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Principal Real Estate Investors Acquires New York City Office Building

Press Release

July 18, 2007 (Des Moines, Iowa) — Principal Real Estate Investors, the fourth largest manager of real estate assets in the United States, has advised on the purchase of an office building on 104 W. 40th Street in New York City, N.Y. The acquisition was done in a joint venture with Mermel & McLain Management LLC, a prominent New York City asset management and investing vehicle.

The 210,000 square foot building enjoys an ideal location in midtown Manhattan, overlooking Bryant Park, which has become the center for various New York City events such as Fashion Week and many concerts. The property has excellent transportation access due to its location between Grand Central Station, the Port Authority and Penn Station. Collectively, these hubs provide access to Metro North, Long Island Rail Road, New Jersey Transit and Amtrak.

"We like this part of New York City because the vibrancy of Bryant Park and the convenient access to transportation have spurred new construction, and created a leasing velocity in the submarket that is causing real rental growth," said Derk Taylor, director of acquisitions and dispositions for the Principal Real Estate Investors. "We believe the building has a great advantage with the expected growth in rental income and utilizing the building's expansion potential."

This is the sixth acquisition by the Principal Real Estate Investors in the midtown Manhattan area.

About Principal Global Investors

Principal Global Investors is a diversified asset management organization and a member of the Principal Financial Group®, with expertise in equities, fixed income and real estate investments, as well as specialized overlay and advisory services. Principal Global Investors manages $213.6 billion in assets primarily for retirement plans and other institutional clients.1

About Principal Real Estate Investors

Principal Real Estate Investors is the fourth largest institutional real estate manager in the United States based on tax-exempt assets under management2 and manages or subadvises $40.0 billion in commercial real estate assets. The firm's real estate capabilities include both public and private equity and debt investment alternatives.

About the Principal Financial Group

The Principal Financial Group® (The Principal®)3 is a leader in offering businesses, individuals and institutional clients a wide range of financial products and services, including retirement and investment services, life and health insurance, and banking through its diverse family of financial services companies and national network of financial professionals. A member of the Fortune 500, the Principal Financial Group has $270.1 billion in assets under management4 and serves some 17.6 million customers worldwide from offices in Asia, Australia, Europe, Latin America and the United States. Principal Financial Group, Inc. is traded on the New York Stock Exchange under the ticker symbol PFG. For more information, visit www.principal.com.

1) As of March 31, 2007. Principal Global Investors is the asset management arm of the Principal Financial Group® (The Principal®) and includes the asset management operations of the following subsidiaries of The Principal: Principal Global Investors, LLC; Principal Real Estate Investors, LLC; Spectrum Asset Management, Inc.; Post Advisory Group, LLC; Columbus Circle Investors, Edge Asset Management, Inc.; Principal Global Investors (Europe) Limited; Principal Global Investors (Singapore) Ltd.; Principal Global Investors (Australia) Ltd.; and the majority owned affiliates of Principal International, Inc.

2) Ranked by U.S. institutional tax-exempt assets, out of 50 managers profiled, as of June 30, 2006. "Real Estate Managers," PENSIONS & INVESTMENTS, Oct. 16, 2006

3) "The Principal Financial Group" and "The Principal" are registered trademarks of Principal Financial Services, Inc., a member of the Principal Financial Group.

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