UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________________________________________________________________________

FORM 10-Q

________________________________________________________________________________

(Mark One)

☒    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2025

OR

☐    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For transition period from ___ to ___

Commission File Number 000-56670

________________________________________________________________________________

Principal Credit Real Estate Income Trust

(Exact name of registrant as specified in charter)

Maryland	99-3313328
(State or other jurisdiction of incorporation or registration)	(I.R.S. Employer Identification No.)
711 High Street Des Moines, Iowa	50392
(Address of principal executive offices)	(Zip Code)

(800) 787-1621

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None

Title of each class Trading Symbol(s) Name of each exchange on which registered

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒     No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes ☒    No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐     No ☒

As of May 8, 2025, the issuer had the following shares outstanding: 2,392,148 Class A common shares, 200,789 Class F-I common shares, 2,814 Class E common shares, and 49 Class I common shares. There are no outstanding Class T common shares, Class D common shares, or Class S common shares.

Table of Contents
	Page
PART I. FINANCIAL INFORMATION	1
Item 1. Financial Statements	1
Condensed Consolidated Financial Statements (Unaudited):
Condensed Consolidated Balance Sheets as of March 31, 2025 and December 31, 2024	1
Condensed Consolidated Statement of Operations for the Three Months Ended March 31, 2025	2
Condensed Consolidated Statement of Changes in Equity as of March 31, 2025 and December 31, 2024	3
Condensed Consolidated Statement of Cash Flows for the Three Months Ended March 31, 2025	4
Notes to Condensed Consolidated Financial Statements	5
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3. Quantitative and Qualitative Disclosures about Market Risk	29
Item 4. Controls and Procedures	31
PART II. OTHER INFORMATION	32
Item 1. Legal Proceedings	32
Item 1A. Risk Factors	32
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	32
Item 3. Defaults Upon Senior Securities	33
Item 4. Mine Safety Disclosure	33
Item 5. Other Information	33
Item 6. Exhibit List	33
SIGNATURES	35

iii

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1.    Financial Statements

Principal Credit Real Estate Income Trust
Condensed Consolidated Balance Sheets (Unaudited)
(in thousands, except for share and per share data)
	As of March 31, 2025		As of December 31, 2024
ASSETS
Cash and cash equivalents	$	13,943	$	11,888
Restricted cash	3,904		4,243
Investment in loans receivable, at fair value	216,346		140,569
Accrued interest receivable	1,439		—
Total assets	$	235,632	$	156,700
LIABILITIES AND EQUITY
Loans payable, at fair value	$	161,767	$	21,750
Line of credit, at cost	41,000		119,000
Escrow deposits	3,903		4,243
Due to adviser	3,480		655
Interest payable	462		322
Distributions payable	303		—
Income tax payable	176		176
Total liabilities	211,091		146,146
Commitments and contingencies (Note 5)
Redeemable common shares (Note 6)	25,638		10,008
Equity
Common shares - Class F-I shares, par value $0.01 per share; 101,557 and no shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively	1		—
Common shares - Class I shares, par value $0.01 per share; 49 and no shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively	—		—
Additional paid-in capital	—		—
Accumulated deficit and cumulative distributions	(1,098)		546
Total shareholders' equity/(deficit)	(1,097)		546
Total liabilities, redeemable common shares and equity	$	235,632	$	156,700
See accompanying notes to the condensed consolidated financial statements

1

Table of Contents

Principal Credit Real Estate Income Trust
Condensed Consolidated Statement of Operations (Unaudited)
(in thousands, except for share and per share data)
	For the Three Months Ended March 31, 2025
Revenues
Interest income	$	3,479
Other revenue	765
Total revenue	4,244
Expenses
Interest expense	2,825
Financing fees	898
Organization costs	841
General and administrative	703
Management fees	39
Total expenses	5,306
Unrealized gains (losses)
Unrealized gain on loans receivable, at fair value	181
Unrealized loss on loans payable, at fair value	(90)
Total unrealized gains (losses)	91
Net loss	$	(971)
Net loss per common share, basic	$	(1.00)
Net loss per common share, diluted	(1.00)
Weighted-average common shares outstanding, basic	972,655
Weighted-average common shares outstanding, diluted	972,655
See accompanying notes to the condensed consolidated financial statements

2

Table of Contents

Principal Credit Real Estate Income Trust
Condensed Consolidated Statement of Changes in Equity (Unaudited)
(in thousands)
	Par Value						Accumulated Earnings (Deficit) and Cumulative Distributions
	Common Shares Class F-I		Common Shares Class I		Additional Paid-In Capital				Total Shareholders' Equity (Deficit)
Balance at December 31, 2024	$	—	$	—	$	—	$	546	$	546
Common shares issued	1		—		2,080		—		2,081
Offering costs	—		—		(1,603)		—		(1,603)
Net loss (net of $896 allocated to redeemable shares)	—		—		—		(75)		(75)
Distributions declared to shareholders (net of $509 allocated to redeemable shares)	—		—		—		(25)		(25)
Remeasurement of redeemable common shares	—		—		(477)		(1,544)		(2,021)
Balance at March 31, 2025	$	1	$	—	$	—	$	(1,098)	$	(1,097)
See accompanying notes to the condensed consolidated financial statements

3

Table of Contents

Principal Credit Real Estate Income Trust
Consolidated Statement of Cash Flows (Unaudited)
(in thousands)
	For the Three Months Ended March 31, 2025
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(971)
Adjustments to reconcile net loss to net cash used in operating activities
Unrealized gain on loans receivable	(181)
Unrealized loss on loans payable	90
Financing fees paid	1,244
Amortization of restricted stock units	14
Interest income paid in kind	(424)
Change in assets and liabilities
Increase in interest receivable	(1,439)
Increase in due to adviser	1,222
Increase in interest payable	140
Net cash used in operating activities	(305)
CASH FLOWS FROM INVESTING ACTIVITIES
Loan origination and funding activity	(75,172)
Net decrease in escrow deposits	(340)
Net cash used in investing activities	(75,512)
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings under line of credit	75,000
Repayments of line of credit	(153,000)
Borrowings under loans payable	139,927
Financing fees paid	(1,244)
Proceeds from issuance of redeemable common shares	15,000
Contributions received from common shares issued	2,081
Distributions paid to shareholders	(231)
Net cash provided by financing activities	77,533
Net change in cash, cash equivalents and restricted cash	1,716
Cash, cash equivalents and restricted cash, beginning of period	16,131
Cash, cash equivalents and restricted cash, end of period	$	17,847
Reconciliation of cash and restricted cash
Cash and cash equivalents, beginning of period	$	11,888
Restricted cash, beginning of period	4,243
Cash, cash equivalents and restricted cash, beginning of period	16,131
Cash and cash equivalents, end of period	13,943
Restricted cash, end of period	3,904
Cash, cash equivalents and restricted cash, end of period	$	17,847
Supplemental disclosure of cash flow information:
Cash paid for interest	$	2,657
Non-cash financing activities:
Accrued offering costs due to adviser	$	1,603
Distributions payable	303
See accompanying notes to the consolidated financial statements

4

Principal Credit Real Estate Income Trust

Notes to Condensed Consolidated Financial Statements (Unaudited)

(amounts in thousands, except for share and per share data)

1.Organization and Business Purpose

Principal Credit Real Estate Income Trust (the “Company”) was formed on May 22, 2024 (Date of Formation), as a Maryland statutory trust and intends to qualify as a real estate investment trust (“REIT”) for U.S. federal income tax purposes, commencing with its taxable year ending December 31, 2025. The Company is managed by Principal Real Estate Investors, LLC, a Delaware limited liability company (the “Adviser” and, together with Principal Real Estate Europe Limited, “Principal Real Estate”). Principal Real Estate is the dedicated real estate group of Principal Global Investors Holding Company (US), LLC, a member company and affiliate of Principal Financial Group, which is a public company listed on the NASDAQ under the ticker symbol “PFG.” The Company entered into a Dealer Manager Agreement with Principal Funds Distributor, Inc., a Washington corporation and affiliate of Principal Real Estate (the “Dealer Manager”). The Dealer Manager is registered as a broker-dealer and is a member of the Financial Industry Regulatory Authority and the Securities Investor Protection Corporation.

The Company was organized to originate, acquire, finance, manage and dispose of a portfolio of primarily commercial real estate (“CRE”) debt investments, including senior mortgage loans, subordinated debt and other similar investments (collectively referred to as, "CRE Debt Investments"), diversified across both geography and asset class. To a lesser extent, the Company may invest in other real estate-related debt securities, including commercial mortgage-backed securities and collateralized loan obligations. The Company believes its other real estate-related debt securities will help maintain liquidity to satisfy any share repurchases it chooses to make in any particular quarter and manage cash before investing subscription proceeds into investments while also seeking attractive current income. The Company seeks to focus on senior secured floating rate investments, collateralized by high quality real estate assets to generate current cash flow. The Company seeks to identify attractive risk-reward investments by financing high quality real estate assets primarily located in the top 50 metropolitan statistical areas as tracked by Principal Real Estate.

2.Summary of Significant Accounting Policies

The Company believes the following significant accounting policies, among others, affect its more significant estimates and assumptions used in the preparation of the consolidated financial statements.

Consolidation and Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the instructions to Form10-Q and Rule 10-01 of Regulation S-X. The accompanying condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Management believes it has made all necessary adjustments, consisting of only normal recurring items, so that the condensed consolidated financial statements are presented fairly and that estimates made in preparing its condensed consolidated financial statements are reasonable and prudent. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024, as filed with the Securities and Exchange Commission (“SEC”) on March 26, 2025.

The Company has not presented a condensed consolidated statement of operations, condensed consolidated statement of changes in equity, or a condensed consolidated statement of cash flows for the three months ended March 31, 2024, because the Company did not have any activity or operations during that period. The Company’s results of operations for the three months ended March 31, 2025, are not necessarily indicative of the results to be expected for the full year or any other future period.

5

Fair Value Option

The Company has elected the fair value option for certain eligible financial assets and liabilities including CRE debt investments, real estate-related debt securities and liabilities associated with borrowing facilities. These financial assets and liabilities for which the Company has elected the fair value options are recorded in investment in loans receivable, at fair value and loans payable, at fair value on the Condensed Consolidated Balance Sheets. The fair value elections will be made to create a more direct alignment between the Company’s financial reporting and the calculation of net asset value per share used to determine the prices at which investors can purchase and redeem shares of the Company’s common stock. The decision to elect the fair value option will be determined on an instrument-by-instrument basis and must be applied to an entire instrument and is irrevocable once elected. Assets and liabilities measured at fair value pursuant to this guidance will be required to be reported separately on the Company’s Condensed Consolidated Balance Sheets from those instruments using another accounting method.

