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|UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549FORM 10-K

(Mark One)

| | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE 
      SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
| | ----------------------------------------------------------------------------------------------------------

For the fiscal year ended December 31, 2005

OR

| | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE 
      SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
| | -----------------------------------------------------------------------------------------------------------------

Commission file Number 33-20018

|PRUCO LIFE INSURANCE COMPANY OF NEW JERSEYin respect of
|-------------------------------------------------------

|                                                           
|-----------------------------------------------------------
|PRUCO
    LIFE OF NEW JERSEY CONTRACT REAL PROPERTY ACCOUNT
|                                                           
|(Exact name of registrant as specified in its charter)     
|                                                           

|New Jersey                                                    |  | 22-2426091                       
|------------------------------------------------------------- |  | ---------------------------------
|                                                              |  |                                  
|(State or other jurisdiction ofincorporation or organization) |  | (IRS Employer Identification No.)

|213
    Washington Street, Newark, New Jersey 07102-2992        
|----------------------------------------------------------------
|                                                                
|(Address
    of principal executive offices) (Zip Code)         
|                                                                
|(800)
    778-2255                                              
|                                                                
|(Registrants Telephone
            Number, including area code)

Indicate
      by check mark if the registrant is a well-known seasoned issuer, as defined
      in Rule 405 of the Securites Act.     YES     NO Indicate
      by check mark if the registrant is not required to file reports pursuant
to Section 13 or Section 15(d) of the Act.     YES     NO


Indicate by check mark if disclosure
      filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter)
      is not contained herein, and will not be contained, to the best of registrants
      knowledge, in definitive proxy or information statements incorporated by
      reference in part III of this Form 10-K or any amendment to this Form 10-K.


Indicate by check mark whether
        the Registrant (1) has filed all reports required to be filed by Section
        13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
        12 months (or for such shorter period that the registrant was required
        to file such reports), and (2) has been subject to such filing requirements
  for the past 90 days.     YES     NO


Indicate by check mark whether
      the registrant is a large accelerated filer, an accelerated filer, or a
      non-accelerated filer. See definition of accelerated filer and large accelerated filer in
  Rule 12b-2 of the Exchange Act (check one)


Large Accelerated filer            Accelerated
      filer            Non-accelerated
filer

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of this Act)    Yes        No


DOCUMENTS INCORPORATED BY REFERENCE

THE INFORMATION REQUIRED TO BE
      FURNISHED PURSUANT TO PART III OF THIS FORM 10-K IS SET FORTH IN, AND IS
      HEREBY INCORPORATED BY REFERENCE HEREIN FROM, THE REGISTANTS DEFINITIVE
      PROXY STATEMENT OR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY
      9, 2006, TO BE FILED WITH BY THE REGISTRANT WITH THE SECURITIES AND EXCHANGE
      COMMISSION PURSUANT TO REGULATION 14A NOT LATER THAN 120 DAYS AFTER THE
      YEAR ENDED DECEMBER 31, 2005.

The Pruco Life of New Jersey Variable Contract Real Property Account meets the conditions set forth in
 General Instruction (I) (1) (a) and (b) on Form 10-K and is therefore filing this Form with reduced disclosure.

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PRUCO LIFE OF NEW JERSEY CONTRACTREAL PROPERTY ACCOUNT(Registrant)

