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Principal Real Estate Investors and U.S. Bank Join Forces in CMBS Market

Des Moines, Iowa and Minneapolis, Minn.- Oct. 24, 2005 - Principal Real Estate Investors and U.S. Bank National Association announced today that they are joining forces to create Principal Commercial Funding II, a jointly-owned business that will compete in the commercial mortgage backed securities ("CMBS") market. Principal Real Estate Investors is the real estate investment arm of Principal Global Investors, a member of the Principal Financial Group (NYSE: PFG). U.S. Bank National Association is the principal banking subsidiary of U.S. Bancorp (NYSE: USB). The new company will be the CMBS platform for both Principal Real Estate Investors and U.S. Bank and will focus on securitizing commercial mortgages originated by both Principal Real Estate Investors and U.S. Bank on its behalf.

This is a landmark agreement that sets a new precedent in the CMBS world," said Pat Halter, chief executive officer of Principal Real Estate Investors. "This arrangement will allow Principal Real Estate Investors and U.S. Bank to leverage their independent and complementary strengths to create a nationwide platform unparalleled in the industry."

Principal Real Estate Investors is the nation's fourth largest institutional real estate manager with over $30 billion in debt and equity commercial real estate assets under management. As a leading originator in the commercial mortgage lending market, Principal Real Estate Investors primarily focuses on providing non-recourse financing solutions for stabilized property, including first mortgages and credit tenant loans, as well as some construction, bridge and mezzanine financing.

As the nation's sixth largest bank, U.S. Bank is also a significant real estate lender, with over $27 billion in real estate assets under management. U.S. Bank builds long term relationships in order to help clients better run their businesses by providing a variety of financial solutions that include secured real estate loans, unsecured credit, deposits and treasury management, syndication, structured finance and mezzanine lending.

"We are pleased to partner with Principal Real Estate Investors in the CMBS business," commented Joe Hoesley, executive vice president and head of U.S. Bank's commercial real estate business. "This arrangement gives U.S. Bank immediate access to Principal's CMBS expertise, enabling us to provide our clients with long-term non-recourse commercial mortgage finance solutions.

"Combining the commercial mortgage origination capabilities of both Principal Real Estate Investors and U.S. Bank will give the new company unequaled access to mortgage investments across the country," added Hoesley. Principal Commercial Funding II will have over 175 loan originators sourcing investment opportunities across the United States, with Principal Real Estate Investors relying on its well-established network of mortgage banking relationships and U.S. Bank its long-standing client relationships.

In addition to originating loans, both Principal Real Estate Investors and U.S. Bank will be actively involved in the operations of Principal Commercial Funding II. Principal Real Estate Investors will provide all customary CMBS business management functions, including pipeline management, underwriting and closing of loans, securitization services and loan servicing. U.S. Bank will provide a warehouse facility and cash management services to the enterprise.

Said Hoesley, "The company formation process has highlighted the complementary nature of the products Principal Real Estate Investors and U.S. Bank offer to their respective markets." Halter added, "The additional capital and loan origination capacity provided by U.S. Bank, combined with Principal Real Estate Investors' experience and historical track record in the CMBS arena, will position the company well for strong future growth."

Principal Commercial Funding II will begin operations immediately, and will begin contributing collateral to securitizations during the first quarter of 2006.

About Principal Real Estate Investors:
Principal Real Estate Investors is the fourth largest institutional real estate manager in the United States based on tax-exempt assets under management and manages or subadvises $30 billion in commercial real estate assets. The firm's real estate capabilities include both public and private equity and debt investment alternatives. Principal Real Estate Investors is the dedicated real estate group of Principal Global Investors.

About Principal Global Investors:
Principal Global Investors is a diversified asset management organization and a member of the Principal Financial Group®, with expertise in equities, fixed income and real estate investments, as well as specialized overlay and advisory services. Principal Global Investors manages $155 billion in assets primarily for retirement plans and other institutional clients.

About the Principal Financial Group:
The Principal Financial Group (The Principal ®) is a leader in offering businesses, individuals and institutional clients a wide range of financial products and services, including retirement and investment services, life and health insurance and banking through its diverse family of financial services companies. A member of the Fortune 500, the Principal Financial Group has $187.8 billion in assets under management and serves clients worldwide from offices in Asia, Australia, Europe, Latin America and the United States. Principal Financial Group, Inc. is traded on the New York Stock Exchange under the ticker symbol PFG. For more information, visit www.principal.com.

About U.S. Bancorp
U.S. Bancorp, with $207 billion in assets, is the 6th largest financial holding company in the United States. The company operates 2,396 banking offices and 4,986 ATMs in 24 states, and provides a comprehensive line of banking, brokerage, insurance, investment, mortgage, trust and payment services products to consumers, businesses and institutions. U.S. Bancorp is home of the Five Star Service Guarantee, in which the company pays customers if certain key banking benefits and services are not met. U.S. Bancorp is the parent company of U.S. Bank. Visit U.S. Bancorp on the web at www.usbank.com.

Principal Financial Group
Investors: Tom Graf, 515-235-9500, graf.tom@principal.com
Media: Tina Marchetti, 515-248-0065, marchetti.tina@principal.com

U.S. Bancorp
Investors: Judith T. Murphy, 612-303-0783, judith.murphy@usbank.com
Media: Steve Dale, 612-303-0784, steve.dale@usbank.com

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding U.S. Bancorp's business which are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" in the Company's Annual Report or Form 10-K for the most recently ended fiscal year.

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