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

                                    FORM 10-K

(Mark One)
[x]     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
        ACT OF 1934
        [FEE REQUIRED]
        For the fiscal year ended December 31, 1995

[ ]     TRANSITION  REPORT  PURSUANT  TO  SECTION  13 OR 15(d) OF THE SECURITIES
        EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
        For the transition period from __________ to __________

                         Commission file number 33-92990

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

            New York                                           Not Applicable
  (State or other jurisdiction                                (I.R.S. Employer
of incorporation or organization)                            Identification No.)

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

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

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

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

Indicate by check mark 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

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

Documents Incorporated by Reference: None

<PAGE>

                                     PART I
ITEM 1. BUSINESS.

         General.  The  TIAA Real Estate  Account (the "Real Estate  Account" or
the  "Account") was  established on February 22, 1995, as a separate  investment
account of Teachers  Insurance and Annuity  Association of America  ("TIAA"),  a
nonprofit New York insurance company, by resolution of TIAA's Board of Trustees.
The  Account,  which  invests  mainly  in real  estate  and real  estate-related
investments, is a variable annuity investment option offered through individual,
group and tax-deferred  annuity contracts  available to employees of educational
and research  institutions.  The Account  commenced  operations on July 3, 1995,
when  TIAA  contributed  $100  million  of  seed  money  to  the  Account,   and
participating   interests  in  the  Account  were  first   offered  to  eligible
participants on October 2, 1995.

         Investment  Practices.  The  investment  objective  of the Account is a
favorable rate of return over the long term, primarily through rental income and
capital  appreciation  from real estate  investments  owned by the Account.  The
Account will also invest in publicly-traded  securities and other instruments to
maintain  liquidity  needed for capital  expenditures  and  expenses and to make
distributions.

         Usually,  between 70% and 80% of the Account's  assets will be invested
directly in real  estate or in real  estate-related  investments.  We expect the
majority  of the  Account's  real  estate  investments  to be  direct  ownership
interests in income-producing real estate, such as office,  industrial,  retail,
and  multi-family  residential  properties.  The Account can also  invest,  to a
limited extent, in other real estate-related  investments,  such as conventional
mortgage loans, participating mortgage loans, and real estate partnerships. To a
limited extent,  the Account can also invest in real estate  investment  trusts,
common or preferred stock of companies whose operations  primarily  involve real
estate, and collateralized mortgage obligations.

         Normally,  between  20% and 30% of the  Account  will  be  invested  in
government and corporate debt securities, short-term money market instruments or
cash  equivalents,  and, to some extent,  common or preferred stock of companies
that don't  primarily  own or manage real  estate.  In some  circumstances,  the
Account can  increase  temporarily  the  portion of its assets  invested in debt
securities  or money market  instruments.  This could happen  because of a rapid
influx of participants'  funds, lack of suitable real estate  investments,  or a
need for more liquidity.

         In  order  not to be  considered  an  "investment  company"  under  the
Investment Company Act of 1940 (the "1940 Act"), the Account

                                        2

<PAGE>

will limit its holdings of investment securities (as defined under the 1940 Act)
to less than 40% of its total assets (not including U.S.  Government  securities
and cash items). However,  during its first year of operations,  the Account may
keep a much larger part of its assets in short-term  and other debt  instruments
or in equity securities.

         Net Assets and  Portfolio  Investments.  As of December 31,  1995,  the
Account's  net assets  totalled  $120,258,345.  Through  December 31, 1995,  the
Account  had  acquired a total of five real  estate  properties,  including  two
industrial  properties,  one  neighborhood  shopping  center,  and two apartment
complexes,  for an aggregate purchase price of approximately $44 million.  Since
that date, the Account has purchased an office  property for a purchase price of
approximately  $10 million.  Most of the remainder of the Account's  assets have
been invested in short-term instruments or is being held as cash. The Account is
continuing to seek suitable real estate-related investments for its portfolio.

         Personnel  and  Management.  The Real Estate  Account does not directly
employ any  persons  nor does the Account  have its own  management  or board of
directors.  Rather,  TIAA  employees,  under the direction and control of TIAA's
Board of Trustees and Mortgage 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,   Inc.
("Services"),  a  non-profit  subsidiary  of TIAA,  also  provide all  portfolio
accounting, custodial, and related services for the Account at cost.

ITEM 2. PROPERTIES.

         The properties the Account has purchased since it  commenced operations
are described below.

MULTI-FAMILY RESIDENTIAL COMPLEXES

Brixworth Apartments -- Atlanta, Georgia

         On December 28, 1995,  the Account  purchased  the fee interest  (i.e.,
ownership of the underlying land and all buildings and other improvements on the
land) in Brixworth Apartments, a first class garden apartment complex located in
Atlanta,  Georgia,  for a purchase price of  approximately  $15.6  million.  The
property is not subject to a mortgage.

         Brixworth  Apartments was built in 1989 and is located on approximately
10.8 acres of land.  The complex  contains 271 one- and  two-bedroom  apartment
units in 11 three story buildings, with each unit containing such amenities as a
washer and dryer and a patio or balcony. Building exteriors are brick and wood.

                                        3

<PAGE>

There are 420 parking  spaces in the complex.  Residents  have use of an on-site
clubhouse,  which  includes  a  fitness  center  and  swimming  pool.  Brixworth
Apartments  is  currently  97%  occupied,  and  according  to  the  Seller,  has
experienced  between  93% and 97%  occupancy  over the prior  five year  period.
Average monthly rents are $699 per unit.  Rents are comparable with  competitive
complexes  and  are  not  subject  to  rent  regulation.  The  Account  will  be
responsible for the expenses of operating the property.

         Brixworth  Apartments is located in northeast Atlanta in DeKalb County,
near several shopping facilities and employment centers. Atlanta has experienced
positive  population and employment  growth over the last 15 years and serves as
the financial and administrative center for the southeastern United States.

The Greens at MetroWest Apartments -- Orlando, Florida

         On December 15,  1995,  the Account  purchased  the fee interest in The
Greens at  MetroWest,  a luxury  garden  apartment  complex  located in Orlando,
Florida,  for a purchase price of approximately  $12.5 million.  The property is
not subject to a mortgage.

         The Greens at MetroWest Apartments was built in 1990, and is located on
approximately  16.7  acres  of  land.  The  complex  consists  of 200  one-  and
two-bedroom  units in 27 two story  buildings,  with each unit  containing  such
amenities as a washer and dryer, a screened porch,  and, in many of the units, a
fireplace  and vaulted  ceilings.  Building  exteriors  are stucco with concrete
tiled roofs. There are 402 parking spaces in the complex.  Residents have use of
an on-site clubhouse, which includes an exercise facility and swimming pool. The
complex is currently 93% occupied,  with monthly rents  averaging $778 per unit.
Rents are  comparable  with  competitive  complexes  and are not subject to rent
regulation.  The Account will be  responsible  for the expenses of operating the
property.