INDEX

|Item     |  |  |                                                                                                                     | Page | 
|-------- |  |  | ------------------------------------------------------------------------------------------------------------------- | ---- | 
|No.      |  |  |                                                                                                                     | No.  | 
|         |  |  |                                                                                                                     |      | 
|         |  |  | Cover Page                                                                                                          |      | 
|         |  |  |                                                                                                                     |      | 
|         |  |  | Index                                                                                                               |      | 
|         |  |  |                                                                                                                     |      | 
|         |  |  | Forward-Looking Statement Disclosure                                                                                |      | 
|         |  |  |                                                                                                                     |      | 
|PART I   | 
|         |  |  |                                                                                                                     |      | 
|1.       |  |  | Business                                                                                                            |      | 
|         |  |  |                                                                                                                     |      | 
|1A.      |  |  | Risk Factors                                                                                                        |      | 
|         |  |  |                                                                                                                     |      | 
|1B.      |  |  | Unresolved Staff Comments                                                                                           |      | 
|         |  |  |                                                                                                                     |      | 
|2.       |  |  | Properties                                                                                                          |      | 
|         |  |  |                                                                                                                     |      | 
|3.       |  |  | Legal Proceedings                                                                                                   |      | 
|         |  |  |                                                                                                                     |      | 
|4.       |  |  | Submission of Matters to a Vote of Security Holders                                                                 |      | 
|         |  |  |                                                                                                                     |      | 
|PART II  | 
|         |  |  |                                                                                                                     |      | 
|5.       |  |  | Market for the Registrants Interests and Related Security Holder Matters and Issuer
Purchases of Equity Securities |      | 
|         |  |  |                                                                                                                     |      | 
|6.       |  |  | Selected Financial Data                                                                                             |      | 
|         |  |  |                                                                                                                     |      | 
|7.       |  |  | Managements Discussion
    and Analysis of Financial Condition and Results of Operations                           |      | 
|         |  |  |                                                                                                                     |      | 
|7A.      |  |  | Quantitative and Qualitative Disclosures About Market Risk                                                          |      | 
|         |  |  |                                                                                                                     |      | 
|8.       |  |  | Financial Statements and Supplementary Data                                                                         |      | 
|         |  |  |                                                                                                                     |      | 
|9.       |  |  | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure                                |      | 
|         |  |  |                                                                                                                     |      | 
|9A.      |  |  | Controls and Procedures                                                                                             |      | 
|         |  |  |                                                                                                                     |      | 
|9B.      |  |  | Other Information                                                                                                   |      | 
|         |  |  |                                                                                                                     |      | 
|PART III | 
|         |  |  |                                                                                                                     |      | 
|10.      |  |  | Directors and Executive Officers of the Registrant                                                                  |      | 
|         |  |  |                                                                                                                     |      | 
|11.      |  |  | Executive Compensation                                                                                              |      | 
|         |  |  |                                                                                                                     |      | 
|12.      |  |  | Security Ownership of Certain Beneficial Owners and Management                                                      |      | 
|         |  |  |                                                                                                                     |      | 
|13.      |  |  | Certain Relationships and Related Transactions                                                                      |      | 
|         |  |  |                                                                                                                     |      | 
|14.      |  |  | Principal Accounting Fees and Services                                                                              |      | 
|         |  |  |                                                                                                                     |      | 
|PART IV  | 
|         |  |  |                                                                                                                     |      | 
|15.      |  |  | Exhibits, Financial Statement Schedules                                                                             |      | 
|         |  |  |                                                                                                                     |      | 
|         |  |  | Exhibit Index                                                                                                       |      | 
|         |  |  |                                                                                                                     |      | 
|         |  |  | Signatures                                                                                                          |      | 

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Forward-Looking Statement Disclosure

Some of the statements included
    in this Annual Report on Form 10-K, including but not limited to those in
    the Managements Discussion and Analysis of Financial Condition and
    Results of Operations, may constitute forward-looking statements within the
    meaning of the U.S. Private Securities Litigation Reform Act of 1995. Words
    such
    as expects, believes, anticipates, includes, plans, assumes, estimates, projects, intends,
    should, will, shall, or variations of such
    words are generally part of forward-looking statements. Forward-looking
statements are made based on managements current expectations and beliefs
concerning future developments and their potential effects upon Pruco Life Insurance
Company of New Jersey (the Company) or the Prudential Variable Contract
Real Property Account (the Real
Property Account). There can be no assurances that future developments
affecting the Company or the Real Property Account will be those anticipated
by management. These forward-looking statements are not a guarantee of future
performance and involve risks and  uncertainties, and there are certain important
factors that could cause actual results to differ, possibly materially, from
expectations or estimates reflected in such forward-looking statements, including
among others: (1) general economic, market and political conditions, including
the performance and fluctuations of stock, real estate and other financial markets;
(2) interest rate fluctuations; (3) re-estimates of our reserves for future policy
benefits and claims; (4) differences between actual experience regarding mortality,
morbidity, persistency, surrender experience, interest rates, or market returns
and the assumptions we use in pricing our products, establishing liabilities
and reserves or for other purposes; (5) changes in our assumptions related to
deferred policy acquisition costs and valuation of business acquired or goodwill; (6) changes
in our claims-paying or credit ratings; (7) investment losses and defaults; (8)
competition in our product lines and for personnel; (9) changes in tax law; (10) economic, political, currency and other risks relating to our international operations; (11) fluctuations in foreign currency exchange rates and foreign securities markets; (12) regulatory or legislative changes; (13) adverse determinations in litigation or regulatory matters and our exposure to contingent liabilities, including in connection with our divestiture or winding down of businesses; (14) domestic or international military  actions, natural or man-made disasters including terrorist activities or pandemic disease, or other events resulting in catastrophic loss of life;  (15) ineffectiveness of risk management policies and procedures in identifying, monitoring and managing risks; (16) effects of acquisitions, divestitures and restructurings, including possible difficulties in integrating and realizing the projected results of acquisitions; (17) changes in statutory or U.S. GAAP accounting principles, practices or
policies; (18) changes in assumptions for retirement expense; (19) Prudential Financial, Inc.s primary reliance, as a holding company, on dividends or distributions from its subsidiaries to meet debt payment obligations and continue share repurchase, and the applicable regulatory restrictions on the ability of the subsidiaries to pay such dividends or distributions; and (20) risks due to the lack of legal separation between our Financial Services Businesses and our Closed Block Business. The Company does not intend, and is under no obligation
to update and particular forward-looking statement
included in this document.
    See Risk Factors for discussion of certain risks relating to
  the operation of the Partnership.

