |          |   | 57,600,000    | 
|Parkview Plaza(10)            |  | Oakbrook, IL         |  | 1990                        |  |  | 1997      |  | 263,912      |  | 65      | % |            | $10.43      |          |   | 54,500,000    | 
|Monument Place                |  | Fairfax, VA          |  | 1990                        |  |  | 1999      |  | 221,538      |  | 97      | % |            | $22.29      |          |   | 53,000,000    | 
|3 Hutton Centre               |  | Santa Ana, CA        |  | 1985(6)                     |  |  | 2003      |  | 197,817      |  | 99      | % |            | $24.74      |          |   | 48,349,580    | 
|Capitol Place                 |  | Sacramento, CA       |  | 1988(6)                     |  |  | 2003      |  | 151,803      |  | 95      | % |            | $28.12      |          |   | 48,000,000    | 
|One Virginia Square           |  | Arlington, VA        |  | 1999                        |  |  | 2004      |  | 117,967      |  | 100     | % |            | $33.16      |          |   | 47,000,000    | 
|The Pointe on Tampa Bay       |  | Tampa, FL            |  | 1982(6)                     |  |  | 2002      |  | 249,215      |  | 97      | % |            | $22.12      |          |   | 44,711,876    | 
|Maitland Promenade One        |  | Maitland, FL         |  | 1999                        |  |  | 2000      |  | 227,814      |  | 89      | % |            | $13.55      |          |   | 37,817,891    | 
|4200 West Cypress Street      |  | Tampa, FL            |  | 1989                        |  |  | 2003      |  | 220,579      |  | 91      | % |            | $18.80      |          |   | 36,691,519    | 
|Fairgate at Ballston(10)      |  | Arlington, VA        |  | 1988                        |  |  | 1997      |  | 137,117      |  | 64      | % |            | $16.75      |          |   | 35,300,000    | 
|Tysons Executive Plaza II(11) |  | McLean, VA           |  | 1988                        |  |  | 2000      |  | 259,614      |  | 85      | % |            | $18.73      |          |   | 34,032,806    | 
|Columbia Centre III           |  | Rosemont, IL         |  | 1989                        |  |  | 1997      |  | 238,696      |  | 70      | % |            | $  7.93     |          |   | 28,700,000    | 
|10 Waterview Boulevard        |  | Parsippany, NJ       |  | 1984                        |  |  | 1999      |  | 209,553      |  | 64      | % |            | $13.07      |          |   | 27,500,000    | 
|9 Hutton Centre               |  | Santa Ana, CA        |  | 1990                        |  |  | 2001      |  | 148,265      |  | 84      | % |            | $16.48      |          |   | 26,746,837    | 
|Columbus Portfolio            |  |                      |  |                             |  |  |           |  | 259,626      |  | 89      | % |            | $10.32      |          |   | 23,000,000    | 
|Metro South Building          |  | Dublin, OH           |  | 1997                        |  |  | 1999      |  | 90,726       |  |         |   |            |             |          |   |              | 
|Vision Service Plan Building  |  | Eaton, OH            |  | 1997                        |  |  | 1999      |  | 50,000       |  |         |   |            |             |          |   |              | 
|One Metro Place               |  | Dublin, OH           |  | 1998                        |  |  | 2001      |  | 118,900      |  |         |   |            |             |          |   |              | 
|Needham Corporate Center      |  | Needham, MA          |  | 1987                        |  |  | 2001      |  | 138,684      |  | 50      | % |            | $10.60      |          |   | 17,143,612    | 
|371 Hoes Lane                 |  | Piscataway, NJ       |  | 1986                        |  |  | 1997      |  | 136,084      |  | 86      | % |            | $14.07      |          |   | 11,700,000    | 
|Batterymarch Park II          |  | Quincy, MA           |  | 1986                        |  |  | 2001      |  | 104,718      |  | 46      | % |            | $  8.32     |          |   | 11,472,283    | 
|                              |  |                      |  |                             |  |  |           |  |              |  |         |   |            |             |          |   |               | 
|SubtotalOffice Properties    |  |                      |  |                             |  |  |           |  |              |  |         |   |            |             |          |   |               | 
|Average Percent Leased        |  |                      |  |                             |  |  |           |  |              |  | 87      | % |            |             |          | $ | 5,642,770,430 | 
|                              |  |                      |  |                             |  |  |           |  |              |  |         |   |            |             |          |   |               | 

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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     | % |            |             | 2.97     |  | $ | 230,000,000
|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-       |  |  | 3,886,541    |  |  | 67      | % |            |             | 1.96     |  |   | 146,000,000
|(formerly Parkwest Center)    |  | Coppell, TX       |  | 2001        |  |  | 2002        |  |  |              |  |  |         |   |            |             |          |  |   |            
|Southern California RA        |  |                   |  |             |  |  |             |  |  |              |  |  |         |   |            |             |          |  |   |            
|Industrial Portfolio          |  | Los Angeles, CA   |  | 1982        |  |  | 2004        |  |  | 920,028      |  |  | 92      | % |            |             | 4.97     |  |   | 89,017,793 
|Cabot Industrial Portfolio    |  | Rancho            |  | 2000-2002   |  |  | 2000; 2001; |  |  | 1,214,475    |  |  | 100     | % |            | $           | 3.54     |  |   | 77,000,000 
|                              |  | Cucamonga, CA     |  | 2000; 2001; |  |  |             |  |  |              |  |  |         |   |            |             |          |  |   |            
|                              |  |                   |  | 2004        |  |  |             |  |  |              |  |  |         |   |            |             |          |  |   |            
|Chicago CalEast               |  |                   |  |             |  |  |             |  |  |              |  |  |         |   |            |             |          |  |   |            
|Industrial Portfolio          |  | Chicago, IL       |  | 1974-2005   |  |  | 2003        |  |  | 1,493,706    |  |  | 90      | % |            | $           | 4.51     |  |   | 74,622,731 
|Atlanta Industrial Portfolio  |  | Lawrenceville, GA |  | 1996-1999   |  |  | 2000        |  |  | 1,945,693    |  |  | 90      | % |            | $           | 2.26     |  |   | 73,825,000 
|Chicago Industrial Portfolio  |  | Chicago and       |  | 1997-       |  |  | 1998;       |  |  | 1,452,974    |  |  | 86      | % |            | $           | 3.28     |  |   | 72,000,000 
|(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    |  |  | 95      | % |            | $           | 2.86     |  |   | 66,871,766 
|Rainier Corporate Park        |  | Fife, WA          |  | 1991-1997   |  |  | 2003        |  |  | 1,104,646    |  |  | 100     | % |            | $           | 3.77     |  |   | 64,273,372 
|Regal Logistics Campus        |  | Seattle, WA       |  | 1999-2004   |  |  | 2005        |  |  | 968,535      |  |  | 100     | % |            | $           | 4.15     |  |   | 63,103,879 
|Northern California RA        |  |                   |  |             |  |  |             |  |  |              |  |  |         |   |            |             |          |  |   |            
|Industrial Portfolio          |  | Oakland, CA       |  | 1981        |  |  | 2004        |  |  | 741,456      |  |  | 89      | % |            | $           | 4.02     |  |   | 62,325,024 
|IDI Kentucky Portfolio        |  |                   |  |             |  |  |             |  |  | 1,437,022    |  |  | 99      | % |            | $           | 2.96     |  |   | 58,500,000 
|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      |  |  |         |   |            |             |          |  |   |           
|South River Road Industrial   |  | Cranbury, NJ      |  | 1999        |  |  | 2001        |  |  | 626,071      |  |  | 100     | % |            | $           | 4.14     |  |   | 55,000,000 
|Memphis CalEast               |  |                   |  |             |  |  |             |  |  |              |  |  |         |   |            |             |          |  |   |            
|Industrial Portfolio          |  | Memphis, TN       |  | 1996-1997   |  |  | 2003        |  |  | 1,600,232    |  |  | 100     | % |            | $           | 2.61     |  |   | 54,000,000 
|GE Appliance East Coast       |  |                   |  |             |  |  |             |  |  |              |  |  |         |   |            |             |          |  |   |            
|Distribution Facility         |  | Perryville, MD    |  | 2003        |  |  | 2005        |  |  | 1,004,000    |  |  | 100     | % |            | $           | 2.82     |  |   | 46,470,475 
|Shawnee Ridge                 |  |                   |  |             |  |  |             |  |  |              |  |  |         |   |            |             |          |  |   |            
|Industrial Portfolio          |  | Atlanta, GA       |  | 2000-2005   |  |  | 2005        |  |  | 775,694      |  |  | 100     | % |            | $           | 3.20     |  |   | 44,418,860 
|New Jersey CalEast            |  |                   |  |             |  |  |             |  |  |              |  |  |         |   |            |             |          |  |   |            
|Industrial Portfolio          |  | Cranbury, NJ      |  | 1982-1989   |  |  | 2003        |  |  | 807,773      |  |  | 100     | % |            | $           | 3.67     |  |   | 42,000,000 
|East North Central RA         |  |                   |  |             |  |  |             |  |  |              |  |  |         |   |            |             |          |  |   |            
|Industrial Portfolio          |  | Chicago, IL       |  | 1978        |  |  | 2004        |  |  | 541,266      |  |  | 90      | % |            | $           | 4.64     |  |   | 37,717,159 
|Northeast RA                  |  |                   |  |             |  |  |             |  |  |              |  |  |         |   |            |             |          |  |   |            
|Industrial Portfolio          |  | Boston, MA        |  | 2000        |  |  | 2004        |  |  | 384,000      |  |  | 100     | % |            | $           | 6.33     |  |   | 29,000,000 
|Centre Pointe and Valley View |  | Los Angeles       |  |             |  |  |             |  |  |              |  |  |         |   |            |             |          |  |   |            
|                              |  | County, CA        |  | 1965-1989   |  |  | 2004        |  |  | 307,685      |  |  | 88      | % |            | $           | 5.10     |  |   | 28,000,000 

5

---



|                                |  |                    |  |            |  |  |           |  |              |      |         |     |            |           | 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)   
|                                |  |                    |  |            |  |  |           |  |              |      |         |     |            |           |             |       |               |   |              
|Summit Distribution Center      |  | Memphis, TN        |  | 2002       |  |  | 2003      |  | 708,532      |      |         | 100 | %          |           | $           | 2.52  |               | $ | 25,900,000   
|Konica Photo                    |  |                    |  |            |  |  |           |  |              |      |         |     |            |           |             |       |               |   |              
|Imaging Headquarters            |  | Mahwah, NJ         |  | 1999       |  |  | 1999      |  | 168,000      |      |         | 100 | %          |           | $           | 10.93 |               |   | 25,300,000   
|Eastgate Distribution Center    |  | San Diego, CA      |  | 1996       |  |  | 1997      |  | 200,000      |      |         | 100 | %          |           | $           | 3.67  |               |   | 22,000,000   
|Northwest RA                    |  |                    |  |            |  |  |           |  |              |      |         |     |            |           |             |       |               |   |              
|Industrial Portfolio            |  | Seattle, WA        |  | 1996       |  |  | 2004      |  | 312,321      |      |         | 100 | %          |           | $           | 3.58  |               |   | 19,700,000   
|UPS Distribution Facility       |  | Fernley, NV        |  | 1998       |  |  | 1998      |  | 256,000      |      |         | 100 | %          |           | $           | 4.07  |               |   | 15,000,000   
|Landmark at Salt Lake City      |  |                    |  |            |  |  |           |  |              |      |         |     |            |           |             |       |               |   |              
|(Building #4)                   |  | Salt Lake City, UT |  | 2000       |  |  | 2000      |  | 328,508      |      |         | 85  | %          |           | $           | 2.70  |               |   | 14,700,000   
|Mideast RA                      |  |                    |  |            |  |  |           |  |              |      |         |     |            |           |             |       |               |   |              
|Industrial Portfolio            |  | Wilmington, DE     |  | 1989       |  |  | 2004      |  | 266,141      |      |         | 72  | %          |           | $           | 3.35  |               |   | 14,258,555   
|FEDEX Distribution Facility     |  | Crofton, MD        |  | 1998       |  |  | 1998      |  | 110,842      |      |         | 100 | %          |           | $           | 7.18  |               |   | 8,500,000    
|Mountain RA                     |  |                    |  |            |  |  |           |  |              |      |         |     |            |           |             |       |               |   |              
|Industrial Portfolio            |  | Phoenix, AZ        |  | 1989       |  |  | 2004      |  | 136,704      |      |         | 100 | %          |           | $           | 2.82  |               |   | 5,754,652    
|Butterfield Industrial Park     |  | El Paso, TX        |  | 1980-81    |  |  | 1995      |  | 183,510      |      |         | 100 | %          |           | $           | 2.35  |               |   | 4,618,955    
|                                |  |                    |  |            |  |  |           |  |              |      |         |     |            |           |             |       |               |   |              
|                               
|SubtotalIndustrial  Properties |  |                    |  |            |  |  |           |  |              |      |         | 95  | %          |           |             |       |               | $ | 1,569,878,221
|Average Percent Leased          |  |                    |  |            |  |  |           |  |              |      |         |     |            |           |             |       |               |   |              
|                                |  |                    |  |            |  |  |           |  |              |      |         |     |            |           |             |       |               |   |              
|RETAIL PROPERTIES               |  |                    |  |            |  |  |           |  |              |      |         |     |            |           |             |       |               |   |              
|The Florida Mall(13)            |  | Orlando, FL        |  | 1986(6)    |  |  | 2002      |  | 921,370      | (14) |         | 99  | %          |           | $           | 37.29 |               |   | 208,013,192  
|West Town Mall(13)              |  | Knoxville, TN      |  | 1972(6)    |  |  | 2002      |  | 684,777      | (14) |         | 96  | %          |           | $           | 17.20 |               |   | 112,650,844  
|Mazza Gallerie                  |  | Washington, DC     |  | 1975       |  |  | 2004      |  | 293,935      |      |         | 97  | %          |           | $           | 18.13 |               |   | 86,001,109   
|Westwood Marketplace            |  | Los Angeles, CA    |  | 1950(15)   |  |  | 2002      |  | 202,201      |      |         | 100 | %          |           | $           | 27.55 |               |   | 86,000,000   
|Miami International Mall(13)    |  | Miami, FL          |  | 1982(6)    |  |  | 2002      |  | 290,299      | (14) |         | 94  | %          |           | $           | 28.27 |               |   | 82,290,482   
|Plainsboro Plaza                |  | Plainsboro, NJ     |  | 1987       |  |  | 2005      |  | 218,653      |      |         | 92  | %          |           | $           | 12.10 |               |   | 50,745,252   
|The Market at Southpark         |  | Littleton, CO      |  | 1988       |  |  | 2004      |  | 190,080      |      |         | 89  | %          |           | $           | 10.74 |               |   | 34,001,746   
|Suncrest Village                |  | Orlando, FL        |  | 1987       |  |  | 2005      |  | 93,358       |      |         | 99  | %          |           | $           | 10.93 |               |   | 16,400,000   
|Plantation Grove                |  | Ocoee, FL          |  | 1995       |  |  | 1995      |  | 73,655       |      |         | 100 | %          |           | $           | 11.64 |               |   | 13,800,000   
|                                |  |                    |  |            |  |  |           |  |              |      |         |     |            |           |             |       |               |   |              
|SubtotalRetail Properties      |  |                    |  |            |  |  |           |  |              |      |         | 96  | %          |           |             |       |               |   | 689,902,625  
|Average Percent Leased          |  |                    |  |            |  |  |           |  |              |      |         |     |            |           |             |       |               |   |              
|                                |  |                    |  |            |  |  |           |  |              |      |         |     |            |           |             |       |               |   |              
|                                |  |                    |  |            |  |  |           |  |              |      |         |     |            |           |             |       |               |   |              
|SubtotalCommercial Properties  |  |                    |  |            |  |  |           |  |              |      |         |     |            |           |             | $     | 7,902,551,276 |  
|                                |  |                    |  |            |  |  |           |  |              |      |         |     |            |           |             |       |               |  
|RESIDENTIAL PROPERTIES(16)      |  |                    |  |            |  |  |           |  |              |      |         |     |            |           |             |       |               |  
|Palomino Park Apartments        |  | Denver, CO         |  | 1996-2001  |  |  | 2005      |  | NA           |      |         | 92  | %          |           |             | NA    |               |   | 176,232,394  
|The Legacy at                   |  |                    |  |            |  |  |           |  |              |      |         |     |            |           |             |       |               |   |              
|Westwood Apartments             |  | Los Angeles, CA    |  | 2001       |  |  | 2002      |  | NA           |      |         | 98  | %          |           |             | NA    |               |   | 100,000,000  
|Larkspur Courts                 |  | Larkspur, CA       |  | 1991       |  |  | 1999      |  | NA           |      |         | 95  | %          |           |             | NA    |               |   | 86,000,000   
|The Colorado                    |  | New York, NY       |  | 1987       |  |  | 1999      |  | NA           |      |         | 99  | %          |           |             | NA    |               |   | 85,048,163   
|Ashford Meadows Apartments      |  | Herndon, VA        |  | 1998       |  |  | 2000      |  | NA           |      |         | 94  | %          |           |             | NA    |               |   | 78,904,526   
|1050 Lenox Park                 |  | Atlanta, GA        |  | 2001       |  |  | 2005      |  | NA           |      |         | 97  | %          |           |             | NA    |               |   | 71,000,000   
|Regents Court Apartments        |  | San Diego, CA      |  | 2001       |  |  | 2002      |  | NA           |      |         | 100 | %          |           |             | NA    |               |   | 62,500,000   
|The Caruth                      |  | Dallas, TX         |  | 1999       |  |  | 2005      |  | NA           |      |         | 93  | %          |           |             | NA    |               |   | 61,200,000   
|South Florida                   |  | Boca Raton and     |  |            |  |  |           |  |              |      |         |     |            |           |             |       |               |   |              
|Apartment Portfolio             |  | Plantation, FL     |  | 1986       |  |  | 2001      |  | NA           |      |         | 98  | %          |           |             | NA    |               |   | 56,400,000   
|Glenridge Walk                  |  | Atlanta, GA        |  | 1996, 2001 |  |  | 2005      |  | NA           |      |         | 95  | %          |           |             | NA    |               |   | 45,300,000   
|The Reserve at Sugarloaf        |  | Duluth, GA         |  | 2000       |  |  | 2005      |  | NA           |      |         | 97  | %          |           |             | NA    |               |   | 44,800,000   
|Lincoln Woods Apartments        |  | Lafayette Hill, PA |  | 1991       |  |  | 1997      |  | NA           |      |         | 99  | %          |           |             | NA    |               |   | 35,528,316   

