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Frequent Contributor

TIAA Real Estate Account VA, 10-Q for 9/30/19

https://www.sec.gov/Archives/edgar/data/946155/000162828019013594/tiaa-realestate09302019x10q.htm

At 9/30/19:

Gross Assets  $29.627 billion

Liabilities  $2.590 billion

Net Assets  $27.037 billion  [used for NAV of $435.222]

Loans Receivable  $1.308 billion; 4.2% of Gross Assets, 4.6% of Net Assets

Line of Credit  $500 million for annual fee 0.20%; remains unused

TR  4.27% for 9 months, 5.69% annualized

Income 2.94% annualized

ER  0.80% annualized

Real-Estate Securities  2.9% of Gross Assets, 3.18% of Net Assets

Treasuries/Agencies  10.5% of Gross Assets, 11.51% of Net Assets

Corporate Bonds  3.9% of Gross Assets, 4.27% of Net Assets [This is new]

Recent Transactions are on pg 60-62.

Subsequect Transactions - not found

Note - Some of the decreases in real-estate securities and Treasuries Agencies went into loans-receivable and corporate bonds [new]. This is a good development, IMO. Still unclear about the unused credit line with an annual commitment fee; there is so much liquidity already and TIAA Liquidity Guarantee [at a fee] on top of that.

YBB
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Frequent Contributor

Re: TIAA Real Estate Account VA, 10-Q for 9/30/19

Ah. Now I see what happened with 4th & Madison in Seattle. Nice gain selling ca. 50% ownership.

Thanks for posting, Yogi.

The corporate bonds are interesting but may make the NAV more volatile as fixed income is whipsawed. 

Bob

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Participant ○○

Re: TIAA Real Estate Account VA, 10-Q for 9/30/19

I wondered what average duration of those corporate bonds is.  I did not see a figure in the document; maybe it is buried somewhere.  Their maturity dates are between 2019 and 2023 so we can see that duration is short, which is good in my opinion.

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Re: TIAA Real Estate Account VA, 10-Q for 9/30/19


@Learner wrote:

I wondered what average duration of those corporate bonds is.  I did not see a figure in the document; maybe it is buried somewhere.  Their maturity dates are between 2019 and 2023 so we can see that duration is short, which is good in my opinion.


Agencies are cut drastically. I also see some Treasury Notes [with longer maturities] - Agencies/Treasuries used to have under 1 yr maturity [like cash]. New corporates are short-term but several with longer than 1 yr maturities. Some loans-receivable have lower credit ratings.

Term duration isn't found in the 10-Q.

Seems that T-REA is betting on continued strong economy and may be another Fed rate cut. After all, Ferguson used to be the Fed VC and he may know things that we don't. Timing for all this seems a bit off.

YBB
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Frequent Contributor

Re: TIAA Real Estate Account VA, 10-Q for 9/30/19

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Participant ○○

Re: TIAA Real Estate Account VA, 10-Q for 9/30/19

Thank you for these documents, Yogi.

I don't see any reason for TREA not to remain in my 403b, at 11.3% of the account's valuation.

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Explorer ○

Re: TIAA Real Estate Account VA, 10-Q for 9/30/19

I concur with Juris2, and have had TREA at about 16% of my retirement assets for a very long time.  TREA just keeps plodding along.

I'd reconsider should we move into a recession, but see no signs of that happening in the near future.

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T-REA FAQs

A new T-REA FAQs has been filed. Notable for updated data to 9/30/19.   https://www.sec.gov/Archives/edgar/data/946155/000162828019014572/a991reafaq93019.htm

YBB
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Frequent Contributor

Re: T-REA FAQs

A guide to expectations (from Yogi's link):

growthof10003qa01.jpg

 

The following table shows total returns and annual standard deviation of returns (volatility) from inception of the Real Estate Account through September 30, 2019.
 
    
 
Annualized Total Return
Annual Standard Deviation
Index
Real Estate Account
6.27%
3.6
 
Bonds
5.23%
3.4
Bloomberg Barclays Aggregate Bonds Index
Stocks
9.08%
14.8
S&P 500 Index

 

Bob

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Explorer ○○○

Re: T-REA FAQs

My favorite part is the table of Sharpe Ratios in F-4. TREA crushes REITs.

John

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Frequent Contributor

Re: T-REA FAQs


@jjustice wrote:

My favorite part is the table of Sharpe Ratios in F-4. TREA crushes REITs.

John


My favorite stats on VNQ : up 28.6% ytd., 10 yr average TR 13.53%,  ER 0.12%.