         The complex is located in the 1,800 acre master planned  development of
MetroWest which contains an 18 hole golf course.  Its proximity to several major
highways gives  residents  easy access to Orlando's  major  employment  centers.
Orlando has experienced  strong population and employment growth during the last
decade.  While  tourism and  entertainment  account  for 40% of local jobs,  the
region's  economy is  diversifying by attracting  "high-tech"  industries and is
growing in importance as a warehouse and distribution location.


                                        4

<PAGE>

OFFICE BUILDINGS

Southbank Business Park -- Phoenix, Arizona

         On February  27,  1996,  the Account  purchased  the fee  interest in a
122,609 square foot office/service building in Phoenix,  Arizona, for a purchase
price  of  approximately  $10.05  million.  The  property  is not  subject  to a
mortgage.

         The building,  completed in 1995, is located on approximately 9.9 acres
of land with 638 parking  spaces.  It is currently 100% occupied by four tenants
in the service industry, with rents averaging $8.77 per square foot. None of the
leases expire until the year 2000, when leases on 65% of the space expire; those
leases together represent total annual rent payments of approximately  $684,907.
Although the terms vary under each lease, most of the expenses for operating the
property are either borne or reimbursed by the tenants.

         The building is located within the Southbank  Business Park adjacent to
the  Phoenix  Airport and is easily  accessible  from either side of the Phoenix
metropolitan  area. Phoenix has experienced  positive  population and employment
growth over the last 15 years.  Over 29% of its employment  base is comprised of
employees in the service industry.


NEIGHBORHOOD SHOPPING CENTERS

Plantation Grove Shopping Center -- Ocoee, Florida

         On  December  28,  1995,  the  Account  purchased  the fee  interest in
Plantation  Grove Shopping Center,  a 73,655 square foot  neighborhood  shopping
center located near Orlando, Florida, for a purchase price of approximately $7.3
million. The property is not subject to a mortgage.

         The center, built in 1995, is located on approximately 14 acres of land
with space for 401 cars.  It is  currently  88%  occupied  and is  anchored by a
47,955 square foot Publix  supermarket,  a regional  supermarket  chain.  Rents,
including a rent guarantee from the seller for the 12% of vacant space,  average
$10.00 per square foot.  Although  the terms vary under each lease,  most of the
expenses  for  operating  the property  are either  borne or  reimbursed  by the
tenants.  Over the next five years,  leases on 16% of the center's space expire;
those leases  together  represent  total annual rent payments of $162,900 in the
year of their expiration. The Publix lease expires in the year 2015.

         The Orlando, Florida area is discussed in the description of The Greens
at MetroWest Apartments set forth above.

                                        5

<PAGE>

INDUSTRIAL PROPERTIES

         On November  22,  1995,  the Account  purchased  the fee  interest in a
warehouse  property located near Minneapolis,  Minnesota for a purchase price of
approximately  $4.1 million.  Rents on the property,  including a rent guarantee
from the seller for the 20% of vacant  space,  average $3.80 per square foot. On
December 22, 1995, the Account purchased leasehold interests (i.e., interests in
the leases on the  underlying  land and  ownership  of the  buildings  and other
improvements on the land) in two warehouse  properties located in El Paso, Texas
for an aggregate purchase price of approximately $4.4 million dollars.  Rents on
the properties  average $2.71 per square foot, after payment of the ground rent.
Although the terms vary under each lease,  most of the  expenses  for  operating
each of the  properties  are either borne or reimbursed by the tenants.  None of
the properties are subject to a mortgage.

         Set forth below are further details relating to each facility:

<TABLE>
<CAPTION>
                          Building                                               Lease
                          Size            Year      Current       Major          Expira-
Property                  (sq. ft.)       Built     Occupancy     Tenants        tion Date
<S>                        <C>             <C>         <C>        <C>              <C>
Fridley,
Minnesota
 Industrial Blvd.          100,584         1995         80%       Packaging        2005
                                                                  Materials,
                                                                  Inc.

El Paso, Texas
 Butterfield warehouse      80,000         1980        100%       Rockwell         2000
 Zane Gray warehouse       103,600         1981        100%       D.J. Inc.        2003
</TABLE>

ITEM 3. LEGAL PROCEEDINGS.

         None.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

         Not applicable.

                                     PART II

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

         (a)  Market Information.  There is no established public trading market
for participating interests in the TIAA Real Estate Account.  Accumulation units
in the Account are sold  to  eligible  participants  at  the  Account's  current
accumulation unit
                                        6

<PAGE>

value,  which is based on the  Account's  then current net asset value.  For the
period from October 2, 1995 (the Account  effective  date) to December 31, 1995,
the high and low  accumulation  unit  values for the  Account  were  $102.57 and
$101.23, respectively.

         (b)      Approximate Number of Holders. The number of contractowners at
February 29, 1996 was 2,309.

         (c)      Dividends.  Not applicable.

ITEM 6.  SELECTED FINANCIAL DATA.

         The  following   selected   financial  data  should  be  considered  in
conjunction  with the  financial  statements  and notes  thereto for the Account
provided herein.

<TABLE>
<CAPTION>
                                                                                                       July 3, 1995
                                                                                                   (commencement of
                                                                                                     operations) to
                                                                                                  December 31, 1995
                                                                                                  -----------------
<S>                                                                                                  <C>
   Investment income:
     Real estate income, net:
         Rental income............................................................................   $    165,762
         Real estate property level                                                                  ------------
           expenses and taxes:
                  Operating.......................................................................         29,173
                  Real estate taxes...............................................................         14,659
                     Total real estate property                                                      ------------
                            level expenses and taxes                                                       43,832
                                                                                                     ------------
                                                                           Real estate income, net        121,930
     Dividends and interest.......................................................................   $  2,828,900
                                                                                                     ------------
                                                                           Total investment income   $  2,950,830
                                                                                                     ============
   Net realized and unrealized
         gain on investments......................................................................        $35,603
                                                                                                          =======
   Net increase in net assets
         resulting from operations................................................................   $  2,676,000
                                                                                                     ============
   Net increase in net assets
         resulting from participant transactions..................................................   $117,582,345
                                                                                                     ============
   Net increase in net assets ....................................................................   $120,258,345
                                                                                                     ============

                                                                                                  December 31, 1995
                                                                                                  -----------------
   Total assets...................................................................................   $143,177,421
                                                                                                     ============
   Total liabilities..............................................................................   $ 22,919,076
                                                                                                     ============
   Total net assets...............................................................................   $120,258,345
                                                                                                     ============
   Accumulation units outstanding.................................................................      1,172,498
                                                                                                     ============
   Accumulation unit value........................................................................        $102.57
                                                                                                          =======
</TABLE>

                                        7

<PAGE>

ITEM 7.           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                  CONDITION AND RESULTS OF OPERATIONS.

