PRINCIPAL REAL ESTATE INCOME FUND
STATEMENT OF INVESTMENTS
January 31, 2017 (Unaudited)
		Shares				Value (Note 2)
COMMON STOCKS (48.87%)
Computer Software (0.48%)
InterXion Holding N.V.(a)			16,400			$	630,252
Real Estate Management/Services (3.18%)
Aeon Mall Co., Ltd.			16,700				242,417
Atrium European Real Estate, Ltd.			96,100				402,511
Charter Hall Group			95,000				338,626
Citycon OYJ			464,193				1,153,525
Deutsche Wohnen AG			24,571				799,446
Mitsubishi Estate Co., Ltd.			35,000				670,335
Sponda OYJ			120,631				548,492
							4,155,352
Real Estate Operation/Development (4.45%)
ADO Properties SA(b)(c)			13,197				471,477
Croesus Retail Trust			2,282,730				1,384,847
Inmobiliaria Colonial SA			60,000				440,177
Mitsui Fudosan Co., Ltd.			61,000				1,413,573
New World Development Co., Ltd.			631,000				731,934
Propertylink Group(c)			600,000				348,106
TLG Immobilien AG			12,000				227,731
Tokyo Tatemono Co., Ltd.			59,000				782,765
							5,800,610
REITS-Apartments (2.58%)
Apartment Investment & Management Co., Class A			19,700				868,179
Colony Starwood Homes			2,529				79,537
Essex Property Trust, Inc.			8,600				1,928,980
Independence Realty Trust, Inc.			13,424				123,904
Japan Rental Housing Investments, Inc.			500				365,778
							3,366,378
REITS-Diversified (11.58%)
Altarea SCA			8,469				1,600,816
American Tower Corp.			2,500				258,750
CoreSite Realty Corp.			1,800				155,034
Crombie Real Estate Investment Trust			21,015				217,539
Crown Castle International Corp.			19,000				1,668,770
Dexus Property Group			210,000				1,430,191
Duke Realty Corp.			23,700				576,621
Empiric Student Property PLC			150,000				203,796
EPR Properties			8,400				621,348
Equinix, Inc.			2,100				808,458
Frasers Logistics & Industrial Trust(c)			786,387				524,500
Invesco Office J-REIT, Inc.			250				219,865
Liberty Property Trust			12,200				468,358
Londonmetric Property PLC			145,000				269,237
Mapletree Commercial Trust			139,600				151,551
Merlin Properties Socimi SA			50,000				558,912
Mirvac Group			443,000				682,022
Nomura Real Estate Master Fund, Inc.			250				389,469
Secure Income REIT PLC			15,401				61,514
Segro PLC			80,187				465,540
Sekisui House REIT, Inc.			307				413,285
Spring Real Estate Investment Trust			2,870,000				1,161,479
STAG Industrial, Inc.			46,318				1,071,798
Stockland			180,100				594,157
Viva Energy REIT			310,137				529,218
							15,102,228

 

		Shares				Value (Note 2)
REITS-Health Care (2.90%)
Care Capital Properties, Inc.			35,000			$	864,850
Physicians Realty Trust			24,000				445,200
Sabra Health Care REIT, Inc.			29,500				749,300
Senior Housing Properties Trust			69,430				1,322,641
Welltower, Inc.			6,072				402,574
							3,784,565
REITS-Hotels (1.90%)
Hoshino Resorts REIT, Inc.			30				160,216
Hospitality Properties Trust			25,600				796,928
Hospitality Property Fund Ltd., Class B			110,000				112,082
Japan Hotel REIT Investment Corp.			700				491,630
Sunstone Hotel Investors, Inc.			62,000				912,640
							2,473,496
REITS-Manufactured Homes (1.15%)
Sun Communities, Inc.			19,083				1,502,977
REITS-Mortgage (0.25%)
CYS Investments, Inc.			43,100				326,267
REITS-Office Property (5.25%)
Alexandria Real Estate Equities, Inc.			11,000				1,219,020
alstria office REIT-AG			20,000				249,689
Brandywine Realty Trust			38,100				613,410
Champion REIT			405,000				219,232
City Office REIT, Inc.			98,278				1,237,320
Corporate Office Properties Trust			10,882				346,265
Investa Office Fund			220,000				750,816
Kilroy Realty Corp.			13,500				1,010,475
SL Green Realty Corp.			6,400				697,408
Viva Industrial Trust			939,500				509,964
							6,853,599
REITS-Regional Malls (3.58%)
GGP, Inc.			35,000				869,400
Simon Property Group, Inc.			20,700				3,804,039
							4,673,439
REITS-Shopping Centers (4.20%)
Aventus Retail Property Fund, Ltd.			95,000				167,872
Equity One, Inc.			11,000				343,090
Fortune Real Estate Investment Trust			587,000				680,895
Kenedix Retail REIT Corp.			418				1,007,332
Kite Realty Group Trust			28,000				672,560
NewRiver REIT PLC			149,000				588,568
Ramco-Gershenson Properties Trust			18,400				299,184
Scentre Group			165,000				550,599
Vastned Retail N.V.			31,600				1,165,444
							5,475,544
REITS-Single Tenant (2.23%)
Agree Realty Corp.			11,034				517,495
Spirit Realty Capital, Inc.			118,000				1,241,360
STORE Capital Corp.			48,881				1,156,524
							2,915,379
REITS-Storage/Warehousing (2.03%)
CubeSmart			22,000				552,860
Extra Space Storage, Inc.			10,200				734,910
National Storage Affiliates Trust			49,545				1,102,376
Safestore Holdings PLC			56,000				260,728
							2,650,874