6

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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)
|                                |  |                      |  |           |  |           |  |              |  |         |   |            |             |          |   |               | 
|The Maroneal                    |  | Houston, TX          |  | 1998      |  | 2005      |  | NA           |  | 97      | % |            | NA          |          | $ | 35,000,000    | 
|Alexan Buckhead                 |  | Atlanta, GA          |  | 2002      |  | 2002      |  | NA           |  | 99      | % |            | NA          |          |   | 34,800,000    | 
|The Lodge at Willow Creek       |  | Denver, CO           |  | 1997      |  | 1997      |  | NA           |  | 96      | % |            | NA          |          |   | 34,600,000    | 
|Westcreek Apartments            |  | Westlake Village, CA |  | 1988      |  | 1997      |  | NA           |  | 99      | % |            | NA          |          |   | 30,939,671    | 
|Golfview Apartments             |  | Lake Mary, FL        |  | 1998      |  | 1998      |  | NA           |  | 98      | % |            | NA          |          |   | 30,835,506    | 
|Kenwood Mews Apartments         |  | Burbank, CA          |  | 1991      |  | 2001      |  | NA           |  | 100     | % |            | NA          |          |   | 30,000,000    | 
|The Legends at Chase Oaks       |  | Plano, TX            |  | 1997      |  | 1998      |  | NA           |  | 97      | % |            | NA          |          |   | 28,499,971    | 
|Monte Vista                     |  | Littleton, CO        |  | 1995      |  | 1996      |  | NA           |  | 93      | % |            | NA          |          |   | 24,647,901    | 
|Royal St. George                |  | W. Palm Beach, FL    |  | 1995      |  | 1996      |  | NA           |  | 98      | % |            | NA          |          |   | 21,400,000    | 
|The Fairways of Carolina        |  | Margate, FL          |  | 1993      |  | 2001      |  | NA           |  | 100     | % |            | NA          |          |   | 21,100,000    | 
|Quiet Water at Coquina Lakes    |  | Deerfield Beach, FL  |  | 1995      |  | 2001      |  | NA           |  | 100     | % |            | NA          |          |   | 20,912,293    | 
|The Greens at                   |  |                      |  |           |  |           |  |              |  |         |   |            |             |          |   |               | 
|Metrowest Apartments            |  | Orlando, FL          |  | 1990      |  | 1995      |  | NA           |  | 95      | % |            | NA          |          |   | 18,200,000    | 
|                                |  |                      |  |           |  |           |  |              |  |         |   |            |             |          |   |               | 
|SubtotalResidential Properties |  |                      |  |           |  |           |  |              |  |         |   |            |             |          |  
|Average Percent Leased          |  |                      |  |           |  |           |  |              |  | 97      | % |            |             |          |   | 1,233,848,741 | 
|                                |  |                      |  |           |  |           |  |              |  |         |   |            |             |          |   |               | 
|OTHER COMMERCIAL PROPERTIES     |  |                      |  |           |  |           |  |              |  |         |   |            |             |          |  
|Storage Portfolio I(17)         |  | Various, U.S.        |  | 19721990 |  | 2003      |  | 2,225,234    |  | 80      | % |            | $     9.77  |          |   | 63,237,298    | 
|                                |  |                      |  |           |  |           |  |              |  |         |   |            |             |          |   |               | 
|TotalAll Properties            |  |                      |  |           |  |           |  |              |  |         |   |            |             |          | $ | 9,199,637,315 | 
|                                |  |                      |  |           |  |           |  |              |  |         |   |            |             |          |   |               | 

|(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, 2005. For those properties purchased in fourth quarter of 2005 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)  | This property is located in London, United Kingdom, and the market value is converted from Pound Sterling to U.S. Dollars at the exchange rate as of December 31, 2005.                                                                                                       
|    
|(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)  | Formerly known as Colorado Center, this property held in 50%/50% joint venture with Equity Office Portfolio Trust.                                                                                                                                                          
|    
|(10) | Purchased through Light Street Partners, L.P. (now 100% owned by the Account).                                                                                                                                                                                                
|    
|(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, 2005, the Account held 85 commercial (non-residential) properties in its portfolio including a portfolio of storage facilities located
throughout the United States. Eleven of these properties are held through joint ventures, and thirteen 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 in whole or in part by the tenants.

The Accounts portfolio is well diversified by both property type, as well as geographic location. The portfolio consists of: 45 office properties containing approximately 21 million square feet
located in 13 states, the District of Columbia and the United Kingdom; 30 industrial properties containing 31 million square feet located in 14 states, including a 60% interest in a portfolio of industrial properties located throughout the United
States; and 9 retail properties containing approximately 3 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, 2005, the overall occupancy rate of Accounts commercial real estate portfolio was 91% on a weighted average basis. Office properties were 87% leased with 1,843 leases,
industrial properties were 95% leased with 340 leases, and retail properties were 96% leased with 587 leases. No single tenant accounts for more than 2.2% of the total rentable area of the Accounts commercial properties.

The Accounts residential property portfolio currently consists of 24 first class or luxury multi-family garden apartment complexes, mid-rise and high rise apartment buildings. The portfolio
contains approximately 7502 units located in 8 states, and is 97% 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

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The table below provides additional information regarding the residential properties in the Accounts portfolio as of December 31, 2005.

---

---

|                                  |  |                     |  |          |  | Average       |  | Avg. Rent
|--------------------------------- |  | ------------------- |  | -------- |  | ------------- |  | ---------
|                                  |  |                     |  | Number   |  | Unit Size     |  | Per Unit/
|Property                          |  | Location            |  | of Units |  | (Square Feet) |  | Per Month
|                                  |  |                     |  |          |  |               |  |          
|                                  |  |                     |  |          |  |               |  |          
|The Greens at Metrowest           |  | Orlando, FL         |  | 200      |  | 920           |  | $        
|Monte Vista                       |  | Littleton, CO       |  | 219      |  | 888           |  | $        
|Royal St. George                  |  | West Palm Beach, FL |  | 224      |  | 870           |  | $        
|Westcreek Apartments              |  | Thousand Oaks, CA   |  | 126      |  | 951           |  | $        
|Lincoln Woods Apartments          |  | Lafayette Hill, PA  |  | 216      |  | 774           |  | $        
|The Lodge at Willow Creek         |  | Douglas County, CO  |  | 316      |  | 996           |  | $        
|Legends at Chase Oaks             |  | Plano, TX           |  | 346      |  | 972           |  | $        
|Golfview Apartments               |  | Lake Mary, FL       |  | 276      |  | 1,149         |  | $        
|The Colorado                      |  | New York, NY        |  | 256      |  | 622           |  | $        
|Larkspur Courts                   |  | Larkspur, CA        |  | 248      |  | 1,001         |  | $        
|Ashford Meadows                   |  | Herndon, VA         |  | 440      |  | 1,050         |  | $        
|South Florida Apartment Portfolio |  | Ft. Lauderdale, FL  |  | 550      |  | 889           |  | $        
|The Fairways of Carolina          |  | Margate, FL         |  | 208      |  | 1,026         |  | $        
|Quiet Waters at Coquina Lakes     |  | Deerfield Beach, FL |  | 200      |  | 1,048         |  | $        
|Kenwood Mews Apartments           |  | Burbank, CA         |  | 141      |  | 942           |  | $        
|The Legacy at Westwood            |  | Los Angeles, CA     |  | 187      |  | 1,181         |  | $        
|Regents Court                     |  | San Diego, CA       |  | 251      |  | 886           |  | $        
|Alexan Buckhead                   |  | Atlanta, GA         |  | 231      |  | 990           |  | $        
|The Reserve at Sugarloaf          |  | Atlanta, GA         |  | 333      |  | 1,220         |  | $        
|The Maroneal                      |  | Houston, TX         |  | 309      |  | 1,232         |  | $        
|Glenridge Walk                    |  | Atlanta, GA         |  | 296      |  | 1,143         |  | $        
|1050 Lenox Park                   |  | Atlanta, GA         |  | 407      |  | 1,007         |  | $        
|Palomino Park                     |  | Denver, CO          |  | 1,184    |  | 1,096         |  | $        
|The Caruth Apartments             |  | Dallas, TX          |  | 338      |  | 1,168         |  | $        

---

---

ITEM 3.      LEGAL PROCEEDINGS.Other than lawsuits in the ordinary course of business, which we believe will have no material impact on our business, there are no lawsuits in which the Account is a
party.

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

9

---



PART II

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

(a)Market Information. There is no established public trading market for participating interests in the TIAA Real Estate Account.
Accumulation units in the Account are sold to eligible participants at the Accounts current accumulation unit value, which is based on the value of the Accounts then current net assets. For the period from January 1, 2005 to December 31,
2005, the high and low accumulation unit values for the Account were $239.9535 and $210.0714, respectively. For the period January 1, 2004 to December 31, 2004, the high and low accumulation unit values for the Account were $210.4446 and
$186.9917, respectively.

Approximate Number of Holders. The number of contract owners at December 31, 2005 was 909,501.

(b) Use of Proceeds: Not applicable.

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

10

---



Thefollowingselectedfinancialdata should
beconsideredinconjunctionwith theAccountsfinancialstatementsand notesprovidedin this report.

|                                 |  | Year Ended   |                | Year Ended   |   | Year Ended    |  | Year Ended   |               |  | Year Ended   |              
|-------------------------------- |  | ------------ | -------------- | ------------ | - | ------------- |  | ------------ | ------------- |  | ------------ | -------------
|                                 |  | December 31, |                | December 31, |   | December 31,  |  | December 31, |               |  | December 31, |              
|                                 |  | 2005         |                | 2004         |   | 2003          |  | 2002         |               |  | 2001         |              
|Investment income:               |  |              |                |              |   |               |  |              |               |  |              |              
|Real estate income, net          |  | $            | 340,089,550    |              | $ | 239,429,500   |  | $            | 224,938,080   |  | $            | 198,998,685  
|Income from real estate          |  |              |                |              |   |               |  |              |               |  |              |              
|joint ventures                   |  |              | 63,580,501     |              |   | 57,275,242    |  |              | 31,989,569    |  |              | 17,077,072   
|Dividends and interest           |  |              | 79,245,154     |              |   | 41,623,715    |  |              | 19,461,931    |  |              | 26,437,901   
|                                 |  |              |                |              |   |               |  |              |               |  |              |              
|Total investment income          |  |              | 482,915,205    |              |   | 338,328,457   |  |              | 276,389,580   |  |              | 242,513,658  
|Expenses                         |  |              | 56,100,197     |              |   | 36,728,425    |  |              | 31,654,065    |  |              | 23,304,336   
|                                 |  |              |                |              |   |               |  |              |               |  |              |              
|Investment
          income, net |  |              | 426,815,008    |              |   | 301,600,032   |  |              | 244,735,515   |  |              | 219,209,322  
|Net realized and unrealized      |  |              |                |              |   |               |  |              |               |  |              |              
|gain (loss) on investments       |  |              | 765,970,272    |              |   | 414,580,303   |  |              | 58,837,371    |  |              | (102,967,284 
|                                 |  |              |                |              |   |               |  |              |               |  |              |              
|Net increase in net assets       |  |              |                |              |   |               |  |              |               |  |              |              
|resulting from operations        |  |              | 1,192,785,280  |              |   | 716,180,335   |  |              | 303,572,886   |  |              | 116,242,038  
|Participant transactions         |  |              | 2,110,375,836  |              |   | 1,735,947,490 |  |              | 813,860,715   |  |              | 346,079,345  
|                                 |  |              |                |              |   |               |  |              |               |  |              |              
|Net increase in net assets       |  | $            | 3,303,161,116  |              | $ | 2,452,127,825 |  | $            | 1,117,433,601 |  | $            | 462,321,383  
|                                 |  |              |                |              |   |               |  |              |               |  |              |              
|                                
|                                 |  | December 31, |               
|                                 |  |              |                |              |   |               |  |              |               |  |              |              
|                                 |  | 2005         |                | 2004         |   | 2003          |  | 2002         |               |  | 2001         |              
|                                 |  |              |                |              |   |               |  |              |               |  |              |              
|Total assets                     |  | $            | 11,685,426,413 |              | $ | 7,843,979,924 |  | $            | 4,867,089,727 |  | $            | 3,731,503,245
|Total liabilities                |  |              | 1,136,715,311  |              |   | 598,429,938   |  |              | 73,667,566    |  |              | 55,514,685   
|                                 |  |              |                |              |   |               |  |              |               |  |              |              
|Total net assets                 |  | $            | 10,548,711,102 |              | $ | 7,245,549,986 |  | $            | 4,793,422,161 |  | $            | 3,675,988,560
|                                 |  |              |                |              |   |               |  |              |               |  |              |              
|Accumulation units outstanding   |  |              | 42,623,491     |              |   | 33,337,597    |  |              | 24,724,183    |  |              | 20,346,696   
|                                 |  |              |                |              |   |               |  |              |               |  |              |              
|Accumulation unit value          |  | $            | 239.95         |              | $ | 210.44        |  | $            | 186.94        |  | $            | 173.90       
|                                 |  |              |                |              |   |               |  |              |               |  |              |              
|Mortgage notes payable           |  |              | 973,502,186    |              | $ | 499,479,256   |  |              |              |  |              |             
|                                 |  |              |                |              |   |               |  |              |               |  |              |              

---



The following selected unaudited financial data for each full quarter of 2005 and 2004 are derived from the financial statements of the Account for the years ended December 31, 2005 and 2004.

|                           |  | 2005                       |            
|-------------------------- |  | -------------------------- | -----------
|                           |  |                            |            
|                           |  | For the Three Months Ended |            
|                           |  | March 31                   |            
|                           |  |                            |            
|Investment income, net     |  | $                          | 93,301,077 
|Net realized gain on       |  |                            |            
|investments                |  |                            | 4,937,265  
|Net unrealized gain on     |  |                            |            
|investments                |  |                            | 16,273,314 
|                           |  |                            |            
|Net increase in net assets |  |                            |            
|resulting from operations  |  | $                          | 114,511,656
|                           |  |                            |            
|Total return               |  |                            | 1.52%      
|                           |  |                            |            
|                          
|                          
|                           |  | 2004                       |            
|                           |  |                            |            
|                           |  | For the Three Months Ended |            
|                           |  | March 31                   |            
|                           |  |                            |            
|Investment income, net     |  | $                          | 60,427,326 
|Net realized gain          |  |                            |            
|on investments             |  |                            | 13,957,043 
|Net unrealized gain        |  |                            |            
|on investments             |  |                            | 25,237,864 
|                           |  |                            |            
|Net increase in net assets |  |                            |            
|resulting from operations  |  | $                          | 99,622,233 
|                           |  |                            |            
|Total return               |  |                            | 2.01%      
|                           |  |                            |            

12

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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, 2005, the TIAA Real Estate Account had total net assets in the amount of $10,548,711,102, a 46% increase over the 2004 year end total net assets. The growth in net assets was
primarily due to the increase in net new money into the Account. The remainder of the increase was due to income from investments and capital appreciation of the Accounts real estate assets. The Account closed on 42 transactions in 2005 for a
total net investment, including acquisitions, dispositions, commitments to purchase interests in real estate limited partnerships and real estate investment trusts, of $1.6 billion. The Account purchased 24 properties for a total net equity
investment of $1.9 billion. These purchases were diverse by both location (twelve states in the United States and the United Kingdom) and sector. The Account purchased eight office properties, including the Accounts first foreign
investment, an office complex located in London, United Kingdom, which is subject to debt, eight industrial properties, six apartment properties and two retail properties. Additional transactions included three commitments to purchase limited
partnership interests in two real estate related funds and one private real estate investment trust in the total amount of $227.5 million (of which $172 million has been funded) and the placement of $250 million in debt on an office
building in which the Account owns a 50% joint venture interest. The Account also sold 14 properties (five industrial, five office, three apartment and one retail property), which had either maximized in value, under-performed or represented
properties needing significant capital infusions in the future, which could have had a negative impact on the Accounts overall performance, for approximately $511.5 million.