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PART I

|Item 1. Business
|----------------

Pruco Life of New Jersey Variable
    Contract Real Property Account (the Real Property Account), the
    Registrant, was established on October 30, 1987. The Real Property Account
    was established as a separate investment account of Pruco Life Insurance
    Company of
New Jersey (Pruco Life of New Jersey), pursuant to New Jersey law.
The Real Property Account was established to provide a real estate investment
option offered in connection with the funding of benefits under certain variable
life insurance and variable annuity contracts
(the Contracts) issued by Pruco Life of New Jersey.

The assets of the Real Property Account
    are invested in The Prudential Variable Contract Real Property Partnership
    (the Partnership). The Partnership, a general partnership organized
    under New Jersey law on April 29, 1988, was formed through an agreement
    among  Prudential, Pruco Life Insurance Company
    and Pruco Life Insurance Company of New Jersey, to provide a means for assets
    allocated to the real estate investment option under certain variable life
    insurance and variable annuity contracts
issued by the respective companies to be invested in a commingled pool.

The Partnership has an investment
    policy of investing at least 65% of its assets in direct ownership interests
    in income-producing real estate and participating mortgage loans. The largest
    portion of these real estate investments are direct ownership interests in
     income-producing real estate, such as office buildings, shopping centers,
    hotels, apartments, or industrial properties. Approximately 10% of the Partnerships
    assets are generally held in cash or invested in liquid instruments and securities
    although the Partners reserve discretion  to increase this amount to meet
    partnership liquidity requirements.

| |  | Office Properties  The
          Partnership owns office properties in Lisle, Illinois; Brentwood, Tennessee;
          and Beaverton, Oregon. Total square footage owned is approximately
          370,550 of which 77%, or 283,975 square feet, are leased between 1
          and 10 years.
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |                                                                                                                                                                                                                                                                                                    
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Apartment Complexes  The
          Partnership owns apartment complexes in Atlanta, Georgia and Raleigh,
          North Carolina, comprising a total of 490 apartment units,
           of which 93%, or 454 units, are leased. Leases range from month
          to month
          to one year.

| |  |                                                                                                                                                                                                                                                                                                                                   
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Retail Property  The
          Partnership owns retail centers in Roswell, Georgia; Kansas City, Kansas
          and Missouri; Ocean City, Maryland; and Hampton, Virginia. Total square
          footage owned is approximately 1,151,208 of which 88%, or 1,009,058
          square feet, are leased
between 1 and 30 years.

| |  |                                                                                                                                                                                                                                                    
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Industrial Properties  The
          Partnership owns an industrial property in Aurora, Colorado. Total
          square footage owned is approximately 277,930 of which 78%, or 216,474
          square feet, are leased between 1 and 10 years.

| |  |                                                                                                                                                                              
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Hotel Property  The Partnership owns a hotel property in Lake Oswego, Oregon. This joint venture investment has 161 rooms. Occupancy for the year ended 2005 averaged 76.5%.

| |  |                                                                                                                                                                                                                                                                               
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Investment in Real Estate
          Trust  The
          Partnership liquidated its entire investment in REIT shares in December
          2001. The Partnership does, however, maintain a preferred equity investment
          in an existing private REIT (see Item 7(a)).

The Partnerships investments
    are maintained so as to meet the diversification requirements set forth in
    treasury regulations issued pursuant to Section 817(h) of the Internal Revenue
    Code relating to the investments of variable life insurance and variable
    annuity  separate accounts. Section 817(h) requires, among other things,
    that the partnership will have no more than 55% of the assets invested in
    any one investment, no more than 70% of the assets will be invested in any
    two investments, no more than 80% of the assets will be
invested in any three investments, and no more than 90% of the assets will be
    invested in any four investments. To comply with regulatory requirements
    of the State of Arizona, the Partnership will limit additional investments
    in
    any
    one
    parcel or related parcels to an amount not
exceeding 10% of the Partnerships gross assets as of the prior fiscal year.



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For information regarding the Partnerships
    investments, operations, and other significant events, see Item 7, Managements
    Discussion and Analysis of Financial Condition and Results of Operations
    and Financial Statements and Supplementary Data.