 

		Shares				Value (Note 2)
REITS-Warehouse/Industrials (3.11%)
Granite Real Estate Investment Trust			8,000			$	272,845
Japan Logistics Fund, Inc.			115				242,609
PLA Administradora Industrial S de RL de CV			645,000				882,744
Prologis Property Mexico SA de CV			120,000				165,325
Prologis, Inc.			24,000				1,172,400
Terreno Realty Corp.			17,000				462,230
WPT Industrial Real Estate Investment Trust			72,800				860,496
							4,058,649
TOTAL COMMON STOCKS
(Cost $61,127,950)							63,769,609

 

					Maturity		Principal				Value
		Rate			Date		Amount				(Note 2)
COMMERCIAL MORTGAGE BACKED SECURITIES (93.16%)
Commercial Mortgage Backed Securities-Subordinated (41.90%)
Bank of America Commercial Mortgage Trust, Series 2016-UBS10(b)			3.000	%	06/15/49		$	3,500,000			$	2,475,630
CFCRE Commercial Mortgage Trust 2016-C3(b)(d)			3.052	%	01/10/26			5,484,000				4,004,157
CFCRE Commercial Mortgage Trust 2016-C7(b)			4.443	%	12/10/26			1,500,000				1,218,927
Commercial Mortgage Pass Through Certificates, Series 2014-CR14(b)(d)			3.496	%	01/10/24			2,000,000				1,257,927
Commercial Mortgage Trust, Series 2013-CCRE11(b)(d)			4.371	%	10/10/23			5,108,000				3,755,187
Commercial Mortgage Trust, Series 2014-CCRE17(b)(d)			4.299	%	05/10/24			6,000,000				3,696,822
Commercial Mortgage Trust, Series 2014-UBS5(b)			3.495	%	09/10/24			4,250,000				3,244,218
CSAIL Commercial Mortgage Trust, Series 2015-C4(d)			3.584	%	11/11/48			5,000,000				3,571,556
Goldman Sachs Mortgage Securities Trust, Series 2013-GC13(b)(d)			4.066	%	07/10/23			3,000,000				2,772,573
Goldman Sachs Mortgage Securities Trust, Series 2013-GC16(b)(d)			5.320	%	11/10/46			2,342,405				2,251,115
Goldman Sachs Mortgage Securities Trust, Series 2014-GC22(b)			3.582	%	06/10/47			2,840,000				1,746,449
JPMBB Commercial Mortgage Securities Trust, Series 2013-C15(b)			3.500	%	10/15/23			2,500,000				1,792,449
JPMorgan Chase Commercial Mortgage Securities Trust, Series 2006-CIBC16			5.623	%	05/12/45			2,176,282				1,876,706
JPMorgan Chase Commercial Mortgage Securities Trust, Series 2013-C16(b)(d)			4.975	%	11/15/23			2,117,483				2,055,210
Merrill Lynch Mortgage Trust, Series 2006-C1(d)			5.657	%	05/12/39			9,000,000				7,119,000
Merrill Lynch-CFC Commercial Mortgage Trust, Series 2006-2(b)(d)			5.643	%	06/12/46			62,922				62,778
Merrill Lynch-CFC Commercial Mortgage Trust, Series 2006-3(d)			5.554	%	04/01/17			2,500,000				2,396,439
Morgan Stanley Bank of America Merrill Lynch Trust, Series 2013-C8(b)(d)			4.062	%	02/15/23			3,000,000				2,732,772
Morgan Stanley Capital I Trust, Series 2016-UB11E(b)(d)			2.709	%	08/15/26			5,000,000				2,732,507
Wells Fargo Commercial Mortgage Trust, Series 2015-NXS1(d)			4.104	%	05/15/48			3,440,000				2,850,417
Wells Fargo Commercial Mortgage Trust, Series 2015-NXS3(b)			3.153	%	09/15/57			1,500,000				1,052,055
												54,664,894