Subsequent to December 31, 2005, the Account closed on two transactions: the purchase of a bulk distribution warehouse for a total amount of approximately $34.7 million and the placement of
approximately $153 million in debt on an office building which the Account already owns.

As of December 31, 2005, the Account owned a total of 109 real estate properties, representing 80.11% of the Accounts Total Investments (eleven of which are held in joint ventures). The real
estate portfolio includes 45 office properties (six of which are held in joint ventures), 30 industrial properties (including one joint venture), 24 apartment complexes, 9 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, 2005.

13

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|                |  | Real Estate Assets Diversification by Market Value
|--------------- |  | --------------------------------------------------
|                |  |                                                   
|                |  | East                                              
|                |  | (30                                               
|                |  |                                                   
|Office (45)     |  | 21.9                                              
|Apartment (24)  |  | 2.2                                               
|Industrial (30) |  | 3.0                                               
|Retail (9)      |  | 1.5                                               
|Other*** (1)    |  | 0.0                                               
|                |  |                                                   
|TOTAL (109)     |  | 28.6                                              

|( ) | 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 United Kingdom real estate investment.                                                                             
|   
|*** | Represents a portfolio of storage facilities located in various regions across the U.S.                                         
|   

Top Ten Real Estate Holdings

|                             |  |  |               |  |        |  |            |  |          |     |             | % of Total |             |  |     
|---------------------------- |  |  | ------------- |  | ------ |  | ---------- |  | -------- | --- | ----------- | ---------- | ----------- |  | ----
|                             |  |  |               |  | State/ |  | Property   |  | Market   |     | Real Estate |            | % Total    
|Property Name                |  |  | City          |  | County |  | Type       |  | Value(a) |     | Portfolio   |            | Investments
|1001 Pennsylvania Ave        |  |  | Washington    |  | DC     |  | Office     |  | $503.0   | (b) |             | 5.47       | %           |  | 4.38
|1 & 7 Westferry Circus       |  |  | London        |  | UK     |  | Office     |  | $373.1   | (c) |             | 4.06       | %           |  | 3.25
|50 Fremont Street            |  |  | San Francisco |  | CA     |  | Office     |  | $373.0   | (d) |             | 4.05       | %           |  | 3.25
|IDX Tower                    |  |  | Seattle       |  | WA     |  | Office     |  | $370.0   | (e) |             | 4.02       | %           |  | 3.22
|Four Oaks Place              |  |  | Houston       |  | TX     |  | Office     |  | $295.2   |     |             | 3.21       | %           |  | 2.57
|99 High Street               |  |  | Boston        |  | MA     |  | Office     |  | $276.3   | (f) |             | 3.00       | %           |  | 2.41
|Lincoln Centre               |  |  | Dallas        |  | TX     |  | Office     |  | $255.3   |     |             | 2.78       | %           |  | 2.22
|780 Third Avenue             |  |  | New York City |  | NY     |  | Office     |  | $230.0   |     |             | 2.50       | %           |  | 2.00
|1900 K Street                |  |  | Washington    |  | DC     |  | Office     |  | $230.0   |     |             | 2.50       | %           |  | 2.00
|Ontario Industrial Portfolio |  |  | Ontario       |  | CA     |  | Industrial |  | $230.0   | (g) |             | 2.50       | %           |  | 2.00

|(a) | Value as reported in the 12/31/05 Statement of Investments. Investments owned 100% by TIAA are reported based on market value. Investments in joint ventures are reported based on the equity method of accounting.                                                                                               
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(b) | This property is shown gross of debt. The value of the Account's interest less leverage is $279.2, representing 3.03% of the Total Real Estate Portfolio and 2.43% of the Total Investments.                                                                                                                      
|   
|(c) | This property is shown gross of debt. The value of the Account's interest less leverage is $142.7, representing 1.55% of the Total Real Estate Portfolio and 1.24% of the Total Investments. The market value has been
converted to U.S. dollars from Pound Sterling at the exchange rate as of December 31, 2005.
|   
|(d) | This property is shown gross of debt. The value of the Account's interest less leverage is $229.6, representing 2.50% of the Total Real Estate Portfolio and 2.00% of the Total Investments.                                                                                                                      
|   
|(e) | This property is shown gross of debt. The value of the Account's interest less leverage is $215.7, representing 2.34% of the Total Real Estate Portfolio and 1.88% of the Total Investments.                                                                                                                      
|   
|(f) | This property is shown gross of debt. The value of the Account's interest less leverage is $91.3, representing 0.99% of the Total Real Estate Portfolio and 0.79% of the Total Investments.                                                                                                                       
|   
|(g) | This property is shown gross of debt. The value of the Account's interest less leverage is $219.9, representing 2.39% of the Total Real Estate Portfolio and 1.91% of the Total Investments.                                                                                                                      
|   

Top Five Overall Market Exposure

|                                     |  | # of        | % Total    
|------------------------------------ |  | ----------- | -----------
|Metropolian Statistical Area         |  | Investments | Investments
|Washington-Arlington-Alexandria      |  | 10          |            
|San Francisco-San Mateo-Redwood City |  | 4           |            
|Los Angeles-Long Beach-Glendale      |  | 7           |            
|Chicago-Naperville-Joliet            |  | 7           |            
|Dallas-Plano-Irving                  |  | 4           |            

14

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As of December 31, 2005, the Account also held investments in real estate limited partnerships, representing 1.71% of Total Investments, real estate equity securities, representing 3.71% of Total
Investments, commercial mortgage-backed securities (CMBS), representing 0.19% of Total Investments, commercial paper representing 11.67% of Total Investments, and government bonds, representing 2.61% of Total Investments.

Real estate had another year of strong performance in 2005. Due to strong inflows of equity and debt capital from domestic and international sources, investment into the asset class grew
substantially. The combination of strong inflows of capital, sustained economic growth, steady improvement in real estate market conditions and low interest rates pushed commercial real estate prices higher in 2005. As a result of higher prices and
greater interest in commercial real estate, sales transactional volume in 2005 totaled approximately $250 billion, 35% higher than in 2004 according to Real Capital Analytics, a prime source for transactional information for commercial real
estate.

Economic activity expanded throughout the nation in 2005. The U.S. economy added a total of 2.0 million new jobs in 2005. Gains were broadly based as the Federal Reserve Boards January 2006
Beige Book reported that Economic expansion continued across the twelve Federal Reserve Districts through the last several weeks of 2005. According to the Beige Book, economic activity was expanding modestly in
six districts, accelerating or increasing at a solid pace in four more, and continuing to expand or reasonably strong in the remaining two districts.

Employment growth in the Accounts primary metropolitan areas has strengthened over the course of 2005. Of the Accounts five top markets, growth was strongest in the Washington D.C.
metropolitan area, where employment grew at 3.1% during 2005. San Francisco (+ 0.9%), Los Angeles (+ 0.7%), Chicago (+ 1.1%), and Dallas (+ 1.4%) follow. By comparison, employment grew 1.6% in the United States as a whole during 2005.

Growth in payroll employment is highly correlated with tenant demand for commercial real estate, though demand for space often occurs following a lag due to the nature of the leasing cycle. Office
space demand, in particular, is correlated with employment growth in the financial activities and professional & business services sectors. These two sectors added 188,000 and 486,000 jobs, respectively, over the course
of 2005. With 24 consecutive months of employment growth in the United States, office space demand has responded in kind. Office absorption, which is the net change in occupied space and a key fundamental indicator, totaled 87 million square feet in
2005 and 76 million square feet in 2004. By comparison, net absorption in 2003 was only 23 million square feet and in 2002 it was a negative 14 million square feet, which indicates that companies vacated more space than they leased. Gains in net
absorption, in turn, have lowered office vacancy rates. Torto Wheaton Research, a widely used source of real estate market data, reported that office market vacancies averaged 13.6% at year-end 2005, and 15.4% at year-end 2004. According to the
Torto Wheaton, office vacancies on a national basis have now declined for ten consecutive quarters.

Improvements in the Accounts office markets are evident. For example, office vacancies in the Washington D.C. metropolitan area, the Accounts top office market, are well below
the

15

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national average and have fallen to 9.3% as of the year-end 2005 compared with 10.3% at year-end 2004. The office market in the Washington, D.C. metro area has undoubtedly benefited from 40 consecutive months of employment growth.
Vacancies in the New York metro area averaged 7.7% as of year-end 2005 and have declined from 9.3% as of year-end 2004. In the Accounts other top office markets, vacancy rates remain high Chicago: (16.9%), Houston (16.4%), San Francisco
(13.1%), and Boston (14.3%) . However, San Francisco, Boston and Houston have seen measurable declines in vacancy rates over the past year.

Industrial space demand is related to a number of factors including the national business cycle, national industrial production, international trade volumes, changes in corporate logistics and
distribution systems, and employment growth in the manufacturing, wholesale trade and transportation and warehousing industries. Most of these indicators have experienced sustained growth over the last several years. For example, U.S. gross domestic
product (GDP), a basic indicator of the national business cycle, grew at a 3.5% pace in 2005, following a growth rate of 4.2% in 2004 and 2.7% in 2003. Similarly, national industrial production grew at a 2.8% rate in 2005, following a growth rate of
4.1% in 2004 and 0.6% in 2003. These gains are reflected in industrial space absorption. According to Torto Wheaton Research, industrial space absorption in major U.S. metropolitan areas totaled 281 million square feet in 2005, as compared with 183
million square feet in 2004 and a mere 31 million square feet in 2003. Healthy space demand, in turn, has lowered industrial vacancies. Torto Wheaton Research reports that industrial vacancies averaged 9.7% at year-end 2005, compared with 11.4% at
the end of 2004. Industrial vacancies have now declined for six consecutive quarters.

The improvement in the Accounts industrial markets is clear. Industrial vacancies in the Riverside-San Bernardino metropolitan area, the Accounts top industrial market, for example, are
well below the national average (9.7%), and have fallen to 5.4% at year-end 2005 compared with 7.1% at year-end 2004. The industrial market in Riverside-San Bernardino has benefited from 20 million square feet of absorption in both 2004 and 2005,
which is the most of any U.S. market. Vacancies in the Los Angeles metro area are also well below the national average at 4.5% at year-end 2005. In the Accounts other top industrial markets, vacancy rates are above the national average,
Chicago: (10.8%), Dallas (12.6%), and Atlanta (12.6%) . Each of these markets has experienced a meaningful decline in vacancies over the past year.

Key factors influencing demand in the apartment sector include employment growth, population and household growth, and housing affordability, each of which moved in ways favorable to apartment demand
during 2005. For example, data from the National Association of Realtors show that housing affordability declined to its lowest level since 2001 due to home price increases of 15% nationwide during 2005 and modest increases in mortgage interest
rates. In addition to healthy apartment demand, Real Capital Analytics reported that the supply of rental units was reduced in a number of markets as developers converted sizeable numbers of apartment units to condominiums over the course of 2005.
Condo conversions were particularly prevalent in metropolitan areas like Miami, Las Vegas, San Diego and Washington D.C. As a result of these two trendsan increase in demand and a reduction in supplyTorto Wheaton Research reported in its
year-end 2005 report that the U.S. apartment market ...tightened throughout 2005. Nationally, vacancies averaged 5.1% at year-end 2005 compared with 6.2% at year-end 2004. In addition, many landlords were able to raise rents for the
first time in several years. Other landlords eliminated rental concessions and incentives which are used for competitive purposes when demand is soft.

16

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The market conditions in the Accounts apartment markets have clearly improved as well. For example, apartment vacancies in the Atlanta metropolitan area, the Accounts top apartment market,
declined to 6.1% at year-end 2005 compared with 8.4% at year-end 2004. In the Accounts other top apartment markets, vacancy rates are well below the national average, Los Angeles (2.4%), Ft. Lauderdale (1.3%), and Washington D.C. (4.2%) .
Vacancies in Dallas are above the national average at 7.4%, but declined from 9.9% at year-end 2004.

Key factors influencing retail space demand include trends in consumer spending, growth in personal income and wages, and retailers growth and expansion plans. For example, the U.S. Census
Bureau reported that U.S. retail sales excluding autos increased a solid 8.3% in 2005. This gain came despite headwinds from higher energy and gasoline prices. Healthy retail sales, in turn, sustained retail space demand. According to Torto Wheaton
Research, vacancies in neighborhood and community centers averaged 7.7% at year-end 2005 as compared with 8.0% at year-end 2004. In its year-end 2005 report, Torto Wheaton Research noted that retail rents and occupancies have risen steadily in
recent years, and ...there is nothing in the marketplace today to suggest that that trend is not going to continue .

Real estate supply/demand conditions also appear favorable. Office construction nationally totaled 35 million square feet in 2005 compared with an average of 80 million square feet during the
1998-2002 cyclical peak period. Torto Wheaton Research expects office construction to increase marginally to 38 million square feet in 2006. Similarly, construction of industrial space in 2005 was roughly 35% below totals during the 1996-2001 peak
construction period. Torto Wheaton Research does not expect a significant increase in industrial construction in 2006. Multi-family construction has slowed less sharply; however, a growing number of these units are being built for sale rather than
rent. Torto Wheaton Research expects that construction of neighborhood and community shopping centers which totaled 26 million square feet in 2005, to decline roughly 25% in 2006 due in part to increased land and construction costs.

On balance, prospects for U.S. commercial real estate markets appear promising given current economic and property market conditions. Nationally, employment is growing at a solid and sustainable pace.
The combination of ongoing employment growth and moderate construction bode well for commercial real estate markets. However, continued strong inflows of capital to real estate markets are likely to put pressure on future pricing and returns. Given
these trends, prudence and pricing discipline will be required with respect to the Accounts acquisition activities going forward.

Year Ended December 31, 2005 Compared to Year Ended December 31, 2004

The Accounts total return was 14.02% for the year ended December 31, 2005, 145 basis points higher than the 2004 annual return of 12.57% . The substantial increase in the Accounts overall
performance on a year-to-year basis reflects the strong performance of the Accounts real

17

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estate properties. The market value of the Accounts real estate portfolio increased substantially in 2005 due to capital appreciation of these assets as a result of the sustained growth in capital investment into the real
estate market from institutional investors as well as foreign investors.

The Accounts net investment income, after deduction of all expenses, was 42% higher for the year ended December 31, 2005 compared to the same period in 2004. This increase is related to a 46%
increase in total net assets, which included a 41% 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 83% and 88% of the Accounts total investment income (before deducting Account level
expenses) during 2005 and 2004, respectively. The decline is due to the effect of the increase in total net assets, a decline in the total percentage of the Accounts assets held in real estate and joint venture interests and the corresponding
growth in the non-real estate assets owned by the Account. As of year end 2005, the Account held 80% of its assets in real estate and 14% short term holdings, as compared to 85% and 9%, respectively in 2004. The remaining portion of the
Accounts total investment income was generated by marketable securities investments.