          The  Account  began  operating  on July 3, 1995 and  interests  in the
Account began being offered to participants on October 2, 1995.

          The  Account's  first real estate  acquisition  closed on November 22,
1995.  Through  December  31,  1995,  the Account  acquired a total of five real
estate  properties,   including  two  industrial  properties,  one  neighborhood
shopping  center,  and two apartment  complexes.  Since  December 31, 1995,  the
Account has purchased an office  property.  The Account is in various  stages of
negotiations  with a number of prospective  sellers for  additional  real estate
purchases.

Results of Operations

          From July 3 to December 31, 1995, the Account's net investment income,
after deduction of all expenses,  was $2,640,397.  In addition,  the Account had
net realized and unrealized gains on investments of $35,603.  This resulted in a
cumulative  total  return  of  2.57%  for  that six  month  period.  Much of the
Account's  investment  income  received  during 1995 was generated by short-term
investments.   However,  as  the  Account  approaches  its  objective  of  being
approximately  70%  to  80%  invested  in  real  estate,  the  Account's  future
investment  income  will be  affected  to a greater  degree  by its real  estate
holdings.  Assuming  little  change  in  underlying  economic  conditions,  this
increase in real estate  holdings should have a positive impact on the Account's
total return.

          Interest  income  on  the  Account's  short-term  investments  totaled
$2,820,229 and its dividend  income  totaled  $8,671 through  December 31, 1995.
Gross  real  estate  income   through  this  same  date  was   $165,762.   Total
property-level  expenses  through  December  31,  1995  were  $43,832  and  were
comprised of real estate taxes and other operating  expenses.  Through  December
31,  1995,  the  Account  also  incurred  expenses of  $228,136  for  investment
management   services  provided  by  TIAA,   $66,320  for   administrative   and
distribution  services  provided by Services,  and $16,582 for the mortality and
expense  risks and  liquidity  guarantee  provided by TIAA.  Because the Account
began accepting  contributions from participants on October 2, 1995, the charges
for  administrative  and  distribution  services,  as well as for  mortality and
expense risks and the liquidity guarantee only began as of that date.

Liquidity and Capital Resources

          In addition to TIAA's initial $100 million seed money investment,  the
Account  has  received  over  $17.5  million  in  premiums  and net  participant
transfers from accumulations in other TIAA and

                                        8

<PAGE>

College Retirement  Equities Fund ("CREF") accounts and has earned $2,640,397 in
net  investment  income.  Real  estate  properties  totaling   $43,989,665  were
purchased during November and December 1995. At December 31, 1995, the Account's
liquid assets (cash and short-term  investments) were $73,948,731.  Much of this
amount will be used by the Account to purchase  additional  suitable real estate
properties.  The  remaining  assets will  continue to be invested in  short-term
instruments  to  meet  expense  needs  and  redemption   requests  (e.g.,   cash
withdrawals or transfers).

          If the  Account's  cash  flow  from  operations  (e.g.,  premiums  and
investment  income) and from  available  liquid assets is not enough to meet its
cash needs including redemption  requests,  the Account will fund redemptions by
having TIAA's general account  purchase  liquidity units, in accordance with the
liquidity guarantee.

          TIAA will begin redeeming the  accumulation  units related to its seed
money  investment  on October 2, 1997,  or the date the  Account's  assets first
reach $200  million,  whichever  comes  first.  After  that,  TIAA will redeem a
portion of the accumulation units related to its seed money investment  monthly,
according to a five-year  repayment  schedule approved by the New York Insurance
Department.

          No major capital expenditures for any of the five properties purchased
during 1995 were made in 1995 or are  expected to be made in 1996.  There are no
leases  expiring in the industrial  properties or in the  neighborhood  shopping
center in 1996, so we do not expect to incur any  construction  costs or leasing
commissions in order to re-lease space. For the apartment  complexes,  we expect
to incur only routine recurring costs to re-lease apartments that become vacant,
i.e. painting and carpet cleaning or replacement.

Effects of Inflation

          In  recent  years,  inflation  has been  modest.  To the  extent  that
inflation may increase property operating expenses in the future, such increases
can generally be billed to tenants either through  contractual  lease provisions
in office,  industrial,  and retail  properties  or through  rent  increases  in
apartment  complexes.  However,  to the  extent  there  is  unrented  space in a
property,  the  Account  may not be able to  recover  the  full  amount  of such
increases in operating expenses.



                                        9

<PAGE>

ITEM 8.           FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

                          INDEX TO FINANCIAL STATEMENTS
                            TIAA REAL ESTATE ACCOUNT
                                                                            Page
Report of Management Responsibility ..........................................11

Report of Independent Auditors ...............................................12

Audited Financial Statements

Statement of Assets and Liabilities -  December 31, 1995 .....................13

Statement of Operations (For Period
  from July 3, 1995 (commencement of operations)
  to December 31, 1995) ......................................................14

Statement of Changes in Net Assets (For Period
  from July 3, 1995 (commencement of operations)
  to December 31, 1995) ......................................................15

Statement of Cash Flows (For Period
  from July 3, 1995 (commencement of operations)
  to December 31, 1995) ......................................................16

Notes to Financial Statements ................................................17

Statement of Investments -- December 31, 1995 ................................23

Financial Statement Schedules

Schedule III -- Real Estate Owned ............................................25

                                       10

<PAGE>

                       REPORT OF MANAGEMENT RESPONSIBILITY

To the Participants of the
  TIAA Real Estate Account:


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

TIAA has established and maintains a strong system of internal 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 TIAA,
including  its  separate  account  operations.  The internal  Auditor  regularly
reports to the Audit Committee of the TIAA Board of Trustees.

The  accompanying  financial  statements  have been  audited by the  independent
auditing firm of Deloitte & Touche LLP. The independent  auditors' report, which
appears on the following page,  expresses an independent opinion on the fairness
of presentation of these financial statements.

The Audit  Committee of the TIAA Board of Trustees,  consisting  of trustees who
are not officers of TIAA,  meets regularly with management,  representatives  of
Deloitte & Touche LLP and internal auditing personnel to review matters relating
to financial reporting, internal controls and auditing.