The following is a description of
    general conditions in the U.S. real estate markets. It does not relate to
    specific properties held by the Partnership. The Partnership does not have
    widely diversified holdings; therefore, the discussions of vacancy rates,
    property values and returns to this section are not necessarily relevant
    to
the Partnerships portfolio. These results are not indicative of future
performance.

|Real Estate Market Overview
|---------------------------

Space market fundamentals continued
    their gradual recovery in 2005 as vacancy rates fell across all property
    types and in most major markets. The gradual recovery and continued strong
    demand for property investments drove transaction volumes to record levels
    last year. All major property types saw increases in transaction volumes
    and pricing, and further declines in capitalization rates last year. According
    to the National Council of Real Estate Investment Fiduciaries (NCREIF),
    the NCREIF Property Index, which is the benchmark for unleveraged private institutional
    real estate investments
    in the U.S., gained 5.43% in the fourth quarter, pushing the indexs

one-year total return to 20.06%.

|Office Market
|-------------

Healthier fundamentals in the office sector contributed to its improved performance last year. According to Torto Wheaton Research (TWR), a Boston-based real estate research firm, the average office vacancy rate fell to about 13.6% at the end of last year from 15.4%
at year-end 2004. Suburban vacancy rates improved by a larger margin than downtown rates, falling about 2 percentage points year-over-year, but absorption of downtown space accelerated in the second half. At year-end, the average downtown vacancy rate was 11.8%, well
below the 13.2% at the end of 2004.

Continued job growth and little risk
    of new supply rising over the next twelve months helped the NCREIF office
    subindex deliver one-year total returns of 19.46% in 2005, which included
    11.96% appreciation
    and a
one-year income return of 6.89%.

|Apartment Market
|----------------

Declining home affordability and
    continued job growth over the second half of 2005 are starting to improve
    apartment market fundamentals. Leasing concessions remain common, but vacancies
    fell
    modestly
    in many markets
    last
    year as the condo market claimed more apartment stock. The condo market has
    had both positive and negative consequences for apartment investors in recent
    years. Increasing condo supply has contributed to the fall in tenant demand
    for
    rental units.
    However, condo converters, investors who buy apartment and other properties
    for conversion to residential
condominiums, have helped raise asset values by competing for multifamily
    assets. As a result, the apartment subindex of the NCREIF Property Index
    delivered a total return of 21.15% in 2005. The apartment return included
    14.85% appreciation and a one-year
income return of 5.69%.

|Retail Market
|-------------

Although space market fundamentals
    in the retail sector remained healthy throughout 2005, retail investment
    performance slowed relative to other property types after three consecutive
    years of dramatic outperformance. Total returns for retail properties in
    the NCREIF Property Index dipped below those for office properties in the
    second and third quarters of 2005 for the first time since the third quarter
    of 2001 as investors shifted their focus from retail to other sectors where
    the near-term prospects
    for rent growth and appreciation seem better. Despite the
relatively weaker performance in 2005, retail market fundamentals remain attractive
    and retail cash yields (after deducting capital expenditures) remain the
highest of any NCREIF property type.

The retail subindex returned 5.99% during the fourth quarter of 2005 and 19.98% for the year overall. Strong appreciation accounted for a large share of the sectors total return in the fourth quarter (4.32%) and for the year as a whole (12.55%).



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|Industrial Market
|-----------------

The industrial sector experienced
    a sharp rise in tenant and investor demand last year. Industrial transaction
    volume surged to nearly $35 billion, according to Real Capital Analytics,
    a New York City-based real estate research firm, an increase of more than
    55% above the total volume in 2004. Strong absorption in many industrial
    markets
    in 2005 likely contributed to the increase. According to TWR, the average
    vacancy rate for industrial properties fell 1.7 percentage points last year
    to about
9.7% at year-end, the lowest level since 3Q01.

The NCREIF industrial subindex delivered a 20.31% total return in 2005, which included 12.32% appreciation and a 7.32% income return.

|Hotel Market
|------------

Although it remained the weakest
    of the NCREIF property types, the lodging industry continued its recovery
    in 2005 as demand rose further and new supply remained limited. According
    to Smith Travel Research (STR), a national lodging industry research firm,
    room demand rose more than 3% in 2005. With only a slight 0.4% increase in
    room supply nationally and stronger demand, particularly from business travelers,
    the national average hotel occupancy rate climbed to 63.1% from 61.3% in
    2004. Hotel revenue per available
room (RevPAR) also posted healthy gains in 2005 and has finally recovered to
    its peak reached in 2000, before the recession and terrorism caused demand
to collapse.

The NCREIF hotel subindex delivered an 18.99% total return in 2005, which included 9.50% appreciation, the lowest among the five property subtypes in the NCREIF index, and an 8.89% income return, the highest in the index.

|Item
            1A. Risk Factors
|---------------------------------

All real estate investments are subject
    to varying degrees of risk. The yields available from investments depend
    on the amounts of income generated and expenses incurred. If investment properties
    do not generate revenues sufficient to meet operating expenses, including
debt service and capital expenditures, cash flow will be adversely affected.