Gross real estate rental income increased approximately 56% in the year ended December
31, 2005 as compared to the same period in 2004. This increase was primarily
due to the increased number of properties owned by the Account. In 2005, the
Account benefited from the full years income from the
properties purchased in 2004 (21) and for a partial years income from those properties purchased throughout 2005 (24 in total). Income from the real estate joint ventures was $63,580,501 for the year ended December 31, 2005 as compared
with $57,275,242 for the year ended December 31, 2004. This 11% increase in joint venture income was due to an increase in the number of joint venture owned by the Account purchased in 2004. Interest income on the Accounts marketable
securities investments increased from $15,055,451 in 2004 to $54,114,448
in 2005 due to the increase in the amount of non-real estate assets held by the
Account as well as an increase in short term rates from 2004 to 2005. Dividend
income on the Accounts real estate equity securities and limited partnership investments decreased from $26,568,264 for the year ended December 31, 2004 to $25,130,706.

Total property level expenses for the year ended December 31, 2005 and 2004 were $278,544,030, and $157,768,776, respectively. In 2005, operating expenses and real estate and other taxes
represented 54% and 32% of the total expenses respectively, with the remaining 14% due to interest payments on mortgages. In comparison, operating expenses, real estate and other taxes, and interest expense represented 64%, 35% and 1%, respectively
in 2004. Overall, property level expenses increased by 77% from 2004 to 2005, with approximately one-third of this increase attributable to interest payments made in 2005. The factors influencing this year to year variance were: an increase in the
number of properties subject to debt, which increased from 4 in 2004, (all acquired in the fourth quarter of 2004) to 7 in 2005 (the interest expense incurred by the Account was $830,361 and $40,028,630, respectively in 2004 and 2005); and
the purchase of additional properties in 2005.

18

---



The Account also incurred expenses for the years ended December 31, 2005 and 2004 of $19,603,225 and $14,393,388, respectively, for investment advisory services, $27,130,406 and
$16,372,446, respectively, for administrative and distribution services and, $9,366,566 and $5,962,591 respectively, for mortality, expense risk and liquidity guarantee charges. The overall 53% 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 net realized and unrealized gains on investments of $765,970,272 for the year ended December 31, 2005, as compared with net realized and unrealized gains on investments of
$414,580,303 for the year ended December 31, 2004. This positive variance is primarily due to a substantial increase in net realized and unrealized gain on the Accounts real estate properties of $590,179,625 for the year ended December
31, 2005 as compared to $184,531,410 for the year ended December 31, 2004. The increase in net realized and unrealized gains is due to the capital appreciation of real estate assets attributable to the continued inflow of capital into the real
estate market from institutional and other investors, which had the effect of increasing the value of real estate. This trend, which began in 2004 and increased in 2005, is evidenced by the net realized gain of $90.3 million on the properties
sold in 2005. The net proceeds of these sales was $511.5 milllion. The Account also had unrealized gains on its real estate joint ventures and limited partnership holdings of $168,723,129 for the year ended December 31, 2005, as compared to
unrealized gains of $161,584,369 for the same period in 2004. This increase was due to the unrealized gains posted in 2005 on the properties in which the Account has an interest. The Accounts marketable securities for the year ended
December 31, 2005 had net realized and unrealized gains totaling $7,067,518 as compared with net realized and unrealized gains of $68,464,524 for the year ended December 31, 2004. The primary factor in the decline is the net effect of the
relatively weak performance of the REIT market on the Accounts real estate equity securities in 2005 as compared to the strong performance of this market in 2004.

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.

19

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The Accounts real estate
    holdings, including joint venture and fund 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 ended December 31, 2004 as compared
    with $31,989,569 for the year ended December 31, 2003. This increase
    in joint venture income was due to positive leasing activity at several 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 performance of the real estate market reflecting the
    increased inflow of capital into real estate-related investments.

Total property level expenses
    for the years 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 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 realized and unrealized gain on the Accounts real estate properties
    of $184,531,410 for the year ended December 31, 2004 as compared to net
    realized and unrealized losses for the year ended December 31, 2003 of $5,040,820.
    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

20

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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.

At year end 2005 and 2004, the Accounts liquid assets (i.e., its real estate equity securities, CMBSs, commercial paper and government securities) had a value of $2,089,557,113 and
$1,045,733,841, respectively. The increase in the Accounts liquid assets was primarily due to the net positive inflow from transfers and premiums into the Account, which likely is in response to the strong relative performance of the
Account.

In 2005, the Account received $968,189,436 in premiums and $1,435,432,984 in net participant transfers from TIAA, CREF Accounts and affiliated mutual funds, while for 2004 the Account received
$738,048,183 in premiums and $1,188,465,203 in net participants transfers. Real estate acquisitions totaling approximately $1.9 billion and $2.5 billion were made during 2005 and 2004, respectively. 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, benefits, or transfers). In the unlikely event that the Accounts liquid
assets and its cash flow from operating activities and participant transactions are not sufficient to meet its cash needs, including redemption requests, TIAAs general account will purchase liquidity units in accordance with TIAAs
liquidity guarantee to the Account.

The Account, under certain conditions more fully described in the Accounts prospectus, may borrow money and assume or obtain a mortgage on a property  i.e., make leveraged real estate
investments. Note that the Account changed its borrowing policy in 2005 to expand the circumstances under which it could borrow. 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, utilities and security costs, may increase property operating expenses in the future. These increases in operating expenses are generally billed to tenants
either through contractual lease provisions in office, industrial, and retail properties or through rent increases in apartment complexes. 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.

21

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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
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 Real Estate Joint Ventures:Real estate joint ventures are stated at the Accounts
equity in the net assets of the underlying joint venture 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 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.

Accumulation and Annuity Fund:The Accumulation Fund represents the net assets attributable to participants in the accumulation phase of their investment. The Annuity
Fund represents the net assets attributable to the participants currently receiving annuity payments. The net increase or decrease in net assets from investment operations is apportioned between

22

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the accounts based upon their relative daily net asset values. Once an Account participant begins receiving lifetime annuity income benefits, monthly payment levels cannot be reduced as a result of the Accounts adverse
mortality experience. In addition, the contracts are required to stipulate the maximum expense charge that can be assessed, which is equal to 2.50% of average net assets per year. Accordingly, a small risk charge is paid by the Account to TIAA to
assume these risks.

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

The Account has limited partnerships interests in various real estate funds (limited partnerships). The Account records its contributions as increases to the investments and distributions from the
investments are treated as either income or return of capital as determined by the management of the limited partnerships. Unrealized gains and losses are calculated and recorded quarterly when our accounting records are compared to the funds
financial statements and we true up our equity value.

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.

Mortgage Notes Payable:Commencing in 2005, the Account separately reports mortgage notes payable at estimated market value. Estimated market values are based on the amount at which the liability could be settled (either transferred or paid back) in a current
transaction exclusive of direct transaction costs. Different assumptions or changes in future market conditions could significantly affect estimated market value. At times, the Account may assume debt in connection with the purchase of real estate.
For debt assumed, the Account allocates a portion of the purchases price to the below or above market debt and amortized the premium or discount over the remaining life of the debt.

Foreign currency transactions and translation:Portfolio investments and other assets and liabilities denominated in foreign currencies are translated into U.S.
dollars at the exchange rates prevailing at the end of the period. Purchases and sales of securities, income receipts and

23

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expense payments made in foreign currencies are translated into U.S. dollars at the exchange rates prevailing on the respective dates of the transactions. The effect of changes in foreign currency exchange rates on portfolio
investments are included in the net realized and unrealized gains and losses on investments. Net realized gains and losses on foreign currency transactions include maturities of forward foreign currency contracts, disposition of foreign currencies,
and currency gains and losses between the accrual and receipt dates of portfolio investment income and between the trade and settlement dates of portfolio investment transactions.

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.

24

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Accounts real estate and real estate-related investments, which as of December 31, 2005 represented 81.82% 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, 2005, 18.19% 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 Statement of Investments for the Account sets forth the terms of these instruments, along
with their fair value, as determined in accordance with procedures described in Note 1 to the Accounts financial statements. Note that the Account does not currently invest in derivative financial instruments.

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

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

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

In addition to these risks, 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.

25

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ITEM 8.      FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

INDEX TO FINANCIAL STATEMENTSTIAA REAL ESTATE ACCOUNT

---



|                                                         |  | Page
|-------------------------------------------------------- |  | ----
|Report of Management Responsibility                      |  | 27  
|Report of the Audit Committee                            |  | 28  
|                                                        
|Audited Financial Statements:                            |  |     
|Statements of Assets and Liabilities                     |  | 29  
|Statements of Operations                                 |  | 30  
|Statements of Changes in Net Assets                      |  | 31  
|Statements of Cash Flows                                 |  | 32  
|Notes to Financial Statements                            |  | 33  
|Statements of Investments                                |  | 40  
|Report of Independent Registered Public Accounting Firm. |  | 51  

26

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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 accounting principles generally accepted in the United States of America and have been presented fairly and objectively in accordance with such principles.

TIAA has established and maintains 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 TIAA Audit Committee.

The accompanying financial statements have been audited by an independent registered public accounting firm. 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 independent registered public accounting firm. The reports of the independent registered public accounting firms, which follow the statements of investments,
express independent opinions 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 PricewaterhouseCoopers LLP and the internal audit group 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.



|March 14, 2006 | /s/
          Herbert M. Allison, Jr.                                   
|-------------- | ------------------------------------------------------------------------
|               |                                                                         
|               | Herbert M. Allison, Jr.Chairman, President and
  Chief Executive Officer
|               |                                                                         
|               |                                                                         
|               | /s/
          Russell Noles                                             
|               |                                                                         
|               | Russell NolesVice President and Acting 
  Chief Financial Officer       



27

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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 audit group and the independent registered public accounting firm in connection with their respective audits of the
Account. The Committee also meets regularly with the internal audit group and the independent registered public accounting firm, both with and without management present, to discuss the results of their examinations, their evaluation of internal
controls, and the overall quality of financial reporting. As required by its charter, the Committee will evaluate rotation of the independent registered public accounting firm whenever circumstances warrant, but in no event will the evaluation be
later than between their fifth and tenth years of service.

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

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

28

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|                                                    |  |              |                |             
|--------------------------------------------------- |  | ------------ | -------------- | ------------
|                                                    |  | December 31, |                | December 31,
|                                                    |  | 2005         |                | 2004        
|                                                    |  |              |                |             
|ASSETS                                              |  |              |                |             
|Investments, at value:                              |  |              |                |             
|Real estate properties                              |  |              |                |             
|(cost: $7,386,769,868 and $5,315,565,355)           |  | $            | 7,977,600,751  |             
|Real estate joint ventures and limited partnerships |  |              |                |             
|(cost: $1,086,041,287 and $1,085,720,476)           |  |              | 1,418,583,542  |             
|Marketable securities:                              |  |              |                |             
|Real estate related                                 |  |              |                |             
|(cost: $433,482,015 and $326,109,979)               |  |              | 448,662,598    |             
|Other                                               |  |              |                |             
|(cost: $1,640,676,190 and $676,124,265)             |  |              | 1,640,894,515  |             
|                                                    |  |              |                |             
|Total investments                                   |  |              |                |             
|(cost: $10,546,969,360 and $7,403,520,075)          |  |              | 11,485,741,406 |             
|                                                    |  |              |                |             
|Cash                                                |  |              | 1,211,370      |             
|Due from investment advisor                         |  |              | 7,717,256      |             
|Other                                               |  |              | 190,756,381    |             
|                                                    |  |              |                |             
|TOTAL ASSETS                                        |  |              | 11,685,426,413 |             
|                                                    |  |              |                |             
|LIABILITIES                                         |  |              |                |             
|Mortgage notes payableNote 5                       |  |              | 973,502,186    |             
|Amounts due to bank                                 |  |              |               |             
|Payable for securities transactions                 |  |              | 993,809        |             
|Accrued real estate property level expenses         |  |              | 145,789,277    |             
|Security deposits held                              |  |              | 16,430,039     |             
|                                                    |  |              |                |             
|TOTAL LIABILITIES                                   |  |              | 1,136,715,311  |             
|                                                    |  |              |                |             
|NET ASSETS                                          |  |              |                |             
|Accumulation Fund                                   |  |              | 10,227,655,797 |             
|Annuity Fund                                        |  |              | 321,055,305    |             
|                                                    |  |              |                |             
|TOTAL NET ASSETS                                    |  | $            | 10,548,711,102 |             
|                                                    |  |              |                |             
|NUMBER OF ACCUMULATION UNITS                        |  |              |                |             
|OUTSTANDINGNotes 6 and 7                           |  |              | 42,623,491     |             
|                                                    |  |              |                |             
|NET ASSET VALUE, PER ACCUMULATION UNITNote 6       |  | $            | 239.95         |             
|                                                    |  |              |                |             

See notes to the financial statements.

29

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TIAA REAL ESTATE ACCOUNTSTATEMENTS OF OPERATIONS

|                                                                    |  | Years Ended December 31, |              
|------------------------------------------------------------------- |  | ------------------------ | -------------
|                                                                    |  |                          |              
|                                                                    |  | 2005                     |              
|                                                                    |  |                          |              
|                                                                   
|INVESTMENT INCOME                                                   |  |                          |              
|Real estate income, net:                                            |  |                          |              
|Rental income                                                       |  | $                        | 618,633,580  
|                                                                    |  |                          |              
|Real estate property level expenses and taxes:                      |  |                          |              
|Operating expenses                                                  |  |                          | 150,501,136  
|Real estate taxes                                                   |  |                          | 88,014,264   
|Interest expense                                                    |  |                          | 40,028,630   
|                                                                    |  |                          |              
|Total real estate property level expenses and taxes                 |  |                          | 278,544,030  
|                                                                    |  |                          |              
|Real estate incomenet                                              |  |                          | 340,089,550  
|Income from joint ventures                                          |  |                          | 63,580,501   
|Dividends                                                           |  |                          | 25,130,706   
|Interest                                                            |  |                          | 54,114,448   
|                                                                    |  |                          |              
|TOTAL INCOME                                                        |  |                          | 482,915,205  
|                                                                    |  |                          |              
|ExpensesNote 2:                                                    |  |                          |              
|Investment advisory charges                                         |  |                          | 19,603,225   
|Administrative and distribution charges                             |  |                          | 27,130,406   
|Mortality and expense risk charges                                  |  |                          | 6,196,549    
|Liquidity guarantee charges                                         |  |                          | 3,170,017    
|                                                                    |  |                          |              
|TOTAL EXPENSES                                                      |  |                          | 56,100,197   
|                                                                    |  |                          |              
|INVESTMENT INCOMENET                                               |  |                          | 426,815,008  
|                                                                    |  |                          |              
|REALIZED AND UNREALIZED                                             |  |                          |              
|GAIN (LOSS) ON INVESTMENTS                                          |  |                          |              
|Net realized gain (loss) on:                                        |  |                          |              
|Real estate properties                                              |  |                          | 84,764,142   
|Marketable securities                                               |  |                          | 35,168,209   
|                                                                    |  |                          |              
|Total realized gain (loss) on investments                           |  |                          | 119,932,351  
|                                                                    |  |                          |              
|Net change in unrealized appreciation (depreciation) on:            |  |                          |              
|Real estate properties and debt                                     |  |                          | 505,415,483  
|Real estate joint ventures and limited partnerships                 |  |                          | 168,723,129  
|Marketable securities                                               |  |                          | (28,100,691  
|                                                                    |  |                          |              
|Net change in unrealized appreciation (depreciation) on investments |  |                          | 646,037,921  
|                                                                    |  |                          |              
|NET REALIZED AND UNREALIZED                                         |  |                          |              
|GAIN (LOSS) ON INVESTMENTS                                          |  |                          | 765,970,272  
|                                                                    |  |                          |              
|NET INCREASE IN NET ASSETS                                          |  |                          |              
|RESULTING FROM OPERATIONS                                           |  | $                        | 1,192,785,280
|                                                                    |  |                          |              

See notes to the financial statements.