                                               /s/ John H. Biggs
                                                   ----------------------------
                                                   Chairman and
                                                   Chief Executive Officer



                                               /s/ Thomas W. Jones
                                                   ----------------------------
                                                   Vice Chairman, President and
                                                   Chief Operating Officer



                                               /s/ Richard L. Gibbs
                                                   ----------------------------
                                                   Executive Vice President and
                                                   Principal Accounting Officer


                                       11

<PAGE>

                         REPORT OF INDEPENDENT AUDITORS

To the Participants of the TIAA Real Estate Account and the Board 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,
1995, and the related  statements of operations,  changes in net assets and cash
flows for the period July 3, 1995  (commencement  of operations) to December 31,
1995.  Our audit also included the financial  statement  schedule  Schedule III,
Real Estate Owned. These financial  statements and financial  statement schedule
are the responsibility of TIAA's management. Our responsibility is to express an
opinion on the financial  statements and financial  statement  schedule based on
our audit.

We conducted our audit in accordance with generally accepted auditing standards.
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. Our procedures included
confirmation of securities owned at December 31, 1995, by correspondence with
the custodian  and brokers.  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
audit provides a reasonable basis for our opinion.

In our  opinion,  such  financial  statements  present  fairly,  in all material
respects,  the  financial  position of the Account as of December 31, 1995,  the
results of its operations,  the changes in its net assets and its cash flows for
the  above-stated  period,  in conformity  with  generally  accepted  accounting
principles.  Also,  in our opinion,  such  financial  statement  schedule,  when
considered  in  relation  to the basic  financial  statements  taken as a whole,
presents fairly in all material respects the information set forth therein.

Investments  in real estate  properties are stated at fair value at December 31,
1995, as discussed in Note 2 to the financial statements.  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.


DELOITTE & TOUCHE LLP
New York, New York

March 8, 1996

                                       12

<PAGE>


                            TIAA REAL ESTATE ACCOUNT
                       STATEMENT OF ASSETS AND LIABILITIES
                                DECEMBER 31, 1995

<TABLE>
<S>                                                                                                    <C>
ASSETS
   Investments, at value:
     Real estate properties (Cost: $43,989,665)......................................................  $ 43,989,665
     Marketable securities
     (Amortized cost: $73,972,831)...................................................................    73,992,569
   Cash..............................................................................................       396,787
   Receivable from securities transactions...........................................................    23,150,000
   Other............................................................................................      1,648,400
                                                                                                       ------------

                                                                                       TOTAL ASSETS     143,177,421
                                                                                                       ------------
LIABILITIES
   Payable for securities transactions...............................................................    22,788,035
   Other.............................................................................................       131,041
                                                                                                       ------------
                                                                                  TOTAL LIABILITIES      22,919,076
                                                                                                       ------------

NET ASSETS  -  Accumulation Fund.....................................................................  $120,258,345
                                                                                                       ============
NUMBER OF ACCUMULATION UNITS
 OUTSTANDING--Notes 6 and 7..........................................................................     1,172,498
                                                                                                          =========
NET ASSET VALUE, PER ACCUMULATION UNIT--Note 6.......................................................       $102.57
                                                                                                            =======

</TABLE>



                       See notes to financial statements.

                                       13

<PAGE>

                            TIAA REAL ESTATE ACCOUNT
                             STATEMENT OF OPERATIONS
            FOR THE PERIOD JULY 3, 1995 (COMMENCEMENT OF OPERATIONS)
                              TO DECEMBER 31, 1995

<TABLE>
<S>                                                                                                         <C>
INVESTMENT INCOME
   Income:
     Real estate income, net:
       Rental income......................................................................................  $  165,762
                                                                                                            ----------
       Real estate property level expenses and taxes:
         Operating........................................................................................      29,173
         Real estate taxes................................................................................      14,659
                                                                                                            ----------
                                                     Total real estate property level expenses and taxes        43,832
                                                                                                            ----------
                                                                                 Real estate income, net       121,930

     Interest.............................................................................................   2,820,229
     Dividends............................................................................................       8,671
                                                                                                            ----------
                                                                                            TOTAL INCOME     2,950,830
                                                                                                            ----------
   Expenses--Note 3:
     Investment advisory..................................................................................     228,136
     Administrative.......................................................................................      66,320
     Mortality and expense risk charges...................................................................       8,291
     Liquidity guarantee charges..........................................................................       8,291
                                                                                                            ----------
                                                                                          TOTAL EXPENSES       311,038
     Fees paid indirectly.................................................................................        (605)
                                                                                                            ----------
                                                                                            NET EXPENSES       310,433
                                                                                                            ----------
                                                                                  INVESTMENT INCOME, NET     2,640,397
                                                                                                            ----------
REALIZED AND UNREALIZED
   GAIN ON INVESTMENTS
     Net realized gain on investments.....................................................................      15,865
     Net change in unrealized appreciation
       on investments ....................................................................................      19,738
                                                                                                            ----------
                                                         NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS        35,603
                                                                                                            ----------
                                                    NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS    $2,676,000
                                                                                                            ==========

</TABLE>

                       See notes to financial statements.


                                       14

<PAGE>


                            TIAA REAL ESTATE ACCOUNT
                       STATEMENT OF CHANGES IN NET ASSETS
            FOR THE PERIOD JULY 3, 1995 (COMMENCEMENT OF OPERATIONS)
                              TO DECEMBER 31, 1995


<TABLE>
<S>                                                                                                         <C>
FROM OPERATIONS
   Investment income, net.................................................................................  $  2,640,397
   Net realized gain on investments.......................................................................        15,865
   Net change in unrealized appreciation
     on investments.......................................................................................        19,738
                                                                                                            ------------
                                                                              NET INCREASE IN NET ASSETS
                                                                              RESULTING FROM OPERATIONS        2,676,000
                                                                                                            ------------
FROM PARTICIPANT TRANSACTIONS
   TIAA seed money contributed--Note 1....................................................................   100,000,000
   Premiums...............................................................................................       500,421
   Disbursements and transfers:
     Net transfers from TIAA..............................................................................     2,901,675
     Net transfers from CREF Accounts.....................................................................    14,204,597
     Annuity and other periodic payments..................................................................          (718)
     Withdrawals..........................................................................................       (23,630)
                                                                                                             ------------
                                                                        INCREASE IN NET ASSETS RESULTING
                                                                        FROM PARTICIPANT TRANSACTIONS         117,582,345
                                                                                                             ------------
                                                                        NET INCREASE IN NET ASSETS            120,258,345
NET ASSETS
   Beginning of period....................................................................................        -      
                                                                                                             ------------

   End of period..........................................................................................   $120,258,345
                                                                                                             ============

</TABLE>


                       See notes to financial statements.