 

					Maturity		Principal				Value
		Rate			Date		Amount				(Note 2)
Commercial Mortgage Backed Securities-Other (51.26%)
Bank of America Commercial Mortgage Trust, Series 2008-1(d)			6.280	%	01/10/18		$	2,500,000			$	2,501,065
CD Commercial Mortgage Trust, Series 2007-CD4(d)			5.398	%	12/11/49			9,529,726				8,624,402
Credit Suisse Commercial Mortgage Trust, Series 2006-C4(d)			5.538	%	09/15/39			3,542,265				3,530,477
Credit Suisse Commercial Mortgage Trust, Series 2007-C1			5.416	%	02/15/40			8,684,857				8,667,576
FHLMC Multifamily Structured Pass Through Certificates, Series 2011-KAIV(d)(e)			3.615	%	06/25/41			9,000,000				1,224,400
FHLMC Multifamily Structured Pass Through Certificates, Series 2012-K052(d)(e)			1.611	%	01/25/26			9,690,000				1,048,621
FHLMC Multifamily Structured Pass Through Certificates, Series 2012-K706(d)(e)			1.904	%	12/25/18			59,523,999				1,942,101
FHLMC Multifamily Structured Pass Through Certificates, Series 2012-K707(d)(e)			1.806	%	01/25/19			27,555,000				850,121
FHLMC Multifamily Structured Pass Through Certificates, Series 2012-K709(d)(e)			1.700	%	04/25/40			30,601,130				1,025,964
FHLMC Multifamily Structured Pass Through Certificates, Series 2012-K710(d)(e)			1.662	%	06/25/42			27,830,000				951,761
Greenwich Capital Commercial Funding Corp. Commercial Mortgage Trust, Series 2007-GG9(d)			5.505	%	02/10/17			7,500,000				7,166,203
JPMBB Commercial Mortgage Securities Trust, Series 2014-C21(b)(d)			3.900	%	07/15/24			12,747,500				8,511,427
JPMorgan Chase Commercial Mortgage Securities Trust, Series 2006-CIBC17(d)			5.489	%	12/12/43			3,730,312				1,615,747
JPMorgan Chase Commercial Mortgage Securities Trust, Series 2007-CIBC19(d)			5.734	%	05/12/17			3,500,000				2,847,943
JPMorgan Chase Commercial Mortgage Securities Trust, Series 2013-C15(b)(d)(e)			1.485	%	10/15/23			11,500,000				910,123
LB-CMT Commercial Mortgage Trust, Series 2007-C3(d)			5.918	%	06/15/17			1,000,000				982,039
LB-UBS Commercial Mortgage Trust, Series 2006-C7			5.407	%	11/15/38			1,323,867				1,022,592
Morgan Stanley Bank of America Merrill Lynch Trust, Series 2015-C20(b)(d)(e)			1.612	%	02/15/25			23,967,000				2,263,810
Morgan Stanley Capital I Trust, Series 2016-UB11XE(b)(d)(e)			1.500	%	08/15/26			13,495,500				1,355,148
Wachovia Bank Commercial Mortgage Trust, Series 2006-C29(d)			5.368	%	11/18/48			4,772,799				4,769,962
Wachovia Bank Commercial Mortgage Trust, Series 2007-C30(d)			5.413	%	12/15/43			5,000,000				5,069,128
												66,880,610
TOTAL COMMERCIAL MORTGAGE BACKED SECURITIES
(Cost $124,094,010)												121,545,504