30

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|                                                     |  |                          |                |  
|---------------------------------------------------- |  | ------------------------ | -------------- | -
|                                                     |  | Years Ended December 31, |               
|                                                     |  |                          |                |  
|                                                     |  | 2005                     |                |  
|                                                     |  |                          |                |  
|FROM OPERATIONS                                      |  |                          |                |  
|Investment income, net                               |  | $                        | 426,815,008    |  
|Net realized gain on investments                     |  |                          | 119,932,351    |  
|Net change in unrealized appreciation (depreciation) |  |                          |                |  
|on investments                                       |  |                          | 646,037,921    |  
|                                                     |  |                          |                |  
|NET INCREASE IN NET ASSETS                           |  |                          |                |  
|RESULTING FROM OPERATIONS                            |  |                          | 1,192,785,280  |  
|                                                     |  |                          |                |  
|                                                    
|FROM PARTICIPANT TRANSACTIONS                        |  |                          |                |  
|Premiums                                             |  |                          | 968,189,436    |  
|Net transfers from (to) TIAA                         |  |                          | 197,272,397    |  
|Net transfers from CREF Accounts                     |  |                          | 1,238,160,587  |  
|Annuity and other periodic payments                  |  |                          | (44,487,142    | )
|Withdrawals and death benefits                       |  |                          | (248,759,442   | )
|                                                     |  |                          |                |  
|NET INCREASE IN NET ASSETS RESULTING                 |  |                          |                |  
|FROM PARTICIPANTTRANSACTIONS                         |  |                          | 2,110,375,836  |  
|                                                     |  |                          |                |  
|NET INCREASE IN NET ASSETS                           |  |                          | 3,303,161,116  |  
|                                                    
|NET ASSETS                                           |  |                          |                |  
|Beginning of year                                    |  |                          | 7,245,549,986  |  
|                                                     |  |                          |                |  
|End of year                                          |  | $                        | 10,548,711,102 |  
|                                                     |  |                          |                |  

See notes to the financial statements.

31

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|                                                              |  |                          |                |  
|------------------------------------------------------------- |  | ------------------------ | -------------- | -
|                                                              |  | Years Ended December 31, |               
|                                                              |  |                          |                |  
|                                                              |  | 2005                     |                |  
|                                                              |  |                          |                |  
|CASH FLOWS FROM OPERATING ACTIVITIES                          |  |                          |                |  
|Net increase in net assets resulting from operations          |  | $                        | 1,192,785,280  |  
|Adjustments to reconcile net increase in net assets resulting |  |                          |                |  
|from operations to net cash used in operating activities:     |  |                          |                |  
|Purchases of real estate properties                           |  |                          | (1,864,646,776 | )
|Capital improvements on real estate properties                |  |                          | (83,150,771    | )
|Proceeds from sale of real estate properties                  |  |                          | 511,500,399    |  
|Decrease (increase) in other investments                      |  |                          | (1,313,788,390 | )
|Increase in other assets                                      |  |                          | (80,412,203    | )
|Increase (decrease) in amounts due to bank                    |  |                          | (231,476       | )
|Increase in accrued real estate property level expenses       |  |                          |                |  
|and taxes                                                     |  |                          | 60,829,395     |  
|Increase in security deposits held                            |  |                          | 2,670,715      |  
|Increase (decrease) in other liabilities                      |  |                          | (1,162,347     | )
|Net realized gain on investments                              |  |                          | (119,932,351   | )
|Unrealized (gain) loss on investments                         |  |                          | (646,037,921   | )
|                                                              |  |                          |                |  
|NET CASH USED IN                                              |  |                          |                |  
|OPERATINGACTIVITIES                                           |  |                          | (2,341,576,446 | )
|                                                              |  |                          |                |  
|CASH FLOWS FROM FINANCING ACTIVITIES                          |  |                          |                |  
|Premiums                                                      |  |                          | 968,189,436    |  
|Net transfers from (to) TIAA                                  |  |                          | 197,272,397    |  
|Net transfers from CREF Accounts                              |  |                          | 1,238,160,587  |  
|Principal payments of mortgages                               |  |                          | (173,361       | )
|Proceeds from mortgage financing                              |  |                          | 232,585,341    |  
|Annuity and other periodic payments                           |  |                          | (44,487,142    | )
|Withdrawals and death benefits                                |  |                          | (248,759,442   | )
|                                                              |  |                          |                |  
|NET CASH PROVIDED BY                                          |  |                          |                |  
|FINANCINGACTIVITIES                                           |  |                          | 2,342,787,816  |  
|                                                              |  |                          |                |  
|                                                             
|NET INCREASE (DECREASE) IN CASH                               |  |                          | 1,211,370      |  
|CASH                                                          |  |                          |                |  
|Beginning of year                                             |  |                          |               |  
|                                                              |  |                          |                |  
|End of year                                                   |  | $                        | 1,211,370      |  
|                                                              |  |                          |                |  
|Supplemental disclosure: Cash paid for interest               |  | $                        | 38,267,618     |  
|                                                              |  |                          |                |  
|Non-cash activity: Debt assumed upon purchase of real estate  |  | $                        | 211,400,000    |  
|                                                              |  |                          |                |  

See notes to the financial statements.

32

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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 accounting principles generally accepted in the United States of America, which may require the use of estimates made by management. Actual results may vary from those estimates. The following is a summary of the
significant accounting policies of the Account.

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

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 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 and that such change is
not reflected in the quarterly appraisal. The independent fiduciary must also approve an appraisal where a propertys value changed by 6% or more from the most recent annual appraisal. The independent fiduciary is appointed by a special
subcommittee of TIAAs Board of Trustees. 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 including debt assumed in connection with the purchase of real estate, are generally valued as described. However, beginning in 2005 the value of the mortgage
is appraised independently of the property and its fair value is reported separately, whereas in 2004, any change in the fair value of the mortgage, including debt assumed in connection with the purchase of real estate, was shown as an adjustment to
the real estate property value. The fair value of the outstanding mortgage 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.

33

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Valuation of Marketable Securities:Equity securities listed or traded on any national market or exchange are valued at the last sale price as of the close of the principal securities
exchange on which such securities are traded or, if there is no sale, at the mean of the last bid and asked prices on such exchange. Debt securities, other than money market instruments, are valued at the most recent bid price or the equivalent
quoted yield for such securities (or those of comparable maturity, quality and type). Money market instruments, with maturities of one year or less, are valued in the same manner as debt securities or derived from a pricing matrix that has various
types of money market instruments along one axis and various maturities along the other. Portfolio securities and limited partnership interests for which market quotations are not readily available are valued at fair value as determined in good
faith under the direction of the Investment Committee of the TIAA Board of Trustees and in accordance with the responsibilities of the Board as a whole.

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

Accounting for Investments:Real estate transactions are accounted for as of the date on which the purchase or sale transactions for the real estate properties close (settlement
date). Rent from real estate properties consists of all amounts earned under tenant operating leases, including base rent, recoveries of real estate taxes and other expenses and charges for miscellaneous services provided to tenants. Rental income
is recognized in accordance with the billing terms of the lease agreements. The Account bears the direct expenses of the real estate properties owned. These expenses include, but are not limited to, fees to local property management companies,
property taxes, utilities, maintenance, repairs, insurance and other operating and administrative costs. An estimate of the net operating income earned from each real estate property is accrued by the Account on a daily basis and such estimates are
adjusted as soon as actual operating results are determined. The Account recognizes a gain to the extent that the contract sales price exceeds the cost-to-date of the property being sold. A loss occurs when the cost-to-date exceeds the sales price.
As the Account is marked-to-market and all properties are appraised quarterly, any accumulated unrealized gains and losses are reversed in the same period in which the realized gains and losses are recognized.

The Account has limited partnership interests in various real estate funds (limited partnerships). The Account records its contributions as increases to the investments and distributions from the investments are treated as
either income or return of capital as determined by the management of the limited partnerships. Unrealized gains and losses are calculated and recorded quarterly when the Accounts accounting records are compared to the financial statements of
the limited partnerships.

Income from joint ventures is recorded based on the Accounts proportional interest 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.

34

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Mortgage Notes Payable:Commencing in 2005, the Account separately reports mortgage notes payable at estimated market value. Estimated market values are based on the amount at which the liability could be settled (either transferred or paid back) in a current transaction exclusive of
direct transaction costs. Different assumptions or changes in future market conditions could significantly affect estimated market value. At times, the Account may assume debt in connection with the purchase of real estate. For debt assumed, the
Account allocates a portion of the purchase price to the below or above market rate debt and amortizes the premium or discount over the remaining life of the debt.

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

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.

Note 2Management Agreements


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

Distribution and administrative services for the Account are provided by TIAA-CREF Individual & Institutional Services, 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 an annual rate of .04% of net assets, 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 imposes a daily charge for bearing certain mortality and expense risks in connection with the contracts equivalent to an annual rate of .07% of
net assets of the Account.

35

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The Accounts real estate properties are leased to tenants under operating lease agreements which expire on various dates through 2031. Aggregate minimum annual rentals for the properties owned, excluding short-term
residential leases, are as follows:

|Years Ending |  |   |              
|------------ |  | - | -------------
|December 31, |  |   |              
|             |  |   |              
|2006         |  | $ | 653,416,605  
|2007         |  |   | 611,538,186  
|2008         |  |   | 549,973,188  
|2009         |  |   | 491,561,855  
|2010         |  |   | 396,090,166  
|2011-2031    |  |   | 1,198,826,686
|             |  |   |              
|            
|Total        |  | $ | 3,901,406,686
|             |  |   |              

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 is $468,664,313 and $345,136,785 at December 31, 2005 and 2004, respectively. The
Accounts equity in the joint ventures at December 31, 2005 and 2004 was $1,222,036,564 and $1,257,893,004, respectively. A condensed summary of the financial position and results of operations of the joint ventures is shown
below.

|                                  |  |                   |             |                   | December 31, 2005 |                   | December 31, 2004
|--------------------------------- |  | ----------------- | ----------- | ----------------- | ----------------- | ----------------- | -----------------
|                                  |  |                   |             |                   |                   |                   |                  
|Assets                            |  |                   |             |                   |                   |                   |                  
|Real estates properties, at value |  |                   |             |                   | $                 | 2,989,209,293     |                  
|Other assets                      |  |                   |             |                   |                   | 80,768,265        |                  
|                                  |  |                   |             |                   |                   |                   |                  
|Total assets                      |  |                   |             |                   | $                 | 3,069,977,558     |                  
|                                  |  |                   |             |                   |                   |                   |                  
|Liabilities and Equity            |  |                   |             |                   |                   |                   |                  
|Mortgages notes payable           |  |                   |             |                   | $                 | 865,828,626       |                  
|Other liabilities                 |  |                   |             |                   |                   | 70,471,251        |                  
|                                  |  |                   |             |                   |                   |                   |                  
|Total liabilities                 |  |                   |             |                   |                   | 936,299,877       |                  
|Equity                            |  |                   |             |                   |                   | 2,133,677,681     |                  
|                                  |  |                   |             |                   |                   |                   |                  
|Total liabilities and equity      |  |                   |             |                   | $                 | 3,069,977,558     |                  
|                                  |  |                   |             |                   |                   |                   |                  
|                                 
|                                  |  | Year Ended        |             | Year Ended        |                   | Year Ended       
|                                  |  | December 31, 2005 |             | December 31, 2004 |                   | December 31, 2003
|                                  |  |                   |             |                   |                   |                   |                  
|Operating Revenues and Expenses   |  |                   |             |                   |                   |                   |                  
|Revenues                          |  | $                 | 270,519,206 |                   | $                 | 250,697,181       |                  
|Expenses                          |  |                   | 142,782,169 |                   |                   | 122,017,640       |                  
|                                  |  |                   |             |                   |                   |                   |                  
|Excess of revenues over expenses  |  | $                 | 127,737,037 |                   | $                 | 128,679,541       |                  
|                                  |  |                   |             |                   |                   |                   |                  

36

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Note 5Mortgage Notes Payable

At December 31, 2005 and 2004, the Account had outstanding mortgage balances on the properties as follows:

|                             |  | Interest                 |   | Amount      |             | Amount |   |             |    
|---------------------------- |  | ------------------------ | - | ----------- | ----------- | ------ | - | ----------- | ---
|Property                     |  | Rate Percentage          |   | 2005        |             | 2004   |   |             | Due
|                             |  |                          |   |             |             |        |   |             |    
|50 Fremont                   |  | 6.40 paid monthly(d)     |   | $           | 135,000,000 |        | $ | 135,000,000 |    
|Ontario Industrial Portfolio |  | 7.24 paid monthly(a)     |   |             | 9,305,895   |        |   | 9,479,256   |    
|IDX Tower                    |  | 6.40 paid monthly(d)     |   |             | 145,000,000 |        |   | 145,000,000 |    
|1001 Pennsylvania Ave        |  | 6.40 paid monthly(d)     |   |             | 210,000,000 |        |   | 210,000,000 |    
|99 High Street               |  | 5.5245 paid monthly(b)   |   |             | 185,000,000 |        |   |            |    
|Reserve at Sugarloaf         |  | 5.49 paid monthly(c)     |   |             | 26,400,000  |        |   |            |    
|Westferry Circus             |  | 5.4003 paid quarterly(d) |   |             | 230,429,185 |        |   |            |    
|                             |  |                          |   |             |             |        |   |             |    
|Total maturities             |  |                          |   | $           | 941,135,080 |        | $ | 499,479,256 |    
|Net unrealized
        loss  |  |                          |   |             | 32,367,106  |        |   |             |    
|                             |  |                          |   |             |             |        |   |             |    
|Total Mortgage Notes Payable |  |                          | $ | 973,502,186 |             |        |   |             |    
|                             |  |                          |   |             |             |        |   |             |    

|(a) | Principal payments due monthly with balloon payment of $8,127,115 due on May 1, 2011. The rate of 7.24% paid monthly is fixed. Debt was assumed at the time of acquisition.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(b) | Debt assumed in conjunction with property acquired in 2005 the mortgage was refinanced on October 21, 2005 at a fixed rate of 5.5245%.                                     
|   
|(c) | Debt assumed in conjunction with property acquired in 2005 at a fixed rate of 5.49%.                                                                                       
|   
|(d) | The mortgage is interest only with balloon payment at maturity. The interest rate is fixed.                                                                                
|   

Principal on mortgage notes payable is due as follows:

|                 |  | Amount
|---------------- |  | ------
|                 |  |       
|2006             |  | $     
|2007             |  |       
|2008             |  |       
|2009             |  |       
|2010             |  |       
|Thereafter       |  |       
|                 |  |       
|Total maturities |  | $     
|                 |  |       

37

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Note 6Condensed Financial Information

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

|                                              | Years Ended December 31,
|--------------------------------------------- | ------------------------
|                                              |                         
|                                              | 2005                    
|                                              |                         
|Per Accumulation Unit data:                   |                         
|Rental income                                 |                         
|Real estate property level expenses and taxes |                         
|                                              |                         
|Real estate income, net                       |                         
|Income from real estate joint ventures        |                         
|Dividends and interest                        |                         
|                                              |                         
|Total income                                  |                         
|Expense charges (1)                           |                         
|                                              |                         
|Investment income, net                        |                         
|Net realized and unrealized                   |                         
|gain (loss) on investments                    |                         
|                                              |                         
|Net increase in Accumulation Unit Value       |                         
|Accumulation Unit Value:                      |                         
|Beginning of year                             |                         
|                                              |                         
|End of year                                   |                         
|                                              |                         
|Total return                                  |                         
|Ratios to Average Net Assets:                 |                         
|Expenses (1)                                  |                         
|Investment income, net                        |                         
|Portfolio turnover rate:                      |                         
|Real estate properties                        |                         
|Securities                                    |                         
|Thousands of Accumulation Units               |                         
|outstanding at end of year                    |                         
|Net assets end of year (in thousands)         |                         

|(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, 2005 would be $8.441 ($6.572, $7.255, $5.920 and $5.749 for the years ended December 31, 2004, 2003, 2002 and 2001, respectively), and the Ratio of Expenses to Average Net Assets
for the year ended December 31, 2005 would be 3.78% (3.33%, 4.04%, 3.61% and 3.50% for the years ended December 31, 2004, 2003, 2002 and 2001, respectively).
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   

38

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Note 7Accumulation Units

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

|                                                      |  | For the Years Ended December 31,
|----------------------------------------------------- |  | --------------------------------
|                                                      |  |                                 
|                                                      |  | 2005                            
|                                                      |  |                                 
|Credited for premiums                                 |  | 4,335,121                       
|Credited (cancelled) for transfers, net disbursements |  |                                 
|and amounts applied to the Annuity Fund               |  | 4,950,773                       
|Outstanding:                                          |  |                                 
|Beginning of year                                     |  | 33,337,597                      
|                                                      |  |                                 
|End of year                                           |  | 42,623,491                      
|                                                      |  |                                 

Note 8Commitments

During the normal course of business, the Account enters into discussions and agreements to purchase or sell real estate properties. As of December 31, 2005, the Account had two outstanding commitments to purchase a bulk
distribution warehouse property for approximately $34.7 million (which has closed subsequent to December 31, 2005) and a mixed use project comprised of an office building and a retail component for a total net amount of $85 million. This
property will be subject to approximately $112.7 million in debt. Subsequent to December 31, 2005 the Account placed approximately $153 million in debt on Lincoln Centre which was purchased in the 4th quarter of 2005.

