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Leshaw 650 Newport Center Drive Newport Beach CA 92660 As soon as practicable after the effective date of this Registration Statement. false true false false false false true false false false false false false false true false true false false false <div style="margin-top: 2pt;"><span style="color: #333333; font-family: arial narrow; font-size: 10pt;">This table is intended to assist investors in understanding the various </span><span style="color: #333333; font-family: arial narrow; font-size: 10pt;">costs and expenses directly or indirectly associated with investing in the </span><span style="color: #333333; font-family: arial narrow; font-size: 10pt;">Fund. You may qualify for sales charge discounts on Class A-4 Common </span><span style="color: #333333; font-family: arial narrow; font-size: 10pt;">Shares of the Fund if you and your family invest, or agree to invest in the </span><span style="color: #333333; font-family: arial narrow; font-size: 10pt;">future, in a certain amount of Class A-3 and/or Class A-4 common </span><span style="color: #333333; font-family: arial narrow; font-size: 10pt;">shares of the Fund (to the extent available) or other eligible closed-end </span><span style="color: #333333; font-family: arial narrow; font-size: 10pt;">interval funds that are sponsored by PIMCO. More information about </span><span style="color: #333333; font-family: arial narrow; font-size: 10pt;">these and other discounts is available in the “Plan of Distribution-Share </span><span style="color: #333333; font-family: arial narrow; font-size: 10pt;">Classes” section on page </span><span style="color: #333333; font-family: arial narrow; font-size: 10pt;">62</span><span style="color: #333333; font-family: arial narrow; font-size: 10pt;"> of this prospectus or from your financial </span><span style="color: #333333; font-family: arial narrow; font-size: 10pt;">advisor.</span></div> <div style="margin-top: 6pt;"><span style="color: #333333; font-family: arial narrow; font-size: 10pt; font-weight: bold;">Shareholder Transaction Expenses (fees paid directly from </span><span style="color: #333333; font-family: arial narrow; font-size: 10pt; font-weight: bold;">your investment):</span><span style="color: #000000; font-family: arial narrow; font-size: 1pt; font-weight: bold;"> </span></div> <table cellpadding="0" cellspacing="0" style="border-bottom: 0.5pt solid #00687d; empty-cells: show; width: 260pt;"> <tr style="height: 17pt;"> <td style="border-right: 0.5pt solid #FFFFFF; padding-bottom: 4.5pt; padding-top: 4.5pt; vertical-align: Bottom; width: 142.68pt;"> <div style="line-height: 0.5pt; text-align: left;"> <div style="margin-left: 3pt; margin-right: 2.25pt; text-align: center; white-space: nowrap;"><span style="color: #00687d; font-family: arial narrow; font-size: 7pt; font-weight: bold;"> </span></div> </div> </td> <td style="border-right: 0.5pt solid #FFFFFF; padding-bottom: 4.5pt; padding-top: 4.5pt; vertical-align: Bottom; width: 25.08pt;"> <div style="line-height: 7.5pt; text-align: left;"> <div style="margin-left: 2.25pt; margin-right: 2.25pt; text-align: center; white-space: nowrap;"><span style="color: #00687d; font-family: arial narrow; font-size: 7pt; font-weight: bold;">Inst</span></div> <div style="margin-left: 2.25pt; margin-right: 2.25pt; text-align: center; white-space: nowrap;"><span style="color: #00687d; font-family: arial narrow; font-size: 7pt; font-weight: bold;">Class</span></div> </div> </td> <td style="border-right: 0.5pt solid #FFFFFF; padding-bottom: 4.5pt; padding-top: 4.5pt; vertical-align: Bottom; width: 31.27pt;"> <div style="line-height: 7.5pt; text-align: left;"> <div style="margin-left: 2.25pt; margin-right: 2.25pt; text-align: center; white-space: nowrap;"><span style="color: #00687d; font-family: arial narrow; font-size: 7pt; font-weight: bold;">Class A-3</span></div> </div> </td> <td style="border-right: 0.5pt solid #FFFFFF; padding-bottom: 4.5pt; padding-top: 4.5pt; vertical-align: Bottom; width: 31.27pt;"> <div style="line-height: 7.5pt; text-align: left;"> <div style="margin-left: 2.25pt; margin-right: 2.25pt; text-align: center; white-space: nowrap;"><span style="color: #00687d; font-family: arial narrow; font-size: 7pt; font-weight: bold;">Class A-4</span></div> </div> </td> <td style="padding-bottom: 4.5pt; padding-top: 4.5pt; vertical-align: Bottom; width: 29.69pt;"> <div style="line-height: 7.5pt; text-align: left;"> <div style="margin-left: 2.25pt; margin-right: 3pt; text-align: center; white-space: nowrap;"><span style="color: #00687d; font-family: arial narrow; font-size: 7pt; font-weight: bold;">Class F</span></div> </div> </td> </tr> <tr style="height: 21pt;"> <td style="border-right: 0.5pt solid #FFFFFF; padding-bottom: 3.5pt; padding-top: 4.5pt; vertical-align: Top; width: 142.68pt;"> <div style="line-height: 8.0pt; text-align: left;"> <div style="margin-left: 3pt; margin-right: 2.25pt; text-align: left; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.0pt;">Maximum Initial Sales Charge (Load) Imposed on </span></div> <div style="margin-left: 3pt; margin-right: 2.25pt; text-align: left; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.0pt;">Purchases (as a percentage of offering price)</span></div> </div> </td> <td style="border-right: 0.5pt solid #FFFFFF; padding-bottom: 3.5pt; padding-top: 4.5pt; vertical-align: Top; width: 25.08pt;"> <div style="line-height: 8.0pt; text-align: left;"> <div style="margin-left: 2.25pt; margin-right: 2.25pt; text-align: center; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.0pt;">None</span><span style="color: #333333; font-family: arial narrow; font-size: 4.5pt; position: relative; top: -3pt;">(1)</span> <div style="clear: right;"> </div> </div> </div> </td> <td style="border-right: 0.5pt solid #FFFFFF; padding-bottom: 3.5pt; padding-top: 4.5pt; vertical-align: Top; width: 31.27pt;"> <div style="line-height: 8.0pt; text-align: left;"> <div style="margin-left: 2.25pt; margin-right: 2.25pt; text-align: center; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.0pt;">None</span><span style="color: #333333; font-family: arial narrow; font-size: 4.5pt; position: relative; top: -3pt;">(1)</span> <div style="clear: right;"> </div> </div> </div> </td> <td style="border-right: 0.5pt solid #FFFFFF; padding-bottom: 3.5pt; padding-top: 4.5pt; vertical-align: Top; width: 31.27pt;"> <div style="line-height: 8.0pt; text-align: left;"> <div style="margin-left: 2.25pt; margin-right: 2.25pt; text-align: center; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.00pt;">3.00%</span><span style="color: #333333; font-family: arial narrow; font-size: 4.5pt; position: relative; top: -3pt;">(2)</span> <div style="clear: right;"> </div> </div> </div> </td> <td style="padding-bottom: 3.5pt; padding-top: 4.5pt; vertical-align: Top; width: 29.69pt;"> <div style="line-height: 8.0pt; text-align: left;"> <div style="margin-left: 2.25pt; margin-right: 3pt; text-align: center; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.00pt;">None</span><span style="color: #333333; font-family: arial narrow; font-size: 4.5pt; position: relative; top: -3pt;">(1)</span> <div style="clear: right;"> </div> </div> </div> </td> </tr> <tr style="height: 25.5pt;"> <td style="background-color: #ecf6f8; border-right: 0.5pt solid #FFFFFF; padding-bottom: 2.5pt; padding-top: 3.5pt; vertical-align: Top; width: 142.68pt;"> <div style="line-height: 8.0pt; text-align: left;"> <div style="margin-left: 3pt; margin-right: 2.25pt; text-align: left; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.0pt;">Maximum Early Withdrawal Charge (Load) (as a </span></div> <div style="margin-left: 3pt; margin-right: 2.25pt; text-align: left; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.0pt;">percentage of the lower of the original purchase </span></div> <div style="margin-left: 3pt; margin-right: 2.25pt; text-align: left; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.0pt;">price or repurchase price)</span></div> </div> </td> <td style="background-color: #ecf6f8; border-right: 0.5pt solid #FFFFFF; padding-bottom: 2.5pt; padding-top: 3.5pt; vertical-align: Top; width: 25.08pt;"> <div style="line-height: 8.0pt; text-align: left;"> <div style="margin-left: 2.25pt; margin-right: 2.25pt; text-align: center; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.00pt;">None</span></div> </div> </td> <td style="background-color: #ecf6f8; border-right: 0.5pt solid #FFFFFF; padding-bottom: 2.5pt; padding-top: 3.5pt; vertical-align: Top; width: 31.27pt;"> <div style="line-height: 8.0pt; text-align: left;"> <div style="margin-left: 2.25pt; margin-right: 2.25pt; text-align: center; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.00pt;">None</span></div> </div> </td> <td style="background-color: #ecf6f8; border-right: 0.5pt solid #FFFFFF; padding-bottom: 2.5pt; padding-top: 3.5pt; vertical-align: Top; width: 31.27pt;"> <div style="line-height: 8.0pt; text-align: left;"> <div style="margin-left: 2.25pt; margin-right: 2.25pt; text-align: center; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.00pt;">1.00%</span></div> </div> </td> <td style="background-color: #ecf6f8; padding-bottom: 2.5pt; padding-top: 3.5pt; vertical-align: Top; width: 29.69pt;"> <div style="line-height: 8.0pt; text-align: left;"> <div style="margin-left: 2.25pt; margin-right: 3pt; text-align: center; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.0pt;">1.70%</span><span style="color: #333333; font-family: arial narrow; font-size: 4.5pt; position: relative; top: -3pt;">(3)</span> <div style="clear: right;"> </div> </div> </div> </td> </tr> </table> <div> <div style="clear: both; margin-top: 2.5pt; position: relative; width: 100%;"> <div style="float: left; line-height: 10.0pt; text-align: left; width: 3.84pt;"><span style="color: #333333; font-family: arial narrow; font-size: 8pt;">1</span></div> <div style="float: left; line-height: 10.0pt; margin-left: 6.16pt; text-align: left; width: 245.00pt;"><span style="color: #333333; font-family: arial narrow; font-size: 8pt;">While neither the Fund nor the Distributor impose an initial sales charge on Institutional Class or Class A-3 Common Shares if you buy Institutional Class or Class A-3 Common Shares through certain financial firms, they may directly charge you transaction or other fees in such amount as they may determine. Please consult your financial firm for additional information.</span><span style="color: #000000; font-family: arial narrow; font-size: 8pt; line-height: 10pt;"> </span></div> </div> <div style="clear: both; position: relative;"> </div> </div> <div> <div style="clear: both; margin-top: 2pt; position: relative; width: 100%;"> <div style="float: left; line-height: 10.0pt; text-align: left; width: 3.84pt;"><span style="color: #333333; font-family: arial narrow; font-size: 8pt;">2</span></div> <div style="float: left; line-height: 10.0pt; margin-left: 6.16pt; text-align: left; width: 245.00pt;"><span style="color: #333333; font-family: arial narrow; font-size: 8pt;">Although the Fund is permitted to charge a maximum sales charge of 3.00%, the Fund has elected to currently charge a maximum sales charge of 2.00%. See “Plan of Distribution - Purchasing Shares - Reductions and Waivers of Initial Sales Charges and EWCs” - Class A-4 Common Shares in this prospectus for more information on sales charge waivers and discounts.</span><span style="color: #000000; font-family: arial narrow; font-size: 8pt; line-height: 10pt;"> </span></div> </div> <div style="clear: both; position: relative;"> </div> </div> <div> <div style="clear: both; margin-top: 2pt; position: relative; width: 100%;"> <div style="float: left; line-height: 10.0pt; text-align: left; width: 3.84pt;"><span style="color: #333333; font-family: arial narrow; font-size: 8pt;">3</span></div> <div style="float: left; line-height: 10.0pt; margin-left: 6.16pt; text-align: left; width: 245.00pt;"><span style="color: #333333; font-family: arial narrow; font-size: 8pt;">See “Appendix B - Financial Firm-Specific Fee Variations” in this prospectus for more information on intermediary-specific variations.</span></div> </div> <div style="clear: both; position: relative;"> </div> </div> 0 0 0.0300 0 0 0 0.0100 0.0170 <div style="margin-top: 10pt;"><span style="color: #00687d; font-family: arial narrow; font-size: 12pt; font-weight: bold;">Annual Fund Operating Expenses (as a percentage of net assets attributable to Common Shares (reflecting leverage attributable to Preferred </span><span style="color: #00687d; font-family: arial narrow; font-size: 12pt; font-weight: bold;">Shares</span><span style="color: #00687d; font-family: arial narrow; font-size: 12pt; font-weight: bold;">,</span><span style="color: #00687d; font-family: arial narrow; font-size: 12pt; font-weight: bold; line-height: 14pt;"> </span><span style="color: #00687d; font-family: arial narrow; font-size: 12pt; font-weight: bold;">reverse repurchase agreements</span><span style="color: #00687d; font-family: arial narrow; font-size: 12pt; font-weight: bold;"> and </span><span style="color: #00687d; font-family: arial narrow; font-size: 12pt; font-weight: bold;">borrowings</span><span style="color: #00687d; font-family: arial narrow; font-size: 12pt; font-weight: bold;">)):</span><span style="color: #000000; font-family: arial narrow; font-size: 1pt; font-weight: bold;"> </span></div> <table cellpadding="0" cellspacing="0" style="border-bottom: 0.5pt solid #00687d; empty-cells: show; width: 260pt;"> <tr style="height: 17pt;"> <td style="border-right: 0.5pt solid #FFFFFF; padding-bottom: 4.5pt; padding-top: 4.5pt; vertical-align: Bottom; width: 141.78pt;"> <div style="line-height: 0.5pt; text-align: left;"> <div style="margin-left: 3pt; margin-right: 2.25pt; text-align: center; white-space: nowrap;"><span style="color: #00687d; font-family: arial narrow; font-size: 7pt; font-weight: bold;"> </span></div> </div> </td> <td style="border-right: 0.5pt solid #FFFFFF; padding-bottom: 4.5pt; padding-top: 4.5pt; vertical-align: Bottom; width: 27.59pt;"> <div style="line-height: 7.5pt; text-align: left;"> <div style="margin-left: 2.25pt; margin-right: 2.25pt; text-align: center; white-space: nowrap;"><span style="color: #00687d; font-family: arial narrow; font-size: 7pt; font-weight: bold;">Inst</span></div> <div style="margin-left: 2.25pt; margin-right: 2.25pt; text-align: center; white-space: nowrap;"><span style="color: #00687d; font-family: arial narrow; font-size: 7pt; font-weight: bold;">Class</span></div> </div> </td> <td style="border-right: 0.5pt solid #FFFFFF; padding-bottom: 4.5pt; padding-top: 4.5pt; vertical-align: Bottom; width: 31.27pt;"> <div style="line-height: 7.5pt; text-align: left;"> <div style="margin-left: 2.25pt; margin-right: 2.25pt; text-align: center; white-space: nowrap;"><span style="color: #00687d; font-family: arial narrow; font-size: 7pt; font-weight: bold;">Class A-3</span></div> </div> </td> <td style="border-right: 0.5pt solid #FFFFFF; padding-bottom: 4.5pt; padding-top: 4.5pt; vertical-align: Bottom; width: 31.27pt;"> <div style="line-height: 7.5pt; text-align: left;"> <div style="margin-left: 2.25pt; margin-right: 2.25pt; text-align: center; white-space: nowrap;"><span style="color: #00687d; font-family: arial narrow; font-size: 7pt; font-weight: bold;">Class A-4</span></div> </div> </td> <td style="padding-bottom: 4.5pt; padding-top: 4.5pt; vertical-align: Bottom; width: 28.09pt;"> <div style="line-height: 7.5pt; text-align: left;"> <div style="margin-left: 2.25pt; margin-right: 3pt; text-align: center; white-space: nowrap;"><span style="color: #00687d; font-family: arial narrow; font-size: 7pt; font-weight: bold;">Class F</span></div> </div> </td> </tr> <tr style="height: 13pt;"> <td style="border-right: 0.5pt solid #FFFFFF; padding-bottom: 3.5pt; padding-top: 4.5pt; vertical-align: Top; width: 141.78pt;"> <div style="line-height: 8.0pt; text-align: left;"> <div style="margin-left: 3pt; margin-right: 2.25pt; text-align: left; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.0pt;">Advisory Fees</span></div> </div> </td> <td style="border-right: 0.5pt solid #FFFFFF; padding-bottom: 3.5pt; padding-top: 4.5pt; vertical-align: Top; width: 27.59pt;"> <div style="line-height: 8.0pt; text-align: left;"> <div style="margin-left: 2.25pt; margin-right: 2.25pt; text-align: center; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.00pt;">1.25%</span></div> </div> </td> <td style="border-right: 0.5pt solid #FFFFFF; padding-bottom: 3.5pt; padding-top: 4.5pt; vertical-align: Top; width: 31.27pt;"> <div style="line-height: 8.0pt; text-align: left;"> <div style="margin-left: 2.25pt; margin-right: 2.25pt; text-align: center; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.00pt;">1.25%</span></div> </div> </td> <td style="border-right: 0.5pt solid #FFFFFF; padding-bottom: 3.5pt; padding-top: 4.5pt; vertical-align: Top; width: 31.27pt;"> <div style="line-height: 8.0pt; text-align: left;"> <div style="margin-left: 2.25pt; margin-right: 2.25pt; text-align: center; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.00pt;">1.25%</span></div> </div> </td> <td style="padding-bottom: 3.5pt; padding-top: 4.5pt; vertical-align: Top; width: 28.09pt;"> <div style="line-height: 8.0pt; text-align: left;"> <div style="margin-left: 2.25pt; margin-right: 3pt; text-align: center; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.00pt;">1.25%</span></div> </div> </td> </tr> <tr style="height: 12pt;"> <td style="background-color: #ecf6f8; border-right: 0.5pt solid #FFFFFF; padding-bottom: 3.5pt; padding-top: 3.5pt; vertical-align: Top; width: 141.78pt;"> <div style="line-height: 8.0pt; text-align: left;"> <div style="margin-left: 3pt; margin-right: 2.25pt; text-align: left; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.0pt;">Administrative Fees</span></div> </div> </td> <td style="background-color: #ecf6f8; border-right: 0.5pt solid #FFFFFF; padding-bottom: 3.5pt; padding-top: 3.5pt; vertical-align: Top; width: 27.59pt;"> <div style="line-height: 8.0pt; text-align: left;"> <div style="margin-left: 2.25pt; margin-right: 2.25pt; text-align: center; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.00pt;">0.50%</span></div> </div> </td> <td style="background-color: #ecf6f8; border-right: 0.5pt solid #FFFFFF; padding-bottom: 3.5pt; padding-top: 3.5pt; vertical-align: Top; width: 31.27pt;"> <div style="line-height: 8.0pt; text-align: left;"> <div style="margin-left: 2.25pt; margin-right: 2.25pt; text-align: center; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.00pt;">0.50%</span></div> </div> </td> <td style="background-color: #ecf6f8; border-right: 0.5pt solid #FFFFFF; padding-bottom: 3.5pt; padding-top: 3.5pt; vertical-align: Top; width: 31.27pt;"> <div style="line-height: 8.0pt; text-align: left;"> <div style="margin-left: 2.25pt; margin-right: 2.25pt; text-align: center; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.00pt;">0.50%</span></div> </div> </td> <td style="background-color: #ecf6f8; padding-bottom: 3.5pt; padding-top: 3.5pt; vertical-align: Top; width: 28.09pt;"> <div style="line-height: 8.0pt; text-align: left;"> <div style="margin-left: 2.25pt; margin-right: 3pt; text-align: center; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.00pt;">0.50%</span></div> </div> </td> </tr> <tr style="height: 12pt;"> <td style="border-right: 0.5pt solid #FFFFFF; padding-bottom: 3.5pt; padding-top: 3.5pt; vertical-align: Top; width: 141.78pt;"> <div style="line-height: 8.0pt; text-align: left;"> <div style="margin-left: 3pt; margin-right: 2.25pt; text-align: left; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.0pt;">Distribution and/or Service (12b-1) Fees</span></div> </div> </td> <td style="border-right: 0.5pt solid #FFFFFF; padding-bottom: 3.5pt; padding-top: 3.5pt; vertical-align: Top; width: 27.59pt;"> <div style="line-height: 8.0pt; text-align: left;"> <div style="margin-left: 2.25pt; margin-right: 2.25pt; text-align: center; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.00pt;"><span class="sec-hidden" style="-sec-ix-hidden: h_17_e880c4c3_6b8f_a1ad_6b89_6623f4aecddd;">N/A</span></span></div> </div> </td> <td style="border-right: 0.5pt solid #FFFFFF; padding-bottom: 3.5pt; padding-top: 3.5pt; vertical-align: Top; width: 31.27pt;"> <div style="line-height: 8.0pt; text-align: left;"> <div style="margin-left: 2.25pt; margin-right: 2.25pt; text-align: center; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.00pt;">0.75%</span></div> </div> </td> <td style="border-right: 0.5pt solid #FFFFFF; padding-bottom: 3.5pt; padding-top: 3.5pt; vertical-align: Top; width: 31.27pt;"> <div style="line-height: 8.0pt; text-align: left;"> <div style="margin-left: 2.25pt; margin-right: 2.25pt; text-align: center; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.00pt;">0.75%</span></div> </div> </td> <td style="padding-bottom: 3.5pt; padding-top: 3.5pt; vertical-align: Top; width: 28.09pt;"> <div style="line-height: 8.0pt; text-align: left;"> <div style="margin-left: 2.25pt; margin-right: 3pt; text-align: center; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.00pt;"><span class="sec-hidden" style="-sec-ix-hidden: h_19_6a35b246_c3ba_3d76_5717_d053c202b495;">N/A</span></span></div> </div> </td> </tr> <tr style="height: 12pt;"> <td style="background-color: #ecf6f8; border-right: 0.5pt solid #FFFFFF; padding-bottom: 3.5pt; padding-top: 3.5pt; vertical-align: Top; width: 141.78pt;"> <div style="line-height: 8.0pt; text-align: left;"> <div style="margin-left: 3pt; margin-right: 2.25pt; text-align: left; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.0pt;">Interest Payments on Borrowed Funds</span><span style="color: #333333; font-family: arial narrow; font-size: 4.5pt; margin-left: 0.0pt; position: relative; top: -3pt;">(1)(2)</span></div> </div> </td> <td style="background-color: #ecf6f8; border-right: 0.5pt solid #FFFFFF; padding-bottom: 3.5pt; padding-top: 3.5pt; vertical-align: Top; width: 27.59pt;"> <div style="line-height: 8.0pt; text-align: left;"> <div style="margin-left: 2.25pt; margin-right: 2.25pt; text-align: center; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.00pt;">0.55%</span></div> </div> </td> <td style="background-color: #ecf6f8; border-right: 0.5pt solid #FFFFFF; padding-bottom: 3.5pt; padding-top: 3.5pt; vertical-align: Top; width: 31.27pt;"> <div style="line-height: 8.0pt; text-align: left;"> <div style="margin-left: 2.25pt; margin-right: 2.25pt; text-align: center; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.00pt;">0.55%</span></div> </div> </td> <td style="background-color: #ecf6f8; border-right: 0.5pt solid #FFFFFF; padding-bottom: 3.5pt; padding-top: 3.5pt; vertical-align: Top; width: 31.27pt;"> <div style="line-height: 8.0pt; text-align: left;"> <div style="margin-left: 2.25pt; margin-right: 2.25pt; text-align: center; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.00pt;">0.55%</span></div> </div> </td> <td style="background-color: #ecf6f8; padding-bottom: 3.5pt; padding-top: 3.5pt; vertical-align: Top; width: 28.09pt;"> <div style="line-height: 8.0pt; text-align: left;"> <div style="margin-left: 2.25pt; margin-right: 3pt; text-align: center; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.00pt;">0.55%</span></div> </div> </td> </tr> <tr style="height: 12pt;"> <td style="border-right: 0.5pt solid #FFFFFF; padding-bottom: 3.5pt; padding-top: 3.5pt; vertical-align: Top; width: 141.78pt;"> <div style="line-height: 8.0pt; text-align: left;"> <div style="margin-left: 3pt; margin-right: 2.25pt; text-align: left; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.0pt;">Property-Level Expenses</span><span style="color: #333333; font-family: arial narrow; font-size: 4.5pt; margin-left: 0.0pt; position: relative; top: -3pt;">(3)</span></div> </div> </td> <td style="border-right: 0.5pt solid #FFFFFF; padding-bottom: 3.5pt; padding-top: 3.5pt; vertical-align: Top; width: 27.59pt;"> <div style="line-height: 8.0pt; text-align: left;"> <div style="margin-left: 2.25pt; margin-right: 2.25pt; text-align: center; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.00pt;"><span class="sec-hidden" style="-sec-ix-hidden: h_23_8f0fc1a9_d480_b340_4bbe_1c311977631e;">N/A</span></span></div> </div> </td> <td style="border-right: 0.5pt solid #FFFFFF; padding-bottom: 3.5pt; padding-top: 3.5pt; vertical-align: Top; width: 31.27pt;"> <div style="line-height: 8.0pt; text-align: left;"> <div style="margin-left: 2.25pt; margin-right: 2.25pt; text-align: center; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.00pt;"><span class="sec-hidden" style="-sec-ix-hidden: h_23_9a855e25_118b_97c9_c551_ee8454d2edeb;">N/A</span></span></div> </div> </td> <td style="border-right: 0.5pt solid #FFFFFF; padding-bottom: 3.5pt; padding-top: 3.5pt; vertical-align: Top; width: 31.27pt;"> <div style="line-height: 8.0pt; text-align: left;"> <div style="margin-left: 2.25pt; margin-right: 2.25pt; text-align: center; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.00pt;"><span class="sec-hidden" style="-sec-ix-hidden: h_23_c6376b03_e5ce_c5d8_21f7_24db402f678b;">N/A</span></span></div> </div> </td> <td style="padding-bottom: 3.5pt; padding-top: 3.5pt; vertical-align: Top; width: 28.09pt;"> <div style="line-height: 8.0pt; text-align: left;"> <div style="margin-left: 2.25pt; margin-right: 3pt; text-align: center; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.00pt;"><span class="sec-hidden" style="-sec-ix-hidden: h_23_e68a71e3_9f1b_f605_e33c_03562054cf99;">N/A</span></span></div> </div> </td> </tr> <tr style="height: 12pt;"> <td style="background-color: #ecf6f8; border-right: 0.5pt solid #FFFFFF; padding-bottom: 3.5pt; padding-top: 3.5pt; vertical-align: Top; width: 141.78pt;"> <div style="line-height: 8.0pt; text-align: left;"> <div style="margin-left: 3pt; margin-right: 2.25pt; text-align: left; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.0pt;">Other Expenses</span><span style="color: #333333; font-family: arial narrow; font-size: 4.5pt; margin-left: 0.0pt; position: relative; top: -3pt;">(4)</span></div> </div> </td> <td style="background-color: #ecf6f8; border-right: 0.5pt solid #FFFFFF; padding-bottom: 3.5pt; padding-top: 3.5pt; vertical-align: Top; width: 27.59pt;"> <div style="line-height: 8.0pt; text-align: left;"> <div style="margin-left: 2.25pt; margin-right: 2.25pt; text-align: center; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.00pt;">0.24%</span></div> </div> </td> <td style="background-color: #ecf6f8; border-right: 0.5pt solid #FFFFFF; padding-bottom: 3.5pt; padding-top: 3.5pt; vertical-align: Top; width: 31.27pt;"> <div style="line-height: 8.0pt; text-align: left;"> <div style="margin-left: 2.25pt; margin-right: 2.25pt; text-align: center; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.00pt;">0.24%</span></div> </div> </td> <td style="background-color: #ecf6f8; border-right: 0.5pt solid #FFFFFF; padding-bottom: 3.5pt; padding-top: 3.5pt; vertical-align: Top; width: 31.27pt;"> <div style="line-height: 8.0pt; text-align: left;"> <div style="margin-left: 2.25pt; margin-right: 2.25pt; text-align: center; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.00pt;">0.24%</span></div> </div> </td> <td style="background-color: #ecf6f8; padding-bottom: 3.5pt; padding-top: 3.5pt; vertical-align: Top; width: 28.09pt;"> <div style="line-height: 8.0pt; text-align: left;"> <div style="margin-left: 2.25pt; margin-right: 3pt; text-align: center; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.00pt;">0.24%</span></div> </div> </td> </tr> <tr style="height: 12pt;"> <td style="border-right: 0.5pt solid #FFFFFF; padding-bottom: 3.5pt; padding-top: 3.5pt; vertical-align: Top; width: 141.78pt;"> <div style="line-height: 8.0pt; text-align: left;"> <div style="margin-left: 3pt; margin-right: 2.25pt; text-align: left; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; font-weight: bold; margin-left: 0.0pt;">Total Annual Fund Operating Expenses</span></div> </div> </td> <td style="border-right: 0.5pt solid #FFFFFF; padding-bottom: 3.5pt; padding-top: 3.5pt; vertical-align: Top; width: 27.59pt;"> <div style="line-height: 8.0pt; text-align: left;"> <div style="margin-left: 2.25pt; margin-right: 2.25pt; text-align: center; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; font-weight: bold; margin-left: 0.00pt;">2.54%</span></div> </div> </td> <td style="border-right: 0.5pt solid #FFFFFF; padding-bottom: 3.5pt; padding-top: 3.5pt; vertical-align: Top; width: 31.27pt;"> <div style="line-height: 8.0pt; text-align: left;"> <div style="margin-left: 2.25pt; margin-right: 2.25pt; text-align: center; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; font-weight: bold; margin-left: 0.00pt;">3.29%</span></div> </div> </td> <td style="border-right: 0.5pt solid #FFFFFF; padding-bottom: 3.5pt; padding-top: 3.5pt; vertical-align: Top; width: 31.27pt;"> <div style="line-height: 8.0pt; text-align: left;"> <div style="margin-left: 2.25pt; margin-right: 2.25pt; text-align: center; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; font-weight: bold; margin-left: 0.00pt;">3.29%</span></div> </div> </td> <td style="padding-bottom: 3.5pt; padding-top: 3.5pt; vertical-align: Top; width: 28.09pt;"> <div style="line-height: 8.0pt; text-align: left;"> <div style="margin-left: 2.25pt; margin-right: 3pt; text-align: center; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; font-weight: bold; margin-left: 0.00pt;">2.54%</span></div> </div> </td> </tr> <tr style="height: 12pt;"> <td style="background-color: #ecf6f8; border-right: 0.5pt solid #FFFFFF; padding-bottom: 3.5pt; padding-top: 3.5pt; vertical-align: Top; width: 141.78pt;"> <div style="line-height: 8.0pt; text-align: left;"> <div style="margin-left: 3pt; margin-right: 2.25pt; text-align: left; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.0pt;">Expense Reimbursement</span><span style="color: #333333; font-family: arial narrow; font-size: 4.5pt; margin-left: 0.0pt; position: relative; top: -3pt;">(5)</span></div> </div> </td> <td style="background-color: #ecf6f8; border-right: 0.5pt solid #FFFFFF; padding-bottom: 3.5pt; padding-top: 3.5pt; vertical-align: Top; width: 27.59pt;"> <div style="line-height: 8.0pt; text-align: left;"> <div style="margin-left: 2.25pt; margin-right: 2.25pt; text-align: center; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.0pt;">(0.07)%</span></div> </div> </td> <td style="background-color: #ecf6f8; border-right: 0.5pt solid #FFFFFF; padding-bottom: 3.5pt; padding-top: 3.5pt; vertical-align: Top; width: 31.27pt;"> <div style="line-height: 8.0pt; text-align: left;"> <div style="margin-left: 2.25pt; margin-right: 2.25pt; text-align: center; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.00pt;">(0.07)%</span></div> </div> </td> <td style="background-color: #ecf6f8; border-right: 0.5pt solid #FFFFFF; padding-bottom: 3.5pt; padding-top: 3.5pt; vertical-align: Top; width: 31.27pt;"> <div style="line-height: 8.0pt; text-align: left;"> <div style="margin-left: 2.25pt; margin-right: 2.25pt; text-align: center; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.00pt;">(0.07)%</span></div> </div> </td> <td style="background-color: #ecf6f8; padding-bottom: 3.5pt; padding-top: 3.5pt; vertical-align: Top; width: 28.09pt;"> <div style="line-height: 8.0pt; text-align: left;"> <div style="margin-left: 2.25pt; margin-right: 3pt; text-align: center; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.0pt;">(0.07)%</span></div> </div> </td> </tr> <tr style="height: 17.5pt;"> <td style="border-right: 0.5pt solid #FFFFFF; padding-bottom: 2.5pt; padding-top: 3.5pt; vertical-align: Top; width: 141.78pt;"> <div style="line-height: 8.0pt; text-align: left;"> <div style="margin-left: 3pt; margin-right: 2.25pt; text-align: left; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; font-weight: bold; margin-left: 0.0pt;">Total Annual Fund Operating Expenses </span></div> <div style="margin-left: 3pt; margin-right: 2.25pt; text-align: left; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; font-weight: bold; margin-left: 0.0pt;">after Expense Reimbursement</span></div> </div> </td> <td style="border-right: 0.5pt solid #FFFFFF; padding-bottom: 2.5pt; padding-top: 3.5pt; vertical-align: Top; width: 27.59pt;"> <div style="line-height: 8.0pt; text-align: left;"> <div style="margin-left: 2.25pt; margin-right: 2.25pt; text-align: center; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; font-weight: bold; margin-left: 0.00pt;">2.47%</span></div> </div> </td> <td style="border-right: 0.5pt solid #FFFFFF; padding-bottom: 2.5pt; padding-top: 3.5pt; vertical-align: Top; width: 31.27pt;"> <div style="line-height: 8.0pt; text-align: left;"> <div style="margin-left: 2.25pt; margin-right: 2.25pt; text-align: center; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; font-weight: bold; margin-left: 0.00pt;">3.22%</span></div> </div> </td> <td style="border-right: 0.5pt solid #FFFFFF; padding-bottom: 2.5pt; padding-top: 3.5pt; vertical-align: Top; width: 31.27pt;"> <div style="line-height: 8.0pt; text-align: left;"> <div style="margin-left: 2.25pt; margin-right: 2.25pt; text-align: center; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; font-weight: bold; margin-left: 0.00pt;">3.22%</span></div> </div> </td> <td style="padding-bottom: 2.5pt; padding-top: 3.5pt; vertical-align: Top; width: 28.09pt;"> <div style="line-height: 8.0pt; text-align: left;"> <div style="margin-left: 2.25pt; margin-right: 3pt; text-align: center; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; font-weight: bold; margin-left: 0.00pt;">2.47%</span></div> </div> </td> </tr> </table> <div> <div style="clear: both; margin-top: 2.5pt; position: relative; width: 100%;"> <div style="float: left; line-height: 10.0pt; text-align: left; width: 3.84pt;"><span style="color: #333333; font-family: arial narrow; font-size: 8pt;">1</span></div> <div style="float: left; line-height: 10.0pt; margin-left: 6.16pt; text-align: left; width: 245.00pt;"><span style="color: #333333; font-family: arial narrow; font-size: 8pt;">“Interest Payments on Borrowed Funds” </span><span style="color: #333333; font-family: arial narrow; font-size: 8pt;">are borne by the Fund separately from the </span><span style="color: #333333; font-family: arial narrow; font-size: 8pt;">advisory and administrative fees paid to PIMCO. Excluding such expenses, estimated </span><span style="color: #333333; font-family: arial narrow; font-size: 8pt;">Total Annual Fund Operating Expenses After </span><span style="color: #333333; font-family: arial narrow; font-size: 8pt;">Expense Reimbursement are 1.92% for </span><span style="color: #333333; font-family: arial narrow; font-size: 8pt;">Institutional Class and Class F shares and 2.67% for Class A-3 and Class A-4 shares.</span><span style="color: #333333; font-family: arial narrow; font-size: 8pt; line-height: 10pt;"> </span></div> </div> <div style="clear: both; position: relative;"> </div> </div> <div style="line-height: 10.0pt; margin-left: 10pt; text-align: left;"><span style="color: #333333; font-family: arial narrow; font-size: 8pt;">Interest Payments on Borrowed Funds is calculated and presented equally across all </span><span style="color: #333333; font-family: arial narrow; font-size: 8pt;">share classes. As a result, Total Annual Fund Operating Expenses may not match the </span><span style="color: #333333; font-family: arial narrow; font-size: 8pt;">Ratio of Expenses to Average Net Assets for certain share classes, as set forth in the </span><span style="color: #333333; font-family: arial narrow; font-size: 8pt;">Financial Highlights table of the Fund's prospectus, because the Ratio of Expenses to </span><span style="color: #333333; font-family: arial narrow; font-size: 8pt;">Average Net Assets is calculated based on the average net assets of the applicable </span><span style="color: #333333; font-family: arial narrow; font-size: 8pt;">share class.</span><span style="color: #000000; font-family: arial narrow; font-size: 8pt; line-height: 10pt;"> </span></div> <div> <div style="clear: both; margin-top: 2pt; position: relative; width: 100%;"> <div style="float: left; line-height: 10.0pt; text-align: left; width: 3.84pt;"><span style="color: #333333; font-family: arial narrow; font-size: 8pt;">2</span></div> <div style="float: left; line-height: 10.0pt; margin-left: 6.16pt; text-align: left; width: 245.00pt;"><span style="color: #333333; font-family: arial narrow; font-size: 8pt;">“Interest Payments on Borrowed Funds” reflects the Fund’s use of leverage in the form of reverse repurchase agreements and lines of credit averaged over the period ended December 31, 2025, which represented 0.21% and 6.20%, respectively of the Fund's average total managed assets (or 0.23% and 6.63%, respectively, of the Fund's average net assets attributable to common shares), as of that date, at an interest expense rate of 4.563% and 5.882%, respectively. The actual amount of leverage used and borrowing expenses borne by the Fund will vary over time in accordance with the level of the Fund's use of secured credit facilities from certain financial institutions and/or other forms of borrowings and variations in market interest rates. Borrowing expense is required to be treated as an expense of the Fund for accounting purposes. Any associated income or gains (or losses) realized from leverage obtained through such instruments is not reflected in the Annual Fund Operating Expenses table above, but would be reflected in the Fund's performance result.</span></div> </div> <div style="clear: both; position: relative;"> </div> </div> <div> <div style="clear: both; margin-top: 2pt; position: relative; width: 100%;"> <div style="float: left; line-height: 10.0pt; text-align: left; width: 3.84pt;"><span style="color: #333333; font-family: arial narrow; font-size: 8pt;">3</span></div> <div style="float: left; line-height: 10.0pt; margin-left: 6.16pt; text-align: left; width: 245.00pt;"><span style="color: #333333; font-family: arial narrow; font-size: 8pt;">“Property-Level Expenses” represents estimated fees and expenses related to property management, disposition expenses, any other expenses related to investments in real property by the Fund’s consolidated subsidiaries. In addition, the Fund also expects that its unconsolidated operating entities will incur property management, disposition and other expenses related to investments in real property, the costs of which will be indirectly borne by Common Shareholders. The Fund’s real estate operating subsidiaries have and expect in the future to hire affiliated or unaffiliated property managers or other service providers (who could also be joint venture partners for an investment) at prevailing market rates to perform management and specialized services for the Fund’s commercial real estate (“CRE”) investments.</span><span style="color: #000000; font-family: arial narrow; font-size: 8pt; line-height: 10pt;"> </span></div> </div> <div style="clear: both; position: relative;"> </div> </div> <div style="margin-top: 2pt;"><span style="color: #333333; font-family: arial narrow; font-size: 8pt;">4 “Other Expenses” are based on estimated amounts for the current fiscal year.</span><span style="color: #000000; font-family: arial narrow; font-size: 8pt; line-height: 10pt;"> </span></div> <div> <div style="clear: both; margin-top: 2pt; position: relative; width: 100%;"> <div style="float: left; line-height: 10.0pt; text-align: left; width: 3.84pt;"><span style="color: #333333; font-family: arial narrow; font-size: 8pt;">5</span></div> <div style="float: left; line-height: 10.0pt; margin-left: 6.16pt; text-align: left; width: 245.00pt;"><span style="color: #333333; font-family: arial narrow; font-size: 8pt;">PIMCO has contractually agreed (the “Expense Limitation Agreement”), through May 1, 2027, to waive its supervisory and administrative fee, or reimburse the Fund, to the extent that organizational expenses (including any initial offering expenses), the payment of expenses associated with obtaining or maintaining a Legal Entity Identifier (“LEI”) and/or payment of the Fund’s pro rata Trustees’ fees (the “Specified Expenses”) in any fiscal year exceed 0.07% of the Fund’s average daily net assets (the “Expense Limit”). Under the Expense Limitation Agreement, if, in any month during which the Administration Agreement is in effect, the estimated annualized Specified Expenses of the Fund for that month are less than the Expense Limit, PIMCO shall be entitled to reimbursement by the Fund of any Supervisory and Administrative Fees waived or reduced pursuant to the Expense Limitation Agreement (the “Reimbursement Amount”) during the previous thirty-six (36) months, to the extent that the Fund’s annualized Specified Expenses plus the amount so reimbursed does not exceed, for such month, the Expense Limit (or the expense limit in place at the time the amount being recouped was originally waived if lower than the Expense Limit) or any future expense limitation that may be in place, provided that such amount paid to PIMCO will in no event exceed the total Reimbursement Amount and will not include any amounts previously reimbursed to PIMCO. The Expense Limitation Agreement shall automatically renew for one-year terms unless PIMCO provides written notice to the Fund of the termination of the Expense Limitation Agreement, which notice shall be received by the Fund at least 30 days prior to the end of the then-current term. In addition, the Expense Limitation Agreement shall terminate upon termination of the Administration Agreement, or it may be terminated by the Fund, without payment of any penalty, upon ninety (90) days’ prior written notice to PIMCO at its principal place of business.</span></div> </div> <div style="clear: both; position: relative;"> </div> </div> as a percentage of net assets attributable to Common Shares 0.0125 0.0125 0.0125 0.0125 0.0050 0.0050 0.0050 0.0050 0.0075 0.0075 0.0055 0.0055 0.0055 0.0055 0.0024 0.0024 0.0024 0.0024 0.0254 0.0329 0.0329 0.0254 -0.0007 -0.0007 -0.0007 -0.0007 0.0247 0.0322 0.0322 0.0247 “Other Expenses” are based on estimated amounts for the current fiscal year. <div style="margin-top: 10pt;"><span style="color: #00687d; font-family: arial narrow; font-size: 12pt; font-weight: bold;">Example</span></div> <div style="margin-top: 4pt;"><span style="color: #333333; font-family: arial narrow; font-size: 10pt;">As required by relevant SEC regulations, the following example </span><span style="color: #333333; font-family: arial narrow; font-size: 10pt;">illustrates the expenses (including any applicable sales charge) that you </span><span style="color: #333333; font-family: arial narrow; font-size: 10pt;">would pay on a $1,000 investment in the Common Shares, assuming a </span><span style="color: #333333; font-family: arial narrow; font-size: 10pt;">5% annual return</span><span style="color: #333333; font-family: arial narrow; font-size: 6.5pt; position: relative; top: -4.25pt;">(1)</span><span style="color: #333333; font-family: arial narrow; font-size: 10pt;">:</span><span style="color: #000000; font-family: arial narrow; font-size: 10pt; line-height: 12pt;"> </span></div> <div style="line-height: 12.0pt; text-align: left;"><span style="color: #333333; font-family: arial narrow; font-size: 10pt; font-weight: bold;">If you redeem your shares at the end of each period:</span><span style="color: #000000; font-family: arial narrow; font-size: 1pt;"> </span></div> <table cellpadding="0" cellspacing="0" style="border-bottom: 0.5pt solid #00687d; empty-cells: show; width: 260pt;"> <tr style="height: 8.5pt;"> <td style="border-right: 0.5pt solid #FFFFFF; padding-bottom: 3.5pt; padding-top: 3.5pt; vertical-align: Bottom; width: 132.84pt;"> <div style="line-height: 0.5pt; text-align: left;"> <div style="margin-left: 3pt; margin-right: 5.75pt; text-align: center; white-space: nowrap;"><span style="color: #00687d; font-family: arial narrow; font-size: 7pt; font-weight: bold;"> </span></div> </div> </td> <td style="border-right: 0.5pt solid #FFFFFF; padding-bottom: 3.5pt; padding-top: 3.5pt; vertical-align: Bottom; width: 29.55pt;"> <div style="line-height: 7pt; text-align: left;"> <div style="margin-left: 5.75pt; margin-right: 5.75pt; text-align: center; white-space: nowrap;"><span style="color: #00687d; font-family: arial narrow; font-size: 7pt; font-weight: bold;">1 Year</span></div> </div> </td> <td style="border-right: 0.5pt solid #FFFFFF; padding-bottom: 3.5pt; padding-top: 3.5pt; vertical-align: Bottom; width: 32.32pt;"> <div style="line-height: 7pt; text-align: left;"> <div style="margin-left: 5.75pt; margin-right: 5.75pt; text-align: center; white-space: nowrap;"><span style="color: #00687d; font-family: arial narrow; font-size: 7pt; font-weight: bold;">3 Years</span></div> </div> </td> <td style="border-right: 0.5pt solid #FFFFFF; padding-bottom: 3.5pt; padding-top: 3.5pt; vertical-align: Bottom; width: 32.32pt;"> <div style="line-height: 7pt; text-align: left;"> <div style="margin-left: 5.75pt; margin-right: 5.75pt; text-align: center; white-space: nowrap;"><span style="color: #00687d; font-family: arial narrow; font-size: 7pt; font-weight: bold;">5 Years</span></div> </div> </td> <td style="padding-bottom: 3.5pt; padding-top: 3.5pt; vertical-align: Bottom; width: 32.96pt;"> <div style="line-height: 7pt; text-align: left;"> <div style="margin-left: 5.75pt; margin-right: 3pt; text-align: center; white-space: nowrap;"><span style="color: #00687d; font-family: arial narrow; font-size: 7pt; font-weight: bold;">10 Years</span></div> </div> </td> </tr> <tr style="height: 12pt;"> <td style="background-color: #ecf6f8; border-right: 0.5pt solid #FFFFFF; padding-bottom: 3.5pt; padding-top: 3.5pt; vertical-align: Top; width: 132.84pt;"> <div style="line-height: 7.5pt; text-align: left;"> <div style="margin-left: 3pt; margin-right: 5.75pt; text-align: left; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.0pt;">Institutional Class</span></div> </div> </td> <td style="background-color: #ecf6f8; border-right: 0.5pt solid #FFFFFF; padding-bottom: 3.5pt; padding-top: 3.5pt; vertical-align: Top; width: 29.55pt;"> <div style="line-height: 7.5pt; text-align: left;"> <div style="margin-left: 5.75pt; margin-right: 5.75pt; text-align: center; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.00pt;">$25</span></div> </div> </td> <td style="background-color: #ecf6f8; border-right: 0.5pt solid #FFFFFF; padding-bottom: 3.5pt; padding-top: 3.5pt; vertical-align: Top; width: 32.32pt;"> <div style="line-height: 7.5pt; text-align: left;"> <div style="margin-left: 5.75pt; margin-right: 5.75pt; text-align: center; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.00pt;">$78</span></div> </div> </td> <td style="background-color: #ecf6f8; border-right: 0.5pt solid #FFFFFF; padding-bottom: 3.5pt; padding-top: 3.5pt; vertical-align: Top; width: 32.32pt;"> <div style="line-height: 7.5pt; text-align: left;"> <div style="margin-left: 5.75pt; margin-right: 5.75pt; text-align: center; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.00pt;">$134</span></div> </div> </td> <td style="background-color: #ecf6f8; padding-bottom: 3.5pt; padding-top: 3.5pt; vertical-align: Top; width: 32.96pt;"> <div style="line-height: 7.5pt; text-align: left;"> <div style="margin-left: 5.75pt; margin-right: 3pt; text-align: center; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.00pt;">$287</span></div> </div> </td> </tr> <tr style="height: 12pt;"> <td style="border-right: 0.5pt solid #FFFFFF; padding-bottom: 3.5pt; padding-top: 3.5pt; vertical-align: Top; width: 132.84pt;"> <div style="line-height: 7.5pt; text-align: left;"> <div style="margin-left: 3pt; margin-right: 5.75pt; text-align: left; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.0pt;">Class A-3</span></div> </div> </td> <td style="border-right: 0.5pt solid #FFFFFF; padding-bottom: 3.5pt; padding-top: 3.5pt; vertical-align: Top; width: 29.55pt;"> <div style="line-height: 7.5pt; text-align: left;"> <div style="margin-left: 5.75pt; margin-right: 5.75pt; text-align: center; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.00pt;">$32</span></div> </div> </td> <td style="border-right: 0.5pt solid #FFFFFF; padding-bottom: 3.5pt; padding-top: 3.5pt; vertical-align: Top; width: 32.32pt;"> <div style="line-height: 7.5pt; text-align: left;"> <div style="margin-left: 5.75pt; margin-right: 5.75pt; text-align: center; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.00pt;">$101</span></div> </div> </td> <td style="border-right: 0.5pt solid #FFFFFF; padding-bottom: 3.5pt; padding-top: 3.5pt; vertical-align: Top; width: 32.32pt;"> <div style="line-height: 7.5pt; text-align: left;"> <div style="margin-left: 5.75pt; margin-right: 5.75pt; text-align: center; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.00pt;">$171</span></div> </div> </td> <td style="padding-bottom: 3.5pt; padding-top: 3.5pt; vertical-align: Top; width: 32.96pt;"> <div style="line-height: 7.5pt; text-align: left;"> <div style="margin-left: 5.75pt; margin-right: 3pt; text-align: center; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.00pt;">$358</span></div> </div> </td> </tr> <tr style="height: 12pt;"> <td style="background-color: #ecf6f8; border-right: 0.5pt solid #FFFFFF; padding-bottom: 3.5pt; padding-top: 3.5pt; vertical-align: Top; width: 132.84pt;"> <div style="line-height: 7.5pt; text-align: left;"> <div style="margin-left: 3pt; margin-right: 5.75pt; text-align: left; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.0pt;">Class A-4</span></div> </div> </td> <td style="background-color: #ecf6f8; border-right: 0.5pt solid #FFFFFF; padding-bottom: 3.5pt; padding-top: 3.5pt; vertical-align: Top; width: 29.55pt;"> <div style="line-height: 7.5pt; text-align: left;"> <div style="margin-left: 5.75pt; margin-right: 5.75pt; text-align: center; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.00pt;">$72</span></div> </div> </td> <td style="background-color: #ecf6f8; border-right: 0.5pt solid #FFFFFF; padding-bottom: 3.5pt; padding-top: 3.5pt; vertical-align: Top; width: 32.32pt;"> <div style="line-height: 7.5pt; text-align: left;"> <div style="margin-left: 5.75pt; margin-right: 5.75pt; text-align: center; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.00pt;">$128</span></div> </div> </td> <td style="background-color: #ecf6f8; border-right: 0.5pt solid #FFFFFF; padding-bottom: 3.5pt; padding-top: 3.5pt; vertical-align: Top; width: 32.32pt;"> <div style="line-height: 7.5pt; text-align: left;"> <div style="margin-left: 5.75pt; margin-right: 5.75pt; text-align: center; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.00pt;">$196</span></div> </div> </td> <td style="background-color: #ecf6f8; padding-bottom: 3.5pt; padding-top: 3.5pt; vertical-align: Top; width: 32.96pt;"> <div style="line-height: 7.5pt; text-align: left;"> <div style="margin-left: 5.75pt; margin-right: 3pt; text-align: center; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.00pt;">$377</span></div> </div> </td> </tr> <tr style="height: 9pt;"> <td style="border-right: 0.5pt solid #FFFFFF; padding-bottom: 2.5pt; padding-top: 3.5pt; vertical-align: Top; width: 132.84pt;"> <div style="line-height: 7.5pt; text-align: left;"> <div style="margin-left: 3pt; margin-right: 5.75pt; text-align: left; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.0pt;">Class F</span></div> </div> </td> <td style="border-right: 0.5pt solid #FFFFFF; padding-bottom: 2.5pt; padding-top: 3.5pt; vertical-align: Top; width: 29.55pt;"> <div style="line-height: 7.5pt; text-align: left;"> <div style="margin-left: 5.75pt; margin-right: 5.75pt; text-align: center; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.00pt;">$42</span></div> </div> </td> <td style="border-right: 0.5pt solid #FFFFFF; padding-bottom: 2.5pt; padding-top: 3.5pt; vertical-align: Top; width: 32.32pt;"> <div style="line-height: 7.5pt; text-align: left;"> <div style="margin-left: 5.75pt; margin-right: 5.75pt; text-align: center; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.00pt;">$78</span></div> </div> </td> <td style="border-right: 0.5pt solid #FFFFFF; padding-bottom: 2.5pt; padding-top: 3.5pt; vertical-align: Top; width: 32.32pt;"> <div style="line-height: 7.5pt; text-align: left;"> <div style="margin-left: 5.75pt; margin-right: 5.75pt; text-align: center; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.00pt;">$134</span></div> </div> </td> <td style="padding-bottom: 2.5pt; padding-top: 3.5pt; vertical-align: Top; width: 32.96pt;"> <div style="line-height: 7.5pt; text-align: left;"> <div style="margin-left: 5.75pt; margin-right: 3pt; text-align: center; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.00pt;">$287</span></div> </div> </td> </tr> </table> <div style="margin-top: 4pt;"><span style="color: #333333; font-family: arial narrow; font-size: 10pt; font-weight: bold;">If you do not redeem your shares:</span><span style="color: #000000; font-family: arial narrow; font-size: 1pt;"> </span></div> <table cellpadding="0" cellspacing="0" style="border-bottom: 0.5pt solid #00687d; empty-cells: show; width: 260pt;"> <tr style="height: 8.5pt;"> <td style="border-right: 0.5pt solid #FFFFFF; padding-bottom: 3.5pt; padding-top: 3.5pt; vertical-align: Bottom; width: 132.84pt;"> <div style="line-height: 0.5pt; text-align: left;"> <div style="margin-left: 3pt; margin-right: 5.75pt; text-align: center; white-space: nowrap;"><span style="color: #00687d; font-family: arial narrow; font-size: 7pt; font-weight: bold;"> </span></div> </div> </td> <td style="border-right: 0.5pt solid #FFFFFF; padding-bottom: 3.5pt; padding-top: 3.5pt; vertical-align: Bottom; width: 29.55pt;"> <div style="line-height: 7pt; text-align: left;"> <div style="margin-left: 5.75pt; margin-right: 5.75pt; text-align: center; white-space: nowrap;"><span style="color: #00687d; font-family: arial narrow; font-size: 7pt; font-weight: bold;">1 Year</span></div> </div> </td> <td style="border-right: 0.5pt solid #FFFFFF; padding-bottom: 3.5pt; padding-top: 3.5pt; vertical-align: Bottom; width: 32.32pt;"> <div style="line-height: 7pt; text-align: left;"> <div style="margin-left: 5.75pt; margin-right: 5.75pt; text-align: center; white-space: nowrap;"><span style="color: #00687d; font-family: arial narrow; font-size: 7pt; font-weight: bold;">3 Years</span></div> </div> </td> <td style="border-right: 0.5pt solid #FFFFFF; padding-bottom: 3.5pt; padding-top: 3.5pt; vertical-align: Bottom; width: 32.32pt;"> <div style="line-height: 7pt; text-align: left;"> <div style="margin-left: 5.75pt; margin-right: 5.75pt; text-align: center; white-space: nowrap;"><span style="color: #00687d; font-family: arial narrow; font-size: 7pt; font-weight: bold;">5 Years</span></div> </div> </td> <td style="padding-bottom: 3.5pt; padding-top: 3.5pt; vertical-align: Bottom; width: 32.96pt;"> <div style="line-height: 7pt; text-align: left;"> <div style="margin-left: 5.75pt; margin-right: 3pt; text-align: center; white-space: nowrap;"><span style="color: #00687d; font-family: arial narrow; font-size: 7pt; font-weight: bold;">10 Years</span></div> </div> </td> </tr> <tr style="height: 12pt;"> <td style="background-color: #ecf6f8; border-right: 0.5pt solid #FFFFFF; padding-bottom: 3.5pt; padding-top: 3.5pt; vertical-align: Top; width: 132.84pt;"> <div style="line-height: 7.5pt; text-align: left;"> <div style="margin-left: 3pt; margin-right: 5.75pt; text-align: left; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.0pt;">Class A-4</span></div> </div> </td> <td style="background-color: #ecf6f8; border-right: 0.5pt solid #FFFFFF; padding-bottom: 3.5pt; padding-top: 3.5pt; vertical-align: Top; width: 29.55pt;"> <div style="line-height: 7.5pt; text-align: left;"> <div style="margin-left: 5.75pt; margin-right: 5.75pt; text-align: center; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.00pt;">$62</span></div> </div> </td> <td style="background-color: #ecf6f8; border-right: 0.5pt solid #FFFFFF; padding-bottom: 3.5pt; padding-top: 3.5pt; vertical-align: Top; width: 32.32pt;"> <div style="line-height: 7.5pt; text-align: left;"> <div style="margin-left: 5.75pt; margin-right: 5.75pt; text-align: center; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.00pt;">$128</span></div> </div> </td> <td style="background-color: #ecf6f8; border-right: 0.5pt solid #FFFFFF; padding-bottom: 3.5pt; padding-top: 3.5pt; vertical-align: Top; width: 32.32pt;"> <div style="line-height: 7.5pt; text-align: left;"> <div style="margin-left: 5.75pt; margin-right: 5.75pt; text-align: center; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.00pt;">$196</span></div> </div> </td> <td style="background-color: #ecf6f8; padding-bottom: 3.5pt; padding-top: 3.5pt; vertical-align: Top; width: 32.96pt;"> <div style="line-height: 7.5pt; text-align: left;"> <div style="margin-left: 5.75pt; margin-right: 3pt; text-align: center; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.00pt;">$377</span></div> </div> </td> </tr> <tr style="height: 9pt;"> <td style="border-right: 0.5pt solid #FFFFFF; padding-bottom: 2.5pt; padding-top: 3.5pt; vertical-align: Top; width: 132.84pt;"> <div style="line-height: 7.5pt; text-align: left;"> <div style="margin-left: 3pt; margin-right: 5.75pt; text-align: left; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.0pt;">Class F</span></div> </div> </td> <td style="border-right: 0.5pt solid #FFFFFF; padding-bottom: 2.5pt; padding-top: 3.5pt; vertical-align: Top; width: 29.55pt;"> <div style="line-height: 7.5pt; text-align: left;"> <div style="margin-left: 5.75pt; margin-right: 5.75pt; text-align: center; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.00pt;">$25</span></div> </div> </td> <td style="border-right: 0.5pt solid #FFFFFF; padding-bottom: 2.5pt; padding-top: 3.5pt; vertical-align: Top; width: 32.32pt;"> <div style="line-height: 7.5pt; text-align: left;"> <div style="margin-left: 5.75pt; margin-right: 5.75pt; text-align: center; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.00pt;">$78</span></div> </div> </td> <td style="border-right: 0.5pt solid #FFFFFF; padding-bottom: 2.5pt; padding-top: 3.5pt; vertical-align: Top; width: 32.32pt;"> <div style="line-height: 7.5pt; text-align: left;"> <div style="margin-left: 5.75pt; margin-right: 5.75pt; text-align: center; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.00pt;">$134</span></div> </div> </td> <td style="padding-bottom: 2.5pt; padding-top: 3.5pt; vertical-align: Top; width: 32.96pt;"> <div style="line-height: 7.5pt; text-align: left;"> <div style="margin-left: 5.75pt; margin-right: 3pt; text-align: center; white-space: nowrap;"><span style="color: #333333; font-family: arial narrow; font-size: 7.5pt; margin-left: 0.00pt;">$287</span></div> </div> </td> </tr> </table> <div> <div style="clear: both; margin-top: 2.5pt; position: relative; width: 100%;"> <div style="float: left; line-height: 7pt; text-align: left; width: 2.88pt;"><span style="color: #333333; font-family: arial narrow; font-size: 5pt; position: relative; top: 0px;">1</span></div> <div style="float: left; line-height: 10.0pt; margin-left: 7.12pt; text-align: left; width: 245.00pt;"><span style="color: #333333; font-family: arial narrow; font-size: 8pt;"><b>The example above should not be considered a representation of future expenses. Actual expenses may be higher or lower than those shown.</b> The example assumes that the estimated Interest Payments on Borrowed Funds and Other Expenses set forth in the Annual Fund Operating Expenses table are accurate, that the Total Annual Fund Operating Expenses (as described above) remain the same for all time periods shown and that all dividends and distributions are reinvested at NAV. Actual expenses may be greater or less than those assumed. Moreover, the Fund’s actual rate of return may be greater or less than the hypothetical 5% annual return shown in the example. In addition to the fees and expenses described above, you may also be required to pay transaction or other fees on purchases of Common Shares of the Fund, which are not reflected in the example.</span></div> </div> <div style="clear: both; position: relative;"> </div> </div> 25 78 134 287 32 101 171 358 72 128 196 377 42 78 134 287 62 128 196 377 25 78 134 287 <div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:12pt;font-weight:bold">Investment Objectives and Strategies</span></div><div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Investment Objectives</span></div><div style="margin-top:2pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund’s primary investment objective is to provide current income </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">with a secondary objective of long- term capital appreciation. There can </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">be no assurance that the Fund will achieve its investment objectives.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund’s investment objectives are not fundamental and may be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">changed by the Board without the approval of the holders of a majority </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of the outstanding Common Shares or Preferred Shares. The Fund is not </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">required to provide prior notice to shareholders of any change to its </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investment objectives.</span></div><div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Principal Investment Strategies</span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> seeks to achieve its investment objective by investing</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">, under </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">normal circumstances, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">income-oriented </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">real estate and debt secured </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">by </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">real estate</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">. Under normal circumstances, the Fund’s portfolio is </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">expected to be principally comprised of properties, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">debt secured by </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">properties</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> and other investments providing direct or indirect exposure </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">to properties</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">, primarily located in the United States but may also be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">diversified on a global basis through investments in properties and debt </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">secured by properties outside of the United States. To a lesser extent, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and subject to the investment limitations described herein, the Fund </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">also may invest in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">issuers in the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">real estate</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> industry</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund invests, under normal circumstances, at least 80% of its net </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">assets (plus the amount of its borrowings for investment purposes) in a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">portfolio of real estate, including in the form of property investments </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and debt interests, equity investments in real estate or real estate </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">related companies, real estate related loans or other real estate debt </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investments and securities of real estate and real estate-related issuers </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">or real estate related companies. The Fund may also invest in private </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">real estate investment funds. The Fund’s investments in private real </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">estate funds will be in private real estate funds that invest primarily in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">real estate debt and real estate equity investments of the types in which </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund may invest directly. Investments included in the Fund’s 80% </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">policy will be in an issuer that either invests 50% or more of its assets in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">real estate or derives at least 50% of its revenue from real estate, or is </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">classified as a real estate company or an issuer engaged in the real </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">estate industry according to an independent classification system, such </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">as Standard Industrial Classification Codes or Global Industry </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Classification Standard, which are each methods for assigning a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">company to a specific economic sector and industry group that best </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">defines its business operations. For purposes of the Fund’s 80% policy, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund values its derivative instruments based on their market value. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund will not invest more than 15% of its assets in private funds </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">that rely on Section 3(c)(1) or 3(c)(7) of the Investment Company Act.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">As a fundamental policy, the Fund will normally invest at least 25% of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">its total assets (</span><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">i.e.,</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> concentrate) in real estate investments and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">mortgage-related assets issued by government agencies or other </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">governmental entities or by private originators or issuers, which for </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">purposes of this investment restriction the Fund treats collectively as an </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">industry or group of industries (for purposes of this restriction, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investment companies are not considered to be part of any industry).</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div> <div style="clear:both;margin-top:6pt;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-weight:bold">Location</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">. The Fund intends to invest principally in major markets </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">in the United States with the ability to selectively invest in other </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">regions that PIMCO believes offer attractive risk-adjusted returns </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">consistent with the objectives of the Fund.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-weight:bold">Property Types</span><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-weight:bold"> and Sectors</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">. The Fund may invest across </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">various </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">property types </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and sectors </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">including, but not limited to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">commercial,</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> residential, industrial, and office, retail, hospitality, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and select niche sectors. The following is not an exhaustive list of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">asset classes or strategies that the Fund may target, and the Fund </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">may not target all (or any one) of the following asset classes or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">strategies at any given time:</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:20pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:223.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-weight:bold">Commercial.</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> Commercial properties generally include </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">stabilized, income-oriented properties, which are properties </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">that are well leased to tenants (that is, the property has </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">favorable occupancy rates) and do not require material capital </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">improvements. Commercial properties may include properties </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">from the residential, industrial, office, retail, hospitality, and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">select niche sectors.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:20pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:223.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-weight:bold">Residential</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">. Residential properties are generally defined as </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">having </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">dwelling units that are part of a single </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">or multi-family </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="line-height:12.0pt;margin-left:32pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">complex and offered for rental use</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> or sale</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">, and also include </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">single-family residential properties offered for rental use</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">sale</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">. This may include apartment, student housing or senior </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">living.</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> Residential properties may also include newly built </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">properties or existing single-family residential properties that </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">are acquired in order to redevelop or renovate with the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">intention to rent or resell within a short timeframe.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:20pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:223.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-weight:bold">Industrial</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">. Industrial properties are generally categorized as </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">warehouse/distribution centers, research and development </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">facilities, flex space or manufacturing.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:20pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:223.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-weight:bold">Office</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">. Office properties include conventional and other office </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">properties.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:20pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:223.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-weight:bold">Retail</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">. Retail properties consist of shopping and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">entertainment properties, such as shopping malls, retail stores, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">shopping centers, etc.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:20pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:223.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-weight:bold">Hospitality</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">. Hospitality properties are generally defined as </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">hotels and lodging properties and can be further divided in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">various sub-categories including (but not limited to) limited </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">service, full service, etc.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:20pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:223.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-weight:bold">Select Niche Sectors</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">. Select niche sectors include </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">sub-segments of the real estate industry with purpose-built </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">properties, such as data centers, life sciences, medical office, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">self-storage, etc.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The following sections further describe certain asset classes and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">strategies that the Fund may target. The following is not an exhaustive </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">list of asset classes or strategies that the Fund may target, and the Fund </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">is not obligated to target all (or any one) of the following asset classes </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">or strategies.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-weight:bold">Private CRE Equity Investments</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">: The Fund intends, under </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">normal circumstances, to invest in stabilized income-oriented </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">private CRE </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and investments providing exposure to CRE </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">located in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the United States. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">However, the Fund may make investments in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">CRE with other characteristics (such as properties that are not </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">well leased and generally require significant capital </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">improvements, restructuring and/or repositioning) or other </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">geographies at PIMCO’s discretion. The Fund may invest in various </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">CRE property types</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> and investments</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">, including residential, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">industrial, office, retail, hospitality, and certain niche sectors. The </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund’s exposure to any of the aforementioned property types </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">sectors </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">may change based on PIMCO’s outlook. While PIMCO </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">generally expects to arrange for third-party property managers or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">joint venture partners to manage </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">any </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">such </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">real estate </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investments, the Fund, PIMCO and/or their respective affiliates (as </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">well as entities owned by or affiliated with any of the foregoing) </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">may also provide such services.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-weight:bold">Private CRE Debt Investments</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">: The Fund’s investments may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">include mortgage loans, mezzanine, preferred equity transitional </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">private debt secured by CRE properties and b-notes (the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">secondary tranche in a commercial mortgage-backed security). </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Such investments may be of any credit quality (including below </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investment grade (commonly referred to as “high yield” securities </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">or “junk bonds”)), may have any combination of principal and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">interest payment structures, may be newly-originated or existing, </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div style="line-height:12.0pt;margin-left:22pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">may have been originated to specific or general underwriting </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">standards which vary according to the seller and may be of any </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">size and any lien position (e.g., first-lien, second-lien or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">unsecured). In addition, the Fund may provide financing in respect </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of real estate or real estate-related assets or interests (including </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">to finance construction, development or improvement projects, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">mortgage loan pay downs and/or mortgage loans), in each case </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">directly or through companies acquired (or created) and owned by </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">or otherwise affiliated with the Fund or PIMCO.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Generally, the day-to-day administration of these investments will be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">handled by one or more servicers selected by PIMCO.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-weight:bold">Publicly Traded CRE Securities</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">: The Fund’s investments in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">publicly traded real estate securities may include CMBS, RMBS, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and other equity or debt securities issued by REITs or real </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">estate-related investment companies. Publicly traded securities </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">may be exchange-traded or traded OTC. Real estate-related </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investment companies are investment companies that primarily </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">invest in real estate or activities relating to the ownership, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">construction, financing, management, servicing or sale of such </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">real estate. The Fund may invest in securities of any credit quality, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">maturity and duration to enhance its income and capital </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">appreciation potential and to provide liquidity to the overall </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">portfolio. This may include below investment grade (commonly </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">referred to as “high yield” securities or “junk”) securities. The </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund expects that its investments in publicly traded real estate </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">securities will primarily be in U.S. securities, but it may also invest </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">in non-U.S. securities. To the extent that an underlying investment </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">company in which the Fund invests has adopted a policy to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">concentrate its investments in a particular industry, the Fund will, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">to the extent applicable, take such underlying investment </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">company’s concentration policy into consideration for purposes of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund’s own industry concentration policy.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-weight:bold">Collateralized Bond Obligations, Collateralized Loan </span><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-weight:bold">Obligations and other Collateralized Debt Obligations</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">: </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund may invest in each of CBOs, CLOs, other CDOs and other </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">similarly structured securities</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> that provide indirect exposure to the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">underlying asset class</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">. CBOs, CLOs and CDOs are types of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">asset-backed securities</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> that provide indirect exposure to the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">underlying asset class</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">. A CBO is a trust which is often backed by a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">diversified pool of high risk, below investment grade fixed income </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">securities. The collateral can be from many different types of fixed </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">income securities such as high-yield debt, residential </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">privately-issued mortgage-related securities, commercial </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">privately-issued mortgage-related securities, trust preferred </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">securities and emerging market debt. A CLO is a trust typically </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">collateralized by a pool of loans, which may include, among </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">others, domestic and foreign senior secured loans, senior </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">unsecured loans and subordinate commercial real estate loans, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">including loans that may be rated below investment grade or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">equivalent unrated loans. Other CDOs are trusts backed by other </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">types of assets representing obligations of various parties. CBOs, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">CLOs and other CDOs may charge management fees and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">administrative expenses. For CBOs, CLOs and CDOs, the cash </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div style="line-height:12.0pt;margin-left:22pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">flows from the trust are split into two or more portions, called </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">tranches, varying in risk and yield. The riskiest portion is the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">“equity” tranche which bears the bulk of defaults from the bonds </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">or loans in the trust and serves to protect the other, more senior </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">tranches from default in all but the most severe circumstances. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Since they are partially protected from defaults, senior tranches </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">from a CBO trust, CLO trust or trust of another CDO typically have </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">higher ratings and lower yields than their underlying securities </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and can be rated investment grade. Despite the protection from </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the equity tranche, CBO, CLO or other CDO tranches can </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">experience substantial losses due to actual defaults, increased </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">sensitivity to defaults due to collateral default and disappearance </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of protecting tranches, market anticipation of defaults, as well as </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">aversion to CBO, CLO or other CDO securities as a class. The Fund </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">may invest in any tranche, including the equity tranche, of a CBO, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">CLO or other CDO. The risks of an investment in a CBO, CLO or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">other CDO depend largely on the type of the collateral securities </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and the class of the instrument in which the Fund invests. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Normally, CBOs, CLOs and other CDOs are privately offered and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">sold, and thus, are not registered under the securities laws. As a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">result, investments in CBOs, CLOs and other CDOs may be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">characterized by the Fund as illiquid investments, however an </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">active dealer market may exist for CBOs, CLOs and other CDOs </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">allowing them to qualify for Rule 144A under the Securities Act of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">1933 (the “Securities Act”). In addition to the normal risks </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">associated with debt instruments discussed elsewhere in this </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">prospectus and in the SAI (e.g., prepayment risk, credit risk, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">liquidity risk, market risk, structural risk, legal risk and interest rate </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">risk (which may be exacerbated if the interest rate payable on a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">structured financing changes based on multiples of changes in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">interest rates or inversely to changes in interest rates) and default </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">risk), CBOs, CLOs and other CDOs may carry additional risks </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">including, but are not limited to: (i) the possibility that </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">distributions from collateral securities will not be adequate to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">make interest or other payments; (ii) the possibility that the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">quality of the collateral may decline in value or default; (iii) the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">possibility that investments in CBOs, CLOs and other CDOs are </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">subordinate to other classes or tranches thereof; and (iv) the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">complex structure of the security may not be fully understood at </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the time of investment and may produce disputes with the issuer </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">or unexpected investment results.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-weight:bold">Derivative Instruments</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">: The Fund may, but is not required to, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">utilize various derivative strategies (both long and short positions) </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">involving the purchase or sale of futures and forward contracts </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">(including foreign currency exchange contracts), call and put </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">options, credit default swaps, total return swaps, basis swaps and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">other swap agreements and other derivative instruments for </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investment purposes, leveraging purposes or in an attempt to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">hedge against market, credit, interest rate, currency and other </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">risks in the portfolio.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund may invest in cash equivalents and treasuries. The Fund may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">invest in securities of other investment companies (including those </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">advised by PIMCO), including closed-end funds, exchange-traded funds </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">and other open-end funds. The Fund may invest in certain money market </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">funds and/or short-term bond funds (“Central Funds”), to the extent </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">permitted by the 1940 Act, the rules thereunder or exemptive relief </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">therefrom. The Central Funds are registered investment companies </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">created for use by certain registered investment companies advised by </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">PIMCO in connection with their cash management activities.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">There is no limit on the maturity or duration of any individual security in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">which the Fund may invest.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund may invest in assets involving leases whereby the tenant is </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">obligated to pay all the expenses of the property, including real estate </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">taxes, building insurance, and maintenance (“triple net leased”). These </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">leases can be signed across property sectors, including office and select </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">retail, to which the Fund plans to gain exposure.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund has received exemptive relief from the SEC that, to the extent </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund relies on such relief, permits it to (among other things) </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">co-invest with certain other persons, including certain affiliates of the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Investment Manager and certain public or private funds managed by the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Investment Manager and its affiliates, subject to certain terms and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">conditions. The exemptive relief from the SEC with respect to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">co-investments imposes extensive conditions on any co-investments </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">made in reliance on such relief.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">For purposes of the Fund’s investment policies, a Controlled Subsidiary </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">will comply with provisions of the 1940 Act related to affiliated </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">transactions and custody (Section 17) or exemptive relief therefrom, and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund will comply with provisions governing investment policies </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">(Section 8) and capital structure and leverage (Section 18) on an </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">aggregate basis with the Controlled Subsidiary. In addition, PIMCO and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Board will comply with the provisions of Section 15 of the 1940 Act </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">with respect to a Controlled Subsidiary’s investment advisory contract. A </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">“Controlled Subsidiary” is a subsidiary (which includes an operating </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">entity, operating company or special purpose entity used by the Fund) </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">that primarily engages in investment activities in securities or other </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">assets and in which the Fund owns all or a majority of the voting </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">securities, i.e., has sole majority voting control. The Fund does not </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">currently intend to create or acquire primary control of any entity which </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">primarily engages in investment activities in securities or other assets </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">other than Controlled Subsidiaries.</span></div><div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Investment Selection Strategies</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">In selecting investments for a Fund, PIMCO develops an outlook for </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">interest rates, economic conditions, and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">real estate market. The </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">proportion of a Fund’s assets committed to a specific investment varies </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">based on PIMCO’s outlook for the U.S. economy and the economies of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">other countries in the world, the financial markets, and other factors. In </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">selecting investments for the Fund, PIMCO may use proprietary </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">quantitative models that are developed and maintained by PIMCO, and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">which are subject to change over time without notice in PIMCO's </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">discretion.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Portfolio Composition</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund’s portfolio is expected to be comprised principally of the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">following types of investments. A more detailed description of the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund’s investment policies and restrictions and more detailed </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">information about the Fund’s portfolio investments are contained in the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">SAI.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-style:italic">Investments in Thematically-Driven Stabilized Real Estate and Single </span><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-style:italic">Tenant Properties</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund may make equity investments in stabilized, income-oriented </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">commercial real estate primarily in U.S. markets that offer the potential </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">to generate current income and, to a lesser extent, long-term capital </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">appreciation. Stabilized income-oriented real estate generally means </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">that a property is well leased to tenants (that is, the property has </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">favorable occupancy rates) and does not require material capital </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">improvements. The Fund also intends to make equity investments in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">commercial real estate leased for long durations (typically at least a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">10-year period) to single tenants that the Investment Manager believes </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">have favorable credit profiles and/or performance attributes supporting </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">highly visible long-term cash flows.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic;text-decoration:underline">Property Characteristics</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">. The Fund may invest in stabilized assets and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">portfolios with, in PIMCO’s view at the time of investment, income from </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">stable, in-place cash flows that require limited near-term capital </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">expenditures.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic;text-decoration:underline">Location</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">. The Fund intends to invest principally in major markets in the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">United States with the ability to selectively invest in other regions that </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">PIMCO believes offer attractive risk-adjusted returns consistent with the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">objectives of the Fund.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund expects that its investments in real estate-related securities </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">will primarily be in U.S. securities, but it may also invest in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">non-U.S. securities.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic;text-decoration:underline">Property Types</span><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic;text-decoration:underline"> and Sectors</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">. The Fund may invest across various </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">property </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">types </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and sectors </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">including, but not limited to, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">commercial,</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> residential, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">industrial, office, retail, hospitality, and select niche sectors. The Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">exposure to any of the below property types may change based on </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">PIMCO’s outlook. The following is not an exhaustive list of asset classes </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">or strategies that the Fund may target, and the Fund may not target all </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">(or any one) of the following asset classes or strategies at any given </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">time:</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt;text-decoration:underline">Commercial Properties</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">. Commercial properties generally include </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">stabilized, income-oriented properties, which are properties that are </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">well leased to tenants (that is, the property has favorable occupancy </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">rates) and do not require material capital improvements. Commercial </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">properties may include properties from the residential, industrial, office, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">retail, hospitality and select niche sectors.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt;text-decoration:underline">Residential Properties</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">. Residential properties are generally defined as </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">having </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">dwelling units that are part of a single </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">or multi-family </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">complex </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and offered for rental use</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> or sale</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">, and also include single-family </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">residential properties offered for rental use</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> or sale</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">. This may include </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">apartment, student housing or senior living.</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> Residential properties may </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">also include newly built properties or existing single-family residential </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">properties that are acquired in order to redevelop or renovate with the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">intention to rent or resell within a short timeframe.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt;text-decoration:underline">Industrial Properties</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">. Industrial properties are generally categorized as </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">warehouse/distribution centers, research and development facilities, flex </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">space or manufacturing.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt;text-decoration:underline">Office Properties</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">. Office properties include conventional and other office </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">properties.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt;text-decoration:underline">Retail.</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> Retail properties consist of shopping and entertainment </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">properties, such as shopping malls, retail stores, shopping centers, etc.