The Company’s fair value option elections will be made in accordance with the guidance in Accounting Standards Codification (“ASC”) 825, Financial Instruments that allows entities to make an irrevocable election of fair value as the initial and subsequent measurement attribute for certain eligible financial assets and liabilities. In the cases of loans and securities investments for which the fair value option is elected, loan origination fees and costs related to the origination or acquisition of the instrument should be immediately recognized in earnings on the Condensed Consolidated Statement of Operations within other revenue. In the cases of debt facilities for which the fair value option is elected, financing fees related to the debt should be immediately recognized as an expense in the Condensed Consolidated Statement of Operations within Financing fees. Unrealized gains and losses on assets and liabilities for which the fair value option has been elected are also reported in earnings without deferral. This is because under the fair value option, a lender reports the instrument at its exit price (i.e., the price that would be received to sell the instrument in an orderly transaction), which reflects the market’s assessment of the instrument’s cash flows and risks and does not include any entity-specific costs or fees.

The Company estimates fair value based on the best information available as of the date of the valuation. Should market conditions deteriorate, or should the Company's assumptions change, further valuation adjustments may be required in future periods, and such adjustments could be material to the financial performance and cash flows of the Company.

Income Taxes

The Company intends to make an election to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986 (the “Code”), as amended, commencing with its taxable year ending December 31, 2025. If the Company elects and qualifies for taxation as a REIT, the Company generally will not be subject to federal corporate income tax to the extent it distributes 90% of its taxable income to its shareholders. Even if the Company qualifies for taxation as a REIT and distributes 90% of its taxable income to its shareholders, it may be subject to certain federal, state, local and foreign taxes on its income and property, and federal income and excise taxes on its undistributed income.

Share-based Payments

The Company recognizes the cost of share-based compensation and payment transactions in the financial statements using the same expense category as would be charged for payments in cash. The fair value of the awards granted is recorded to expense on a straight-line basis over the vesting period for the entire award, with an offsetting increase in shareholders’ equity. For grants to trustees, the fair value is determined based upon the net asset value ("NAV") on the grant date. On November 11, 2024 the Company granted 2,814 restricted Class E shares to its independent trustees with a fair value of $56.3 based on the NAV per share of $20 per share that vest one year from the date of grant. For the three months ended March 31, 2025, the Company recognized compensation expenses of $13.9. None of the shares granted to the trustees have vested as of March 31, 2025 and December 31, 2024.

6

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash investments, single asset commercial mortgage-backed securities (“CMBS”), loan investments and interest receivable. The Company may place cash investments in excess of insured amounts with high quality financial institutions. The Company performs ongoing analysis of credit risk concentrations in its investment portfolio by evaluation exposure to various markets, underlying property types, term, tenant mix and other credit metrics. As of March 31, 2025, the Company’s assets included seven CRE loans. Refer to Note 3- “Investment in Loans Receivable” for additional information.

Segment Reporting

The Company operates and reports its business as a single reportable segment, which includes the origination and servicing of commercial mortgage loans. The Company’s chief operating decision maker (“CODM”) is the Company’s senior leadership team, which includes, the Chief Executive Officer, President, Chief Operating Officer, Chief Financial Officer, Head of Investment Production, and the Company’s Portfolio Managers. The CODM makes key operating decisions, evaluates financial results, and allocates resources at the consolidated level for the entire portfolio. Accordingly, the Company has a single operating and reportable segment and the CODM evaluates profitability using net income. Net income is used by the CODM in assessing the operating performance of the segment. The CODM does not regularly review asset information. All expense categories on the Condensed Consolidated Statement of Operations are significant and there are no significant segment expenses that require disclosure.

Recent Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-07, Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures, which improves reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. This ASU is effective for the Company's fiscal year ending December 31, 2024. The impact to the Company was primarily including disclosure around identifying the title and position of the Company’s CODM. The Company has one reportable segment and the required disclosure updates have been reflected in the Segment Reporting section elsewhere in Note 2.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures, which improves income tax disclosures by primarily requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. This ASU will be effective for the Company's fiscal year ending December 31, 2025. The guidance will not have a material impact on the Company's notes to the consolidated financial statements. Any required disclosure will be reflected in the Income Taxes section elsewhere in Note 2.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) (“ASU 2024-03”). ASU 2024-03 requires a public entity to disclose additional information about specific expense categories in the notes to financial statements on an annual and interim basis. The amendments are effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted. The Company will have the election to apply the amendments either prospectively to financial statements issued for reporting periods after the effective date of this ASU or retrospectively to any or all prior periods presented in the financial statements. While this update will result in enhanced disclosures, the Company does not expect it will have a material impact on the Company’s consolidated financial statements.

7

3.Investment in Loans Receivable

As of March 31, 2025, the Company held the following investments in loans receivable:

Description	Location	Origination Date	Principal Balance Outstanding	Fair Value	Stated Rate*	Payment Terms	Initial Maturity Date
Industrial	Castle Rock, CO	12/10/2024	$25,000	$25,012	Term SOFR + 3.25%	I/O	1/1/2027
Industrial	Puyallup, WA	12/16/2024	$29,139	$29,197	Term SOFR + 3.25%	I/O	1/1/2027
Industrial	Olathe, KS	12/30/2024	$36,629	$36,665	Term SOFR + 3.40%	I/O	1/1/2027
Industrial	Greenwood, IN	12/30/2024	$9,699	$9,704	Term SOFR + 3.85%	I/O	1/1/2027
Industrial	Mesa, AZ	12/30/2024	$17,231	$17,239	Term SOFR + 3.70%	I/O	1/1/2027
Industrial	Richmond, CA	12/30/2024	$23,467	$23,478	Term SOFR + 3.85%	I/O	1/1/2027
Residential	Tempe, AZ	2/14/2025	$75,000	$75,051	Term SOFR + 3.25%	I/O	3/1/2027
			$216,165	$216,346

*Term Secured Overnight Financing Rate ("SOFR") for the Company's loan portfolio ranged from 4.33% to 4.41% as of March 31, 2025

As of December 31, 2024, the Company held the following investments in loans receivable:

Description	Location	Origination Date	Principal Balance Outstanding	Fair Value	Stated Rate*	Payment Terms	Initial Maturity Date
Industrial	Castle Rock, CO	12/10/2024	$25,000	$25,000	Term SOFR + 3.25%	Monthly; I/O	1/1/2027
Industrial	Puyallup, WA	12/16/2024	$29,000	$29,000	Term SOFR + 3.25%	Monthly; I/O	1/1/2027
Industrial	Olathe, KS	12/30/2024	$36,324	$36,324	Term SOFR + 3.40%	Monthly; I/O	1/1/2027
Industrial	Greenwood, IN	12/30/2024	$9,547	$9,547	Term SOFR + 3.85%	Monthly; I/O	1/1/2027
Industrial	Mesa, AZ	12/30/2024	$17,231	$17,231	Term SOFR + 3.70%	Monthly; I/O	1/1/2027
Industrial	Richmond, CA	12/30/2024	$23,467	$23,467	Term SOFR + 3.85%	Monthly; I/O	1/1/2027
			$140,569	$140,569

*Term SOFR for the Company's loan portfolio ranged from 4.34% to 4.48% as of December 31, 2024

8

4.Debt

The following table presents the value of debt securities at fair value as of March 31, 2025:

Description	Weighted Average Interest Rate	Maximum Facility Size		Available Capacity		Debt Amount Outstanding		Fair Value of Debt		Fair Value of Collateral		Current Maturity Date	Maximum Maturity Date
Goldman Repurchase Agreement	6.49%	$	250,000	$	88,323	$	161,677	$	161,767	$	216,346	12/17/2026	12/17/2031

The following table presents the value of debt securities at cost as of March 31, 2025:

Description	Weighted Average Interest Rate	Maximum Facility Size	Available Capacity	Debt Amount Outstanding	Fair Value of Debt	Fair Value of Collateral	Current Maturity Date	Maximum Maturity Date
JPM Line of Credit	6.57%	$150,000	$59,000	$41,000	N/A	N/A	11/25/2025	5/26/2026

The following table presents the value of debt securities at fair value as of December 31, 2024:

Description	Weighted Average Interest Rate	Maximum Facility Size		Available Capacity		Debt Amount Outstanding		Fair Value of Debt		Fair Value of Collateral		Current Maturity Date	Maximum Maturity Date
Goldman Repurchase Agreement	6.47%	$	250,000	$	228,250	$	21,750	$	21,750	$	29,000	12/17/2026	12/17/2031

The following table presents the value of debt securities at cost as of December 31, 2024:

Description	Weighted Average Interest Rate	Maximum Facility Size	Available Capacity	Debt Amount Outstanding	Fair Value of Debt	Fair Value of Collateral	Current Maturity Date	Maximum Maturity Date
JPM Line of Credit	6.84%	$150,000	$7,000	$119,000	N/A	N/A	11/25/2025	5/26/2026

Repurchase Agreement

On December 17, 2024, the Company entered into a Master Repurchase Agreement (together with the related transaction documents, the “GS Repurchase Agreement”), with Goldman Sachs Bank USA (“Goldman”), to finance the acquisition and origination by the Company of eligible loans as more particularly described in the GS Repurchase Agreement. The GS Repurchase Agreement provides for asset purchases by Goldman of up to $250.0 million (the “Facility”). The Company has borrowed $161.7 million and $21.8 million under the terms of the GS Repurchase Agreement as of March 31, 2025 and December 31, 2024, respectively.

Advances under the GS Repurchase Agreement accrue interest at a per annum rate equal to the Term SOFR Reference Rate (as defined in the GS Repurchase Agreement) for a one-month period plus a margin as agreed upon by Goldman and the Company for each transaction. Interest is paid monthly. The stated termination date of the Facility is December 17, 2031, subject to an option to extend the stated termination date pursuant to a term out period, provided certain customary conditions are met.

In connection with the GS Repurchase Agreement, the Company provided a Guaranty (the “Guaranty”), under which the Company guarantees up to a maximum liability of 25% of the then outstanding obligations of the special purpose (indirect) subsidiaries wholly-owned by the Company under the GS Repurchase Agreement. The Guaranty may become full recourse to the Company upon the occurrence of certain events as described in the Guaranty.

9

The GS Repurchase Agreement and the Guaranty contain representations, warranties, covenants, events of default and indemnities that are customary for agreements of their type. As of March 31, 2025 and December 31, 2024, the Company is in compliance with all covenants.

Line of Credit

On November 26, 2024, the Company entered into a subscription credit agreement (“JPM Subscription Line”), which provides for a maximum line of credit of $100.0 million with a maturity date of November 25, 2025, which may be extended upon the Company’s request to May 26, 2026, subject to the consent of JPM and other customary conditions. The Company may also increase the maximum line of credit to an amount not exceeding $150.0 million. Borrowings under the JPM Subscription Line bear interest at a variable rate and are secured by outstanding capital commitments of the Anchor Investors (as defined below). Advances under the JPM Subscription Line generally bear interest at a rate per annum equal to one-month Term SOFR plus 2.15% plus a spread adjustment of 0.10%. The Company pays a commitment fee on a quarterly basis to JPM on the daily unused amount of its commitment at a rate per annum of 0.35% when the aggregate principal unused portion of the JPM Subscription Line is greater than 50% or 0.25% when the aggregate principal unused portion of the JPM Subscription Line is equal to or less than 50%. The balances outstanding under the JPM Subscription Line were $41.0 million and $119.0 million, with effective interest rates of 6.57% and 6.84% as of March 31, 2025 and December 31, 2024, respectively.