The revenues and value of a particular
    real estate investment may be adversely affected by a number of factors,
    including, but not limited to: the cyclical nature of the real estate market,
    general national economic conditions, local economic conditions, local real
    estate conditions, and fluctuations in operating costs, including real estate
    taxes and utilities. Certain significant expenditures associated with each
    equity investment, such as mortgage payments, real estate taxes, insurance
    and maintenance costs, are generally not reduced when circumstances cause
    a reduction in income from the investment. If a property is mortgaged to
    secure payment of indebtedness, and if the mortgaged property is unable to
    produce enough revenue to cover its mortgage or other debt payments, a loss
    could be sustained as a result of foreclosure on the property or the exercise
    of other remedies by the lender. In addition, a property's revenues and real
    estate value may also be affected by such factors as potential liability
    under applicable federal, state and local laws and regulations, which may
    vary widely depending upon location, including tax laws, environmental laws,
    Americans with Disabilities Act accessibility requirements, and rent stabilization
    laws.

|Item
            1B. Unresolved Staff Comments
|----------------------------------------------

None.

|Item 2. Properties
|------------------

Not Applicable.

|Item 3. Legal Proceedings
|-------------------------

None.

|Item 4. Submission of Matters to a Vote of Securities Holders
|-------------------------------------------------------------

Contract owners participating in the Real Property Account have no voting rights with respect to the Real Property Account.

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PART II

Item 5. Market for the Registrants Interests, Related Security Holder Matters and Issuer Purchases of Equity Securities

Owners of the Contracts may participate
    by allocating all or part of the net premiums or purchase payments to the
    Real Property Account. Contract values vary with the performance of
    the Real Property Accounts
    investments through the Partnership. Participating interests in the Real
    Property Account are not traded in any public market; therefore a discussion of
    market information
is not relevant.

As of December 31, 2005 approximately
2,481 contract owners of record held investments in the Real Property Account.

Item 6. Selected Financial Data

RESULTS OF OPERATIONS:

|                                                                     |  | Year Ended December 31, |           
|-------------------------------------------------------------------- |  | ----------------------- | ----------
|                                                                     |  |                         |           
|                                                                     |  | 2005                    |           
|                                                                     |  |                         |           
|Total Investment Income                                              |  | $                       | 28,644,271
|                                                                     |  |                         |           
|Net Investment Income                                                |  | $                       | 9,219,171 
|                                                                     |  |                         |           
|Net Realized and Unrealized (Loss) Gain on Investment in Partnership |  |                         | 15,460,619
|                                                                     |  |                         |           
|Net Increase in Net Assets Resulting From Operations                 |  | $                       | 24,679,790
|                                                                     |  |                         |           

|FINANCIAL POSITION:
|-------------------
|                   

|                                 |  | Year Ended December 31, |            
|-------------------------------- |  | ----------------------- | -----------
|                                 |  |                         |            
|                                 |  | 2005                    |            
|                                 |  |                         |            
|Total Assets                     |  | $                       | 246,015,115
|                                 |  |                         |            
|Long Term Lease Obligation       |  | $                       | 0          
|                                 |  |                         |            
|Mortgage
          Loans Payable |  | $                       | 33,195,607 
|                                 |  |                         |            

Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations

All of the assets of the Account
    are invested in the Partnership. Accordingly, the liquidity and capital resources
    and results of operations for the Account are contingent upon those of the
    Partnership. Therefore, this managements discussion and analysis addresses
    these  items at the Partnership level. The partners in the Partnership are
    Prudential, Pruco Life Insurance Company, and Pruco Life Insurance Company
    of New Jersey (collectively, the Partners).

The following discussion and analysis of the liquidity and capital resources and results of operations of the Partnership should be read in conjunction with the audited Consolidated Financial Statements of the Account and the Partnership and the related Notes included
herein.

(a) Liquidity and Capital Resources

As of December 31, 2005, the
    Partnerships liquid assets, consisting of cash and cash equivalents,
    were approximately $45.5 million, an increase of approximately $27.9 million
    from $17.6 million at December 31, 2004. The increase was primarily
    due to net sales  proceeds of approximately $41.7 million, of which the Partnership
    received approximately $39.5 million in cash. Partially offsetting the increase
    were an initial preferred equity investment and additional funding of existing
    investments, as described below. Sources of liquidity
include net cash flow from property operations, sales, financings and interest
    from short-term investments. The Partnership uses cash for its real estate
    investment activities and for distribution to its partners. As of December 31,
    2005, 18.5% of the Partnerships total gross
assets consisted of cash and cash equivalents.

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Dispositions for the year included
    the sale of an apartment complex located in Salem, Oregon, an office property
    located in Oakbrook Terrace, Illinois, an apartment complex located in Gresham,
    Oregon, and an apartment complex located in Jacksonville, Florida. In addition,
    the Partnership sold, prior to funding, a parcel of land located in Blue
    Springs, Missouri. The five investments sold for combined proceeds, prior
to the repayment of debt and minority interest, of $55.1 million. A minority interest partner bought out the Partnerships
investment in the aforementioned Jacksonville, Florida
consolidated real estate partnership resulting in net
proceeds to the Partnership of $15.9 million. This
transaction resulted in the assumption of a mortgage loan by the partner
of approximately $10.0 million and a reduction of the partners minority interest of $3.7 million.