                                       15

<PAGE>

                            TIAA REAL ESTATE ACCOUNT
                             STATEMENT OF CASH FLOWS
            FOR THE PERIOD JULY 3, 1995 (COMMENCEMENT OF OPERATIONS)
                              TO DECEMBER 31, 1995


<TABLE>
<S>                                                                                                         <C>
CASH FLOWS FROM OPERATING ACTIVITIES
   Net increase in net assets
     resulting from operations............................................................................  $  2,676,000
   Adjustments to reconcile net increase
     in net assets resulting from operations
     to net cash used in operating activities:
       Increase in investments............................................................................  (117,982,234)
       Increase in receivable from securities transactions................................................   (23,150,000)
       Increase in other assets...........................................................................    (1,648,400)
       Increase in payable for securities transactions....................................................    22,788,035
       Increase in other liabilities......................................................................       131,041
                                                                                                            ------------
                                                                   NET CASH USED IN OPERATING ACTIVITIES    (117,185,558)
                                                                                                            ------------
CASH FLOWS FROM PARTICIPANT TRANSACTIONS
   TIAA seed money contributed............................................................................   100,000,000
   Premiums...............................................................................................       500,421
   Disbursements and transfers:
     Net transfers from TIAA..............................................................................     2,901,675
     Net transfers from CREF Accounts.....................................................................    14,204,597
     Annuity and other periodic payments..................................................................          (718)
     Withdrawals..........................................................................................       (23,630)
                                                                                                            ------------
                                                           NET CASH PROVIDED BY PARTICIPANT TRANSACTIONS     117,582,345
                                                                                                            ------------

                                                                                    NET INCREASE IN CASH         396,787
CASH

   Beginning of period.....................................................................................         -
                                                                                                            ------------
   End of period........................................................................................... $    396,787
                                                                                                            ============

</TABLE>

                       See notes to financial statements.

                                       16

<PAGE>

                            TIAA REAL ESTATE ACCOUNT
                          NOTES TO FINANCIAL STATEMENTS

Note 1--Organization

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 Account commenced  operations on July 3, 1995 with a $100,000,000 seed money
investment by TIAA. TIAA purchased  1,000,000  Accumulation Units in the Account
and such Units share in the pro rata  investment  experience  of the Account and
are subject to the same valuation procedures and expense deductions as all other
Accumulation  Units of the Account.  The initial  registration  statement of the
Account filed by TIAA with the Securities and Exchange Commission ("Commission")
under the  Securities  Act of 1933  became  effective  on October  2, 1995.  The
Account  began to offer  Accumulation  Units and Annuity  Units to  participants
other than TIAA  starting  October 2, and  November  1, 1995,  respectively.  At
December 31, 1995, amounts retained by TIAA in the Account remained at 1,000,000
units with a total value of $102,565,900.

TIAA will redeem a portion of its seed money  Accumulation Units monthly (at the
net asset value at the time of  redemption),  according to a five year repayment
schedule approved by the State of New York Insurance  Department.  This schedule
requires TIAA to begin redeeming the seed money Accumulation Units on October 2,
1997,  or on the date the Account's  assets first reach $200 million,  whichever
comes first.

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   will  also  invest  in
publicly-traded  securities and other instruments to maintain adequate liquidity
for operating expenses and capital expenditures and to make benefit payments.

TIAA employees, under the direction of TIAA's Board of Trustees and its Mortgage
Committee,  manage the investment of the Account's assets pursuant to investment
management  procedures  adopted  by TIAA  for  the  Account.  TIAA's  investment
management  decisions  for the Account  are  subject to review by the  Account's
independent  fiduciary,  Institutional  Property  Consultants,  Inc.  TIAA  also
provides  all  portfolio  accounting  and  related  services  for  the  Account.
TIAA-CREF Individual & Institutional Services,  Inc. ("Services"),  a subsidiary
of TIAA which is  registered  with the  Commission as a  broker-dealer  and is a
member of the National

                                       17

<PAGE>

Association  of  Securities   Dealers,   Inc.,   provides   administrative   and
distribution  services  pursuant to a Distribution and  Administrative  Services
Agreement with the Account.


Note 2--Significant Accounting Policies

The following is a summary of the significant  accounting  policies  followed by
the  Account,  which  are  in  conformity  with  generally  accepted  accounting
principles.

Valuation of Real Estate  Properties:  Investments in real estate properties are
stated at fair value, as determined in accordance  with  procedures  approved by
the  Mortgage  Committee  of the 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  will  value each real  estate  property  at least  once a year.  The
independent  fiduciary must approve all independent  appraisers that the Account
uses. The  independent  fiduciary can also require  additional  appraisals if it
believes that a property's  value has changed  materially or otherwise to assure
that the Account is valued  correctly.  TIAA will perform a valuation  review of
each real  estate  property on a  quarterly  basis and will update the  property
value if it  believes  that the  value of the  property  has  changed  since the
previous  valuation review or appraisal.  The independent  fiduciary will review
and approve any such  valuation  adjustments  which  exceed  certain  prescribed
limits.  TIAA will  continue to use the revised value to calculate the Account's
net asset value until the next valuation review or appraisal.

Valuation of Marketable  Securities:  Equity  securities listed or traded on any
United States national securities exchange are valued at the last sales 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.
Short-term  money  market  instruments  are  stated at market  value.  Portfolio
securities for which market  quotations are not readily  available are valued at
fair value as  determined  in good faith  under the  direction  of the  Mortgage
Committee of the Board of Trustees and in accordance  with the  responsibilities
of the Board as a whole.

                                       18

<PAGE>

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
paid  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.  Realized gains and losses on real
estate transactions are accounted for under the specific identification method.

Securities  transactions  are  accounted for as of the date the  securities  are
purchased or sold (trade date).  Interest  income is recorded as earned and, for
short-term   money  market   instruments,   includes  accrual  of  discount  and
amortization of premium.  Dividend  income is recorded on the ex-dividend  date.
Realized  gains and losses on security  transactions  are  accounted  for on the
average cost basis.

Federal  Income  Taxes:  Based on  provisions  of the Internal  Revenue Code, no
federal income taxes are  attributable  to the net investment  experience of the
Account.


Note 3--Management Agreements

All services  necessary for the operation of the Account are provided,  at cost,
by TIAA and  Services.  TIAA  provides  investment  management  services for the
Account, while distribution and administrative services are provided by Services
in accordance with a Distribution and Administrative  Services Agreement between
the Account  and  Services.  TIAA also  provides a  liquidity  guarantee  to the
Account,  for a fee,  to ensure  that funds are  available  to meet  participant
transfer and cash withdrawal requests in the event that the Account's cash flows
and  liquid  investments  are  insufficient  to fund  such  requests.  TIAA also
receives a fee for assuming certain mortality and expense risks.