5.Commitments and Contingencies

As of March 31, 2025 and December 31, 2024, the Company is not subject to any material litigation nor is the Company aware of any material litigation threatened against it.

6.Redeemable Common Shares

On June 25, 2024 (the “Initial Capitalization”), the Company was capitalized with a $1.0 investment for 50 Class E common shares by Principal Real Estate at a price per share equal to $20.00. The Company repurchased these initial redeemable common shares for an aggregate purchase price equal to $1.0 on December 11, 2024.

On July 19, 2024, each of (1) Principal Life Insurance Company and/or its affiliate (“Principal Life”) and (2) an unaffiliated life insurance company and/or its affiliates (collectively with Principal Life, the “Anchor Investors”) entered into a subscription agreement with the Company, pursuant to which, each of the Anchor Investors agreed, from time to time, to purchase an aggregate amount of $75.0 million in the Company’s Class A shares, in each case, at a price per share equal to the most recently determined NAV of the Class A shares, or if a Class A share NAV has yet to be calculated, then at a price per share equal to $20.00 (collectively, referred to as, the “Anchor Investment”).

On December 9, 2024, in connection with the Anchor Investment, the Company issued an aggregate of 500,000 of its Class A common shares to the Anchor Investors at a price per share of $20.00 for an aggregated purchase price of $10.0 million.

On February 4, 2025, in connection with the Anchor Investment, the Company issued an aggregate of 710,634 of its Class A common shares to the Anchor Investors at a price per share of $21.11 for an aggregate purchase price of $15.0 million.

Each of the offers and sales of the shares/units described above was exempt from the registration provisions of the Securities Act of 1933, as amended, by virtue of Section 4(a)(2) and/or Rule 506 of Regulation D thereunder.

The following table summarizes the changes in the Company's outstanding redeemable common shares for the three months ended March 31, 2025 (amounts in thousands except share and per share data):

10

	Redeemable Common Shares
Balance at December 31, 2024	500,000
Issuance of redeemable common shares	710,634
Balance at Balance at March 31, 2025	1,210,634
Balance at December 31, 2024	$	10,008
Proceeds from issuance of redeemable common shares	15,000
Amortization of share grants	14
Allocation of net loss	(896)
Distributions declared to shareholders	(509)
Remeasurement of redeemable common shares	2,021
Balance at March 31, 2025	$	25,638

As of March 31, 2025, Class A shares held by Anchor Investors and Class E units held by non-employee trustees are classified in mezzanine equity because the Company is required to repurchase or redeem, as applicable, these Class A and Class E shares / units upon request by the holders, subject to certain limitations and terms set forth in the applicable subscription agreement if certain conditions outside of the control of the Company are met (as discussed below).

Each of the Anchor Investors has agreed to hold all of the Class A shares it receives in connection with the Anchor Investment until the earlier of (1) the first date that the Company’s NAV reaches $1.5 billion and (2) March 3, 2030, which is the date that is the fifth anniversary of the Initial Retail Closing (as defined below) (the “Anchor Investor Liquidity Date”). Following the Anchor Investor Liquidity Date, each quarter, the Anchor Investors may, from time to time, request, with respect to the Class A shares issued in respect of the Anchor Investment, that the Company repurchase (each, an “Anchor Investor Repurchase”), an aggregate number of Class A shares equal to the amount available under the Company's share repurchase plan’s 5% quarterly cap, but only after it first satisfies repurchase requests from all other common shareholders who have properly submitted a repurchase request for such quarter in accordance with the share repurchase plan. The Class A shares issued in the Anchor Investment are not eligible for repurchase pursuant to the Company's share repurchase plan (but rather are eligible for repurchase pursuant to the terms of the applicable subscription agreement through which the Anchor Investor purchased the Class A shares) and are therefore not subject to the quarterly limitation or the Early Repurchase Deduction (defined below). However, the aggregate amount of Class A shares that may be repurchased by the Company from Anchor Investors during any calendar quarter is determined by reference to repurchases by other shareholders pursuant to the share repurchase plan, as described above.

The Company compensates each of its non-employee trustees who are not affiliated with Principal Real Estate with an annual retainer of $75.0, plus an additional cash annual retainer of $15.0 for the chairperson of the Audit Committee. The Company pays in quarterly installments 75% of the annual retainer in cash and the remaining 25% in an annual grant of restricted Class E shares based on the most recent prior month’s NAV. The restricted shares will generally vest one year from the date of grant, however, in connection with the trustees’ first annual grant, the restricted shares will vest one year from the date on which the independent trustees were appointed, and will be based on the initial per share price of the Company's common shares offered in its continuous private, blind pool offering (the "Offering"). On November 11, 2024, in connection with the board of trustees meeting, the Company issued, but not outstanding, an aggregate of 2,814 of its Class E common shares to the non-employee trustees at a price per share of $20.00 for an aggregated price of $56.3. These will vest over a one year period of which $13.9 and $7.7 were recognized as of March 31, 2025 and December 31, 2024, respectively.

The Class A and Class E shares are classified as redeemable common shares on the Company's Condensed Consolidated Balance Sheets.

The following table summarizes the distributions declared for redeemable common shares for the three months ended March 31, 2025:

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	Redeemable Common Shares
Aggregate gross distributions declared per common share	$0.5000
Shareholder servicing fee per common share	—
Balance at Net distributions declared per common share	$0.5000

7.Shareholders' Equity (Deficit)

Authorized Capital

As of July 19, 2024, under its Declaration of Trust, the Company was authorized to issue an unlimited number of common shares, including an unlimited number of shares classified as Class S shares, an unlimited number of shares classified as Class T shares, an unlimited number of shares classified as Class D shares, an unlimited number of shares classified as Class I shares, an unlimited number of shares classified as Class F-I shares, an unlimited number of shares classified as Class E shares, an unlimited number of shares classified as Class A shares, and an unlimited number of shares classified as preferred shares of beneficial interest, par value $0.01 per share. The share classes have different upfront selling commissions, dealer manager fees and ongoing shareholder servicing fees, as well as different management fees and performance fees. The initial per share purchase price for each class of common share (other than Class A shares) sold in the Offering will be equal to the most recently determined NAV per share for the Class A shares issued to the Anchor Investors, in connection with the Anchor Investment (as defined below) plus, for Class S shares, Class T shares and Class D shares only, applicable upfront selling commissions and dealer manager fees. Thereafter, the purchase price per share for each class of common share will vary and will generally equal the prior month’s NAV per share for such class, as determined monthly, plus any applicable upfront selling commissions and dealer manager fees.

Common Shares

On November 26, 2024, the Company commenced the Offering of an unlimited number of its common shares.

The following table summarizes the movement of and proceeds received from the Company’s outstanding common shares during the three months ended March 31, 2025 (amounts in thousands except share and per share data):

	Class F-I Common Shares		Class I Common Shares		Total
Shares outstanding as of December 31, 2024	—		—		—
Common shares issued	101,557		49		101,606
Shares outstanding as of March 31, 2025	101,557		49		101,606
Proceeds from issuance of common shares	$	2,080	$	1	$	2,081

As of March 31, 2025, no Class D, Class S, or Class T shares have been issued.

Share Repurchase Plan

Effective as of November 11, 2024, the board of trustees adopted a share repurchase plan, pursuant to which shareholders may request on a quarterly basis that the Company repurchase all or any portion of their common shares, subject to certain limitations (which is presently expected to commence in the quarterly repurchase period ending June 30, 2025, which is the first full calendar quarter following the Initial Retail Closing of the continuous private offering). The Company is not obligated to repurchase any shares and may choose to repurchase only some, or even none, of the shares that have been requested to be repurchased in any particular quarter in its discretion. Repurchases will be made at the transaction price in effect on the repurchase date, except that shares that have not been outstanding for at least one year will be repurchased at 95% of the transaction price (an “Early Repurchase Deduction”). The one-year holding period is measured from the first calendar day of the month the shares were issued to the subscription closing date immediately following the prospective repurchase date. The Early Repurchase Deduction will not apply to shares acquired through the Company's distribution reinvestment plan (“DRIP”).

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The aggregate NAV of total repurchases of Class S shares, Class T shares, Class D shares, Class I shares, Class E shares and Class A shares (including repurchases at certain non-U.S. investor access funds primarily created to hold the Company’s shares) under its share repurchase plan is limited to no more than 5% of the Company’s aggregate NAV per calendar quarter (measured using the aggregate NAV as of the end of the immediately preceding month).

In the event that the Company determine to repurchase some but not all of its common shares submitted for repurchase during any calendar quarter, common shares submitted for repurchase during such calendar quarter will be repurchased on a pro rata basis after the Company has repurchased all common shares for which repurchase has been requested due to death, disability or divorce and other limited exceptions. All unsatisfied repurchase requests must be resubmitted after the start of the next calendar quarter, or upon the recommencement of the share repurchase plan, as applicable.

Under the share repurchase plan, the Company's board of trustees may amend, suspend or terminate the share repurchase plan at any time if it deems such action to be in the best interest of the Company. As a result, share repurchases may not be available each quarter.

The Company may fund repurchase requests from sources other than cash flow from operations, including, without limitation, borrowings, offering proceeds (including from sales of its common shares), the sale of its assets, and repayments of its real estate debt investments, and the Company has no limits on the amounts it may fund from such sources.

Distributions

The following table summarizes the aggregate distributions declared for each class of common shares for the three months ended March 31, 2025:

	Class I Common Shares		Class F-I Common Shares
Aggregate gross distributions declared per common share	$	0.2300	$	0.2300
Shareholder servicing fee per common share	—		—
Net distributions per common share	$	0.2300	$	0.2300

8.Fair Value

GAAP establishes a hierarchy of valuation techniques based on the observability of inputs utilized in measuring financial assets and liabilities at fair value. GAAP establishes market-based or observable inputs as the preferred source of values, followed by valuation models using management assumptions in the absence of market inputs. The three levels of the hierarchy are described below:

Level 1—Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.

Level 2—Inputs (other than quoted prices included in Level I) are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life.

Level 3—Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.

Valuation Process

The Company has a valuation control processes in place to validate the fair value of the Company’s financial assets and liabilities measured at fair value including those derived from pricing models. These control processes are designed to assure that the values used for financial reporting are based on observable inputs wherever possible. In the event that observable inputs are not available, the control processes are designed to assure that the valuation approach utilized is appropriate and consistently applied and the assumptions are reasonable.

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Pricing Verification—The Company uses recently executed transactions, other observable market data such as exchange data, broker/dealer quotes, third party pricing vendors and aggregation services for validating the fair values generated using valuation models. Pricing data provided by approved external sources is evaluated using a number of approaches; for example, by corroborating the external sources’ prices to executed trades, analyzing the methodology and assumptions used by the external source to generate a price and/or by evaluating how active the third party pricing source (or originating sources used by the third party pricing source) is in the market.

Unobservable Inputs—Where inputs are not observable, the Company reviews the appropriateness of the proposed valuation methodology to ensure it is consistent with how a market participant would arrive at the unobservable input. The valuation methodologies utilized in the absence of observable inputs may include extrapolation techniques and the use of comparable observable inputs.