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt;text-decoration:underline">Hospitality</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">. Hospitality properties are generally defined as hotels and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">lodging properties and can be further divided in various sub-categories </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">including (but not limited to) limited service, full service, etc.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt;text-decoration:underline">Select Niche Sectors</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">. Select niche sectors include sub-segments of the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">real estate industry with purpose-built properties, such as data centers, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">life sciences, medical office, self-storage, etc.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic;text-decoration:underline">Ownership Structure</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">. The Fund’s property investments in each primary </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">strategy are expected to be structured through privately-owned </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">operating entities or private real estate operating companies which hold </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">whole or partial interests in real properties. The Fund, directly or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">indirectly through its Controlled Subsidiaries expects to enter into joint </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">ventures with third parties to make investments. The Fund or its </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Controlled Subsidiaries may also make investments in partnerships or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">other co-ownership arrangements or participations arrangements with </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">other investors, including affiliates, to acquire properties. The Fund, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">directly or indirectly through its Controlled Subsidiaries, expects to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">generally acquire fee simple interests for the properties (in which the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund has an interest in both the land and the building improvements), </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">but may consider leased fee and leasehold interests if the Investment </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Manager believes the investment is consistent with the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investment objectives and strategies.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-style:italic">Investments in Private Real Estate Debt and Preferred Equity</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">In addition to equity investments in the property types listed above, the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund may also invest in privately sourced debt and preferred equity </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">interests that offer current income secured or backed by real estate. The </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund intends to originate and selectively acquire mezzanine loans, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">preferred equity, and to a lesser extent, senior mortgage loans.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The loans may vary in duration, bear interest at fixed or floating rates </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and amortize, if at all, over varying periods, often with a balloon </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">payment of principal at maturity and in the case of mezzanine and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">preferred equity may allow for interest to accrue and be added to the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">principal amount rather than paid on a current basis and may include </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">equity participation rights. The borrower of the Fund’s loan investments </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">will generally be responsible for servicing obligations. In cases where </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund as lender is responsible for servicing a loan, such obligations </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">will generally consist of collecting, or arranging for the collection of, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">interest payments and, when applicable, enforcing the Fund’s rights </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">under the loan documentation. There are no limits on the amount of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">loans the Fund may originate; provided such transactions do not impact </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund’s ability to maintain its status as a REIT.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic;text-decoration:underline">Mezzanine Loans</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">. Mezzanine loans are a type of subordinate loan in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">which the loan is secured by one or more direct or indirect ownership </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">interests in an entity that directly or indirectly owns real estate. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Mezzanine loans are subordinate to a first mortgage or other senior </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">debt. Investors in mezzanine loans are generally compensated for the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">increased credit risk from a pricing perspective and still benefit from the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">right to foreclose on its security, in many instances more efficiently than </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the rights of foreclosure for first mortgage loans. Upon a default by the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">borrower under a mezzanine loan, the mezzanine lender generally can </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">take control of the property owning entity on an expedited basis, subject </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">to the rights of the holders of debt senior in priority on the property. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Rights of holders of mezzanine loans are usually governed by </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">intercreditor or interlender agreements, which may limit the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">ability to pursue remedies.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic;text-decoration:underline">Preferred Equity</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">. Preferred equity is a type of interest in an entity that </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">owns real estate or real estate-related investments. Preferred equity </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">interests are generally senior with respect to the payments of dividends </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and other distributions, redemption rights and rights upon liquidation to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">such entity’s common equity. Investors in preferred equity are typically </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">compensated for their increased credit risk from a pricing perspective </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">with fixed payments but may also participate in capital appreciation. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Upon a default by a general partner of a preferred equity issuer, there </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">typically is a change of control event and the limited partner assumes </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">control of the entity. Rights of holders of preferred equity are usually </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">governed by partnership agreements.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic;text-decoration:underline">Senior Mortgage Loans</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">. Senior mortgage loans are generally loans </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">secured by a first mortgage lien on a commercial property. Senior </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">mortgage loans generally provide for a higher recovery rate and lower </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">defaults than other debt positions due to the lender’s favorable control </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">features which at times may mean control of the entire capital structure.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic;text-decoration:underline">Subordinate Mortgage Loans</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">. Subordinate mortgage loans are loans </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">that have a lower priority to collateral claims. Investors in subordinate </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">mortgages are generally compensated for the increased risk from a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">pricing perspective as compared to first mortgage loans but still benefit </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">from a direct lien on the related property or a security interest in the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">entity that owns the real estate. Investors typically receive principal and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">interest payments at the same time as senior debt unless a default </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">occurs, in which case these payments are made only after any senior </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">debt is repaid in full. The rights of holders of subordinate mortgages are </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">usually governed by participation and other agreements.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-style:italic">Investments in Traded Real Estate-Related Securities</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund may invest in traded real estate-related securities, which </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">includes MBS and other equity or debt securities issued by REITs or real </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">estate-related investment companies.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund expects that its investments in real estate-related securities </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">will primarily be in U.S. securities, but it may also invest in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">non-U.S. securities.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund may invest in the following traded real estate-related </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">securities:</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt;text-decoration:underline">CMBS</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">. CMBS are securities backed by obligations (including certificates </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of participation in obligations) that are principally secured by </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">commercial mortgages on real property or interests therein having a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">multifamily or commercial use, such as retail, office or industrial </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">properties, hotels, apartments, nursing homes and senior living facilities. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">CMBS are typically issued in multiple tranches whereby the more senior </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">classes are entitled to priority distributions from the trust’s income to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">make specified interest and principal payments on such tranches. Losses </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and other shortfalls from expected amounts to be received on the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">mortgage pool are borne by the most subordinate classes, which receive </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">principal payments only after the more senior classes have received all </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">principal payments to which they are entitled. The credit quality of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">CMBS depends on the credit quality of the underlying mortgage loans, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">which is a function of factors such as the principal amount of loans </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">relative to the value of the related properties; the cash flow produced by </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the property; the mortgage loan terms, such as principal amortization; </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">market assessment and geographic location; construction quality of the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">property; and the creditworthiness of the borrowers.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic;text-decoration:underline">Agency RMBS</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">. Agency RMBS are residential mortgage-backed securities </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">for which a U.S. government agency such as Government National </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Mortgage Association (“Ginnie Mae”), or a federally chartered </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">corporation such as Federal National Mortgage Association (“Fannie </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Mae”) or Federal Home Loan Mortgage Corporation (“Freddie Mac”) </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">guarantees payments of principal and interest on the securities. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Although the U.S. government guarantees principal and interest </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">payments on securities issued by the U.S. government and some of its </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">agencies, such as securities issued by Ginnie Mae, this guarantee does </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">not apply to losses resulting from declines in the market value of these </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">securities. Some agency RMBS that the Fund may hold are not </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">guaranteed or backed by the full faith and credit of the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">U.S. government, such as those issued by Fannie Mae and Freddie Mac. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Although the U.S. government in the past has provided financial support </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">to Fannie Mae and Freddie Mac, there can be no assurance that it will </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">support these or other government-sponsored enterprises in the future.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Agency RMBS differ from other forms of traditional debt securities, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">which normally provide for periodic payments of interest in fixed </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">amounts with principal payments at maturity or on specified call dates. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Instead, agency RMBS provide for monthly payments, which consist of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">both principal and interest. In effect, these payments are a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">“pass-through” of scheduled and prepaid principal payments and the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">monthly interest made by the individual borrowers on the mortgage </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">loans, net of any fees paid to the issuers, servicers or guarantors of the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">securities. The principal may be prepaid at any time due to prepayments </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">on the underlying mortgage loans or other assets. These differences can </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">result in significantly greater price and yield volatility than is the case </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">with traditional fixed income securities.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund’s allocation of agency RMBS collateralized by fixed-rate </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">mortgages (“FRMs”), adjustable rate mortgages (“ARMs”), or hybrid </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">adjustable-rate mortgages (“hybrid ARMs”) will depend on various </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">factors including, but not limited to, relative value, expected future </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">prepayment trends, supply and demand, costs of hedging, costs of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">financing, expected future interest rate volatility and the overall shape </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">of the Treasury and interest rate swap yield curves. The Investment </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Manager intends to take these factors into account when making </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investments on behalf of the Fund. The Fund may also make </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investments in debentures that are issued and guaranteed by Freddie </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Mac or Fannie Mae or mortgage-backed securities the collateral of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">which is guaranteed by Ginnie Mae, Freddie Mac, Fannie Mae or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">another federally chartered corporation.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic;text-decoration:underline">Non-Agency RMBS</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">. Non-agency RMBS are RMBS that are collateralized </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">by pools of mortgage loans assembled for sale to investors by </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">commercial banks, savings and loan associations and specialty finance </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">companies. Non-agency RMBS are not issued or guaranteed by a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">U.S. government agency or federally chartered corporation. Like agency </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">RMBS, non-agency RMBS represent interests in pools of mortgage loans </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">secured by residential real property.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The mortgage loan collateral for non-agency RMBS consists of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">residential mortgage loans that do not generally conform to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">underwriting guidelines issued by a federally chartered corporation, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">such as Fannie Mae or Freddie Mac, or an agency of the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">U.S. government, such as Ginnie Mae, due to certain factors, including </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">mortgage balances in excess of agency underwriting guidelines, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">borrower characteristics, loan characteristics and level of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">documentation, and therefore are not issued or guaranteed by an </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">agency. The Fund may also invest in credit risk transfer notes that, while </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">not structured products, face similar risks as structured products </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">because they are debt securities issued by governmental agencies but </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">their value depends in part on a pool of mortgage loans.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The non-agency and agency RMBS acquired by the Fund could be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">secured by FRMs, ARMs, hybrid ARMs or interest only mortgages. FRMs </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">have interest rates that are fixed for the term of the loan and do not </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">adjust. The interest rates on ARMs generally adjust annually (although </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">some may adjust more frequently) to an increment over a specified </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">interest rate index. Hybrid ARMs have interest rates that are fixed for a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">specified period of time (typically three, five, seven or ten years) and, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">thereafter, adjust to an increment over a specified interest rate index. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">ARMs and hybrid ARMs generally have periodic and lifetime constraints </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">on how much the loan interest rate can change on any predetermined </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">interest rate reset date. Interest only securities are backed by mortgages </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">where the borrower pays interest only. Relative value analysis, including </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">consideration of current market conditions, will determine the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">allocation to FRMs, ARMs, hybrid ARMs and interest only mortgages.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund’s allocation of non-agency RMBS collateralized by FRMs, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">ARMs, hybrid ARMs or interest only mortgages will depend on various </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">factors including, but not limited to, relative value, expected future </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">prepayment trends, home price appreciation trends, supply and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">demand, availability of financing, expected future interest rate volatility </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and the overall state of the non-agency RMBS secondary market. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Borrowers of the underlying loans that secure the non-agency RMBS </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">assets which the Fund may purchase can be divided into prime, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Alternative-A (“Alt-A”) and subprime borrowers based on their credit </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">rating.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic;text-decoration:underline">Real Estate Mortgage Investment Conduits (“REMICs”)</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">. REMICs are </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">special purpose vehicles used to pool mortgage loans and issue </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">mortgage-backed securities. They are designed to hold a fixed pool of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">mortgages and issue multiple classes of interests, known as tranches, to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investors. REMICs are treated as pass-through entities for tax purposes, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">meaning that income is passed directly to investors, thereby avoiding </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">double taxation. The primary purpose of REMICs is to securitize </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">mortgage loans, providing liquidity and diversification to investors.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic;text-decoration:underline">Re-securitized Real Estate Mortgage Investment Conduits </span><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic;text-decoration:underline">(“Re-REMICs”)</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">. REMICs involve the re-securitization of existing REMIC </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">tranches into new securities. This process takes tranches from one or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">more REMICs and re-pools them to create new tranches with different </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">risk and return profiles. The purpose of Re-REMICs is to restructure </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">existing mortgage-backed securities to better meet investor needs, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">manage risk and enhance liquidity. Both REMICs and Re-REMICs play </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">significant roles in the mortgage-backed securities market, offering </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">mechanisms for the securitization and re-securitization of mortgage </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">loans.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic;text-decoration:underline">Other Fixed Income Instruments</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">. The Fund may invest in fixed income </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">instruments, such as investment grade and high-yield corporate debt </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">securities, or junk bonds, or U.S. government debt securities. The issuer </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of a fixed income instrument pays the investor a fixed- or variable-rate </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of interest and normally must repay the amount borrowed on or before </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">maturity. Certain bonds are “perpetual” in that they have no maturity </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">date. Holders of fixed income bonds as creditors have a prior legal claim </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">over common and preferred shareholders as to both income and assets </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of the issuer for the principal and interest due them and may have a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">prior claim over other creditors but are generally subordinate to any </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">existing lenders in the issuer’s capital structure. Fixed income </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">instruments may be secured or unsecured. The investment return of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">corporate bonds is generated by payments of interest on the security </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and changes in the market value of the security. The market value of a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">corporate bond, especially a fixed-rate bond, will generally rise and fall </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">inversely with interest rates. The value of intermediate- and longer-term </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">corporate bonds normally fluctuates more in response to changes in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">interest rates than does the value of shorter-term corporate bonds. The </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">market value of a corporate bond also may be affected by the credit </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">rating of the corporation, the corporation’s performance and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">perceptions of the corporation in the marketplace. There is a risk that </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the issuers of the securities may not be able to meet their obligations on </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">interest or principal payments at the time called for by an instrument. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Corporate fixed income instruments usually yield more than government </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">or agency bonds due to the presence of credit risk. The types of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">mortgage-backed securities in which the Fund may invest include </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">interest-only, inverse-interest only, or principal only residential MBS, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">commercial MBS, collateralized mortgage obligations (“CMOs”), </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">securities issued by REMICs, Re-REMICs, pass-through certificates, credit </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">linked notes, mortgage forwards or “to be announced” transactions, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">collateralized loan obligations backed by commercial loans and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">mortgage servicing rights securities. The Fund may invest in a Re-REMIC </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">in order to obtain exposure to mortgages with a specific risk profile that </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">could not otherwise be obtained through the purchase of existing </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">REMICs. Pass-through certificates are fixed income securities whereby </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">certificates are issued representing interests in a pool of mortgages or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">mortgage-backed securities. The Fund may invest in various tranches or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">classes of MBS.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic;text-decoration:underline">Publicly Traded REITs</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">. The Fund may invest in publicly traded REITs. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">REITs are investment vehicles that invest primarily in income-producing </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">real estate or mortgages and other real estate-related loans or interests.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Many public REITs are listed on major stock exchanges, such as the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">New York Stock Exchange and NASDAQ. Publicly traded REITs typically </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">employ leverage, which magnifies the potential for gains and the risk of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">loss. They typically pay out all of their taxable income as dividends to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">shareholders. In turn, shareholders pay income taxes on those </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">dividends.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic;text-decoration:underline">Ratings of Securities</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">. The Fund may invest in debt securities that are </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">rated investment grade, debt securities rated below investment grade, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and unrated debt securities. The Fund is not required to hold any </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">minimum percentage of its NAV in debt securities rated investment </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">grade.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-style:italic">Derivatives</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund may, but is not required to, utilize various derivative strategies </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">(both long and short positions) for investment purposes, leveraging </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">purposes, or in an attempt to hedge against market, credit, interest rate, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">currency and other risks in the portfolio. See “Use of Leverage.” </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Generally, derivatives and other similar instruments (referred to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">collectively as “derivatives”) are financial contracts whose value </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">depends upon, or is derived from, the value of an underlying asset, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">reference rate or index, and may relate to, among others, individual debt </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">instruments, interest rates, currencies or currency exchange rates, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">commodities and related indexes. Examples of derivative instruments </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">that the Fund may use include, without limitation, futures and forward </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">contracts (including foreign currency exchange contracts), call and put </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">options (including options on futures contracts), credit default swaps, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">total return swaps, basis swaps and other swap agreements. The Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">use of derivative instruments involves risks different from, and possibly </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">greater than, the risks associated with investment directly in securities </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and other more traditional investments. Please see “Investment Policies </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and Techniques-Derivatives” in the SAI for additional information about </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">these and other derivative instruments that the Fund may use and the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">risks associated with such instruments. There is no assurance that these </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">derivative strategies will be available at any time or that PIMCO will </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">determine to use them for the Fund or, if used, that the strategies will be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">successful. In addition, the Fund may be subject to certain restrictions on </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">its use of derivative strategies imposed by guidelines of one or more </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">rating agencies that may issue ratings for any Preferred Shares issued by </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund will engage in derivative transactions only to the extent such </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">transactions are consistent with the requirements of the Code for </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">maintaining its qualification as a REIT for federal income tax purposes. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">See “Certain U.S. Federal Income Tax Considerations.”</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-style:italic">Temporary Defensive Strategies</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">At times, PIMCO may judge that conditions in the markets make </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">pursuing the Fund’s primary investment strategy inconsistent with the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">best interests of its Common Shareholders. The Fund may make </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">short-term investments when attempting to respond to adverse market, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">economic, political, or other conditions, as determined by PIMCO. Upon </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">PIMCO’s recommendation, the Fund may, for temporary defensive </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">purposes, or in order to keep the Fund’s cash fully invested until the net </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">proceeds of this offering of Common Shares can be invested in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">accordance with the Fund’s primary investment strategies, the Fund may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">deviate from its investment policies and objectives. At such times the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Investment Manager may, temporarily, take temporary defensive </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">positions primarily designed to reduce fluctuations in the value of the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund’s assets. If the Fund takes a temporary position, it may be unable </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">to achieve its investment objectives. While the Fund would seek to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">continue to qualify as a REIT during such a period, there can be no </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">guarantee it will be able to do so. In implementing these temporary </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">strategies, the Fund may invest all or a portion of its assets in fixed </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">income securities; traded real estate-related securities; U.S. government </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">securities, including bills, notes and bonds differing as to maturity and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">rates of interest that are either issued or guaranteed by the Treasury or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">by U.S. government agencies or instrumentalities; certificates of deposit </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">issued against funds deposited in a bank or a savings and loan </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">association; commercial paper; bankers’ acceptances; bank time </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">deposits; shares of money market funds; securities issued or guaranteed </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">by the federal government or any of its agencies, or any state or local </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">government; repurchase agreements with respect to any of the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">foregoing; or any other securities or cash equivalents that the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Investment Manager considers consistent with this strategy.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">It is impossible to predict when, or for how long, the Fund will take </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">temporary defensive positions. There can be no assurance that such </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">strategies will be successful.</span></div> <div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Effects of Leverage</span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The following table is furnished in response to requirements of the SEC. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">It is designed to illustrate the effects of leverage through the use of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">senior securities, as that term is defined under Section 18 of the 1940 </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Act, on Common Share total return, assuming investment portfolio total </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">returns (consisting of income and changes in the value of investments </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">held in the Fund’s portfolio) of -10%, -5%, 0%, 5% and 10%. These </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">assumed investment portfolio returns are hypothetical figures and are </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">not necessarily indicative of the investment portfolio returns expected to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">be experienced by the Fund. The table below assumes the Fund’s use of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Preferred Shares representing approximately </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">0.03</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">% of the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">average net assets, and, although not senior securities under the 1940 </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Act, the Fund’s use of reverse repurchase agreements </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and lines of credit </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">representing approximately </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">0.21</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">% </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and 6.20%, respectively </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund’s average </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">total managed</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> assets during the year ended </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">December 31, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">2025 (or 0.23% and 6.63%, respectively, of the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">average net assets attributable to common shares as of that date)</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">. The </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">table below also assumes that the Fund will pay dividends on Preferred </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Shares at an estimated annual rate of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">12</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">% for the Preferred Shares and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">interest on reverse repurchase agreements </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and lines of credit </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">at an </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">estimated annual effective interest expense rate of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">4.563</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">%</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">5.882%, respectively </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">(based on market interest rates as of </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">December 31, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">2025</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">). Based on such estimates, the annual return that </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund’s portfolio must experience (net of expenses) in order to cover </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">such costs is 0.38%.The information below does not reflect the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">use of certain other forms of economic leverage achieved through the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">use of other instruments or transactions not considered to be senior </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">securities under the 1940 Act, such as credit default swaps or other </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">derivative instruments. The assumed investment portfolio returns in the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">table below are hypothetical figures and are not necessarily indicative of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the investment portfolio returns expected to be experienced by the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund. Your actual returns may be greater or less than those appearing </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">below. In addition, actual borrowing expenses associated with reverse </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">repurchase agreements (or dollar rolls/buybacks or borrowings, if any) </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">used by the Fund may vary frequently and may be significantly higher or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">lower than the rate used for the example below.</span><span style="color:#000000;font-family:arial narrow;font-size:1pt"> </span></div> <table cellpadding="0" cellspacing="0" style="border-bottom:0.5pt solid #00687d;empty-cells:show;width:260pt"> <tr style="height:21.5pt"> <td style="background-color:#FFFFFF;padding-bottom:3pt;padding-top:3pt;vertical-align:Top;width:108.62pt;"> <div style="line-height:7.5pt;text-align:left;"> <div style="margin-left:3pt;margin-right:4pt;text-align:left;white-space:nowrap;"><span style="color:#3f3f3f;font-family:arial narrow;font-size:7.5pt;margin-left:0.0pt">Assumed Portfolio Total Return (Net </span></div> <div style="margin-left:3pt;margin-right:4pt;text-align:left;white-space:nowrap;"><span style="color:#3f3f3f;font-family:arial narrow;font-size:7.5pt;margin-left:0.0pt">of Expenses)</span></div> </div> </td> <td style="background-color:#FFFFFF;padding-bottom:3pt;padding-top:3pt;vertical-align:Top;white-space:nowrap;width:34.19pt;"> <div style="line-height:7.5pt;margin-left:4pt;margin-right:4pt;text-align:right;width:26.19pt;"> <div style="display:flex;margin:auto;width:28.19pt;"> <div style="display:flex;white-space:nowrap;width:28.19pt;"><span style="color:#3f3f3f;font-family:arial narrow;font-size:7.5pt">(10.0)%</span></div> </div> </div> </td> <td style="background-color:#FFFFFF;padding-bottom:3pt;padding-top:3pt;vertical-align:Top;white-space:nowrap;width:30.59pt;"> <div style="line-height:7.5pt;margin-left:4pt;margin-right:4pt;text-align:right;width:22.59pt;"> <div style="display:flex;margin:auto;width:24.59pt;"> <div style="display:flex;white-space:nowrap;width:24.59pt;"><span style="color:#3f3f3f;font-family:arial narrow;font-size:7.5pt">(5.0)%</span></div> </div> </div> </td> <td style="background-color:#FFFFFF;padding-bottom:3pt;padding-top:3pt;vertical-align:Top;white-space:nowrap;width:30.59pt;"> <div style="line-height:7.5pt;margin-left:4pt;margin-right:4pt;text-align:right;width:22.59pt;"> <div style="display:flex;margin:auto;width:24.59pt;"> <div style="display:flex;white-space:nowrap;width:24.59pt;"><span style="color:#3f3f3f;font-family:arial narrow;font-size:7.5pt;margin-left:1.94pt">0.0%</span></div> </div> </div> </td> <td style="background-color:#FFFFFF;padding-bottom:3pt;padding-top:3pt;vertical-align:Top;white-space:nowrap;width:26.71pt;"> <div style="line-height:7.5pt;margin-left:4pt;margin-right:4pt;text-align:right;width:18.71pt;"> <div style="display:flex;margin:auto;width:20.71pt;"> <div style="display:flex;white-space:nowrap;width:20.71pt;"><span style="color:#3f3f3f;font-family:arial narrow;font-size:7.5pt">5.0%</span></div> </div> </div> </td> <td style="background-color:#FFFFFF;padding-bottom:3pt;padding-top:3pt;vertical-align:Top;white-space:nowrap;width:29.31pt;"> <div style="line-height:7.5pt;margin-left:4pt;margin-right:1.5pt;text-align:right;width:22.31pt;"> <div style="display:flex;margin:auto;width:24.31pt;"> <div style="display:flex;white-space:nowrap;width:24.31pt;"><span style="color:#3f3f3f;font-family:arial narrow;font-size:7.5pt">10.0%</span></div> </div> </div> </td> </tr> <tr style="height:8.5pt"> <td style="background-color:azure;padding-bottom:2pt;padding-top:3pt;vertical-align:Top;width:108.62pt;"> <div style="line-height:7.5pt;text-align:left;"> <div style="margin-left:3pt;margin-right:4pt;text-align:left;white-space:nowrap;"><span style="color:#3f3f3f;font-family:arial narrow;font-size:7.5pt;margin-left:0.0pt">Common Shares Total Return</span></div> </div> </td> <td style="background-color:azure;padding-bottom:2pt;padding-top:3pt;vertical-align:Top;white-space:nowrap;width:34.19pt;"> <div style="line-height:7.5pt;margin-left:4pt;margin-right:4pt;text-align:right;width:26.19pt;"> <div style="display:flex;margin:auto;width:28.19pt;"> <div style="display:flex;white-space:nowrap;width:28.19pt;"><span style="color:#3f3f3f;font-family:arial narrow;font-size:7.5pt">(11.09)%</span></div> </div> </div> </td> <td style="background-color:azure;padding-bottom:2pt;padding-top:3pt;vertical-align:Top;white-space:nowrap;width:30.59pt;"> <div style="line-height:7.5pt;margin-left:4pt;margin-right:4pt;text-align:right;width:22.59pt;"> <div style="display:flex;margin:auto;width:24.59pt;"> <div style="display:flex;white-space:nowrap;width:24.59pt;"><span style="color:#3f3f3f;font-family:arial narrow;font-size:7.5pt">(5.75)%</span></div> </div> </div> </td> <td style="background-color:azure;padding-bottom:2pt;padding-top:3pt;vertical-align:Top;white-space:nowrap;width:30.59pt;"> <div style="line-height:7.5pt;margin-left:4pt;margin-right:4pt;text-align:right;width:22.59pt;"> <div style="display:flex;margin:auto;width:24.59pt;"> <div style="display:flex;white-space:nowrap;width:24.59pt;"><span style="color:#3f3f3f;font-family:arial narrow;font-size:7.5pt">(0.40)%</span></div> </div> </div> </td> <td style="background-color:azure;padding-bottom:2pt;padding-top:3pt;vertical-align:Top;white-space:nowrap;width:26.71pt;"> <div style="line-height:7.5pt;margin-left:4pt;margin-right:4pt;text-align:right;width:18.71pt;"> <div style="display:flex;margin:auto;width:20.71pt;"> <div style="display:flex;white-space:nowrap;width:20.71pt;"><span style="color:#3f3f3f;font-family:arial narrow;font-size:7.5pt">4.94%</span></div> </div> </div> </td> <td style="background-color:azure;padding-bottom:2pt;padding-top:3pt;vertical-align:Top;white-space:nowrap;width:29.31pt;"> <div style="line-height:7.5pt;margin-left:4pt;margin-right:1.5pt;text-align:right;width:22.31pt;"> <div style="display:flex;margin:auto;width:24.31pt;"> <div style="display:flex;white-space:nowrap;width:24.31pt;"><span style="color:#3f3f3f;font-family:arial narrow;font-size:7.5pt">10.28%</span></div> </div> </div> </td> </tr> </table><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Common Shares Total Return is composed of two elements-the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">distributions paid by the Fund to holders of Common Shares (the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">amount of which is largely determined by the net investment income of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund after paying dividend payments on any Preferred Shares issued </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">by the Fund and expenses on any forms of leverage outstanding) and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">gains or losses on the value of the securities and other instruments the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund owns. As required by SEC rules, the table assumes that the Fund is </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">more likely to suffer capital losses than to enjoy capital appreciation. For </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">example, to assume a total return of 0%, the Fund must assume that </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the income it receives on its investments is entirely offset by losses in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the value of those investments. This table reflects hypothetical </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">performance of the Fund’s portfolio and not the actual performance of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund’s Common Shares, the value of which is determined by market </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">forces and other factors.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Should the Fund elect to add additional leverage, any benefits of such </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">additional leverage cannot be fully achieved until the proceeds resulting </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">from the use of such leverage have been received by the Fund and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">invested in accordance with the Fund’s investment objectives and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">policies. As noted above, the Fund’s willingness to use additional </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">leverage, and the extent to which leverage is used at any time, will </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">depend on many factors, including, among other things, PIMCO’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">assessment of the yield curve environment, interest rate trends, market </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">conditions and other factors.</span></div> <div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The following table is furnished in response to requirements of the SEC. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">It is designed to illustrate the effects of leverage through the use of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">senior securities, as that term is defined under Section 18 of the 1940 </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Act, on Common Share total return, assuming investment portfolio total </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">returns (consisting of income and changes in the value of investments </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">held in the Fund’s portfolio) of -10%, -5%, 0%, 5% and 10%. These </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">assumed investment portfolio returns are hypothetical figures and are </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">not necessarily indicative of the investment portfolio returns expected to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">be experienced by the Fund. The table below assumes the Fund’s use of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Preferred Shares representing approximately </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">0.03</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">% of the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">average net assets, and, although not senior securities under the 1940 </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Act, the Fund’s use of reverse repurchase agreements </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and lines of credit </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">representing approximately </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">0.21</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">% </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and 6.20%, respectively </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund’s average </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">total managed</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> assets during the year ended </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">December 31, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">2025 (or 0.23% and 6.63%, respectively, of the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">average net assets attributable to common shares as of that date)</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">. The </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">table below also assumes that the Fund will pay dividends on Preferred </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Shares at an estimated annual rate of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">12</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">% for the Preferred Shares and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">interest on reverse repurchase agreements </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and lines of credit </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">at an </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">estimated annual effective interest expense rate of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">4.563</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">%</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">5.882%, respectively </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">(based on market interest rates as of </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">December 31, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">2025</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">). Based on such estimates, the annual return that </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund’s portfolio must experience (net of expenses) in order to cover </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">such costs is 0.38%.The information below does not reflect the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">use of certain other forms of economic leverage achieved through the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">use of other instruments or transactions not considered to be senior </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">securities under the 1940 Act, such as credit default swaps or other </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">derivative instruments. The assumed investment portfolio returns in the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">table below are hypothetical figures and are not necessarily indicative of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the investment portfolio returns expected to be experienced by the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund. Your actual returns may be greater or less than those appearing </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">below. In addition, actual borrowing expenses associated with reverse </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">repurchase agreements (or dollar rolls/buybacks or borrowings, if any) </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">used by the Fund may vary frequently and may be significantly higher or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">lower than the rate used for the example below.</span><span style="color:#000000;font-family:arial narrow;font-size:1pt"> </span></div> <table cellpadding="0" cellspacing="0" style="border-bottom:0.5pt solid #00687d;empty-cells:show;width:260pt"> <tr style="height:21.5pt"> <td style="background-color:#FFFFFF;padding-bottom:3pt;padding-top:3pt;vertical-align:Top;width:108.62pt;"> <div style="line-height:7.5pt;text-align:left;"> <div style="margin-left:3pt;margin-right:4pt;text-align:left;white-space:nowrap;"><span style="color:#3f3f3f;font-family:arial narrow;font-size:7.5pt;margin-left:0.0pt">Assumed Portfolio Total Return (Net </span></div> <div style="margin-left:3pt;margin-right:4pt;text-align:left;white-space:nowrap;"><span style="color:#3f3f3f;font-family:arial narrow;font-size:7.5pt;margin-left:0.0pt">of Expenses)</span></div> </div> </td> <td style="background-color:#FFFFFF;padding-bottom:3pt;padding-top:3pt;vertical-align:Top;white-space:nowrap;width:34.19pt;"> <div style="line-height:7.5pt;margin-left:4pt;margin-right:4pt;text-align:right;width:26.19pt;"> <div style="display:flex;margin:auto;width:28.19pt;"> <div style="display:flex;white-space:nowrap;width:28.19pt;"><span style="color:#3f3f3f;font-family:arial narrow;font-size:7.5pt">(10.0)%</span></div> </div> </div> </td> <td style="background-color:#FFFFFF;padding-bottom:3pt;padding-top:3pt;vertical-align:Top;white-space:nowrap;width:30.59pt;"> <div style="line-height:7.5pt;margin-left:4pt;margin-right:4pt;text-align:right;width:22.59pt;"> <div style="display:flex;margin:auto;width:24.59pt;"> <div style="display:flex;white-space:nowrap;width:24.59pt;"><span style="color:#3f3f3f;font-family:arial narrow;font-size:7.5pt">(5.0)%</span></div> </div> </div> </td> <td style="background-color:#FFFFFF;padding-bottom:3pt;padding-top:3pt;vertical-align:Top;white-space:nowrap;width:30.59pt;"> <div style="line-height:7.5pt;margin-left:4pt;margin-right:4pt;text-align:right;width:22.59pt;"> <div style="display:flex;margin:auto;width:24.59pt;"> <div style="display:flex;white-space:nowrap;width:24.59pt;"><span style="color:#3f3f3f;font-family:arial narrow;font-size:7.5pt;margin-left:1.94pt">0.0%</span></div> </div> </div> </td> <td style="background-color:#FFFFFF;padding-bottom:3pt;padding-top:3pt;vertical-align:Top;white-space:nowrap;width:26.71pt;"> <div style="line-height:7.5pt;margin-left:4pt;margin-right:4pt;text-align:right;width:18.71pt;"> <div style="display:flex;margin:auto;width:20.71pt;"> <div style="display:flex;white-space:nowrap;width:20.71pt;"><span style="color:#3f3f3f;font-family:arial narrow;font-size:7.5pt">5.0%</span></div> </div> </div> </td> <td style="background-color:#FFFFFF;padding-bottom:3pt;padding-top:3pt;vertical-align:Top;white-space:nowrap;width:29.31pt;"> <div style="line-height:7.5pt;margin-left:4pt;margin-right:1.5pt;text-align:right;width:22.31pt;"> <div style="display:flex;margin:auto;width:24.31pt;"> <div style="display:flex;white-space:nowrap;width:24.31pt;"><span style="color:#3f3f3f;font-family:arial narrow;font-size:7.5pt">10.0%</span></div> </div> </div> </td> </tr> <tr style="height:8.5pt"> <td style="background-color:azure;padding-bottom:2pt;padding-top:3pt;vertical-align:Top;width:108.62pt;"> <div style="line-height:7.5pt;text-align:left;"> <div style="margin-left:3pt;margin-right:4pt;text-align:left;white-space:nowrap;"><span style="color:#3f3f3f;font-family:arial narrow;font-size:7.5pt;margin-left:0.0pt">Common Shares Total Return</span></div> </div> </td> <td style="background-color:azure;padding-bottom:2pt;padding-top:3pt;vertical-align:Top;white-space:nowrap;width:34.19pt;"> <div style="line-height:7.5pt;margin-left:4pt;margin-right:4pt;text-align:right;width:26.19pt;"> <div style="display:flex;margin:auto;width:28.19pt;"> <div style="display:flex;white-space:nowrap;width:28.19pt;"><span style="color:#3f3f3f;font-family:arial narrow;font-size:7.5pt">(11.09)%</span></div> </div> </div> </td> <td style="background-color:azure;padding-bottom:2pt;padding-top:3pt;vertical-align:Top;white-space:nowrap;width:30.59pt;"> <div style="line-height:7.5pt;margin-left:4pt;margin-right:4pt;text-align:right;width:22.59pt;"> <div style="display:flex;margin:auto;width:24.59pt;"> <div style="display:flex;white-space:nowrap;width:24.59pt;"><span style="color:#3f3f3f;font-family:arial narrow;font-size:7.5pt">(5.75)%</span></div> </div> </div> </td> <td style="background-color:azure;padding-bottom:2pt;padding-top:3pt;vertical-align:Top;white-space:nowrap;width:30.59pt;"> <div style="line-height:7.5pt;margin-left:4pt;margin-right:4pt;text-align:right;width:22.59pt;"> <div style="display:flex;margin:auto;width:24.59pt;"> <div style="display:flex;white-space:nowrap;width:24.59pt;"><span style="color:#3f3f3f;font-family:arial narrow;font-size:7.5pt">(0.40)%</span></div> </div> </div> </td> <td style="background-color:azure;padding-bottom:2pt;padding-top:3pt;vertical-align:Top;white-space:nowrap;width:26.71pt;"> <div style="line-height:7.5pt;margin-left:4pt;margin-right:4pt;text-align:right;width:18.71pt;"> <div style="display:flex;margin:auto;width:20.71pt;"> <div style="display:flex;white-space:nowrap;width:20.71pt;"><span style="color:#3f3f3f;font-family:arial narrow;font-size:7.5pt">4.94%</span></div> </div> </div> </td> <td style="background-color:azure;padding-bottom:2pt;padding-top:3pt;vertical-align:Top;white-space:nowrap;width:29.31pt;"> <div style="line-height:7.5pt;margin-left:4pt;margin-right:1.5pt;text-align:right;width:22.31pt;"> <div style="display:flex;margin:auto;width:24.31pt;"> <div style="display:flex;white-space:nowrap;width:24.31pt;"><span style="color:#3f3f3f;font-family:arial narrow;font-size:7.5pt">10.28%</span></div> </div> </div> </td> </tr> </table> -0.1109 -0.0575 -0.0040 0.0494 0.1028 <div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:12pt;font-weight:bold">Principal Risks of the Fund</span><span style="color:#000000;font-family:arial narrow;font-size:12pt;font-weight:bold;line-height:14pt"> </span></div><div style="margin-top:2pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">The NAV of the Common Shares will fluctuate with and be affected by, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">among other things, various principal risks of the Fund and its </span><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">investments which are summarized below. The Fund is subject to the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">principal risks noted below, whether through the Fund’s direct </span><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">investments, investments by subsidiaries or derivatives positions.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Limited Prior History</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund is a non-diversified, closed-end management investment </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">company with limited history of operations and is designed for </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">long-term investors and not as a trading vehicle.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Investment and Market Risk</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The market price of securities owned by the Fund may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">fluctuate</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">sometimes rapidly or unpredictably. Securities may decline in value due </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">a variety of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">factors affecting </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">(or perceiving to affect)</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> securities or real </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">estate markets generally or particular industries</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">,</span><span style="color:#333333;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">sectors </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">or companies </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">represented in the securities or real estate markets. The value of a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">security may decline due to general market conditions that are not </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">specifically related to a particular company, such as real or perceived </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">adverse economic conditions, changes in the general outlook for </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">corporate earnings, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">levels of public debt and deficits,</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> changes in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">inflation, interest or currency rates, financial system instability, adverse </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">changes to credit markets or adverse investor sentiment generally. The </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">value of a security may also decline due to factors that affect a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">particular industry or industries, such as labor shortages or increased </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">production costs and competitive conditions within an industry. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Conversely, a change in financial condition or other event affecting a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">single issuer may adversely impact securities markets as a whole. During </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">a general downturn in the securities markets, multiple asset classes may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">decline in value simultaneously even if the performance of those asset </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">classes is not otherwise historically correlated. Investments may also be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">negatively impacted by market disruptions and by attempts by other </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">market participants to manipulate the prices of particular investments. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Equity securities generally have greater price volatility than fixed income </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">securities. Credit ratings downgrades may also negatively affect </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">securities held by the Fund. Even when markets perform well, there is no </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">assurance that the investments held by the Fund will increase in value </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">along with the broader market.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">In addition, market risk includes the risk that geopolitical and other </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">events will disrupt the economy on a national or global level. For </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">instance, war or military conflict, terrorism, social unrest, recessions, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">supply chain disruptions, market manipulation, government defaults, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">government shutdowns, political </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and regulatory </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">changes, diplomatic </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">developments or the imposition of sanctions and other similar </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">measures, including the imposition of tariffs, or other U.S. economic </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">policies and any related public health emergencies (such as the spread </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of infectious diseases, pandemics and epidemics), natural/environmental </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">disasters, climate-change and climate related events can all negatively </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">impact the securities markets, which could cause the Fund to lose value. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">This includes reliance on global supply chains that are susceptible to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">disruptions resulting from, among other things, war and other armed </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">conflicts, tariffs, extreme weather events, and natural disasters.</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> These </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">events could reduce consumer demand or economic output, result in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">market closures, changes in interest rates, inflation/deflation, travel </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">restrictions or quarantines, and significantly adversely impact the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">economy.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">As computing technology and data analytics advance, there has been a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">trend towards machine driven and artificially intelligent trading systems, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">particularly with respect to increasing levels of autonomy in trading </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">decision capabilities. Regulators of financial markets have become </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">increasingly focused on the potential impact of artificial intelligence on </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investment activities and may issue regulations that affect the use of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">artificial technology in trading activities. Any such regulations may not </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">have the effect on financial markets that regulators intend. Moreover, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">advancements in artificial intelligence and other technologies may result </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">in the introduction of errors, defects or security vulnerabilities, which can </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">go undetected. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Issues in the construction and implementation of AI </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">systems and models (including software issues, issues related to the use </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of artificial intelligence and machine learning (AI), and other </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">technological issues) may adversely impact the Fund. AI systems may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">contain design flaws or faulty assumptions, rely on incomplete or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">inaccurate data inputs, and may be difficult to interpret or audit.</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> The </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">potential speed of such trading and other technologies may exacerbate </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the impact of any such incidents, particularly where such incidents are </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">exploited by other artificially intelligent systems designed to impair or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">prevent the intervention of a human control.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">domestic political environment, as well as political and diplomatic </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">events within the United States and abroad, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the U.S. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">budget</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> and deficit </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">reduction plan and foreign policy tensions</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> with foreign nations,</span><span style="color:#333333;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">including embargoes</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">tariffs, sanctions, trade wars, and other similar </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">developments,</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> has in the past resulted, and may in the future result, in a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">government shutdown or otherwise adversely affect the U.S. regulatory </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">landscape, the general market environment and/or investor sentiment, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">which could have an adverse impact on the Fund’s investments and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">operations. Additional and/or prolonged U.S. federal government </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">shutdowns</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">,</span><span style="color:#333333;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">U.S.</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> foreign policy, the imposition of tariffs, or other </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">U.S.</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> economic policies and any related domestic and/or geopolitical </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">tensions </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">may affect investor and consumer confidence and may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">adversely impact financial markets and the broader economy, perhaps </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">suddenly and to a significant degree. Governmental and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">quasi-governmental authorities and regulators throughout the world </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">have previously responded to serious economic disruptions with a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">variety of significant fiscal and monetary policy changes. The reversal of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">any fiscal and/or monetary policies or the ineffectiveness of these </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">policies, could increase volatility in securities markets, which could </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">adversely affect the Fund’s investments. Any market disruptions could </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">also prevent the Fund from executing advantageous investment </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">decisions in a timely manner. Funds that have focused their investments </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">in a region enduring geopolitical market disruption will face higher risks </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of loss. Thus, investors should closely monitor current market conditions </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">to determine whether the Fund meets their individual financial needs </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and tolerance for risk.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">When inflationary price movements occur, fixed income securities </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">markets may experience heightened levels of interest rate, volatility and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">liquidity risk. Interest rate increases in the future could cause the value </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of a fund that invests in fixed income securities to decrease</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">, which could </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">force the Fund to liquidate investments at disadvantageous times or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">prices, therefore adversely affecting the Fund and its shareholders</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Higher interest rates generally lower the values of real estate-related </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">assets. When this does not occur as expected, it presents an increased </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">risk of a correction or severe downturn in real estate-related asset </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">prices, which could adversely impact the value of other investments as </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">well (such as loans, securitized debt and other fixed income securities). </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">This risk is particularly present with respect to commercial real </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">estate-related asset prices, and the value of other investments with a </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">connection to the commercial real estate sector. Examples of risks faced </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">by real estate-related assets that may impact commercial real </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">estate-related asset prices include: tenant vacancy rates, increased </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">tenant turnover and tenant concentration; general real estate </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">headwinds, including delinquencies and difficulties in collecting rents </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and other payments (which increases the risk of owners being unable to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">pay or otherwise defaulting on their own borrowings and obligations); </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">decreases in property values; increases in inflation, upkeep costs and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">other expenses; fluctuations in rents; and increased concentration in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">ownership of certain types of properties.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Exchanges and securities markets may close early, close late or issue </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">trading halts on specific securities, which may result in, among other </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">things, the Fund being unable to buy or sell certain securities or financial </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">instruments at an advantageous time or accurately price its portfolio </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investments.</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> In addition, the Fund may rely on various third-party </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">sources to calculate its NAV. As a result, the Fund is subject to certain </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">operational risks associated with reliance on service providers and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">service providers’ data sources. In particular, errors or systems failures </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and other technological issues may adversely impact the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">calculation of its NAV, and such NAV calculation issues may result in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">inaccurately calculated NAV, delays in NAV calculation and/or the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">inability to calculate NAVs over extended periods. The Fund may be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">unable to recover any losses associated with such failures.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Distribution Rate Risk</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund's distribution rates may be affected by numerous factors, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">including but not limited to changes in realized and projected market </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">returns, fluctuations in market interest rates, Fund performance and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">other factors. The Fund’s distributions may be comprised of a return of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">capital. In general terms, a return of capital would occur where a Fund </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">distribution (or portion thereof) represents a return of a portion of your </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investment, rather than net income or capital gains generated from your </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investment during a particular period. There can be no assurance that a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">change in market conditions or other factors will not result in a change </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">in the Fund’s distribution rate or that the rate will be sustainable in the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">future. See “Distributions” for a description of return of capital and its </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">impacts. There can be no assurance that a change in market conditions </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">or other factors will not result in a change in a Fund’s distribution rate </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">or that the rate will be sustainable in the future. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Additionally</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">distribution rate is not indicative of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">performance and may not </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">correlate with </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">actual returns generated</span><span style="color:#333333;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">by the Fund</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investments</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">For instance, during periods of low or declining interest rates, the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">distributable income and dividend levels may decline for many reasons. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">For example, the Fund may have to deploy uninvested assets (whether </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">from sales of Fund shares, proceeds from matured, traded or called debt </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">obligations or other sources) in new, lower yielding instruments. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Additionally, payments from certain instruments that may be held by the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund (such as variable and floating rate securities) may be negatively </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">impacted by declining interest rates, which may also lead to a decline in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund’s distributable income and dividend levels. The distribution rate </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">is not indicative of the Fund's performance and may not correlate with </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the actual returns generated by the Fund's investments.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Liquidity Risk</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">To the extent consistent with the applicable liquidity requirements for </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">interval funds under Rule 23c-3 under the 1940 Act, the Fund may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">invest without limit in illiquid investments. Liquidity risk exists when </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">particular investments are difficult to purchase or sell at the time that </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund would like or at the price that the Fund believes such </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investments are currently worth. Many of the Fund’s investments may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">be illiquid. The term “illiquid investments” for this purpose means any </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investment that the Fund reasonably expects cannot be sold or disposed </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of in current market conditions in seven calendar days or less without </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the sale or disposition significantly changing the market value of the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investment. Illiquid investments may become harder to value, especially </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">in changing markets. The Fund’s investments in illiquid investments may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">reduce the returns of the Fund because it may be unable to sell the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">illiquid investments at an advantageous time or price or possibly require </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund to dispose of other investments at unfavorable times or prices </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">in order to satisfy its obligations, which could prevent the Fund from </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">taking advantage of other investment opportunities. Illiquidity can be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">caused by, among other things, a drop in overall market trading volume, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">an inability to find a willing buyer, or legal restrictions on the securities’ </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">resale</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">, capital controls, delays or limits on repatriation of local currency, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">or insolvency of local governments</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">. Additionally, the market for certain </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investments may become illiquid under adverse market or economic </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">conditions independent of any specific adverse changes in the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">conditions of a particular issuer, such as during </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">changes in</span><span style="color:#333333;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">interest rates,</span><span style="color:#333333;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">elevated volatility,</span><span style="color:#333333;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">market or geopolitical disruptions</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">, economic </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">uncertainty or public health crises</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">. There can be no assurance that an </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investment that is deemed to be liquid when purchased will continue to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">be liquid while it is held by the Fund and/or when the Fund wishes to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">dispose of it. Bond markets have consistently grown over </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">time</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> while the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">capacity for traditional dealer counterparties to engage in fixed income </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">trading has not kept pace </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">with the growth of bond markets and may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">remain constrained</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">. As a result, dealer inventories of corporate bonds, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">which provide a core indication of the ability of financial intermediaries </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">to “make markets,” </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">to remain limited relative to the size of the market</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Because market makers seek to provide stability to a market through </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">their intermediary services, the significant reduction in dealer inventories </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">could potentially lead to decreased liquidity and increased volatility in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the fixed income markets</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">,</span><span style="color:#333333;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">especially</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> during periods of economic </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">uncertainty</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> or market stress</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">. In such cases, the Fund, due to regulatory </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">limitations on investments in illiquid investments and the difficulty in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">purchasing and selling such securities or instruments, may be unable to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">achieve its desired level of exposure to a certain sector. To the extent </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">that the Fund’s principal investment strategies involve securities of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">companies with smaller market capitalizations, foreign (non-U.S.) </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">securities, Rule 144A securities, illiquid sectors of fixed income </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">securities, derivatives or securities with substantial market and/or credit </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">risk, the Fund will tend to have the greatest exposure to liquidity risk.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Further, fixed income securities with longer durations until maturity face </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">heightened levels of liquidity risk as compared to fixed income securities </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">with shorter durations until maturity. The risks associated with illiquid </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">instruments may be particularly acute in situations in which the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">operations require cash (such as in connection with repurchase offers) </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">and could result in the Fund borrowing to meet its short-term needs or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">incurring losses on the sale of illiquid instruments. It may also be the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">case that other market participants may be attempting to liquidate fixed </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">income holdings at the same time as the Fund, causing increased supply </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">in the market and contributing to liquidity risk and downward pricing </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">pressure. Liquidity risk also refers to the risk that the Fund may be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">required to hold additional cash or sell other investments in order to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">obtain cash to close out derivatives or meet the liquidity demands that </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">derivatives can create to make payments of margin, collateral, or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">settlement payments to counterparties. The Fund may have to sell a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">security at a disadvantageous time or price to meet such obligations. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">The actions of governments and regulators may have the effect of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">reducing market liquidity, market resiliency and money supply.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Management Risk</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund is subject to management risk because it is an actively </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">managed investment portfolio. PIMCO will apply investment techniques </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and risk analysis in making investment decisions for the Fund. PIMCO </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and each portfolio manager may determine that certain factors are </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">more significant than others, but there can be no guarantee that these </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">decisions will produce the desired results or that the due diligence </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">conducted by PIMCO </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">will evaluate every factor prior to investing in a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">company or issuer and expose all material risks associated with an </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investment. Additionally, PIMCO </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">may not be able to identify suitable </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investment opportunities and may face competition from other </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investment managers when identifying and consummating certain </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investments, or may determine that certain factors are more significant </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">than others. Certain securities or other instruments in which the Fund </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">seeks to invest may not be available in the quantities desired, including </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">in circumstances where other funds for which PIMCO acts as investment </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">adviser, including funds with names, investment objectives and policies, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and/or portfolio management teams, similar to the Fund, are seeking to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">invest in the same or similar securities or instruments. In addition, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">regulatory restrictions, actual or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">perceived</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> conflicts of interest or other </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">considerations may cause PIMCO to restrict or prohibit participation in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">certain investments. In such circumstances, PIMCO </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">may determine to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">purchase other securities or instruments as substitutes. Such substitute </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">securities or instruments may not perform as intended, which could </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">result in losses to the Fund. To the extent the Fund employs strategies </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">targeting perceived pricing inefficiencies, arbitrage strategies or similar </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">strategies, it is subject to the risk that the pricing or valuation of the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">securities and instruments involved in such strategies may change </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">unexpectedly, which may result in reduced returns or losses to the Fund. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Additionally, legislative, regulatory, or tax developments may adversely </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">affect management of the Fund.</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> The Fund is also subject to the risk that </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">deficiencies in the internal systems or controls of PIMCO or another </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">service provider will cause losses for the Fund or hinder Fund </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">operations. For example, trading delays or errors (both human and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">systemic) could prevent the Fund from purchasing a security expected to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">appreciate in value. Please refer to “Portfolio Managers – Conflicts of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Interest” in the SAI for further information. Additionally, actual or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">potential conflicts of interest, legislative, regulatory, or tax restrictions, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">policies or developments may affect the investment techniques available </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">to PIMCO </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">in connection with managing the Fund, may cause PIMCO to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">restrict or prohibit participation in certain investments and may also </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">adversely affect the ability of the Fund to achieve its investment </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">objectives. There also can be no assurance that all of the personnel of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">PIMCO will continue to be associated with PIMCO for any length of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">time. The loss of the services of one or more key employees of PIMCO </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">could have an adverse impact on the Fund’s ability to realize its </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investment objectives.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">In addition, the Fund may rely on various third-party sources to calculate </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">its NAV. As a result, the Fund is subject to certain operational risks </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">associated with reliance on service providers and service providers’ data </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">sources. In particular, errors or systems failures and other technological </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">issues may adversely impact the Fund’s calculations of its NAV, and such </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">NAV calculation issues may result in inaccurately calculated NAVs, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">delays in NAV calculation and/or the inability to calculate NAVs over </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">extended periods. The Fund may be unable to recover any losses </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">associated with such failures.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Delay in Use of Proceeds Risk</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Although the Fund currently intends to invest the proceeds from any </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">sale of the Common Shares offered hereby as soon as practicable, such </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investments may be delayed if suitable investments are unavailable at </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the time. Pending investment, the net proceeds of the offering may be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">invested in permitted temporary investments, which include short-term </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">U.S. government securities, bank certificates of deposit and other </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">short-term liquid investments. The rate of return on these investments, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">which affects the amount of cash available to make distributions, may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">be less than the return obtainable from the type of investments in the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">real estate industry the Fund seeks to originate or acquire. Such </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investments may also make it more difficult for the Fund to qualify as a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">REIT. Therefore, delays the Fund encounters in the selection, due </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">diligence and origination or acquisition of investments would likely limit </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">its ability to pay distributions and lower overall returns. In the event the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund is unable to find suitable investments such temporary investments </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">may be maintained for longer periods which would be dilutive to overall </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investment returns. This could cause a substantial delay in the time it </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">takes for a shareholder’s investment to realize its full potential return.