 

		7-Day Yield				Shares				Value (Note 2)
SHORT TERM INVESTMENTS (3.23%)
State Street Institutional Treasury Plus Money Market Fund			0.420	%			4,210,422				4,210,422
TOTAL SHORT TERM INVESTMENTS
(Cost $4,210,422)											4,210,422

 

		Value (Note 2)
TOTAL INVESTMENTS (145.26%)
(Cost $189,432,382)		$	189,525,535
Liabilities in Excess of Other Assets (-45.26%)			(59,050,790	)
NET ASSETS (100.00%)		$	130,474,745

 

(a)	Non-income producing security.
(b)	Security exempt from registration under Rule 144A of the Securities Act of 1933. Such securities may normally be sold to qualified institutional buyers in transactions exempt from registration. The total value of Rule 144A securities amounts $50,362,761, which represents approximately 38.60% of net assets as of January 31, 2017.
(c)	Securities were purchased pursuant to Regulation S under the Securities Act of 1933, which exempts securities offered and sold outside of the United States from registration.  Such securities cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. As of January 31, 2017, the aggregate market value of those securities was $1,344,083, representing 1.03% of net assets.
(d)	Interest rate will change at a future date. Interest rate shown reflects the rate in effect at January 31, 2017.
(e)	Interest only security.

See Notes to Quarterly Statement of Investments.

PRINCIPAL REAL ESTATE INCOME FUND

Notes to Quarterly Statement of Investments

January 31, 2017 (Unaudited)

 

NOTE 1. ORGANIZATION

 

Principal Real Estate Income Fund (the ‘‘Fund’’) is a Delaware statutory trust registered as a non-diversified, closed-end management investment company under the Investment Company Act of 1940, as amended (the ‘‘1940 Act’’). The Fund’s investment objective is to seek to provide high current income, with capital appreciation as a secondary investment objective, by investing in commercial real estate-related securities.

 

Investing in the Fund involves risks, including exposure to below-investment grade investments. The Fund’s net asset value will vary and its distribution rate may vary and both may be affected by numerous factors, including changes in the market spread over a specified benchmark, market interest rates and performance of the broader equity markets. Fluctuations in net asset value may be magnified as a result of the Fund’s use of leverage.

 

NOTE 2. SIGNIFICANT ACCOUNTING POLICIES

 

Use of Estimates: The preparation of the Statement of Investments in accordance with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts and disclosures in the Statement of Investments during the period reported. Management believes the estimates and security valuations are appropriate; however, actual results may differ from those estimates, and the security valuations reflected in the Statement of Investments may differ from the value the Fund’s ultimately realize upon sale of the securities. The Fund is considered an investment company under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies in the Financial Accounting Standards Board Accounting Standards Codification Topic 946. The Statement of Investments has been prepared as of the close of the New York Stock Exchange (“NYSE”) on January 31, 2017.

 

Portfolio Valuation: The net asset value per Common Share of the Fund is determined daily, on each day that the NYSE is open for trading, as of the close of regular trading on the NYSE (normally 4:00 p.m. New York time). The Fund’s net asset value per Common Share is calculated in the manner authorized by the Fund’s Board of Trustees (the “Board”). Net asset value is computed by dividing the value of the Fund’s total assets, less its liabilities by the number of shares outstanding.

 

The Board has established the following procedures for valuation of the Fund’s assets under normal market conditions. Marketable securities listed on foreign or U.S. securities exchanges generally are valued at closing sale prices or, if there were no sales, at the mean between the closing bid and ask prices on the exchange where such securities are primarily traded.

 

The Fund values commercial mortgage-backed securities and other debt securities not traded in an organized market on the basis of valuations provided by an independent pricing service, approved by the Board, which uses information with respect to transactions in such securities, interest rate movements, new issue information, cash flows, yields, spreads, credit quality, and other pertinent information as determined by the pricing service, in determining value. If the independent primary or secondary pricing service is unable to provide a price for a security, if the price provided by the independent primary or secondary pricing service is deemed unreliable, or if events occurring after the close of the market for a security but before the time as of which the Fund values its Common Shares would materially affect net asset value, such security will be valued at its fair value as determined in good faith under procedures approved by the Board.