Any changes to the valuation methodology will be reviewed by the Company's management to ensure the changes are appropriate. The methods used may produce a fair value calculation that is not indicative of net realizable value or reflective of future fair values. Furthermore, while the Company anticipates that its valuation methods are appropriate and consistent with other market participants, the use of different methodologies, or assumptions, to determine the fair value could result in a different estimate of fair value at the reporting date.

Fair Value on a Recurring Basis

The Company determines the fair value of its financial assets and liabilities measured at fair value on a recurring basis as follows:

The Company measures the fair value of its loans receivable and loans payable using a discounted cash flow analysis unless observable market data is available. A discounted cash flow analysis requires management to make estimates regarding future interest rates and credit spreads. The most significant of these inputs relates to credit spreads and is unobservable. Thus, the Company has determined that the fair values of loans receivable and loans payable valued using a discounted cash flow analysis should be classified in Level 3 of the fair value hierarchy, while mortgage loans valued using securitized pricing should be classified in Level 2 of the fair value hierarchy. Mortgage loans classified in Level 3 are transferred to Level 2 if securitized pricing becomes available.

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Fair Value Disclosure

The following table presents the Company's financial assets and liabilities carried at fair value on a recurring basis in the consolidated balance sheet by their level in the fair value hierarchy (amounts in thousands):

	March 31, 2025				December 31, 2024
	Level 1	Level 2	Level 3		Level 1	Level 2	Level 3
Financial Assets:
Investment in loans receivable, at fair value	—	—	$	216,346	—	—	$	140,569
Total	—	—	$	216,346	—	—	$	140,569
Financial Liabilities:
Loans payable, at fair value	—	—	$	(161,767)	—	—	$	(21,750)
Total	—	—	$	(161,767)	—	—	$	(21,750)

The following table shows a reconciliation of the beginning and ending fair value measurements of our loans receivable (amounts in thousands):

Balance as of December 31, 2024	$	140,569
Loan originations and funding	75,172
Interest income paid in kind	424
Unrealized gain	181
Balance as of March 31, 2025	$	216,346

The following table shows a reconciliation of the beginning and ending fair value measurements of our loans payable (amounts in thousands):

Balance as of December 31, 2024	$	(21,750)
Borrowings under repurchase agreement	(139,927)
Unrealized loss	(90)
Balance as of March 31, 2025	$	(161,767)

The following table contains the quantitative inputs and assumptions used for items categorized in Level 3 of the fair value hierarchy (amounts in thousands):

	March 31, 2025
	Fair Value		Valuation Technique	Significant Unobservable Inputs	Weighted Average*
Financial Assets:
Investment in loans receivable, at fair value	$	216,346	Discounted Cash Flow	Discount Rate	3.40%
Financial Liabilities:
Loans payable, at fair value	$	(161,767)	Discounted Cash Flow	Discount Rate	2.17%
	December 31, 2024
	Fair Value		Valuation Technique	Significant Unobservable Inputs	Weighted Average*
Financial Assets:
Investment in loans receivable, at fair value	$	140,569	Discounted Cash Flow	Discount Rate	3.48%
Financial Liabilities:
Loans payable, at fair value	$	(21,750)	Discounted Cash Flow	Discount Rate	2.10%

*The preceding tables show discount margins above floating SOFR, as provided by the Company’s third-party valuation provider, SitusAMC.

9.Related Party Transactions

Principal Life, an Anchor Investor, intends to purchase a total of $75.0 million of Class A shares. Principal Life has purchased $12.5 million and $5.0 million of Class A shares in connection with this commitment as of March 31, 2025 and December 31, 2024, respectively.

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On July 19, 2024, the Company entered into an advisory agreement (the “Advisory Agreement”) with the Adviser, pursuant to which the Adviser is responsible for sourcing, evaluating, and monitoring investment opportunities and making decisions related to the origination, acquisition, management, financing, and disposition of assets, in accordance with the investment objectives, guidelines, policies and limitations, subject to oversight by the board of trustees.

Management Fee

As compensation for its services provided pursuant to the Advisory Agreement, the Adviser will be paid a management fee equal to (1) 1.25% of NAV for the outstanding Class S shares, Class T shares, Class D shares, and Class I shares and (2) 0.75% of NAV for the outstanding Class A shares and Class F-I shares, in each case, per annum, payable monthly in arrears. The management fee may be paid, at the Adviser’s election, in cash or Class E shares, or any combination thereof. The Company will not pay the Adviser the management fee with respect to the Class E shares, and as a result, it is a class-specific expense. For the three months ended March 31, 2025, the Company incurred $39.4 of management fees.

Performance Fee

In addition, the Adviser will be entitled to a performance fee, which is calculated and payable quarterly in arrears in an amount equal to 12.5% of the Company’s Core Earnings for the immediately preceding calendar quarter, subject to the “Applicable Quarterly Hurdle Rate,” which is expressed as a rate of return on average adjusted capital, equal to (x) the 90 days average of the Secured Overnight Financing Rate (“90 days Average SOFR”) as of the last business day of the preceding calendar quarter, divided by (y) four, plus 0.25% per quarter. For purposes of the performance fee, “adjusted capital” means cumulative net proceeds generated from sales of the Company’s common shares (including proceeds from the DRIP) reduced for distributions from non-liquidating dispositions of the Company’s investments paid to shareholders and amounts paid for share repurchases pursuant to the Company’s share repurchase plan. Once the Company’s Core Earnings in any calendar quarter exceed the Applicable Quarterly Hurdle Rate, the Adviser is entitled to a “catch-up” fee equal to the amount of Core Earnings in excess of the Applicable Quarterly Hurdle Rate, until the Company’s Core Earnings for such quarter equal the result of (i) the Applicable Quarterly Hurdle Rate, divided by (ii) 0.875 (or 1 minus 0.125) of adjusted capital. Thereafter, the Adviser is entitled to receive 12.5% of the Company’s Core Earnings. The Company will not pay the Adviser a performance fee with respect to the Class E shares or Class A shares.

For purposes of calculating the performance fee, “Core Earnings” means: the net income (loss) attributable to shareholders of Class S shares, Class T shares, Class D shares, Class I shares and Class F-I shares, computed in accordance with GAAP, including realized gains (losses) not otherwise included in GAAP net income (loss) and excluding (i) non-cash equity compensation expense, (ii) the performance fee, (iii) depreciation and amortization, (iv) any unrealized gains or losses or other non-cash items that are included in GAAP net income (loss) for the applicable reporting period, regardless of whether such items are included in other comprehensive income or loss, or in net income, (v) one-time events pursuant to changes in GAAP, and (vi) certain non-cash adjustments and certain material non-cash in-come or expense items, in each case after discussions between the Adviser and the Company’s independent trustees and approved by a majority of the Company’s independent trustees. As of March 31, 2025 and December 31, 2024, there was no performance fee accrued.

Due to Adviser

The Company may retain the Adviser and/or certain of its affiliates, from time to time, for services relating to its investments or its operations, which may include capital markets services, restructuring services, valuation services, underwriting and diligence services, and special servicing, as well as services related to mortgage servicing, capital markets/credit origination, loan servicing and asset management, property, title and other types of insurance, management consulting and other similar operational and investment matters. Any fees paid to the Adviser’s affiliates for any such services will not reduce the management fee. In addition, such out-of-pocket costs and expenses will include expenses relating to compliance-related matters and regulatory filings relating to its activities (including, without limitation, expenses relating to the preparation and filing of Form PF, Form ADV, reports to be filed with the CFTC and SEC, reports, disclosures, and/or other regulatory filings of the Adviser and its affiliates relating to its activities (including its pro rata share of the costs of the Adviser and its affiliates of regulatory expenses that relate to the Company and investment funds, REITs, vehicles, accounts, products and/or other similar arrangements sponsored, advised, sub-advised and/or managed by Principal Real Estate or its affiliates, whether currently in existence or subsequently established)).

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The following table details the components of due to the Adviser and its affiliates (amounts in thousands):

	March 31, 2025		December 31, 2024
Accrued offering costs	$	1,603	$	—
Accrued organizational costs	841		—
Accrued operational costs	688		—
Accrued loan financing fees	304		650
Accrued management fees	44		5
Total	$	3,480	$	655

Accrued operating costs

The Adviser has agreed to advance certain of the Company's operating expenses and costs through March 3, 2026, the first anniversary of the initial retail closing of the Offering that includes non-Anchor Investors (the "Initial Retail Closing"). The Company will reimburse the Adviser for such advanced expenses ratably over the 60 months following March 3, 2026. Operating expenses incurred after March 3, 2026 will be paid by the Company as incurred. The Adviser had incurred operating costs on the Company’s behalf of $0.6 million and $0.4 million through March 31, 2025 and December 31, 2024, respectively. As of March 31, 2025, such costs and are recorded on the accompanying Condensed Consolidated Balance Sheets. These operating expenses became the Company’s liability in conjunction with the Initial Retail Closing and are therefore not recorded on the financial statements as of December 31, 2024. The Company will reimburse the Adviser for all such advanced expenses ratably over the 60-month period following March 3, 2026.

Accrued organization and offering costs

The Adviser has agreed to advance organization and offering expenses associated with the Offering (including legal, accounting, and other expenses attributable to the organization, but excluding upfront selling commissions, dealer manager fees and shareholder servicing fees) through March 3, 2026, the first anniversary of the Initial Retail Closing. Such reimbursement may be paid, at the Adviser’s election, in cash or Class E shares, or any combination thereof. If the Adviser elects to receive any portion of such reimbursement in common shares, the Company may repurchase such common shares from the Adviser at a later date. The Adviser had incurred $0.8 million and $0.7 million of organization and $1.6 million and $1.4 million offering costs (excluding upfront selling commissions, dealer manager fees and shareholder servicing fees) on the Company’s behalf through March 31, 2025 and December 31, 2024, respectively. As of March 31, 2025, such costs are recorded on the accompanying Condensed Consolidated Balance Sheets. These operating expenses became the Company’s liability in conjunction with the Initial Retail Closing and are therefore not recorded on the financial statements as of December 31, 2024. The Company will reimburse the Adviser for all such advanced expenses ratably over the 60-month period following March 3, 2026.

Accrued shareholder servicing fees

The Company accrues the estimated amount of the future shareholder servicing fees payable to the Dealer Manager for Class T, Class S, and Class D shares based on the estimated hold period of those shares. The Company does not pay a shareholder servicing fee with respect to its outstanding Class I shares, Class F-I shares, Class E shares or Class A shares. As of March 31, 2025 and December 31, 2024, there were no accrued shareholder servicing fees.

10.Net Income Per Share

Net income per common share for the three months ended March 31, 2025 is computed as follows (amounts in thousands, except for share and per share data):

Basic:
Net loss attributable to Principal Credit Real Estate Income Trust	$	(971)
Weighted-average shares of common stock outstanding, basic	972,655
Basic net income per common share	$	(1.00)
Diluted:
Net loss attributable to Principal Credit Real Estate Income Trust	$	(971)
Weighted-average shares of common stock outstanding, diluted	972,655
Diluted net income per common share	$	(1.00)

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For the three months ended March 31, 2025, unvested Class E common shares awarded to the Company's independent trustees are excluded from the calculation of diluted earnings per share as the inclusion of such potential common shares in the calculation would be anti-dilutive. The weighted average number of shares of common stock outstanding is identical for both basic and diluted shares. As of March 31, 2025, 1,735 unvested shares were outstanding.