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Best Efforts Offering</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">This offering is being made on a “best efforts” basis, meaning the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Distributor and broker-dealers participating in the offering are only </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">required to use their best efforts to sell the Fund’s shares and have no </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">firm commitment or obligation to sell any of the shares. In the event of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the liquidation, dissolution or winding up of the Fund, Common </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Shareholders are entitled to receive the then-current NAV per share of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the assets legally available for distribution to the Fund’s Common </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Shareholders, after payment of or adequate provision for all of the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund’s known debts and liabilities, including any outstanding debt </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">securities or other borrowings and any interest thereon. These rights are </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">subject to the preferential rights of outstanding shares of any other </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">class or series of the Fund’s shares, including any Preferred Shares.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Competition Risk</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Identifying, completing and realizing attractive portfolio investments is </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">competitive and involves a high degree of uncertainty. The Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">profitability depends, in large part, on its ability to acquire target assets </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">at attractive prices. In acquiring its target assets, the Fund will compete </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">with a variety of institutional investors, including specialty finance </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">companies, public and private funds (including other funds managed by </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">PIMCO), REITs, commercial and investment banks, commercial finance </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and insurance companies and other financial institutions. Also, as a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">result of this competition, desirable investments in the Fund’s target </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">assets may be limited in the future and the Fund may not be able to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">take advantage of attractive investment opportunities from time to time, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">as the Fund can provide no assurance that it will be able to identify and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">make investments that are consistent with its investment objectives. The </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund cannot assure you that the competitive pressures it faces will not </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">have a material adverse effect on its business, financial condition and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">results of operations or the Fund’s ability to locate, consummate and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">exit investments that satisfy its investment objectives.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Non-Diversification Risk</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund is “non-diversified,” which means that the Fund may invest a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">significant portion of its assets in the securities of a smaller number of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">issuers than a diversified fund. Focusing investments on a small number </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of issuers increases risk. A fund that invests in a relatively smaller </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">number of issuers is more susceptible to risks associated with a single </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">economic, political or regulatory occurrence than a diversified fund </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">might be. Some of those issuers also may present substantial credit or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">other risks. Similarly, a non-diversified fund may be subject to increased </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">economic, business or political risk to the extent that it invests a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">substantial portion of its assets in a particular currency, in a group of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">related industries, in a particular issuer, in the bonds of similar projects </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">or in a narrowly defined geographic area outside the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">U.S. Notwithstanding the Fund’s status as a “non-diversified” </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investment company under the Act, the Fund intends to qualify as a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">REIT accorded special tax treatment under the Code, which imposes its </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">own diversification requirements.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Illiquid Investment Risk</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Many of the Fund’s investments will be illiquid, including the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">private commercial real estate investments. A variety of factors could </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">make it difficult for the Fund to dispose of any of its illiquid assets on </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">acceptable terms even if a disposition is in the best interests of the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund’s Common Shareholders. The Fund cannot predict whether it will </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">be able to sell any asset for the price or on the terms set by it or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">whether any price or other terms offered by a prospective purchaser </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">would be acceptable to the Fund. The Fund also cannot predict the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">length of time needed to find a willing purchaser and to close the sale </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of an asset. The Fund may be required to expend cash to correct defects </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">or to make improvements before an asset can be sold, and there can be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">no assurance that it will have cash available to correct those defects or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">to make those improvements. As a result, the Fund’s ability to sell </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investments in response to changes in economic and other conditions </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">could be limited. Limitations on the Fund’s ability to respond to adverse </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">changes in the performance of its investments may have a material </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">adverse effect on the Fund’s business, financial condition and results of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">operations and the Fund’s ability to make distributions.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Real Estate Investment Risk</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund’s investments will be subject to the risks inherent in the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">ownership and operation of real estate and real estate-related </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">businesses and assets. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">In addition, the real estate industry has </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">historically been cyclical and particularly sensitive to economic </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">downturns and other events that limit demand for real estate, which </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">would adversely impact the value of real estate investments.</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> These risks </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">include, but are not limited to:</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div> <div style="clear:both;margin-top:6pt;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">the burdens of ownership of real property;</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">general and local economic conditions (such as an oversupply of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">space or a reduction in demand for space);</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">the supply and demand for properties (including competition </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">based on rental rates);</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">energy and supply shortages;</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">fluctuations in average occupancy and room rates;</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">the attractiveness, type and location of the properties and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">changes in the relative popularity of commercial properties as an </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investment;</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">the financial condition and resources of tenants, buyers and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">sellers of properties;</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">increased mortgage defaults;</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">the quality of maintenance, insurance and management services;</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">changes in the availability of debt financing which may render the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">sale or refinancing of properties difficult or impracticable;</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">changes in building, environmental and other laws and/or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">regulations (including those governing usage and improvements), </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">fiscal policies and zoning laws;</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">changes in real property tax rates;</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">changes in interest rates and the availability of mortgage funds </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">which may render the sale or refinancing of properties difficult or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">impracticable;</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">changes in operating costs and expenses;</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">lack of availability of insurance coverage or increases in insurance </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">costs;</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">uninsured losses or delays from casualties or condemnation;</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">negative developments in the economy that depress travel or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">leasing activity;</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">environmental liabilities;</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">contingent liabilities on disposition of assets;</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">uninsured or uninsurable casualties;</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">acts of God, including earthquakes, hurricanes and other natural </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">disasters;</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">social unrest and civil disturbances, epidemics, pandemics or other </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">public crises;</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">terrorist attacks and war;</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">risks and operating problems arising out of the presence of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">certain construction materials, structural or property-level latent </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">defects, work stoppages, labor shortages, strikes, union relations </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div style="line-height:12.0pt;margin-left:22pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">and contracts, fluctuating prices and supply of labor and/or other </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">labor-related factor; and</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">other factors which are beyond the control of the Investment </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Manager and its affiliates.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">In addition, the Fund’s investments will be subject to various risks which </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">could cause fluctuations in occupancy, rental rates, operating income </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and expenses or which could render the sale or financing of its </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">properties difficult or unattractive. For example, following the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">termination or expiration of a tenant’s lease, there may be a period of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">time before the Fund will begin receiving rental payments under a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">replacement lease. During that period, the Fund will continue to bear </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">fixed expenses such as interest, real estate taxes, maintenance and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">other operating expenses. In addition, declining economic conditions </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">may impair the Fund’s ability to attract replacement tenants and achieve </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">rental rates equal to or greater than the rents paid under previous </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">leases. Increased competition for tenants may require the Fund to make </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">capital improvements to properties which would not have otherwise </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">been planned. Ultimately, to the extent that the Fund is unable to renew </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">leases or re-let space as leases expire, decreased cash flow from tenants </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">will result, which could adversely impact the Fund’s operating results. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Real estate income and values may also be affected by demographic </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">trends, such as population shifts or changing tastes, preferences (such </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">as remote work arrangements) and social values.</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> Furthermore, events </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">involving limited liquidity, defaults, non-performance or other adverse </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">developments that affect financial institutions or the financial services </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">industry generally, or concerns or rumors about any events of these </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">kinds or other similar risks, have in the past and may in the future lead </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">to market-wide liquidity problems.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Separately, certain service providers to the Fund and/or its subsidiaries, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">as applicable, may be owned by, employed by, or otherwise related to, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">PIMCO, Allianz SE, their affiliates and/or their respective employees, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">consultants and other personnel. PIMCO may, in its sole discretion, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">determine to provide, or engage or recommend an affiliate of PIMCO to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">provide, certain services to the Fund, instead of engaging or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">recommending one or more third parties to provide such services. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Subject to the governance requirements of a particular fund and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">applicable law, PIMCO or its affiliates, as applicable, will receive </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">compensation in connection with the provision of such services. As a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">result, PIMCO faces a conflict of interest when selecting or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">recommending service providers for the Fund. Fees paid to an affiliated </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">service provider will be determined in PIMCO's commercially reasonable </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">discretion. Although PIMCO has adopted various policies and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">procedures intended to mitigate or otherwise manage conflicts of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">interest with respect to affiliated service providers, there can be no </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">guarantee that such policies and procedures (which may be modified or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">terminated at any time in PIMCO's sole discretion) will be successful.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Market Disruptions Risk</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund is subject to investment and operational risks associated with </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">financial, economic and other global market developments and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">disruptions, including those arising from war, military conflicts, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">geopolitical disputes,</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> terrorism, social </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">or political </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">unrest, recessions, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">supply chain disruptions, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">tariffs and other restrictions on trade,</span><span style="color:#333333;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">sanctions,</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> market manipulation, government interventions, defaults and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">shutdowns, political changes or diplomatic developments, public health </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">emergencies (such as the spread of infectious diseases, pandemics and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">epidemics), bank failures, natural/environmental disasters, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">climate-change and climate related events</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">,</span><span style="color:#333333;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">responses to government </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">actions or interventions (the threat or imposition of tariffs, trade </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">restrictions, currency restrictions, or similar actions)</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> which can all </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">negatively impact the securities markets, interest rates, auctions, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">secondary trading, ratings, credit risk, inflation, deflation and other </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">factors relating to the Fund’s investments or the Investment Manager’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">operations and the value of an investment in the Fund, its distributions </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and its returns. These events can also impair the technology and other </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">operational systems upon which the Fund’s service providers, including </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">PIMCO as the Fund’s investment adviser, rely, and could otherwise </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">disrupt the Fund’s service providers’ ability to fulfill their obligations to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund. Furthermore, events involving limited liquidity, defaults, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">non-performance or other adverse developments that affect financial </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">institutions or the financial services industry generally, or concerns or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">rumors about any events of these kinds or other similar risks, have in the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">past and may in the future lead to market-wide liquidity problems.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Commercial Real Estate Industry Risk</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund’s business and operations are dependent on the commercial </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">real estate industry generally, which in turn is dependent upon broad </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">economic conditions. Challenging economic and financial market </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">conditions may cause the Fund to experience an increase in the number </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of private commercial real estate investments that result in losses, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">including delinquencies, non-performing assets and a decrease in the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">value of the property or, in the case of real estate debt and traded real </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">estate-related securities, collateral which secures its investments, all of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">which could adversely affect the Fund’s results of operations. The Fund </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">may need to establish significant provisions for losses or impairment, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and be forced to sell assets at undesirable prices, which may result in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund’s NAV declining and the Fund incurring substantial losses.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Additionally, economic conditions can negatively impact the businesses </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of tenants of the Fund’s private commercial real estate investments, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">which in turn could cause the Fund to experience increased </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">delinquencies or decreasing rents, either of which would negatively </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">impact the Fund’s income. These conditions may increase the volatility of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the value of private commercial real estate investments made by the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund. These developments also may make it more difficult for the Fund </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">to accurately value its investments or to sell its investments on a timely </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">basis. These developments, including elevated interest rates relative to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">previous years, or a gradual decline in interest rates from these elevated </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">levels, could adversely affect the ability of the Fund to use leverage for </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investment purposes and increase the cost of such leverage, which </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">would reduce returns. Such developments could, in turn, diminish </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">significantly the Fund’s revenue from investments and adversely affect </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund’s NAV.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Private Commercial Real Estate Risk</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Lease defaults, terminations by one or more tenants or landlord-tenant </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">disputes may reduce the Fund’s revenues and net income. Any of these </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">situations may result in extended periods during which there is a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">significant decline in revenues or no revenues generated by a property. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">If this occurred, it could adversely affect the Fund’s performance.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund’s financial position and its ability to make distributions may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">also be adversely affected by financial difficulties experienced by any </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">major tenants, including bankruptcy, insolvency or a general downturn </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">in the business, or in the event any major tenants do not renew or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">extend their relationship as their lease terms expire. A tenant in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">bankruptcy may be able to restrict the ability to collect unpaid rents or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">interest during the bankruptcy proceeding. Furthermore, dealing with a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">tenants’ bankruptcy or other default may divert management’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">attention and cause the Fund to incur substantial legal and other costs.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund’s investments in real estate will be pressured in challenging </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">economic and rental market conditions. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund's investments in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">private commercial real estate may be subject to reduced demand for </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">commercial and office space as well as increased maintenance or tenant </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">improvement costs to convert properties for other uses.</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> If the Fund is </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">unable to re-let or renew leases for all or substantially all of the space at </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">these properties, if the rental rates upon such renewal or re-letting are </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">significantly lower than expected, or if the Fund’s reserves for these </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">purposes prove inadequate, the Fund will experience a reduction in net </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">income and may be required to reduce or eliminate cash distributions.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund may obtain only limited warranties when it purchases an </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">equity investment in private commercial real estate. The purchase of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">properties with limited warranties increases the risk that the Fund may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">lose some or all of its invested capital in the property, as well as the loss </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of rental income from that property if an issue should arise that </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">decreases the value of that property and is not covered by the limited </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">warranties. If any of these results occur, it may have a material adverse </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">effect on the Fund’s business, financial condition and results of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">operations and the Fund’s ability to make distributions.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Single Tenant Risk</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund depends on its tenants for revenue, and therefore the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">revenue is dependent on the success and economic viability of its </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">tenants. Certain of the Fund’s investments in single tenant properties </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">may be leased out to single tenants that the Investment Manager </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">believes have favorable credit profiles and/or performance attributes </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">supporting highly visible long-term cash flows. Adverse impacts to such </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">tenants, including as a result of changes in market or economic </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">conditions, natural disasters, outbreaks of an infectious disease, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">pandemic or any other serious public health concern, political events or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">other factors that may impact the operation of these properties, may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">have negative effects on the Fund’s business and financial results. As a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">result, such tenants may in the future be required to suspend operations </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">at the Fund’s properties for what could be an extended period of time. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Further, if such tenants default under their leases, the Fund may not be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">able to promptly enter into a new lease or operating arrangement for </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">such properties, rental rates or other terms under any new leases or </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">operating arrangement may be less favorable than the terms of the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">current lease or operating arrangement or the Fund may be required to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">make capital improvements to such properties for a new tenant, any of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">which could adversely impact the Fund’s operating results.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Litigation Risk</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">In the ordinary course of its business, the Fund may be subject to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">litigation from time to time. The outcome of such proceedings may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">materially adversely affect the value of the Fund or its investments and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">may continue without resolution for long periods of time. Any litigation </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">may consume substantial amounts of the Investment Manager’s time </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and attention, and that time and the devotion of these resources to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">litigation may, at times, be disproportionate to the amounts at stake in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the litigation.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The acquisition, ownership and disposition of real properties carries </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">certain specific litigation risks. Litigation may be commenced with </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">respect to a property acquired by the Fund or its subsidiaries in relation </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">to activities that took place prior to the Fund’s acquisition of such </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">property. In addition, at the time of disposition of an individual property, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">a potential buyer may claim that it should have been afforded the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">opportunity to purchase the asset or alternatively that such potential </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">buyer should be awarded due diligence expenses incurred or statutory </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">damages for misrepresentation relating to disclosure made, if such </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">buyer is passed over in favor of another as part of the Fund’s efforts to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">maximize sale proceeds. Similarly, successful buyers may later sue the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund under various damage theories, including those sounding in tort, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">for losses associated with latent defects or other problems not </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">uncovered in due diligence.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Insurance Risk</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Certain types of losses, generally of a catastrophic nature, such as </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">earthquakes, floods and hurricanes may be uninsurable or not </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">economically insurable. The Fund may not obtain, or be able to require </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">tenants to obtain certain types of insurance if it is deemed commercially </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">unreasonable. Under such circumstances, the insurance proceeds, if any, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">might not be adequate to restore the economic value of the property, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">which might decrease the value of the property. As a result, the insured </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">company could lose its investments in, and anticipated profits and cash </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">flows from, a number of properties and, as a result, adversely affect the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund’s investment performance.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Environmental Risk</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund may be exposed to substantial risk of loss arising from </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investments involving undisclosed or unknown environmental, health or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">occupational safety matters, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">including costs or disruptions caused by </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">extreme weather events, natural disasters, or other climate-related </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">factors or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">inadequate reserves, insurance or insurance proceeds for such </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">matters that have been previously identified. Under various U.S. federal, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">state and local and non-U.S. laws, ordinances and regulations, an owner </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of real property may be liable for the costs of removal or remediation of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">certain hazardous or toxic substances on or in such property. Such laws </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">may also impose joint and several liability, which can result in a party </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">being obligated to pay for greater than its share, or even all, of the </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">liability involved. Such liability may also be imposed without regard to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">whether the owner knew of, or was responsible for, the presence of such </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">hazardous or toxic substances and may be imposed on the owner in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">connection with the activities of a tenant at the property. The cost of any </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">required remediation and the owner’s liability therefore as to any </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">property are generally not limited under such laws and could exceed the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">value of the property and/or the aggregate assets of the owner. The </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">presence of such substances, or the failure to properly remediate </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">contamination from such substances, would adversely affect the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">owner’s ability to sell the real estate or to borrow funds using such </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">property as collateral, which could have an adverse effect on the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">return from such investment. Environmental claims with respect to a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">specific investment could exceed the value of such investment, and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">under certain circumstances, subject the other assets of the Fund to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">such liabilities. In addition, some environmental laws create a lien on </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">contaminated property in favor of governments or government agencies </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">for costs they incur in connection with the contamination.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The ongoing presence of environmental contamination, pollutants or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">other hazardous materials on a property (whether known at the time of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">acquisition or not) could also result in personal injury (and associated </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">liability) to persons on the property and persons removing such </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">materials, future or continuing property damage (which would adversely </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">affect property value) or claims by third parties, including as a result of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">exposure to such materials through the spread of contaminants.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">In addition, the Fund’s operating costs and performance may be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">adversely affected by compliance obligations under environmental </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">protection statutes, rules and regulations relating to investments of the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund, including additional compliance obligations arising from any </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">change to such statutes, rules and regulations. Statutes, rules and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">regulations may also restrict development of, and use of, property. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Certain clean-up actions brought by governmental agencies and private </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">parties could also impose obligations in relation to the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investments and result in additional costs to the Fund. If the Fund is </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">deemed liable for any such environmental liabilities and is unable to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">seek recovery against its tenant, the Fund’s business, financial condition </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and results of operations could be materially and adversely affected, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and the amount available to make distributions could be reduced.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Further, even in cases where the Fund is indemnified by the seller with </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">respect to an investment against liabilities arising out of violations of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">environmental laws and regulations, there can be no assurance as to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the financial viability of the seller to satisfy such indemnities or the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">ability of the Fund to achieve enforcement of such indemnities.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Joint Venture Risk</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund expects to enter into joint ventures with third parties to make </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investments. Joint ventures entered into by the Fund would only include </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">arrangements in which the Fund does not primarily control the joint </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">venture. The Fund’s partial interest investments will generally be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">structured as joint ventures or co-investment arrangements with third </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">parties. In these joint ventures, the Fund would generally share control </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">with the third-party partner (for example the Fund may have approval </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">rights over some of the joint venture’s activities, and in limited </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">circumstances that do not amount to primary control of the joint </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">venture, may have the ability to require that the joint venture take </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">specific actions), even though the Fund may hold a majority of the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">economic interests of a joint venture. In many cases the third-party </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">partner may provide services for the joint venture or its assets, including, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">without limitation, management of day-to-day operations, asset </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">management, property management, construction or development </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">management, leasing, refinancing or disposition related services. The </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund may also make investments in partnerships or other co-ownership </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">arrangements or participations. Such investments may involve risks not </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">otherwise present with other methods of investment, including, for </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">instance, the following risks and conflicts of interest:</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">the joint venture partner in an investment could become insolvent </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">or bankrupt</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> or experience financial distress that impairs its ability </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">to meet its obligations to the joint venture</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">;</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">the joint venture partner may be subject to cybersecurity </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">incidents, operational failures, or other business disruptions that </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">could adversely affect the joint venture's operations and the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund's investment;</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">fraud or other misconduct by the joint venture partner;</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund may share decision-making authority with its joint </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">venture partner regarding certain major decisions affecting the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">ownership of the joint venture and the joint venture property, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">such as the sale of the property or the making of additional </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">capital contributions for the benefit of the property, which may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">prevent the Fund from taking actions that are opposed by its joint </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">venture partner</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">. In addition, disputes between the Fund and its </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">joint venture partner may be difficult and costly to resolve and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">may require arbitration or litigation in jurisdictions that may be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">unfavorable to the Fund</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">;</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">under certain joint venture arrangements, neither party may have </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the power to control the venture and, under certain </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">circumstances, an impasse could result regarding cash </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">distributions, reserves, or a proposed sale or refinancing of the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investment, and this impasse could have an adverse impact on </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the joint venture, which could adversely impact the operations </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and profitability of the joint venture and/or the amount and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">timing of distributions the Fund receives from such joint venture;</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">the joint venture partner may at any time have economic or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">business interests or goals that are or that become in conflict with </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund’s business interests or goals, including, for instance, the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">operation of the properties;</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">the joint venture partner may be structured differently than the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund for tax purposes and this could create conflicts of interest </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and risk to the Fund’s ability to qualify as a REIT;</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund may rely upon its joint venture partner to manage the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">day-to-day operations of the joint venture and underlying assets, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">as well as to prepare financial information for the joint venture </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and any failure to perform these obligations may have a negative </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">impact on the Fund’s performance and results of operations;</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">the joint venture partner may experience a change of control, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">which could result in new management of the joint venture </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div style="line-height:12.0pt;margin-left:22pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">partner with less experience or conflicting interests to the Fund </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and be disruptive to the Fund’s business;</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">such joint venture partner may be in a position to take action </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">contrary to the Fund’s instructions or requests or contrary to the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund’s policies or objectives, including the Fund’s policy with </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">respect to maintaining its qualification as a REIT;</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">the terms of the joint ventures could restrict the Fund’s ability to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">sell or transfer its interest to a third party when it desires on </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">advantageous terms, which could result in reduced liquidity;</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund or its joint venture partner may have the right to trigger </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">a buy-sell arrangement, which could cause the Fund to sell its </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">interest, or acquire its partner’s interest, at a time when the Fund </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">otherwise would not have initiated such a transaction;</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">the joint venture partner may not have sufficient personnel or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">appropriate levels of expertise to adequately support the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">initiatives; and</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">to the extent it is permissible under the Investment Company Act </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">for the Fund to partner with other vehicles advised by the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Investment Manager, the Investment Manager may have conflicts </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of interest that may not be resolved in the Fund’s favor.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">In addition, disputes between the Fund and its joint venture partner may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">result in litigation or arbitration that would increase the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">expenses and prevent the Fund’s officers and trustees from focusing </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">their time and efforts on the Fund’s business. Any of the above might </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">subject the Fund to liabilities and thus reduce its returns on the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investment with the joint venture partner. The Fund may at times enter </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">into arrangements that provide for unfunded commitments and, even </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">when not contractually obligated to do so, may be incentivized to fund </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">future commitments related to its investments.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-weight:bold">Investments in REITs Risk</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">REITs are pooled investment vehicles that own, and usually operate, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">income-producing real estate. Some REITs also finance real estate. If a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">REIT meets certain requirements, including distributing to shareholders </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">substantially all of its taxable income (other than net capital gains), then </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">it is not typically taxed on the income distributed to shareholders.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">REITs are sometimes informally characterized as: equity REITs, mortgage </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">REITs and hybrid REITs. Equity REITs invest the majority of their assets </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">directly in real property. They derive their income primarily from rents </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">received and any profits on the sale of their properties. Equity REITs can </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">also realize capital gains by selling properties that have appreciated in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">value. Mortgage REITs invest the majority of their assets in real estate </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">mortgages and derive most of their income from mortgage interest </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">payments. As its name suggests, hybrid REITs combine characteristics of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">both equity REITs and mortgage REITs. Finally, REITs may either be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">public or private. Private REITs are not traded on a national securities </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">exchange, whereas public REITs are traded on a national securities </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">exchange. Accordingly, private REITs may be less liquid than public </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">REITs. This reduces the ability of the Fund to redeem its investment in a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">private REIT early. Private REITs are also generally harder to value and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">may bear higher fees than public REITs.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">An investment in a REIT, or in a real estate linked derivative instrument </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">linked to the value of a REIT, is subject to the risks that impact the value </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of the underlying properties of the REIT. These risks include loss to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">casualty or condemnation, and changes in supply and demand. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Additional risks include changes in interest rates, zoning laws, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">regulatory limitations on rents, property taxes, and operating expenses. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Real estate income and values may also be affected by demographic </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">trends, such as population shifts or changing tastes, preferences (such </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">as remote work arrangements) and social values. Other factors that may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">adversely affect REITs include poor performance by management of the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">REIT, changes to the tax laws, or failure by the REIT to qualify for </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">favorable tax treatment. The securities of REITs involve greater risks </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">than those associated with larger, more established companies and may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">be subject to more abrupt or erratic price movements because of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">interest rate changes, economic conditions and real estate market </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">conditions (such as oversupply of real estate for rent or sale or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">vacancies, potentially for extended periods), reduced demand for </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">commercial and office space as well as increased maintenance or tenant </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">improvement costs and costs to convert properties for other uses, and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">default risk and credit quality of tenants and borrowers and other </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">factors. For example, the value of these securities may decline when </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">interest rates rise and will also be affected by the real estate market and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">by the management or development of the underlying properties. The </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">underlying properties may be subject to mortgage loans, which may also </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">be subject to the risks of default. REITs are also subject to default by </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">borrowers and self-liquidation, and are heavily dependent on cash flow. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Some REITs lack diversification because they invest in a limited number </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of properties, a narrow geographic area, or a single type of property. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Mortgage REITs may be impacted by the quality of the credit extended.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Recourse Financings Risk</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">In certain cases, financings for the Fund’s commercial real estate </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">properties may be recourse to the Fund. Generally, commercial real </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">estate financings are structured as non-recourse to the borrower, which </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">limits a lender’s recourse to the property pledged as collateral for the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">loan, and not the other assets of the borrower or to any parent of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">borrower, in the event of a loan default. However, lenders customarily </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">will require that a creditworthy parent entity enter into so-called </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">“recourse carveout” guarantees to protect the lender against certain </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">bad-faith or other intentional acts of the borrower in violation of the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">loan documents. A “bad boy” guarantee typically provides that the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">lender can recover losses from the guarantors for certain bad acts, such </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">as fraud or intentional misrepresentation, intentional waste, willful </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">misconduct, criminal acts, misappropriation of funds, voluntary </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">incurrence of prohibited debt and environmental losses sustained by </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">lender. In addition, “bad boy” guarantees typically provide that the loan </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">will be a full personal recourse obligation of the guarantor, for certain </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">actions, such as prohibited transfers of the collateral or changes of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">control and voluntary bankruptcy of the borrower. These financing </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">arrangements with respect to the Fund’s investments generally require </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">“bad boy” guarantees from the Fund and/or certain of the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">subsidiaries and in the event that such a guarantee is called, the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">assets could be adversely affected. Moreover, the Fund’s “bad boy” </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">guarantees could apply to actions of the joint venture partners </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">associated with the Fund’s investments. While the Investment Manager </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">expects to negotiate indemnities from such joint venture partners to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">protect against such risks, there remains the possibility that the acts of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">such joint venture partner could result in liability to the Fund under such </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">guarantees. PIMCO may provide “bad boy” guarantees on behalf of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">other funds, investment vehicles and accounts managed by PIMCO </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investing alongside the Fund and as such guarantees are not for </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">borrowed money, they will typically not be included under the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">leverage limitations.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Valuation Risk</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Certain securities, including certain real estate investments that the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund makes, in which the Fund invests may be less liquid and more </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">difficult to value than other types of securities. Investments for which </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">market quotations are not readily available are valued at fair value as </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">determined in good faith pursuant to Rule 2a-5 under the Act. See </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">“How Fund Shares are Priced.” Fair value pricing may require subjective </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">determinations about the value of a security or other asset. As a result, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">there can be no assurance that fair value pricing will result in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">adjustments to the prices of securities or other assets, or that fair value </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">pricing will reflect actual market value, and it is possible that the fair </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">value determined for a security or other asset will be materially different </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">from quoted or published prices, from the prices used by others for the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">same security or other asset and/or from the value that actually could be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">or is realized upon the sale of that security or other asset. The price the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund pays for its private commercial real estate investments will be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">based on the Investment Manager’s projections of market demand, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">occupancy levels, rental income, the costs of any development, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">redevelopment or renovation of a property, borrower expertise and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">other factors. If any of the Investment Manager’s projections are </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">inaccurate or it ascribes a higher value to assets and their value </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">subsequently drops or fails to rise because of market factors, returns on </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund’s investment may be lower than expected and the Fund could </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">experience losses.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">For the purposes of calculating the Fund’s NAV, private commercial real </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">estate investments typically will initially be valued at cost, which the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund expects to represent fair value at that time. Thereafter, valuations </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of properties will be derived from independent property appraisals or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">based on one or more fair valuation methodologies as determined by </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">PIMCO in accordance with its policies and procedures.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The valuation methodologies used to value the Fund’s private </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">commercial real estate investments will involve subjective judgments </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and projections that may not materialize. Valuation methodologies will </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">also involve assumptions and opinions about future events, which may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">or may not materialize. Valuations and appraisals of the Fund’s private </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">commercial real estate investments will be only estimates of fair value. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Ultimate realization of the value of an asset depends to a great extent </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">on economic, market and other conditions beyond the Fund’s control </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and the control of the Investment Manager and the Fund’s independent </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">valuation advisors, as applicable.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Valuations and appraisals of the Fund’s private commercial real estate </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investments are only conducted on a periodic basis. If the relevant </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">asset’s value changes after such appraisal, it will be difficult for PIMCO </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">to quantify the impact of such change and the necessary information to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">make a full assessment of the value may not be immediately available, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">which may require the Investment Manager to make an assessment of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">fair value with incomplete information. The participation of PIMCO in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund’s valuation process could result in a conflict of interest, since </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the advisory fee is based on the Fund’s average daily net assets. A </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">material change in a private commercial real estate investment or a new </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">appraisal of a private commercial real estate investment may have a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">material impact on the Fund’s overall NAV, resulting in a sudden </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">increase or decrease to the Fund’s NAV per share. Further, valuations do </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">not necessarily represent the price at which an asset would sell, since </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">market prices of assets can only be determined by negotiation between </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">a willing buyer and seller. As such, the carrying value of an asset may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">not reflect the price at which the asset could be sold in the market, and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the difference between carrying value and the ultimate sales price could </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">be material. In addition, accurate valuations are more difficult to obtain </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">in times of low transaction volume because there are fewer market </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">transactions that can be considered in the context of the appraisal. It </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">also may be difficult to reflect fully and accurately rapidly changing </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">market conditions or material events that may impact the value of the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund’s real property investments between valuations, or to obtain </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">complete information regarding any such events in a timely manner. For </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">example, an unexpected termination or renewal of a material lease, a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">material increase or decrease in vacancies, an unanticipated structural </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">or environmental event at a property or material changes in market, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">economic and political conditions globally and in the jurisdictions and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">sectors in which a property operates, may cause the value of a property </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">to change materially, yet obtaining sufficient relevant information after </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the occurrence has come to light and/or analyzing fully the financial </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">impact of such an event may be difficult to do and may require some </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">time. As a result, the Fund’s NAV per share may not reflect a material </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">event until such time as sufficient information is available and the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">impact of such an event on a property’s valuation is evaluated, such that </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund’s NAV may be appropriately updated. The Investment Manager </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">expects to utilize the independent valuation advisors’ appraisals in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">determining the fair value of the private commercial real estate </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investments. There will be no retroactive adjustment in the valuation of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">such assets, the offering price of the Common Shares, the price the Fund </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">paid to repurchase Common Shares or NAV-based fees the Fund paid to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">PIMCO and the Distributor to the extent such valuations prove to not </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">accurately reflect the realizable value of the Fund’s assets. Because the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">price shareholders will pay for Common Shares in this offering, and the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">price at which shares will be repurchased in quarterly repurchase offers </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">by the Fund, are based on NAV per share of Common Shares, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">shareholders may pay more than realizable value or receive less than </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">realizable value for an investment in the Fund.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Risks Related to Specific Private Commercial Real Estate </span><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Property Types</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund may invest across various CRE property types, including, but </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">not limited to residential, industrial, and office, retail, hospitality and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">select niche sectors. The Fund’s exposure to any of the aforementioned </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">property types may change based on PIMCO’s outlook, which may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">expose the Fund to risks. For example, the Fund’s investments in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">multifamily properties may be affected by declining rents or may incur </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">vacancies either by the expiration and non-renewal of tenant leases or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the continued default of tenants under their leases, resulting in reduced </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">revenues and less cash available to distribute to Common Shareholders. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fluctuations in manufacturing activity in the United States may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">adversely affect the tenants of the Fund’s industrial properties and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">therefore the demand for and profitability of its industrial properties. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Office properties are subject to risks that the tenants of those office </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">properties face, including the overall health of the economy, the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">possibility of a downturn in the businesses operated by the tenants, lack </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of demand or obsolescence of the products or services provided by the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">tenants, and the non-competitiveness of the office tenants relative to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">their competitors. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">In addition, there has been reduced demand for </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">commercial and office space as well as increased maintenance or tenant </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">improvement costs to convert properties for other uses, and the inability </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">to re-lease space on attractive terms.</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> Specialty properties are subject to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">risks specific to their specialty use. For example, student housing </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">properties are subject to seasonality and increased leasing risk and may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">be adversely affected by a change in university admission policies. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Additional niche sectors may include, among others, data centers, life </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">sciences, medical offices, and self-storage. The above is not an </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">exhaustive list of the sectors that the Fund expects to invest in or the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">risks associated with those sectors. The Fund is not obliged to target all </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">(or any one) of the above asset classes or strategies.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Residential Real Estate Risk</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund expects to invest in residential real estate, including rental </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">properties, and instruments providing exposure to residential real </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">estate, such as REITs. Regional, national, and international economic </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">conditions can affect the residential real estate industry, including rental </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">properties. A downturn or slowdown in the rental demand for single- or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">multi-family housing caused by adverse economic, regulatory, or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">environmental conditions, or other events may have a negative impact </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">on the Fund's investments. In addition, adverse economic conditions, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">including those resulting from deteriorating market conditions, natural </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">disasters, public health or political events, could negatively impact </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">tenants. A decline in the economic conditions of tenants could lead to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">lease defaults, terminations by one or more tenants, or landlord-tenant </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">disputes.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">In addition, the Fund may also invest in single-family residential </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">properties that are acquired in order to redevelop or renovate with the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">intention to resell within a short timeframe. Redevelopment or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">renovation projects involve various risks, including the risk of cost </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">overruns and non-completion. In addition, these projects may be subject </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">to permitting or construction delays or delays caused by adverse </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">environmental conditions. If a redevelopment or renovation project is </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">not completed in a timely manner, it can result in increased costs or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">cause the property to be put on the market at a less favorable time, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">which would ultimately reduce the project's overall profitability. In </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">addition, there is a risk that the property may not be sold at a favorable </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">price or at all once the property has been redeveloped or renovated.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Mortgage Loan Risk</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund may originate and selectively acquire senior mortgage loans </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">which are generally loans secured by a first mortgage lien on a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">commercial property and are subject to risks of delinquency and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">foreclosure and risks of loss, that are greater than similar risks </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">associated with loans made on the security of single-family residential </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">property. In addition, certain of the mortgage loans in which the Fund </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">invests may be structured so that all or a substantial portion of the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">principal will not be paid until maturity </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">(balloon payment structures)</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">which increases the risk of default at that time</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> particularly in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">environments of declining property values where refinancing may be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">difficult or unavailable on favorable terms</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">. The ability of a borrower to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">repay a loan secured by an income-producing property typically is </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">dependent primarily upon the successful operation of such property </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">rather than upon the existence of independent income or assets of the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">borrower. If the net operating income of the property is reduced, the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">borrower’s ability to repay the loan may be impaired. Net operating </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">income of an income-producing property can be affected by, among </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">other things: tenant mix, success of tenant businesses, property </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">management decisions, property location and condition, competition </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">from comparable types of properties, changes in laws that increase </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">operating expense or limit rents that may be charged, any need to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">address environmental contamination at the property, the occurrence of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">any uninsured casualty at the property, changes in national, regional or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">local economic conditions and/or specific industry segments, declines in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">regional or local real estate values, declines in regional or local rental or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">occupancy rates, increases in interest rates, real estate tax rates and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">other operating expenses, changes in governmental rules, regulations </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and fiscal policies, including environmental legislation, acts of God, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">terrorism, social unrest, civil disturbances, epidemics and other public </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">crises.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">In the event of any default under a mortgage loan held directly by the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund, it will bear a risk of loss of principal to the extent of any deficiency </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">between the value of the collateral and the principal and accrued </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">interest of the mortgage loan, which could have a material adverse </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">effect on the profitability of the Fund. In the event of the bankruptcy of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">a mortgage loan borrower, the mortgage loan to such borrower will be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">deemed to be secured only to the extent of the value of the underlying </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">collateral at the time of bankruptcy (as determined by the bankruptcy </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">court), and the lien securing the mortgage loan will be subject to the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">avoidance powers of the bankruptcy trustee or debtor-in-possession to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the extent the lien is unenforceable under state law.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Foreclosure of a mortgage loan can be an expensive and lengthy </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">process which could have a substantial negative effect on the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">anticipated return on the foreclosed mortgage loan. RMBS evidence </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">interests in or are secured by pools of residential mortgage loans and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">CMBS evidence interests in or are secured by a single commercial </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">mortgage loan or a pool of commercial mortgage loans. Accordingly, the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">mortgage-backed securities in which the Fund invests are subject to all </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of the risks of the underlying mortgage loans.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Mezzanine Loan Risk</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund may invest in mezzanine loans that take the form of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">subordinated loans secured by a pledge of the ownership interests of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">either the entity owning the real property or the entity that owns the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">interest in the entity owning the real property. These types of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investments involve a higher degree of risk than first mortgage lien </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">loans secured by income producing real property because the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investment may become unsecured as a result of foreclosure by the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">senior lender. In the event of a bankruptcy of the entity providing the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">pledge of its ownership interests as security, the Fund may not have full </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">recourse to the assets of such entity, or the assets of the entity may not </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">be sufficient to satisfy the Fund’s mezzanine loan. If a borrower defaults </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">on the Fund’s mezzanine loan or debt senior to the Fund’s loan, or in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the event of a borrower bankruptcy, the Fund’s mezzanine loan will be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">satisfied only after the senior debt. As a result, the Fund may not recover </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">some or all of its investment. In addition, mezzanine loans may have </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">higher loan-to-value ratios than conventional mortgage loans, resulting </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">in less equity in the real property and increasing the risk of loss of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">principal.</span></div><div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Certain Affiliations</span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Certain broker-dealers may be considered to be affiliated persons of the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund and/or the Investment Manager due to their possible affiliations </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">with Allianz SE, the ultimate parent of the Investment Manager, or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">another Allianz entity. Allianz Asset Management of America LP merged </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">with Allianz Asset Management, with the latter being the surviving </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">entity, effective January 1, 2023. Following the merger, Allianz Asset </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Management is PIMCO LLC’s managing member and direct parent </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">entity. Absent an exemption from the SEC or other regulatory relief, the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund is generally precluded from effecting certain principal transactions </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">with affiliated brokers, and its ability to purchase securities being </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">underwritten by an affiliated broker or a syndicate including an affiliated </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">broker, or to utilize affiliated brokers for agency transactions, is subject </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">to restrictions. This could limit the Fund’s ability to engage in securities </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">transactions and take advantage of market opportunities.</span></div><div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Mortgage-Related and Other Asset-Backed Instruments Risk</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Mortgage-related and other asset-backed instruments represent </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">interests in “pools” of mortgages or other assets such as consumer </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">loans or receivables held in trust and often involve risks that are </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">different from or possibly more acute than risks associated with other </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">types of debt instruments.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Generally, rising interest rates tend to extend the duration of fixed rate </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">mortgage-related assets, making them more sensitive to changes in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">interest rates. Compared to other fixed income investments with similar </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">maturity and credit, mortgage-related securities may increase in value to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">a lesser extent when interest rates decline and may decline in value to a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">similar or greater extent when interest rates rise. As a result, in a period </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of rising interest rates, the Fund may exhibit additional volatility since </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">individual mortgage holders are less likely to exercise prepayment </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">options, thereby putting additional downward pressure on the value of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">these securities and potentially causing the Fund to experience losses. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">This is known as extension risk. Mortgage-backed securities can be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">highly sensitive to rising interest rates, such that even small movements </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">can cause the Fund to lose value. Mortgage-backed securities, and in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">particular those not backed by a government guarantee, are subject to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">credit risk. In addition, adjustable and fixed rate mortgage-related </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">securities are subject to prepayment risk. When interest rates decline, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">borrowers may pay off their mortgages sooner than expected. This can </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">reduce the returns of the Fund because the Fund may have to reinvest </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">that money at the lower prevailing interest rates. In addition, the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">creditworthiness, servicing practices, and financial viability of the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">servicers of the underlying mortgage pools present significant risks. For </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">instance, a servicer may be required to make advances in respect of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">delinquent loans underlying the mortgage-related securities; however, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">servicers experiencing financial difficulties may not be able to perform </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">these obligations. Additionally, both mortgage-related securities and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">asset-backed securities are subject to risks associated with fraud or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">negligence by, or defalcation of, their servicers. These securities are also </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">subject to the risks of the underlying loans. In some circumstances, a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">servicer’s or originator’s mishandling of documentation related to the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">underlying collateral (e.g., failure to properly document a security </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">interest in the underlying collateral) may affect the rights of security </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">holders in and to the underlying collateral. In addition, the underlying </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">loans may have been extended pursuant to inappropriate underwriting </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">guidelines, to no underwriting guidelines at all, or to fraudulent </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">origination practices. The owner of a mortgage-backed security’s ability </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">to recover against the sponsor, servicer or originator is uncertain and is </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">often limited. The Fund’s investments in other asset-backed instruments </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">are subject to risks similar to those associated with mortgage-related </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">assets, as well as additional risks associated with the nature of the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">assets and the servicing of those assets. Payment of principal and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">interest on asset-backed instruments may be largely dependent upon </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the cash flows generated by the assets backing the instruments, and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">asset-backed instruments may not have the benefit of any security </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">interest in the related assets.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Subordinate mortgage-backed or asset-backed instruments are paid </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">interest only to the extent that there are funds available to make </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">payments. To the extent the collateral pool includes a large percentage </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of delinquent loans, there is a risk that interest payments on </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">subordinate mortgage-backed or asset-backed instruments will not be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">fully paid.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">There are multiple tranches of mortgage-backed and asset-backed </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">instruments, offering investors various maturity and credit risk </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">characteristics. For example, tranches may be categorized as senior, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">mezzanine, and subordinated/equity or “first loss,” according to their </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">degree of risk. The most senior tranche of a mortgage-backed or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">asset-backed instrument generally has the greatest collateralization and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">generally pays the lowest interest rate. If there are defaults or the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">collateral otherwise underperforms, scheduled payments to senior </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">tranches take precedence over those of mezzanine tranches, and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">scheduled payments to mezzanine tranches take precedence over those </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">to subordinated/equity tranches. Lower tranches represent lower </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">degrees of credit quality and pay higher interest rates intended to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">compensate for the attendant risks. The return on the lower tranches is </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">especially sensitive to the rate of defaults in the collateral pool.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The lowest tranche (i.e., the “equity” or “residual” tranche) specifically </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">receives the residual interest payments (i.e., money that is left over after </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the higher tranches have been paid and expenses of the issuing entities </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">have been paid) rather than a fixed interest rate. The Fund may also </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">invest in the residual or equity tranches of mortgage-related and other </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">asset-backed instruments, which may be referred to as subordinate </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">mortgage-backed or asset-backed instruments and interest-only </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">mortgage-backed or asset-backed instruments. The Fund expects that </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investments in subordinate mortgage-backed and other asset-backed </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">instruments will be subject to risks arising from delinquencies and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">foreclosures, thereby exposing its investment portfolio to potential </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">losses. Subordinate securities of mortgage-backed and other </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">asset-backed instruments are also subject to greater credit risk than </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">those mortgage-backed or other asset-backed instruments that are </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">more highly rated.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The mortgage markets in the United States and in various foreign </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">countries have experienced extreme difficulties in the past that </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">adversely affected the performance and market value of certain </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">mortgage-related investments. Delinquencies and losses on residential </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and commercial mortgage loans (especially subprime and second-lien </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">mortgage loans) may increase, and a decline in or flattening of housing </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and other real property values may exacerbate such delinquencies and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">losses. In addition, reduced investor demand for mortgage loans and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">mortgage-related securities and increased investor yield requirements </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">have caused limited liquidity in the secondary market for </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">mortgage-related securities, which can adversely affect the market value </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of mortgage-related securities. It is possible that such limited liquidity in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">such secondary markets could continue or worsen.