In addition, the Account has outstanding commitments to purchase interests in six limited partnerships and to purchase shares in a private real estate equity investment trusts, which total $366.7 million. As of December
31, 2005, $101.3 million remains to be funded under these commitments.

Other than lawsuits in the ordinary course of business, that are expected to have no material impact, there are no lawsuits in which the Account is a party.

39

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REAL ESTATE PROPERTIES 69.46% and 69.78%

|                                                          | Value |            
|--------------------------------------------------------- | ----- | -----------
|                                                          |       |            
|Location / Description                                    | 2005  |            
|                                                          |       |            
|Alabama:                                                  |       |            
|Inverness Center - Office building                        | $     | 98,090,987 
|Arizona:                                                  |       |            
|Biltmore Commerce Center - Office building                |       |           
|Mountain RA Industrial Portfolio - Industrial building    |       | 5,754,652  
|California:                                               |       |            
|3 Hutton Centre Drive - Office building                   |       | 48,349,580 
|9 Hutton Centre - Office building                         |       | 26,746,837 
|50 Fremont - Office building                              |       | 373,010,003
|88 Kearny Street - Office building                        |       | 81,567,474 
|Cabot Industrial Portfolio - Industrial building          |       | 77,000,000 
|Capitol Place - Office building                           |       | 48,000,000 
|Centerside I - Office building                            |       | 66,000,000 
|Centre Pointe and Valley View - Industrial building       |       | 28,000,000 
|Eastgate Distribution Center - Industrial building        |       | 22,000,000 
|Embarcadero Center West - Office building                 |       | 205,965,261
|Kenwood Mews - Apartments                                 |       | 30,000,000 
|Larkspur Courts - Apartments                              |       | 86,000,000 
|The Legacy at Westwood - Apartments                       |       | 100,000,000
|Northern CA RA Industrial Portfolio - Industrial building |       | 62,325,024 
|Northpoint Commerce Center - Industrial building          |       |           
|Ontario Industrial Portfolio - Industrial building        |       | 230,000,000
|                                                         
|Regents Court - Apartments                                |       | 62,500,000 
|Southern CA RA Industrial Portfolio - Industrial building |       | 89,017,793 
|U.S. Bank Plaza - Office building                         |       | 159,000,000
|Westcreek - Apartments                                    |       | 30,939,671 
|West Lake North Business Park - Office building           |       | 57,600,000 
|Westwood Marketplace - Shopping center                    |       | 86,000,000 
|Colorado:                                                 |       |            
|The Lodge at Willow Creek - Apartments                    |       | 34,600,000 
|The Market at Southpark - Shopping center                 |       | 34,001,746 
|Monte Vista - Apartments                                  |       | 24,647,901 
|Palomino Park - Apartments                                |       | 176,232,394
|Connecticut:                                              |       |            
|Ten & Twenty Westport Road - Office building              |       | 157,000,000
|Delaware:                                                 |       |            
|Mideast RA Industrial Portfolio- Industrial building      |       | 14,258,555 
|Florida:                                                  |       |            
|701 Brickell - Office building                            |       | 201,173,724
|4200 West Cypress Street - Office building                |       | 36,691,519 
|The Fairways of Carolina - Apartments                     |       | 21,100,000 
|Golfview - Apartments                                     |       | 30,835,506 
|The Greens at Metrowest - Apartments                      |       | 18,200,000 
|Maitland Promenade One - Office building                  |       | 37,817,891 
|Plantation Grove - Shopping center                        |       | 13,800,000 
|Pointe on Tampa Bay - Office building                     |       | 44,711,876 
|Quiet Waters at Coquina Lakes - Apartments                |       | 20,912,293 
|Royal St. George - Apartments                             |       | 21,400,000 

40

---



|                                                                    |  | Value
|------------------------------------------------------------------- |  | -----
|                                                                    |  |      
|Location / Description                                              |  | 2005 
|                                                                    |  |      
|Sawgrass Office Portfolio - Office building                         |  | $    
|South Florida Apartment Portfolio - Apartments                      |  |      
|Suncrest Village - Shopping center                                  |  |      
|Urban Centre - Office building                                      |  |      
|Georgia:                                                            |  |      
|Alexan Buckhead - Apartments                                        |  |      
|Atlanta Industrial Portfolio - Industrial building                  |  |      
|Reserve at Sugarloaf - Apartments                                   |  |      
|Glenridge Walk - Apartments                                         |  |      
|1050 Lenox Park - Apartments                                        |  |      
|Shawnee Ridge Industrial Portfolio - Industrial building            |  |      
|Illinois:                                                           |  |      
|Chicago CalEast Industrial Portfolio- Industrial building           |  |      
|Chicago Industrial Portfolio - Industrial building                  |  |      
|Columbia Centre 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                   |  |      
|GE Appliance East Coast Distribution Facility - Industrial building |  |      
|Massachusetts:                                                      |  |      
|99 High Street - Office building                                    |  |      
|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                |  |      
|Plainsboro Plaza - Shopping center                                  |  |      
|South River Road Industrial - Industrial building                   |  |      
|New York:                                                           |  |      
|780 Third Avenue - Office building                                  |  |      
|The Colorado - Apartments                                           |  |      
|Ohio:                                                               |  |      
|Bent Tree - Apartments                                              |  |      
|Columbus Portfolio - Office building                                |  |      

41

---



|                                                               |  | Value |              
|-------------------------------------------------------------- |  | ----- | -------------
|                                                               |  |       |              
|Location / Description                                         |  |       | 2005         
|                                                               |  |       |              
|Oregon:                                                        |  |       |              
|Five Centerpointe - Office building                            |  | $     |             
|Pennsylvania:                                                  |  |       |              
|Lincoln Woods - Apartments                                     |  |       | 35,528,316   
|Tennessee:                                                     |  |       |              
|Memphis CalEast Industrial Portfolio- Industrial building      |  |       | 54,000,000   
|Summit Distribution Center- Industrial building                |  |       | 25,900,000   
|Texas:                                                         |  |       |              
|Butterfield Industrial Park - Industrial building              |  |       | 4,618,955    
|Dallas Industrial Portfolio - Industrial building              |  |       | 146,000,000  
|Four Oaks Place - Office building                              |  |       | 295,239,109  
|The Caruth - Apartments                                        |  |       | 61,200,000   
|The Legends at Chase Oaks - Apartments                         |  |       | 28,499,971   
|Lincoln Centre - Office building                               |  |       | 255,311,299  
|The Maroneal - Apartments                                      |  |       | 35,000,000   
|United Kingdom:                                                |  |       |              
|1& 7 Westferry Circus - Office building                        |  |       | 373,116,817  
|Utah:                                                          |  |       |              
|Landmark at Salt Lake City (Building #4) - Industrial building |  |       | 14,700,000   
|Virginia:                                                      |  |       |              
|8270 Greensboro Drive - Office building                        |  |       | 60,200,000   
|Ashford Meadows - Apartments                                   |  |       | 78,904,526   
|Fairgate at Ballston - Office building                         |  |       | 35,300,000   
|Monument Place - Office building                               |  |       | 53,000,000   
|One Virginia Square - Office building                          |  |       | 47,000,000   
|Washington:                                                    |  |       |              
|IDX Tower - Office building                                    |  |       | 370,000,000  
|Northwest RA Industrial Portfolio- Industrial building         |  |       | 19,700,000   
|Rainier Corporate Park - Industrial building                   |  |       | 64,273,372   
|Regal Logistics Campus - Industrial building                   |  |       | 63,103,879   
|Washington DC:                                                 |  |       |              
|1001 Pennsylvania Avenue - Office building                     |  |       | 502,993,710  
|1015 15th Street - Office building                             |  |       | 73,121,166   
|1900 K Street - Office building                                |  |       | 230,000,000  
|The Farragut Building - Office building                        |  |       |             
|Mazza Gallerie - Shopping center                               |  |       | 86,001,109   
|                                                               |  |       |              
|                                                              
|TOTAL REAL ESTATE PROPERTIES                                   |  |       |              
|(Cost $7,386,769,868 and $5,315,565,355)                       |  |       | 7,977,600,751
|                                                               |  |       |              
|OTHER REAL ESTATE RELATED INVESTMENTS12.35% and 16.68%        |  |       |              
|REAL ESTATE JOINT VENTURE10.64% and 16.28%                    |  |       |              
|Teachers REA LLC, which owns                                   |  |       |              
|Cabot Industrial Portfolio (100% Account Interest)             |  |       |             
|Bisys Crossings I, LLC                                         |  |       |              
|BISYS Fund Services Building (96% Account Interest)            |  |       |             
|GA-Buckhead LLC                                                |  |       |              
|Prominence in Buckhead (75% Account Interest)                  |  |       | 97,142,406   
|IL-161 Clark Street LLC                                        |  |       |              
|161 North Clark Street (75% Account Interest)                  |  |       | 175,578,714  
|One Boston Place REIT                                          |  |       |              
|One Boston Place (50.25% Account Interest)                     |  |       | 149,723,498  
|Storage Portfolio I, LLC                                       |  |       |              
|Storage Portfolio (3) (75% Account Interest)                   |  |       | 63,237,298   

42

---



|                                                               |   |               |     |                                    | Value         |           
|-------------------------------------------------------------- | - | ------------- | --- | ---------------------------------- | ------------- | ----------
|                                                               |   |               |     |                                    |               |           
|Location / Description                                         |   |               |     | 2005                               |               |           
|                                                               |   |               |     |                                    |               |           
|CA-Treat Towers LP                                             |   |               |     |                                    |               |           
|Treat Towers (75% Account Interest)                            | $ | 93,964,192    |     | $                                  | 88,524,364    |           
|Strategic Ind Portfolio I, LLC                                 |   |               |     |                                    |               |           
|IDI Nationwide Industrial Portfolio (3) (60% Account Interest) |   | 66,871,766    | (4) |                                    | 64,041,442    | (4)       
|CA-Colorado Center LP                                          |   |               |     |                                    |               |           
|Yahoo! Center (50% Account Interest)                           |   | 138,531,366   | (4) |                                    | 222,702,820   |           
|Florida Mall Associates, Ltd.                                  |   |               |     |                                    |               |           
|The Florida Mall (50% Account Interest)                        |   | 208,013,192   | (4) |                                    | 162,632,565   | (4)       
|Teachers REA IV, LLC, which owns                               |   |               |     |                                    |               |           
|Tysons Executive Plaza II (50% Account Interest)              |   | 34,032,806    |     |                                    | 27,894,742    |           
|West Dade Associates                                           |   |               |     |                                    |               |           
|Miami International Mall (50% Account Interest)                |   | 82,290,482    | (4) |                                    | 61,577,257    | (4)       
|West Town Mall, LLC                                            |   |               |     |                                    |               |           
|West Town Mall (50% Account Interest)                          |   | 112,650,844   | (4) |                                    | 107,452,790   | (4)       
|                                                               |   |               |     |                                    |               |           
|                                                              
|TOTAL REAL ESTATE JOINT VENTURE                                |   |               |     |                                    |               |           
|(Cost $888,034,873 and $1,060,788,631)                         |   | 1,222,036,564 |     |                                    | 1,257,893,004 |           
|                                                               |   |               |     |                                    |               |           
|                                                              
|LIMITED PARTNERSHIPS 1.71% and 0.40%                          |   |               |     |                                    |               |           
|Cobalt Industrial REIT (10.00% Account Interest)               |   | 8,352,409     |     |                                    |              |           
|Colony Realty Partners, LP (5.27% Account Interest)            |   | 13,481,704    |     |                                    |              |           
|Essex Apartment Value Fund, LP (10% Account Interest)          |   | 487,306       |     |                                    | 11,434,495    |           
|Heitman Value Partners, LP (8.43% Account Interest)            |   | 8,106,810     |     |                                    | 3,766,214     |           
|Lion Gables Apartment Fund, LP (18.45% Account Interest)       |   | 150,000,000   |     |                                    |              |           
|MONY/Transwestern Mezzanine Realty Partners II, LLC            |   |               |     |                                    |               |           
|(16.67% Account Interest)                                      |   | 14,142,822    |     |                                    | 3,134,952     |           
|MONY/Transwestern Mezzanine Realty Partners, LP                |   |               |     |                                    |               |           
|(19.75% Account Interest)                                      |   | 1,975,927     |     |                                    | 12,486,734    |           
|                                                               |   |               |     |                                    |               |           
|                                                              
|TOTAL LIMITED PARTNERSHIP                                      |   |               |     |                                    |               |           
|(Cost $198,006,414 and $24,931,845)                            |   | 196,546,978   |     |                                    | 30,822,395    |           
|                                                               |   |               |     |                                    |               |           
|                                                              
|TOTAL OTHER REAL ESTATE RELATED INVESTMENTS                    |   |               |     |                                    |               |           
|(Cost $1,086,041,287 and $1,085,720,476)                       |   | 1,418,583,542 |     |                                    | 1,288,715,399 |           
|                                                               |   |               |     |                                    |               |           
|                                                              
|MARKETABLE SECURITIES18.19% and 13.54%                        |   |               |     |                                    |               |           
|                                                              
|REAL ESTATE RELATED3.91% and 4.79%                            |   |               |     |                                    |               |           
|                                                              
|REAL ESTATE EQUITY SECURITIES3.72% and 4.25%                  |   |               |     |                                    |               |           
|Shares                                                         |   |               |     |                                    |               |           
|                                                               |   |               |     |                                    |               |           
|2005                                                           |   | 2004          |     | Issuer                             |               |           
|                                                               |   |               |     |                                    |               |           
|75,000                                                         |   |              |     | Aames Investment Corp              |               | 484,500   
|                                                              |   | 70,000        |     | Acadia Realty Trust                |               |          
|550,000                                                        |   | 550,000       |     | Affordable Residential Communities |               | 5,241,500 
|36,685                                                         |   | 36,685        |     | AMB Property Corp                  |               | 1,803,801 
|40,000                                                         |   | 446,100       |     | American Campus Communities        |               | 992,000   
|919,000                                                        |   |              |     | American Financial Realty          |               | 11,028,000
|                                                              |   | 140,000       |     | Amli Residential Properties        |               |          
|450,000                                                        |   | 46,000        |     | Archstone-Smith Trust              |               | 18,850,500
|150,000                                                        |   | 232,900       |     | Ashford Hospitality Trust          |               | 1,573,500 
|40,000                                                         |   |              |     | Avalonbay Communities Inc          |               | 3,570,000 
|150,000                                                        |   |              |     | Bimini Mortgage Management-A       |               | 1,357,500 

