Company: PGZ
Filing Date: 2025-01-03
Form Type: N-CSR
Source: 0001398344-25-000145
Chunk: 59

Company: Principal Real Estate Income Fund
Filing Date: 2025-01-03
Form: N-CSR
Chunk 59
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, as reset periodically, the leverage may cause the holders of Common Shares to receive a higher current rate of return than if the Fund were not leveraged. If, however, long-term and/or short-term rates rise, the interest rate on borrowed money could exceed the rate of return on securities held by the Fund, reducing return to the holders of Common Shares.

There is no assurance that a leveraging strategy will be successful or that it will be used. Leverage involves risks and special considerations for Common Stockholders, including:

| ● | the                                                                                   
 likelihood of greater volatility of NAV, market price and dividend rate of the Common 
 Shares than a comparable portfolio without leverage;                                  |

| ● | the                                                                                      
 risk that fluctuations in interest rates on borrowings or on short-term debt or in the   
 interest or dividend rates on any debt securities or preferred shares that the Fund must 
 pay will reduce the return to the Common Stockholders;                                   |

| ● | the                                                                                  
 effect of leverage in a declining market, which is likely to cause a greater decline 
 in the NAV of the Common Shares than if the Fund were not leveraged, may result in a 
 greater decline in the market price of the Common Shares;                            |

| ● | when                                                                                    
 the Fund uses financial leverage, the investment management fees payable to the Adviser 
 and the subadvisory fees payable by the Adviser to the Subadviser will be higher than   
 if the Fund did not use leverage. This may create a conflict of interest between the    
 Adviser and the Subadviser, on the one hand, and the holders of Common Shares, on the   
 other; and                                                                              |

| ● | leverage                                                     
 may increase operating costs, which may reduce total return. |

The use of leverage will require the Fund to segregate assets to cover its obligations (or, if the Fund borrows money or issues preferred shares, to maintain asset coverage in conformity with the requirements of the 1940 Act). While the segregated assets will be invested in liquid securities, they may not be used for other operational purposes. Consequently, the use of leverage may limit the Fund’s flexibility and may require that the Fund sell other portfolio investments to pay Fund expenses, to maintain assets in an amount sufficient to cover the Fund’s leveraged exposure or to meet other obligations at a time when it may be disadvantageous to sell such assets. Certain types of borrowings by the Fund may result in the Fund being subject to covenants in credit agreements relating to asset coverage and portfolio