11.Economic Dependency

The Company is dependent on the Adviser and its affiliates for certain services that are essential to it, including the sale of the Company’s common shares, origination, acquisition and disposition decisions, and certain other responsibilities. In the event that the Adviser and its affiliates are unable to provide such services, the Company would be required to find alternative service providers.

12.Subsequent Events

Subsequent to March 31, 2025, the Company issued the following shares (amounts in thousands, except for share and per share data):

	Shares	Gross Proceeds
Class A Common Shares	1,181,514	$	25,000
Class F-I Common Shares	99,232	2,022
Total	1,280,746	$	27,022

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Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations

References herein to “Principal Credit Real Estate Income Trust,” the “Company,” “we,” “us,” or “our” refer to Principal Credit Real Estate Income Trust and its subsidiaries unless the context specifically requires otherwise.

The following discussion should be read in conjunction with the financial statements and notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q (“Form 10-Q”).

Forward-Looking Information

Some of the statements in this Form 10-Q constitute forward-looking statements because they relate to future events or our future performance or financial condition. The forward-looking statements contained in this Form 10-Q may include statements as to:

•our future operating results;

•our business prospects and the prospects of the assets in which we may invest;

•the impact of the investments that we expect to make;

•our ability to raise sufficient capital to execute our investment and lending strategies;

•our ability to source adequate investment and lending opportunities to efficiently deploy capital;

•our current and expected financing arrangements;

•the effect of global and national economic and market conditions generally upon our operating results, including, but not limited to, changes with respect to inflation, interest rate changes and supply chain disruptions, and changes in government rules, regulations and fiscal policies;

•the adequacy of our cash resources, financing sources and working capital;

•the timing and amount of cash flows, distributions and dividends, if any, from our investments;

•our contractual arrangements and relationships with third parties;

•actual and potential conflicts of interest with the Adviser or any of its affiliates;

•the dependence of our future success on the general economy and its effect on the assets in which we may invest;

•our use of financial leverage;

•the ability of the Adviser to locate suitable investments for us and to monitor and administer our investments;

•the ability of the Adviser or its affiliates to attract and retain highly talented professionals;

•our ability to structure investments in a tax-efficient manner and the effect of changes to tax legislation and our tax position; and

•the tax status of the assets in which we may invest.

In addition, our narrative analysis below contains forward-looking statements intended to enhance the reader’s ability to assess our future financial performance. Forward-looking statements include, but are not limited to, statements that represent our beliefs concerning future operations, strategies, financial results or other developments, and contain words and phrases such as “anticipate,” “believe,” “plan,” “estimate,” “expect,” “intend” and similar expressions. Forward-looking statements are made based upon management’s current expectations and beliefs concerning future developments and their potential effects on us. Such forward-looking statements are not guarantees of future performance. Our actual results could differ materially from those implied or expressed in the forward-looking statements for any reason, including the factors set forth in Item 1A. “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2024, and elsewhere in this Form 10-Q. Other factors that could cause actual results to differ materially include:

•changes in the economy, particularly those affecting the real estate industry;

•risks associated with possible disruption in our operations or the economy generally due to terrorism, natural disasters, epidemics or other events having a broad impact on the economy;

•adverse conditions in the areas where our investments or the properties underlying such investments are located and local real estate conditions;

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•our portfolio may be concentrated in certain industries and geographies, and, as a consequence, our aggregate return may be substantially affected by adverse economic or business conditions affecting that particular type of asset or geography;

•limitations on our business and our ability to satisfy requirements to maintain our exclusion from registration under the Investment Company Act of 1940, as amended (the “Investment Company Act”), or to maintain our qualification as a REIT for U.S. federal income tax purposes;

•since there is no public trading market for our common shares, repurchase of common shares by us will likely be the only way to dispose of your shares. Our share repurchase plan provides shareholders with the opportunity to request that we repurchase their shares on a quarterly basis, but we are not obligated to repurchase any shares and may choose to repurchase only some, or even none, of the shares that have been requested to be repurchased in any particular quarter in our discretion. In addition, repurchases will be subject to available liquidity and other significant restrictions. Further, our board of trustees may make exceptions to, modify and suspend our share repurchase plan if, in its reasonable judgement, it deems such action to be in our best interest. As a result, our common shares should be considered as having only limited liquidity and at times may be illiquid;

•distributions are not guaranteed and may be funded from sources other than cash flow from operations, including, without limitation, borrowings, offering proceeds, the sale of our assets, and repayments of our real estate debt investments, and we have no limits on the amounts we may fund from such sources;

•the purchase and repurchase prices for our common shares are generally based on our prior month’s NAV and are not based on any public trading market; and

•future changes in laws or regulations and conditions in our operating areas.

Although we believe the assumptions underlying the forward-looking statements, are reasonable, any of the assumptions could be inaccurate, and, as a result, the forward-looking statements based on those assumptions also could be inaccurate. In light of the these and other uncertainties, the inclusion of a projection or forward-looking statement in this Form 10-Q should not be regarded as a representation by us that our plans and objectives will be achieved. These forward-looking statements apply only as of the date of this Form 10-Q. Moreover, we assume no duty and do not undertake to update the forward-looking statements.

Overview

We are a Maryland statutory trust formed on May 22, 2024. We are managed by Principal Real Estate Investors, LLC, a Delaware limited liability company (the “Adviser” and, together with Principal Real Estate Europe Limited, “Principal Real Estate”). Principal Real Estate is the dedicated real estate group of Principal Global Investors Holding Company (US), LLC, a member company and affiliate of Principal Financial Group, which is a public company listed on the NASDAQ under the ticker symbol “PFG.”

We are an externally advised, perpetual-life REIT formed to pursue the following investment objectives:

•provide current income in the form of regular, stable cash distributions to achieve an attractive distribution yield;

•preserve and protect invested capital, by focusing on high quality real assets with current cash-flow and/or limited business plan risk; and

•provide an investment alternative for shareholders seeking to allocate a portion of their long-term investment portfolios to commercial real estate (“CRE”) debt with lower volatility than publicly traded securities and compelling risk-adjusted returns compared to fixed income alternatives.

Our investment strategy will be focused on originating, acquiring, financing managing and disposing of a portfolio of primarily commercial real estate (“CRE”) debt investments, including senior mortgage loans, subordinated debt and other similar investments (collectively referred to as, “CRE Debt Investments“), diversified across both geography and asset class. To a lesser extent, the Company may invest in other real estate-related debt securities, including commercial mortgage-backed securities and collateralized loan obligations. Our CRE loans are expected to be primarily secured by properties in the U.S. and include multifamily, industrial and select other CRE asset classes, such as student housing, self-storage, life science and data center assets.

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Our board of trustees at all times will have ultimate oversight and policy-making authority over us, including responsibility for governance, financial controls, compliance and disclosure. Pursuant to an advisory agreement between the Adviser and us (the "Advisory Agreement"), we have delegated to the Adviser the authority to source, evaluate and monitor our investment opportunities and make decisions related to the acquisition, management, financing and disposition of our assets, in accordance with our investment objectives, guidelines, policies and limitations, subject to oversight by our board of trustees.

We are structured as a non-listed, perpetual-life REIT, and therefore our securities are not listed on a national securities exchange and, as of the date of this Form 10-Q, there is no plan to list our securities on a national securities exchange. We are organized as a holding company and conduct our business primarily through our various subsidiaries. For the taxable year ending December 31, 2025 the Company intends to elect and qualify to be taxed as a REIT under the Code, for U.S. federal income tax purposes and generally will not be subject to U.S. federal income taxes on our taxable income to the extent we annually distribute all of our REIT taxable income to shareholders and maintain our qualification as a REIT.

We are conducting a blind pool continuous private offering (the "Offering") of our common shares in reliance on an exemption from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), to investors that are (i) accredited investors (as defined in Regulation D under the Securities Act) and (ii) in the case of common shares sold outside the United States, to persons that are not “U.S. persons” (as defined in Regulation S under the Securities Act).

We are not aware of any material trends or uncertainties, favorable or unfavorable, other than national economic conditions affecting real estate generally, that may be reasonably anticipated to have a material impact on either capital resources or the revenues or income to be derived from our real estate debt investments or real estate-related securities, other than those referred to in this Form 10-Q.

Q1 2025 Highlights

Fundraising and Distributions

•During the three months ended March 31, 2025, pursuant to the Offering, the Company sold an aggregate of 812,240 of its common shares for aggregate net consideration of approximately $17.1 million, plus applicable upfront selling commissions and dealer manager fees. The offer and sale of the shares was exempt from the registration provisions of the Securities Act by virtue of Section 4(a)(2) and Regulation D thereunder. In addition, during the three months ended March 31, 2025, the Company did not issue any shares pursuant to its distribution reinvestment plan (the “DRIP”).

•During the three months ended March 31, 2025, the Company declared aggregate distributions of $0.5000, $0.2300 and $0.2300 per Class A share, Class I share, and Class F-I share, respectively. Refer to the Distributions section below for further details on the distributions declared.

Investments

•On February 14, 2024, the Company originated a $76.5 million floating rate first mortgage loan collateralized by a multifamily residential asset in Tempe, AZ. The initial term of the loan is two years with three one-year extension options subject to satisfaction of certain predefined conditions by the borrower.

Financings

•On January 29, 2025, February 4, 2025, and March 4, 2025, the Company borrowed additional proceeds under the terms of the Master Repurchase Agreement (together with the related transaction documents, the “GS Repurchase Agreement”), with Goldman Sachs Bank USA. (“Goldman”), in connection with the six most recently originated investments in loans receivables. The GS Repurchase Agreement provides for asset purchases by Goldman of up to $250 million. As of March 31, 2025 and December 31, 2024, the Company borrowed $161.7 million and $21.8 million, respectively, under the terms of the GS Repurchase Agreement.

Results of Operations

The following table sets forth information regarding our consolidated results of operations for the three months ended March 31, 2025 and December 31, 2024(1) (amounts in thousands, except for share and per share data):

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	For the Three Months Ended March 31, 2025		For the Three Months Ended December 31, 2024
Revenues
Interest income	$	3,479	$	255
Other revenue		765		1,570
Total revenue		4,244		1,825
Expenses
Interest expense		2,825		322
Financing fees		898		767
Organization costs		841		—
General and administrative		703		9
Management fees		39		5
Total expenses		5,306		1,103
Unrealized gains (losses)
Unrealized gain on loans receivable, at fair value		181		—
Unrealized loss on loans payable, at fair value		(90)		—
Total unrealized gains (losses)		91		—
Net loss before taxes	$	(971)	$	722
Income tax expense		—		176
Net income (loss)	$	(971)	$	546

(1) The Company was formed on May 22, 2024 and there were no operations during the three months ended 2024. Accordingly, no comparative amounts for the three months ended March 31, 2024 are included.