During 2005, the Partnership made an initial $7.1 million preferred equity investment in an existing private REIT, Capital Automotive, or CARS. CARS, owns approximately 364 properties, which are leased to sixty automobile dealership operators throughout the
United States. This investment is structured with an annual preference rate of 7.5% for years one through five, 8.75% during years six and seven, and 12% for all subsequent years.

Also in 2005, the Partnership funded an additional $3.0 million to an existing Leasehold Mortgage Loan that was originated in January 2004 for the acquisition and redevelopment of a retail center in Westminster, Maryland. Since inception, approximately $4.3 million
has been funded at an interest rate of 10% per annum.

The Partnership spent approximately
    $6.0 million on capital improvements to existing properties during 2005.
    Approximately $1.1 million was associated with the renovation of an apartment
    complex in Atlanta, Georgia, approximately $3.8 million with
    the renovation and redevelopment of a retail center in Roswell, Georgia,
    and approximately $0.5 million with the renovation of a hotel property in
    Lake Oswego, Oregon. The remaining $0.6 million was associated with minor
    capital improvements and
transaction costs associated with leasing at various other properties.

(b) Results of Operations

The following is a comparison of the Partnerships results of operations for the periods ended December 31, 2005 and 2004.

Net Investment Income Overview

The Partnerships net investment
    income for the year ended December 31,
    2005 was approximately $9.2 million, an increase of $1.4 million from $7.8
    million for the prior year period. The office and hotel sector investments
    posted increases of $1.0 million and $0.5 million, respectively, from the
    prior
    year period.
    Partially offsetting these increases for 2005 were decreases in net investment
    income in the apartment, retail and industrial sectors, which posted decreases
    of $0.2 million, $0.3 million and $0.4 million, respectively, from the prior
    year
period. Other net investment income increased $0.9 million during the year ended
December 31, 2005 from the prior year period. Detail on the components of
this net investment income are discussed below by property type sector.

Valuation Overview

The Partnership recorded an aggregate net realized and unrealized gain of $15.5 million for the year ended December 31, 2005, compared to an aggregate net realized and unrealized gain of $3.3 million for the prior year period.

The Partnership recorded an aggregate
  net realized gain of $6.2 million for the year ended December 31, 2005,
  compared to an aggregate net realized gain of $1.7 million for the prior year
  period. The realized gain for 2005 was recorded in the apartment and office sectors,
  which realized gains of $4.4 million and $1.2 million, respectively. In addition,
  the aggregate net realized gain for 2005 includes approximately $0.6 million
  of gain realized from the sale of a parcel of land located in Blue Springs,
  Missouri.

The Partnership recorded an aggregate
    net unrealized gain of $9.3 million for the year ended December 31,
    2005, compared to an aggregate net unrealized gain of $1.6 million for the
    prior year period. The unrealized gain for 2005 was attributed to valuation
    gains in  all property type sectors. Details of on the components of these
    valuation gains and/or losses are discussed below by property type sector.

Net Realized Gain (Loss) on Real Estate Investments Sold Overview

On November 28, 2005, the Partnerships
    Blue Springs, Missouri land investment was sold, prior to funding, for $2.3
million, resulting in a realized gain of approximately $0.6 million.

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On November 30, 2005, the Partnership sold its interest in a consolidated joint venture that owns one apartment complex in Jacksonville, Florida for net proceeds of $15.9 million and a realized gain of approximately $4.3 million.

The following table presents a comparison
    of the Partnerships
    sources of net investment income, and realized and unrealized gains or losses
by investment type for the years ended December 31, 2005 and 2004.

|                                                                   |  | Twelve Months Ended December 31, |           
|------------------------------------------------------------------ |  | -------------------------------- | ----------
|                                                                   |  | 2005                             |           
|                                                                   |  |                                  |           
|Net Investment Income:                                             |  |                                  |           
|Office properties                                                  |  | $                                | 3,100,955 
|Apartment complexes                                                |  |                                  | 1,952,155 
|Retail properties                                                  |  |                                  | 4,402,792 
|Industrial properties                                              |  |                                  | 574,977   
|Hotel property                                                     |  |                                  | 1,086,783 
|Other (including interest income, investment mgt fee, etc.)        |  |                                  | (1,898,491
|                                                                   |  |                                  |           
|Total Net Investment Income                                        |  | $                                | 9,219,171 
|                                                                   |  |                                  |           
|                                                                   |  |                                  |           
|Net Realized Gain (Loss) on Real Estate Investments:               |  |                                  |           
|Apartment complexes                                                |  |                                  | 4,446,010 
|Office properties                                                  |  |                                  | 1,174,380 
|Land                                                               |  |                                  | 598,432   
|                                                                   |  |                                  |           
|Total Net Realized Gain (Loss) on Real Estate Investments          |  |                                  | 6,218,822 
|                                                                   |  |                                  |           
|                                                                   |  |                                  |           
|Net Unrealized Gain (Loss) on Real Estate Investments:             |  |                                  |           
|Office properties                                                  |  |                                  | 3,298,783 
|Apartment complexes                                                |  |                                  | 516,658   
|Retail properties                                                  |  |                                  | 3,011,793 
|Industrial properties                                              |  |                                  | 1,369,434 
|Hotel property                                                     |  |                                  | 1,045,129 
|                                                                   |  |                                  |           
|Total Net Unrealized Gain (Loss) on Real Estate Investments        |  |                                  | 9,241,797 
|                                                                   |  |                                  |           
|Net Realized and Unrealized Gain (Loss) on Real Estate Investments |  | $                                | 15,460,619
|                                                                   |  |                                  |           