Fee  payments  are made from the Account on a daily  basis to TIAA and  Services
according to formulas  established  each year with the  objective of keeping the
fees as close as possible to the  Account's  actual  expenses.  Any  differences
between actual expenses and daily charges are adjusted quarterly.

                                       19

<PAGE>

TIAA and Services  generally pay directly for all third-party  services provided
for the benefit of the Account.  "Soft-dollar"  arrangements  for  brokerage and
other  services are  generally  not utilized by the  Account.  However,  certain
custodial  fees are  reduced  based on the level of  average  cash  balances  on
deposit with a custodian bank during the period.  The amount by which  custodial
fees were reduced  under these  expense  offset  agreements  is reflected in the
accompanying Statement of Operations as "Fees paid indirectly".


Note 4--Real Estate Properties

Had the Account's real estate  properties  been acquired at the beginning of the
current  period (July 3, 1995),  rental  income and real estate  property  level
expenses  and  taxes  would  have  increased  by  approximately  $2,538,000  and
$889,000,  respectively.  In addition,  interest  income would have decreased by
approximately  $1,082,000.  Accordingly,  the  total  pro  forma  effect  on the
Account's  net  investment  income would have been an increase of  approximately
$567,000,  if the real estate  properties  had been acquired at the beginning of
the period.


Note 5--Leases

The Account's real estate properties are leased to tenants under operating lease
agreements which expire on various dates through 2015.  Aggregate minimum annual
rentals for the properties owned,  excluding short-term  residential leases, are
as follows:

         Years Ending
         December 31,
         ------------
         1996                                        $ 1,653,336
         1997                                          1,653,336
         1998                                          1,638,541
         1999                                          1,513,600
         2000                                          1,461,217
         Thereafter                                    7,673,670
                                                     -----------
         Total                                       $15,593,700
                                                     ===========


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


                                       20

<PAGE>

Note 6--Condensed Financial Information

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

<TABLE>
<CAPTION>
                                                                                                       July 3, 1995
                                                                                                      (Commencement
                                                                                                  of Operations) to
                                                                                                  December 31, 1995
                                                                                                 ------------------
<S>                                                                                                     <C>

Per Accumulation Unit Data:
  Rental income.......................................................................................  $  0.159
  Real estate property level expenses and taxes.......................................................     0.042
                                                                                                        --------
                                                                               Real estate income, net     0.117
  Dividends and interest..............................................................................     2.716
                                                                                                        --------
                                                                                          Total income     2.833
  Expense charges (1).................................................................................     0.298
                                                                                                        --------

                                                                                Investment income, net     2.535
  Net realized and unrealized gain on investments.....................................................     0.031
                                                                                                        --------
Net increase in Accumulation Unit Value...............................................................     2.566

Accumulation Unit Value:
  Beginning of period..................................................................................  100.000
                                                                                                        --------
  End of period........................................................................................ $102.566
                                                                                                        ========



Cumulative total return................................................................................    2.57%
Ratios to Average Net Assets:
  Expenses (1).........................................................................................    0.30%
  Investment income, net...............................................................................    2.51%
Portfolio turnover rate...............................................................................        0%
Thousands of Accumulation Units outstanding
  at end of period.....................................................................................    1,172

</TABLE>

(1) Expense charges per  Accumulation  Unit and the expense ratio to Average Net
Assets  exclude real estate  property  level  operating  expenses and taxes.  If
included,  the  expense  charge  per  Accumulation  Unit would be $0.340 and the
expense ratio to Average Net Assets would be 0.34%.


                                       21

<PAGE>

Note 7--Accumulation Units

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

                                                                    July 3, 1995
                                                                   (Commencement
                                                               of Operations) to
                                                               December 31, 1995
                                                               -----------------

Accumulation Units:
 Credited for premiums and TIAA seed money investment.........        1,004,905
 Credited for net transfers and disbursements.................          167,593

Outstanding:
 Beginning of period..........................................              -  
                                                                      ---------
 End of period................................................        1,172,498
                                                                      =========

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, 1995,
the Account had  outstanding  commitments  to  purchase  real estate  properties
(subject to various  closing  conditions)  of  $23,550,000.  Of that  amount,  a
purchase of real estate  property  totalling  $10,050,000 was closed on February
27, 1996.

                                       22

<PAGE>

                            TIAA REAL ESTATE ACCOUNT
                            STATEMENT OF INVESTMENTS
                                DECEMBER 31, 1995



REAL ESTATE PROPERTIES--37.28%

Location                Description                                     Value
--------                -----------                                  -----------
Fridley, Minnesota(1)   Industrial building......................... $ 4,166,787

Orlando, Florida(1)     Apartments..................................  12,490,895

El Paso, Texas(2)       Industrial building.........................   4,431,166

Atlanta, Georgia(1)     Apartments..................................  15,574,647

Ocoee, Florida(1)       Shopping center.............................   7,326,170
                                                                     -----------


         TOTAL REAL ESTATE PROPERTIES
          (Cost $43,989,665)........................................  43,989,665
                                                                      ----------

(1) Fee interest
(2) Leasehold interest

MARKETABLE SECURITIES--62.72%

Shares         Issuer                                                   Value
------         ------                                                  --------
REAL ESTATE INVESTMENT TRUST--.37%:

15,000   Reckson Associates Realty................................      440,625
                                                                       --------
         TOTAL REAL ESTATE INVESTMENT TRUST
         (Cost $402,000)..........................................      440,625
                                                                       --------


                       See notes to financial statements.

                                       23

<PAGE>


Par Value      Issuer                                                  Value
---------      ------                                              ------------
COMMERCIAL PAPER--18.17%:

14,360,000     AT&T Capital Corporation
                5.64% 02/01/96...................................  $ 14,285,025
 7,150,000     Corporate Asset Funding Company, Inc.
                5.80% 01/02/96...................................     7,148,022
                                                                   ------------
         TOTAL COMMERCIAL PAPER
          (Amortized cost $21,439,106)...........................    21,433,047
                                                                   ------------

GOVERNMENT AGENCIES--44.18%:

 5,930,000  Federal Home Loan Bank
            5.60% 01/08/96.......................................     5,922,505
15,700,000  Federal Home Loan Bank
            5.48% 01/22/96.......................................    15,645,015
 5,000,000  Federal Home Loan Bank
            5.38% 02/22/96.......................................     4,958,793
25,670,000  Federal National Mortgage Association
            5.67% 01/19/96.......................................    25,592,584
                                                                     ----------
         TOTAL GOVERNMENT AGENCIES
          (Amortized cost $52,131,725)...........................    52,118,897
                                                                     ----------

TOTAL MARKETABLE SECURITIES
 (Amortized cost $73,972,831)....................................    73,992,569
                                                                   ------------
TOTAL INVESTMENTS
 (Amortized cost $117,962,496)...................................  $117,982,234
                                                                   ============



                       See notes to financial statements.