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The values of, and income generated by, commercial mortgage-backed </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">securities may be adversely affected by changing interest rates and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">other developments impacting the commercial real estate market, such </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">as population shifts and other demographic changes, increasing </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">vacancies (potentially for extended periods) and reduced demand for </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">commercial and office space as well as maintenance or tenant </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">improvement costs and costs to convert properties for other uses. These </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">developments could result from, among other things, changing tastes </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and preferences (such as for remote work arrangements) as well as </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">cultural, technological, global or local economic and market </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">developments. In addition, changing interest rate environments and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">associated changes in lending standards and higher refinancing rates </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">may adversely affect the commercial real estate and CMBS markets. The </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">occurrence of any of the foregoing developments would likely increase </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">default risk for the properties and loans underlying these investments as </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">well as impact the value of, and income generated by, these </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investments. These developments could also result in reduced liquidity </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">for CMBS and other real estate-related investments.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Risks Related to Investments in Publicly Traded REITs</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund’s investments in the securities of publicly traded REITs will be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">subject to a variety of risks affecting those REITs directly. Share prices of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">publicly traded REITs may decline because of adverse developments </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">affecting the real estate industry and real property values, including </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">supply and demand for properties, the economic health of the country </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">or of different regions, the strength of specific industries that rent </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">properties and interest rates. REITs often invest in highly leveraged </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">properties. Returns from REITs, which typically are small or medium </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">capitalization stocks, may trail returns from the overall stock market. In </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">addition, changes in interest rates may hurt real estate values or make </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">REIT shares less attractive than other income-producing investments. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">REITs are also subject to heavy cash flow dependency and defaults by </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">borrowers and tenants.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Repurchase Offers Risk</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">As described under “Periodic Repurchase Offers” above, the Fund is an </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">“interval fund” and, in order to provide liquidity to shareholders, the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund, subject to applicable law, intends to conduct quarterly repurchase </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">offers of the Fund’s outstanding Common Shares at NAV, subject to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">approval of the Board. In each quarter, such repurchase offers will be for </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">at least 5% and not more than 25% of its outstanding Common Shares </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">at NAV, pursuant to Rule 23c-3 under the Act.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund currently expects to conduct quarterly repurchase offers for </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">5% of its outstanding Common Shares under ordinary circumstances. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund believes that these repurchase offers are generally beneficial </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">to the Fund’s shareholders, and repurchases generally will be funded </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">from available cash or sales of portfolio securities. However, repurchase </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">offers and the need to fund repurchase obligations may affect the ability </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of the Fund to be fully invested or force the Fund to maintain a higher </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">percentage of its assets in liquid investments, which may harm the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund’s investment performance. Moreover, diminution in the size of the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund through repurchases may result in untimely sales of portfolio </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">securities (with associated imputed transaction costs, which may be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">significant), and may limit the ability of the Fund to participate in new </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investment opportunities or to achieve its investment objectives. The </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund may accumulate cash by holding back (i.e., not reinvesting) </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">payments received in connection with the Fund’s investments. The Fund </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">believes that payments received in connection with the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investments will generate sufficient cash to meet the maximum </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">potential amount of the Fund’s repurchase obligations.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">If at any time cash and other liquid assets held by the Fund are not </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">sufficient to meet the Fund’s repurchase obligations, the Fund intends, if </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">necessary, to sell investments. To the extent the Fund employs </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investment leverage, repurchases of Common Shares would compound </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the adverse effects of leverage in a declining market. In addition, if the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund borrows to finance repurchases, interest on that borrowing will </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">negatively affect Common Shareholders who do not tender their </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Common Shares by increasing the Fund’s expenses and reducing any </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">net investment income. If a repurchase offer is oversubscribed, the Fund </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">may, but is not required to, determine to increase the amount </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">repurchased by up to 2% of the Fund’s outstanding shares as of the </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">date of the Repurchase Request Deadline. In the event that the Fund </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">determines not to repurchase more than the repurchase offer amount, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">or if shareholders tender more than the repurchase offer amount plus </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">2% of the Fund’s outstanding shares as of the date of the Repurchase </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Request Deadline, the Fund will repurchase the Common Shares </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">tendered on a pro rata basis, and shareholders will have to wait until </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the next repurchase offer to make another repurchase request. As a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">result, shareholders may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">not </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">able </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">to liquidate all or a given </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">percentage of their investment in the Fund during a particular </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">repurchase offer. Notwithstanding the foregoing, the Fund may accept </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">all Common Shares tendered for repurchase by shareholders who own </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">less than one hundred Common Shares and who tender all of their </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Common Shares, before prorating Common Shares tendered by other </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">shareholders; provided that, if a shareholder holds shares through a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">financial intermediary, such intermediary may not be willing or able to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">arrange for this treatment on such shareholder's behalf. Some </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">shareholders, in anticipation of proration, may tender more Common </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Shares than they wish to have repurchased in a particular quarter, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">thereby increasing the likelihood that proration will occur. A shareholder </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">may be subject to market and other risks, and the NAV of Common </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Shares tendered in a repurchase offer may decline between the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Repurchase Request Deadline and the date on which the NAV for </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">tendered Common Shares is determined. In addition, the repurchase of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Common Shares by the Fund may be a taxable event to shareholders.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">High Yield Securities Risk</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Issuers of high yield securities may have the right to “call” or redeem </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the issue prior to maturity, which may result in the Fund having to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">reinvest the proceeds in other high yield securities or similar instruments </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">that may pay lower interest rates. The Fund may also be subject to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">greater levels of liquidity risk than funds that do not invest in high yield </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">securities. Consequently, transactions in high yield securities may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">involve greater costs than transactions in more actively traded </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">securities. A lack of publicly-available information, irregular trading </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">activity and wide bid/ask spreads among other factors, may, in certain </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">circumstances, make high yield debt more difficult to sell at an </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">advantageous time or price than other types of securities or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">instruments. These factors may result in the Fund being unable to realize </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">full value for these securities and/or may result in the Fund not receiving </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the proceeds from a sale of a high yield security for an extended period </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">after such sale, each of which could result in losses to the Fund. To the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">extent that the Fund invests in high yield securities and unrated </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">securities of similar credit quality (commonly known as “high yield </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">securities” or “junk bonds”), the Fund may be subject to greater levels </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">market risk,</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> credit risk, call risk and liquidity risk than funds that do </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">not invest in such securities, which could have a negative effect on the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">NAV of the Fund’s Common Shares or Common Share dividends. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">High </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">yield securities may be issued by companies that are restructuring, are </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">smaller and less credit worthy or are more highly leveraged or indebted </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">than other companies, or are financially distressed, and therefore they </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">typically have more difficulty making scheduled payments of principal </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and interest than issuers of higher rated investments.</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> These securities </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">are considered predominantly speculative by rating agencies with </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">respect to an issuer’s continuing ability to make principal and interest </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">payments, and their value may be more volatile than other types of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">securities. An economic downturn or individual corporate developments </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">could adversely affect the market for these securities and reduce the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund’s ability to sell these securities at an advantageous time or price. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">An economic downturn could also lead to a higher non-payment rate </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and, a high yield security may lose significant market value before a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">default occurs. The Fund may purchase distressed securities that are in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">default or the issuers of which are in bankruptcy, which involve </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">heightened risks.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">High yield securities structured as zero-coupon bonds or pay-in-kind </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">securities tend to be especially volatile as they are particularly sensitive </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">to downward pricing pressures from rising interest rates or widening </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">spreads and may require the Fund to make taxable distributions of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">imputed income without receiving the actual cash currency. Issuers of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">high yield securities may have the right to “call” or redeem the issue </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">prior to maturity, which may result in the Fund having to reinvest the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">proceeds in other high yield securities or similar instruments that may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">pay lower interest rates. The Fund may also be subject to greater levels </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of liquidity risk than funds that do not invest in high yield securities. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Consequently, transactions in high yield securities may involve greater </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">costs than transactions in more actively traded securities. A lack of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">publicly-available information, irregular trading activity and wide </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">bid/ask spreads among other factors, may, in certain circumstances, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">make high yield debt more difficult to sell at an advantageous time or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">price than other types of securities or instruments. These factors may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">result in the Fund being unable to realize full value for these securities </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and/or may result in the Fund not receiving the proceeds from a sale of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">a high yield security for an extended period after such sale, each of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">which could result in losses to the Fund. Because of the risks involved in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investing in high yield securities, an investment in the Fund should be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">considered speculative.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">In general, lower rated debt securities carry a greater degree of risk that </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the issuer will lose its ability to make interest and principal payments, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">which could have a negative effect on the Fund. Securities of below </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investment grade quality are regarded as having predominantly </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">speculative characteristics with respect to capacity to pay interest and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">repay principal and are commonly referred to as “high yield” securities </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">or “junk bonds.” High yield securities involve a greater risk of default </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and their prices are generally more volatile and sensitive to actual or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">perceived negative developments. Debt securities in the lowest </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investment grade category also may be considered to possess some </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">speculative characteristics by certain rating agencies. The Fund may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">purchase stressed or distressed securities that are in default or the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">issuers of which are in bankruptcy, which involve heightened risks. An </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">economic downturn could severely affect the ability of issuers </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">(particularly those that are highly leveraged) to service or repay their </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">debt obligations. Lower-rated securities are generally less liquid than </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">higher-rated securities, which may have an adverse effect on the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">ability to dispose of them. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">High yield securities are particularly sensitive </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">to adverse economic</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">market,</span><span style="color:#333333;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">industry or issuer-specific developments, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">which may result in an increased incidence of default. During </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">periods of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">deteriorating economic conditions, such as recessions or periods of </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">rising unemployment, or changing interest rates (notably increases), </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">high yield securities are particularly susceptible to credit and default risk </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">as delinquencies and losses could increase, and such increases could be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">sudden and significant. An economic downturn or individual issuer </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">developments could adversely affect the market for these investments </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and reduce a Fund’s ability to sell these investments at an </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">advantageous time or price. These types of developments could cause </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">high yield securities to lose significant market value, including before a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">default occurs.</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> In the event of a default, the Fund may incur additional </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">expenses to seek recovery or to negotiate new terms with a defaulting </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">issuer.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">To the extent the Fund focuses on below investment grade debt </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">obligations, PIMCO’s capabilities in analyzing credit quality and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">associated risks will be particularly important, and there can be no </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">assurance that PIMCO will be successful in this regard. Due to the risks </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">involved in investing in high yield securities, an investment in the Fund </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">should be considered speculative. The Fund’s credit quality policies apply </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">only at the time a security is purchased, and the Fund is not required to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">dispose of a security in the event that a rating agency or PIMCO </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">downgrades its assessment of the credit characteristics of a particular </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">issue. In determining whether to retain or sell such a security, PIMCO </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">may consider factors including, but not limited to, PIMCO's assessment </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of the credit quality of the issuer of such security, the price at which </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">such security could be sold and the rating, if any, assigned to such </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">security by other rating agencies. Analysis of creditworthiness may be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">more complex for issuers of high yield securities than for issuers of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">higher quality debt securities.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Capital Markets Risk</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund expects to fund a portion of its commercial real estate </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investments with property-level financing. The Fund’s business may be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">adversely affected by disruptions in the debt and equity capital markets </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and institutional lending market, including the lack of access to capital </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">or prohibitively high costs of obtaining or replacing capital. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Economies </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and financial markets throughout the world are becoming increasingly </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">interconnected, which increases the likelihood that events or conditions </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">in one country or region will adversely impact markets or issuers in other </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">countries or regions. Extraordinary governmental and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">quasi-governmental responses to economic, market, labor and public </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">health conditions and U.S.</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> and other government policies designed to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">support the markets may, at times, significantly increase government </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and other public debt, which heighten these risks and the long-term </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">consequences of these actions are not known.</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> There can be no </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">assurance that any financing will be available to the Fund in the future </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">on acceptable terms, if at all, or that it will be able to satisfy the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">conditions precedent required to use its credit facilities, if entered into, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">which could reduce the number, or alter the type, of investments that </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund would make otherwise. This may reduce the Fund’s income. To </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the extent that financing proves to be unavailable when needed, the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund may be compelled to modify its investment strategies to optimize </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the performance of the portfolio. Any failure to obtain financing could </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">have a material adverse effect on the continued development or growth </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of the Fund’s business and harm the Fund’s ability to operate and make </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">distributions.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Interest Rate Risk</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Interest rate risk is the risk that fixed income securities and other </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">instruments in the Fund’s portfolio will fluctuate in value because of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">changes,</span><span style="color:#333333;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">or the anticipation of changes,</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> in interest rates. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Factors </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">including central bank monetary policy, rising inflation rates, and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">changes in general economic conditions may cause interest rates to rise, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">which could cause the value of the Fund’s investments to decline.</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> For </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">example, as nominal interest rates rise, the value of certain securities </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">held by the Fund is likely to decrease. Interest rate changes can be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">sudden and unpredictable, and the Fund may be adversely affected as a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">result of movements in interest rates. The Fund may not be able to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">hedge against changes in interest rates or may choose not to do so for </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">cost or other reasons. In addition, any hedges may not work as </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">intended.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fixed income securities with longer durations tend to be more sensitive </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">to changes in interest rates, usually making them more volatile than </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">securities with shorter durations. The values of equity and other </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">non-fixed income securities may also decline due to fluctuations in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">interest rates. Inflation-indexed bonds, including Treasury </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Inflation-Protected Securities (“TIPS”), decline in value when real </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">interest rates rise. In certain interest rate environments, such as when </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">real interest rates are rising faster than nominal interest rates, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">inflation-indexed bonds may experience greater losses than other fixed </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">income securities with similar durations.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Dividend-paying equity securities, particularly those whose market price </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">is closely related to their yield, may be more sensitive to changes in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">interest rates. During periods of rising interest rates, the values of such </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">securities may decline and may result in losses to the Fund.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Variable and floating rate securities generally are less sensitive to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">interest rate changes but may decline in value if their interest rates do </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">not rise as much, or as quickly, as interest rates in general. Conversely, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">floating rate securities will not generally increase in value if interest </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">rates decline. Inverse floating rate securities may decrease in value if </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">interest rates increase. Inverse floating rate securities may also exhibit </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">greater price volatility than a fixed rate obligation with similar credit </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">quality. When a Fund holds variable or floating rate securities, a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">decrease (or, in the case of inverse floating rate securities, an increase) </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">in market interest rates will adversely affect the income received from </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">such securities and the NAV of the Fund’s shares.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">A wide variety of factors can cause interest rates or yields of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">U.S. Treasury securities (or yields of other types of bonds) to rise, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">including but not limited to central bank monetary policies, changing </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">inflation or real growth rates, general economic conditions, increasing </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">bond issuances or reduced market demand for low yielding investments. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Risks associated with changes in interest rates may be heightened </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">under certain market conditions, such as during times when the Federal </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Reserve raises interest rates or when such rates remain elevated </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">following a period of historically low levels. Additionally, the U.S. and </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">other governments have increased, and are likely to continue increasing, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">their debt issuances, which may also heighten these risks. There is the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">risk that the income generated by investments may not keep pace with </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">inflation. Actions by governments and central banking authorities can </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">result in increases or decreases in interest rates. Periods of higher </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">inflation could cause such authorities to raise interest rates, which may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">adversely affect a Fund and its investments. In addition, changes in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">monetary policy may exacerbate the risks associated with changing </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">interest rates. Further, in market environments where interest rates are </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">rising, issuers may be less willing or able to make principal and interest </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">payments on fixed-income investments when due.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">During periods of very low or negative interest rates, the Fund may be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">unable to maintain positive returns. Very low or negative interest rates </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">may magnify interest rate risk. Changing interest rates, including rates </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">that fall below zero, may have unpredictable effects on markets, may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">result in heightened market volatility and may detract from Fund </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">performance to the extent the Fund is exposed to such interest rates.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Measures such as average duration may not accurately reflect the true </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">interest rate sensitivity of the Fund. This is especially the case if the Fund </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">consists of securities with widely varying durations. Therefore, if the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund has an average duration that suggests a certain level of interest </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">rate risk, the Fund may in fact be subject to greater interest rate risk </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">than the average would suggest. This risk is greater to the extent the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund uses leverage or derivatives in connection with the management </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of the Fund.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Convexity is an additional measure used to understand a security’s or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund’s interest rate sensitivity. Convexity measures the rate of change of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">duration in response to changes in interest rates. With respect to a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">security’s price, a larger convexity (positive or negative) may imply more </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">dramatic price changes in response to changing interest rates. Convexity </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">may be positive or negative. Negative convexity implies that interest </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">rate increases result in increased duration, and vice versa, meaning </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">increased sensitivity in prices in response to changes in interest rates. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Thus, securities with negative convexity, which may include bonds with </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">traditional call features and certain mortgage-backed securities, may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">experience greater losses in periods of rising interest rates. Accordingly, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">if the Fund holds such securities, the Fund may be subject to a greater </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">risk of losses in periods of rising interest rates.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Derivatives Risk</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund may, but is not required to, utilize a variety of derivative </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">instruments (both long and short positions) for investment or risk </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">management purposes.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Derivatives or other similar instruments (referred to collectively as </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">“derivatives”) are financial contracts whose value depends on, or is </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">derived from, the value of an underlying asset, reference rate or index. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">For example, the Fund may use derivative instruments for purposes of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">increasing liquidity, providing efficient portfolio management, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">broadening investment opportunities (including taking short or negative </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">positions), implementing a tax or cash management strategy, gaining </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">exposure to a particular security or segment of the market, modifying </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the effective duration of the Fund’s portfolio investments and/or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">enhancing total return.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Investments in derivatives may take the form of buying and/or writing </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">(selling) derivatives, and/or the Fund may otherwise become an obligor </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">under a derivatives transaction. These transactions may produce </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">short-term capital gains in the form of premiums or other returns for the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund (which may support, constitute and/or increase the distributions </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">paid by, or the yield of, the Fund) but create the risk of losses that can </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">significantly exceed such current income or other returns. For example, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the premium received for writing a call option may be dwarfed by the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">losses the Fund may incur if the call option is exercised, and derivative </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">transactions where the Fund is an obligor can produce an up-front </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">benefit, but the potential for leveraged losses. The distributions, or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">distribution rates, paid by the Fund should not be viewed as the total </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">returns or overall performance of the Fund. These strategies may also </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">produce adverse tax consequences (for example, the Fund’s income and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">gain-generating strategies may generate current income and gains</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">,</span><span style="color:#333333;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">including short-term capital gains,</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> taxable as ordinary income) and limit </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund’s opportunity to profit or otherwise benefit from certain gains. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund may enter into opposing derivative transactions, or otherwise </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">take opposing positions. Such transactions can generate distributable </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">gains (which, as noted elsewhere, may be taxed as ordinary income) and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">create the risk of losses and NAV declines.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund may engage in investment strategies, including the use of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">derivatives, to, among other things, generate current, distributable </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">income, even if such strategies could potentially result in declines in the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund’s net asset value. The Fund’s income and gain-generating </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">strategies, including certain derivatives strategies, may generate current </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">income and gains taxable as ordinary income sufficient to support </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">distributions, even in situations when the Fund has experienced a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">decline in net assets due to, for example, adverse changes in the broad </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">U.S. or non-U.S. securities markets or the Fund’s portfolio of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investments, or arising from its use of derivatives. Consequently, Fund </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">shareholders may receive distributions subject to tax at ordinary income </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">rates at a time when their investment in the Fund has declined in value, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">which may be economically similar to a taxable return of capital.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The use of derivative and other similar instruments (referred to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">collectively as “derivatives”) involves risks different from, and possibly </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">greater than, the risks associated with investing directly in securities and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">other traditional investments. Derivatives are subject to a number of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">risks, such as liquidity risk (which may be heightened for </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">highly-customized derivatives), interest rate risk, market risk, credit risk, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">leveraging risk, (including credit), operational risk, legal risk and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">management risk arising from changes in applicable regulatory </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">requirements, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">governmental risk, sanctions risk,</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> risks arising from </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">margin requirements and risks arising from mispricing or valuation </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">complexity (including the risk of improper valuation), </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">as well as the risks </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">associated with the underlying asset, reference rate or index</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">. They also </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">involve the risk of unfavorable or ambiguous documentation and the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">risk that changes in the value of the derivative may not correlate </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">perfectly with the underlying asset, rate or index. If the Fund invests in a </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">derivative instrument, it could lose more than the principal amount </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">invested and derivatives may increase the volatility of the Fund, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">especially in unusual or extreme market conditions. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">In addition, the use </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of derivatives may cause the Fund’s investment returns to be impacted </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">by the performance of assets the Fund does not own, potentially </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">resulting in the Fund’s total investment exposure exceeding the value of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">its portfolio.</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> The Fund may be required to hold additional cash or sell </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">other investments in order to obtain cash to close out a position and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">changes in the value of a derivative may also create margin delivery or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">settlement payment obligations for the Fund. Also, suitable derivative </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">transactions may not be available in all circumstances and there can be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">no assurance that the Fund will engage in these transactions to reduce </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">exposure to other risks when that would be beneficial. The Fund’s use of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">derivatives may increase or accelerate the amount of taxes payable by </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Common Shareholders.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Non-centrally-cleared over-the-counter (“OTC”) derivatives are also </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">subject to the risk that a counterparty to the transaction will not fulfill </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">its contractual obligations to the other party, as many of the protections </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">afforded to centrally-cleared derivatives might not be available for </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">non-centrally-cleared OTC derivatives transactions. For derivatives </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">traded on an exchange or through a central counterparty, credit risk </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">resides with the Fund’s clearing broker, or the clearinghouse</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Derivatives that are cleared by a central clearing organization can still </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">be subject to different risks, including the creditworthiness of the central </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">clearing organization and its members.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">In addition, derivatives that are traded on an exchange are subject to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the risk that an exchange may limit the maximum daily price fluctuation </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of a derivative contract and restrict or suspend trading of a contract that </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">has reached a limit. Such limit governs only price movements of a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">contract during a particular trading day and therefore does not limit </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">potential losses because the limit may work to prevent the liquidation of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">unfavorable positions. A daily limit may be reached for several </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">consecutive days with little or no trading.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Participation in the markets for derivative instruments involves </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investment risks and transaction costs to which the Fund may not be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">subject absent the use of these strategies. The skills needed to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">successfully execute derivative strategies may be different from those </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">needed for other types of transactions. If the Fund incorrectly forecasts </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the value and/or creditworthiness of securities, currencies, interest rates, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">counterparties or other economic factors involved in a derivative </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">transaction, the Fund might have been in a better position if the Fund </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">had not entered into such derivative transaction. In evaluating the risks </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and contractual obligations associated with particular derivative </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">instruments</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> or other similar investments</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">, it is important to consider that </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">certain derivative transactions</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">,</span><span style="color:#333333;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">absent a default or termination event,</span><span style="color:#333333;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">only </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">be modified or terminated only by mutual consent of the Fund </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and its counterparty.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">It may not be possible for the Fund to modify, terminate, or offset the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund’s obligations or the Fund’s exposure to the risks associated with a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">derivative transaction prior to its scheduled termination or maturity </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">date, which may create a possibility of increased volatility and/or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">decreased liquidity to the Fund.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Because the markets for certain derivative instruments (including </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">markets located in foreign countries) are relatively new and still </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">developing, appropriate derivative transactions may not be available in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">all circumstances for risk management or other purposes. Upon the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">expiration of a particular contract, a Fund may wish to retain its position </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">in the derivative instrument by entering into a similar contract, but may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">be unable to do so if the counterparty to the original contract is </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">unwilling to enter into the new contract and no other appropriate </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">counterparty can be found. When such markets are unavailable, a Fund </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">will be subject to increased liquidity and investment risk.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund may enter into opposite sides of interest rate swap and other </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">derivatives for the principal purpose of generating distributable gains on </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the one side (characterized as ordinary income for tax purposes) that </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">are not part of the Fund’s duration or yield curve management </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">strategies (“paired swap transactions”), and with a substantial </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">possibility that the Fund will experience a corresponding capital loss </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and decline in NAV with respect to the opposite side transaction (to the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">extent it does not have corresponding offsetting capital gains). </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Consequently, Common Shareholders may receive distributions and owe </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">tax on amounts that are effectively a taxable return of the shareholder’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investment in the Fund, at a time when their investment in the Fund has </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">declined in value, which tax may be at ordinary income rates. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">In </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">addition, the Fund's use of derivatives may cause the Fund to realize </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">higher amounts of short-term capital gains (generally taxed at ordinary </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">income tax rates), potentially subjecting shareholders of the Fund to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">adverse tax consequences.</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> The tax treatment of certain derivatives in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">which the Fund invests may be unclear and thus subject to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">recharacterization. Any recharacterization of payments made or received </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">by the Fund pursuant to derivatives potentially could affect the amount, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">timing or character of Fund distributions. In addition, the tax treatment </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of such investment strategies may be changed by regulation or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">otherwise.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">When a derivative is used as a hedge against a position that the Fund </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">holds, any loss generated by the derivative generally should be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">substantially offset by gains on the hedged investment, and vice versa.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Although hedging can reduce or eliminate losses, it can also reduce or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">eliminate gains. Hedges are sometimes subject to imperfect matching </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">between the derivative and the underlying instrument, and there can be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">no assurance that the Fund’s hedging transactions will be effective. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Derivatives used for hedging or risk management may not operate as </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">intended or may expose the Fund to additional risks. In addition, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">derivatives used for hedging may partially protect the Fund from the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">risks they were intended to hedge yet not fully mitigate the impact of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">such risks. The regulation of the derivatives markets has increased over </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">time, and additional future regulation of the derivatives markets may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">make derivatives more costly, may limit the availability or reduce the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">liquidity of derivatives, or may otherwise adversely affect the value or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">performance of derivatives. Any such adverse future developments could </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">impair the effectiveness or raise the costs of a Fund’s derivative </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">transactions, impede the employment of the Fund’s derivatives </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">strategies, or adversely affect the Fund’s performance and cause the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund to lose value.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Leverage Risk</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund’s use of leverage, if any, creates the opportunity for increased </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Common Share net income, but also creates special risks for Common </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Shareholders (including an increased risk of loss). To the extent used, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">there is no assurance that the Fund’s leveraging strategies will be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">successful. Leverage is a speculative technique that may expose the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund to greater risk and increased costs. The Fund’s assets attributable </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">to leverage will be invested in accordance with the Fund’s investment </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">objectives and policies. Interest expense payable by the Fund with </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">respect to derivatives and other forms of leverage, and dividends </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">payable with respect to any Preferred Shares outstanding will generally </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">be based on shorter-term interest rates would be periodically reset. So </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">long as the Fund's portfolio investments provide a higher rate of return </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">(net of applicable Fund expenses) than the dividend rate on any </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Preferred Shares outstanding, including the Preferred Shareholder </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Gross-Up, and the interest expenses and other costs to the Fund of such </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">other leverage, the investment of the proceeds thereof will generate </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">more income than will be needed to pay the costs of the leverage. If so, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and all other things being equal, the excess may be used to pay higher </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">dividends to Common Shareholders than if the Fund were not so </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">leveraged. If, however, shorter-term interest rates rise relative to the rate </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of return on the Fund’s portfolio, the interest and other costs to the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund of leverage could exceed the rate of return on the debt obligations </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and other investments held by the Fund, thereby reducing return to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Common Shareholders. When the Fund reduces or discontinues its use </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of leverage (“deleveraging”), which it may be required to do at </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">inopportune times, it may be required to sell portfolio securities at </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">inopportune times to repay leverage obligations, which could result in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">realized losses and a decrease in the Fund's net asset value. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Deleveraging involves complex operational processes, including the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">coordination of asset sales, repayment of debt, and potential </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">restructuring of the Fund's capital and may involve significant costs, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">including transaction costs associated with the sale of portfolio </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">securities, prepayment penalties on borrowed funds, and, if applicable, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">fees related to the redemption of preferred shares. Leveraging </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">transactions pursued by the Fund may increase its duration and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">sensitivity to interest rate </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">changes and other market risks</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">. The Fund may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">continue to use leverage even if available financing rates are higher </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">than anticipated returns, including, for example, in cases where </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">deleveraging, including any expenses related thereto, might be viewed </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">as detrimental to the Fund’s portfolio. In addition, fees and expenses of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">any form of leverage used by the Fund will be borne entirely by the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Common Shareholders (and not by preferred shareholders) and will </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">reduce the investment return of the Common Shares. Therefore, there </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">can be no assurance that the Fund’s use of leverage will result in a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">higher yield on the Common Shares, and it may result in losses. In </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">addition, any Preferred Shares issued by the Fund are expected to pay </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">cumulative dividends, which may tend to increase leverage risk.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Leverage creates several major types of risks for Common Shareholders, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">including:</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">the likelihood of greater volatility of NAV of Common Shares, and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of the investment return to Common Shareholders, than a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">comparable portfolio without leverage;</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">the possibility either that Common Share dividends will fall if the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">interest and other costs of leverage rise, or that dividends paid on </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Common Shares will fluctuate because such costs vary over time; </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">the effects of leverage in a declining market or a rising interest </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">rate environment, as leverage is likely to cause a greater decline in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the NAV of the Common Shares than if the Fund were not </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">leveraged and may result in a greater decline in the market value </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of the Common Shares.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">In addition, the counterparties to the Fund’s leveraging transactions and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">any preferred shareholders of the Fund will have priority of payment </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">over the Fund’s Common Shareholders.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Reverse repurchase agreements involve the risks that the interest </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">income earned on the investment of the proceeds will be less than the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">interest expense and Fund expenses associated with the repurchase </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">agreement, that the market value of the securities sold by the Fund may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">decline below the price at which the Fund is obligated to repurchase </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">such securities and that the securities may not be returned to the Fund. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">There is no assurance that reverse repurchase agreements can be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">successfully employed. Dollar roll transactions involve the risk that the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">market value of the securities the Fund is required to purchase may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">decline below the agreed upon repurchase price of those securities. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Successful use of dollar rolls/buybacks may depend upon the Investment </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Manager’s ability to correctly predict interest rates and prepayments. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">There is no assurance that dollar rolls/buybacks can be successfully </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">employed. In connection with reverse repurchase agreements and dollar </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">rolls/buybacks, the Fund will also be subject to counterparty risk with </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">respect to the purchaser of the securities. If the broker/dealer to whom </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund sells securities becomes insolvent, the Fund’s right to purchase </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">or repurchase securities may be restricted.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund may engage in total return swaps, reverse repurchases, loans </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of portfolio securities, short sales and when-issued, delayed delivery and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">forward commitment transactions, credit default swaps, basis swaps </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and other swap agreements, purchases or sales of futures and forward </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">contracts (including foreign currency exchange contracts), call and put </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">options and/or other derivatives. The Fund’s use of such transactions </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">gives rise to associated leverage risks described above, and may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">adversely affect the Fund’s income, distributions and total returns to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Common Shareholders. To the extent that any offsetting positions do </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">not behave in relation to one another as expected, the Fund may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">perform as if it is leveraged through use of these derivative strategies.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Any total return swaps, reverse repurchases, loans of portfolio securities, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">short sales and when-issued, delayed delivery and forward commitment </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">transactions, credit default swaps, basis swaps and other swap </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">agreements, purchases or sales of futures and forward contracts </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">(including foreign currency exchange contracts), call and put options or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">other derivatives by the Fund or counterparties to the Fund’s other </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">leveraging transactions, if any, would have seniority over the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Common Shares.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Additional Risks Relating to the Fund’s Preferred Shares</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Because the Fund has issued Preferred Shares, it is required to satisfy </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">certain asset coverage requirements, including those imposed by </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">regulatory and rating agency requirements. Accordingly, any decline in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the net asset value of the Fund’s investments could result in the risk that </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund will fail to meet its asset coverage requirements for such </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Preferred Shares or the risk of the Preferred Shares being downgraded </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">by a rating agency. In an extreme case, the Fund’s current investment </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">income might not be sufficient to meet the dividend requirements on </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">any Preferred Shares outstanding. In order to address these types of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">events, the Fund might need to dispose of investments in order to fund </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">a redemption of some or all of its Preferred Shares. Dispositions at times </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of adverse economic conditions may result in a loss to the Fund. At </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">other times, these dispositions may result in gain at the Fund level and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">thus in additional taxable distributions to Common Shareholders. See </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">“Certain U.S. Federal Income Tax Considerations” for more information. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Preferred Shares have seniority over the Fund’s Common Shares.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund pays (and the Common Shareholders bear) all costs and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">expenses relating to the issuance and ongoing maintenance of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Preferred Shares. In addition, holders of Preferred Shares issued by the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund have complete priority over Common Shareholders in the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">distribution of the Fund’s assets. Furthermore, Preferred Shareholders, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">voting separately as a single class, have the right to elect two members </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of the Board at all times and to elect a majority of the trustees in the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">event two full years’ dividends on the Preferred Shares are unpaid, and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">also have separate class voting rights on certain matters. Accordingly, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Preferred Shareholders may have interests that differ from those of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Common Shareholders, and may at times have disproportionate </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">influence over the Fund’s affairs.</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> The use of leverage through Preferred </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Shares may also increase the Fund's sensitivity to interest rate risks. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">When the Fund is deleveraging, it may be required to sell portfolio </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">securities at inopportune times to repay leverage obligations or meet </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">asset coverage requirements, which could adverse affect the Fund's </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">performance.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Potential Conflicts of Interest Risk – Allocation of Investment </span><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Opportunities</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Investment Manager and its affiliates are involved worldwide with a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">broad spectrum of financial services and asset management activities </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and may engage in the ordinary course of business in activities in which </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">their interests or the interests of their clients may conflict with those of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund. The Investment Manager may provide investment </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">management services to other funds and discretionary managed </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">accounts that follow an investment program similar to that of the Fund. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Subject to the requirements of the 1940 Act, the Investment Manager </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">intends to engage in such activities and may receive compensation from </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">third parties for its services. The results of the Fund’s investment </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">activities may differ from those of the Fund’s affiliates, or another </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">account managed by the Fund’s affiliates, and it is possible that the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund could sustain losses during periods in which one or more of the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund’s affiliates and/or other accounts managed by the Investment </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Manager or its affiliates, including proprietary accounts, achieve profits </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">on their trading.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Geopolitical Conflicts Risk</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The occurrence of geopolitical conflicts, war or terrorist activities could </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">have adverse impacts on markets in various and unpredictable ways. For </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">example, following Russia’s large-scale invasion of Ukraine in February </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">2022, Russia, and other countries, persons and entities that were </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">viewed as having provided material aid to Russia’s aggression against </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Ukraine, became the subject of economic sanctions and import and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">export controls imposed by countries throughout the world, including </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the United States. Such measures have had and may continue to have </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">an adverse effect on the Russian, Belarusian and other securities and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">economies. Additional examples include, but are not limited to, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">heightened concerns of trade disputes, which could result in increased </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">tariffs, trade restrictions or other retaliatory countermeasures. The </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">extent, duration and impact of geopolitical conflicts and related market </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">impacts are difficult to ascertain, but could be significant and could </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">have significant adverse effects on regional and global economies and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the markets for certain securities and commodities, such as oil and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">natural gas, as well as other sectors, and on the Fund's investments.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Cyber Security Risk</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">As the use of technology, including cloud-based technology, has </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">become more prevalent </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and interconnected </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">in the course of business, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund is potentially more susceptible to operational and information </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">security risks resulting from breaches in cyber security</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">, including: </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">processing and human errors, inadequate or failed internal or external </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">processes, failures in system and technology, errors in algorithms used </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">with respect to Fund operations and changes in personnel</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">. A breach in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">cyber security refers to both intentional and unintentional cyber events </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">from outside threat actors or internal resources that may, among other </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">things, cause the Fund to lose proprietary information, suffer data </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">corruption and/or destruction, lose operational capacity, result in the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">unauthorized release or other misuse of confidential information, or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">otherwise disrupt normal business operations. Geopolitical tensions can </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">increase the scale and sophistication of deliberate cybersecurity attacks, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">particularly those from nation-states or from entities with nation-state </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">backing, who may desire to use cybersecurity attacks to cause damage </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">or create leverage against geopolitical rivals. Cyber security breaches </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">may involve unauthorized access to the Fund’s digital information </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">systems (e.g., through “hacking” or malicious software coding), and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">may come from multiple sources, including outside attacks such as </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">denial-of-service attacks (i.e., efforts to make network services </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">unavailable to intended users) or cyber extortion, including exfiltration </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of data held for ransom and/or “ransomware” attacks that renders </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">systems inoperable until </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">ransom is paid, or insider actions (e.g., </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">intentionally or unintentionally harmful acts of PIMCO personnel). In </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">addition, cyber security breaches involving the Fund’s third party service </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">providers (including but not limited to advisers, sub-advisers, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">administrators, transfer agents, custodians, vendors, suppliers, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">distributors and other third parties), trading counterparties or issuers in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">which the Fund invests can also subject the Fund to many of the same </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">risks associated with direct cyber security breaches or extortion of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">company data. PIMCO's use of cloud-based service providers could </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">heighten or change these risks. In addition, work-from-home </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">arrangements by the Fund, the Investment Manager or their service </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">providers could increase all of the above risks, create additional data </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and information accessibility concerns, and make the Fund, the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Investment Manager or their service providers susceptible to operational </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">disruptions, any of which could adversely impact their operations.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Cyber security failures or breaches may result in financial losses to the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund and its shareholders. For example, cyber security failures or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">breaches involving trading counterparties or issuers in which the Fund </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">invests could adversely impact such counterparties or issuers and cause </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund’s investment to lose value. These failures or breaches may also </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">result in disruptions to business operations, potentially resulting in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">financial losses; interference with the Fund’s ability to calculate its NAV, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">process shareholder transactions or otherwise transact business with </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">shareholders; impediments to trading; violations of applicable privacy </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and other laws; regulatory fines; penalties; third-party claims in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">litigation; reputational damage; reimbursement or other compensation </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">costs; additional compliance and cyber security risk management costs </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and other adverse consequences. In addition, substantial costs may be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">incurred in order to prevent any cyber incidents in the future.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Like with operational risk in general, the Fund has established business </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">continuity plans and risk management systems designed to reduce the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">risks associated with cyber security. However, there are inherent </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">limitations in these plans and systems, including that certain risks may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">not have been identified, in large part because different or unknown </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">threats may emerge in the future. As such, there is no guarantee that </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">such efforts will succeed, especially because the Fund does not directly </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">control the cyber security systems of issuers in which the Fund may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">invest, trading counterparties or third-party service providers to the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund. Such entities have experienced cyber attacks and other attempts </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">to gain unauthorized access to systems from time to time, and there is </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">no guarantee that efforts to prevent or mitigate the effects of such </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">attacks or other attempts to gain unauthorized access will be successful. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">There is also a risk that cyber security breaches may not be detected. The </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund and its shareholders may suffer losses as a result of a cyber </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">security breach related to the Fund, its service providers, trading </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">counterparties or the issuers in which the Fund invests.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Non-U.S. Investment Risk</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">PIMCO may invest in real estate located outside of the United States </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and real estate debt issued in, and/or backed by real estate in, countries </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">outside the United States. Non-U.S. real estate and real estate-related </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investments involve certain factors not typically associated with </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investing in real estate and real estate-related investments in the U.S., </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">including risks relating to (i) currency exchange matters, including </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">fluctuations in the rate of exchange between the U.S. dollar and the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">various non-U.S. currencies in which such investments are denominated, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and costs associated with conversion of investment principal and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">income from one currency into another; (ii) differences in conventions </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">relating to documentation, settlement, corporate actions, stakeholder </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">rights and other matters; (iii) differences between U.S. and non-U.S. real </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">estate markets, including potential price volatility in and relative </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">illiquidity of some non-U.S. markets; (iv) the absence of uniform </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">accounting, auditing and financial reporting standards, practices and </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">disclosure requirements and differences in government supervision and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">regulation; (v) certain economic, social and political risks, including </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">potential exchange-control regulations </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">(including repatriation </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">restrictions)</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">, potential restrictions on non-U.S. investment and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">repatriation of capital, the risks associated with political, economic or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">social instability, including the risk of sovereign defaults, regulatory </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">change, and the possibility of expropriation or confiscatory taxation or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the imposition of withholding or other taxes on dividends, interest, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">capital gains, other income or gross sale or disposition proceeds, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">trade </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">restrictions (including tariffs), sanctions,</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> and adverse economic and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">political developments; (vi) the possible imposition of non-U.S. taxes on </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">income and gains and gross sales or other proceeds recognized with </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">respect to such investments; (vii) differing and potentially less </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">well-developed or well-tested corporate laws regarding stakeholder </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">rights, creditors’ rights (including the rights of secured parties), fiduciary </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">duties and the protection of investors; (viii) different laws and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">regulations including differences in the legal and regulatory </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">environment or enhanced legal and regulatory compliance; (ix) political </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">hostility to investments by foreign investors; (x) less publicly available </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">information; (xi) obtaining or enforcing a court judgement abroad; (xii) </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">restrictions on foreign investment in other jurisdictions; and (xiii) </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">difficulties in effecting repatriation of capital. Furthermore, while PIMCO </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">may have the capacity, but not the obligation, to mitigate such </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">additional risks, including through the utilization of certain foreign </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">exchange hedging instruments, there is no guarantee that PIMCO will </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">be successful in mitigating such risks and in turn may introduce </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">additional risks and expenses linked to such efforts.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Property Manager Risk</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Investment Manager hires property managers to manage the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">properties and leasing agents to lease vacancies in the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">properties. These property managers may be the Fund’s affiliates or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">partners in joint ventures that the Fund enters into. The property </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">managers have significant decision-making authority with respect to the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">management of the Fund’s properties. The Fund’s ability to direct and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">control how the Fund’s properties are managed on a day-to-day basis </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">may be limited because PIMCO engages other parties to perform this </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">function. Thus, the success of the Fund’s business may depend in large </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">part on the ability of the Fund’s property managers to manage the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">day-to-day operations and the ability of the Fund’s leasing agents to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">lease vacancies in the Fund’s properties. Any adversity experienced by, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">or problems in the Fund’s relationship with, the Fund’s property </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">managers or leasing agents could adversely impact the operation and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">profitability of the Fund’s properties.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Privacy and Data Security Risk</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The GLBA and other laws limit the disclosure of certain non-public </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">personal information about a consumer to non- affiliated third parties </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and require financial institutions to disclose certain privacy policies and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">practices with respect to information sharing with both affiliates and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">non- affiliated third parties. Many states and a number of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">non-U.S. jurisdictions have enacted privacy and data security laws </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">requiring safeguards on the privacy and security of consumers’ </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">personally identifiable information. Other laws deal with obligations to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">safeguard and dispose of private information in a manner designed to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">avoid its dissemination. Privacy rules adopted by the U.S. Federal Trade </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Commission and SEC implement the GLBA and other requirements and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">govern the disclosure of consumer financial information by certain </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">financial institutions, ranging from banks to private investment funds. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">U.S. platforms following certain models generally are required to have </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">privacy policies that conform to these GLBA and other requirements. In </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">addition, such platforms typically have policies and procedures intended </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">to maintain platform participants’ personal information securely and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">dispose of it properly. The Fund generally does not intend to obtain or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">hold borrowers’ non-public personal information, and the Fund has </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">implemented procedures reasonably designed to prevent the disclosure </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of borrowers’ non-public personal information to the Fund. However, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">service providers to the Fund or its direct or indirect fully-owned </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">subsidiaries, including their custodians and the platforms acting as loan </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">servicers for the Fund or its direct or indirect fully-owned subsidiaries, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">may obtain, hold or process such information. The Fund </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and entities that </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">interact with the Fund, including service providers, custodians, and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">platforms, are susceptible to operational, information security, and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">related cybersecurity risks. The Fund </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">cannot guarantee the security of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">non-public personal information in the possession of such a service </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">provider and cannot guarantee that service providers have been and will </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">continue to comply with the GLBA, other data security and privacy laws </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and any other related regulatory requirements. Violations of the GLBA </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and other laws could subject the Fund to litigation and/or fines, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">penalties or other regulatory action, which, individually or in the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">aggregate, could have an adverse effect on the Fund. The Fund may also </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">face regulations related to privacy and data security in the other </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">jurisdictions in which the Fund invests.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Regulatory Changes Risk</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Financial entities, such as investment companies and investment </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">advisers, are generally subject to extensive government regulation and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">intervention. Government regulation and/or intervention may change </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the way the Fund is regulated, affect the expenses incurred directly by </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund and the value of its investments, and limit and/or preclude the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund’s ability to achieve its investment objectives. Government </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">regulation may change frequently and may have significant adverse </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">consequences. The Fund and the Investment Manager have historically </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">been eligible for exemptions from certain regulations. However, there is </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">no assurance that the Fund and the Investment Manager will continue </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">to be eligible for such exemptions. Actions by government entities may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">also impact certain instruments in which the Fund invests and reduce </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">market liquidity and resiliency.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Recent policy initiatives undertaken by the U.S. government have the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">potential to impact international relations, trade agreements, and the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">overall regulatory environment in ways that could create uncertainty </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and instability in domestic and global markets, and could adversely </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">affect the investment performance of the Fund. In particular, actions </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">taken by the U.S. government in respect of international trade relations </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">could lead to trade wars, increased costs for imported goods, disruptions </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">in supply chains, reduced foreign investment, and instability in regions </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">where the Fund invests.