•During the three months ended March 31, 2025, revenues totaled $4.2 million, and consisted of interest income of $3.5 million and other revenue of $0.7 million (predominantly origination fees). The increase from the $1.8 million recognized during the three months ended December 31, 2024 was due to the timing of the initial loan origination activity that all occurred in December 2024, resulting in higher origination fees in the prior quarter but only a partial month of interest income.

•During the three months ended March 31, 2025, interest expense and financing fees were $2.8 million and $0.9 million, respectively, and $0.3 million and $0.8 million, respectively, for the three months ended December 31, 2024. Interest expense and financing fees were incurred in financing the mortgage loan assets originated in December 2024 and February 2025. The increase in interest expense during the three months ended March 31, 2025 as compared to the three months ended December 31, 2024 is due to the timing of the debt financing activity between the two periods. The increase in financing fees during the three months ended March 31, 2025 as compared to the three months ended December 31, 2024 is due to timing and size of loans placed on the GS Repurchase Facility.

•During the three months ended March 31, 2025, general and administrative fees were approximately $0.7 million and primarily related to operating costs incurred during the period. $0.7 million of these costs have been advanced by the Adviser and paid on behalf of the Company. The Company will commence reimbursement of the advances to the Adviser in March 2026 and will pay the balance due at that time, ratably in 60 monthly installments thereafter. The increase in professional fees during the three months ended March 31, 2025 as compared to the three months ended December 31, 2024 is due to the timing of the recognition of certain expenses incurred prior to the initial retail closing of the Offering (the "Initial Retail Closing") that includes investors other than Principal Life Insurance Company and/or its affiliate and an unaffiliated life insurance company and/or its affiliates (collectively, the "Anchor Investors"). Note that the Company started recognizing operating costs incurred by the Adviser on March 1, 2025, the date of the Initial Retail Closing of the Offering.

•Management fees and performance fees are earned by our Adviser for providing services pursuant to the Advisory Agreement. During the three months ended March 31, 2025 and December 31, 2024, management fees were $39.4 and $4.6 , respectively. No performance fees were earned during the three months ended March 31, 2025, and December 31, 2024.

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•The net unrealized loss from operations and financing of $90.0 for the period is mostly related to the remeasurement of the investment in loans receivable and loans payable at fair value as of March 31, 2025. The increase in net unrealized gains from operations and financing recognized during the three months ended December 31, 2024 was driven by the closing of all the investments in loans receivable and loans payable at fair value occurring December 2024 and therefore measured at par for fair market value.

Financial Condition

Investment Activities

As of March 31, 2025, the Company had originated seven CRE loans. The following table details the statistics of the Company's investment in loans receivable portfolio as of March 31, 2025 (amounts in thousands):

Loan Type	Origination Date(1)	Total Loan	Principal Balance Outstanding	Fair Value	Cash Coupon(2)	Maximum Maturity(3)	Location	Property Type	LTV(4)
Senior Loan	12/10/2024	$25,000	$25,000	$25,012	3.25%	01/01/2030	Castle Rock, CO	Industrial	72%
Senior Loan	12/16/2024	$32,500	$29,139	$29,197	3.25%	01/01/2029	Puyallup, WA	Industrial	49%
Senior Loan	12/30/2024	$40,728	$36,629	$36,665	3.40%	01/01/2030	Olathe, KS	Industrial	73%
Senior Loan	12/30/2024	$12,637	$9,699	$9,704	3.85%	01/01/2030	Greenwood, IN	Industrial	54%
Senior Loan	12/30/2024	$19,139	$17,231	$17,239	3.70%	01/01/2030	Mesa, AZ	Industrial	70%
Senior Loan	12/30/2024	$27,017	$23,467	$23,478	3.85%	01/01/2030	Richmond, CA	Industrial	61%
Senior Loan	2/14/2025	$76,500	$75,000	$75,051	3.25%	03/01/2030	Tempe, AZ	Residential	77%
		$233,521	$216,165	$216,346

(1)Origination date represents the date the loan investment was initially originated or acquired by us.

(2)The cash coupon is expressed as a spread over the relevant floating benchmark rate, which is SOFR.

(3)Maximum maturity assumes all extension options are exercised by the borrower; however, loans may be repaid prior to such date.

(4)LTV represents the loan-to-value ratio as of the Origination Date, which is not updated for subsequent loan modifications or upsizes.

Financing Activities

We finance the majority of our CRE loan portfolio through line of credit and repurchase agreements. The table below summarizes our borrowings as of March 31, 2025 (amounts in thousands):

Description	Weighted Average Interest Rate(1)	Maximum Facility Size	Available Capacity	Debt Amount Outstanding	Fair Value of Debt	Fair Value of Collateral	Current Maturity Date	Maximum Maturity Date(2)
GS Repurchase Agreement	6.49%	$250,000	$88,323	$161,677	$161,767	$216,346	12/17/2026	12/17/2031
JPM Line of Credit	6.57%	$150,000	$59,000	$41,000	N/A	N/A	11/25/2025	5/26/2026

(1)Represents weighted average interest rate as of period end. Borrowings under our repurchase agreement carry interest at one-month Term SOFR plus a spread.

(2)Maximum maturity assumes all extension options are exercised. The extensions are subject to satisfaction of certain predefined conditions including compliance with certain financial and administrative covenants as well as payment of applicable extension fees.

Liquidity and Capital Resources

Liquidity is a measure of our ability to meet our cash requirements, including ongoing commitments to repay borrowings, fund and maintain our assets and operations, make new investments where appropriate, pay distributions to our shareholders and other general business need. We closely monitor our liquidity position and believe that we have sufficient current liquidity and access to additional liquidity to meet our financial obligations for at least the next 12 months.

The Anchor Investors have agreed, from time to time, to purchase an aggregate amount of $150 million in Class A shares, in each case, at a price per share equal to the most recently determined NAV of Class A shares. We expect to generate cash primarily from (i) the net proceeds of the Offering, (ii) cash flows from our operations, (iii) any financing arrangements we may enter into in the future and (iv) any future offerings of our equity or debt securities. As of March 31, 2025, the Anchor Investors have purchased $25.0 million in our Class A shares.

We expect to generate cash primarily from (i) the net proceeds of the Offering, (ii) cash flows from our operations, (iii) any financing arrangements we may enter into in the future and (iv) any future offerings of equity and / or debt securities.

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Our primary use of cash will be for (i) origination or acquisition of commercial mortgage loans and other commercial debt investments, CMBS and other commercial real estate-related debt investments, (ii) the cost of operations (including the management fee and performance fee), (iii) debt service of any borrowings, (iv) periodic repurchases, including under our share purchase plan (as described herein), and (v) cash distributions (if any) to the holders of our shares to the extent authorized by our board of trustees and declared by us.

The Company will seek to enter into bank debt, credit facility, and / or other financing arrangements on at least customary and market terms; however, such incurrence would be subject to prevailing market conditions, the Company’s liquidity requirements, contractual and regulatory restrictions and other factors. As of March 31, 2025, the Company has established a $250 million loan repurchase facility. The Company has pledged one residential and six industrial loans as collateral and based on the value of the loans pledged as collateral and the advanced rates attributed to each loan by the lender, the Company has $161.7 million in outstanding debt. Refer to Note 3- “Investment in Loans Receivable” and Note 4 - “Loans Payable” for further information.

As of March 31, 2025 and December 31, 2024, respectively, the company had cash and cash equivalents of $13.9 million and $11.9 million and approved, but undrawn credit capacity, which is the amount the Company is permitted to borrow less the borrowings outstanding, of $88.3 million and $228.3 million. These amounts do not include $125.0 million and $140.0 million of undrawn capacity under Anchor Investors' equity commitment which represents readily available liquidity as of March 31, 2025 and December 31, 2024, respectively.

Cash Flows

The following table provides a breakdown of the net change in our cash and cash equivalents (amounts in thousands):

March 31, 2025	Amounts
Net cash used in operating activities	$	(305)
Net cash used in investing activities	(75,512)
Net cash provided by financing activities	77,533
Net increase in cash and cash equivalents	$	1,716

Net cash used in operating activities was $(0.3) million and was primarily comprised of financing fees paid and due to adviser expenses incurred during the period, offset by interest income during the period. The due to adviser expenses during the three months ended March 31, 2025, relates to the completion of the Initial Retail Closing of the Offering.

Net cash used in investing activities was $(75.5) million and was related to the loan origination and funding activity during the period.

Net cash provided by financing activities was $77.5 million and was related to the additional proceeds from and repayment of the loan payable and the proceeds from the Offering during the period.

NAV and NAV Per Share Calculation

For the purposes of the monthly NAV computations, our board of trustees, including a majority of our independent trustees, adopted valuation guidelines that contain a comprehensive set of methodologies used by the Adviser and our independent valuation advisor. These guidelines are designed to produce a fair and accurate estimate of the price that would be received for our investments in an arm’s-length transaction between a willing buyer and a willing seller in possession of all material information about our investments. Periodically, our board of trustees, including a majority of our independent trustees, will review the appropriateness of our valuation procedures. From time to time, our board of trustees, including a majority of our independent trustees, may adopt changes to the valuation guidelines if it (1) determines that such changes are likely to result in a more accurate reflection of NAV or a more efficient or less costly procedure for the determination of NAV without having a material adverse effect on the accuracy of such determination or (2) otherwise reasonably believes a change is appropriate for the determination of NAV. Refer to Item 7. “Management's Discussion and Analysis of Financial Conditions and Results of Operations” on our Annual Report on Form 10-K for the year ended December 31, 2024 for further information on the valuation methods used for the purposes of determining the valuations of our assets and liabilities, calculating related unrealized gains and losses and our monthly NAV.

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With regard to NAV calculations, the same fair values of assets and liabilities determined by the application of the methods cited above are generally used in monthly NAV calculations. To calculate our NAV for purposes of establishing a purchase and repurchase price for our common shares, we have adopted a model that calculates the fair values of our assets and liabilities in accordance with our valuation guidelines. Because these fair value calculations involve significant professional judgment in the application of both observable and unobservable inputs, the calculated fair value of our assets may differ from their actual realizable value or future fair value. While we believe our NAV calculation methodologies are consistent with standard industry practices, there is no rule or regulation that requires we calculate NAV in a certain way. As a result, other REITs may use different methodologies or assumptions to determine NAV. In addition, NAV is not a measure used under GAAP and the valuations of and certain adjustments made to our assets and liabilities used in the determination of NAV differ from GAAP. Shareholders should not consider NAV to be equivalent to shareholders' equity or any other GAAP measure. The calculation of our NAV is intended to be a calculation of the fair value of our assets less our outstanding liabilities as described below and will likely differ from the book value of our equity reflected in our financial statements.

The board of trustees of the Company has delegated to the Adviser the responsibility for monitoring significant events that may materially affect the values of our facilities for determining whether the existing valuations should be re-evaluated prior to the next scheduled monthly valuation in light of such significant events.

