Company: PGZ
Filing Date: 2025-07-03
Form Type: N-CSRS
Source: 0001398344-25-012685
Chunk: 19

Company: Principal Real Estate Income Fund
Filing Date: 2025-07-03
Form: N-CSRS
Chunk 19
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. These types of events quickly and significantly
impact markets in the U.S. and across the globe leading to extreme market volatility and disruption. The extent and nature of the impact
on supply chains or economies and markets from these events is unknown, particularly if a health emergency or other similar event, persists
for an extended period of time. Such events could impact the Adviser's investment advisory activities and services of other service providers,
which in turn could adversely affect the Fund’s investments and other operations. The value of the Fund’s investments may
decrease as a result of such events, particularly if these events adversely impact the operations and effectiveness of the Adviser or
key service providers or if these events disrupt systems and processes necessary or beneficial to the investment advisory, other activities
on behalf the Fund.

Shareholder Activism Risk: Shareholder activism
involving closed-end funds can take many forms, including engaging in public campaigns to demand that the Fund consider significant transactions
such as a tender offer, merger or liquidation or to attempt to influence the Fund’s corporate governance and/or management, commencing
proxy contests to attempt to elect the activists’ representatives or others to the Fund’s Board of Trustees, or seeking other
actions such as a termination of the Fund’s investment advisory contract with its current investment manager, or commencing litigation.
If the Fund becomes the subject of shareholder activism, then management and the Board may be required to divert significant resources
and attention to respond to the activist and the Fund may incur substantial costs defending against such activism if management and the
Board determine that the activist’s demands are not in the best interest of the Fund. Further, the Fund’s share price could
be subject to significant fluctuation or otherwise be adversely affected by the events, risks and uncertainties arising from or in connection
with any shareholder activism.

| 26 | www.principalcef.com |

| Principal Real Estate Income Fund | Notes to Financial Statements |

April 30, 2025 (Unaudited)

3. LEVERAGE

Under normal market conditions, the Fund’s policy
is to utilize leverage through Borrowings and the issuance of preferred shares in an amount that represents approximately 33 1/3% of the
Fund’s total assets, including proceeds from such Borrowings and issuances (or approximately 50% of the Fund’s net assets).
It is possible that the assets of the Fund will decline due to market conditions such that this 33 1/3% limit will be exceeded. In that
case, the