When applicable, fair value of an investment is determined by the Fund’s Fair Valuation Committee as a designee of the Board. In fair valuing the Fund’s investments, consideration is given to several factors, which may include, among others, the following: the fundamental business data relating to the issuer, borrower, or counterparty; an evaluation of the forces which influence the market in which the investments are purchased and sold; the type, size and cost of the investment; the information as to any transactions in or offers for the investment; the price and extent of public trading in similar securities (or equity securities) of the issuer, or comparable companies; the coupon payments, yield data/cash flow data; the quality, value and saleability of collateral, if any, securing the investment; the business prospects of the issuer, borrower, or counterparty, as applicable, including any ability to obtain money or resources from a parent or affiliate and an assessment of the issuer’s, borrower’s, or counterparty’s management; the prospects for the industry of the issuer, borrower, or counterparty, as applicable, and multiples (of earnings and/or cash flow) being paid for similar businesses in that industry; one or more independent broker quotes for the sale price of the portfolio security; and other relevant factors.

 

Securities Transactions and Investment Income: Investment security transactions are accounted for on a trade date basis. Dividend income is recorded on the ex-dividend date. Certain dividend income from foreign securities will be recorded, in the exercise of reasonable diligence, as soon as a Fund is informed of the dividend if such information is obtained subsequent to the ex-dividend date and may be subject to withholding taxes in these jurisdictions. Interest income, which includes amortization of premium and accretion of discount, is recorded on the accrual basis. Realized gains and losses from securities transactions and unrealized appreciation and depreciation of securities are determined using the first-in/first-out cost basis method for both financial reporting and income tax purposes.

 

Fair Value Measurements: The Fund discloses the classification of its fair value measurements following a three-tier hierarchy based on the inputs used to measure fair value. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk. Inputs may be observable or unobservable. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability that are developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability that are developed based on the best information available.

 

Various inputs are used in determining the value of the Fund’s investments as of the end of the reporting period. When inputs used fall into different levels of the fair value hierarchy, the level in the hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The designated input levels are not necessarily an indication of the risk or liquidity associated with these investments.

 

These inputs are categorized in the following hierarchy under applicable financial accounting standards:

Level 1 –	Unadjusted quoted prices in active markets for identical investments, unrestricted assets or liabilities that a Fund has the ability to access at the measurement date;
Level 2 –	Quoted prices which are not active, quoted prices for similar assets or liabilities in active markets or inputs other than quoted prices that are observable (either directly or indirectly) for substantially the full term of the asset or liability; and
Level 3 –	Significant unobservable prices or inputs (including the Fund’s own assumptions in determining the fair value of investments) where there is little or no market activity for the asset or liability at the measurement date.

 

The following is a summary of the inputs used to value the Fund’s investments as of January 31, 2017:

 

Principal Real Estate Income Fund
Investments in Securities at Value*		Level 1 - Quoted Prices				Level 2 - Other Significant Observable Inputs				Level 3 - Significant Unobservable Inputs				Total
Common Stocks		$	63,769,609			$	–			$	–			$	63,769,609
Commercial Mortgage Backed Securities			–				121,545,504				–				121,545,504
Short Term Investments			4,210,422				–				–				4,210,422
Total		$	67,980,031			$	121,545,504			$	–			$	189,525,535

 

The Fund recognizes transfers between the levels as of the end of the period. For the period ended January 31, 2017, the Fund did not have any transfers between Level 1 and Level 2 securities. The Fund did not have any securities which used significant unobservable inputs (Level 3) in determining fair value.

Commercial Mortgage Backed Securities (“CMBS”): As part of its investments in commercial real estate related securities, the Fund will invest in CMBS which are subject to certain risks associated with direct investments in CMBS. A CMBS is a type of mortgage-backed security that is secured by a loan (or loans) on one or more interests in commercial real estate property. Investments in CMBS are subject to the various risks which relate to the pool of underlying assets in which the CMBS represents an interest. CMBS may be backed by obligations (including certificates of participation in obligations) that are principally secured by commercial real estate loans or interests therein having multi-family or commercial use. Securities backed by commercial real estate assets are subject to securities market risks as well as risks similar to those of direct ownership of commercial real estate loans because those securities derive their cash flows and value from the performance of the commercial real estate underlying such investments and/or the owners of such real estate.