Each share class will have an undivided interest in our assets and liabilities, other than class-specific shareholder servicing fees, distributions payable, the management fee and the performance fee. In accordance with the valuation guidelines, our fund administrator will calculate our NAV per share for each class as of the last calendar day of each month, including the estimated fair value of (1) real estate debt and other investments owned by us and (2) any other assets and liabilities. Because shareholder servicing fees, distributions payable, the management fee and the performance fee allocable to a specific class of shares will only be included in the NAV calculation for that class, the NAV per share for our classes of shares may differ.

The monthly NAV for each class of shares will be based on the net asset values of our investments, the addition of any other assets (such as cash on hand), and the deduction of any other liabilities (including distributions payable, accrued management fees, accrued performance fees and the deduction of any shareholder servicing fees specifically applicable to such class of shares). At the end of each month, before taking into consideration repurchases or class-specific expense accruals for that month, any change in our aggregate NAV (whether an increase or decrease) is allocated among each class of shares based on each class’s relative percentage of the previous aggregate NAV plus issuances of shares that were effective on the first calendar day of such month. The NAV calculation is available generally within 15 calendar days after the end of the applicable month. Changes in monthly NAV includes, without limitation, accruals of our net portfolio income, interest expense, the management fee, the performance fee, distributions, unrealized/realized gains and losses on assets, any applicable organization and offering expenses and any expense reimbursements. Changes in monthly NAV also includes material non-recurring events occurring during the month. On an ongoing basis, the Adviser will adjust the accruals to reflect actual operating results and the outstanding receivable, payable and other account balances resulting from the accumulation of monthly accruals for which financial information is available. The operating expenses and organizational and offering expenses which are advanced by the Adviser to be reimbursed by us will not be included in such calculations until reimbursed to the Adviser.

For purposes of calculating our NAV, neither (1) organization and offering expenses paid by the Adviser through the first anniversary of the Initial Retail Closing, nor (2) operating expenses paid by the Adviser, incurred by us during the period through the first anniversary of the Initial Retail Closing, are recognized as expenses or as a component of equity and reflected in our NAV until we reimburse the Adviser for these costs. After the first anniversary of the Initial Retail Closing of the Offering, we will reimburse the Adviser for any organization and offering expenses and operating expenses that it incurs on behalf of us as and when incurred (or promptly thereafter).

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Following the aggregation of the net asset values of our investments, the addition of any other assets (such as cash on hand) and the deduction of any other liabilities, our fund administrator incorporates any class-specific adjustments to NAV, including additional issuances and repurchases of shares and accruals of class-specific distributions, management fees, performance fees and shareholder servicing fees. The declaration of distributions will reduce the NAV for each class of our shares in an amount equal to the accrual of our liability to pay any such distribution to our shareholders of record of each class. NAV per share for each class of shares is calculated by dividing such class’s NAV at the end of each month by the number of shares outstanding for that class at the end of such month.

The following table provides a breakdown of the major components of our total NAV as of March 31, 2025 (amounts in thousands, except for share and per share data):

March 31, 2025	Amounts
Cash and cash equivalents	$	13,943
Restricted cash	3,904
Loans receivable, at fair value	216,346
Accrued interest receivable	1,439
Loans payable, at fair value	(161,767)
Line of credit, at fair value	(41,000)
Escrow deposits	(3,903)
Due to adviser	(348)
Interest payable	(462)
Income tax payable	(176)
Distributions payable	(303)
Net Asset Value	$	27,673
Number of outstanding shares (all classes)	1,312

The following table reconciles U.S. GAAP shareholders’ equity and redeemable common shares per our condensed consolidated balance sheet to our NAV (amounts in thousands):

March 31, 2025	Amounts
Shareholders' equity and redeemable common shares	$	24,541
Adjustments:
Organization and offering costs advanced by Adviser(1)	2,444
Operating expenses advanced by Adviser(2)	688
NAV	$	27,673

(1)This represents the unamortized amount of organization and offering costs advanced by the Adviser. The Adviser has agreed to advance organization and offering expenses on behalf of the Company (including legal, accounting, and other expenses attributable to the organization, but excluding upfront selling commissions, dealer manager fees and shareholder servicing fees) through the first anniversary of the date of the Initial Retail Closing of the Offering. The Company will reimburse the Adviser for all such advanced expenses ratably over a 60-month period following the first anniversary of the Initial Retail Closing of the Offering.

(2)This represents the unamortized amount of operating costs advanced by the Adviser. The Adviser has agreed to advance certain of the Company’s operating expenses through the first anniversary of the Initial Retail Closing of the Offering. The Company will reimburse the Adviser for such advanced expenses ratably over the 60 months following the first anniversary of the Initial Retail Closing of the Offering. Operating expenses incurred after the first anniversary of the Initial Retail Closing of the Offering will be paid by the Company as incurred.

The following table provides a breakdown of our total NAV and NAV per share by class as of March 31, 2025 (amounts in thousands, except for share and per share data):

March 31, 2025	Class I Shares		Class F-I Shares		Class A Shares		Total
Net asset value	$	1	$	2,056	$	25,616	$	27,673
Number of outstanding shares	—		102		1,211		1,312
NAV Per Share as of March 31, 2025	$	20.24	$	20.25	$	21.16

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Distributions

Any distributions we make will be at the discretion of our board of trustees, considering factors such as our earnings, cash flow, capital needs and general financial condition. As a result, our distribution rates and payment frequency may vary from time to time. Shareholders are not entitled to receive a distribution on shares that are repurchased prior to the applicable time of the record date.

Our board of trustees’ discretion as to the payment of distributions will be directed, in substantial part, by its determination to cause us to comply with the REIT requirements. To maintain our qualification as a REIT, we generally are required to make aggregate annual distributions to our shareholders of at least 90% of our REIT taxable income, determined without regard to the distributions-paid deduction and excluding net capital gains.

Beginning January 31, 2025, we have declared monthly distributions for each class of common shares then-outstanding, which are generally paid fifteen days after month-end. Each class of our common stock received the same gross distribution per share if then-outstanding, which was $0.1350 per share for the three months ended March 31, 2025. The net distribution rates per share vary for each class based on the applicable shareholder servicing fee, which is deducted from the gross distribution per share and paid to the Dealer Manager. The table below details the net distribution for each of our share classes for the three months ended March 31, 2025:

Record Date	Class I Common Shares		Class F-I Common Shares		Class A Common Shares
January 31, 2025	$	—	$	—	$	0.1350
February 28, 2025	—		—		0.1350
March 31, 2025	0.2300		0.2300		0.2300
Totals	$	0.2300	$	0.2300	$	0.5000

The following table summarizes our distributions declared during the three months ended March 31, 2025 (in thousands):

	For the Three Months Ended March 31, 2025
	Amount		%
Distributions
Payable in cash	$	303	100.0	%
Reinvested in shares	—		—	%
Total distributions	$	303	100.0	%
Sources of Distributions
Cash flow from operating activities*	$	303	100.0	%
Offering proceeds	—		—	%
Total sources of distributions	$	303	100.0	%
Cash flows from operating activities	$	(305)

*As of March 31, 2025, our inception to date cash flows from operating activities funded 100% of our distributions to date.

Critical Accounting Estimates

Our discussion and analysis of our financial condition and results of operations is based upon our condensed consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of the financial statements in accordance with GAAP involves significant judgments and assumptions and requires estimates about matters that are inherently uncertain. There have been no material changes to our Critical Accounting Estimates, including significant accounting policies that we believe are the most affect by our judgment, estimates and assumptions, which are described in our Annual Report on Form 10-K for the year ended December 31, 2024.

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Recent Accounting Developments

Refer to Note 2 — “Summary of Significant Accounting Policies” to the financial statements for a discussion of recent accounting developments and the expected impact to the Company.

Subsequent Events

Subsequent to March 31, 2025 through the date of filing, the Company issued the following shares (amounts in thousands, except for share and per share data):

	Shares	Gross Proceeds
Class A Common Shares	1,181,514	$	25,000
Class F-I Common Shares	99,232	2,022
Total	1,280,746	$	27,022

Subsequent to March 31, 2025 through the date of filing, the Company also issued less than one share under the DRIP.

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Item 3. Quantitative and Qualitative Disclosures about Market Risk

The primary components of our market risk are related to interest rates, credit spreads, credit market values, liquidity and foreign currency exchange rates. While we do not seek to avoid risk completely, we believe that risk can be quantified from historical experience, and we seek to actively manage that risk, to earn sufficient compensation to justify taking those risks and to maintain capital levels consistent with the risks we undertake.

Interest Rate Risk

Interest rate risk is highly sensitive to many factors, including governmental, monetary and tax policies, domestic and international economic and political considerations, and other factors beyond our control. Our net interest income is exposed to interest rate volatility primarily as a result of the floating rate nature of the investments we hold and the financing we place on them.

Additionally, we may use company-level facilities featuring floating interest rates for liquidity and working capital purposes. Furthermore, we may make investments in fixed and floating rate debt securities; the value of our positions may increase or decrease depending on interest rate movements. Finally, interest rate changes may impact the demand for loans and the availability of financing needed to expand our investment portfolio.

A rise in the general level of interest rates can be expected to lead to higher debt service payment requirements relative to any variable rate investments we hold and to declines in the value of any fixed rate investments we may hold. Rising interest rates carry default risk to our borrowers, because cash flows from underlying properties may fall below the debt service payments due to us on the investments, triggering borrower liquidity covenants. Therefore, we expect to protect property cash flows by requiring borrowers to purchase interest rate caps, which provides a hedge against rising interest rates, whereby the borrower will receive excess cash if interest rates exceed predetermined strike prices. Furthermore, rising interest rates also cause our overall cost of borrowing to increase, partially or fully, offsetting any increase in elevated debt service payments received on our variable rate investments. In general, we will seek to match the interest rate characteristics of our investments with the interest rate characteristics of any related financing obligations. In instances where the interest rate characteristics of an investment and the related financing obligation are not matched, we may mitigate such interest rate risk through the utilization of interest rate derivatives of the same duration. Given our target leverage ratios, an increase in interest rates may result in an increase in our net investment income and the amount of the performance fee payable to the Adviser.

A decline in interest rates can be expected to lead to lower debt service payments received from any variable rate investments we may hold, decreases in the interest income earned on any floating rate investments we hold, and increases in the value of any fixed rate investments we hold. To mitigate the impact of reduced earnings as a result of declining interest rates, we expect to structure interest rate floors into each loan where the borrower will be required to pay minimum interest payments should interest rates fall below a predetermined rate. Additionally, reduced interest rates also cause our overall cost of borrowings to decrease. Because our borrowings do not typically feature interest rate floors, but our variable rate investments feature minimum interest payments due to us, declining interest rates may result in an increase to the Company’s net interest income and an increase in the amount of the performance fee payable to the Adviser.

The net interest income sensitivity analysis calculates the estimated impact over a 12 month period of an instantaneous parallel shift in the yield curve, up and down by 100 basis points, on our net interest income, assuming no changes in the composition of our commercial real estate loan investment portfolio and our outstanding borrowings in effect as of March 31, 2025.