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Moreover, government regulation may have unpredictable and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">unintended effects. Legislative or regulatory actions to address </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">perceived liquidity or other issues in fixed income markets generally, or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">in particular markets such as the municipal securities market, may alter </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">or impair the Fund’s ability to pursue its investment objectives or utilize </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">certain investment strategies and techniques.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">While there continues to be uncertainty about the full impact of these </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and other regulatory changes, it is the case that the Fund will be subject </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">to a more complex regulatory framework, and may incur additional </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">costs to comply with new requirements as well as to monitor for </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">compliance in the future. Actions by governmental entities may also </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">impact certain instruments in which the Fund invests and reduce market </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">liquidity and resiliency.</span></div><div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Risk Retention Investment Risk</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund may invest in risk retention tranches of CMBS or other eligible </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">securitizations, if any, which are eligible residual interests held by the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">sponsors of such securitizations pursuant to the final rules </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">implementing the credit risk retention requirements of the “U.S. Risk </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Retention Rules.” In the case of CMBS transactions, for example, the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">U.S. Risk Retention Rules permit all or a portion of the retained credit </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">risk associated with certain securitizations (i.e., retained risk) to be held </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">by a “third party purchaser,” such as the Fund, if, among other </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">requirements, the third-party purchaser holds its retained interest, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">unhedged, for at least five years following the closing of the CMBS </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">transaction, after which it is entitled to transfer its interest in the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">securitization to another person that meets the requirements for a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">third-party purchaser. Even after the required holding period has </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">expired, due to the generally illiquid nature of such investments, no </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">assurance can be given as to what, if any, exit strategies will ultimately </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">be available for any given position.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">In addition, there is limited guidance on the application of the final </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">U.S. Risk Retention Rules to specific securitization structures. There can </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">be no assurance that the applicable federal agencies charged with the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">implementation of the final U.S. Risk Retention Rules (the Federal </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Deposit Insurance Corporation, the Comptroller of the Currency, the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Federal Reserve Board, the SEC, the Department of Housing and Urban </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Development, and the Federal Housing Finance Agency) could not take </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">positions in the future that differ from the interpretation of such rules </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">taken or embodied in such securitizations, or that the final U.S. Risk </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Retention Rules will not change.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Furthermore, in situations where the Fund invests in risk retention </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">tranches of securitizations structured by third parties, the Fund may be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">required to execute one or more letters or other agreements, the exact </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">form and nature of which will vary under which it will make certain </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">undertakings designed to ensure such securitization complies with the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">final U.S. Risk Retention Rules. Such Risk Retention Agreements may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">include a variety of representations, warranties, covenants and other </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">indemnities, each of which may run to various transaction parties. If the </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund breaches any undertakings in any Risk Retention Agreement, it will </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">be exposed to claims by the other parties thereto, including for any </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">losses incurred as a result of such breach, which could be significant </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and exceed the value of the Fund’s investments.</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> Direct investments in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">mortgages and other types of collateral are subject to risks similar (and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">in some cases to a greater degree) to those described above.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The illiquid nature of risk retention investments may make them difficult </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">or impossible to value accurately. The Fund may have limited or no </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">access to market quotations or other pricing data for these investments, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">requiring reliance on subjective valuation methodologies. In addition, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund's ability to dispose of these investments, even after the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">required holding period, may be constrained by the lack of an active </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">secondary market, and any sales may occur at significant discounts to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund's carrying value, if at all.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Risks of Investing in Private Real Estate Investment Funds</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">To the extent the Fund invests in private real estate investment funds, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Investment Manager will have limited or no control over the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investment decisions made by any such private real estate investment </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">funds. Investments in private real estate investment funds are illiquid, as </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">interests are not listed for trading on any securities exchange and there </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">is little to no secondary market for trading such investments. In addition, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Investment Manager’s ability to withdraw an investment or allocate </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">away from the private real estate investment funds, may be constrained </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">by limitations imposed by the private real estate investment funds. The </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">illiquid nature of private fund investments may prevent the Fund from </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">actively managing its portfolio away from underperforming private real </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">estate investment funds or in uncertain markets.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Under the terms of the limited partnership agreements or limited </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">liability company operating agreements, as applicable, of many of the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">private real estate investment funds in which the Fund may invest, the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund will make commitments to make capital contributions in specified </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">maximum amounts to such private real estate investment funds (each, a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">“Capital Contribution”) based on notices provided by the private real </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">estate investment funds (each, a “Capital Call”). These Capital </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Contributions will be made from time to time generally on an as-needed </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">basis rather than upfront. The Capital Contributions would be used by </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the applicable private real estate investment funds to pay specified </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">expenses of the private real estate investment funds and to make </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investments in a manner consistent with the investment strategy or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">guidelines established by the applicable private real estate investment </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">funds. As a result, the Fund, as an investor in a private real estate </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investment fund, may be required to make a Capital Contribution to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">such private real estate investment fund without the benefit of an </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">extensive notice period after a Capital Call and without regard to the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund’s current financial condition and availability of cash to make such </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Capital Contribution.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The limited partnership agreement or limited liability company operating </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">agreement, as applicable, of the applicable private real estate </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investment funds may contain detailed provisions regarding the failure </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of an investor in such private real estate investment funds to honor its </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Capital Contribution obligation. The consequences that may be imposed </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">upon a defaulting investor in such private real estate investment funds </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">include interest on overdue amounts, a loss of voting rights in the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">private real estate investment funds as long as the default is continuing, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and (in many cases) a forced sale or forfeiture of the defaulting </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investor’s interest in the private real estate investment funds in favor of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the other investors in such private real estate investment funds.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The private real estate investment funds will not be registered as </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investment companies under the 1940 Act and, therefore, the Fund will </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">not be able to avail itself of the protections of the 1940 Act with respect </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">to the private real estate investment funds, including certain corporate </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">governance protections, such as the requirement to have a majority </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Independent Directors serving on the board, statutory protections </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">against self-dealings and joint transactions by the institutional asset </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">managers and their affiliates, and leverage limitations. Furthermore, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">some of the institutional asset managers for the private real estate </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investment funds may not be registered under the Investment Advisers </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Act of 1940 (“Advisers Act”), meaning that the Fund will not be able to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">rely on the statutory protections of the Advisers Act.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The valuation of the Fund’s investments in private real estate investment </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">funds will be determined by the institutional asset managers of those </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">private real estate investment funds, which valuation may not be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">accurate or reliable. While the valuation of the Fund’s publicly traded </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">securities are more readily ascertainable, the Fund’s ownership interests </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">in private real estate investment funds are not publicly traded and the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund will depend on appraisers, service providers, and the institutional </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">asset manager to a private real estate investment fund to provide a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">valuation, or assistance with a valuation, of those investments. Any such </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">valuation is a subjective analysis of the fair market value of an asset and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">requires the use of techniques that are costly and time-consuming and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">ultimately provide no more than an estimate of value. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Valuations may be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">based on limited market data, incomplete information, or assumptions </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">that prove inaccurate.</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> Moreover, the valuation of the Fund’s investment </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">in a private real estate investment funds, as provided by an institutional </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">asset manager for its assets as of a specific date, may vary from the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">actual sales price of its assets or any secondary market value price for </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the underlying fund’s interest, if such investments were sold to a third </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">party.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Risks Related to the Fund’s REIT Status</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">If the Fund does not qualify as a REIT, the Fund will be subject to tax as </span><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">a regular corporation and could face a substantial tax liability.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund expects to operate so as to qualify as a REIT under the Code. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">However, qualification as a REIT involves the application of highly </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">technical and complex Code provisions for which only a limited number </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of judicial or administrative interpretations exist. Notwithstanding the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">availability of cure provisions in the Code, various compliance </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">requirements could be failed and could jeopardize the Fund’s REIT </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">status. Furthermore, new tax legislation, administrative guidance or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">court decisions, in each instance potentially with retroactive effect, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">could make it more difficult or impossible for the Fund to qualify as a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">REIT. If the Fund fails to qualify as a REIT in any tax year, then:</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund would be taxed as a regular domestic corporation, which </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div style="line-height:12.0pt;margin-left:22pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">under current laws, among other things, means being unable to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">deduct distributions to Common Shareholders in computing </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">taxable income and being subject to federal income tax on the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund’s taxable income at regular corporate income tax rates;</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">any resulting tax liability could be substantial and could have a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">material adverse effect on the Fund’s book value;</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">unless the Fund were entitled to relief under applicable statutory </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">provisions, the Fund would be required to pay taxes, and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">therefore, the Fund’s cash available for distribution to Common </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Shareholders would be reduced for each of the years during </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">which the Fund did not qualify as a REIT and for which the Fund </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">had taxable income; and</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund generally would not be eligible to requalify as a REIT for </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the subsequent four full taxable years.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">To maintain the Fund’s REIT status, the Fund may have to borrow funds </span><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">on a short-term basis during unfavorable market conditions.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">To qualify as a REIT, the Fund generally must distribute annually to the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund’s Common Shareholders a minimum of 90% of the Fund’s net </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">taxable income, determined without regard to the dividends-paid </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">deduction and excluding net capital gains. The Fund will be subject to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">regular corporate income taxes on any undistributed REIT taxable </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">income each year. Additionally, the Fund will be subject to a 4% </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">nondeductible excise tax on any amount by which distributions paid by </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund in any calendar year are less than the sum of 85% of the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund’s ordinary income, 95% of the Fund’s capital gain net income and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">100% of the Fund’s undistributed income from previous years. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Payments to the Fund’s Common Shareholders under the Fund’s share </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">repurchase plan will not be taken into account for purposes of these </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">distribution requirements. If the Fund does not have sufficient cash to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">make distributions necessary to preserve the Fund’s REIT status for any </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">year or to avoid taxation, the Fund may be forced to borrow funds or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">sell assets even if the market conditions at that time are not favorable </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">for these borrowings or sales. These options could increase the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">costs or reduce the Fund’s equity.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">Compliance with REIT requirements may cause the Fund to forego </span><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">otherwise attractive opportunities, which may hinder or delay the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">ability to meet the Fund’s investment objectives and reduce overall </span><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">return for the Fund's Common Shareholders.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">To qualify as a REIT, the Fund is required at all times to satisfy tests </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">relating to, among other things, the sources of the Fund’s income, the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">nature and diversification of the Fund’s assets, the ownership of the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund’s stock and the amounts the Fund distributes to Fund’s Common </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Shareholders. Compliance with the REIT requirements may impair the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund’s ability to operate solely on the basis of maximizing profits. For </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">example, the Fund may be required to make distributions to Common </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Shareholders at disadvantageous times or when the Fund does not have </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">funds readily available for distribution.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">Compliance with REIT requirements may force the Fund to liquidate or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">restructure otherwise attractive investments.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">To qualify as a REIT, at the end of each calendar quarter, at least 75% of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the value of the Fund’s assets must consist of cash, cash items, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">government securities and qualified real estate assets. The remainder of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund’s investments in securities (other than qualified real estate </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">assets and government securities) generally cannot include more than </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">10% of the voting securities (other than securities that qualify for the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">straight debt safe harbor) of any one issuer or more than 10% of the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">value of the outstanding securities of more than any one issuer unless </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">PIMCO and such issuer jointly elect for such issuer to be treated as a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">“taxable REIT subsidiary” under the Code. Debt will generally meet the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">“straight debt” safe harbor if the debt is a written unconditional </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">promise to pay on demand or on a specified date a certain sum of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">money, the debt is not convertible, directly or indirectly, into stock, and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the interest rate and the interest payment dates of the debt are not </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">contingent on the profits, the borrower’s discretion, or similar factors. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Additionally, no more than 5% of the value of the Fund’s assets (other </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">than government securities and qualified real estate assets) can consist </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of the securities of any one issuer, and no more than </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">25</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">% of the value </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of the Fund’s assets may be represented by securities of one or more </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">taxable REIT subsidiaries. If the Fund fails to comply with these </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">requirements at the end of any calendar quarter, the Fund must dispose </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of a portion of the Fund’s assets within 30 days after the end of the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">calendar quarter or qualify for certain statutory relief provisions in order </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">to avoid losing the Fund’s REIT qualification and suffering adverse tax </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">consequences. In order to satisfy these requirements and maintain the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund’s qualification as a REIT, the Fund may be forced to liquidate </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">assets from the Fund’s portfolio or not make otherwise attractive </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investments. These actions could have the effect of reducing the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">income and amounts available for distribution to the Fund’s Common </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Shareholders.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">The Fund’s Declaration of Trust does not permit any person or group to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">own more than 9.8% in value or number of shares, whichever is more </span><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">restrictive, of the Fund’s outstanding Common Shares or of the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">outstanding capital stock of all classes or series, and attempts to acquire </span><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">the Fund’s Common Shares or the Fund’s capital stock of all other </span><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">classes or series in excess of these 9.8% limits would not be effective </span><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">without an exemption (prospectively or retroactively) from these limits </span><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">by the Fund’s Board of Trustees.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">For the Fund to qualify as a REIT under the Code, not more than 50% of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the value of the Fund’s outstanding Common Shares may be owned, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">directly or indirectly, by five or fewer individuals (including certain </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">entities treated as individuals for this purpose) during the last half of a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">taxable year. For the purpose of assisting the Fund’s qualification as a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">REIT for U.S. federal income tax purposes, among other purposes, the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund’s Declaration of Trust prohibits beneficial or constructive </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">ownership by any person or group of more than 9.8%, in value or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">number of shares, whichever is more restrictive, of the outstanding </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">shares of the Fund’s outstanding Common Shares, or 9.8% in value or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">number of shares, whichever is more restrictive, of the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">outstanding capital stock of all classes or series, which PIMCO refers to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">as the “Ownership Limit.” The constructive ownership rules under the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Code and the Fund’s Declaration of Trust are complex and may cause </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">shares of the outstanding Common Shares owned by a group of related </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">persons to be deemed to be constructively owned by one person. As a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">result, the acquisition of less than 9.8% of the Fund’s outstanding </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Common Shares or the Fund’s capital stock by a person could cause </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">another person to constructively own in excess of 9.8% of the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">outstanding Common Shares or the Fund’s capital stock, respectively, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and thus violate the Ownership Limit. There can be no assurance that </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund’s board of trustees, as permitted in the Declaration of Trust, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">will not decrease this Ownership Limit in the future. Any attempt to own </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">or transfer shares of the Fund’s Common Shares or capital stock in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">excess of the Ownership Limit without the consent of the Fund’s board </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of trustees will result in the transfer being void.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Ownership Limit may have the effect of precluding a change in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">control of the Fund by a third party, even if such change in control </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">would be in the best interests of the Fund’s Common Shareholders or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">would result in receipt of a premium to the price of the Fund’s Common </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Shares (and even if such change in control would not reasonably </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">jeopardize the Fund’s REIT status). The exemptions to the Ownership </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Limit granted to date may limit the Fund’s Board’s power to increase the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Ownership Limit or grant further exemptions in the future.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">The Fund’s Board of Trustees is authorized to revoke the Fund’s REIT </span><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">election without shareholder approval, which may cause adverse </span><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">consequences to the Fund’s shareholders.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund’s Declaration of Trust authorizes the Fund’s Board of Trustees </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">to revoke or otherwise terminate the Fund’s REIT election, without the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">approval of the Fund’s shareholders, if it determines that changes to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">U.S. federal income tax laws and regulations or other considerations </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">mean it is no longer in the Fund’s best interests to qualify as a REIT. The </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund’s Board of Trustees has fiduciary duties to us and the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">shareholders and could only cause such changes in the Fund’s tax </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">treatment if it determines in good faith that such changes are in the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund’s best interests and in the best interests of the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">shareholders. In this event, the Fund would become subject to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">U.S. federal income tax on the Fund’s taxable income and the Fund </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">would no longer be required to distribute most of the Fund’s net income </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">to the Fund’s shareholders, which may cause a reduction in the total </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">return to the Fund’s shareholders.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Tax Risks of Investing in the Fund</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">Non-U.S. holders may be subject to U.S. federal income tax upon their </span><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">disposition of shares of the Fund’s Common Shares or upon their receipt </span><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">of certain distributions from PIMCO.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">In addition to any potential withholding tax on ordinary dividends, a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">non-U.S. holder (as such term is defined below under “Certain </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">U.S. Federal Income Tax Considerations—Taxation of U.S. Holders of the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund’s Common Shares”), other than a “qualified shareholder” or a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">“qualified foreign pension fund,” that disposes of a “U.S. real property </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">interest” (“USRPI”) (which includes shares of stock of a U.S. corporation </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">whose assets consist principally of USRPIs), is generally subject to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">U.S. federal income tax under the Foreign Investment in Real Property </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Tax Act of 1980, as amended (“FIRPTA”), on the amount received from </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">such disposition. Such tax does not apply, however, to the disposition of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">stock in a REIT that is “domestically controlled.” Generally, a REIT is </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">domestically controlled if less than 50% of its stock, by value, has been </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">owned directly or indirectly by non-U.S. persons during a continuous </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">five-year period ending on the date of disposition or, if shorter, during </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the entire period of the REIT’s existence. The Fund cannot assure </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Common Shareholders that it will qualify as a domestically controlled </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">REIT. If the Fund were to fail to so qualify, amounts received by a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">non-U.S. holder on certain dispositions of the Fund’s Common Shares </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">(including a redemption) would be subject to tax under FIRPTA, unless </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">(i) the Fund’s Common Shares were regularly traded on an established </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">securities market and (ii) the non-U.S. holder did not, at any time during </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">a specified testing period, hold more than 10% of the Fund’s Common </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Shares. See “Certain U.S. Federal Income Tax Considerations—Taxation </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of Non-U.S. Holders of the Fund’s Common Shares—Sales of the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Common Shares.”</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">A non-U.S. holder other than a “qualified shareholder” or a “qualified </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">foreign pension fund,” that receives a distribution from a REIT that is </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">attributable to gains from the disposition of a USRPI as described </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">above, including in connection with a repurchase of the Fund’s Common </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Shares, is generally subject to U.S. federal income tax under FIRPTA to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the extent such distribution is attributable to gains from such </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">disposition, regardless of whether the difference between the fair </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">market value and the tax basis of the USRPI giving rise to such gains is </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">attributable to periods prior to or during such non-U.S. holder’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">ownership of the Fund’s Common Shares. In addition, a repurchase of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund’s Common Shares, to the extent not treated as a sale or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">exchange, may be subject to withholding as an ordinary dividend. See </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">“Certain U.S. Federal Income Tax Considerations—Taxation of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Non-U.S. Holders of the Fund’s Common Shares—Distributions, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and—Repurchases of the Fund’s Common Shares.”</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">PIMCO seeks to act in the best interests of the Fund as a whole and not </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">in consideration of the particular tax consequences to any specific </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">holder of the Fund’s Common Shares. Potential non-U.S. holders should </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">inform themselves as to the U.S. tax consequences, and the tax </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">consequences within the countries of their citizenship, residence, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">domicile, and place of business, with respect to the purchase, ownership </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and disposition of shares of the Fund’s Common Shares.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">Investments outside the United States may subject the Fund to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">additional taxes and could present additional complications to the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">Fund’s ability to satisfy the REIT qualification requirements.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Non-U.S. investments may subject the Fund to various non-U.S. tax </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">liabilities, including withholding taxes. In addition, operating in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">functional currencies other than the U.S. dollar and in environments in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">which real estate transactions are typically structured differently than </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">they are in the United States or are subject to different legal rules may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">present complications to the Fund’s ability to structure </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">non-U.S. investments in a manner that enables the Fund to satisfy the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">REIT qualification requirements.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">The Fund may incur tax liabilities that would reduce the Fund’s cash </span><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">available for distribution to shareholders.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Even if the Fund qualifies and maintains the Fund’s status as a REIT, the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund may become subject to U.S. federal income taxes and related state </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and local taxes. For example, net income from the sale of properties that </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">are “dealer” properties sold by a REIT (a “prohibited transaction” under </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Code) will be subject to a 100% tax. The Fund may not make </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">sufficient distributions to avoid excise taxes applicable to REITs. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Similarly, if the Fund were to fail an income test (and did not lose the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund’s REIT status because such failure was due to reasonable cause </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and not willful neglect) the Fund would be subject to tax on the income </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">that does not meet the income test requirements. To qualify as a REIT, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund generally must distribute annually to the Fund’s Common </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Shareholders a minimum of 90% of the Fund’s net taxable income, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">determined without regard to the dividends-paid deduction and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">excluding net capital gains. If the Fund does not have sufficient cash to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">make distributions necessary to preserve the Fund’s REIT status for any </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">year or to avoid taxation, the Fund may be forced to borrow funds or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">sell assets even if the market conditions at that time are not favorable </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">for these borrowings or sales. These options could increase the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">costs or reduce the Fund’s equity. The Fund also may decide to retain </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">net capital gains the Fund earns from the sale or other disposition of the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund’s investments and pay income tax directly on such income. In that </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">event, the Fund’s shareholders would be treated as if they earned that </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">income and paid the tax on it directly. However, shareholders that are </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">tax-exempt, such as charities or qualified pension plans, would have no </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">benefit from their deemed payment of such tax liability unless they file </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">U.S. federal income tax returns and thereon seek a refund of such tax. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund also may be subject to state and local taxes on the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">income, gross receipts or property, including franchise, payroll, mortgage </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">recording and transfer taxes, either directly or at the level of the other </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">companies through which the Fund indirectly owns assets, such as the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund’s taxable REIT subsidiaries, which are subject to full U.S. federal, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">state, local and foreign corporate-level income taxes. Any taxes the Fund </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">pays directly or indirectly will reduce the Fund’s cash available for </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">distribution to shareholders.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">There may be current tax liability on distributions reinvested in the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">Fund’s Common Shares.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">If a shareholder participates in the Fund’s distribution reinvestment </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">plan, that shareholder will be deemed to have received, and for </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">U.S. federal income tax purposes will be taxed on, the amount </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">reinvested in shares of the Fund’s Common Shares to the extent the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">amount reinvested was not a tax-free return of capital. Therefore, unless </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the shareholder is a tax-exempt entity, the shareholder may be forced to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">use funds from other sources to pay any tax liability on the reinvested </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">dividends.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">Generally, ordinary dividends payable by REITs do not qualify for </span><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">reduced U.S. federal income tax rates.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Currently, the maximum tax rate applicable to qualified dividend income </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">payable to certain non-corporate U.S. Common Shareholders is 20%. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Dividends payable by REITs, however, generally are not eligible for the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">reduced rate. Although this does not adversely affect the taxation of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">REITs or dividends payable by REITs, the more favorable rates applicable </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">to regular corporate qualified dividends could cause certain </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">non-corporate investors to perceive investments in REITs to be relatively </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">less attractive than investments in the stocks of non-REIT corporations </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">that pay dividends, which could adversely affect the value of the shares </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of REITs, including the Fund’s Common Shares. However, under current </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">law, individual taxpayers may be entitled to claim </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">a deduction in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">determining their taxable income of 20% of ordinary REIT dividends </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">(dividends other than capital gain dividends and dividends attributable </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">to certain qualified dividend income received by the Fund), which </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">temporarily reduces the effective tax rate on such dividends. See </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">“Certain U.S. Federal Income Tax Considerations—Taxation of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">U.S. Holders of the Fund’s Common Shares—Distributions Generally.” </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Shareholders are urged to consult with a tax advisor regarding the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">effective tax rate with respect to REIT dividends.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">The Fund may be subject to adverse legislative or regulatory tax </span><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">changes that could increase the Fund’s tax liability, reduce the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">operating flexibility and reduce the price of the Fund’s Common Shares.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">In recent years, numerous legislative, judicial and administrative </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">changes have been made in the provisions of U.S. federal income tax </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">laws applicable to investments similar to an investment in shares of the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund’s Common Shares. Additional changes to the tax laws are likely to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">continue to occur, and PIMCO cannot assure shareholders that any such </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">changes will not adversely affect the taxation of the Fund’s Common </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Shareholders. Any such changes could have an adverse effect on an </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investment in the Fund’s shares or on the market value or the resale </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">potential of the Fund’s assets. Shareholders are urged to consult with a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">tax advisor with respect to the impact of recent legislation on your </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investment in the Fund’s shares and the status of legislative, regulatory </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">or administrative developments and proposals and their potential effect </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">on an investment in the Fund’s shares. Although REITs generally receive </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">certain tax advantages compared to entities taxed as regular </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">corporations, it is possible that future legislation would result in a REIT </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">having fewer tax advantages, and it could become more advantageous </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">for a company that invests in real estate to elect to be treated for </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">U.S. federal income tax purposes as a corporation. As a result, the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund’s Declaration of Trust authorizes the Fund’s Board of Trustees to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">revoke or otherwise terminate the Fund’s REIT election, without the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">approval of the Fund’s Common Shareholders, if it determines that </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">changes to U.S. federal income tax laws and regulations or other </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">considerations mean it is no longer in the Fund’s best interests to qualify </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">as a REIT. Prospective investors should consult their own tax advisors </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">regarding changes in tax laws.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">The failure of a mezzanine loan to qualify as a real estate asset could </span><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">adversely affect the Fund’s ability to qualify as a REIT.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">PIMCO may acquire mezzanine loans, for which the United States </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Internal Revenue Service (the “IRS”) has provided a safe harbor but not </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">rules of substantive law. Pursuant to the safe harbor, if a mezzanine </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">loan meets certain requirements, it will be treated by the IRS as a real </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">estate asset for purposes of the REIT asset tests, and interest derived </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">from the mezzanine loan will be treated as qualifying mortgage interest </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">for purposes of the REIT 75% income test. PIMCO may acquire </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">mezzanine loans that do not meet all of the requirements of this safe </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">harbor. In the event the Fund owns a mezzanine loan that does not </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">meet the safe harbor, the IRS could challenge such loan’s treatment as a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">real estate asset for purposes of the REIT asset and income tests and, if </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">such a challenge were sustained, the Fund could fail to qualify as a REIT.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">If the Fund’s operating partnership failed to qualify as a partnership or is </span><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">not otherwise disregarded for U.S. federal income tax purposes, the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">Fund would cease to qualify as a REIT.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">If the IRS were to successfully challenge the status of the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">operating partnership as a partnership or disregarded entity for </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">U.S. federal income tax purposes, it would be taxable as a corporation. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">In the event that this occurs, it would reduce the amount of distributions </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">that the Fund’s operating partnership could make to the Fund. This </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">would also result in the Fund’s failing to qualify as a REIT and becoming </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">subject to a corporate-level tax on the Fund’s income, which would </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">substantially reduce the Fund’s cash available to pay distributions and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the yield on your investment.</span></div> <div style="line-height:12.0pt;text-align:left;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Investment and Market Risk</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The market price of securities owned by the Fund may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">fluctuate</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">sometimes rapidly or unpredictably. Securities may decline in value due </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">a variety of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">factors affecting </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">(or perceiving to affect)</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> securities or real </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">estate markets generally or particular industries</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">,</span><span style="color:#333333;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">sectors </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">or companies </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">represented in the securities or real estate markets. The value of a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">security may decline due to general market conditions that are not </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">specifically related to a particular company, such as real or perceived </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">adverse economic conditions, changes in the general outlook for </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">corporate earnings, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">levels of public debt and deficits,</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> changes in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">inflation, interest or currency rates, financial system instability, adverse </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">changes to credit markets or adverse investor sentiment generally. The </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">value of a security may also decline due to factors that affect a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">particular industry or industries, such as labor shortages or increased </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">production costs and competitive conditions within an industry. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Conversely, a change in financial condition or other event affecting a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">single issuer may adversely impact securities markets as a whole. During </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">a general downturn in the securities markets, multiple asset classes may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">decline in value simultaneously even if the performance of those asset </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">classes is not otherwise historically correlated. Investments may also be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">negatively impacted by market disruptions and by attempts by other </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">market participants to manipulate the prices of particular investments. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Equity securities generally have greater price volatility than fixed income </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">securities. Credit ratings downgrades may also negatively affect </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">securities held by the Fund. Even when markets perform well, there is no </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">assurance that the investments held by the Fund will increase in value </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">along with the broader market.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">In addition, market risk includes the risk that geopolitical and other </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">events will disrupt the economy on a national or global level. For </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">instance, war or military conflict, terrorism, social unrest, recessions, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">supply chain disruptions, market manipulation, government defaults, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">government shutdowns, political </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and regulatory </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">changes, diplomatic </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">developments or the imposition of sanctions and other similar </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">measures, including the imposition of tariffs, or other U.S. economic </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">policies and any related public health emergencies (such as the spread </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of infectious diseases, pandemics and epidemics), natural/environmental </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">disasters, climate-change and climate related events can all negatively </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">impact the securities markets, which could cause the Fund to lose value. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">This includes reliance on global supply chains that are susceptible to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">disruptions resulting from, among other things, war and other armed </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">conflicts, tariffs, extreme weather events, and natural disasters.</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> These </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">events could reduce consumer demand or economic output, result in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">market closures, changes in interest rates, inflation/deflation, travel </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">restrictions or quarantines, and significantly adversely impact the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">economy.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">As computing technology and data analytics advance, there has been a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">trend towards machine driven and artificially intelligent trading systems, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">particularly with respect to increasing levels of autonomy in trading </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">decision capabilities. Regulators of financial markets have become </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">increasingly focused on the potential impact of artificial intelligence on </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investment activities and may issue regulations that affect the use of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">artificial technology in trading activities. Any such regulations may not </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">have the effect on financial markets that regulators intend. Moreover, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">advancements in artificial intelligence and other technologies may result </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">in the introduction of errors, defects or security vulnerabilities, which can </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">go undetected. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Issues in the construction and implementation of AI </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">systems and models (including software issues, issues related to the use </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of artificial intelligence and machine learning (AI), and other </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">technological issues) may adversely impact the Fund. AI systems may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">contain design flaws or faulty assumptions, rely on incomplete or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">inaccurate data inputs, and may be difficult to interpret or audit.</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> The </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">potential speed of such trading and other technologies may exacerbate </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the impact of any such incidents, particularly where such incidents are </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">exploited by other artificially intelligent systems designed to impair or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">prevent the intervention of a human control.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">domestic political environment, as well as political and diplomatic </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">events within the United States and abroad, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the U.S. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">budget</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> and deficit </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">reduction plan and foreign policy tensions</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> with foreign nations,</span><span style="color:#333333;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">including embargoes</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">tariffs, sanctions, trade wars, and other similar </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">developments,</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> has in the past resulted, and may in the future result, in a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">government shutdown or otherwise adversely affect the U.S. regulatory </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">landscape, the general market environment and/or investor sentiment, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">which could have an adverse impact on the Fund’s investments and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">operations. Additional and/or prolonged U.S. federal government </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">shutdowns</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">,</span><span style="color:#333333;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">U.S.</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> foreign policy, the imposition of tariffs, or other </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">U.S.</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> economic policies and any related domestic and/or geopolitical </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">tensions </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">may affect investor and consumer confidence and may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">adversely impact financial markets and the broader economy, perhaps </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">suddenly and to a significant degree. Governmental and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">quasi-governmental authorities and regulators throughout the world </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">have previously responded to serious economic disruptions with a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">variety of significant fiscal and monetary policy changes. The reversal of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">any fiscal and/or monetary policies or the ineffectiveness of these </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">policies, could increase volatility in securities markets, which could </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">adversely affect the Fund’s investments. Any market disruptions could </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">also prevent the Fund from executing advantageous investment </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">decisions in a timely manner. Funds that have focused their investments </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">in a region enduring geopolitical market disruption will face higher risks </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of loss. Thus, investors should closely monitor current market conditions </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">to determine whether the Fund meets their individual financial needs </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and tolerance for risk.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">When inflationary price movements occur, fixed income securities </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">markets may experience heightened levels of interest rate, volatility and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">liquidity risk. Interest rate increases in the future could cause the value </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of a fund that invests in fixed income securities to decrease</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">, which could </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">force the Fund to liquidate investments at disadvantageous times or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">prices, therefore adversely affecting the Fund and its shareholders</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Higher interest rates generally lower the values of real estate-related </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">assets. When this does not occur as expected, it presents an increased </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">risk of a correction or severe downturn in real estate-related asset </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">prices, which could adversely impact the value of other investments as </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">well (such as loans, securitized debt and other fixed income securities). </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">This risk is particularly present with respect to commercial real </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">estate-related asset prices, and the value of other investments with a </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">connection to the commercial real estate sector. Examples of risks faced </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">by real estate-related assets that may impact commercial real </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">estate-related asset prices include: tenant vacancy rates, increased </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">tenant turnover and tenant concentration; general real estate </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">headwinds, including delinquencies and difficulties in collecting rents </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and other payments (which increases the risk of owners being unable to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">pay or otherwise defaulting on their own borrowings and obligations); </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">decreases in property values; increases in inflation, upkeep costs and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">other expenses; fluctuations in rents; and increased concentration in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">ownership of certain types of properties.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Exchanges and securities markets may close early, close late or issue </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">trading halts on specific securities, which may result in, among other </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">things, the Fund being unable to buy or sell certain securities or financial </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">instruments at an advantageous time or accurately price its portfolio </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investments.</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> In addition, the Fund may rely on various third-party </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">sources to calculate its NAV. As a result, the Fund is subject to certain </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">operational risks associated with reliance on service providers and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">service providers’ data sources. In particular, errors or systems failures </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and other technological issues may adversely impact the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">calculation of its NAV, and such NAV calculation issues may result in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">inaccurately calculated NAV, delays in NAV calculation and/or the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">inability to calculate NAVs over extended periods. The Fund may be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">unable to recover any losses associated with such failures.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> <div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Distribution Rate Risk</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund's distribution rates may be affected by numerous factors, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">including but not limited to changes in realized and projected market </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">returns, fluctuations in market interest rates, Fund performance and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">other factors. The Fund’s distributions may be comprised of a return of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">capital. In general terms, a return of capital would occur where a Fund </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">distribution (or portion thereof) represents a return of a portion of your </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investment, rather than net income or capital gains generated from your </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investment during a particular period. There can be no assurance that a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">change in market conditions or other factors will not result in a change </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">in the Fund’s distribution rate or that the rate will be sustainable in the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">future. See “Distributions” for a description of return of capital and its </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">impacts. There can be no assurance that a change in market conditions </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">or other factors will not result in a change in a Fund’s distribution rate </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">or that the rate will be sustainable in the future. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Additionally</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">distribution rate is not indicative of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">performance and may not </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">correlate with </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">actual returns generated</span><span style="color:#333333;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">by the Fund</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investments</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">For instance, during periods of low or declining interest rates, the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">distributable income and dividend levels may decline for many reasons. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">For example, the Fund may have to deploy uninvested assets (whether </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">from sales of Fund shares, proceeds from matured, traded or called debt </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">obligations or other sources) in new, lower yielding instruments. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Additionally, payments from certain instruments that may be held by the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund (such as variable and floating rate securities) may be negatively </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">impacted by declining interest rates, which may also lead to a decline in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund’s distributable income and dividend levels. The distribution rate </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">is not indicative of the Fund's performance and may not correlate with </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the actual returns generated by the Fund's investments.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> <div style="line-height:12.0pt;text-align:left;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Liquidity Risk</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">To the extent consistent with the applicable liquidity requirements for </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">interval funds under Rule 23c-3 under the 1940 Act, the Fund may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">invest without limit in illiquid investments. Liquidity risk exists when </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">particular investments are difficult to purchase or sell at the time that </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund would like or at the price that the Fund believes such </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investments are currently worth. Many of the Fund’s investments may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">be illiquid. The term “illiquid investments” for this purpose means any </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investment that the Fund reasonably expects cannot be sold or disposed </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of in current market conditions in seven calendar days or less without </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the sale or disposition significantly changing the market value of the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investment. Illiquid investments may become harder to value, especially </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">in changing markets. The Fund’s investments in illiquid investments may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">reduce the returns of the Fund because it may be unable to sell the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">illiquid investments at an advantageous time or price or possibly require </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund to dispose of other investments at unfavorable times or prices </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">in order to satisfy its obligations, which could prevent the Fund from </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">taking advantage of other investment opportunities. Illiquidity can be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">caused by, among other things, a drop in overall market trading volume, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">an inability to find a willing buyer, or legal restrictions on the securities’ </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">resale</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">, capital controls, delays or limits on repatriation of local currency, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">or insolvency of local governments</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">. Additionally, the market for certain </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investments may become illiquid under adverse market or economic </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">conditions independent of any specific adverse changes in the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">conditions of a particular issuer, such as during </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">changes in</span><span style="color:#333333;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">interest rates,</span><span style="color:#333333;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">elevated volatility,</span><span style="color:#333333;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">market or geopolitical disruptions</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">, economic </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">uncertainty or public health crises</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">. There can be no assurance that an </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investment that is deemed to be liquid when purchased will continue to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">be liquid while it is held by the Fund and/or when the Fund wishes to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">dispose of it. Bond markets have consistently grown over </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">time</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> while the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">capacity for traditional dealer counterparties to engage in fixed income </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">trading has not kept pace </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">with the growth of bond markets and may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">remain constrained</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">. As a result, dealer inventories of corporate bonds, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">which provide a core indication of the ability of financial intermediaries </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">to “make markets,” </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">to remain limited relative to the size of the market</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Because market makers seek to provide stability to a market through </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">their intermediary services, the significant reduction in dealer inventories </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">could potentially lead to decreased liquidity and increased volatility in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the fixed income markets</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">,</span><span style="color:#333333;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">especially</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> during periods of economic </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">uncertainty</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> or market stress</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">. In such cases, the Fund, due to regulatory </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">limitations on investments in illiquid investments and the difficulty in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">purchasing and selling such securities or instruments, may be unable to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">achieve its desired level of exposure to a certain sector. To the extent </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">that the Fund’s principal investment strategies involve securities of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">companies with smaller market capitalizations, foreign (non-U.S.) </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">securities, Rule 144A securities, illiquid sectors of fixed income </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">securities, derivatives or securities with substantial market and/or credit </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">risk, the Fund will tend to have the greatest exposure to liquidity risk.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Further, fixed income securities with longer durations until maturity face </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">heightened levels of liquidity risk as compared to fixed income securities </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">with shorter durations until maturity. The risks associated with illiquid </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">instruments may be particularly acute in situations in which the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">operations require cash (such as in connection with repurchase offers) </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">and could result in the Fund borrowing to meet its short-term needs or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">incurring losses on the sale of illiquid instruments. It may also be the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">case that other market participants may be attempting to liquidate fixed </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">income holdings at the same time as the Fund, causing increased supply </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">in the market and contributing to liquidity risk and downward pricing </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">pressure. Liquidity risk also refers to the risk that the Fund may be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">required to hold additional cash or sell other investments in order to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">obtain cash to close out derivatives or meet the liquidity demands that </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">derivatives can create to make payments of margin, collateral, or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">settlement payments to counterparties. The Fund may have to sell a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">security at a disadvantageous time or price to meet such obligations. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">The actions of governments and regulators may have the effect of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">reducing market liquidity, market resiliency and money supply.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> <div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Management Risk</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund is subject to management risk because it is an actively </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">managed investment portfolio. PIMCO will apply investment techniques </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and risk analysis in making investment decisions for the Fund. PIMCO </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and each portfolio manager may determine that certain factors are </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">more significant than others, but there can be no guarantee that these </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">decisions will produce the desired results or that the due diligence </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">conducted by PIMCO </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">will evaluate every factor prior to investing in a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">company or issuer and expose all material risks associated with an </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investment. Additionally, PIMCO </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">may not be able to identify suitable </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investment opportunities and may face competition from other </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investment managers when identifying and consummating certain </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investments, or may determine that certain factors are more significant </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">than others. Certain securities or other instruments in which the Fund </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">seeks to invest may not be available in the quantities desired, including </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">in circumstances where other funds for which PIMCO acts as investment </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">adviser, including funds with names, investment objectives and policies, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and/or portfolio management teams, similar to the Fund, are seeking to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">invest in the same or similar securities or instruments. In addition, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">regulatory restrictions, actual or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">perceived</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> conflicts of interest or other </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">considerations may cause PIMCO to restrict or prohibit participation in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">certain investments. In such circumstances, PIMCO </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">may determine to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">purchase other securities or instruments as substitutes. Such substitute </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">securities or instruments may not perform as intended, which could </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">result in losses to the Fund. To the extent the Fund employs strategies </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">targeting perceived pricing inefficiencies, arbitrage strategies or similar </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">strategies, it is subject to the risk that the pricing or valuation of the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">securities and instruments involved in such strategies may change </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">unexpectedly, which may result in reduced returns or losses to the Fund. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Additionally, legislative, regulatory, or tax developments may adversely </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">affect management of the Fund.</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> The Fund is also subject to the risk that </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">deficiencies in the internal systems or controls of PIMCO or another </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">service provider will cause losses for the Fund or hinder Fund </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">operations. For example, trading delays or errors (both human and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">systemic) could prevent the Fund from purchasing a security expected to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">appreciate in value. Please refer to “Portfolio Managers – Conflicts of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Interest” in the SAI for further information. Additionally, actual or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">potential conflicts of interest, legislative, regulatory, or tax restrictions, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">policies or developments may affect the investment techniques available </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">to PIMCO </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">in connection with managing the Fund, may cause PIMCO to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">restrict or prohibit participation in certain investments and may also </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">adversely affect the ability of the Fund to achieve its investment </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">objectives. There also can be no assurance that all of the personnel of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">PIMCO will continue to be associated with PIMCO for any length of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">time. The loss of the services of one or more key employees of PIMCO </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">could have an adverse impact on the Fund’s ability to realize its </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investment objectives.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">In addition, the Fund may rely on various third-party sources to calculate </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">its NAV. As a result, the Fund is subject to certain operational risks </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">associated with reliance on service providers and service providers’ data </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">sources. In particular, errors or systems failures and other technological </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">issues may adversely impact the Fund’s calculations of its NAV, and such </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">NAV calculation issues may result in inaccurately calculated NAVs, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">delays in NAV calculation and/or the inability to calculate NAVs over </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">extended periods. The Fund may be unable to recover any losses </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">associated with such failures.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> <div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Delay in Use of Proceeds Risk</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Although the Fund currently intends to invest the proceeds from any </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">sale of the Common Shares offered hereby as soon as practicable, such </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investments may be delayed if suitable investments are unavailable at </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the time. Pending investment, the net proceeds of the offering may be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">invested in permitted temporary investments, which include short-term </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">U.S. government securities, bank certificates of deposit and other </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">short-term liquid investments. The rate of return on these investments, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">which affects the amount of cash available to make distributions, may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">be less than the return obtainable from the type of investments in the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">real estate industry the Fund seeks to originate or acquire. Such </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investments may also make it more difficult for the Fund to qualify as a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">REIT. Therefore, delays the Fund encounters in the selection, due </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">diligence and origination or acquisition of investments would likely limit </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">its ability to pay distributions and lower overall returns. In the event the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund is unable to find suitable investments such temporary investments </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">may be maintained for longer periods which would be dilutive to overall </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investment returns. This could cause a substantial delay in the time it </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">takes for a shareholder’s investment to realize its full potential return.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> <div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Best Efforts Offering</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">This offering is being made on a “best efforts” basis, meaning the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Distributor and broker-dealers participating in the offering are only </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">required to use their best efforts to sell the Fund’s shares and have no </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">firm commitment or obligation to sell any of the shares. In the event of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the liquidation, dissolution or winding up of the Fund, Common </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Shareholders are entitled to receive the then-current NAV per share of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the assets legally available for distribution to the Fund’s Common </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Shareholders, after payment of or adequate provision for all of the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund’s known debts and liabilities, including any outstanding debt </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">securities or other borrowings and any interest thereon. These rights are </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">subject to the preferential rights of outstanding shares of any other </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">class or series of the Fund’s shares, including any Preferred Shares.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> <div style="line-height:12.0pt;text-align:left;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Competition Risk</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Identifying, completing and realizing attractive portfolio investments is </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">competitive and involves a high degree of uncertainty. The Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">profitability depends, in large part, on its ability to acquire target assets </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">at attractive prices. In acquiring its target assets, the Fund will compete </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">with a variety of institutional investors, including specialty finance </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">companies, public and private funds (including other funds managed by </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">PIMCO), REITs, commercial and investment banks, commercial finance </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and insurance companies and other financial institutions. Also, as a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">result of this competition, desirable investments in the Fund’s target </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">assets may be limited in the future and the Fund may not be able to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">take advantage of attractive investment opportunities from time to time, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">as the Fund can provide no assurance that it will be able to identify and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">make investments that are consistent with its investment objectives. The </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund cannot assure you that the competitive pressures it faces will not </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">have a material adverse effect on its business, financial condition and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">results of operations or the Fund’s ability to locate, consummate and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">exit investments that satisfy its investment objectives.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> <div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Non-Diversification Risk</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund is “non-diversified,” which means that the Fund may invest a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">significant portion of its assets in the securities of a smaller number of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">issuers than a diversified fund. Focusing investments on a small number </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of issuers increases risk. A fund that invests in a relatively smaller </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">number of issuers is more susceptible to risks associated with a single </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">economic, political or regulatory occurrence than a diversified fund </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">might be. Some of those issuers also may present substantial credit or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">other risks. Similarly, a non-diversified fund may be subject to increased </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">economic, business or political risk to the extent that it invests a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">substantial portion of its assets in a particular currency, in a group of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">related industries, in a particular issuer, in the bonds of similar projects </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">or in a narrowly defined geographic area outside the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">U.S. Notwithstanding the Fund’s status as a “non-diversified” </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investment company under the Act, the Fund intends to qualify as a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">REIT accorded special tax treatment under the Code, which imposes its </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">own diversification requirements.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> <div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Illiquid Investment Risk</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Many of the Fund’s investments will be illiquid, including the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">private commercial real estate investments. A variety of factors could </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">make it difficult for the Fund to dispose of any of its illiquid assets on </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">acceptable terms even if a disposition is in the best interests of the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund’s Common Shareholders. The Fund cannot predict whether it will </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">be able to sell any asset for the price or on the terms set by it or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">whether any price or other terms offered by a prospective purchaser </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">would be acceptable to the Fund. The Fund also cannot predict the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">length of time needed to find a willing purchaser and to close the sale </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of an asset. The Fund may be required to expend cash to correct defects </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">or to make improvements before an asset can be sold, and there can be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">no assurance that it will have cash available to correct those defects or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">to make those improvements. As a result, the Fund’s ability to sell </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investments in response to changes in economic and other conditions </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">could be limited. Limitations on the Fund’s ability to respond to adverse </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">changes in the performance of its investments may have a material </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">adverse effect on the Fund’s business, financial condition and results of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">operations and the Fund’s ability to make distributions.