43

---



|Shares    |  |           |  | Value                               
|--------- |  | --------- |  | ------------------------------------
|          |  |           |  |                                     
|2005      |  | 2004      |  | Issuer                              
|          |  |           |  |                                     
|         |  | 150,000   |  | Boston Properties Inc.              
|         |  | 150,000   |  | Brandywine Realty Trust             
|30,000    |  | 35,000    |  | BRE Properties                      
|270,000   |  |          |  | Brookfield Properties               
|         |  | 60,000    |  | Capital Lease Funding Inc.          
|194,000   |  |          |  | Carramerica Realty Corp             
|424,000   |  |          |  | Cedar Shopping Centers Inc.         
|50,000    |  | 60,000    |  | Centerpoint Properties Trust        
|280,000   |  |          |  | Cogdell Spencer Inc.                
|         |  | 143,000   |  | Corporate Office Properties         
|976,000   |  |          |  | Deerfield Triarc Capital Cor        
|380,000   |  | 434,000   |  | Developers Diversified Realty       
|         |  | 1,072,990 |  | Digital Realty Trust Inc.           
|193,400   |  |          |  | Duke Realty Corp.                   
|1,087,000 |  |          |  | ECC Capital Corp.                   
|600,000   |  |          |  | Education Realty Trust Inc          
|         |  | 31,875    |  | Equity Lifestyle Properties         
|         |  | 147,518   |  | Equity Office Properties Trust      
|180,000   |  | 180,000   |  | Equity Residential                  
|580,577   |  | 594,500   |  | Extra Space Storage Inc.            
|         |  | 413,873   |  | Falcon Financial Investment         
|1,367,000 |  | 1,367,000 |  | Feldman Mall Properties             
|111,600   |  |          |  | First Potomac Realty Trust          
|110,000   |  | 110,000   |  | General Growth Properties           
|         |  | 75,000    |  | Glenborough Realty Trust Inc.       
|404,800   |  | 912,000   |  | GMH Communities Trust               
|348,700   |  | 38,818    |  | Gramercy Capital Corp.              
|300,000   |  | 72,550    |  | Great Wolf Resorts Inc.             
|         |  | 75,000    |  | HealthCare Realty Trust Inc.        
|562,000   |  | 350,000   |  | Hersha Hospitality Trust            
|150,000   |  |          |  | Highland Hospitality Corp.          
|60,000    |  |          |  | Hilton Hotels Corp.                 
|80,000    |  | 168,000   |  | Home Properties Inc.                
|450,000   |  | 325,000   |  | Homebanc Corp/Ga.                   
|300,000   |  |          |  | Host Marriott Corp                  
|         |  | 74,257    |  | Impac Mortgage Holdings Inc.        
|300,000   |  | 300,000   |  | Interstate Hotels & Resorts         
|80,000    |  |          |  | Istar Financial Inc                 
|1,958,000 |  | 1,908,000 |  | Jameson Inns Inc                    
|100,000   |  |          |  | JER Investors Trust Inc.            
|108,000   |  | 54,000    |  | Kimco Realty Corp                   
|426,000   |  | 324,443   |  | Kite Realty Group Trust             
|300,000   |  |          |  | KKR Financial Corp                  
|200,000   |  |          |  | Lasalle Hotel Properties            
|120,000   |  | 215,078   |  | Lexington Corporate Properties Trust
|1,266,660 |  | 1,266,660 |  | Lodgian Inc                         
|200,000   |  | 162,000   |  | LTC Properties Inc                  
|75,000    |  | 150,000   |  | Macerich Company/The                
|400,000   |  | 30,420    |  | Mack-Cali Realty Corp.              
|200,000   |  |          |  | Medical Properties Trust Inc.       
|40,000    |  | 40,000    |  | Mills Corp/The                      
|100,000   |  | 150,000   |  | Mission West Properties             
|331,200   |  |          |  | Monmouth REIT-CLA                   
|300,000   |  |          |  | Mortgageit Holdings Inc             

44

---



|                                                      |  | Shares                                      |  |                     | Value
|----------------------------------------------------- |  | ------------------------------------------- |  | ------------------- | -----
|                                                      |  |                                             |  |                     |      
|                                                      |  | 2005                                        |  | 2004                |      
|                                                      |  |                                             |  |                     |      
|                                                      |  | 130,000                                     |  |                    |      
|                                                      |  |                                            |  | 270,000             |      
|                                                      |  |                                            |  | 100,000             |      
|                                                      |  | 100,000                                     |  |                    |      
|                                                      |  | 525,000                                     |  | 525,000             |      
|                                                      |  | 328,100                                     |  | 70,700              |      
|                                                      |  |                                            |  | 75,000              |      
|                                                      |  | 400,000                                     |  | 200,000             |      
|                                                      |  | 30,000                                      |  |                    |      
|                                                      |  | 100,000                                     |  |                    |      
|                                                      |  |                                            |  | 507,000             |      
|                                                      |  | 236,000                                     |  | 45,000              |      
|                                                      |  | 384,000                                     |  |                    |      
|                                                      |  | 305,721                                     |  | 255,900             |      
|                                                      |  | 350,000                                     |  |                    |      
|                                                      |  | 303,820                                     |  | 303,820             |      
|                                                      |  |                                            |  | 315,000             |      
|                                                      |  | 111,200                                     |  | 268,200             |      
|                                                      |  | 50,000                                      |  | 1,500,000           |      
|                                                      |  | 100,000                                     |  | 100,000             |      
|                                                      |  | 95,000                                      |  | 77,558              |      
|                                                      |  | 200,000                                     |  | 50,000              |      
|                                                      |  | 944                                         |  |                    |      
|                                                      |  |                                             |  |                     |      
|                                                     
|                                                      |  | TOTAL REAL ESTATE EQUITY SECURITIES         |  |                     |      
|                                                      |  | (Cost $411,877,936 and $284,166,107 )       |  | 426,781,565         |      
|                                                      |  |                                             |  |                     |      
|                                                     
|COMMERCIAL MORTGAGE BACKED SECURITIES0.19% and 0.54% |  |                                             |  |                     |      
|                                                      |  | Principal                                   |  |                     |      
|                                                      |  |                                             |  |                     |      
|                                                      |  | 2005                                        |  | 2004                |      
|                                                      |  |                                             |  |                     |      
|$                                                     |  |                                            |  | $10,000,000         |      
|                                                      |  |                                             |  |                     |      
|                                                      |  |                                            |  | 10,000,000          |      
|                                                      |  |                                             |  |                     |      
|10,000,000                                            |  | 10,000,000                                  |  | GSMS 2001-Rock A2FL |      
|                                                      |  |                                             |  |                     |      
|10,000,000                                            |  | 10,000,000                                  |  | MSDWC 2001-280 A2F  |      
|                                                      |  |                                             |  |                     |      
|                                                      |  | 1,601,634                                   |  | 1,940,947           |      
|                                                      |  |                                             |  |                     |      
|                                                      |  |                                             |  |                     |      
|                                                     
|                                                      |  | TOTAL COMMERCIAL MORTGAGE BACKED SECURITIES |  |                     |      
|                                                      |  | (Cost $21,604,079 and $41,943,872)          |  | 21,881,033          |      
|                                                      |  |                                             |  |                     |      
|                                                     
|                                                      |  | TOTAL REAL ESTATE RELATED                   |  |                     |      
|                                                      |  | (Cost $433,482,015 and $326,109,979 )       |  | 448,662,598         |      
|                                                      |  |                                             |  |                     |      

45

---



|OTHER14.28% and 8.75%            |  
|--------------------------------- | -
|                                  |  
|COMMERCIAL PAPER11.67% and 4.51% |  
|Principal                         |  
|                                  |  
|2005                              |  
|                                  |  
|$25,000,000                       | $
|                                  |  
|25,000,000                        |  
|                                  |  
|10,000,000                        |  
|                                  |  
|25,000,000                        |  
|                                  |  
|2,430,000                         |  
|                                  |  
|10,000,000                        |  
|                                  |  
|25,000,000                        |  
|                                  |  
|25,000,000                        |  
|                                  |  
|30,000,000                        |  
|                                  |  
|15,000,000                        |  
|                                  |  
|18,040,000                        |  
|                                  |  
|13,100,000                        |  
|                                  |  
|11,000,000                        |  
|                                  |  
|                                 |  
|                                  |  
|20,000,000                        |  
|                                  |  
|10,000,000                        |  
|                                  |  
|14,000,000                        |  
|                                  |  
|40,000,000                        |  
|                                  |  
|10,000,000                        |  
|                                  |  
|37,000,000                        |  
|                                  |  
|13,000,000                        |  
|                                  |  
|24,150,000                        |  
|                                  |  
|15,000,000                        |  
|                                  |  

46

---



|Principal   |   |            |  | Value                                 
|----------- | - | ---------- |  | --------------------------------------
|            |   |            |  |                                       
|2005        |   | 2004       |  | Issuer, Current Rate and Maturity Date
|            |   |            |  |                                       
|$ 5,035,000 | $ |           |  | Corporate Asset Funding Corp, Inc     
|            |   |            |  | 4.200% 01/23/06                       
|16,000,000  |   |           |  | Corporate Asset Funding Corp, Inc     
|            |   |            |  | 4.210% 01/25/06                       
|5,905,000   |   |           |  | Corporate Asset Funding Corp, Inc     
|            |   |            |  | 4.290% 01/31/06                       
|2,020,000   |   |           |  | Corporate Asset Funding Corp, Inc     
|            |   |            |  | 4.360%
        02/17/06               
|25,000,000  |   |           |  | Deutsche Bank                         
|            |   |            |  | 4.270% 02/14/06                       
|50,000,000  |   |           |  | Dexia Bank                            
|            |   |            |  | 4.280% 01/30/06                       
|8,000,000   |   |           |  | Dorada Finance Inc                    
|            |   |            |  | 3.900% 01/23/06                       
|20,000,000  |   |           |  | Dorada Finance Inc                    
|            |   |            |  | 4.350% 02/27/06                       
|21,500,000  |   |           |  | Dorada Finance Inc                    
|            |   |            |  | 4.250% 02/16/06                       
|13,000,000  |   |           |  | Edison Asset Securitization, LLC      
|            |   |            |  | 4.190% 01/17/06                       
|20,000,000  |   |           |  | Edison Asset Securitization, LLC      
|            |   |            |  | 4.360% 02/22/06                       
|7,248,000   |   |           |  | Edison Asset Securitization, LLC      
|            |   |            |  | 4.420%
        04/07/06               
|20,000,000  |   |           |  | FCAR Owner Trust I                    
|            |   |            |  | 4.340% 02/07/06                       
|17,000,000  |   |           |  | First Tennessee National Bank         
|            |   |            |  | 4.330% 02/06/06                       
|           |   | 2,670,000  |  | Fortune Brands                        
|            |   |            |  | 2.060%
        01/11/05               
|21,590,000  |   |           |  | General Electric Capital Corp         
|            |   |            |  | 4.440% 04/28/06                       
|25,000,000  |   |           |  | General Electric Capital Corp         
|            |   |            |  | 4.520%
        06/28/06               
|35,000,000  |   |           |  | Goldman Sachs Group, LP               
|            |   |            |  | 4.280%
        02/03/06               
|10,000,000  |   | 15,000,000 |  | Govco Incorporated                    
|            |   |            |  | 4.080%
        01/18/06               
|9,000,000   |   | 10,000,000 |  | Govco Incorporated                    
|            |   |            |  | 4.390% 03/14/06                       
|29,140,000  |   |           |  | Govco Incorporated                    
|            |   |            |  | 4.040% 01/09/06                       
|5,015,000   |   |           |  | Grampian Funding LLC                  
|            |   |            |  | 4.320% 01/23/06                       
|20,000,000  |   |           |  | Grampian Funding LLC                  
|            |   |            |  | 4.040% 02/01/06                       
|10,000,000  |   | 25,000,000 |  | Greyhawk Funding LLC                  
|            |   |            |  | 4.000% 01/06/06                       
|           |   | 10,750,000 |  | Harley- Davidson Funding Corp         
|            |   |            |  | 2.230%
        02/14/05               

47

---



|Principal   |  |            |  | Value                                 
|----------- |  | ---------- |  | --------------------------------------
|            |  |            |  |                                       
|2005        |  | 2004       |  | Issuer, Current Rate and Maturity Date
|            |  |            |  |                                       
|$25,000,000 |  |           |  | Harrier Finance Funding (US) LLC      
|            |  |            |  | 3.930% 01/25/06                       
|10,085,000  |  |           |  | HBOS Treasury Srvcs Plc               
|            |  |            |  | 4.200% 02/15/06                       
|31,740,000  |  | 15,000,000 |  | Kitty Hawk Funding Corp               
|            |  |            |  | 4.300% 01/12/06                       
|10,000,000  |  | 9,565,000  |  | Kitty Hawk Funding Corp               
|            |  |            |  | 3.890%
        02/15/06               
|25,000,000  |  |           |  | Links Finance L.L.C.                  
|            |  |            |  | 4.300%
        02/10/06               
|25,000,000  |  |           |  | Links Finance L.L.C.                  
|            |  |            |  | 4.380% 03/13/06                       
|10,000,000  |  | 10,000,000 |  | Paccar Financial Corp                 
|            |  |            |  | 4.020% 01/12/06                       
|13,655,000  |  |           |  | Paccar Financial Corp                 
|            |  |            |  | 4.360%
        03/03/06               
|20,080,000  |  |           |  | Park Avenue Receivables Corp          
|            |  |            |  | 4.270%
        01/27/06               
|10,000,000  |  |           |  | Park Avenue Receivables Corp          
|            |  |            |  | 4.290% 01/04/06                       
|10,000,000  |  |           |  | Preferred Receivables Funding Corp    
|            |  |            |  | 4.130%
        01/06/06               
|15,000,000  |  | 10,000,000 |  | Private Export Funding Corporation    
|            |  |            |  | 4.080% 02/13/06                       
|5,000,000   |  |           |  | Private Export Funding Corporation    
|            |  |            |  | 4.440%
        04/04/06               
|9,000,000   |  |           |  | Private Export Funding Corporation    
|            |  |            |  | 4.300% 03/09/06                       
|19,150,000  |  |           |  | Private Export Funding Corporation    
|            |  |            |  | 4.170% 02/07/06                       
|20,000,000  |  |           |  | Proctor & Gamble                      
|            |  |            |  | 4.030%
        01/10/06               
|3,500,000   |  |           |  | Proctor & Gamble                      
|            |  |            |  | 4.090%
        01/26/06               
|           |  | 25,000,000 |  | Rabobank USA Financial Corp           
|            |  |            |  | 3.640%
        11/28/05               
|50,000,000  |  |           |  | Ranger Funding Company LLC            
|            |  |            |  | 4.290%
        01/17/06               
|17,000,000  |  |           |  | Regions Bank (Alabama)                
|            |  |            |  | 4.180%
        01/30/06               
|           |  | 23,135,000 |  | Royal Bank of Canada                  
|            |  |            |  | 3.660% 11/08/05                       
|           |  | 16,430,000 |  | Royal Bank of Scotland PLC            
|            |  |            |  | 3.680% 11/16/05                       
|540,000     |  | 2,000,000  |  | Sherwin-Williams Co                   
|            |  |            |  | 4.070% 02/07/06                       
|14,390,000  |  | 15,000,000 |  | Sigma Finance Inc                     
|            |  |            |  | 4.030%
        01/12/06               
|8,000,000   |  |           |  | Sigma Finance Inc                     
|            |  |            |  | 4.390%
        03/08/06               

48

---



|                                        | Principal                               |  |               |            | Value                               
|--------------------------------------- | --------------------------------------- |  | ------------- | ---------- | ------------------------------------
|                                        |                                         |  |               |            |                                     
|                                        | 2005                                    |  |               | 2004       |                                     
|                                        |                                         |  |               |            |                                     
|$                                       | 5,000,000                               |  | $             |           |                                     
|                                        |                                         |  |               |            |                                     
|17,000,000                              |                                         |  |              |            | Sigma Finance Inc                   
|                                        |                                         |  |               |            |                                     
|                                        | 5,575,000                               |  |               |           |                                     
|                                        |                                         |  |               |            |                                     
|                                        | 6,030,000                               |  |               |           |                                     
|                                        |                                         |  |               |            |                                     
|27,600,000                              |                                         |  |              |            | Swedish Export Credit Corp          
|                                        |                                         |  |               |            |                                     
|15,000,000                              |                                         |  |              |            | Toyota Motor Credit Corp            
|                                        |                                         |  |               |            |                                     
|                                        |                                        |  |               | 25,000,000 |                                     
|                                        |                                         |  |               |            |                                     
|24,000,000                              |                                         |  | 25,000,000    |            | UBS Finance, (Delaware) Inc         
|                                        |                                         |  |               |            |                                     
|                                        | 3,120,000                               |  |               |           |                                     
|                                        |                                         |  |               |            |                                     
|25,000,000                              |                                         |  |              |            | Variable Funding Capital Corporation
|                                        |                                         |  |               |            |                                     
|                                        | 5,010,000                               |  |               |           |                                     
|                                        |                                         |  |               |            |                                     
|20,000,000                              |                                         |  |              |            | Wells Fargo                         
|                                        |                                         |  |               |            |                                     
|19,460,000                              |                                         |  |              |            | Yorktown Capital, LLC               
|                                        |                                         |  |               |            |                                     
|                                        | 2,625,000                               |  |               |           |                                     
|                                        |                                         |  |               |            |                                     
|                                        | 4,066,000                               |  |               |           |                                     
|                                        |                                         |  |               |            |                                     
|                                        |                                         |  |               |            |                                     
|                                       
|                                        | TOTAL COMMERCIAL PAPER                  |  |               |            |                                     
|                                        | (Cost $1,340,511,661 and $348,329,276 ) |  | 1,340,656,583 |            | 348,261,543                         
|                                        |                                         |  |               |            |                                     
|                                       
|GOVERNMENT AGENCY BONDS2.61% and 4.24% |                                         |  |               |            |                                     
|                                        | Principal                               |  |               |            | Value                               
|                                        |                                         |  |               |            |                                     
|                                        | 2005                                    |  |               | 2004       |                                     
|                                        |                                         |  |               |            |                                     
|$                                       |                                        |  | $             | 9,380,000  |                                     
|                                        |                                         |  |               |            |                                     
|                                        |                                        |  |               | 8,603,000  |                                     
|                                        |                                         |  |               |            |                                     
|                                        | 7,030,000                               |  |               | 7,860,000  |                                     
|                                        |                                         |  |               |            |                                     
|                                        |                                        |  |               | 18,000,000 |                                     
|                                        |                                         |  |               |            |                                     
|                                        |                                        |  |               | 22,825,000 |                                     
|                                        |                                         |  |               |            |                                     
|                                        |                                        |  |               | 20,700,000 |                                     
|                                        |                                         |  |               |            |                                     