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Participant ○○

Re: T-REA FAQs


@Intruder wrote:

@jjustice wrote:

My favorite part is the table of Sharpe Ratios in F-4. TREA crushes REITs.

John


My favorite stat on VNQ : up 28.6% ytd.10 yr average TR 13.53%.  ER 0.12%.


Apples and oranges.  Different goals, different instruments.  You hold a tiny % in VNQ; some of us hold a much higher % in TREA.

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Re: T-REA FAQs


@Learner wrote:

@Intruder wrote:

@jjustice wrote:

My favorite part is the table of Sharpe Ratios in F-4. TREA crushes REITs.

John


My favorite stat on VNQ : up 28.6% ytd.10 yr average TR 13.53%.  ER 0.12%.


Apples and oranges.  Different goals, different instruments.  You hold a tiny % in VNQ; some of us hold a much higher % in TREA.


Both invest in RE . Apples and oranges pertains to the wrapper in which the RE is held. TREA RE is held in  a tax inefficient variable annuity where all distributions, not in a Roth account are taxed at ordinary income tax rates.VNQ shares held in a taxable account are taxed at cap gains rates , as a non taxable return of capital and as IRC 199A income which are lower than ordinary rates for REIT dividends.

another drag on TREA is its 0.83% ER. VNQ ER is 0.12%.

In addition to VNQ I also own BX which is the largest holder of RE in the world and WPC a reit , both of which provide diversity in RE not available in TREA.

 

 

 

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Participant ○○

Re: T-REA FAQs

TREA can be held with a higher % allocation. It has much less volatility with acceptable returns for some.  Yes, both invest in real estate but they can/should be used for different purposes.  Maybe you like going over things again and again.

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Re: T-REA FAQs

Learner to intruder: "Maybe you like going over things again and again."

And again and again, as noted in this post, made in a spirit of humor, on the old forum, in 2017:

http://socialize.morningstar.com/NewSocialize/ViewPost.aspx?apptype=0&PostID=3867126

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Re: T-REA FAQs


@EtoileDuMatin wrote:

Learner to intruder: "Maybe you like going over things again and again."

And again and again, as noted in this post, made in a spirit of humor, on the old forum, in 2017:

http://socialize.morningstar.com/NewSocialize/ViewPost.aspx?apptype=0&PostID=3867126


I didn’t start the fire. I responded to JJustice bragging about how TREAs sharpe ratio crushed REITs. All I did was responded with VNQ performance, lower fees and tax efficiency.

seems that TREA investors have a LT Kaffee complex. They can’t handle the truth.

 

 

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Participant ○○

Re: T-REA FAQs

That 2017 post is a classic.  Thanks for composing and retrieving it.


@EtoileDuMatin wrote:

Learner to intruder: "Maybe you like going over things again and again."

And again and again, as noted in this post, made in a spirit of humor, on the old forum, in 2017:

http://socialize.morningstar.com/NewSocialize/ViewPost.aspx?apptype=0&PostID=3867126




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Participant ○

Re: T-REA FAQs


@Intruder wrote:

@EtoileDuMatin wrote:

Learner to intruder: "Maybe you like going over things again and again."

And again and again, as noted in this post, made in a spirit of humor, on the old forum, in 2017:

http://socialize.morningstar.com/NewSocialize/ViewPost.aspx?apptype=0&PostID=3867126


I didn’t start the fire. I responded to JJustice bragging about how TREAs sharpe ratio crushed REITs. All I did was responded with VNQ performance, lower fees and tax efficiency.

 


Since TREA cannot be held in a taxable account, you need to consider VNQ in either type of IRA for an all apples comparison...

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Frequent Contributor

Re: T-REA FAQs


@TheWizard wrote:

@Intruder wrote:

@EtoileDuMatin wrote:

Learner to intruder: "Maybe you like going over things again and again."

And again and again, as noted in this post, made in a spirit of humor, on the old forum, in 2017:

http://socialize.morningstar.com/NewSocialize/ViewPost.aspx?apptype=0&PostID=3867126


I didn’t start the fire. I responded to JJustice bragging about how TREAs sharpe ratio crushed REITs. All I did was responded with VNQ performance, lower fees and tax efficiency.

 


Since TREA cannot be held in a taxable account, you need to consider VNQ in either type of IRA for an all apples comparison...


No you have think outside the box to include tax efficient investing principles which is why I removed VNQ from my TIRA to take advantage of all the tax benefits available in a taxable account. Investing VNQ in a taxable account lowers my effective tax rate on distributions to cap gain rate.

 

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Participant ○○

Re: T-REA FAQs

So much ink spent for years for a tiny allocation by own admission.

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