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> <div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Real Estate Investment Risk</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund’s investments will be subject to the risks inherent in the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">ownership and operation of real estate and real estate-related </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">businesses and assets. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">In addition, the real estate industry has </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">historically been cyclical and particularly sensitive to economic </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">downturns and other events that limit demand for real estate, which </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">would adversely impact the value of real estate investments.</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> These risks </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">include, but are not limited to:</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div> <div style="clear:both;margin-top:6pt;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">the burdens of ownership of real property;</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">general and local economic conditions (such as an oversupply of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">space or a reduction in demand for space);</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">the supply and demand for properties (including competition </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">based on rental rates);</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">energy and supply shortages;</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">fluctuations in average occupancy and room rates;</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">the attractiveness, type and location of the properties and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">changes in the relative popularity of commercial properties as an </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investment;</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">the financial condition and resources of tenants, buyers and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">sellers of properties;</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">increased mortgage defaults;</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">the quality of maintenance, insurance and management services;</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">changes in the availability of debt financing which may render the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">sale or refinancing of properties difficult or impracticable;</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">changes in building, environmental and other laws and/or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">regulations (including those governing usage and improvements), </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">fiscal policies and zoning laws;</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">changes in real property tax rates;</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">changes in interest rates and the availability of mortgage funds </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">which may render the sale or refinancing of properties difficult or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">impracticable;</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">changes in operating costs and expenses;</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">lack of availability of insurance coverage or increases in insurance </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">costs;</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">uninsured losses or delays from casualties or condemnation;</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">negative developments in the economy that depress travel or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">leasing activity;</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">environmental liabilities;</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">contingent liabilities on disposition of assets;</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">uninsured or uninsurable casualties;</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">acts of God, including earthquakes, hurricanes and other natural </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">disasters;</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">social unrest and civil disturbances, epidemics, pandemics or other </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">public crises;</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">terrorist attacks and war;</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">risks and operating problems arising out of the presence of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">certain construction materials, structural or property-level latent </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">defects, work stoppages, labor shortages, strikes, union relations </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div style="line-height:12.0pt;margin-left:22pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">and contracts, fluctuating prices and supply of labor and/or other </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">labor-related factor; and</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">other factors which are beyond the control of the Investment </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Manager and its affiliates.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">In addition, the Fund’s investments will be subject to various risks which </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">could cause fluctuations in occupancy, rental rates, operating income </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and expenses or which could render the sale or financing of its </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">properties difficult or unattractive. For example, following the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">termination or expiration of a tenant’s lease, there may be a period of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">time before the Fund will begin receiving rental payments under a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">replacement lease. During that period, the Fund will continue to bear </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">fixed expenses such as interest, real estate taxes, maintenance and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">other operating expenses. In addition, declining economic conditions </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">may impair the Fund’s ability to attract replacement tenants and achieve </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">rental rates equal to or greater than the rents paid under previous </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">leases. Increased competition for tenants may require the Fund to make </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">capital improvements to properties which would not have otherwise </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">been planned. Ultimately, to the extent that the Fund is unable to renew </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">leases or re-let space as leases expire, decreased cash flow from tenants </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">will result, which could adversely impact the Fund’s operating results. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Real estate income and values may also be affected by demographic </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">trends, such as population shifts or changing tastes, preferences (such </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">as remote work arrangements) and social values.</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> Furthermore, events </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">involving limited liquidity, defaults, non-performance or other adverse </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">developments that affect financial institutions or the financial services </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">industry generally, or concerns or rumors about any events of these </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">kinds or other similar risks, have in the past and may in the future lead </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">to market-wide liquidity problems.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Separately, certain service providers to the Fund and/or its subsidiaries, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">as applicable, may be owned by, employed by, or otherwise related to, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">PIMCO, Allianz SE, their affiliates and/or their respective employees, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">consultants and other personnel. PIMCO may, in its sole discretion, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">determine to provide, or engage or recommend an affiliate of PIMCO to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">provide, certain services to the Fund, instead of engaging or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">recommending one or more third parties to provide such services. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Subject to the governance requirements of a particular fund and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">applicable law, PIMCO or its affiliates, as applicable, will receive </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">compensation in connection with the provision of such services. As a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">result, PIMCO faces a conflict of interest when selecting or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">recommending service providers for the Fund. Fees paid to an affiliated </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">service provider will be determined in PIMCO's commercially reasonable </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">discretion. Although PIMCO has adopted various policies and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">procedures intended to mitigate or otherwise manage conflicts of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">interest with respect to affiliated service providers, there can be no </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">guarantee that such policies and procedures (which may be modified or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">terminated at any time in PIMCO's sole discretion) will be successful.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> <div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Market Disruptions Risk</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund is subject to investment and operational risks associated with </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">financial, economic and other global market developments and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">disruptions, including those arising from war, military conflicts, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">geopolitical disputes,</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> terrorism, social </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">or political </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">unrest, recessions, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">supply chain disruptions, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">tariffs and other restrictions on trade,</span><span style="color:#333333;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">sanctions,</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> market manipulation, government interventions, defaults and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">shutdowns, political changes or diplomatic developments, public health </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">emergencies (such as the spread of infectious diseases, pandemics and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">epidemics), bank failures, natural/environmental disasters, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">climate-change and climate related events</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">,</span><span style="color:#333333;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">responses to government </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">actions or interventions (the threat or imposition of tariffs, trade </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">restrictions, currency restrictions, or similar actions)</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> which can all </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">negatively impact the securities markets, interest rates, auctions, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">secondary trading, ratings, credit risk, inflation, deflation and other </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">factors relating to the Fund’s investments or the Investment Manager’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">operations and the value of an investment in the Fund, its distributions </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and its returns. These events can also impair the technology and other </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">operational systems upon which the Fund’s service providers, including </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">PIMCO as the Fund’s investment adviser, rely, and could otherwise </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">disrupt the Fund’s service providers’ ability to fulfill their obligations to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund. Furthermore, events involving limited liquidity, defaults, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">non-performance or other adverse developments that affect financial </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">institutions or the financial services industry generally, or concerns or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">rumors about any events of these kinds or other similar risks, have in the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">past and may in the future lead to market-wide liquidity problems.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> <div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Commercial Real Estate Industry Risk</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund’s business and operations are dependent on the commercial </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">real estate industry generally, which in turn is dependent upon broad </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">economic conditions. Challenging economic and financial market </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">conditions may cause the Fund to experience an increase in the number </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of private commercial real estate investments that result in losses, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">including delinquencies, non-performing assets and a decrease in the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">value of the property or, in the case of real estate debt and traded real </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">estate-related securities, collateral which secures its investments, all of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">which could adversely affect the Fund’s results of operations. The Fund </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">may need to establish significant provisions for losses or impairment, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and be forced to sell assets at undesirable prices, which may result in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund’s NAV declining and the Fund incurring substantial losses.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Additionally, economic conditions can negatively impact the businesses </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of tenants of the Fund’s private commercial real estate investments, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">which in turn could cause the Fund to experience increased </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">delinquencies or decreasing rents, either of which would negatively </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">impact the Fund’s income. These conditions may increase the volatility of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the value of private commercial real estate investments made by the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund. These developments also may make it more difficult for the Fund </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">to accurately value its investments or to sell its investments on a timely </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">basis. These developments, including elevated interest rates relative to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">previous years, or a gradual decline in interest rates from these elevated </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">levels, could adversely affect the ability of the Fund to use leverage for </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investment purposes and increase the cost of such leverage, which </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">would reduce returns. Such developments could, in turn, diminish </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">significantly the Fund’s revenue from investments and adversely affect </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund’s NAV.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> <div style="line-height:12.0pt;text-align:left;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Private Commercial Real Estate Risk</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Lease defaults, terminations by one or more tenants or landlord-tenant </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">disputes may reduce the Fund’s revenues and net income. Any of these </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">situations may result in extended periods during which there is a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">significant decline in revenues or no revenues generated by a property. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">If this occurred, it could adversely affect the Fund’s performance.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund’s financial position and its ability to make distributions may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">also be adversely affected by financial difficulties experienced by any </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">major tenants, including bankruptcy, insolvency or a general downturn </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">in the business, or in the event any major tenants do not renew or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">extend their relationship as their lease terms expire. A tenant in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">bankruptcy may be able to restrict the ability to collect unpaid rents or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">interest during the bankruptcy proceeding. Furthermore, dealing with a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">tenants’ bankruptcy or other default may divert management’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">attention and cause the Fund to incur substantial legal and other costs.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund’s investments in real estate will be pressured in challenging </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">economic and rental market conditions. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund's investments in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">private commercial real estate may be subject to reduced demand for </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">commercial and office space as well as increased maintenance or tenant </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">improvement costs to convert properties for other uses.</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> If the Fund is </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">unable to re-let or renew leases for all or substantially all of the space at </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">these properties, if the rental rates upon such renewal or re-letting are </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">significantly lower than expected, or if the Fund’s reserves for these </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">purposes prove inadequate, the Fund will experience a reduction in net </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">income and may be required to reduce or eliminate cash distributions.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund may obtain only limited warranties when it purchases an </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">equity investment in private commercial real estate. The purchase of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">properties with limited warranties increases the risk that the Fund may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">lose some or all of its invested capital in the property, as well as the loss </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of rental income from that property if an issue should arise that </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">decreases the value of that property and is not covered by the limited </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">warranties. If any of these results occur, it may have a material adverse </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">effect on the Fund’s business, financial condition and results of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">operations and the Fund’s ability to make distributions.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> <div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Single Tenant Risk</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund depends on its tenants for revenue, and therefore the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">revenue is dependent on the success and economic viability of its </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">tenants. Certain of the Fund’s investments in single tenant properties </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">may be leased out to single tenants that the Investment Manager </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">believes have favorable credit profiles and/or performance attributes </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">supporting highly visible long-term cash flows. Adverse impacts to such </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">tenants, including as a result of changes in market or economic </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">conditions, natural disasters, outbreaks of an infectious disease, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">pandemic or any other serious public health concern, political events or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">other factors that may impact the operation of these properties, may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">have negative effects on the Fund’s business and financial results. As a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">result, such tenants may in the future be required to suspend operations </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">at the Fund’s properties for what could be an extended period of time. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Further, if such tenants default under their leases, the Fund may not be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">able to promptly enter into a new lease or operating arrangement for </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">such properties, rental rates or other terms under any new leases or </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">operating arrangement may be less favorable than the terms of the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">current lease or operating arrangement or the Fund may be required to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">make capital improvements to such properties for a new tenant, any of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">which could adversely impact the Fund’s operating results.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> <div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Litigation Risk</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">In the ordinary course of its business, the Fund may be subject to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">litigation from time to time. The outcome of such proceedings may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">materially adversely affect the value of the Fund or its investments and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">may continue without resolution for long periods of time. Any litigation </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">may consume substantial amounts of the Investment Manager’s time </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and attention, and that time and the devotion of these resources to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">litigation may, at times, be disproportionate to the amounts at stake in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the litigation.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The acquisition, ownership and disposition of real properties carries </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">certain specific litigation risks. Litigation may be commenced with </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">respect to a property acquired by the Fund or its subsidiaries in relation </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">to activities that took place prior to the Fund’s acquisition of such </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">property. In addition, at the time of disposition of an individual property, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">a potential buyer may claim that it should have been afforded the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">opportunity to purchase the asset or alternatively that such potential </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">buyer should be awarded due diligence expenses incurred or statutory </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">damages for misrepresentation relating to disclosure made, if such </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">buyer is passed over in favor of another as part of the Fund’s efforts to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">maximize sale proceeds. Similarly, successful buyers may later sue the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund under various damage theories, including those sounding in tort, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">for losses associated with latent defects or other problems not </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">uncovered in due diligence.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> <div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Insurance Risk</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Certain types of losses, generally of a catastrophic nature, such as </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">earthquakes, floods and hurricanes may be uninsurable or not </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">economically insurable. The Fund may not obtain, or be able to require </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">tenants to obtain certain types of insurance if it is deemed commercially </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">unreasonable. Under such circumstances, the insurance proceeds, if any, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">might not be adequate to restore the economic value of the property, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">which might decrease the value of the property. As a result, the insured </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">company could lose its investments in, and anticipated profits and cash </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">flows from, a number of properties and, as a result, adversely affect the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund’s investment performance.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> <div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Environmental Risk</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund may be exposed to substantial risk of loss arising from </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investments involving undisclosed or unknown environmental, health or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">occupational safety matters, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">including costs or disruptions caused by </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">extreme weather events, natural disasters, or other climate-related </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">factors or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">inadequate reserves, insurance or insurance proceeds for such </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">matters that have been previously identified. Under various U.S. federal, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">state and local and non-U.S. laws, ordinances and regulations, an owner </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of real property may be liable for the costs of removal or remediation of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">certain hazardous or toxic substances on or in such property. Such laws </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">may also impose joint and several liability, which can result in a party </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">being obligated to pay for greater than its share, or even all, of the </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">liability involved. Such liability may also be imposed without regard to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">whether the owner knew of, or was responsible for, the presence of such </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">hazardous or toxic substances and may be imposed on the owner in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">connection with the activities of a tenant at the property. The cost of any </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">required remediation and the owner’s liability therefore as to any </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">property are generally not limited under such laws and could exceed the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">value of the property and/or the aggregate assets of the owner. The </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">presence of such substances, or the failure to properly remediate </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">contamination from such substances, would adversely affect the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">owner’s ability to sell the real estate or to borrow funds using such </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">property as collateral, which could have an adverse effect on the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">return from such investment. Environmental claims with respect to a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">specific investment could exceed the value of such investment, and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">under certain circumstances, subject the other assets of the Fund to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">such liabilities. In addition, some environmental laws create a lien on </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">contaminated property in favor of governments or government agencies </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">for costs they incur in connection with the contamination.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The ongoing presence of environmental contamination, pollutants or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">other hazardous materials on a property (whether known at the time of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">acquisition or not) could also result in personal injury (and associated </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">liability) to persons on the property and persons removing such </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">materials, future or continuing property damage (which would adversely </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">affect property value) or claims by third parties, including as a result of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">exposure to such materials through the spread of contaminants.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">In addition, the Fund’s operating costs and performance may be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">adversely affected by compliance obligations under environmental </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">protection statutes, rules and regulations relating to investments of the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund, including additional compliance obligations arising from any </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">change to such statutes, rules and regulations. Statutes, rules and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">regulations may also restrict development of, and use of, property. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Certain clean-up actions brought by governmental agencies and private </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">parties could also impose obligations in relation to the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investments and result in additional costs to the Fund. If the Fund is </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">deemed liable for any such environmental liabilities and is unable to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">seek recovery against its tenant, the Fund’s business, financial condition </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and results of operations could be materially and adversely affected, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and the amount available to make distributions could be reduced.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Further, even in cases where the Fund is indemnified by the seller with </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">respect to an investment against liabilities arising out of violations of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">environmental laws and regulations, there can be no assurance as to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the financial viability of the seller to satisfy such indemnities or the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">ability of the Fund to achieve enforcement of such indemnities.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> <div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Joint Venture Risk</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund expects to enter into joint ventures with third parties to make </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investments. Joint ventures entered into by the Fund would only include </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">arrangements in which the Fund does not primarily control the joint </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">venture. The Fund’s partial interest investments will generally be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">structured as joint ventures or co-investment arrangements with third </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">parties. In these joint ventures, the Fund would generally share control </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">with the third-party partner (for example the Fund may have approval </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">rights over some of the joint venture’s activities, and in limited </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">circumstances that do not amount to primary control of the joint </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">venture, may have the ability to require that the joint venture take </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">specific actions), even though the Fund may hold a majority of the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">economic interests of a joint venture. In many cases the third-party </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">partner may provide services for the joint venture or its assets, including, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">without limitation, management of day-to-day operations, asset </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">management, property management, construction or development </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">management, leasing, refinancing or disposition related services. The </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund may also make investments in partnerships or other co-ownership </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">arrangements or participations. Such investments may involve risks not </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">otherwise present with other methods of investment, including, for </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">instance, the following risks and conflicts of interest:</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">the joint venture partner in an investment could become insolvent </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">or bankrupt</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> or experience financial distress that impairs its ability </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">to meet its obligations to the joint venture</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">;</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">the joint venture partner may be subject to cybersecurity </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">incidents, operational failures, or other business disruptions that </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">could adversely affect the joint venture's operations and the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund's investment;</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">fraud or other misconduct by the joint venture partner;</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund may share decision-making authority with its joint </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">venture partner regarding certain major decisions affecting the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">ownership of the joint venture and the joint venture property, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">such as the sale of the property or the making of additional </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">capital contributions for the benefit of the property, which may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">prevent the Fund from taking actions that are opposed by its joint </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">venture partner</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">. In addition, disputes between the Fund and its </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">joint venture partner may be difficult and costly to resolve and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">may require arbitration or litigation in jurisdictions that may be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">unfavorable to the Fund</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">;</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">under certain joint venture arrangements, neither party may have </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the power to control the venture and, under certain </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">circumstances, an impasse could result regarding cash </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">distributions, reserves, or a proposed sale or refinancing of the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investment, and this impasse could have an adverse impact on </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the joint venture, which could adversely impact the operations </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and profitability of the joint venture and/or the amount and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">timing of distributions the Fund receives from such joint venture;</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">the joint venture partner may at any time have economic or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">business interests or goals that are or that become in conflict with </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund’s business interests or goals, including, for instance, the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">operation of the properties;</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">the joint venture partner may be structured differently than the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund for tax purposes and this could create conflicts of interest </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and risk to the Fund’s ability to qualify as a REIT;</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund may rely upon its joint venture partner to manage the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">day-to-day operations of the joint venture and underlying assets, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">as well as to prepare financial information for the joint venture </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and any failure to perform these obligations may have a negative </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">impact on the Fund’s performance and results of operations;</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">the joint venture partner may experience a change of control, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">which could result in new management of the joint venture </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div style="line-height:12.0pt;margin-left:22pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">partner with less experience or conflicting interests to the Fund </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and be disruptive to the Fund’s business;</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">such joint venture partner may be in a position to take action </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">contrary to the Fund’s instructions or requests or contrary to the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund’s policies or objectives, including the Fund’s policy with </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">respect to maintaining its qualification as a REIT;</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">the terms of the joint ventures could restrict the Fund’s ability to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">sell or transfer its interest to a third party when it desires on </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">advantageous terms, which could result in reduced liquidity;</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund or its joint venture partner may have the right to trigger </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">a buy-sell arrangement, which could cause the Fund to sell its </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">interest, or acquire its partner’s interest, at a time when the Fund </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">otherwise would not have initiated such a transaction;</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">the joint venture partner may not have sufficient personnel or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">appropriate levels of expertise to adequately support the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">initiatives; and</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">to the extent it is permissible under the Investment Company Act </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">for the Fund to partner with other vehicles advised by the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Investment Manager, the Investment Manager may have conflicts </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of interest that may not be resolved in the Fund’s favor.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">In addition, disputes between the Fund and its joint venture partner may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">result in litigation or arbitration that would increase the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">expenses and prevent the Fund’s officers and trustees from focusing </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">their time and efforts on the Fund’s business. Any of the above might </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">subject the Fund to liabilities and thus reduce its returns on the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investment with the joint venture partner. The Fund may at times enter </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">into arrangements that provide for unfunded commitments and, even </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">when not contractually obligated to do so, may be incentivized to fund </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">future commitments related to its investments.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> <div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-weight:bold">Investments in REITs Risk</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">REITs are pooled investment vehicles that own, and usually operate, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">income-producing real estate. Some REITs also finance real estate. If a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">REIT meets certain requirements, including distributing to shareholders </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">substantially all of its taxable income (other than net capital gains), then </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">it is not typically taxed on the income distributed to shareholders.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">REITs are sometimes informally characterized as: equity REITs, mortgage </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">REITs and hybrid REITs. Equity REITs invest the majority of their assets </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">directly in real property. They derive their income primarily from rents </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">received and any profits on the sale of their properties. Equity REITs can </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">also realize capital gains by selling properties that have appreciated in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">value. Mortgage REITs invest the majority of their assets in real estate </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">mortgages and derive most of their income from mortgage interest </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">payments. As its name suggests, hybrid REITs combine characteristics of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">both equity REITs and mortgage REITs. Finally, REITs may either be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">public or private. Private REITs are not traded on a national securities </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">exchange, whereas public REITs are traded on a national securities </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">exchange. Accordingly, private REITs may be less liquid than public </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">REITs. This reduces the ability of the Fund to redeem its investment in a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">private REIT early. Private REITs are also generally harder to value and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">may bear higher fees than public REITs.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">An investment in a REIT, or in a real estate linked derivative instrument </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">linked to the value of a REIT, is subject to the risks that impact the value </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of the underlying properties of the REIT. These risks include loss to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">casualty or condemnation, and changes in supply and demand. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Additional risks include changes in interest rates, zoning laws, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">regulatory limitations on rents, property taxes, and operating expenses. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Real estate income and values may also be affected by demographic </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">trends, such as population shifts or changing tastes, preferences (such </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">as remote work arrangements) and social values. Other factors that may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">adversely affect REITs include poor performance by management of the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">REIT, changes to the tax laws, or failure by the REIT to qualify for </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">favorable tax treatment. The securities of REITs involve greater risks </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">than those associated with larger, more established companies and may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">be subject to more abrupt or erratic price movements because of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">interest rate changes, economic conditions and real estate market </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">conditions (such as oversupply of real estate for rent or sale or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">vacancies, potentially for extended periods), reduced demand for </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">commercial and office space as well as increased maintenance or tenant </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">improvement costs and costs to convert properties for other uses, and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">default risk and credit quality of tenants and borrowers and other </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">factors. For example, the value of these securities may decline when </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">interest rates rise and will also be affected by the real estate market and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">by the management or development of the underlying properties. The </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">underlying properties may be subject to mortgage loans, which may also </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">be subject to the risks of default. REITs are also subject to default by </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">borrowers and self-liquidation, and are heavily dependent on cash flow. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Some REITs lack diversification because they invest in a limited number </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of properties, a narrow geographic area, or a single type of property. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Mortgage REITs may be impacted by the quality of the credit extended.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> <div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Recourse Financings Risk</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">In certain cases, financings for the Fund’s commercial real estate </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">properties may be recourse to the Fund. Generally, commercial real </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">estate financings are structured as non-recourse to the borrower, which </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">limits a lender’s recourse to the property pledged as collateral for the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">loan, and not the other assets of the borrower or to any parent of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">borrower, in the event of a loan default. However, lenders customarily </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">will require that a creditworthy parent entity enter into so-called </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">“recourse carveout” guarantees to protect the lender against certain </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">bad-faith or other intentional acts of the borrower in violation of the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">loan documents. A “bad boy” guarantee typically provides that the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">lender can recover losses from the guarantors for certain bad acts, such </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">as fraud or intentional misrepresentation, intentional waste, willful </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">misconduct, criminal acts, misappropriation of funds, voluntary </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">incurrence of prohibited debt and environmental losses sustained by </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">lender. In addition, “bad boy” guarantees typically provide that the loan </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">will be a full personal recourse obligation of the guarantor, for certain </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">actions, such as prohibited transfers of the collateral or changes of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">control and voluntary bankruptcy of the borrower. These financing </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">arrangements with respect to the Fund’s investments generally require </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">“bad boy” guarantees from the Fund and/or certain of the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">subsidiaries and in the event that such a guarantee is called, the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">assets could be adversely affected. Moreover, the Fund’s “bad boy” </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">guarantees could apply to actions of the joint venture partners </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">associated with the Fund’s investments. While the Investment Manager </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">expects to negotiate indemnities from such joint venture partners to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">protect against such risks, there remains the possibility that the acts of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">such joint venture partner could result in liability to the Fund under such </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">guarantees. PIMCO may provide “bad boy” guarantees on behalf of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">other funds, investment vehicles and accounts managed by PIMCO </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investing alongside the Fund and as such guarantees are not for </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">borrowed money, they will typically not be included under the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">leverage limitations.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> <div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Valuation Risk</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Certain securities, including certain real estate investments that the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund makes, in which the Fund invests may be less liquid and more </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">difficult to value than other types of securities. Investments for which </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">market quotations are not readily available are valued at fair value as </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">determined in good faith pursuant to Rule 2a-5 under the Act. See </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">“How Fund Shares are Priced.” Fair value pricing may require subjective </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">determinations about the value of a security or other asset. As a result, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">there can be no assurance that fair value pricing will result in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">adjustments to the prices of securities or other assets, or that fair value </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">pricing will reflect actual market value, and it is possible that the fair </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">value determined for a security or other asset will be materially different </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">from quoted or published prices, from the prices used by others for the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">same security or other asset and/or from the value that actually could be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">or is realized upon the sale of that security or other asset. The price the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund pays for its private commercial real estate investments will be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">based on the Investment Manager’s projections of market demand, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">occupancy levels, rental income, the costs of any development, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">redevelopment or renovation of a property, borrower expertise and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">other factors. If any of the Investment Manager’s projections are </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">inaccurate or it ascribes a higher value to assets and their value </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">subsequently drops or fails to rise because of market factors, returns on </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund’s investment may be lower than expected and the Fund could </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">experience losses.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">For the purposes of calculating the Fund’s NAV, private commercial real </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">estate investments typically will initially be valued at cost, which the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund expects to represent fair value at that time. Thereafter, valuations </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of properties will be derived from independent property appraisals or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">based on one or more fair valuation methodologies as determined by </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">PIMCO in accordance with its policies and procedures.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The valuation methodologies used to value the Fund’s private </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">commercial real estate investments will involve subjective judgments </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and projections that may not materialize. Valuation methodologies will </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">also involve assumptions and opinions about future events, which may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">or may not materialize. Valuations and appraisals of the Fund’s private </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">commercial real estate investments will be only estimates of fair value. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Ultimate realization of the value of an asset depends to a great extent </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">on economic, market and other conditions beyond the Fund’s control </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and the control of the Investment Manager and the Fund’s independent </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">valuation advisors, as applicable.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Valuations and appraisals of the Fund’s private commercial real estate </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investments are only conducted on a periodic basis. If the relevant </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">asset’s value changes after such appraisal, it will be difficult for PIMCO </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">to quantify the impact of such change and the necessary information to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">make a full assessment of the value may not be immediately available, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">which may require the Investment Manager to make an assessment of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">fair value with incomplete information. The participation of PIMCO in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund’s valuation process could result in a conflict of interest, since </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the advisory fee is based on the Fund’s average daily net assets. A </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">material change in a private commercial real estate investment or a new </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">appraisal of a private commercial real estate investment may have a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">material impact on the Fund’s overall NAV, resulting in a sudden </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">increase or decrease to the Fund’s NAV per share. Further, valuations do </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">not necessarily represent the price at which an asset would sell, since </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">market prices of assets can only be determined by negotiation between </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">a willing buyer and seller. As such, the carrying value of an asset may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">not reflect the price at which the asset could be sold in the market, and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the difference between carrying value and the ultimate sales price could </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">be material. In addition, accurate valuations are more difficult to obtain </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">in times of low transaction volume because there are fewer market </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">transactions that can be considered in the context of the appraisal. It </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">also may be difficult to reflect fully and accurately rapidly changing </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">market conditions or material events that may impact the value of the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund’s real property investments between valuations, or to obtain </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">complete information regarding any such events in a timely manner. For </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">example, an unexpected termination or renewal of a material lease, a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">material increase or decrease in vacancies, an unanticipated structural </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">or environmental event at a property or material changes in market, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">economic and political conditions globally and in the jurisdictions and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">sectors in which a property operates, may cause the value of a property </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">to change materially, yet obtaining sufficient relevant information after </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the occurrence has come to light and/or analyzing fully the financial </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">impact of such an event may be difficult to do and may require some </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">time. As a result, the Fund’s NAV per share may not reflect a material </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">event until such time as sufficient information is available and the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">impact of such an event on a property’s valuation is evaluated, such that </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund’s NAV may be appropriately updated. The Investment Manager </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">expects to utilize the independent valuation advisors’ appraisals in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">determining the fair value of the private commercial real estate </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investments. There will be no retroactive adjustment in the valuation of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">such assets, the offering price of the Common Shares, the price the Fund </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">paid to repurchase Common Shares or NAV-based fees the Fund paid to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">PIMCO and the Distributor to the extent such valuations prove to not </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">accurately reflect the realizable value of the Fund’s assets. Because the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">price shareholders will pay for Common Shares in this offering, and the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">price at which shares will be repurchased in quarterly repurchase offers </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">by the Fund, are based on NAV per share of Common Shares, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">shareholders may pay more than realizable value or receive less than </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">realizable value for an investment in the Fund.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> <div style="line-height:12.0pt;text-align:left;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Risks Related to Specific Private Commercial Real Estate </span><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Property Types</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund may invest across various CRE property types, including, but </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">not limited to residential, industrial, and office, retail, hospitality and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">select niche sectors. The Fund’s exposure to any of the aforementioned </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">property types may change based on PIMCO’s outlook, which may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">expose the Fund to risks. For example, the Fund’s investments in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">multifamily properties may be affected by declining rents or may incur </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">vacancies either by the expiration and non-renewal of tenant leases or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the continued default of tenants under their leases, resulting in reduced </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">revenues and less cash available to distribute to Common Shareholders. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fluctuations in manufacturing activity in the United States may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">adversely affect the tenants of the Fund’s industrial properties and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">therefore the demand for and profitability of its industrial properties. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Office properties are subject to risks that the tenants of those office </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">properties face, including the overall health of the economy, the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">possibility of a downturn in the businesses operated by the tenants, lack </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of demand or obsolescence of the products or services provided by the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">tenants, and the non-competitiveness of the office tenants relative to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">their competitors. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">In addition, there has been reduced demand for </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">commercial and office space as well as increased maintenance or tenant </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">improvement costs to convert properties for other uses, and the inability </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">to re-lease space on attractive terms.</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> Specialty properties are subject to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">risks specific to their specialty use. For example, student housing </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">properties are subject to seasonality and increased leasing risk and may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">be adversely affected by a change in university admission policies. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Additional niche sectors may include, among others, data centers, life </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">sciences, medical offices, and self-storage. The above is not an </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">exhaustive list of the sectors that the Fund expects to invest in or the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">risks associated with those sectors. The Fund is not obliged to target all </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">(or any one) of the above asset classes or strategies.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> <div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Residential Real Estate Risk</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund expects to invest in residential real estate, including rental </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">properties, and instruments providing exposure to residential real </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">estate, such as REITs. Regional, national, and international economic </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">conditions can affect the residential real estate industry, including rental </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">properties. A downturn or slowdown in the rental demand for single- or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">multi-family housing caused by adverse economic, regulatory, or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">environmental conditions, or other events may have a negative impact </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">on the Fund's investments. In addition, adverse economic conditions, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">including those resulting from deteriorating market conditions, natural </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">disasters, public health or political events, could negatively impact </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">tenants. A decline in the economic conditions of tenants could lead to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">lease defaults, terminations by one or more tenants, or landlord-tenant </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">disputes.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">In addition, the Fund may also invest in single-family residential </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">properties that are acquired in order to redevelop or renovate with the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">intention to resell within a short timeframe. Redevelopment or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">renovation projects involve various risks, including the risk of cost </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">overruns and non-completion. In addition, these projects may be subject </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">to permitting or construction delays or delays caused by adverse </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">environmental conditions. If a redevelopment or renovation project is </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">not completed in a timely manner, it can result in increased costs or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">cause the property to be put on the market at a less favorable time, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">which would ultimately reduce the project's overall profitability. In </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">addition, there is a risk that the property may not be sold at a favorable </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">price or at all once the property has been redeveloped or renovated.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> <div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Mortgage Loan Risk</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund may originate and selectively acquire senior mortgage loans </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">which are generally loans secured by a first mortgage lien on a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">commercial property and are subject to risks of delinquency and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">foreclosure and risks of loss, that are greater than similar risks </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">associated with loans made on the security of single-family residential </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">property. In addition, certain of the mortgage loans in which the Fund </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">invests may be structured so that all or a substantial portion of the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">principal will not be paid until maturity </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">(balloon payment structures)</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">which increases the risk of default at that time</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> particularly in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">environments of declining property values where refinancing may be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">difficult or unavailable on favorable terms</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">. The ability of a borrower to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">repay a loan secured by an income-producing property typically is </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">dependent primarily upon the successful operation of such property </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">rather than upon the existence of independent income or assets of the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">borrower. If the net operating income of the property is reduced, the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">borrower’s ability to repay the loan may be impaired. Net operating </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">income of an income-producing property can be affected by, among </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">other things: tenant mix, success of tenant businesses, property </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">management decisions, property location and condition, competition </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">from comparable types of properties, changes in laws that increase </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">operating expense or limit rents that may be charged, any need to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">address environmental contamination at the property, the occurrence of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">any uninsured casualty at the property, changes in national, regional or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">local economic conditions and/or specific industry segments, declines in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">regional or local real estate values, declines in regional or local rental or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">occupancy rates, increases in interest rates, real estate tax rates and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">other operating expenses, changes in governmental rules, regulations </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and fiscal policies, including environmental legislation, acts of God, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">terrorism, social unrest, civil disturbances, epidemics and other public </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">crises.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">In the event of any default under a mortgage loan held directly by the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund, it will bear a risk of loss of principal to the extent of any deficiency </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">between the value of the collateral and the principal and accrued </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">interest of the mortgage loan, which could have a material adverse </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">effect on the profitability of the Fund. In the event of the bankruptcy of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">a mortgage loan borrower, the mortgage loan to such borrower will be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">deemed to be secured only to the extent of the value of the underlying </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">collateral at the time of bankruptcy (as determined by the bankruptcy </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">court), and the lien securing the mortgage loan will be subject to the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">avoidance powers of the bankruptcy trustee or debtor-in-possession to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the extent the lien is unenforceable under state law.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Foreclosure of a mortgage loan can be an expensive and lengthy </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">process which could have a substantial negative effect on the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">anticipated return on the foreclosed mortgage loan. RMBS evidence </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">interests in or are secured by pools of residential mortgage loans and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">CMBS evidence interests in or are secured by a single commercial </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">mortgage loan or a pool of commercial mortgage loans. Accordingly, the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">mortgage-backed securities in which the Fund invests are subject to all </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of the risks of the underlying mortgage loans.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> <div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Mezzanine Loan Risk</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund may invest in mezzanine loans that take the form of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">subordinated loans secured by a pledge of the ownership interests of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">either the entity owning the real property or the entity that owns the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">interest in the entity owning the real property. These types of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investments involve a higher degree of risk than first mortgage lien </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">loans secured by income producing real property because the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investment may become unsecured as a result of foreclosure by the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">senior lender. In the event of a bankruptcy of the entity providing the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">pledge of its ownership interests as security, the Fund may not have full </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">recourse to the assets of such entity, or the assets of the entity may not </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">be sufficient to satisfy the Fund’s mezzanine loan. If a borrower defaults </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">on the Fund’s mezzanine loan or debt senior to the Fund’s loan, or in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the event of a borrower bankruptcy, the Fund’s mezzanine loan will be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">satisfied only after the senior debt. As a result, the Fund may not recover </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">some or all of its investment. In addition, mezzanine loans may have </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">higher loan-to-value ratios than conventional mortgage loans, resulting </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">in less equity in the real property and increasing the risk of loss of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">principal.</span></div> <div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Certain Affiliations</span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Certain broker-dealers may be considered to be affiliated persons of the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund and/or the Investment Manager due to their possible affiliations </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">with Allianz SE, the ultimate parent of the Investment Manager, or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">another Allianz entity. Allianz Asset Management of America LP merged </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">with Allianz Asset Management, with the latter being the surviving </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">entity, effective January 1, 2023. Following the merger, Allianz Asset </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Management is PIMCO LLC’s managing member and direct parent </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">entity. Absent an exemption from the SEC or other regulatory relief, the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund is generally precluded from effecting certain principal transactions </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">with affiliated brokers, and its ability to purchase securities being </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">underwritten by an affiliated broker or a syndicate including an affiliated </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">broker, or to utilize affiliated brokers for agency transactions, is subject </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">to restrictions. This could limit the Fund’s ability to engage in securities </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">transactions and take advantage of market opportunities.</span></div> <div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Mortgage-Related and Other Asset-Backed Instruments Risk</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Mortgage-related and other asset-backed instruments represent </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">interests in “pools” of mortgages or other assets such as consumer </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">loans or receivables held in trust and often involve risks that are </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">different from or possibly more acute than risks associated with other </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">types of debt instruments.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Generally, rising interest rates tend to extend the duration of fixed rate </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">mortgage-related assets, making them more sensitive to changes in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">interest rates. Compared to other fixed income investments with similar </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">maturity and credit, mortgage-related securities may increase in value to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">a lesser extent when interest rates decline and may decline in value to a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">similar or greater extent when interest rates rise. As a result, in a period </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of rising interest rates, the Fund may exhibit additional volatility since </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">individual mortgage holders are less likely to exercise prepayment </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">options, thereby putting additional downward pressure on the value of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">these securities and potentially causing the Fund to experience losses. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">This is known as extension risk. Mortgage-backed securities can be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">highly sensitive to rising interest rates, such that even small movements </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">can cause the Fund to lose value. Mortgage-backed securities, and in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">particular those not backed by a government guarantee, are subject to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">credit risk. In addition, adjustable and fixed rate mortgage-related </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">securities are subject to prepayment risk. When interest rates decline, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">borrowers may pay off their mortgages sooner than expected. This can </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">reduce the returns of the Fund because the Fund may have to reinvest </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">that money at the lower prevailing interest rates. In addition, the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">creditworthiness, servicing practices, and financial viability of the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">servicers of the underlying mortgage pools present significant risks. For </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">instance, a servicer may be required to make advances in respect of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">delinquent loans underlying the mortgage-related securities; however, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">servicers experiencing financial difficulties may not be able to perform </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">these obligations. Additionally, both mortgage-related securities and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">asset-backed securities are subject to risks associated with fraud or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">negligence by, or defalcation of, their servicers. These securities are also </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">subject to the risks of the underlying loans. In some circumstances, a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">servicer’s or originator’s mishandling of documentation related to the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">underlying collateral (e.g., failure to properly document a security </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">interest in the underlying collateral) may affect the rights of security </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">holders in and to the underlying collateral. In addition, the underlying </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">loans may have been extended pursuant to inappropriate underwriting </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">guidelines, to no underwriting guidelines at all, or to fraudulent </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">origination practices. The owner of a mortgage-backed security’s ability </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">to recover against the sponsor, servicer or originator is uncertain and is </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">often limited. The Fund’s investments in other asset-backed instruments </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">are subject to risks similar to those associated with mortgage-related </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">assets, as well as additional risks associated with the nature of the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">assets and the servicing of those assets. Payment of principal and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">interest on asset-backed instruments may be largely dependent upon </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the cash flows generated by the assets backing the instruments, and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">asset-backed instruments may not have the benefit of any security </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">interest in the related assets.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Subordinate mortgage-backed or asset-backed instruments are paid </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">interest only to the extent that there are funds available to make </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">payments. To the extent the collateral pool includes a large percentage </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of delinquent loans, there is a risk that interest payments on </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">subordinate mortgage-backed or asset-backed instruments will not be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">fully paid.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">There are multiple tranches of mortgage-backed and asset-backed </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">instruments, offering investors various maturity and credit risk </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">characteristics. For example, tranches may be categorized as senior, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">mezzanine, and subordinated/equity or “first loss,” according to their </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">degree of risk. The most senior tranche of a mortgage-backed or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">asset-backed instrument generally has the greatest collateralization and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">generally pays the lowest interest rate. If there are defaults or the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">collateral otherwise underperforms, scheduled payments to senior </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">tranches take precedence over those of mezzanine tranches, and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">scheduled payments to mezzanine tranches take precedence over those </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">to subordinated/equity tranches. Lower tranches represent lower </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">degrees of credit quality and pay higher interest rates intended to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">compensate for the attendant risks. The return on the lower tranches is </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">especially sensitive to the rate of defaults in the collateral pool.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The lowest tranche (i.e., the “equity” or “residual” tranche) specifically </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">receives the residual interest payments (i.e., money that is left over after </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the higher tranches have been paid and expenses of the issuing entities </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">have been paid) rather than a fixed interest rate. The Fund may also </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">invest in the residual or equity tranches of mortgage-related and other </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">asset-backed instruments, which may be referred to as subordinate </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">mortgage-backed or asset-backed instruments and interest-only </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">mortgage-backed or asset-backed instruments. The Fund expects that </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investments in subordinate mortgage-backed and other asset-backed </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">instruments will be subject to risks arising from delinquencies and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">foreclosures, thereby exposing its investment portfolio to potential </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">losses. Subordinate securities of mortgage-backed and other </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">asset-backed instruments are also subject to greater credit risk than </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">those mortgage-backed or other asset-backed instruments that are </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">more highly rated.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The mortgage markets in the United States and in various foreign </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">countries have experienced extreme difficulties in the past that </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">adversely affected the performance and market value of certain </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">mortgage-related investments. Delinquencies and losses on residential </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and commercial mortgage loans (especially subprime and second-lien </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">mortgage loans) may increase, and a decline in or flattening of housing </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and other real property values may exacerbate such delinquencies and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">losses. In addition, reduced investor demand for mortgage loans and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">mortgage-related securities and increased investor yield requirements </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">have caused limited liquidity in the secondary market for </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">mortgage-related securities, which can adversely affect the market value </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of mortgage-related securities. It is possible that such limited liquidity in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">such secondary markets could continue or worsen.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The values of, and income generated by, commercial mortgage-backed </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">securities may be adversely affected by changing interest rates and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">other developments impacting the commercial real estate market, such </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">as population shifts and other demographic changes, increasing </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">vacancies (potentially for extended periods) and reduced demand for </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">commercial and office space as well as maintenance or tenant </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">improvement costs and costs to convert properties for other uses. These </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">developments could result from, among other things, changing tastes </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and preferences (such as for remote work arrangements) as well as </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">cultural, technological, global or local economic and market </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">developments. In addition, changing interest rate environments and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">associated changes in lending standards and higher refinancing rates </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">may adversely affect the commercial real estate and CMBS markets. The </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">occurrence of any of the foregoing developments would likely increase </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">default risk for the properties and loans underlying these investments as </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">well as impact the value of, and income generated by, these </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investments. These developments could also result in reduced liquidity </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">for CMBS and other real estate-related investments.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> <div style="line-height:12.0pt;text-align:left;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Risks Related to Investments in Publicly Traded REITs</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund’s investments in the securities of publicly traded REITs will be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">subject to a variety of risks affecting those REITs directly. Share prices of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">publicly traded REITs may decline because of adverse developments </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">affecting the real estate industry and real property values, including </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">supply and demand for properties, the economic health of the country </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">or of different regions, the strength of specific industries that rent </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">properties and interest rates. REITs often invest in highly leveraged </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">properties. Returns from REITs, which typically are small or medium </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">capitalization stocks, may trail returns from the overall stock market. In </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">addition, changes in interest rates may hurt real estate values or make </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">REIT shares less attractive than other income-producing investments. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">REITs are also subject to heavy cash flow dependency and defaults by </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">borrowers and tenants.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> <div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Repurchase Offers Risk</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">As described under “Periodic Repurchase Offers” above, the Fund is an </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">“interval fund” and, in order to provide liquidity to shareholders, the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund, subject to applicable law, intends to conduct quarterly repurchase </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">offers of the Fund’s outstanding Common Shares at NAV, subject to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">approval of the Board. In each quarter, such repurchase offers will be for </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">at least 5% and not more than 25% of its outstanding Common Shares </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">at NAV, pursuant to Rule 23c-3 under the Act.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund currently expects to conduct quarterly repurchase offers for </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">5% of its outstanding Common Shares under ordinary circumstances. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund believes that these repurchase offers are generally beneficial </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">to the Fund’s shareholders, and repurchases generally will be funded </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">from available cash or sales of portfolio securities. However, repurchase </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">offers and the need to fund repurchase obligations may affect the ability </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of the Fund to be fully invested or force the Fund to maintain a higher </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">percentage of its assets in liquid investments, which may harm the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund’s investment performance. Moreover, diminution in the size of the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund through repurchases may result in untimely sales of portfolio </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">securities (with associated imputed transaction costs, which may be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">significant), and may limit the ability of the Fund to participate in new </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investment opportunities or to achieve its investment objectives. The </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund may accumulate cash by holding back (i.e., not reinvesting) </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">payments received in connection with the Fund’s investments. The Fund </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">believes that payments received in connection with the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investments will generate sufficient cash to meet the maximum </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">potential amount of the Fund’s repurchase obligations.