 

Real Estate Investment Trusts (“REITs”): As part of its investments in real estate related securities, the Fund will invest in REITs and are subject to certain risks associated with direct investment in REITs. REITs possess certain risks which differ from an investment in common stocks. REITs are financial vehicles that pool investors’ capital to acquire, develop and/or finance real estate and provide services to their tenants. REITs may concentrate their investments in specific geographic areas or in specific property types, e.g., regional malls, shopping centers, office buildings, apartment buildings and industrial warehouses. REITs may be affected by changes in the value of their underlying properties and by defaults by borrowers or tenants. REITs depend generally on their ability to generate cash flow to make distributions to shareowners, and certain REITs have self-liquidation provisions by which mortgages held may be paid in full and distributions of capital returns may be made at any time.

 

As REITs generally pay a higher rate of dividends than most other operating companies, to the extent application of the Fund’s investment strategy results in the Fund investing in REIT shares, the percentage of the Fund’s dividend income received from REIT shares will likely exceed the percentage of the Fund’s portfolio that is comprised of REIT shares. Distributions received by the Fund from REITs may consist of dividends, capital gains and/or return of capital.

 

Dividend income from REITs is recognized on the ex-dividend date. The calendar year-end amounts of ordinary income, capital gains, and return of capital included in distributions received from the Fund’s investments in REITs are reported to the Fund after the end of the calendar year; accordingly, the Fund estimates these amounts for accounting purposes until the characterization of REIT distributions is reported to the Fund after the end of the calendar year. Estimates are based on the most recent REIT distribution information available.

The performance of a REIT may be affected by its failure to qualify for tax-free pass-through of income under the Internal Revenue Code of 1986, as amended (the “Code”), or its failure to maintain exemption from registration under the 1940 Act. Due to the Fund’s investments in REITs, the Fund may also make distributions in excess of the Fund’s earnings and capital gains. Distributions, if any, in excess of the Fund’s earnings and profits will first reduce the adjusted tax basis of a holder’s Common Shares and, after that basis has been reduced to zero, will constitute capital gains to the Common Shareholder.

 

Concentration Risk: The Fund invests in companies in the real estate industry, which may include CMBS, REITs, REIT-like structures, and other securities that are secured by, or otherwise have exposure to, real estate. Any fund that concentrates in a particular segment of the market will generally be more volatile than a fund that invests more broadly. Any market price movements, regulatory changes, or economic conditions affecting CMBS, REITs, REIT-like structures, and real estate more generally, will have a significant impact on the Fund’s performance.

 

Foreign Currency Risk: The Fund expects to invest in securities denominated or quoted in currencies other than the U.S. dollar. Changes in foreign currency exchange rates may affect the value of securities owned by the Fund, the unrealized appreciation or depreciation of investments and gains on and income from investments. Currencies of certain countries may be volatile and therefore may affect the value of securities denominated in such currencies, which means that the Fund’s net asset value could decline as a result of changes in the exchange rates between foreign currencies and the U.S. dollar. These risks often are heightened for investments in smaller, emerging capital markets.

The accounting records of the Fund are maintained in U.S. dollars. Prices of securities denominated in foreign currencies are translated into U.S. dollars at the closing rates of the exchanges at period end. Amounts related to the purchase and sale of foreign securities and investment income are translated at the rates of exchange prevailing on the respective dates of such transactions.

 

3. Tax Basis Information

 

Tax Basis of Investments:  As of January 31, 2017, the cost of investments for federal income tax purposes and accumulated net unrealized appreciation/(depreciation) on investments were as follows:

 

Principal Real Estate Income Fund
Cost of investments for income tax purposes		$	190,282,695
Gross appreciation on investments (excess of value over tax cost)		$	6,862,401
Gross depreciation on investments (excess of tax cost over value)			(7,619,561	)
Net unrealized appreciation on investments		$	(757,160	)

 

	PRINCIPAL REAL ESTATE INCOME FUND
	By:	/s/ Thomas A. Carter
		Thomas A. Carter
		President (Principal Executive Officer)
	Date:	March 29, 2017

	By:	/s/ Thomas A. Carter
		Thomas A. Carter
		President (Principal Executive Officer)
	Date:	March 29, 2017

	By:	/s/ Patrick D. Buchanan
		Patrick D. Buchanan
		Treasurer (Principal Financial Officer)
	Date:	March 29, 2017