                                       24

<PAGE>



                            TIAA REAL ESTATE ACCOUNT
                        Schedule III - Real Estate Owned
                                December 31, 1995

<TABLE>
<CAPTION>
                                                                                                  Costs
                                                              Initial Cost      Capitalized      Value at           Year
                                     Encum-    to Acquire     Subsequent        December 31,   Construction         Dated
Description                          brances    Property      to Acquisition        1995        Completed          Acquired
-----------                          -------   ----------     --------------    -----------    ------------        --------
<S>                                    <C>     <C>                <C>            <C>               <C>             <C>
River Road Distribution Center         $-0-    $ 4,166,787        $-0-           $ 4,166,787       1995            11/22/95
Industrial Building
Fridley, Minnesota (1)

The Greens At Metrowest                 -0-     12,490,895         -0-            12,490,895       1990            12/15/95
Apartments
Orlando, Florida (1)

Butterfield Industrial Park             -0-      4,431,166         -0-             4,431,166       1980            12/22/95
Industrial Building
El Paso, Texas (2)

Brixworth Apartments                    -0-     15,574,647         -0-            15,574,647       1989            12/28/95
Apartments
Atlanta, Georgia (1)

Plantation Grove Shopping Center        -0-      7,326,170         -0-             7,326,170       1995            12/28/95
Shopping Center
Ocoee, Florida (1)
                                      -----   ------------        -----         ------------
                                      $ -0-   $ 43,989,665        $ -0-         $ 43,989,665
                                      =====   ============        =====         ============
</TABLE>

(1)  Fee interest
(2)  Leasehold interest


Reconciliation of investment property owned:
Balance at beginning of period ......................               $       -
    Acquisitions                                                     43,989,665
    Capital improvements and carrying costs                                   -
                                                                   ------------
Balance at end of period                                            $43,989,665
                                                                   ============




                                       25

<PAGE>




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

          Not applicable.

                                    PART III

ITEM 10.      DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

          The Account has no officers or  directors.  The Trustees and principal
executive officers of TIAA, and their principal occupations during the last five
years, are as follows:


Trustees

David Alexander,   63.
American  Secretary,  Rhodes Scholarship  Trust, and Trustees' Professor, Pomona
College. Formerly,  President, Pomona College, until 1991.

Marcus Alexis, 64.
Board  of  Trustees, Professor  of  Economics  and  Professor of  Management and
Strategy, Northwestern University.

A. Howard Amon, Jr., 68.
Retired Vice President and Director of Real Estate, J. C. Penney,
Inc.

Jenne K. Britell, 53.
Executive Vice President, since June 1995, and Chief Lending Officer and General
Manager,  Mortgage Banking,  The Dime Savings Bank of New York, FSB, since 1993.
Formerly, Chairman and Chief Executive Officer, HomePower, Inc., from 1990 until
1993, and Chairman of the Management Board, Polish-American Mortgage Bank, Inc.
(Warsaw), from June 1992 until April 1993.

Willard T. Carleton, 61.
Karl  L.  Eller Professor of Finance, College of Business and Public Administra-
tion, University of Arizona.

Robert C. Clark, 52.
Dean and Royall Professor of Law, Harvard Law School, Harvard University.

Flora Mancuso Edwards, 51.
Professor  of  English  as  a  Second  Language, Middlesex County College, since
October 1995.  Formerly, President, Middlesex County College until October 1995.

                                       26

<PAGE>

Estelle A. Fishbein, 61.
General Counsel of The Johns Hopkins University since 1975.
Elected Vice President and General Counsel of the University,
April 1991.

Frederick R. Ford, 60.
Executive Vice President and Treasurer, Purdue University.

Ruth Simms Hamilton, 58.
Professor,  Department  of  Sociology  and Urban Affairs Programs, and Director,
African Diaspora Research Project, Michigan State University.

Dorothy Ann Kelly, O.S.U., 66.
President, College of New Rochelle.

Robert M. O'Neil, 61.
Professor of Law,  University  of Virginia and  Director,  The Thomas  Jefferson
Center for the Protection of Free Expression.

Leonard S. Simon, 59.
Chairman,  President  and  Chief  Executive Officer, RCSB Financial, Inc., since
September  1995.  Formerly,  Chairman and Chief Executive Officer, The Rochester
Community Savings Bank, from 1984 until September 1995.

Ronald L. Thompson, 46.
Chairman  of  the  Board  and  Chief  Executive  Officer,  Midwest  Stamping Co.
Formerly,  Chairman of the Board and President, The GR Group, until 1993.

Paul R. Tregurtha, 60.
Chairman,  Chief  Executive,  and  Director,  Mormac  Marine  Group,  Inc.; Vice
Chairman and Director, The Interlake Steamship Company; Chairman  and  Director,
Moran Transportation Company; and Chairman, MAC Acquisitions, Inc.

Charles J. Urstadt, 67.
Chairman and President, HRE Properties (a real estate investment trust).

William H. Waltrip, 58.
Interim Chairman and Chief Executive Officer,  Bausch & Lomb Inc., since January
1996.  Chairman and Chief Executive Officer, Technology Solutions Company, since
1993.  Formerly,  Chairman  and Chief Executive Officer, Biggers Brothers, Inc.,
and Vice Chairman, Unifax, from 1991 until 1993.

                                       27

<PAGE>

Officer-Trustees

John H. Biggs, 59.
Chairman  and Chief  Executive  Officer,  TIAA and CREF,  since 1993.  Formerly,
President and Chief Operating Officer, TIAA and CREF.

Thomas W. Jones, 46.
Vice Chairman, TIAA and CREF, since 1995. President and Chief Operating Officer,
TIAA and CREF, since 1993. Formerly, Executive Vice President, Finance and
Planning, TIAA and CREF.

Martin L. Leibowitz, 59.
Vice Chairman and Chief Investment Officer, TIAA and CREF, since 1995. Formerly,
Managing Director -- Director of Research and member of the Executive Committee,
Salomon Brothers, Inc.


Other Officers

Richard L. Gibbs, 49.
Executive  Vice  President,  TIAA and CREF,  since  1993,  and  Vice  President,
TIAA-CREF Investment  Management,  Inc. ("Investment  Management") and Services,
since 1992;  Executive Vice President,  Teachers  Advisors,  ("Advisors")  since
1995. Formerly, Vice President, Finance, TIAA and CREF.