OFFICE PORTFOLIO

|Year Ended December 31,  |  | Net InvestmentIncome/Loss2005 |           | Net InvestmentIncome/Loss2004 |   | Realized/UnrealizedGain/(Loss)2005 |   | UnrealizedGain/(Loss)2004 |           | Occupancy2005 |   | Occupancy2004 |  
|------------------------ |  | ----------------------------- | --------- | ----------------------------- | - | ---------------------------------- | - | ------------------------- | --------- | ------------- | - | ------------- | -
|                         |  |                               |           |                               |   |                                    |   |                           |           |               |   |               |  
|Property                 |  |                               |           |                               |   |                                    |   |                           |           |               |   |               |  
|Lisle, IL                |  | $                             | 313,356   |                               | $ | 498,150                            |   | $                         | (98,837   | )             | $ | (2,161,087    | )
|Brentwood, TN            |  |                               | 984,017   |                               |   | 806,096                            |   |                           | 1,254,008 |               |   | 1,626,824     |  
|Oakbrook Terrace, IL (1) |  |                               | 203,313   |                               |   | 404,805                            |   |                           | 1,174,380 |               |   | (613,875      | )
|Beaverton, OR            |  |                               | 851,182   |                               |   | 904,462                            |   |                           | 809,842   |               |   | (400,000      | )
|Brentwood, TN            |  |                               | 749,087   |                               |   | (511,048                           | ) |                           | 1,333,767 |               |   | 1,770,522     |  
|                         |  |                               |           |                               |   |                                    |   |                           |           |               |   |               |  
|                         |  | $                             | 3,100,955 |                               | $ | 2,102,465                          |   | $                         | 4,473,160 |               | $ | 222,384       |  
|                         |  |                               |           |                               |   |                                    |   |                           |           |               |   |               |  
|                         |  |                               |           |                               |   |                                    |   |                           |           |               |   |               |  

| | 
| | 

|(1) | Net investment income for the year ended December 31, 2005 reflects partial period results for the office property located in Oakbrook Terrace, Illinois that was sold on June 8, 2005.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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Net Investment Income

Net investment income for the Partnerships office properties was approximately $3.1 million for the year ended December 31, 2005, an increase of $1.0 million from the prior year period. The increase was primarily due to stabilized occupancy and increased market
rents at both of the Partnerships office assets in Brentwood, Tennessee. Partially offsetting these increases were (a) the loss of rent at the Oakbrook Terrace, Illinois office property that was sold on June 8, 2005, (b) a decrease in occupancy at the office property in Lisle,
Illinois, and (c) increased expenses at the office property in Beaverton, Oregon.

Total Net Realized and Unrealized Gain/(Loss)

The office properties owned by the
    Partnership recorded an aggregate net realized and unrealized gain of approximately
    $4.5 million for the year ended December 31,
    2005, compared to an aggregate net unrealized gain of $0.2 million for the
    prior year period. The 2005 gains were primarily due to (a) the sale of the
    office property in Oakbrook Terrace, Illinois and (b) strengthening market
    fundamentals and increases in occupancy at the office properties located
    in Brentwood, Tennessee and Beaverton, Oregon. Partially offsetting these
    gains for 2005 was a net unrealized loss of approximately $0.1 million related
    to the
office property in Lisle, Illinois.