49

---



|           | Principal                                          |            |                 |                                       |                                        | Value
|---------- | -------------------------------------------------- | ---------- | --------------- | ------------------------------------- | -------------------------------------- | -----
|           |                                                    |            |                 |                                       |                                        |      
|           | 2005                                               |            | 2004            |                                       | Issuer, Current Rate and Maturity Date |      
|           |                                                    |            |                 |                                       |                                        |      
|$          |                                                   |            | $11,245,000     |                                       | Federal Home Loan Banks                |      
|           |                                                    |            |                 |                                       | 3.230%
        09/02/05                |      
|           |                                                   |            | 8,510,000       |                                       | Federal Home Loan Banks                |      
|           |                                                    |            |                 |                                       | 2.950% 07/01/05                        |      
|30,000,000 |                                                    | 20,000,000 |                 | Federal Home Loan Mortgage Corp       |                                        |      
|           |                                                    |            |                 |                                       | 3.910%
        01/03/06                |      
|18,000,000 |                                                    | 15,000,000 |                 | Federal Home Loan Mortgage Corp       |                                        |      
|           |                                                    |            |                 |                                       | 4.210% 02/09/06                        |      
|50,000,000 |                                                    | 15,540,000 |                 | Federal Home Loan Mortgage Corp       |                                        |      
|           |                                                    |            |                 |                                       | 4.210%
        01/31/06                |      
|           | 3,840,000                                          |            |                |                                       | Federal Home Loan Mortgage Corp        |      
|           |                                                    |            |                 |                                       | 3.740% 01/09/06                        |      
|37,615,000 |                                                    | 22,280,000 |                 | Federal National Mortgage Association |                                        |      
|           |                                                    |            |                 |                                       | 4.150%
        01/10/06                |      
|23,940,000 |                                                    | 50,000,000 |                 | Federal National Mortgage Association |                                        |      
|           |                                                    |            |                 |                                       | 4.240%
        02/23/06                |      
|46,555,000 |                                                    | 25,000,000 |                 | Federal National Mortgage Association |                                        |      
|           |                                                    |            |                 |                                       | 4.100%
        01/11/06                |      
|29,320,000 |                                                    | 31,925,000 |                 | Federal National Mortgage Association |                                        |      
|           |                                                    |            |                 |                                       | 4.200% 02/02/06                        |      
|           | 1,766,000                                          |            | 32,184,000      |                                       | Federal National Mortgage Association  |      
|           |                                                    |            |                 |                                       | 3.960% 02/15/06                        |      
|50,000,000 |                                                    | 9,270,000  |                 | Federal National Mortgage Association |                                        |      
|           |                                                    |            |                 |                                       | 4.240%
        02/17/06                |      
|           | 3,015,000                                          |            |                |                                       | Federal National Mortgage Association  |      
|           |                                                    |            |                 |                                       | 4.110%
        02/01/06                |      
|           |                                                    |            |                 |                                       |                                        |      
|          
|           | TOTAL GOVERNMENT AGENCY BONDS                      |            |                 |                                       |                                        |      
|           | (Cost $300,164,529 and $327,794,989 )              |            |                 | 300,237,932                           |                                        |      
|           |                                                    |            |                 |                                       |                                        |      
|          
|           | TOTAL OTHER(Cost $1,640,676,190 and $676,124,265 ) |            |                 | 1,640,894,515                         |                                        |      
|           |                                                    |            |                 |                                       |                                        |      
|          
|           | TOTAL MARKETABLE SECURITIES                        |            |                 |                                       |                                        |      
|           | (Cost $2,074,158,205 and $1,002,234,244)           |            |                 | 2,089,557,113                         |                                        |      
|           |                                                    |            |                 |                                       |                                        |      
|          
|           | TOTAL INVESTMENTS100.00%                          |            |                 |                                       |                                        |      
|           | (Cost $10,546,969,360 and $7,403,520,075)          |            | $11,485,741,406 |                                       | $7,725,918,490                        
|           |                                                    |            |                 |                                       |                                       

|(1) | The investment has a mortgage payable outstanding, as indicated in Note 5.             
|--- | ---------------------------------------------------------------------------------------
|   
|(2) | Leasehold interest only.                                                               
|   
|(3) | Located throughout the U.S.                                                            
|   
|(4) | The market value reflects the Accounts interest in the joint venture, net of any debt.
|   

50

---



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:

In our opinion, the accompanying statements of assets and liabilities, including the statement of investments, and the related statements of operations, changes in net assets and cash flows, present fairly, in all material
respects, the financial position of the TIAA Real Estate Account (the Account) at December 31, 2005, the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in
the United States of America. These financial statements are the responsibility of the Accounts management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit of these
statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the 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, assessing the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

51

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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 statement of assets and liabilities of the TIAA Real Estate Account (Account) of Teachers Insurance and Annuity Association of America (TIAA), including the statement
of investments, as of December 31, 2004, and the related statements of operations, changes in net assets and cash flows for each of the two 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 the results of its operations, changes in its net assets
and its cash flows for each of the two years in the period ended December 31, 2004, in conformity with U.S. generally accepted accounting principles.

|New York, New York |  | /s/ Ernst & Young LLP
|------------------ |  | ---------------------
|April 14, 2005     |  |                      

52

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ADDITIONAL INFORMATION

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. TIAA has engaged
PricewaterhouseCoopers LLP as the independent accountants.

(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, 2005.

(b)Changes in internal controls over financial reporting. There have been no significant changes in the registrants internal controls
over financial reporting that occurred during the registrants last fiscal quarter that materially affected, or is reasonably likely to materially affect, the registrants internal controls over financial reporting.

53

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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,67

John C. Hower Professor of Public Policy and Management, Wharton School, University of Pennsylvania. Director, CSX Corporation, Altria Group, Inc. and National Bureau of Economic Research. Honorary Trustee, the Brookings
Institute.

Robert C. Clark,62

Harvard University Distinguished Service Professor and Austin Wakeman Scott Professor of Law, Harvard Law School, Harvard University, Formerly Dean and Royall Professor of Law, Harvard Law School. Director, Collins & Aikman
Corporation, Time Warner, Inc. and Omnicom Group.

Edward M. Hundert, M.D.,49

President, Professor of Biomedical Ethics, Professor of Cognitive Science, Case Western Reserve University. Formerly, Dean, 2000-2002, University of Rochester School of Medicine and Dentistry, Professor of Medical Humanities and Psychiatry, 1997-2002. Member of BioEnterprise and the Cleveland Orchestra. Board Member,
Rock and Roll of Fame, the Greater Cleveland Partnership and Nortech.

Marjorie Fine Knowles,66

Professor of Law, Georgia State University College of Law.

Donald K. Peterson,56

Chairman and Chief Executive Officer, Avaya Inc. Formerly, Executive Vice President and Chief Financial Officer, Lucent Technologies. Chairman, Board of Trustees, Worcester Polytechnic Institute.

Sidney A. Ribeau,58

President, Bowling Green University. Director, The Andersons, Convergys and Worthington Industries.

Leonard S. Simon,69

Former 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.

54

---



David F. Swensen,52

Chief Investment Officer, Yale University. Trustee, Brookings Institute, Carnegie Institution of Washington, Carnegie Corporation, Yale New Haven Hospital, Howard Hughes Medical Institute, Courtauld Institute of Art, Wesleyan
University, and Hopkins School.

Ronald L. Thompson,56

Former Chairman and Chief Executive Officer, Midwest Stamping and Manufacturing Company. Director, Interstate Bakeries Corporation, Ralston Purina, Ryerson Tull Inc., and Washington University in St. Louis.

Marta Tienda,55

Professor of Demographic Studies, Princeton University. Director, Office of Population Research, Princeton University, 1998-2002. Director, Corporation of Brown University, the Princeton Healthcare System, Federal Reserve Bank of
New York, Sloan Foundation, Jacobs Foundation and Hispanic Business Incorporated.

Paul R. Tregurtha,70

Chairman 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,64

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

Herbert M. Allison, Jr.,62

Chairman, President and Chief Executive Officer, TIAA. President and Chief Executive Officer, CREF. Formerly, President, Chief Operating Officer and Member of the Board of Directors of Merrill Lynch & Co., Inc., 1997-1999 and
President and Chief Executive Officer of Alliance for LifeLong Learning, Inc., 1999-2002.

55

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Effective February 1, 2006, the management of the Accounts REIT portfolio was changed. David Copp and Anne Sapp will be responsible for implementing the Accounts REIT investment
strategy.

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.

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, 2005, the Account paid TIAA $3,170,017 for this liquidity guarantee through
a daily deduction from the net assets of the Account.

56

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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, 2005, the Account paid TIAA $19,603,225 for investment management services and $6,196,549 for mortality and expense risks. For the same period, the Account paid
Services $27,130,406 for its administrative and distribution services.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

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

Audit Fees. PwCs fees for professional services rendered for the audit of the registrants annual financial statements for the year ended December 31, 2005
and review of financial statements included in the registrants annual financial statements was $429,500. 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 $1,804,200 and $151,700, respectively.

Tax Fees. PwC had no tax fees for the fiscal year ended December 31, 2005. 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, there were no additional fees with respect to Registrant.

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

Committee) adopted a Preapproval Policy for External Audit Firm Services (the Policy). The Policy describes the types of services that may be provided by the independent auditor to the Registrant without
impairing the auditors independence. Under the Policy, the Audit Committee is required to preapprove services to be performed by the Registrants independent auditor in order to ensure that such services do not impair the auditors
independence.

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

57

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Auditor Fees for Related Entities. The aggregate non-audit fees billed by PwC for services rendered to the Registrant and affiliates performing on-going services to
the

Registrant, including TIAA for the year ended December 31, 2005 was $331,500. 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.

PwCs aggregate fee for professional services rendered in connection with the audit of the financial statements for TIAA and the College Retirement Equities Fund (CREF) and their
affiliated companies for the year ended December 31, 2005 was $5,709,300. PwCs aggregate fees for audit related-services provided to TIAA and CREF and their affiliated entities for the year ended December 31, 2005 was $322,000.
PwCs aggregate fees for tax services provided to TIAA and CREF and their affiliated entities for the year ended December 31, 2005 was $166,000. PwC had no additional aggregate fees for other services provided to TIAA and CREF and their
affiliated entities for the year ended December 31, 2005. 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.

58

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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.         
| | ---- |  |  | -------------------------------------------------------------------------- |  |  | ----------------------------------------------------------------------------
|
| |      |  |  | 2.                                                                         |  |  | Financial Statement Schedules. See Item 8 for required financial statements.
|
| | (b)  |  |  |                                                                            |  |  | Exhibits.                                                                   
|
| | (1)  |  |  | Distribution and Administrative Services Agreement by and between TIAA and
| |      |  |  | TIAA-CREF Individual & Institutional Services, Inc. (as amended)1and the  
| |      |  |  | Amendment thereto5                                                        
|
| | (3)  |  |  | (A)                                                                        |  |  | Charter of TIAA (as amended)4                                               
| |      |  |  | (B)                                                                        |  |  | Bylaws of TIAA (as amended)4                                                
| | (4)  |  |  | (A)                                                                        |  |  | Forms of RA, GRA, GSRA, SRA, IRA Real Estate Account Contract               
| |      |  |  |                                                                            |  |  | Endorsements2, Keogh Contract1, Retirement Select and Retirement Select Plus
| |      |  |  |                                                                            |  |  | Contracts and Endorsements3and Retirement Choice and Retirement Choice      
| |      |  |  |                                                                            |  |  | Plus Contracts6                                                             
| |      |  |  | (B)                                                                        |  |  | Forms of Income-Paying Contracts2                                           
| | (10) |  |  | (A)                                                                        |  |  | Independent Fiduciary Agreement by and among TIAA, the Registrant, and      
| |      |  |  |                                                                            |  |  | Real Estate Research Corporation                                            
| |      |  |  | (B)                                                                        |  |  | Custodial Services Agreement by and between TIAA and Morgan Guaranty        
| |      |  |  |                                                                            |  |  | Trust Company of New York with respect to the Real Estate Account           
| |      |  |  |                                                                            |  |  | (Agreement assigned to The Bank of New York, January, 1996)2                
| | (14) |  |  | Code of Ethics                                                            
| | (31) |  |  | Rule 13a-15(e)/15d-15(e) Certifications                                   
| | (32) |  |  | Section 1350 Certifications                                               

_____________________________1- Previously filed and incorporated herein by reference to Post-Effective Amendment No. 6 to the Accounts previous Registration Statement on Form S-1, filed April 26, 2000 (File No.
333-22809).

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

3- Previously filed and incorporated herein by reference to Pre-Effective Amendment No. 1 to the Accounts Registration Statement on Form S-1 filed April 29, 2004 (File No.
333-113602).

4- Previously filed and incorporated herein by reference to Pre-Effective Amendment No. 1 to the Accounts Registration Statement on Form S-1 filed December 21, 2004 (File No.
333-121493).

5- Previously filed and incorporated herein by reference to Pre-Effective Amendment No. 1 to the Accounts Registration Statement on Form S-1 filed April 29, 2005 (File No.
333-121493).

59

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SIGNATURES

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

| |  | 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
|                        |  |                                                 |  |                                            
|Herbert M. Allison, Jr. |  | Executive Officer (Principal Executive Officer) |  |                                            
|                       
|                       
|                       
|/s/                     |  | Russell Noles                                   |  | Vice President                             
|                        |  |                                                 |  |                                            
|Russell Noles           |  | and Acting Chief Financial Officer              |  |                                            

60

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|Signature of Trustee    |                         | Date    |         | Signature of Trustee |                 | Date              
|----------------------- | ----------------------- | ------- | ------- | -------------------- | --------------- | ------------------
|                       
|/s/                     | Herbert M. Allison, Jr. |         | 3/14/06 |                      | /s/             | Leonard S. Simon  
|                        |                         |         |         |                      |                 |                   
|Herbert M. Allison, Jr. |                         |         |         | Leonard S. Simon     |                 |                   
|                       
|                       
|/s/                     | Elizabeth E. Bailey     |         | 3/14/06 |                      | /s/             | David F. Swensen  
|                        |                         |         |         |                      |                 |                   
|Elizabeth E. Bailey     |                         |         |         | David F. Swensen     |                 |                   
|                       
|                       
|/s/                     | Robert C. Clark         |         | 3/14/06 |                      | /s/             | Ronald L. Thompson
|                        |                         |         |         |                      |                 |                   
|Robert C. Clark         |                         |         |         | Ronald L. Thompson   |                 |                   
|                       
|                       
|/s/                     | Edward M. Hundert       |         | 3/14/06 |                      | /s/             | Marta Tienda      
|                        |                         |         |         |                      |                 |                   
|Edward M. Hundert       |                         |         |         | Marta Tienda         |                 |                   
|                       
|                       
|/s/                     | Marjorie Fine Knowles   |         | 3/14/06 |                      | /s/             | Paul R. Tregurtha 
|                        |                         |         |         |                      |                 |                   
|Marjorie Fine Knowles   |                         |         |         | Paul R. Tregurtha    |                 |                   
|                       
|                       
|/s/ Donald K. Peterson  |                         | 3/14/06 |         | /s/                  | Rosalie J. Wolf |                   
|                        |                         |         |         |                      |                 |                   
|Donald K. Peterson      |                         |         |         | Rosalie J. Wolf      |                 |                   
|                       
|                       
|/s/                     | Sidney A. Ribeau        |         | 3/14/06 |                      |                 |                   
|                        |                         |         |         |                      |                 |                   
|Sidney A. Ribeau        |                         |         |         |                      |                 |                   

61

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

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







62

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