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">If at any time cash and other liquid assets held by the Fund are not </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">sufficient to meet the Fund’s repurchase obligations, the Fund intends, if </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">necessary, to sell investments. To the extent the Fund employs </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investment leverage, repurchases of Common Shares would compound </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the adverse effects of leverage in a declining market. In addition, if the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund borrows to finance repurchases, interest on that borrowing will </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">negatively affect Common Shareholders who do not tender their </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Common Shares by increasing the Fund’s expenses and reducing any </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">net investment income. If a repurchase offer is oversubscribed, the Fund </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">may, but is not required to, determine to increase the amount </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">repurchased by up to 2% of the Fund’s outstanding shares as of the </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">date of the Repurchase Request Deadline. In the event that the Fund </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">determines not to repurchase more than the repurchase offer amount, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">or if shareholders tender more than the repurchase offer amount plus </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">2% of the Fund’s outstanding shares as of the date of the Repurchase </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Request Deadline, the Fund will repurchase the Common Shares </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">tendered on a pro rata basis, and shareholders will have to wait until </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the next repurchase offer to make another repurchase request. As a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">result, shareholders may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">not </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">able </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">to liquidate all or a given </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">percentage of their investment in the Fund during a particular </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">repurchase offer. Notwithstanding the foregoing, the Fund may accept </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">all Common Shares tendered for repurchase by shareholders who own </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">less than one hundred Common Shares and who tender all of their </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Common Shares, before prorating Common Shares tendered by other </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">shareholders; provided that, if a shareholder holds shares through a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">financial intermediary, such intermediary may not be willing or able to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">arrange for this treatment on such shareholder's behalf. Some </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">shareholders, in anticipation of proration, may tender more Common </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Shares than they wish to have repurchased in a particular quarter, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">thereby increasing the likelihood that proration will occur. A shareholder </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">may be subject to market and other risks, and the NAV of Common </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Shares tendered in a repurchase offer may decline between the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Repurchase Request Deadline and the date on which the NAV for </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">tendered Common Shares is determined. In addition, the repurchase of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Common Shares by the Fund may be a taxable event to shareholders.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> <div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">High Yield Securities Risk</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Issuers of high yield securities may have the right to “call” or redeem </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the issue prior to maturity, which may result in the Fund having to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">reinvest the proceeds in other high yield securities or similar instruments </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">that may pay lower interest rates. The Fund may also be subject to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">greater levels of liquidity risk than funds that do not invest in high yield </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">securities. Consequently, transactions in high yield securities may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">involve greater costs than transactions in more actively traded </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">securities. A lack of publicly-available information, irregular trading </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">activity and wide bid/ask spreads among other factors, may, in certain </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">circumstances, make high yield debt more difficult to sell at an </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">advantageous time or price than other types of securities or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">instruments. These factors may result in the Fund being unable to realize </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">full value for these securities and/or may result in the Fund not receiving </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the proceeds from a sale of a high yield security for an extended period </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">after such sale, each of which could result in losses to the Fund. To the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">extent that the Fund invests in high yield securities and unrated </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">securities of similar credit quality (commonly known as “high yield </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">securities” or “junk bonds”), the Fund may be subject to greater levels </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">market risk,</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> credit risk, call risk and liquidity risk than funds that do </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">not invest in such securities, which could have a negative effect on the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">NAV of the Fund’s Common Shares or Common Share dividends. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">High </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">yield securities may be issued by companies that are restructuring, are </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">smaller and less credit worthy or are more highly leveraged or indebted </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">than other companies, or are financially distressed, and therefore they </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">typically have more difficulty making scheduled payments of principal </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and interest than issuers of higher rated investments.</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> These securities </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">are considered predominantly speculative by rating agencies with </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">respect to an issuer’s continuing ability to make principal and interest </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">payments, and their value may be more volatile than other types of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">securities. An economic downturn or individual corporate developments </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">could adversely affect the market for these securities and reduce the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund’s ability to sell these securities at an advantageous time or price. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">An economic downturn could also lead to a higher non-payment rate </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and, a high yield security may lose significant market value before a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">default occurs. The Fund may purchase distressed securities that are in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">default or the issuers of which are in bankruptcy, which involve </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">heightened risks.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">High yield securities structured as zero-coupon bonds or pay-in-kind </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">securities tend to be especially volatile as they are particularly sensitive </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">to downward pricing pressures from rising interest rates or widening </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">spreads and may require the Fund to make taxable distributions of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">imputed income without receiving the actual cash currency. Issuers of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">high yield securities may have the right to “call” or redeem the issue </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">prior to maturity, which may result in the Fund having to reinvest the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">proceeds in other high yield securities or similar instruments that may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">pay lower interest rates. The Fund may also be subject to greater levels </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of liquidity risk than funds that do not invest in high yield securities. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Consequently, transactions in high yield securities may involve greater </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">costs than transactions in more actively traded securities. A lack of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">publicly-available information, irregular trading activity and wide </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">bid/ask spreads among other factors, may, in certain circumstances, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">make high yield debt more difficult to sell at an advantageous time or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">price than other types of securities or instruments. These factors may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">result in the Fund being unable to realize full value for these securities </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and/or may result in the Fund not receiving the proceeds from a sale of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">a high yield security for an extended period after such sale, each of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">which could result in losses to the Fund. Because of the risks involved in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investing in high yield securities, an investment in the Fund should be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">considered speculative.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">In general, lower rated debt securities carry a greater degree of risk that </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the issuer will lose its ability to make interest and principal payments, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">which could have a negative effect on the Fund. Securities of below </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investment grade quality are regarded as having predominantly </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">speculative characteristics with respect to capacity to pay interest and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">repay principal and are commonly referred to as “high yield” securities </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">or “junk bonds.” High yield securities involve a greater risk of default </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and their prices are generally more volatile and sensitive to actual or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">perceived negative developments. Debt securities in the lowest </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investment grade category also may be considered to possess some </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">speculative characteristics by certain rating agencies. The Fund may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">purchase stressed or distressed securities that are in default or the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">issuers of which are in bankruptcy, which involve heightened risks. An </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">economic downturn could severely affect the ability of issuers </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">(particularly those that are highly leveraged) to service or repay their </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">debt obligations. Lower-rated securities are generally less liquid than </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">higher-rated securities, which may have an adverse effect on the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">ability to dispose of them. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">High yield securities are particularly sensitive </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">to adverse economic</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">market,</span><span style="color:#333333;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">industry or issuer-specific developments, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">which may result in an increased incidence of default. During </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">periods of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">deteriorating economic conditions, such as recessions or periods of </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">rising unemployment, or changing interest rates (notably increases), </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">high yield securities are particularly susceptible to credit and default risk </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">as delinquencies and losses could increase, and such increases could be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">sudden and significant. An economic downturn or individual issuer </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">developments could adversely affect the market for these investments </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and reduce a Fund’s ability to sell these investments at an </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">advantageous time or price. These types of developments could cause </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">high yield securities to lose significant market value, including before a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">default occurs.</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> In the event of a default, the Fund may incur additional </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">expenses to seek recovery or to negotiate new terms with a defaulting </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">issuer.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">To the extent the Fund focuses on below investment grade debt </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">obligations, PIMCO’s capabilities in analyzing credit quality and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">associated risks will be particularly important, and there can be no </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">assurance that PIMCO will be successful in this regard. Due to the risks </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">involved in investing in high yield securities, an investment in the Fund </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">should be considered speculative. The Fund’s credit quality policies apply </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">only at the time a security is purchased, and the Fund is not required to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">dispose of a security in the event that a rating agency or PIMCO </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">downgrades its assessment of the credit characteristics of a particular </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">issue. In determining whether to retain or sell such a security, PIMCO </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">may consider factors including, but not limited to, PIMCO's assessment </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of the credit quality of the issuer of such security, the price at which </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">such security could be sold and the rating, if any, assigned to such </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">security by other rating agencies. Analysis of creditworthiness may be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">more complex for issuers of high yield securities than for issuers of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">higher quality debt securities.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> <div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Capital Markets Risk</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund expects to fund a portion of its commercial real estate </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investments with property-level financing. The Fund’s business may be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">adversely affected by disruptions in the debt and equity capital markets </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and institutional lending market, including the lack of access to capital </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">or prohibitively high costs of obtaining or replacing capital. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Economies </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and financial markets throughout the world are becoming increasingly </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">interconnected, which increases the likelihood that events or conditions </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">in one country or region will adversely impact markets or issuers in other </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">countries or regions. Extraordinary governmental and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">quasi-governmental responses to economic, market, labor and public </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">health conditions and U.S.</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> and other government policies designed to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">support the markets may, at times, significantly increase government </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and other public debt, which heighten these risks and the long-term </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">consequences of these actions are not known.</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> There can be no </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">assurance that any financing will be available to the Fund in the future </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">on acceptable terms, if at all, or that it will be able to satisfy the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">conditions precedent required to use its credit facilities, if entered into, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">which could reduce the number, or alter the type, of investments that </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund would make otherwise. This may reduce the Fund’s income. To </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the extent that financing proves to be unavailable when needed, the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund may be compelled to modify its investment strategies to optimize </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the performance of the portfolio. Any failure to obtain financing could </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">have a material adverse effect on the continued development or growth </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of the Fund’s business and harm the Fund’s ability to operate and make </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">distributions.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> <div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Interest Rate Risk</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Interest rate risk is the risk that fixed income securities and other </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">instruments in the Fund’s portfolio will fluctuate in value because of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">changes,</span><span style="color:#333333;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">or the anticipation of changes,</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> in interest rates. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Factors </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">including central bank monetary policy, rising inflation rates, and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">changes in general economic conditions may cause interest rates to rise, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">which could cause the value of the Fund’s investments to decline.</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> For </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">example, as nominal interest rates rise, the value of certain securities </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">held by the Fund is likely to decrease. Interest rate changes can be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">sudden and unpredictable, and the Fund may be adversely affected as a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">result of movements in interest rates. The Fund may not be able to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">hedge against changes in interest rates or may choose not to do so for </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">cost or other reasons. In addition, any hedges may not work as </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">intended.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fixed income securities with longer durations tend to be more sensitive </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">to changes in interest rates, usually making them more volatile than </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">securities with shorter durations. The values of equity and other </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">non-fixed income securities may also decline due to fluctuations in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">interest rates. Inflation-indexed bonds, including Treasury </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Inflation-Protected Securities (“TIPS”), decline in value when real </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">interest rates rise. In certain interest rate environments, such as when </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">real interest rates are rising faster than nominal interest rates, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">inflation-indexed bonds may experience greater losses than other fixed </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">income securities with similar durations.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Dividend-paying equity securities, particularly those whose market price </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">is closely related to their yield, may be more sensitive to changes in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">interest rates. During periods of rising interest rates, the values of such </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">securities may decline and may result in losses to the Fund.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Variable and floating rate securities generally are less sensitive to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">interest rate changes but may decline in value if their interest rates do </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">not rise as much, or as quickly, as interest rates in general. Conversely, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">floating rate securities will not generally increase in value if interest </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">rates decline. Inverse floating rate securities may decrease in value if </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">interest rates increase. Inverse floating rate securities may also exhibit </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">greater price volatility than a fixed rate obligation with similar credit </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">quality. When a Fund holds variable or floating rate securities, a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">decrease (or, in the case of inverse floating rate securities, an increase) </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">in market interest rates will adversely affect the income received from </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">such securities and the NAV of the Fund’s shares.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">A wide variety of factors can cause interest rates or yields of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">U.S. Treasury securities (or yields of other types of bonds) to rise, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">including but not limited to central bank monetary policies, changing </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">inflation or real growth rates, general economic conditions, increasing </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">bond issuances or reduced market demand for low yielding investments. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Risks associated with changes in interest rates may be heightened </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">under certain market conditions, such as during times when the Federal </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Reserve raises interest rates or when such rates remain elevated </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">following a period of historically low levels. Additionally, the U.S. and </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">other governments have increased, and are likely to continue increasing, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">their debt issuances, which may also heighten these risks. There is the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">risk that the income generated by investments may not keep pace with </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">inflation. Actions by governments and central banking authorities can </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">result in increases or decreases in interest rates. Periods of higher </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">inflation could cause such authorities to raise interest rates, which may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">adversely affect a Fund and its investments. In addition, changes in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">monetary policy may exacerbate the risks associated with changing </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">interest rates. Further, in market environments where interest rates are </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">rising, issuers may be less willing or able to make principal and interest </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">payments on fixed-income investments when due.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">During periods of very low or negative interest rates, the Fund may be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">unable to maintain positive returns. Very low or negative interest rates </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">may magnify interest rate risk. Changing interest rates, including rates </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">that fall below zero, may have unpredictable effects on markets, may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">result in heightened market volatility and may detract from Fund </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">performance to the extent the Fund is exposed to such interest rates.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Measures such as average duration may not accurately reflect the true </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">interest rate sensitivity of the Fund. This is especially the case if the Fund </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">consists of securities with widely varying durations. Therefore, if the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund has an average duration that suggests a certain level of interest </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">rate risk, the Fund may in fact be subject to greater interest rate risk </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">than the average would suggest. This risk is greater to the extent the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund uses leverage or derivatives in connection with the management </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of the Fund.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Convexity is an additional measure used to understand a security’s or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund’s interest rate sensitivity. Convexity measures the rate of change of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">duration in response to changes in interest rates. With respect to a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">security’s price, a larger convexity (positive or negative) may imply more </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">dramatic price changes in response to changing interest rates. Convexity </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">may be positive or negative. Negative convexity implies that interest </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">rate increases result in increased duration, and vice versa, meaning </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">increased sensitivity in prices in response to changes in interest rates. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Thus, securities with negative convexity, which may include bonds with </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">traditional call features and certain mortgage-backed securities, may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">experience greater losses in periods of rising interest rates. Accordingly, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">if the Fund holds such securities, the Fund may be subject to a greater </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">risk of losses in periods of rising interest rates.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> <div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Derivatives Risk</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund may, but is not required to, utilize a variety of derivative </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">instruments (both long and short positions) for investment or risk </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">management purposes.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Derivatives or other similar instruments (referred to collectively as </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">“derivatives”) are financial contracts whose value depends on, or is </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">derived from, the value of an underlying asset, reference rate or index. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">For example, the Fund may use derivative instruments for purposes of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">increasing liquidity, providing efficient portfolio management, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">broadening investment opportunities (including taking short or negative </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">positions), implementing a tax or cash management strategy, gaining </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">exposure to a particular security or segment of the market, modifying </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the effective duration of the Fund’s portfolio investments and/or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">enhancing total return.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Investments in derivatives may take the form of buying and/or writing </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">(selling) derivatives, and/or the Fund may otherwise become an obligor </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">under a derivatives transaction. These transactions may produce </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">short-term capital gains in the form of premiums or other returns for the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund (which may support, constitute and/or increase the distributions </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">paid by, or the yield of, the Fund) but create the risk of losses that can </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">significantly exceed such current income or other returns. For example, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the premium received for writing a call option may be dwarfed by the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">losses the Fund may incur if the call option is exercised, and derivative </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">transactions where the Fund is an obligor can produce an up-front </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">benefit, but the potential for leveraged losses. The distributions, or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">distribution rates, paid by the Fund should not be viewed as the total </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">returns or overall performance of the Fund. These strategies may also </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">produce adverse tax consequences (for example, the Fund’s income and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">gain-generating strategies may generate current income and gains</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">,</span><span style="color:#333333;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">including short-term capital gains,</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> taxable as ordinary income) and limit </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund’s opportunity to profit or otherwise benefit from certain gains. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund may enter into opposing derivative transactions, or otherwise </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">take opposing positions. Such transactions can generate distributable </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">gains (which, as noted elsewhere, may be taxed as ordinary income) and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">create the risk of losses and NAV declines.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund may engage in investment strategies, including the use of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">derivatives, to, among other things, generate current, distributable </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">income, even if such strategies could potentially result in declines in the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund’s net asset value. The Fund’s income and gain-generating </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">strategies, including certain derivatives strategies, may generate current </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">income and gains taxable as ordinary income sufficient to support </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">distributions, even in situations when the Fund has experienced a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">decline in net assets due to, for example, adverse changes in the broad </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">U.S. or non-U.S. securities markets or the Fund’s portfolio of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investments, or arising from its use of derivatives. Consequently, Fund </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">shareholders may receive distributions subject to tax at ordinary income </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">rates at a time when their investment in the Fund has declined in value, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">which may be economically similar to a taxable return of capital.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The use of derivative and other similar instruments (referred to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">collectively as “derivatives”) involves risks different from, and possibly </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">greater than, the risks associated with investing directly in securities and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">other traditional investments. Derivatives are subject to a number of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">risks, such as liquidity risk (which may be heightened for </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">highly-customized derivatives), interest rate risk, market risk, credit risk, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">leveraging risk, (including credit), operational risk, legal risk and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">management risk arising from changes in applicable regulatory </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">requirements, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">governmental risk, sanctions risk,</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> risks arising from </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">margin requirements and risks arising from mispricing or valuation </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">complexity (including the risk of improper valuation), </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">as well as the risks </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">associated with the underlying asset, reference rate or index</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">. They also </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">involve the risk of unfavorable or ambiguous documentation and the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">risk that changes in the value of the derivative may not correlate </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">perfectly with the underlying asset, rate or index. If the Fund invests in a </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">derivative instrument, it could lose more than the principal amount </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">invested and derivatives may increase the volatility of the Fund, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">especially in unusual or extreme market conditions. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">In addition, the use </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of derivatives may cause the Fund’s investment returns to be impacted </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">by the performance of assets the Fund does not own, potentially </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">resulting in the Fund’s total investment exposure exceeding the value of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">its portfolio.</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> The Fund may be required to hold additional cash or sell </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">other investments in order to obtain cash to close out a position and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">changes in the value of a derivative may also create margin delivery or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">settlement payment obligations for the Fund. Also, suitable derivative </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">transactions may not be available in all circumstances and there can be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">no assurance that the Fund will engage in these transactions to reduce </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">exposure to other risks when that would be beneficial. The Fund’s use of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">derivatives may increase or accelerate the amount of taxes payable by </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Common Shareholders.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Non-centrally-cleared over-the-counter (“OTC”) derivatives are also </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">subject to the risk that a counterparty to the transaction will not fulfill </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">its contractual obligations to the other party, as many of the protections </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">afforded to centrally-cleared derivatives might not be available for </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">non-centrally-cleared OTC derivatives transactions. For derivatives </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">traded on an exchange or through a central counterparty, credit risk </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">resides with the Fund’s clearing broker, or the clearinghouse</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Derivatives that are cleared by a central clearing organization can still </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">be subject to different risks, including the creditworthiness of the central </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">clearing organization and its members.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">In addition, derivatives that are traded on an exchange are subject to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the risk that an exchange may limit the maximum daily price fluctuation </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of a derivative contract and restrict or suspend trading of a contract that </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">has reached a limit. Such limit governs only price movements of a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">contract during a particular trading day and therefore does not limit </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">potential losses because the limit may work to prevent the liquidation of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">unfavorable positions. A daily limit may be reached for several </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">consecutive days with little or no trading.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Participation in the markets for derivative instruments involves </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investment risks and transaction costs to which the Fund may not be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">subject absent the use of these strategies. The skills needed to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">successfully execute derivative strategies may be different from those </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">needed for other types of transactions. If the Fund incorrectly forecasts </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the value and/or creditworthiness of securities, currencies, interest rates, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">counterparties or other economic factors involved in a derivative </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">transaction, the Fund might have been in a better position if the Fund </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">had not entered into such derivative transaction. In evaluating the risks </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and contractual obligations associated with particular derivative </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">instruments</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> or other similar investments</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">, it is important to consider that </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">certain derivative transactions</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">,</span><span style="color:#333333;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">absent a default or termination event,</span><span style="color:#333333;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">only </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">be modified or terminated only by mutual consent of the Fund </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and its counterparty.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">It may not be possible for the Fund to modify, terminate, or offset the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund’s obligations or the Fund’s exposure to the risks associated with a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">derivative transaction prior to its scheduled termination or maturity </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">date, which may create a possibility of increased volatility and/or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">decreased liquidity to the Fund.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Because the markets for certain derivative instruments (including </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">markets located in foreign countries) are relatively new and still </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">developing, appropriate derivative transactions may not be available in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">all circumstances for risk management or other purposes. Upon the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">expiration of a particular contract, a Fund may wish to retain its position </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">in the derivative instrument by entering into a similar contract, but may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">be unable to do so if the counterparty to the original contract is </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">unwilling to enter into the new contract and no other appropriate </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">counterparty can be found. When such markets are unavailable, a Fund </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">will be subject to increased liquidity and investment risk.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund may enter into opposite sides of interest rate swap and other </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">derivatives for the principal purpose of generating distributable gains on </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the one side (characterized as ordinary income for tax purposes) that </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">are not part of the Fund’s duration or yield curve management </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">strategies (“paired swap transactions”), and with a substantial </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">possibility that the Fund will experience a corresponding capital loss </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and decline in NAV with respect to the opposite side transaction (to the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">extent it does not have corresponding offsetting capital gains). </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Consequently, Common Shareholders may receive distributions and owe </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">tax on amounts that are effectively a taxable return of the shareholder’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investment in the Fund, at a time when their investment in the Fund has </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">declined in value, which tax may be at ordinary income rates. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">In </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">addition, the Fund's use of derivatives may cause the Fund to realize </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">higher amounts of short-term capital gains (generally taxed at ordinary </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">income tax rates), potentially subjecting shareholders of the Fund to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">adverse tax consequences.</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> The tax treatment of certain derivatives in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">which the Fund invests may be unclear and thus subject to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">recharacterization. Any recharacterization of payments made or received </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">by the Fund pursuant to derivatives potentially could affect the amount, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">timing or character of Fund distributions. In addition, the tax treatment </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of such investment strategies may be changed by regulation or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">otherwise.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">When a derivative is used as a hedge against a position that the Fund </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">holds, any loss generated by the derivative generally should be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">substantially offset by gains on the hedged investment, and vice versa.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Although hedging can reduce or eliminate losses, it can also reduce or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">eliminate gains. Hedges are sometimes subject to imperfect matching </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">between the derivative and the underlying instrument, and there can be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">no assurance that the Fund’s hedging transactions will be effective. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Derivatives used for hedging or risk management may not operate as </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">intended or may expose the Fund to additional risks. In addition, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">derivatives used for hedging may partially protect the Fund from the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">risks they were intended to hedge yet not fully mitigate the impact of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">such risks. The regulation of the derivatives markets has increased over </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">time, and additional future regulation of the derivatives markets may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">make derivatives more costly, may limit the availability or reduce the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">liquidity of derivatives, or may otherwise adversely affect the value or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">performance of derivatives. Any such adverse future developments could </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">impair the effectiveness or raise the costs of a Fund’s derivative </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">transactions, impede the employment of the Fund’s derivatives </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">strategies, or adversely affect the Fund’s performance and cause the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund to lose value.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> <div style="line-height:12.0pt;text-align:left;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Leverage Risk</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund’s use of leverage, if any, creates the opportunity for increased </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Common Share net income, but also creates special risks for Common </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Shareholders (including an increased risk of loss). To the extent used, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">there is no assurance that the Fund’s leveraging strategies will be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">successful. Leverage is a speculative technique that may expose the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund to greater risk and increased costs. The Fund’s assets attributable </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">to leverage will be invested in accordance with the Fund’s investment </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">objectives and policies. Interest expense payable by the Fund with </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">respect to derivatives and other forms of leverage, and dividends </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">payable with respect to any Preferred Shares outstanding will generally </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">be based on shorter-term interest rates would be periodically reset. So </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">long as the Fund's portfolio investments provide a higher rate of return </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">(net of applicable Fund expenses) than the dividend rate on any </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Preferred Shares outstanding, including the Preferred Shareholder </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Gross-Up, and the interest expenses and other costs to the Fund of such </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">other leverage, the investment of the proceeds thereof will generate </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">more income than will be needed to pay the costs of the leverage. If so, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and all other things being equal, the excess may be used to pay higher </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">dividends to Common Shareholders than if the Fund were not so </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">leveraged. If, however, shorter-term interest rates rise relative to the rate </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of return on the Fund’s portfolio, the interest and other costs to the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund of leverage could exceed the rate of return on the debt obligations </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and other investments held by the Fund, thereby reducing return to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Common Shareholders. When the Fund reduces or discontinues its use </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of leverage (“deleveraging”), which it may be required to do at </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">inopportune times, it may be required to sell portfolio securities at </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">inopportune times to repay leverage obligations, which could result in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">realized losses and a decrease in the Fund's net asset value. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Deleveraging involves complex operational processes, including the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">coordination of asset sales, repayment of debt, and potential </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">restructuring of the Fund's capital and may involve significant costs, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">including transaction costs associated with the sale of portfolio </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">securities, prepayment penalties on borrowed funds, and, if applicable, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">fees related to the redemption of preferred shares. Leveraging </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">transactions pursued by the Fund may increase its duration and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">sensitivity to interest rate </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">changes and other market risks</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">. The Fund may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">continue to use leverage even if available financing rates are higher </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">than anticipated returns, including, for example, in cases where </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">deleveraging, including any expenses related thereto, might be viewed </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">as detrimental to the Fund’s portfolio. In addition, fees and expenses of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">any form of leverage used by the Fund will be borne entirely by the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Common Shareholders (and not by preferred shareholders) and will </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">reduce the investment return of the Common Shares. Therefore, there </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">can be no assurance that the Fund’s use of leverage will result in a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">higher yield on the Common Shares, and it may result in losses. In </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">addition, any Preferred Shares issued by the Fund are expected to pay </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">cumulative dividends, which may tend to increase leverage risk.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Leverage creates several major types of risks for Common Shareholders, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">including:</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">the likelihood of greater volatility of NAV of Common Shares, and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of the investment return to Common Shareholders, than a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">comparable portfolio without leverage;</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">the possibility either that Common Share dividends will fall if the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">interest and other costs of leverage rise, or that dividends paid on </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Common Shares will fluctuate because such costs vary over time; </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">the effects of leverage in a declining market or a rising interest </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">rate environment, as leverage is likely to cause a greater decline in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the NAV of the Common Shares than if the Fund were not </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">leveraged and may result in a greater decline in the market value </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of the Common Shares.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">In addition, the counterparties to the Fund’s leveraging transactions and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">any preferred shareholders of the Fund will have priority of payment </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">over the Fund’s Common Shareholders.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Reverse repurchase agreements involve the risks that the interest </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">income earned on the investment of the proceeds will be less than the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">interest expense and Fund expenses associated with the repurchase </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">agreement, that the market value of the securities sold by the Fund may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">decline below the price at which the Fund is obligated to repurchase </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">such securities and that the securities may not be returned to the Fund. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">There is no assurance that reverse repurchase agreements can be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">successfully employed. Dollar roll transactions involve the risk that the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">market value of the securities the Fund is required to purchase may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">decline below the agreed upon repurchase price of those securities. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Successful use of dollar rolls/buybacks may depend upon the Investment </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Manager’s ability to correctly predict interest rates and prepayments. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">There is no assurance that dollar rolls/buybacks can be successfully </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">employed. In connection with reverse repurchase agreements and dollar </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">rolls/buybacks, the Fund will also be subject to counterparty risk with </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">respect to the purchaser of the securities. If the broker/dealer to whom </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund sells securities becomes insolvent, the Fund’s right to purchase </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">or repurchase securities may be restricted.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund may engage in total return swaps, reverse repurchases, loans </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of portfolio securities, short sales and when-issued, delayed delivery and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">forward commitment transactions, credit default swaps, basis swaps </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and other swap agreements, purchases or sales of futures and forward </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">contracts (including foreign currency exchange contracts), call and put </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">options and/or other derivatives. The Fund’s use of such transactions </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">gives rise to associated leverage risks described above, and may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">adversely affect the Fund’s income, distributions and total returns to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Common Shareholders. To the extent that any offsetting positions do </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">not behave in relation to one another as expected, the Fund may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">perform as if it is leveraged through use of these derivative strategies.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Any total return swaps, reverse repurchases, loans of portfolio securities, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">short sales and when-issued, delayed delivery and forward commitment </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">transactions, credit default swaps, basis swaps and other swap </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">agreements, purchases or sales of futures and forward contracts </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">(including foreign currency exchange contracts), call and put options or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">other derivatives by the Fund or counterparties to the Fund’s other </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">leveraging transactions, if any, would have seniority over the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Common Shares.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> <div style="line-height:12.0pt;text-align:left;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Additional Risks Relating to the Fund’s Preferred Shares</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Because the Fund has issued Preferred Shares, it is required to satisfy </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">certain asset coverage requirements, including those imposed by </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">regulatory and rating agency requirements. Accordingly, any decline in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the net asset value of the Fund’s investments could result in the risk that </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund will fail to meet its asset coverage requirements for such </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Preferred Shares or the risk of the Preferred Shares being downgraded </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">by a rating agency. In an extreme case, the Fund’s current investment </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">income might not be sufficient to meet the dividend requirements on </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">any Preferred Shares outstanding. In order to address these types of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">events, the Fund might need to dispose of investments in order to fund </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">a redemption of some or all of its Preferred Shares. Dispositions at times </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of adverse economic conditions may result in a loss to the Fund. At </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">other times, these dispositions may result in gain at the Fund level and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">thus in additional taxable distributions to Common Shareholders. See </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">“Certain U.S. Federal Income Tax Considerations” for more information. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Preferred Shares have seniority over the Fund’s Common Shares.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund pays (and the Common Shareholders bear) all costs and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">expenses relating to the issuance and ongoing maintenance of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Preferred Shares. In addition, holders of Preferred Shares issued by the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund have complete priority over Common Shareholders in the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">distribution of the Fund’s assets. Furthermore, Preferred Shareholders, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">voting separately as a single class, have the right to elect two members </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of the Board at all times and to elect a majority of the trustees in the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">event two full years’ dividends on the Preferred Shares are unpaid, and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">also have separate class voting rights on certain matters. Accordingly, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Preferred Shareholders may have interests that differ from those of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Common Shareholders, and may at times have disproportionate </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">influence over the Fund’s affairs.</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> The use of leverage through Preferred </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Shares may also increase the Fund's sensitivity to interest rate risks. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">When the Fund is deleveraging, it may be required to sell portfolio </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">securities at inopportune times to repay leverage obligations or meet </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">asset coverage requirements, which could adverse affect the Fund's </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">performance.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> <div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Potential Conflicts of Interest Risk – Allocation of Investment </span><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Opportunities</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Investment Manager and its affiliates are involved worldwide with a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">broad spectrum of financial services and asset management activities </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and may engage in the ordinary course of business in activities in which </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">their interests or the interests of their clients may conflict with those of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund. The Investment Manager may provide investment </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">management services to other funds and discretionary managed </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">accounts that follow an investment program similar to that of the Fund. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Subject to the requirements of the 1940 Act, the Investment Manager </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">intends to engage in such activities and may receive compensation from </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">third parties for its services. The results of the Fund’s investment </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">activities may differ from those of the Fund’s affiliates, or another </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">account managed by the Fund’s affiliates, and it is possible that the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund could sustain losses during periods in which one or more of the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund’s affiliates and/or other accounts managed by the Investment </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Manager or its affiliates, including proprietary accounts, achieve profits </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">on their trading.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> <div style="line-height:12.0pt;text-align:left;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Geopolitical Conflicts Risk</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The occurrence of geopolitical conflicts, war or terrorist activities could </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">have adverse impacts on markets in various and unpredictable ways. For </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">example, following Russia’s large-scale invasion of Ukraine in February </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">2022, Russia, and other countries, persons and entities that were </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">viewed as having provided material aid to Russia’s aggression against </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Ukraine, became the subject of economic sanctions and import and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">export controls imposed by countries throughout the world, including </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the United States. Such measures have had and may continue to have </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">an adverse effect on the Russian, Belarusian and other securities and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">economies. Additional examples include, but are not limited to, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">heightened concerns of trade disputes, which could result in increased </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">tariffs, trade restrictions or other retaliatory countermeasures. The </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">extent, duration and impact of geopolitical conflicts and related market </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">impacts are difficult to ascertain, but could be significant and could </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">have significant adverse effects on regional and global economies and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the markets for certain securities and commodities, such as oil and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">natural gas, as well as other sectors, and on the Fund's investments.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> <div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Cyber Security Risk</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">As the use of technology, including cloud-based technology, has </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">become more prevalent </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and interconnected </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">in the course of business, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund is potentially more susceptible to operational and information </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">security risks resulting from breaches in cyber security</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">, including: </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">processing and human errors, inadequate or failed internal or external </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">processes, failures in system and technology, errors in algorithms used </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">with respect to Fund operations and changes in personnel</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">. A breach in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">cyber security refers to both intentional and unintentional cyber events </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">from outside threat actors or internal resources that may, among other </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">things, cause the Fund to lose proprietary information, suffer data </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">corruption and/or destruction, lose operational capacity, result in the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">unauthorized release or other misuse of confidential information, or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">otherwise disrupt normal business operations. Geopolitical tensions can </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">increase the scale and sophistication of deliberate cybersecurity attacks, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">particularly those from nation-states or from entities with nation-state </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">backing, who may desire to use cybersecurity attacks to cause damage </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">or create leverage against geopolitical rivals. Cyber security breaches </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">may involve unauthorized access to the Fund’s digital information </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">systems (e.g., through “hacking” or malicious software coding), and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">may come from multiple sources, including outside attacks such as </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">denial-of-service attacks (i.e., efforts to make network services </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">unavailable to intended users) or cyber extortion, including exfiltration </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of data held for ransom and/or “ransomware” attacks that renders </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">systems inoperable until </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">ransom is paid, or insider actions (e.g., </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">intentionally or unintentionally harmful acts of PIMCO personnel). In </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">addition, cyber security breaches involving the Fund’s third party service </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">providers (including but not limited to advisers, sub-advisers, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">administrators, transfer agents, custodians, vendors, suppliers, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">distributors and other third parties), trading counterparties or issuers in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">which the Fund invests can also subject the Fund to many of the same </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">risks associated with direct cyber security breaches or extortion of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">company data. PIMCO's use of cloud-based service providers could </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">heighten or change these risks. In addition, work-from-home </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">arrangements by the Fund, the Investment Manager or their service </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">providers could increase all of the above risks, create additional data </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and information accessibility concerns, and make the Fund, the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Investment Manager or their service providers susceptible to operational </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">disruptions, any of which could adversely impact their operations.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Cyber security failures or breaches may result in financial losses to the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund and its shareholders. For example, cyber security failures or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">breaches involving trading counterparties or issuers in which the Fund </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">invests could adversely impact such counterparties or issuers and cause </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund’s investment to lose value. These failures or breaches may also </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">result in disruptions to business operations, potentially resulting in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">financial losses; interference with the Fund’s ability to calculate its NAV, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">process shareholder transactions or otherwise transact business with </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">shareholders; impediments to trading; violations of applicable privacy </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and other laws; regulatory fines; penalties; third-party claims in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">litigation; reputational damage; reimbursement or other compensation </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">costs; additional compliance and cyber security risk management costs </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and other adverse consequences. In addition, substantial costs may be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">incurred in order to prevent any cyber incidents in the future.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Like with operational risk in general, the Fund has established business </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">continuity plans and risk management systems designed to reduce the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">risks associated with cyber security. However, there are inherent </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">limitations in these plans and systems, including that certain risks may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">not have been identified, in large part because different or unknown </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">threats may emerge in the future. As such, there is no guarantee that </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">such efforts will succeed, especially because the Fund does not directly </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">control the cyber security systems of issuers in which the Fund may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">invest, trading counterparties or third-party service providers to the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund. Such entities have experienced cyber attacks and other attempts </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">to gain unauthorized access to systems from time to time, and there is </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">no guarantee that efforts to prevent or mitigate the effects of such </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">attacks or other attempts to gain unauthorized access will be successful. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">There is also a risk that cyber security breaches may not be detected. The </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund and its shareholders may suffer losses as a result of a cyber </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">security breach related to the Fund, its service providers, trading </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">counterparties or the issuers in which the Fund invests.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> <div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Non-U.S. Investment Risk</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">PIMCO may invest in real estate located outside of the United States </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and real estate debt issued in, and/or backed by real estate in, countries </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">outside the United States. Non-U.S. real estate and real estate-related </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investments involve certain factors not typically associated with </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investing in real estate and real estate-related investments in the U.S., </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">including risks relating to (i) currency exchange matters, including </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">fluctuations in the rate of exchange between the U.S. dollar and the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">various non-U.S. currencies in which such investments are denominated, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and costs associated with conversion of investment principal and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">income from one currency into another; (ii) differences in conventions </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">relating to documentation, settlement, corporate actions, stakeholder </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">rights and other matters; (iii) differences between U.S. and non-U.S. real </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">estate markets, including potential price volatility in and relative </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">illiquidity of some non-U.S. markets; (iv) the absence of uniform </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">accounting, auditing and financial reporting standards, practices and </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">disclosure requirements and differences in government supervision and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">regulation; (v) certain economic, social and political risks, including </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">potential exchange-control regulations </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">(including repatriation </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">restrictions)</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">, potential restrictions on non-U.S. investment and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">repatriation of capital, the risks associated with political, economic or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">social instability, including the risk of sovereign defaults, regulatory </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">change, and the possibility of expropriation or confiscatory taxation or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the imposition of withholding or other taxes on dividends, interest, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">capital gains, other income or gross sale or disposition proceeds, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">trade </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">restrictions (including tariffs), sanctions,</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> and adverse economic and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">political developments; (vi) the possible imposition of non-U.S. taxes on </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">income and gains and gross sales or other proceeds recognized with </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">respect to such investments; (vii) differing and potentially less </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">well-developed or well-tested corporate laws regarding stakeholder </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">rights, creditors’ rights (including the rights of secured parties), fiduciary </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">duties and the protection of investors; (viii) different laws and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">regulations including differences in the legal and regulatory </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">environment or enhanced legal and regulatory compliance; (ix) political </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">hostility to investments by foreign investors; (x) less publicly available </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">information; (xi) obtaining or enforcing a court judgement abroad; (xii) </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">restrictions on foreign investment in other jurisdictions; and (xiii) </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">difficulties in effecting repatriation of capital. Furthermore, while PIMCO </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">may have the capacity, but not the obligation, to mitigate such </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">additional risks, including through the utilization of certain foreign </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">exchange hedging instruments, there is no guarantee that PIMCO will </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">be successful in mitigating such risks and in turn may introduce </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">additional risks and expenses linked to such efforts.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> <div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Property Manager Risk</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Investment Manager hires property managers to manage the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">properties and leasing agents to lease vacancies in the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">properties. These property managers may be the Fund’s affiliates or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">partners in joint ventures that the Fund enters into. The property </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">managers have significant decision-making authority with respect to the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">management of the Fund’s properties. The Fund’s ability to direct and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">control how the Fund’s properties are managed on a day-to-day basis </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">may be limited because PIMCO engages other parties to perform this </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">function. Thus, the success of the Fund’s business may depend in large </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">part on the ability of the Fund’s property managers to manage the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">day-to-day operations and the ability of the Fund’s leasing agents to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">lease vacancies in the Fund’s properties. Any adversity experienced by, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">or problems in the Fund’s relationship with, the Fund’s property </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">managers or leasing agents could adversely impact the operation and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">profitability of the Fund’s properties.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> <div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Privacy and Data Security Risk</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The GLBA and other laws limit the disclosure of certain non-public </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">personal information about a consumer to non- affiliated third parties </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and require financial institutions to disclose certain privacy policies and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">practices with respect to information sharing with both affiliates and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">non- affiliated third parties. Many states and a number of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">non-U.S. jurisdictions have enacted privacy and data security laws </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">requiring safeguards on the privacy and security of consumers’ </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">personally identifiable information. Other laws deal with obligations to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">safeguard and dispose of private information in a manner designed to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">avoid its dissemination. Privacy rules adopted by the U.S. Federal Trade </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Commission and SEC implement the GLBA and other requirements and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">govern the disclosure of consumer financial information by certain </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">financial institutions, ranging from banks to private investment funds. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">U.S. platforms following certain models generally are required to have </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">privacy policies that conform to these GLBA and other requirements. In </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">addition, such platforms typically have policies and procedures intended </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">to maintain platform participants’ personal information securely and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">dispose of it properly. The Fund generally does not intend to obtain or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">hold borrowers’ non-public personal information, and the Fund has </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">implemented procedures reasonably designed to prevent the disclosure </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of borrowers’ non-public personal information to the Fund. However, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">service providers to the Fund or its direct or indirect fully-owned </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">subsidiaries, including their custodians and the platforms acting as loan </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">servicers for the Fund or its direct or indirect fully-owned subsidiaries, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">may obtain, hold or process such information. The Fund </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and entities that </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">interact with the Fund, including service providers, custodians, and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">platforms, are susceptible to operational, information security, and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">related cybersecurity risks. The Fund </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">cannot guarantee the security of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">non-public personal information in the possession of such a service </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">provider and cannot guarantee that service providers have been and will </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">continue to comply with the GLBA, other data security and privacy laws </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and any other related regulatory requirements. Violations of the GLBA </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and other laws could subject the Fund to litigation and/or fines, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">penalties or other regulatory action, which, individually or in the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">aggregate, could have an adverse effect on the Fund. The Fund may also </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">face regulations related to privacy and data security in the other </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">jurisdictions in which the Fund invests.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> <div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Regulatory Changes Risk</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Financial entities, such as investment companies and investment </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">advisers, are generally subject to extensive government regulation and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">intervention. Government regulation and/or intervention may change </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the way the Fund is regulated, affect the expenses incurred directly by </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund and the value of its investments, and limit and/or preclude the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund’s ability to achieve its investment objectives. Government </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">regulation may change frequently and may have significant adverse </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">consequences. The Fund and the Investment Manager have historically </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">been eligible for exemptions from certain regulations. However, there is </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">no assurance that the Fund and the Investment Manager will continue </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">to be eligible for such exemptions. Actions by government entities may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">also impact certain instruments in which the Fund invests and reduce </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">market liquidity and resiliency.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Recent policy initiatives undertaken by the U.S. government have the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">potential to impact international relations, trade agreements, and the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">overall regulatory environment in ways that could create uncertainty </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and instability in domestic and global markets, and could adversely </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">affect the investment performance of the Fund. In particular, actions </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">taken by the U.S. government in respect of international trade relations </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">could lead to trade wars, increased costs for imported goods, disruptions </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">in supply chains, reduced foreign investment, and instability in regions </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">where the Fund invests.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Moreover, government regulation may have unpredictable and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">unintended effects. Legislative or regulatory actions to address </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">perceived liquidity or other issues in fixed income markets generally, or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">in particular markets such as the municipal securities market, may alter </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">or impair the Fund’s ability to pursue its investment objectives or utilize </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">certain investment strategies and techniques.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">While there continues to be uncertainty about the full impact of these </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and other regulatory changes, it is the case that the Fund will be subject </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">to a more complex regulatory framework, and may incur additional </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">costs to comply with new requirements as well as to monitor for </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">compliance in the future. Actions by governmental entities may also </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">impact certain instruments in which the Fund invests and reduce market </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">liquidity and resiliency.</span></div> <div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Risk Retention Investment Risk</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund may invest in risk retention tranches of CMBS or other eligible </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">securitizations, if any, which are eligible residual interests held by the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">sponsors of such securitizations pursuant to the final rules </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">implementing the credit risk retention requirements of the “U.S. Risk </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Retention Rules.” In the case of CMBS transactions, for example, the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">U.S. Risk Retention Rules permit all or a portion of the retained credit </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">risk associated with certain securitizations (i.e., retained risk) to be held </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">by a “third party purchaser,” such as the Fund, if, among other </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">requirements, the third-party purchaser holds its retained interest, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">unhedged, for at least five years following the closing of the CMBS </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">transaction, after which it is entitled to transfer its interest in the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">securitization to another person that meets the requirements for a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">third-party purchaser. Even after the required holding period has </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">expired, due to the generally illiquid nature of such investments, no </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">assurance can be given as to what, if any, exit strategies will ultimately </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">be available for any given position.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">In addition, there is limited guidance on the application of the final </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">U.S. Risk Retention Rules to specific securitization structures. There can </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">be no assurance that the applicable federal agencies charged with the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">implementation of the final U.S. Risk Retention Rules (the Federal </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Deposit Insurance Corporation, the Comptroller of the Currency, the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Federal Reserve Board, the SEC, the Department of Housing and Urban </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Development, and the Federal Housing Finance Agency) could not take </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">positions in the future that differ from the interpretation of such rules </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">taken or embodied in such securitizations, or that the final U.S. Risk </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Retention Rules will not change.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Furthermore, in situations where the Fund invests in risk retention </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">tranches of securitizations structured by third parties, the Fund may be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">required to execute one or more letters or other agreements, the exact </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">form and nature of which will vary under which it will make certain </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">undertakings designed to ensure such securitization complies with the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">final U.S. Risk Retention Rules. Such Risk Retention Agreements may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">include a variety of representations, warranties, covenants and other </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">indemnities, each of which may run to various transaction parties. If the </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund breaches any undertakings in any Risk Retention Agreement, it will </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">be exposed to claims by the other parties thereto, including for any </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">losses incurred as a result of such breach, which could be significant </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and exceed the value of the Fund’s investments.</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> Direct investments in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">mortgages and other types of collateral are subject to risks similar (and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">in some cases to a greater degree) to those described above.