TIAA Real Estate Account

A different kind of real estate investment

Direct investment exposure to commercial real estate and offers income for life.3

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- Last January, we presented an optimistic case for the real estate industry, and our expectations were exceeded as the Real Estate Account produced the net total return of 17.9%, it's highest since 2011. In this 2022 outlook, we focus on the implications of record low property yields and the shift toward a more resilient core portfolio. The steady decline of interest rates since 1981, has perhaps been the most significant driver of appreciation across all major asset classes, and real estate is no exception. Real estate income yields have declined from 8.6% in 1996, to all time lows of 4% in 2021. So how sensitive are returns if interest rates rise in the future? We identified quarters where sharp increases in the 10-year U.S. Treasury rate occurred, and compared the subsequent 1-year total returns of bonds, REITs and private real estate. Compared to these, private real estate has consistently outperformed. All real estate is not created equal however. Some property types do a better job of providing inflation protection while others provide more durable income. We have learned that the most resilient and best performing real estate is often the least glamorous. Reviewing historical data, we found that the self-storage, warehouse and apartment sectors have outperformed the industry overall from 2008 until 2021. We believe this outperformance will continue going forward and we will continue to reallocate the portfolio accordingly. For three main reasons, we expect 2022 to be another solid year for private real estate. First, decreased supply. Delays in new construction due to supply chain bottlenecks, have created an artificially low inventory of space for certain sectors, especially housing. Second, dry powder. As of September of 2021, there was more than $350 billion of capital raised by over 1,200 funds targeting private real estate globally. And third, momentum. Changes in performance of private real estate did not occur overnight, but rather, take place over longer periods of time. Since the first quarter of 2007, private real estate experienced only 7 negative quarters versus 17 quarters for REITs. In conclusion, strong results from appreciation and better-than-expected rent growth should continue to positively drive performance this year. Albeit unlikely, at the levels experienced in 2021. On behalf of TIAA, and the Real Estate Account Portfolio Team, we hope that you have a healthy, productive and profitable year ahead.

- [Narrator] You should consider the investment objectives, risks, charges and expenses carefully before investing. Please call 8-7-7-5-1-8-9-1-6-1 or go to tiaa.org for current product and fund prospectuses that contain this and other information. Please read the prospectuses carefully before investing.

2022 TIAA Real Estate Account Outlook

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Views from the Global Investment Committee

2022 outlook: Slower. But still pretty fast.

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Performance

TIAA Real Estate Account performance returns

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Why real estate?

Direct investment exposure to commercial real estate

  • True diversification1
  • Alternative to the "safety" of bonds2
  • Hedges against inflation as rents rise with other prices

Access to income you can't outlive

  • Convert some or all of your balance into payments that last a lifetime3
  • Access your money anytime through a range of withdrawal options4.
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Properties

Check out some TIAA Real Estate Account properties

Colorado center

Colorado Center

Colorado Center is an urban creative office that is comprised of six buildings and approximately 1,184,339 rentable square feet, as well as a three-level, underground parking garage with 3,100 stalls. Colorado Center is a premier office campus with a significant amenity base and open outdoor space located in the Santa Monica office market, which is home to the largest concentration of technology, media, advertising and entertainment tenants in Los Angeles. The campus sits on a 15-acre site in the Media and Entertainment District of Santa Monica, and it is one block north of the Bergamot Station of Los Angeles County’s new Light Rail service connecting Colorado Center to downtown Santa Monica and Downtown Los Angeles.

The Florida Mall/retail/Orlando, FL

The Florida Mall / Retail / Orlando, FL

The Florida Mall is a 1.7-million square foot property offering more than 250 shopping, dining and entertainment options. Located a short drive from the Orlando International Airport, Walt Disney World Resort, and other popular attractions, the mall sees more than 20 million visitors annually. Increased sales and rents due to recent redevelopments has increased the property’s valuation.

99 High / Office / Boston, MA

99 High / Office / Boston, MA

99 High is a 32-story, LEED Gold-certified office building in downtown Boston overlooking the Greenway. The property has a distinct architectural design and recently went through a lobby renovation. In addition to the building’s new street level restaurant, the property is situated within walking distance of great dining options, several hotels and convenient parking.

1001 Pennsylvania Avenue / Office / Washington, DC

1001 Pennsylvania Avenue / Office / Washington, DC

1001 Pennsylvania Avenue is an 800,000 square foot, 14-story office building occupying an entire city block between the White House and the Capitol. The property features an iconic DC limestone exterior that blends new and old by incorporating century-old Victorian facades. The building offers rooftop terraces with Monument views, and the ground floor also features multiple dining options for tenants.

