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TIAA Real Estate Account — Quarter Ended September 30, 2026 Earnings Summary

  • Financial Performance:

    • Total Return for the quarter ended September 30, 2026, was 3.96%.
    • Adjusted Total Return for the quarter ended September 30, 2026, was 4.27%.
    • Net assets increased from $22,951.1 million as of June 30, 2026, to $23,757.6 million as of September 30, 2026.
    • Total Return for the 1-year period was 7.21% (Total Return) and 7.79% (Adjusted Total Return).
    • Total Return for the 3-year period was 0.22% (Total Return) and 0.52% (Adjusted Total Return).
    • Total Return for the 5-year period was 0.94% (Total Return) and 1.39% (Adjusted Total Return).
    • Total Return for the 10-year period was 3.05% (Total Return) and 3.68% (Adjusted Total Return).
    • Since inception, Total Return was 5.35% and Adjusted Total Return was 6.56%.
    • Net asset value per accumulation unit increased from $489.635 to $509.028.
    • Total expenses for the quarter were $48.4 million, representing 0.20% of beginning net assets.
    • Investment management charges were $16.8 million (0.07%); administrative charges were $12.7 million (0.06%); distribution charges were $2.7 million (0.01%); liquidity guarantee charges were $16.2 million (0.06%).
    • Real estate properties, net generated a return of 1.49% with a net asset value of $15,583.3 million.
    • Real estate joint ventures generated a return of 1.74% with a net asset value of $5,318.0 million.
    • Real estate funds generated a return of 1.09% with a net asset value of $831.7 million.
    • Real estate operating business generated a return of 47.98% with a net asset value of $1,842.5 million.
    • Loans receivable generated a return of 1.84% with a net asset value of $318.5 million.
    • Cash and short-term securities generated a return of 0.97% with a net asset value of $1,805.5 million.
    • Line of credit generated a return of (6.12)% with a net asset value of $302.0 million.
    • Other unsecured debt generated a return of 1.29% with a net asset value of $1,662.0 million.
    • Realized gain (loss) for the quarter was $(153.9) million; unrealized gain (loss) was $895.0 million; income was $213.2 million.
    • Estimated annual expenses for the period May 1, 2026, through April 30, 2027, are 0.855% of net assets.
    • Loan-to-value (LTV) ratio as of September 30, 2026, was 17.8%.

  • Guidance and Future Outlook:

    • The Account targets to hold between 15% and 25% of its net assets in Liquid Assets on a long-term basis.
    • As of September 30, 2026, Liquid Assets comprised less than 8% of total net assets.
    • Management estimates expenses based on projected expense and asset levels, with differences adjusted quarterly.

  • Business Segments and Product Lines:

    • The Account offers individual and group accumulating annuity contracts (pre-tax or after-tax contributions) and individual lifetime and term-certain variable payout annuity contracts.
    • The portfolio is diversified across property types and geographic locations, including directly held real estate, real estate joint ventures, real estate funds, and real estate operating businesses.
    • The Account provides a liquidity guarantee feature, allowing investors to transfer funds to or from the Account under certain circumstances.
    • The Adjusted Total Return metric is used to compare performance against the NCREIF Fund Index - Open End Diversified Core Equity (NFI-ODCE) by removing the impact of Liquid Assets (up to 15% of net assets) and liquidity guarantee expenses.

  • Market and Competitive Landscape:

    • The NCREIF Fund Index - Open End Diversified Core Equity (NFI-ODCE) is used as the primary comparison index.
    • NFI-ODCE Value Weight Total Return for the quarter was 1.51% (1-year: 4.61%, 3-year: (0.25)%, 5-year: 0.90%, 10-year: 3.69%, Since Inception: 6.85%).
    • NFI-ODCE Equal Weight Total Return for the quarter was 1.57% (1-year: 4.68%, 3-year: (0.43)%, 5-year: 0.87%, 10-year: 3.92%, Since Inception: 6.65%).
    • NFI-ODCE LTV as of September 30, 2026, was 27.2% (Value Weighted) and 26.7% (Equal Weighted).
    • The Account's performance is compared to the NFI-ODCE to assess performance relative to peers in open-end direct real estate products.

  • Risks and Challenges:

    • Risks include fluctuations in property values, higher expenses or lower income than expected, risks associated with borrowing, potential environmental problems and liability, risks associated with participant flows, and conflicts of interest.
    • Differences in leverage between the Account and the NFI-ODCE can contribute to performance differences; higher leverage (LTV) can produce higher returns but exposes investors to higher risk.
    • The Account's LTV calculation includes only the Account's actual percentage interest in borrowings on joint venture investments and excludes leverage employed by real estate funds, operating businesses, or REITs in which the Account invests.
    • Historical results may be revised if NCREIF contributors revise their historical information.
    • The Adjusted Total Return is a non-GAAP measure and should not be construed as an accurate indication of actual relative performance compared to the Total Return.

  • Management Commentary and Tone:

    • Management believes the Adjusted Total Return is a more appropriate approximation of performance when juxtaposed with the NFI-ODCE, as it removes the impact of holding significantly more Liquid Assets and liquidity guarantee costs than the peer group.
    • Management notes that the Account is unique due to its liquidity guarantee feature, which creates cash drag and costs not present in the NFI-ODCE.
    • Management states that comparisons to the NFI-ODCE are highly complex due to the Account's unique features.
    • Adjusted Total Return may be used as a factor in assessing performance-based compensation for TIAA managers servicing the Account.

  • Other Key Points:

    • The TIAA Real Estate Account was established in February 1995, with interests first offered on October 2, 1995.
    • Accumulation unit values fluctuate depending on the Account's performance.
    • The Account seeks to generate favorable total returns primarily through rental income and appreciation of a diversified portfolio of directly held, private real estate investments and real estate-related investments.
    • Real estate returns have historically shown little correlation to stock and bond returns and have tended to provide a hedge against inflation.
    • The Account's prospectus is available via TIAA.org or by calling 888-842-0318.
    • The document includes a reconciliation of Total Return to Adjusted Total Returns in Appendix A.
    • Reconciliations for periods prior to March 31, 2012, are incorporated by reference from a previous Form 8-K filing.