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The illiquid nature of risk retention investments may make them difficult </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">or impossible to value accurately. The Fund may have limited or no </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">access to market quotations or other pricing data for these investments, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">requiring reliance on subjective valuation methodologies. In addition, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund's ability to dispose of these investments, even after the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">required holding period, may be constrained by the lack of an active </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">secondary market, and any sales may occur at significant discounts to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund's carrying value, if at all.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> <div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Risks of Investing in Private Real Estate Investment Funds</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">To the extent the Fund invests in private real estate investment funds, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Investment Manager will have limited or no control over the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investment decisions made by any such private real estate investment </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">funds. Investments in private real estate investment funds are illiquid, as </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">interests are not listed for trading on any securities exchange and there </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">is little to no secondary market for trading such investments. In addition, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Investment Manager’s ability to withdraw an investment or allocate </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">away from the private real estate investment funds, may be constrained </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">by limitations imposed by the private real estate investment funds. The </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">illiquid nature of private fund investments may prevent the Fund from </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">actively managing its portfolio away from underperforming private real </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">estate investment funds or in uncertain markets.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Under the terms of the limited partnership agreements or limited </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">liability company operating agreements, as applicable, of many of the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">private real estate investment funds in which the Fund may invest, the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund will make commitments to make capital contributions in specified </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">maximum amounts to such private real estate investment funds (each, a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">“Capital Contribution”) based on notices provided by the private real </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">estate investment funds (each, a “Capital Call”). These Capital </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Contributions will be made from time to time generally on an as-needed </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">basis rather than upfront. The Capital Contributions would be used by </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the applicable private real estate investment funds to pay specified </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">expenses of the private real estate investment funds and to make </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investments in a manner consistent with the investment strategy or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">guidelines established by the applicable private real estate investment </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">funds. As a result, the Fund, as an investor in a private real estate </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investment fund, may be required to make a Capital Contribution to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">such private real estate investment fund without the benefit of an </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">extensive notice period after a Capital Call and without regard to the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund’s current financial condition and availability of cash to make such </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Capital Contribution.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The limited partnership agreement or limited liability company operating </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">agreement, as applicable, of the applicable private real estate </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investment funds may contain detailed provisions regarding the failure </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of an investor in such private real estate investment funds to honor its </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Capital Contribution obligation. The consequences that may be imposed </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">upon a defaulting investor in such private real estate investment funds </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">include interest on overdue amounts, a loss of voting rights in the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">private real estate investment funds as long as the default is continuing, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and (in many cases) a forced sale or forfeiture of the defaulting </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investor’s interest in the private real estate investment funds in favor of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the other investors in such private real estate investment funds.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The private real estate investment funds will not be registered as </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investment companies under the 1940 Act and, therefore, the Fund will </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">not be able to avail itself of the protections of the 1940 Act with respect </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">to the private real estate investment funds, including certain corporate </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">governance protections, such as the requirement to have a majority </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Independent Directors serving on the board, statutory protections </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">against self-dealings and joint transactions by the institutional asset </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">managers and their affiliates, and leverage limitations. Furthermore, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">some of the institutional asset managers for the private real estate </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investment funds may not be registered under the Investment Advisers </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Act of 1940 (“Advisers Act”), meaning that the Fund will not be able to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">rely on the statutory protections of the Advisers Act.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The valuation of the Fund’s investments in private real estate investment </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">funds will be determined by the institutional asset managers of those </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">private real estate investment funds, which valuation may not be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">accurate or reliable. While the valuation of the Fund’s publicly traded </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">securities are more readily ascertainable, the Fund’s ownership interests </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">in private real estate investment funds are not publicly traded and the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund will depend on appraisers, service providers, and the institutional </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">asset manager to a private real estate investment fund to provide a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">valuation, or assistance with a valuation, of those investments. Any such </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">valuation is a subjective analysis of the fair market value of an asset and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">requires the use of techniques that are costly and time-consuming and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">ultimately provide no more than an estimate of value. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Valuations may be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">based on limited market data, incomplete information, or assumptions </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">that prove inaccurate.</span><span style="color:#333333;font-family:arial narrow;font-size:10pt"> Moreover, the valuation of the Fund’s investment </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">in a private real estate investment funds, as provided by an institutional </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">asset manager for its assets as of a specific date, may vary from the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">actual sales price of its assets or any secondary market value price for </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the underlying fund’s interest, if such investments were sold to a third </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">party.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> <div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Risks Related to the Fund’s REIT Status</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">If the Fund does not qualify as a REIT, the Fund will be subject to tax as </span><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">a regular corporation and could face a substantial tax liability.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund expects to operate so as to qualify as a REIT under the Code. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">However, qualification as a REIT involves the application of highly </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">technical and complex Code provisions for which only a limited number </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of judicial or administrative interpretations exist. Notwithstanding the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">availability of cure provisions in the Code, various compliance </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">requirements could be failed and could jeopardize the Fund’s REIT </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">status. Furthermore, new tax legislation, administrative guidance or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">court decisions, in each instance potentially with retroactive effect, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">could make it more difficult or impossible for the Fund to qualify as a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">REIT. If the Fund fails to qualify as a REIT in any tax year, then:</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund would be taxed as a regular domestic corporation, which </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div style="line-height:12.0pt;margin-left:22pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">under current laws, among other things, means being unable to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">deduct distributions to Common Shareholders in computing </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">taxable income and being subject to federal income tax on the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund’s taxable income at regular corporate income tax rates;</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">any resulting tax liability could be substantial and could have a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">material adverse effect on the Fund’s book value;</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">unless the Fund were entitled to relief under applicable statutory </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">provisions, the Fund would be required to pay taxes, and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">therefore, the Fund’s cash available for distribution to Common </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Shareholders would be reduced for each of the years during </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">which the Fund did not qualify as a REIT and for which the Fund </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">had taxable income; and</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div> <div style="clear:both;position:relative;width:100%;"> <div style="float:left;line-height:12.0pt;margin-left:10pt;text-align:left;width:5.56pt;"><span style="color:#1e8297;font-family:arial narrow;font-size:10pt">■</span></div> <div style="float:left;line-height:12.0pt;margin-left:6.44pt;text-align:left;width:233.00pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund generally would not be eligible to requalify as a REIT for </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the subsequent four full taxable years.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> </div> <div style="clear:both;position:relative;"> </div> </div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">To maintain the Fund’s REIT status, the Fund may have to borrow funds </span><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">on a short-term basis during unfavorable market conditions.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">To qualify as a REIT, the Fund generally must distribute annually to the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund’s Common Shareholders a minimum of 90% of the Fund’s net </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">taxable income, determined without regard to the dividends-paid </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">deduction and excluding net capital gains. The Fund will be subject to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">regular corporate income taxes on any undistributed REIT taxable </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">income each year. Additionally, the Fund will be subject to a 4% </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">nondeductible excise tax on any amount by which distributions paid by </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund in any calendar year are less than the sum of 85% of the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund’s ordinary income, 95% of the Fund’s capital gain net income and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">100% of the Fund’s undistributed income from previous years. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Payments to the Fund’s Common Shareholders under the Fund’s share </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">repurchase plan will not be taken into account for purposes of these </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">distribution requirements. If the Fund does not have sufficient cash to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">make distributions necessary to preserve the Fund’s REIT status for any </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">year or to avoid taxation, the Fund may be forced to borrow funds or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">sell assets even if the market conditions at that time are not favorable </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">for these borrowings or sales. These options could increase the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">costs or reduce the Fund’s equity.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">Compliance with REIT requirements may cause the Fund to forego </span><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">otherwise attractive opportunities, which may hinder or delay the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">ability to meet the Fund’s investment objectives and reduce overall </span><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">return for the Fund's Common Shareholders.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">To qualify as a REIT, the Fund is required at all times to satisfy tests </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">relating to, among other things, the sources of the Fund’s income, the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">nature and diversification of the Fund’s assets, the ownership of the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund’s stock and the amounts the Fund distributes to Fund’s Common </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Shareholders. Compliance with the REIT requirements may impair the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund’s ability to operate solely on the basis of maximizing profits. For </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">example, the Fund may be required to make distributions to Common </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Shareholders at disadvantageous times or when the Fund does not have </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">funds readily available for distribution.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">Compliance with REIT requirements may force the Fund to liquidate or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">restructure otherwise attractive investments.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">To qualify as a REIT, at the end of each calendar quarter, at least 75% of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the value of the Fund’s assets must consist of cash, cash items, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">government securities and qualified real estate assets. The remainder of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund’s investments in securities (other than qualified real estate </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">assets and government securities) generally cannot include more than </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">10% of the voting securities (other than securities that qualify for the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">straight debt safe harbor) of any one issuer or more than 10% of the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">value of the outstanding securities of more than any one issuer unless </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">PIMCO and such issuer jointly elect for such issuer to be treated as a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">“taxable REIT subsidiary” under the Code. Debt will generally meet the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">“straight debt” safe harbor if the debt is a written unconditional </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">promise to pay on demand or on a specified date a certain sum of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">money, the debt is not convertible, directly or indirectly, into stock, and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the interest rate and the interest payment dates of the debt are not </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">contingent on the profits, the borrower’s discretion, or similar factors. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Additionally, no more than 5% of the value of the Fund’s assets (other </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">than government securities and qualified real estate assets) can consist </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of the securities of any one issuer, and no more than </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">25</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">% of the value </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of the Fund’s assets may be represented by securities of one or more </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">taxable REIT subsidiaries. If the Fund fails to comply with these </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">requirements at the end of any calendar quarter, the Fund must dispose </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of a portion of the Fund’s assets within 30 days after the end of the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">calendar quarter or qualify for certain statutory relief provisions in order </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">to avoid losing the Fund’s REIT qualification and suffering adverse tax </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">consequences. In order to satisfy these requirements and maintain the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund’s qualification as a REIT, the Fund may be forced to liquidate </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">assets from the Fund’s portfolio or not make otherwise attractive </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investments. These actions could have the effect of reducing the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">income and amounts available for distribution to the Fund’s Common </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Shareholders.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">The Fund’s Declaration of Trust does not permit any person or group to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">own more than 9.8% in value or number of shares, whichever is more </span><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">restrictive, of the Fund’s outstanding Common Shares or of the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">outstanding capital stock of all classes or series, and attempts to acquire </span><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">the Fund’s Common Shares or the Fund’s capital stock of all other </span><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">classes or series in excess of these 9.8% limits would not be effective </span><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">without an exemption (prospectively or retroactively) from these limits </span><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">by the Fund’s Board of Trustees.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">For the Fund to qualify as a REIT under the Code, not more than 50% of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the value of the Fund’s outstanding Common Shares may be owned, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">directly or indirectly, by five or fewer individuals (including certain </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">entities treated as individuals for this purpose) during the last half of a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">taxable year. For the purpose of assisting the Fund’s qualification as a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">REIT for U.S. federal income tax purposes, among other purposes, the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund’s Declaration of Trust prohibits beneficial or constructive </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">ownership by any person or group of more than 9.8%, in value or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">number of shares, whichever is more restrictive, of the outstanding </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">shares of the Fund’s outstanding Common Shares, or 9.8% in value or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">number of shares, whichever is more restrictive, of the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">outstanding capital stock of all classes or series, which PIMCO refers to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">as the “Ownership Limit.” The constructive ownership rules under the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Code and the Fund’s Declaration of Trust are complex and may cause </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">shares of the outstanding Common Shares owned by a group of related </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">persons to be deemed to be constructively owned by one person. As a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">result, the acquisition of less than 9.8% of the Fund’s outstanding </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Common Shares or the Fund’s capital stock by a person could cause </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">another person to constructively own in excess of 9.8% of the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">outstanding Common Shares or the Fund’s capital stock, respectively, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and thus violate the Ownership Limit. There can be no assurance that </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund’s board of trustees, as permitted in the Declaration of Trust, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">will not decrease this Ownership Limit in the future. Any attempt to own </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">or transfer shares of the Fund’s Common Shares or capital stock in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">excess of the Ownership Limit without the consent of the Fund’s board </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of trustees will result in the transfer being void.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Ownership Limit may have the effect of precluding a change in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">control of the Fund by a third party, even if such change in control </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">would be in the best interests of the Fund’s Common Shareholders or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">would result in receipt of a premium to the price of the Fund’s Common </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Shares (and even if such change in control would not reasonably </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">jeopardize the Fund’s REIT status). The exemptions to the Ownership </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Limit granted to date may limit the Fund’s Board’s power to increase the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Ownership Limit or grant further exemptions in the future.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">The Fund’s Board of Trustees is authorized to revoke the Fund’s REIT </span><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">election without shareholder approval, which may cause adverse </span><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">consequences to the Fund’s shareholders.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund’s Declaration of Trust authorizes the Fund’s Board of Trustees </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">to revoke or otherwise terminate the Fund’s REIT election, without the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">approval of the Fund’s shareholders, if it determines that changes to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">U.S. federal income tax laws and regulations or other considerations </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">mean it is no longer in the Fund’s best interests to qualify as a REIT. The </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund’s Board of Trustees has fiduciary duties to us and the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">shareholders and could only cause such changes in the Fund’s tax </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">treatment if it determines in good faith that such changes are in the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund’s best interests and in the best interests of the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">shareholders. In this event, the Fund would become subject to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">U.S. federal income tax on the Fund’s taxable income and the Fund </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">would no longer be required to distribute most of the Fund’s net income </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">to the Fund’s shareholders, which may cause a reduction in the total </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">return to the Fund’s shareholders.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div> <div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Tax Risks of Investing in the Fund</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">Non-U.S. holders may be subject to U.S. federal income tax upon their </span><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">disposition of shares of the Fund’s Common Shares or upon their receipt </span><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">of certain distributions from PIMCO.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">In addition to any potential withholding tax on ordinary dividends, a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">non-U.S. holder (as such term is defined below under “Certain </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">U.S. Federal Income Tax Considerations—Taxation of U.S. Holders of the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund’s Common Shares”), other than a “qualified shareholder” or a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">“qualified foreign pension fund,” that disposes of a “U.S. real property </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">interest” (“USRPI”) (which includes shares of stock of a U.S. corporation </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">whose assets consist principally of USRPIs), is generally subject to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">U.S. federal income tax under the Foreign Investment in Real Property </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Tax Act of 1980, as amended (“FIRPTA”), on the amount received from </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">such disposition. Such tax does not apply, however, to the disposition of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">stock in a REIT that is “domestically controlled.” Generally, a REIT is </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">domestically controlled if less than 50% of its stock, by value, has been </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">owned directly or indirectly by non-U.S. persons during a continuous </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">five-year period ending on the date of disposition or, if shorter, during </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the entire period of the REIT’s existence. The Fund cannot assure </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Common Shareholders that it will qualify as a domestically controlled </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">REIT. If the Fund were to fail to so qualify, amounts received by a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">non-U.S. holder on certain dispositions of the Fund’s Common Shares </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">(including a redemption) would be subject to tax under FIRPTA, unless </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">(i) the Fund’s Common Shares were regularly traded on an established </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">securities market and (ii) the non-U.S. holder did not, at any time during </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">a specified testing period, hold more than 10% of the Fund’s Common </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Shares. See “Certain U.S. Federal Income Tax Considerations—Taxation </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of Non-U.S. Holders of the Fund’s Common Shares—Sales of the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Common Shares.”</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">A non-U.S. holder other than a “qualified shareholder” or a “qualified </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">foreign pension fund,” that receives a distribution from a REIT that is </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">attributable to gains from the disposition of a USRPI as described </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">above, including in connection with a repurchase of the Fund’s Common </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Shares, is generally subject to U.S. federal income tax under FIRPTA to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the extent such distribution is attributable to gains from such </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">disposition, regardless of whether the difference between the fair </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">market value and the tax basis of the USRPI giving rise to such gains is </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">attributable to periods prior to or during such non-U.S. holder’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">ownership of the Fund’s Common Shares. In addition, a repurchase of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund’s Common Shares, to the extent not treated as a sale or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">exchange, may be subject to withholding as an ordinary dividend. See </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">“Certain U.S. Federal Income Tax Considerations—Taxation of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Non-U.S. Holders of the Fund’s Common Shares—Distributions, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and—Repurchases of the Fund’s Common Shares.”</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">PIMCO seeks to act in the best interests of the Fund as a whole and not </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">in consideration of the particular tax consequences to any specific </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">holder of the Fund’s Common Shares. Potential non-U.S. holders should </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">inform themselves as to the U.S. tax consequences, and the tax </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">consequences within the countries of their citizenship, residence, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">domicile, and place of business, with respect to the purchase, ownership </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and disposition of shares of the Fund’s Common Shares.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">Investments outside the United States may subject the Fund to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">additional taxes and could present additional complications to the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">Fund’s ability to satisfy the REIT qualification requirements.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Non-U.S. investments may subject the Fund to various non-U.S. tax </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">liabilities, including withholding taxes. In addition, operating in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">functional currencies other than the U.S. dollar and in environments in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">which real estate transactions are typically structured differently than </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">they are in the United States or are subject to different legal rules may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">present complications to the Fund’s ability to structure </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">non-U.S. investments in a manner that enables the Fund to satisfy the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">REIT qualification requirements.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">The Fund may incur tax liabilities that would reduce the Fund’s cash </span><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">available for distribution to shareholders.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Even if the Fund qualifies and maintains the Fund’s status as a REIT, the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund may become subject to U.S. federal income taxes and related state </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and local taxes. For example, net income from the sale of properties that </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">are “dealer” properties sold by a REIT (a “prohibited transaction” under </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Code) will be subject to a 100% tax. The Fund may not make </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">sufficient distributions to avoid excise taxes applicable to REITs. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Similarly, if the Fund were to fail an income test (and did not lose the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund’s REIT status because such failure was due to reasonable cause </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and not willful neglect) the Fund would be subject to tax on the income </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">that does not meet the income test requirements. To qualify as a REIT, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund generally must distribute annually to the Fund’s Common </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Shareholders a minimum of 90% of the Fund’s net taxable income, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">determined without regard to the dividends-paid deduction and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">excluding net capital gains. If the Fund does not have sufficient cash to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">make distributions necessary to preserve the Fund’s REIT status for any </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">year or to avoid taxation, the Fund may be forced to borrow funds or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">sell assets even if the market conditions at that time are not favorable </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">for these borrowings or sales. These options could increase the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">costs or reduce the Fund’s equity. The Fund also may decide to retain </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">net capital gains the Fund earns from the sale or other disposition of the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund’s investments and pay income tax directly on such income. In that </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">event, the Fund’s shareholders would be treated as if they earned that </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">income and paid the tax on it directly. However, shareholders that are </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">tax-exempt, such as charities or qualified pension plans, would have no </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">benefit from their deemed payment of such tax liability unless they file </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">U.S. federal income tax returns and thereon seek a refund of such tax. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund also may be subject to state and local taxes on the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">income, gross receipts or property, including franchise, payroll, mortgage </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">recording and transfer taxes, either directly or at the level of the other </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">companies through which the Fund indirectly owns assets, such as the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund’s taxable REIT subsidiaries, which are subject to full U.S. federal, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">state, local and foreign corporate-level income taxes. Any taxes the Fund </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">pays directly or indirectly will reduce the Fund’s cash available for </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">distribution to shareholders.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">There may be current tax liability on distributions reinvested in the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">Fund’s Common Shares.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">If a shareholder participates in the Fund’s distribution reinvestment </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">plan, that shareholder will be deemed to have received, and for </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">U.S. federal income tax purposes will be taxed on, the amount </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">reinvested in shares of the Fund’s Common Shares to the extent the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">amount reinvested was not a tax-free return of capital. Therefore, unless </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the shareholder is a tax-exempt entity, the shareholder may be forced to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">use funds from other sources to pay any tax liability on the reinvested </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">dividends.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">Generally, ordinary dividends payable by REITs do not qualify for </span><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">reduced U.S. federal income tax rates.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Currently, the maximum tax rate applicable to qualified dividend income </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">payable to certain non-corporate U.S. Common Shareholders is 20%. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Dividends payable by REITs, however, generally are not eligible for the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">reduced rate. Although this does not adversely affect the taxation of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">REITs or dividends payable by REITs, the more favorable rates applicable </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">to regular corporate qualified dividends could cause certain </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">non-corporate investors to perceive investments in REITs to be relatively </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">less attractive than investments in the stocks of non-REIT corporations </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">that pay dividends, which could adversely affect the value of the shares </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of REITs, including the Fund’s Common Shares. However, under current </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">law, individual taxpayers may be entitled to claim </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">a deduction in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">determining their taxable income of 20% of ordinary REIT dividends </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">(dividends other than capital gain dividends and dividends attributable </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">to certain qualified dividend income received by the Fund), which </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">temporarily reduces the effective tax rate on such dividends. See </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">“Certain U.S. Federal Income Tax Considerations—Taxation of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">U.S. Holders of the Fund’s Common Shares—Distributions Generally.” </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Shareholders are urged to consult with a tax advisor regarding the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">effective tax rate with respect to REIT dividends.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">The Fund may be subject to adverse legislative or regulatory tax </span><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">changes that could increase the Fund’s tax liability, reduce the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">operating flexibility and reduce the price of the Fund’s Common Shares.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">In recent years, numerous legislative, judicial and administrative </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">changes have been made in the provisions of U.S. federal income tax </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">laws applicable to investments similar to an investment in shares of the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund’s Common Shares. Additional changes to the tax laws are likely to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">continue to occur, and PIMCO cannot assure shareholders that any such </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">changes will not adversely affect the taxation of the Fund’s Common </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Shareholders. Any such changes could have an adverse effect on an </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investment in the Fund’s shares or on the market value or the resale </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">potential of the Fund’s assets. Shareholders are urged to consult with a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">tax advisor with respect to the impact of recent legislation on your </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investment in the Fund’s shares and the status of legislative, regulatory </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">or administrative developments and proposals and their potential effect </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">on an investment in the Fund’s shares. Although REITs generally receive </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">certain tax advantages compared to entities taxed as regular </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">corporations, it is possible that future legislation would result in a REIT </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">having fewer tax advantages, and it could become more advantageous </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">for a company that invests in real estate to elect to be treated for </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">U.S. federal income tax purposes as a corporation. As a result, the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund’s Declaration of Trust authorizes the Fund’s Board of Trustees to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">revoke or otherwise terminate the Fund’s REIT election, without the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">approval of the Fund’s Common Shareholders, if it determines that </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">changes to U.S. federal income tax laws and regulations or other </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">considerations mean it is no longer in the Fund’s best interests to qualify </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">as a REIT. Prospective investors should consult their own tax advisors </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">regarding changes in tax laws.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">The failure of a mezzanine loan to qualify as a real estate asset could </span><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">adversely affect the Fund’s ability to qualify as a REIT.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">PIMCO may acquire mezzanine loans, for which the United States </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Internal Revenue Service (the “IRS”) has provided a safe harbor but not </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">rules of substantive law. Pursuant to the safe harbor, if a mezzanine </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">loan meets certain requirements, it will be treated by the IRS as a real </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">estate asset for purposes of the REIT asset tests, and interest derived </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">from the mezzanine loan will be treated as qualifying mortgage interest </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">for purposes of the REIT 75% income test. PIMCO may acquire </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">mezzanine loans that do not meet all of the requirements of this safe </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">harbor. In the event the Fund owns a mezzanine loan that does not </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">meet the safe harbor, the IRS could challenge such loan’s treatment as a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">real estate asset for purposes of the REIT asset and income tests and, if </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">such a challenge were sustained, the Fund could fail to qualify as a REIT.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">If the Fund’s operating partnership failed to qualify as a partnership or is </span><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">not otherwise disregarded for U.S. federal income tax purposes, the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt;font-style:italic">Fund would cease to qualify as a REIT.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">If the IRS were to successfully challenge the status of the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">operating partnership as a partnership or disregarded entity for </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">U.S. federal income tax purposes, it would be taxable as a corporation. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">In the event that this occurs, it would reduce the amount of distributions </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">that the Fund’s operating partnership could make to the Fund. This </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">would also result in the Fund’s failing to qualify as a REIT and becoming </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">subject to a corporate-level tax on the Fund’s income, which would </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">substantially reduce the Fund’s cash available to pay distributions and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the yield on your investment.</span></div> <div style="line-height:14.0pt;text-align:left;"><span style="color:#00687d;font-family:arial narrow;font-size:12pt;font-weight:bold">Description of Capital Structure and Shares</span></div><div style="margin-top:2pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The following is a brief description of the capital structure of the Fund. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">This description does not purport to be complete and is subject to and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">qualified in its entirety by reference to the Declaration and the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Bylaws, as amended and restated through the date hereof (the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">“Bylaws”). The Declaration of Trust and Bylaws are each exhibits to the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">registration statement of which this prospectus is a part.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund is a Delaware statutory trust with transferable shares of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">beneficial interest established under the laws of the State of Delaware. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Declaration of Trust provides that the Trustees of the Fund may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">authorize separate classes of shares of beneficial interest. Preferred </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Shares may be issued in one or more series, with such par value and with </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">such rights as determined by the Board, by action of the Board without </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the approval of the Common Shareholders.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The following table shows the amounts of Common Shares of the Fund </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">that were authorized and outstanding as of March 31, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">2026</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">:</span><span style="color:#000000;font-family:arial narrow;font-size:1pt"> </span></div> <table cellpadding="0" cellspacing="0" style="border-bottom:0.5pt solid #00687d;empty-cells:show;width:263pt"> <tr style="height:14.25pt"> <td style="background-color:#FFFFFF;border-bottom:0.5pt solid #00687D;padding-bottom:1.75pt;padding-top:1.75pt;vertical-align:Bottom;width:106.48pt;"> <div style="line-height:8.0pt;text-align:left;"> <div style="margin-left:3pt;margin-right:6pt;text-align:left;white-space:nowrap;"><span style="color:#00687d;font-family:arial narrow;font-size:7pt;font-weight:bold;margin-left:0.0pt">(1)</span></div> </div> </td> <td style="background-color:#FFFFFF;border-bottom:0.5pt solid #00687D;padding-bottom:1.75pt;padding-top:1.75pt;vertical-align:Bottom;width:44.14pt;"> <div style="line-height:8.0pt;text-align:left;"> <div style="margin-left:6pt;margin-right:6pt;text-align:center;white-space:nowrap;"><span style="color:#00687d;font-family:arial narrow;font-size:7pt;font-weight:bold">(2)</span></div> </div> </td> <td style="background-color:#FFFFFF;border-bottom:0.5pt solid #00687D;padding-bottom:1.75pt;padding-top:1.75pt;vertical-align:Bottom;width:58.83pt;"> <div style="line-height:8.0pt;text-align:left;"> <div style="margin-left:6pt;margin-right:6pt;text-align:center;white-space:nowrap;"><span style="color:#00687d;font-family:arial narrow;font-size:7pt;font-weight:bold">(3)</span></div> </div> </td> <td style="background-color:#FFFFFF;border-bottom:0.5pt solid #00687D;padding-bottom:1.75pt;padding-top:1.75pt;vertical-align:Bottom;width:53.55pt;"> <div style="line-height:8.0pt;text-align:left;"> <div style="margin-left:6pt;margin-right:3pt;text-align:center;white-space:nowrap;"><span style="color:#00687d;font-family:arial narrow;font-size:7pt;font-weight:bold">(4)</span></div> </div> </td> </tr> <tr style="height:39.5pt"> <td style="background-color:azure;border-bottom:0.5pt solid #00687D;padding-bottom:1.75pt;padding-top:1.75pt;vertical-align:Bottom;width:106.48pt;"> <div style="line-height:8.0pt;text-align:left;"> <div style="margin-left:3pt;margin-right:6pt;text-align:left;white-space:nowrap;"><span style="color:#00687d;font-family:arial narrow;font-size:7pt;font-weight:bold;margin-left:0.0pt">Title of Class</span></div> </div> </td> <td style="background-color:azure;border-bottom:0.5pt solid #00687D;padding-bottom:1.75pt;padding-top:1.75pt;vertical-align:Bottom;width:44.14pt;"> <div style="line-height:8.0pt;text-align:left;"> <div style="margin-left:6pt;margin-right:6pt;text-align:center;white-space:nowrap;"><span style="color:#00687d;font-family:arial narrow;font-size:7pt;font-weight:bold">Amount</span></div> <div style="margin-left:6pt;margin-right:6pt;text-align:center;white-space:nowrap;"><span style="color:#00687d;font-family:arial narrow;font-size:7pt;font-weight:bold">Authorized</span></div> </div> </td> <td style="background-color:azure;border-bottom:0.5pt solid #00687D;padding-bottom:1.75pt;padding-top:1.75pt;vertical-align:Bottom;width:58.83pt;"> <div style="line-height:8.0pt;text-align:left;"> <div style="margin-left:6pt;margin-right:6pt;text-align:center;white-space:nowrap;"><span style="color:#00687d;font-family:arial narrow;font-size:7pt;font-weight:bold">Amount Held by</span></div> <div style="margin-left:6pt;margin-right:6pt;text-align:center;white-space:nowrap;"><span style="color:#00687d;font-family:arial narrow;font-size:7pt;font-weight:bold">the Fund for its</span></div> <div style="margin-left:6pt;margin-right:6pt;text-align:center;white-space:nowrap;"><span style="color:#00687d;font-family:arial narrow;font-size:7pt;font-weight:bold">Account</span></div> </div> </td> <td style="background-color:azure;border-bottom:0.5pt solid #00687D;padding-bottom:1.75pt;padding-top:1.75pt;vertical-align:Bottom;width:53.55pt;"> <div style="line-height:8.0pt;text-align:left;"> <div style="margin-left:6pt;margin-right:3pt;text-align:center;white-space:nowrap;"><span style="color:#00687d;font-family:arial narrow;font-size:7pt;font-weight:bold">Amount</span></div> <div style="margin-left:6pt;margin-right:3pt;text-align:center;white-space:nowrap;"><span style="color:#00687d;font-family:arial narrow;font-size:7pt;font-weight:bold">Outstanding</span></div> <div style="margin-left:6pt;margin-right:3pt;text-align:center;white-space:nowrap;"><span style="color:#00687d;font-family:arial narrow;font-size:7pt;font-weight:bold">Exclusive of</span></div> <div style="margin-left:6pt;margin-right:3pt;text-align:center;white-space:nowrap;"><span style="color:#00687d;font-family:arial narrow;font-size:7pt;font-weight:bold">Amount Shown</span></div> <div style="margin-left:6pt;margin-right:3pt;text-align:center;white-space:nowrap;"><span style="color:#00687d;font-family:arial narrow;font-size:7pt;font-weight:bold">Under (3)</span></div> </div> </td> </tr> <tr style="height:11.25pt"> <td style="background-color:#FFFFFF;padding-bottom:3pt;padding-top:1.75pt;vertical-align:Top;width:106.48pt;"> <div style="line-height:7.5pt;text-align:left;"> <div style="margin-left:3pt;margin-right:6pt;text-align:left;white-space:nowrap;"><span style="color:#3f3f3f;font-family:arial narrow;font-size:7.5pt;margin-left:0.0pt">Institutional Class Common Shares</span></div> </div> </td> <td style="background-color:#FFFFFF;padding-bottom:3pt;padding-top:1.75pt;vertical-align:Top;width:44.14pt;"> <div style="line-height:7.5pt;text-align:left;"> <div style="margin-left:6pt;margin-right:6pt;text-align:center;white-space:nowrap;"><span style="color:#3f3f3f;font-family:arial narrow;font-size:7.5pt;margin-left:0.00pt">Unlimited</span></div> </div> </td> <td style="background-color:#FFFFFF;padding-bottom:3pt;padding-top:1.75pt;vertical-align:Top;width:58.83pt;"> <div style="line-height:7.5pt;text-align:left;"> <div style="margin-left:6pt;margin-right:6pt;text-align:center;white-space:nowrap;"><span style="color:#3f3f3f;font-family:arial narrow;font-size:7.5pt;margin-left:0.00pt">0</span></div> </div> </td> <td style="background-color:#FFFFFF;padding-bottom:3pt;padding-top:1.75pt;vertical-align:Top;width:53.55pt;"> <div style="line-height:7.5pt;text-align:left;"> <div style="margin-left:6pt;margin-right:3pt;text-align:center;white-space:nowrap;"><span style="color:#3f3f3f;font-family:arial narrow;font-size:7.5pt;margin-left:0.00pt">40,756,369</span></div> </div> </td> </tr> <tr style="height:11pt"> <td style="background-color:azure;padding-bottom:3pt;padding-top:3pt;vertical-align:Top;width:106.48pt;"> <div style="line-height:7.5pt;text-align:left;"> <div style="margin-left:3pt;margin-right:6pt;text-align:left;white-space:nowrap;"><span style="color:#3f3f3f;font-family:arial narrow;font-size:7.5pt;margin-left:0.0pt">Class A-3 Common Shares</span></div> </div> </td> <td style="background-color:azure;padding-bottom:3pt;padding-top:3pt;vertical-align:Top;width:44.14pt;"> <div style="line-height:7.5pt;text-align:left;"> <div style="margin-left:6pt;margin-right:6pt;text-align:center;white-space:nowrap;"><span style="color:#3f3f3f;font-family:arial narrow;font-size:7.5pt;margin-left:0.00pt">Unlimited</span></div> </div> </td> <td style="background-color:azure;padding-bottom:3pt;padding-top:3pt;vertical-align:Top;width:58.83pt;"> <div style="line-height:7.5pt;text-align:left;"> <div style="margin-left:6pt;margin-right:6pt;text-align:center;white-space:nowrap;"><span style="color:#3f3f3f;font-family:arial narrow;font-size:7.5pt;margin-left:0.00pt">0</span></div> </div> </td> <td style="background-color:azure;padding-bottom:3pt;padding-top:3pt;vertical-align:Top;width:53.55pt;"> <div style="line-height:7.5pt;text-align:left;"> <div style="margin-left:6pt;margin-right:3pt;text-align:center;white-space:nowrap;"><span style="color:#3f3f3f;font-family:arial narrow;font-size:7.5pt;margin-left:0.00pt">4,463,600</span></div> </div> </td> </tr> <tr style="height:11pt"> <td style="background-color:#FFFFFF;padding-bottom:3pt;padding-top:3pt;vertical-align:Top;width:106.48pt;"> <div style="line-height:7.5pt;text-align:left;"> <div style="margin-left:3pt;margin-right:6pt;text-align:left;white-space:nowrap;"><span style="color:#3f3f3f;font-family:arial narrow;font-size:7.5pt;margin-left:0.0pt">Class A-4 Common Shares</span></div> </div> </td> <td style="background-color:#FFFFFF;padding-bottom:3pt;padding-top:3pt;vertical-align:Top;width:44.14pt;"> <div style="line-height:7.5pt;text-align:left;"> <div style="margin-left:6pt;margin-right:6pt;text-align:center;white-space:nowrap;"><span style="color:#3f3f3f;font-family:arial narrow;font-size:7.5pt;margin-left:0.00pt">Unlimited</span></div> </div> </td> <td style="background-color:#FFFFFF;padding-bottom:3pt;padding-top:3pt;vertical-align:Top;width:58.83pt;"> <div style="line-height:7.5pt;text-align:left;"> <div style="margin-left:6pt;margin-right:6pt;text-align:center;white-space:nowrap;"><span style="color:#3f3f3f;font-family:arial narrow;font-size:7.5pt;margin-left:0.00pt">0</span></div> </div> </td> <td style="background-color:#FFFFFF;padding-bottom:3pt;padding-top:3pt;vertical-align:Top;width:53.55pt;"> <div style="line-height:7.5pt;text-align:left;"> <div style="margin-left:6pt;margin-right:3pt;text-align:center;white-space:nowrap;"><span style="color:#3f3f3f;font-family:arial narrow;font-size:7.5pt;margin-left:0.00pt">1,013</span></div> </div> </td> </tr> <tr style="height:11pt"> <td style="background-color:azure;padding-bottom:3pt;padding-top:3pt;vertical-align:Top;width:106.48pt;"> <div style="line-height:7.5pt;text-align:left;"> <div style="margin-left:3pt;margin-right:6pt;text-align:left;white-space:nowrap;"><span style="color:#3f3f3f;font-family:arial narrow;font-size:7.5pt;margin-left:0.0pt">Class F Common Shares</span></div> </div> </td> <td style="background-color:azure;padding-bottom:3pt;padding-top:3pt;vertical-align:Top;width:44.14pt;"> <div style="line-height:7.5pt;text-align:left;"> <div style="margin-left:6pt;margin-right:6pt;text-align:center;white-space:nowrap;"><span style="color:#3f3f3f;font-family:arial narrow;font-size:7.5pt;margin-left:0.00pt">Unlimited</span></div> </div> </td> <td style="background-color:azure;padding-bottom:3pt;padding-top:3pt;vertical-align:Top;width:58.83pt;"> <div style="line-height:7.5pt;text-align:left;"> <div style="margin-left:6pt;margin-right:6pt;text-align:center;white-space:nowrap;"><span style="color:#3f3f3f;font-family:arial narrow;font-size:7.5pt;margin-left:0.00pt">0</span></div> </div> </td> <td style="background-color:azure;padding-bottom:3pt;padding-top:3pt;vertical-align:Top;width:53.55pt;"> <div style="line-height:7.5pt;text-align:left;"> <div style="margin-left:6pt;margin-right:3pt;text-align:center;white-space:nowrap;"><span style="color:#3f3f3f;font-family:arial narrow;font-size:7.5pt;margin-left:0.00pt">11,540,309</span></div> </div> </td> </tr> <tr style="height:8.5pt"> <td style="background-color:#FFFFFF;padding-bottom:2pt;padding-top:3pt;vertical-align:Top;width:106.48pt;"> <div style="line-height:7.5pt;text-align:left;"> <div style="margin-left:3pt;margin-right:6pt;text-align:left;white-space:nowrap;"><span style="color:#3f3f3f;font-family:arial narrow;font-size:7.5pt;margin-left:0.0pt">Series A Preferred Shares</span></div> </div> </td> <td style="background-color:#FFFFFF;padding-bottom:2pt;padding-top:3pt;vertical-align:Top;width:44.14pt;"> <div style="line-height:7.5pt;text-align:left;"> <div style="margin-left:6pt;margin-right:6pt;text-align:center;white-space:nowrap;"><span style="color:#3f3f3f;font-family:arial narrow;font-size:7.5pt;margin-left:0.00pt">Unlimited</span></div> </div> </td> <td style="background-color:#FFFFFF;padding-bottom:2pt;padding-top:3pt;vertical-align:Top;width:58.83pt;"> <div style="line-height:7.5pt;text-align:left;"> <div style="margin-left:6pt;margin-right:6pt;text-align:center;white-space:nowrap;"><span style="color:#3f3f3f;font-family:arial narrow;font-size:7.5pt;margin-left:0.00pt">0</span></div> </div> </td> <td style="background-color:#FFFFFF;padding-bottom:2pt;padding-top:3pt;vertical-align:Top;width:53.55pt;"> <div style="line-height:7.5pt;text-align:left;"> <div style="margin-left:6pt;margin-right:3pt;text-align:center;white-space:nowrap;"><span style="color:#3f3f3f;font-family:arial narrow;font-size:7.5pt;margin-left:0.00pt">125</span></div> </div> </td> </tr> </table><div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Common Shares</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:17pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Declaration of Trust authorizes the issuance of an unlimited number </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of Common Shares. The Common Shares will be issued with a par value </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of $0.00001 per share. The Fund currently has four classes of Common </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Shares: Institutional Class, Class A-3, Class A-4 and Class F. An </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">investment in any share class of the Fund represents an investment in </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the same assets of the Fund. However, the ongoing fees and expenses </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">for each share class may be different. The fees and expenses for the Fund </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">are set forth in “Summary of Fund Expenses” above. Certain share class </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">details are set forth in “Plan of Distribution” above.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Common Shareholders will be entitled to the payment of dividends and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">other distributions when, as and if declared by the Board. All Common </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Shares have equal rights to the payment of dividends and the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">distribution of assets upon liquidation. Common Shares will, when </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">issued, be fully paid and non-assessable, and will have no pre-emptive or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">conversion rights or rights to cumulative voting. Upon liquidation of the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund, after paying or adequately providing for the payment of all </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">liabilities of the Fund and the liquidation preference with respect to any </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">outstanding Preferred Shares, and upon receipt of such releases, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">indemnities and refunding agreements as they deem necessary for their </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">protection, the Trustees may distribute the remaining assets of the Fund </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">among the Fund’s Common Shareholders.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund does not intend to hold annual meetings of shareholders. If the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund does hold a meeting of shareholders, Common Shares of the Fund </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">entitle their holders to one vote for each Common Share held; however, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">separate votes are taken by each class of Common Shares on matters </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">affecting an individual class of Common Shares. Each fractional share </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">shall be entitled to a proportionate fractional vote, except as otherwise </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">provided by the Declaration of Trust, Bylaws, or required by applicable </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">law.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund will send unaudited reports at least semiannually and audited </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">financial statements annually to all of its Common Shareholders.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Common Shares are not, and are not expected to be, listed for </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">trading on any national securities exchange nor is there expected to be </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">any secondary trading market in the Common Shares.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">As noted under “Leverage,” the Fund currently intends, subject to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">favorable market conditions, to add leverage to its portfolio by utilizing </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">reverse repurchase agreements, credit default swaps, dollar </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">rolls/buybacks or borrowings, such as through bank loans or commercial </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">paper and/or other credit facilities. The Fund may also enter into </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">transactions other than those noted above that may give rise to a form of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">leverage including, among others, futures and forward contracts </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">(including foreign currency exchange contracts), credit default swaps, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">total return swaps and other derivative transactions, loans of portfolio </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">securities, short sales and when-issued, delayed delivery and forward </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">commitment transactions.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund has issued Preferred Shares, and may issue additional Preferred </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Shares or other senior securities to add leverage to its portfolio. Any such </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Preferred Shares would have complete priority upon distribution of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">assets over the Common Shares.</span></div><div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Preferred Shares</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The Fund’s Declaration of Trust authorizes the Board to classify and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">reclassify any unissued Common Shares into shares of other classes or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">series of shares, including Preferred Shares, without the approval of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Common Shareholders. Common Shareholders have no preemptive right </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">to purchase any shares of Preferred Shares that the Fund may issue. The </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund may elect to issue additional Preferred Shares in the future as part </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of a leveraging strategy.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Prior to issuance of shares of any class or series, the Board is required by </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Delaware statutory trust and by the Fund’s Declaration of Trust to set the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">preferences, conversion and other rights, voting powers, restrictions, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">limitations as to dividends and other distributions, qualifications and </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">terms and conditions of redemption of each such class or series. Thus, the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Board could authorize the Fund to issue shares of Preferred Shares with </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">terms that could have the effect of delaying, deferring or preventing a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">transaction or a change in control that might involve a premium price for </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">common shareholders or otherwise be in their best interests. Any </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">issuance of Preferred Shares, however, must comply with the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">requirements of the Investment Company Act. The Fund's ability to make </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">distributions to its common shareholders may be limited by the terms of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">such Preferred Shares or debt securities, the asset coverage requirements </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">and other limitations imposed by the Investment Company Act, Delaware </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">law and the Fund’s lenders.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">On January 5, 2023, and as approved by the Board, the Fund issued 125 </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Shares in a single series, Series A.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Under the Investment Company Act, holders of the Preferred Shares are </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">entitled to elect two trustees of the Fund at all times and to elect a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">majority of the Fund’s trustees if at any time dividends on the Preferred </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Shares are unpaid in an amount equal to two full years’ dividends. </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Holders of the Preferred Shares would continue to have the right to elect </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">a majority of the Fund’s trustees until all dividends in arrears on the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Preferred Shares have been paid. In addition, holders of the Preferred </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Shares would also be entitled to vote separately as a class on certain </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">matters, which may at times give holders of Preferred Shares </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">disproportionate influence over the Fund’s affairs.</span></div><div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Transfer Restrictions</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">For the Fund to qualify as a REIT, no more than 50% in value of the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">outstanding shares of the Fund’s Common Shares may be owned, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">directly or indirectly through the application of certain attribution rules </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">under the Code, by any five or fewer individuals, as defined in the Code </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">to include specified entities, during the last half of any taxable year other </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">than the Fund’s first taxable year. In addition, the outstanding shares of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the Fund’s Common Shares must be owned by 100 or more persons </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">independent of the Fund and each other during at least 335 days of a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">12-month taxable year or during a proportionate part of a shorter </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">taxable year, excluding the Fund’s first taxable year for which the Fund </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">elects to be taxed as a REIT. In addition, the Fund must meet certain </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">other qualification tests set forth in the Code to qualify as a REIT. See </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">“Certain U.S. Federal Income Tax Considerations.”</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">To assist the Fund in preserving the Fund’s status as a REIT, among other </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">purposes, the Fund’s Declaration of Trust contains limitations on the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">transfer and ownership of shares of the Fund’s Common Shares which </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">prohibit: (i) any person, entity or group from owning or acquiring, directly </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">or indirectly, more than 9.8% in value or number of shares, whichever is </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">more restrictive, of the aggregate of the Fund’s then outstanding shares </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">of capital stock of all classes and series or more than 9.8% in value or </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">number of shares, whichever is more restrictive, of the aggregate of the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund’s then outstanding Common Shares; (ii) any person or entity from </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">owning or acquiring, directly or indirectly shares of the Fund’s Common </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Shares to the extent such ownership would result in the Fund’s being </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">“closely held” within the meaning of Section 856(h) of the Code </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">(without regard to whether the ownership interest is held during the last </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">half of a taxable year) or otherwise failing to qualify as a REIT; and (iii) </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">any transfer of or other event or transaction with respect to shares of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">capital stock that would result in the beneficial ownership of the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">outstanding shares of capital stock by fewer than 100 persons </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">(determined under the principles of Section 856(a)(5) of the Code). The </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund’s Declaration of Trust provides that any transfer of shares of the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund’s capital stock that, if effective, would result in a violation of the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">above restrictions, shall be automatically void and the intended </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">transferee shall acquire no rights in such shares of capital stock.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Any person who acquires or attempts to acquire shares of the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">capital stock in violation of the foregoing restrictions, is required to give </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">immediate written notice to the Fund of such event, or, in the case of </span></div><div style="line-height:12.0pt;text-align:left;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">such a proposed or attempted transaction, 15 days written notice prior </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">to such purported transaction. In both cases, such persons must provide </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">to the Fund such other information as PIMCO may request to determine </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">the effect, if any, of such event on the Fund’s status as a REIT.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The foregoing restrictions will continue to apply until the Board </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">determines it is no longer in the Fund’s best interest to attempt to, or to </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">continue to, qualify as a REIT or that compliance with the restrictions is </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">no longer required for the Fund to qualify as a REIT.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The ownership limits do not apply to a person or persons that the Board </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">exempts from the ownership limit upon appropriate assurances </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">(including certain representations and undertakings from the intended </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">transferee) that the Fund’s qualification as a REIT is not jeopardized. In </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">addition, the Fund’s Declaration of Trust exempts PIMCO and its affiliates </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">from the Ownership Limit.</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;line-height:12pt"> </span></div><div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">Every owner of 5% or more (or such lower percentage as required by the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Code or the regulations promulgated thereunder) of the Fund’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">outstanding Common Shares is required, within 30 days after the end of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">each taxable year, to give the Fund written notice stating his, her or its </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">name and address, the number of shares of each class and series of the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund’s Common Shares which the shareholders beneficially owns and a </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">description of the manner in which the shares are held. Each such owner </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">shall provide the Fund with such additional information as the Fund may </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">request in order to determine the effect, if any, of the shareholder’s </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">beneficial ownership on the Fund’s qualification as a REIT and to ensure </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">compliance with the restrictions noted above. In addition, each </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">shareholders shall upon demand be required to provide the Fund with </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">such information as the Fund may request in order to determine the </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">Fund’s qualification as a REIT and to comply with the requirements of </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">any taxing authority or governmental authority or to determine such </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">compliance.</span></div> <div style="margin-top:4pt;"><span style="color:#333333;font-family:arial narrow;font-size:10pt">The following table shows the amounts of Common Shares of the Fund </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">that were authorized and outstanding as of March 31, </span><span style="color:#333333;font-family:arial narrow;font-size:10pt">2026</span><span style="color:#333333;font-family:arial narrow;font-size:10pt">:</span><span style="color:#000000;font-family:arial narrow;font-size:1pt"> </span></div> <table cellpadding="0" cellspacing="0" style="border-bottom:0.5pt solid #00687d;empty-cells:show;width:263pt"> <tr style="height:14.25pt"> <td style="background-color:#FFFFFF;border-bottom:0.5pt solid #00687D;padding-bottom:1.75pt;padding-top:1.75pt;vertical-align:Bottom;width:106.48pt;"> <div style="line-height:8.0pt;text-align:left;"> <div style="margin-left:3pt;margin-right:6pt;text-align:left;white-space:nowrap;"><span style="color:#00687d;font-family:arial narrow;font-size:7pt;font-weight:bold;margin-left:0.0pt">(1)</span></div> </div> </td> <td style="background-color:#FFFFFF;border-bottom:0.5pt solid #00687D;padding-bottom:1.75pt;padding-top:1.75pt;vertical-align:Bottom;width:44.14pt;"> <div style="line-height:8.0pt;text-align:left;"> <div style="margin-left:6pt;margin-right:6pt;text-align:center;white-space:nowrap;"><span style="color:#00687d;font-family:arial narrow;font-size:7pt;font-weight:bold">(2)</span></div> </div> </td> <td style="background-color:#FFFFFF;border-bottom:0.5pt solid #00687D;padding-bottom:1.75pt;padding-top:1.75pt;vertical-align:Bottom;width:58.83pt;"> <div style="line-height:8.0pt;text-align:left;"> <div style="margin-left:6pt;margin-right:6pt;text-align:center;white-space:nowrap;"><span style="color:#00687d;font-family:arial narrow;font-size:7pt;font-weight:bold">(3)</span></div> </div> </td> <td style="background-color:#FFFFFF;border-bottom:0.5pt solid #00687D;padding-bottom:1.75pt;padding-top:1.75pt;vertical-align:Bottom;width:53.55pt;"> <div style="line-height:8.0pt;text-align:left;"> <div style="margin-left:6pt;margin-right:3pt;text-align:center;white-space:nowrap;"><span style="color:#00687d;font-family:arial narrow;font-size:7pt;font-weight:bold">(4)</span></div> </div> </td> </tr> <tr style="height:39.5pt"> <td style="background-color:azure;border-bottom:0.5pt solid #00687D;padding-bottom:1.75pt;padding-top:1.75pt;vertical-align:Bottom;width:106.48pt;"> <div style="line-height:8.0pt;text-align:left;"> <div style="margin-left:3pt;margin-right:6pt;text-align:left;white-space:nowrap;"><span style="color:#00687d;font-family:arial narrow;font-size:7pt;font-weight:bold;margin-left:0.0pt">Title of Class</span></div> </div> </td> <td style="background-color:azure;border-bottom:0.5pt solid #00687D;padding-bottom:1.75pt;padding-top:1.75pt;vertical-align:Bottom;width:44.14pt;"> <div style="line-height:8.0pt;text-align:left;"> <div style="margin-left:6pt;margin-right:6pt;text-align:center;white-space:nowrap;"><span style="color:#00687d;font-family:arial narrow;font-size:7pt;font-weight:bold">Amount</span></div> <div style="margin-left:6pt;margin-right:6pt;text-align:center;white-space:nowrap;"><span style="color:#00687d;font-family:arial narrow;font-size:7pt;font-weight:bold">Authorized</span></div> </div> </td> <td style="background-color:azure;border-bottom:0.5pt solid #00687D;padding-bottom:1.75pt;padding-top:1.75pt;vertical-align:Bottom;width:58.83pt;"> <div style="line-height:8.0pt;text-align:left;"> <div style="margin-left:6pt;margin-right:6pt;text-align:center;white-space:nowrap;"><span style="color:#00687d;font-family:arial narrow;font-size:7pt;font-weight:bold">Amount Held by</span></div> <div style="margin-left:6pt;margin-right:6pt;text-align:center;white-space:nowrap;"><span style="color:#00687d;font-family:arial narrow;font-size:7pt;font-weight:bold">the Fund for its</span></div> <div style="margin-left:6pt;margin-right:6pt;text-align:center;white-space:nowrap;"><span style="color:#00687d;font-family:arial narrow;font-size:7pt;font-weight:bold">Account</span></div> </div> </td> <td style="background-color:azure;border-bottom:0.5pt solid #00687D;padding-bottom:1.75pt;padding-top:1.75pt;vertical-align:Bottom;width:53.55pt;"> <div style="line-height:8.0pt;text-align:left;"> <div style="margin-left:6pt;margin-right:3pt;text-align:center;white-space:nowrap;"><span style="color:#00687d;font-family:arial narrow;font-size:7pt;font-weight:bold">Amount</span></div> <div style="margin-left:6pt;margin-right:3pt;text-align:center;white-space:nowrap;"><span style="color:#00687d;font-family:arial narrow;font-size:7pt;font-weight:bold">Outstanding</span></div> <div style="margin-left:6pt;margin-right:3pt;text-align:center;white-space:nowrap;"><span style="color:#00687d;font-family:arial narrow;font-size:7pt;font-weight:bold">Exclusive of</span></div> <div style="margin-left:6pt;margin-right:3pt;text-align:center;white-space:nowrap;"><span style="color:#00687d;font-family:arial narrow;font-size:7pt;font-weight:bold">Amount Shown</span></div> <div style="margin-left:6pt;margin-right:3pt;text-align:center;white-space:nowrap;"><span style="color:#00687d;font-family:arial narrow;font-size:7pt;font-weight:bold">Under (3)</span></div> </div> </td> </tr> <tr style="height:11.25pt"> <td style="background-color:#FFFFFF;padding-bottom:3pt;padding-top:1.75pt;vertical-align:Top;width:106.48pt;"> <div style="line-height:7.5pt;text-align:left;"> <div style="margin-left:3pt;margin-right:6pt;text-align:left;white-space:nowrap;"><span style="color:#3f3f3f;font-family:arial narrow;font-size:7.5pt;margin-left:0.0pt">Institutional Class Common Shares</span></div> </div> </td> <td style="background-color:#FFFFFF;padding-bottom:3pt;padding-top:1.75pt;vertical-align:Top;width:44.14pt;"> <div style="line-height:7.5pt;text-align:left;"> <div style="margin-left:6pt;margin-right:6pt;text-align:center;white-space:nowrap;"><span style="color:#3f3f3f;font-family:arial narrow;font-size:7.5pt;margin-left:0.00pt">Unlimited</span></div> </div> </td> <td style="background-color:#FFFFFF;padding-bottom:3pt;padding-top:1.75pt;vertical-align:Top;width:58.83pt;"> <div style="line-height:7.5pt;text-align:left;"> <div style="margin-left:6pt;margin-right:6pt;text-align:center;white-space:nowrap;"><span style="color:#3f3f3f;font-family:arial narrow;font-size:7.5pt;margin-left:0.00pt">0</span></div> </div> </td> <td style="background-color:#FFFFFF;padding-bottom:3pt;padding-top:1.75pt;vertical-align:Top;width:53.55pt;"> <div style="line-height:7.5pt;text-align:left;"> <div style="margin-left:6pt;margin-right:3pt;text-align:center;white-space:nowrap;"><span style="color:#3f3f3f;font-family:arial narrow;font-size:7.5pt;margin-left:0.00pt">40,756,369</span></div> </div> </td> </tr> <tr style="height:11pt"> <td style="background-color:azure;padding-bottom:3pt;padding-top:3pt;vertical-align:Top;width:106.48pt;"> <div style="line-height:7.5pt;text-align:left;"> <div style="margin-left:3pt;margin-right:6pt;text-align:left;white-space:nowrap;"><span style="color:#3f3f3f;font-family:arial narrow;font-size:7.5pt;margin-left:0.0pt">Class A-3 Common Shares</span></div> </div> </td> <td style="background-color:azure;padding-bottom:3pt;padding-top:3pt;vertical-align:Top;width:44.14pt;"> <div style="line-height:7.5pt;text-align:left;"> <div style="margin-left:6pt;margin-right:6pt;text-align:center;white-space:nowrap;"><span style="color:#3f3f3f;font-family:arial narrow;font-size:7.5pt;margin-left:0.00pt">Unlimited</span></div> </div> </td> <td style="background-color:azure;padding-bottom:3pt;padding-top:3pt;vertical-align:Top;width:58.83pt;"> <div style="line-height:7.5pt;text-align:left;"> <div style="margin-left:6pt;margin-right:6pt;text-align:center;white-space:nowrap;"><span style="color:#3f3f3f;font-family:arial narrow;font-size:7.5pt;margin-left:0.00pt">0</span></div> </div> </td> <td style="background-color:azure;padding-bottom:3pt;padding-top:3pt;vertical-align:Top;width:53.55pt;"> <div style="line-height:7.5pt;text-align:left;"> <div style="margin-left:6pt;margin-right:3pt;text-align:center;white-space:nowrap;"><span style="color:#3f3f3f;font-family:arial narrow;font-size:7.5pt;margin-left:0.00pt">4,463,600</span></div> </div> </td> </tr> <tr style="height:11pt"> <td style="background-color:#FFFFFF;padding-bottom:3pt;padding-top:3pt;vertical-align:Top;width:106.48pt;"> <div style="line-height:7.5pt;text-align:left;"> <div style="margin-left:3pt;margin-right:6pt;text-align:left;white-space:nowrap;"><span style="color:#3f3f3f;font-family:arial narrow;font-size:7.5pt;margin-left:0.0pt">Class A-4 Common Shares</span></div> </div> </td> <td style="background-color:#FFFFFF;padding-bottom:3pt;padding-top:3pt;vertical-align:Top;width:44.14pt;"> <div style="line-height:7.5pt;text-align:left;"> <div style="margin-left:6pt;margin-right:6pt;text-align:center;white-space:nowrap;"><span style="color:#3f3f3f;font-family:arial narrow;font-size:7.5pt;margin-left:0.00pt">Unlimited</span></div> </div> </td> <td style="background-color:#FFFFFF;padding-bottom:3pt;padding-top:3pt;vertical-align:Top;width:58.83pt;"> <div style="line-height:7.5pt;text-align:left;"> <div style="margin-left:6pt;margin-right:6pt;text-align:center;white-space:nowrap;"><span style="color:#3f3f3f;font-family:arial narrow;font-size:7.5pt;margin-left:0.00pt">0</span></div> </div> </td> <td style="background-color:#FFFFFF;padding-bottom:3pt;padding-top:3pt;vertical-align:Top;width:53.55pt;"> <div style="line-height:7.5pt;text-align:left;"> <div style="margin-left:6pt;margin-right:3pt;text-align:center;white-space:nowrap;"><span style="color:#3f3f3f;font-family:arial narrow;font-size:7.5pt;margin-left:0.00pt">1,013</span></div> </div> </td> </tr> <tr style="height:11pt"> <td style="background-color:azure;padding-bottom:3pt;padding-top:3pt;vertical-align:Top;width:106.48pt;"> <div style="line-height:7.5pt;text-align:left;"> <div style="margin-left:3pt;margin-right:6pt;text-align:left;white-space:nowrap;"><span style="color:#3f3f3f;font-family:arial narrow;font-size:7.5pt;margin-left:0.0pt">Class F Common Shares</span></div> </div> </td> <td style="background-color:azure;padding-bottom:3pt;padding-top:3pt;vertical-align:Top;width:44.14pt;"> <div style="line-height:7.5pt;text-align:left;"> <div style="margin-left:6pt;margin-right:6pt;text-align:center;white-space:nowrap;"><span style="color:#3f3f3f;font-family:arial narrow;font-size:7.5pt;margin-left:0.00pt">Unlimited</span></div> </div> </td> <td style="background-color:azure;padding-bottom:3pt;padding-top:3pt;vertical-align:Top;width:58.83pt;"> <div style="line-height:7.5pt;text-align:left;"> <div style="margin-left:6pt;margin-right:6pt;text-align:center;white-space:nowrap;"><span style="color:#3f3f3f;font-family:arial narrow;font-size:7.5pt;margin-left:0.00pt">0</span></div> </div> </td> <td style="background-color:azure;padding-bottom:3pt;padding-top:3pt;vertical-align:Top;width:53.55pt;"> <div style="line-height:7.5pt;text-align:left;"> <div style="margin-left:6pt;margin-right:3pt;text-align:center;white-space:nowrap;"><span style="color:#3f3f3f;font-family:arial narrow;font-size:7.5pt;margin-left:0.00pt">11,540,309</span></div> </div> </td> </tr> <tr style="height:8.5pt"> <td style="background-color:#FFFFFF;padding-bottom:2pt;padding-top:3pt;vertical-align:Top;width:106.48pt;"> <div style="line-height:7.5pt;text-align:left;"> <div style="margin-left:3pt;margin-right:6pt;text-align:left;white-space:nowrap;"><span style="color:#3f3f3f;font-family:arial narrow;font-size:7.5pt;margin-left:0.0pt">Series A Preferred Shares</span></div> </div> </td> <td style="background-color:#FFFFFF;padding-bottom:2pt;padding-top:3pt;vertical-align:Top;width:44.14pt;"> <div style="line-height:7.5pt;text-align:left;"> <div style="margin-left:6pt;margin-right:6pt;text-align:center;white-space:nowrap;"><span style="color:#3f3f3f;font-family:arial narrow;font-size:7.5pt;margin-left:0.00pt">Unlimited</span></div> </div> </td> <td style="background-color:#FFFFFF;padding-bottom:2pt;padding-top:3pt;vertical-align:Top;width:58.83pt;"> <div style="line-height:7.5pt;text-align:left;"> <div style="margin-left:6pt;margin-right:6pt;text-align:center;white-space:nowrap;"><span style="color:#3f3f3f;font-family:arial narrow;font-size:7.5pt;margin-left:0.00pt">0</span></div> </div> </td> <td style="background-color:#FFFFFF;padding-bottom:2pt;padding-top:3pt;vertical-align:Top;width:53.55pt;"> <div style="line-height:7.5pt;text-align:left;"> <div style="margin-left:6pt;margin-right:3pt;text-align:center;white-space:nowrap;"><span style="color:#3f3f3f;font-family:arial narrow;font-size:7.5pt;margin-left:0.00pt">125</span></div> </div> </td> </tr> </table> Institutional Class Common Shares 0 40756369 Class A-3 Common Shares 0 4463600 Class A-4 Common Shares 0 1013 Class F Common Shares 0 11540309 Series A Preferred Shares 0 125 <div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Common Shares</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:17pt"> </span></div> Common Shareholders will be entitled to the payment of dividends and other distributions when, as and if declared by the Board. Upon liquidation of the Fund, after paying or adequately providing for the payment of all liabilities of the Fund and the liquidation preference with respect to any outstanding Preferred Shares, and upon receipt of such releases, indemnities and refunding agreements as they deem necessary for their protection, the Trustees may distribute the remaining assets of the Fund among the Fund’s Common Shareholders. If the Fund does hold a meeting of shareholders, Common Shares of the Fund entitle their holders to one vote for each Common Share held; however, separate votes are taken by each class of Common Shares on matters affecting an individual class of Common Shares. Each fractional share shall be entitled to a proportionate fractional vote, except as otherwise provided by the Declaration of Trust, Bylaws, or required by applicable law. <div style="margin-top:10pt;"><span style="color:#00687d;font-family:arial narrow;font-size:10pt;font-weight:bold">Preferred Shares</span><span style="color:#000000;font-family:arial narrow;font-size:10pt;font-weight:bold;line-height:12pt"> </span></div> Common Shareholders have no preemptive right to purchase any shares of Preferred Shares that the Fund may issue. While neither the Fund nor the Distributor impose an initial sales charge on Institutional Class or Class A-3 Common Shares if you buy Institutional Class or Class A-3 Common Shares through certain financial firms, they may directly charge you transaction or other fees in such amount as they may determine. Please consult your financial firm for additional information. “Interest Payments on Borrowed Funds” are borne by the Fund separately from the advisory and administrative fees paid to PIMCO. Excluding such expenses, estimated Total Annual Fund Operating Expenses After Expense Reimbursement are 1.92% for Institutional Class and Class F shares and 2.67% for Class A-3 and Class A-4 shares. Interest Payments on Borrowed Funds is calculated and presented equally across all share classes. As a result, Total Annual Fund Operating Expenses may not match the Ratio of Expenses to Average Net Assets for certain share classes, as set forth in the Financial Highlights table of the Fund's prospectus, because the Ratio of Expenses to Average Net Assets is calculated based on the average net assets of the applicable share class. “Interest Payments on Borrowed Funds” reflects the Fund’s use of leverage in the form of reverse repurchase agreements and lines of credit averaged over the period ended December 31, 2025, which represented 0.21% and 6.20%, respectively of the Fund's average total managed assets (or 0.23% and 6.63%, respectively, of the Fund's average net assets attributable to common shares), as of that date, at an interest expense rate of 4.563% and 5.882%, respectively. The actual amount of leverage used and borrowing expenses borne by the Fund will vary over time in accordance with the level of the Fund's use of secured credit facilities from certain financial institutions and/or other forms of borrowings and variations in market interest rates. Borrowing expense is required to be treated as an expense of the Fund for accounting purposes. Any associated income or gains (or losses) realized from leverage obtained through such instruments is not reflected in the Annual Fund Operating Expenses table above, but would be reflected in the Fund's performance result. “Other Expenses” are based on estimated amounts for the current fiscal year. “Property-Level Expenses” represents estimated fees and expenses related to property management, disposition expenses, any other expenses related to investments in real property by the Fund’s consolidated subsidiaries. In addition, the Fund also expects that its unconsolidated operating entities will incur property management, disposition and other expenses related to investments in real property, the costs of which will be indirectly borne by Common Shareholders. The Fund’s real estate operating subsidiaries have and expect in the future to hire affiliated or unaffiliated property managers or other service providers (who could also be joint venture partners for an investment) at prevailing market rates to perform management and specialized services for the Fund’s commercial real estate (“CRE”) investments. Although the Fund is permitted to charge a maximum sales charge of 3.00%, the Fund has elected to currently charge a maximum sales charge of 2.00%. See “Plan of Distribution - Purchasing Shares - Reductions and Waivers of Initial Sales Charges and EWCs” - Class A-4 Common Shares in this prospectus for more information on sales charge waivers and discounts. PIMCO has contractually agreed (the “Expense Limitation Agreement”), through May 1, 2027, to waive its supervisory and administrative fee, or reimburse the Fund, to the extent that organizational expenses (including any initial offering expenses), the payment of expenses associated with obtaining or maintaining a Legal Entity Identifier (“LEI”) and/or payment of the Fund’s pro rata Trustees’ fees (the “Specified Expenses”) in any fiscal year exceed 0.07% of the Fund’s average daily net assets (the “Expense Limit”). Under the Expense Limitation Agreement, if, in any month during which the Administration Agreement is in effect, the estimated annualized Specified Expenses of the Fund for that month are less than the Expense Limit, PIMCO shall be entitled to reimbursement by the Fund of any Supervisory and Administrative Fees waived or reduced pursuant to the Expense Limitation Agreement (the “Reimbursement Amount”) during the previous thirty-six (36) months, to the extent that the Fund’s annualized Specified Expenses plus the amount so reimbursed does not exceed, for such month, the Expense Limit (or the expense limit in place at the time the amount being recouped was originally waived if lower than the Expense Limit) or any future expense limitation that may be in place, provided that such amount paid to PIMCO will in no event exceed the total Reimbursement Amount and will not include any amounts previously reimbursed to PIMCO. The Expense Limitation Agreement shall automatically renew for one-year terms unless PIMCO provides written notice to the Fund of the termination of the Expense Limitation Agreement, which notice shall be received by the Fund at least 30 days prior to the end of the then-current term. In addition, the Expense Limitation Agreement shall terminate upon termination of the Administration Agreement, or it may be terminated by the Fund, without payment of any penalty, upon ninety (90) days’ prior written notice to PIMCO at its principal place of business. The example above should not be considered a representation of future expenses. Actual expenses may be higher or lower than those shown. The example assumes that the estimated Interest Payments on Borrowed Funds and Other Expenses set forth in the Annual Fund Operating Expenses table are accurate, that the Total Annual Fund Operating Expenses (as described above) remain the same for all time periods shown and that all dividends and distributions are reinvested at NAV. Actual expenses may be greater or less than those assumed. Moreover, the Fund’s actual rate of return may be greater or less than the hypothetical 5% annual return shown in the example. In addition to the fees and expenses described above, you may also be required to pay transaction or other fees on purchases of Common Shares of the Fund, which are not reflected in the example. See “Appendix B - Financial Firm-Specific Fee Variations” in this prospectus for more information on intermediary-specific variations.