Albert J. Wilson, 63.
Vice President  and Chief Counsel,  Corporate  Secretary,  TIAA and CREF,  since
1991. Formerly, Vice President,  Secretary,  and Associate General Counsel, TIAA
and CREF.

Richard J. Adamski, 53.

Vice President and  Treasurer,  TIAA and CREF,  since March 1991; Vice President
and Treasurer,  Investment  Management and Services,  since 1992; Vice President
and Treasurer,  Teachers Personal Investors Services,  Inc. and Advisors,  since
1994. Formerly, Treasurer, TIAA and CREF.


ITEM 11. EXECUTIVE COMPENSATION.

          Not applicable.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

          On July 3, 1995, the Account issued  1,000,000  accumulation  units to
TIAA,  at $100 per unit,  in  consideration  of TIAA's $100  million  seed money
investment.  As of December 31, 1995, TIAA held accumulation  units representing
85.3% of the Account's total net assets.


                                       28

<PAGE>



ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

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

          Seed Money. On July 3, 1995, TIAA supplied the Account's  initial $100
million seed money investment in exchange for one million accumulation units, at
$100 per unit. TIAA will redeem a portion of its seed money investment  monthly,
commencing  on the earlier of (1) October 2, 1997, or (2) the date the Account's
assets first reach $200 million.  TIAA's  accumulation units will be redeemed at
net asset value at the time of redemption.

          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,  subject to Department of Labor approval.  TIAA
thereby  guarantees  that a participant can redeem  accumulation  units at their
then current daily net asset value.  For the year ended  December 31, 1995,  the
Account paid TIAA $8,291 for this liquidity  guarantee through a daily deduction
from the net assets of the Account.

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

          For the year ended  December 31, 1995,  the Account paid TIAA $228,136
for investment  management  services and $8,291 for mortality and expense risks.
For the same period,  the Account paid Services  $66,320 for its  administrative
and distribution services.


                                       29

<PAGE>


                                     PART IV

ITEM 14.          EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS
                  ON FORM 8-K.

          (a)     1.  Financial Statements.  See  Item 8  for required financial
                      statements.

          (a)     2.  Financial  Statement  Schedules.  See  Item 8 for required
                      financial statement schedules.

          (a)     3.  Exhibits.

          (1)     Form of Distribution and  Administrative Services Agreement by
                  and  between  TIAA  and  TIAA-CREF  Individual & Institutional
                  Services, Inc. *

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

          (4)     (A) Forms  of  RA,  GRA,  GSRA,  SRA, and  IRA Real Estate
                      Account Endorsements *
                  (B) Forms of Income-Paying Contracts *

          (10)    (A) Independent Fiduciary Agreement by and among TIAA, the
                      Registrant, and Institutional Property
                      Consultants, Inc. *
                  (B) Custodial  Services  Agreement by and between TIAA and
                      Morgan  Guaranty  Trust  Company  of   New  York  with
                      respect to the Real Estate Account *

          (27) (A)    Financial  Data  Schedule  of  the Account's Financial
                      Statements for the period ended December 31, 1995

          (b) Reports on 8-K. The Account  filed  reports on Form 8-K on January
3,  1996 and on March 1,  1996  under  Item 5 of the form  with  respect  to the
acquisition of properties for its portfolio.

--------------------

*  Incorporated herein by reference to Pre-Effective Amendment
No. 1 to the Account's Registration Statement on Form S-1 filed
September 19, 1995 (File No. 33-92990).

** Incorporated herein by reference to the Account's  Registration  Statement on
Form S-1 filed June 1, 1995 (File No. 33-92990).


                                       30

<PAGE>



                                   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:  /s/ Peter C. Clapman
                                                 ------------------------------
                                                 Peter C. Clapman
                                                 Senior Vice President and
                                                 Chief Counsel, Investments



                                                            March 20, 1996
                                                 ------------------------------
                                                                Date

                  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/ John H. Biggs               Chairman of the Board            March 20, 1996
------------------------        and Chief Executive
John H. Biggs                   Officer (Principal
                                Executive Officer)
                                and Trustee


/s/ Thomas W. Jones             Vice Chairman,                   March 20, 1996
------------------------        President and Chief
Thomas W. Jones                 Operating Officer
                                (Principal Financial
                                Officer) and Trustee



/s/ Richard L. Gibbs            Executive Vice President
------------------------        (Principal Accounting Officer)   March 20, 1996
Richard L. Gibbs


<PAGE>

Signature of Trustee          Date         Signature of Trustee        Date
--------------------          ----         --------------------        ----


/s/ Martin L. Leibowitz      3/20/96       /s/ Frederick R. Ford       3/20/96
------------------------                   ---------------------
Martin L. Leibowitz                        Frederick R. Ford




/s/ David Alexander          3/20/96       /s/ Ruth Simms Hamilton     3/20/96
------------------------                   ---------------------
David Alexander                            Ruth Simms Hamilton




/s/ Marcus Alexis            3/20/96       /s/ Dorothy Ann Kelly       3/20/96
------------------------                   ---------------------
Marcus Alexis                              Dorothy Ann Kelly, O.S.U.




/s/ A. Howard Amon, Jr.      3/20/96       /s/ Ronald L. Thompson      3/20/96
------------------------                   ---------------------
A. Howard Amon, Jr.                        Ronald L. Thompson




/s/ Jenne K. Britell         3/20/96       /s/ Robert M. O'Neil        3/20/96
------------------------                   ---------------------
Jenne K. Britell                           Robert M. O'Neil




/s/ Willard T. Carleton      3/20/96       /s/ Leonard S. Simon        3/20/96
------------------------                   ---------------------
Willard T. Carleton                        Leonard S. Simon




/s/ Robert C. Clark           3/20/96      /s/ Paul R. Tregurtha       3/20/96
------------------------                   ---------------------
Robert C. Clark                            Paul R. Tregurtha


/s/ Flora Mancuso Edwards     3/20/96      /s/ Charles J. Urstadt      3/20/96
------------------------                   ---------------------
Flora Mancuso Edwards                      Charles J. Urstadt




/s/ Estelle A. Fishbein       3/20/96      /s/ William H. Waltrip      3/20/96
------------------------                   ---------------------
Estelle A. Fishbein                        William H. Waltrip

<PAGE>

           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.
<PAGE>

                                  EXHIBIT INDEX

Exhibit
Number            Description of Exhibit
-------           ----------------------
27(A)             Financial  Data Schedule of the Account's Financial Statements
                  for the period ended December 31, 1995