Why TIAA?

An effective way to get exposure to real estate

The TIAA Real Estate Account is a variable annuity designed to maximize the benefits of real estate investing, while minimizing the drawbacks of managing your own properties.

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We're here to help you

Help diversify your portfolio through investment exposure to commercial real estate with TIAA Real Estate Account (QREARX)*

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Weekdays, 8 a.m. – 10 p.m. (ET)

800-842-2252

*These articles and reports are being provided for general information regarding the business of Nuveen Real Estate ("NRE") and are not specific to the TIAA Real Estate Account, which is managed solely by TIAA. NRE is a division of Nuveen Asset Management, LLC, a registered investment adviser and an affiliate of Nuveen, LLC.

1 Returns are largely unaffected by movements in stock or bond markets since returns are generated by rental income and changes in property values. For the 10-year period ended September 30, 2021, REA correlation to the S&P 500 Index and Barclay's Aggregate Bond Index was -0.03 and -0.09, respectively. Over this same period, correlation between the FTSE Nareit All Equity REIT Index and the S&P 500 Index was 0.71. You cannot invest directly in any index. Index returns do not reflect a deduction for fees and expenses.

2 Direct real estate has delivered higher risk-adjusted returns than bonds since the account's inception in 1995. As of September 30, 2021, the REA since-inception Sharpe ratio (a measure of risk-adjusted return) was 1.2, while the Bloomberg Barclays U.S. Aggregate Bond Index was 0.9 over the same period. The REA inception date is October 2, 1995. You cannot invest directly in any index. Index returns do not reflect a deduction for fees and expenses. Past performance does not guarantee future results.

3 Other payout options are available. Any guarantees under annuities issued by Teachers Insurance and Annuity Association of America are subject to its' claims-paying ability. Payments from the TIAA Real Estate Account will rise or fall based on investment performance.

4 Withdrawals of earnings are subject to ordinary income tax, plus a possible federal 10% penalty if you make a withdrawal before age 59 ½. Transfers out of the account to another TIAA or to a CREF account or into another investment option can be executed at any time, but are limited to once per calendar quarter, although some plans may allow systematic transfers that result in more than one transfer per calendar quarter, and certain other limited exceptions to this restriction apply.

*Diversification is a way to help avoid risk and does not guarantee against loss.

The real estate industry is subject to various risks including fluctuations in underlying property values, expenses and income, and potential environmental liabilities.

In general, the value of the TIAA Real Estate Account will fluctuate based on the underlying value of the direct real estate or real estate-related securities in which it invests. The risks associated with investing in the Real Estate Account include the risks associated with real estate ownership including among other things fluctuations in underlying property values, higher expenses or lower income than expected, risks associated with borrowing and potential environmental problems and liability, as well as risks associated with participant flows and conflicts of interest. For more complete discussion of these and other risks, please consult the prospectus. Please consider all risks carefully prior to investing. You should consider the investment objectives, risks, charges and expenses carefully before investing. Please call 800-842-2252 or go to TIAA.org/pdf/prospectuses/realestate_prosp.pdfOpens pdf for copies that contain this and other information. Please read the prospectus carefully before investing.

This material is for informational or educational purposes only and does not constitute fiduciary investment advice under ERISA, a securities recommendation under all securities laws, or an insurance product recommendation under state insurance laws or regulations. This material does not take into account any specific objectives or circumstances of any particular investor, or suggest any specific course of action. Investment decisions should be made based on the investor's own objectives and circumstances.

Past performance does not guarantee future results.

The TIAA Real Estate Account is an insurance separate account of Teachers Insurance and Annuity Association of America, New York, NY. TIAA-CREF Individual & Institutional Services, LLC, Member FINRA, distributes securities products.

For its stability, claims-paying ability and overall financial strength, Teachers Insurance and Annuity Association of America (TIAA) is a member of one of only three insurance groups in the United States to currently hold the highest rating available to U.S. insurers from three of the four leading insurance company rating agencies: A.M. Best (A++ as of 7/21), Fitch (AAA as of 11/21) and Standard & Poor's (AA+ as of 9/21), and the second highest possible rating from Moody's Investors Service (Aa1 as of 5/21). There is no guarantee that current ratings will be maintained. The financial strength ratings represent a company's ability to meet policyholders' obligations and do not apply to variable annuities or any other product or service not fully backed by TIAA's claims-paying ability. The ratings also do not apply to the safety or the performance of the variable accounts, which will fluctuate in value.

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