The estimated impacted on net interest income is as follows (dollar amounts in thousands):

Change in Interest Rates	Projected Increase (Decrease) in Net Interest Income		Percentage Change in Projected Net Interest Income
+1.00%	$	135	3.91%
-1.00%	$	(135)	-3.91%

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Credit Spread Risk

Credit spread risk is the risk that interest rate spreads between two different financial instruments will change. In general, U.S. fixed-rate commercial mortgage loans and CMBS are priced based on a spread to U.S. Treasury securities or interest rate swaps. We will generally benefit if credit spreads narrow during the time that we hold a portfolio of mortgage loans, CMBS and/or CLO investments, and we may experience losses if credit spreads widen during the time that we hold a portfolio of mortgage loans, CMBS and/or CLO investments. We actively monitor our exposure to changes in credit spreads and we may enter into credit total return swaps or take positions in other credit-related derivative instruments to moderate our exposure to losses associated with a widening of credit spreads.

Credit Risk

We are exposed to credit risk in our investments with respect to a borrower’s ability to make required debt service payments to us and repay the unpaid principal balance in accordance with the terms of the loan agreement. We manage this risk by conducting a credit analysis prior to making an investment and by actively monitoring our portfolio and the underlying credit quality, including subordination and diversification, of our investments on an ongoing basis. In addition, we re-evaluate the credit risk inherent in our investments on a regular basis taking into consideration a number of fundamental macro-economic factors such as gross domestic product, unemployment, interest rates, capital markets activity, retail sales, store closing/openings, corporate earnings, housing inventory, affordability and regional home price trends.

We are exposed to credit risk with respect to the tenants that occupy properties that serve as collateral to our investments. To mitigate this risk, we seek to avoid large single tenant exposure and we undertake a credit evaluation of major tenants prior to making a loan. This analysis includes extensive due diligence of a potential tenant’s creditworthiness and business, as well as an assessment of the strategic importance of the property to the tenant’s core business operations.

Finally, we may be exposed to counterparty credit risk under the terms of a derivative contract. If the fair value of a derivative contract is positive, the counterparty will owe us, which creates credit risk for us. If the fair value of a derivative contract is negative, we will owe the counterparty and, therefore, do not have credit risk. We may seek to mitigate the credit risk associated with derivative instruments by entering into transactions with high-quality counterparties.

Market Value Risks

We may also be exposed to market value risk with respect to the fair value of our investments, including debt securities, and borrowings due to changes in market conditions, including credit spreads, interest rates, property cash flows, and commercial property values that serve as collateral. We seek to manage our exposure to market risk by originating or acquiring investments secured by different property types located in diverse, but liquid markets with stable credit ratings. The fair value of our investments may fluctuate, therefore the amount we will realize upon any repayment, sale, or an alternative liquidation event is unknown.

Commercial property values are subject to volatility and may be adversely affected by a number of factors, including: national, regional and local economic conditions; local real estate conditions; changes or continued weakness in specific industry segments; construction quality, age and design; demographic factors; and retroactive changes to building or similar codes and/or tax and legal considerations. Changes in commercial property values are difficult to predict with accuracy. We model a range of valuation scenarios and the resulting impacts to our investments.

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Liquidity Risk

Market disruptions may lead to a significant decline in transaction activity in all or a significant portion of the asset classes in which we intend to invest and may at the same time lead to a significant contraction in short-term and long-term debt and equity funding sources. A decline in liquidity of real estate and real estate-related investments, as well as a lack of availability of observable transaction data and inputs, may make it more difficult to sell our investments or determine their fair values. As a result, we may be unable to sell investments, or only be able to sell investments at a price that may be materially different from the fair values presented. Also, in such conditions, there is no guarantee that the Company’s borrowing arrangements or other arrangements for obtaining leverage will continue to be available or, if available, will be available on terms and conditions acceptable to us. In addition, a decline in market value of our assets may have particular adverse consequences in instances where we borrowed money based on the fair value of our assets. A decrease in the market value of our assets may result in the lender requiring us to post additional collateral or otherwise sell assets at a time when it may not be in our best interest to do so.

Foreign Currency Risk

Our loans and investments that are denominated in a foreign currency are also subject to risks related to fluctuations in exchange rates. Over the term of our investments we generally expect to mitigate this exposure by matching the currency of our foreign currency assets to the currency of the borrowings that finance those assets. In addition, we expect to typically enter into a series of foreign currency forward contracts to fix the U.S. dollar amount of foreign currency-denominated cash flows (interest income, principal payments and net sales proceeds after the repayment of debt) we expect to receive from our foreign currency denominated investments. We also expect substantially reduce our exposure to changes in portfolio value related to changes in foreign exchange rates.

We intend to hedge our net currency exposures in a prudent manner. In doing so, we generally expect to structure our foreign currency hedges so that the notional values and expiration dates of our hedges approximate the amounts and timing of future payments we expect to receive on the related investments. However, our currency hedging strategies may not eliminate all of our currency risk due to, among other things, uncertainties in the timing and/or amounts of payments received on the related investments, and/or unequal, inaccurate, or unavailable hedges to perfectly offset changes in future exchange rates. Additionally, we may be required under certain circumstances to collateralize our currency hedges for the benefit of the hedge counterparty, which could adversely affect our liquidity.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

An evaluation of the effectiveness of the design and operation of our “disclosure controls and procedures” (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (as amended, the “Exchange Act”), as of the end of the period covered by this Quarterly Report on Form 10-Q was made under the supervision and with the participation of our management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”). Based upon this evaluation, our CEO and CFO have concluded that our disclosure controls and procedures (a) are effective to ensure that information required to be disclosed by us in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the SEC rules and forms and (b) include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Controls over Financial Reporting

There have been no changes in our “internal control over financial reporting” (as defined in Rule 13a-15(f) of the Exchange Act) that occurred during our most recent quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1.    Legal Proceedings

From time to time, we may be involved in various claims and legal actions arising in the ordinary course of business. As of March 31, 2025, we were not involved in any material legal proceedings.

Item 1A.    Risk Factors

For information regarding factors that could affect our results of operations, financial condition and liquidity, see the risk factors discussed in Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC. There have been no material changes from the risk factors set forth in Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2024.

Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds

Unregistered Sales of Equity Securities

We are engaging in the Offering of our common shares to “accredited investors” (as defined in Rule 501 promulgated pursuant to the Securities Act) made pursuant to exemptions provided by Section 4(a)(2) of the Securities Act and applicable state securities laws. On December 3, 2025, we began accepting subscriptions from investors in the Offering. As of May 8, 2025, we have issued 2,392,148 Class A common shares, 200,789 Class F-I common shares and 49 Class I common shares for an aggregate price of $146 million. Shares granted to trustees are not included within these amounts, as they are currently unvested. These shares have been issued and sold in reliance upon the available exemption from registration requirements of the 1933 Act under Section 4(a)(2) thereof and Regulation D promulgated thereunder.

Share Repurchase Plan

On November 11, 2024, our board of trustees adopted a share repurchase plan, whereby shareholders may request on a quarterly basis that we repurchase all or any portion of their shares. We may choose to repurchase all, some or none of the shares that have been requested to be repurchased at the end of any particular calendar quarter, in our discretion, subject to any limitations in the share repurchase plan.

Under our share repurchase plan, to the extent we choose to repurchase shares in any particular calendar quarter, we will only repurchase shares following the close of business as of the last calendar day of that calendar quarter (each such date, a “Repurchase Date”). Shares are repurchased at a price equal to the transaction price on the applicable Repurchase Date, except that shares that have not been outstanding for at least one year will be repurchased at 95% of the transaction price (the “Early Repurchase Deduction”). This Early Repurchase Deduction does not apply to shares acquired through our distribution reinvestment plan.

The aggregate NAV of total repurchases of Class S shares, Class T shares, Class D shares, Class I shares, Class E shares, Class A shares, and Class F-I shares (including repurchases at certain non-U.S. investor access funds primarily created to hold our common shares) is limited to no more than 5% of our aggregate NAV per calendar quarter (measured using the aggregate NAV as of the end of the immediately preceding month). Common shares issued to the Adviser pursuant to the Advisory Agreement are not subject to these repurchase limitations.

In the event that the Company determines to repurchase some but not all of the common shares submitted for repurchase during any calendar quarter, common shares repurchased at the end of the calendar quarter will be repurchased on a pro rata basis. All unsatisfied repurchase requests must be resubmitted after the start of the next calendar quarter, or upon the recommencement of the share repurchase plan, as applicable.

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Under our share repurchase plan, our board of trustees may amend, suspend or terminate our share repurchase plan at any time if it deems such action to be in our best interest. As a result, share repurchases may not be available each calendar quarter. We may fund repurchase requests from sources other than cash flow from operations, including, without limitation, the sale of or repayment under our assets, borrowings or offering proceeds, and we have no limits on the amounts we may pay from such sources. Should repurchase requests, in our judgment, place an undue burden on our liquidity, adversely affect our operations or risk having an adverse impact on the Company as a whole, or should we otherwise determine that investing our liquid assets in real estate or other investments rather than repurchasing our shares is in the best interests of the Company as a whole, then we may choose to repurchase fewer shares than have been requested to be repurchased, or none at all. Further, our board of trustees may make exceptions to, modify or suspend our share repurchase plan if it deems in its reasonable judgment such action to be in our best interest.

During the quarter ended March 31, 2025, no common shares were repurchased pursuant to the Company’s share repurchase plan.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosure

None.

Item 5. Other Information

None.

Item 6. Exhibit List

(a)List of documents filed:

(1)The Financial Statements of the Company. (See Item 1 above.)

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(b)Exhibits

3.1	Certificate of Trust of the Company, dated May 22, 2024 (filed as Exhibit 3.1 to the Company’s Registration Statement on Form 10 filed on July 26, 2024 and incorporated by reference herein)
3.2	Second Amended and Restated Declaration of Trust of the Company, dated November 11, 2024 (filed as Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q filed on November 12, 2024 and incorporated by reference herein)
3.3	Bylaws of the Company (filed as Exhibit 3.3 to the Company’s Registration Statement on Form 10 filed on July 26, 2024 and incorporated by reference herein)
31.1*	Certification of Principal Executive Officer Pursuant to Rule 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*	Certification of Principal Financial Officer Pursuant to Rule 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1**	Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2**	Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101	The following financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2025 formatted in inline XBRL (eXtensible Business Reporting Language): (i) Condensed consolidated Balance Sheet (Unaudited), (ii) Condensed Consolidated Statements of Operations (Unaudited), (iii) Consolidated Statements of Changes in Equity (Unaudited), (iv) Consolidated Statement of Cash Flows (Unaudited), (v) the Notes to Consolidated Financial Statements (Unaudited), and (vi) cover page
104	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

* Filed herewith

** Furnished herewith

The agreements and other documents filed as exhibits to this report are not intended to provide factual information or other disclosure other than with respect to the terms of the agreements or other documents themselves, and you should not rely on them for that purpose. In particular, any representations and warranties made by us in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual state of affairs as of the date they were made or at any other time.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		PRINCIPAL CREDIT REAL ESTATE INCOME TRUST
Dated: May 8, 2025	By:	/s/ John T. Berg
		John T. Berg Chief Executive Officer (Principal Executive Officer)
Dated: May 8, 2025	By:	/s/ Brian Riley
		Brian Riley Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

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