APARTMENT COMPLEXES

|Year Ended December 31, |  | Net InvestmentIncome/Loss2005 |           | Net InvestmentIncome/Loss2004 |   | Realized/UnrealizedGain/(Loss)2005 |   | Realized/UnrealizedGain/(Loss)2004 |           | Occupancy2005 |   | Occupancy2004 |  
|----------------------- |  | ----------------------------- | --------- | ----------------------------- | - | ---------------------------------- | - | ---------------------------------- | --------- | ------------- | - | ------------- | -
|                        |  |                               |           |                               |   |                                    |   |                                    |           |               |   |               |  
|Property                |  |                               |           |                               |   |                                    |   |                                    |           |               |   |               |  
|Atlanta, GA             |  | $                             | 123,570   |                               | $ | 814,285                            |   | $                                  | (597,672  | )             | $ | (1,946,818    | )
|Raleigh, NC             |  |                               | 678,498   |                               |   | 559,605                            |   |                                    | 1,114,329 |               |   | 262,271       |  
|Jacksonville, FL (1)    |  |                               | 902,707   |                               |   | 972,604                            |   |                                    | 4,283,549 |               |   | 69,368        |  
|Gresham/Salem, OR (1)   |  |                               | 247,380   |                               |   | (155,387                           | ) |                                    | 162,462   |               |   | 2,691,965     |  
|                        |  |                               |           |                               |   |                                    |   |                                    |           |               |   |               |  
|                        |  | $                             | 1,952,155 |                               | $ | 2,191,107                          |   | $                                  | 4,962,668 |               | $ | 1,076,786     |  
|                        |  |                               |           |                               |   |                                    |   |                                    |           |               |   |               |  
|                        |  |                               |           |                               |   |                                    |   |                                    |           |               |   |               |  

| | 
| | 

|(1) | Net investment income for the year ended December 31, 2005 reflects partial period results for the apartment properties in Salem, Oregon, Gresham, Oregon and Jacksonville, Florida that were sold on March 10, 2005, August 10, 2005 and November 30, 2005, respectively.
Net investment income for the year ended December 31, 2004 reflects results for four apartment properties located in Salem and Gresham, Oregon, two of which were sold on December 14, 2004.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Net Investment Income

Net investment income for the Partnerships apartment properties was approximately $2.0 million for the year ended December 31, 2005, a decrease of $0.2 million from the prior year period. The decrease was primarily due to (a) increased expenses, rental concessions
and interest incurred for a mortgage loan placed in September 2004 for the apartment property in Atlanta, Georgia and (b) the loss of rent at the apartment property in Jacksonville, Florida that was sold on November 30, 2005. Partially offsetting the decrease was (a) an
increase in net investment income for the apartment properties in Gresham/Salem, Oregon due to a diminution of mortgage interest expense resulting from the prepayment of debt on the properties and (b) reduced expenses at the apartment property in Raleigh, North Carolina.

Total Realized and Unrealized Gain/(Loss)

The Partnership recorded an aggregate
    net realized and unrealized gain of $5.0 million for the year ended December 31,
    2005, compared to a net realized and unrealized gain of $1.1 million for
    the prior year period. The 2005 gains in the Partnerships
    apartment sector were primarily due to (a) continued investor demand for
    apartment property types that resulted in a net unrealized gain of approximately
    $1.1 million related to the Raleigh, North Carolina property and (b) the
    sales of one apartment complex in Salem, Oregon and one apartment
complex in Jacksonville, Florida. Partially offsetting these gains was a net
unrealized loss of approximately $0.6 million related
    to the apartment property in Atlanta, Georgia attributable to capital expended
    in connection with the completion of an exterior redevelopment that did
    not
result in value gains.

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RETAIL PROPERTIES

|Year Ended December 31,          |  | Net InvestmentIncome/Loss2005 |           | Net InvestmentIncome/Loss2004 |   | UnrealizedGain/(Loss)2005 |  | UnrealizedGain/(Loss)2004 |            | Occupancy2005 |   | Occupancy2004 |  
|-------------------------------- |  | ----------------------------- | --------- | ----------------------------- | - | ------------------------- |  | ------------------------- | ---------- | ------------- | - | ------------- | -
|                                 |  |                               |           |                               |   |                           |  |                           |            |               |   |               |  
|Property                         |  |                               |           |                               |   |                           |  |                           |            |               |   |               |  
|Roswell, GA                      |  | $                             | 1,767,394 |                               | $ | 1,576,783                 |  | $                         | 1,652,340  |               | $ | (2,536,369    | )
|Kansas City, KS;
Kansas City, MO |  |                               | 195,927   |                               |   | 623,917                   |  |                           | (5,069,318 | )             |   | 2,727,694     |  
|Hampton, VA                      |  |                               | 1,272,509 |                               |   | 1,220,607                 |  |                           | 5,096,161  |               |   | 981,574       |  
|Ocean City, MD                   |  |                               | 871,644   |                               |   | 921,803                   |  |                           | 1,332,610  |               |   | 899,597       |  
|Westminster, MD (1)              |  |                               | (5,704    | )                             |   | 138,296                   |  |                           |           |               |   |              |  
|Westminster, MD (2)              |  |                               | 278,799   |                               |   | 246,765                   |  |                           |           |               |   |              |  
|CARS Preferred Equity (3)        |  |                               | 22,223    |                               |   |                          |  |                           |           |               |   |              |  
|                                 |  |                               |           |                               |   |                           |  |                           |            |               |   |               |  
|                                 |  | $                             | 4,402,792 |                               | $ | 4,728,171                 |  | $                         | 3,011,793  |               | $ | 2,072,496     |  
|                                 |  |                               |           |                               |   |                           |  |                           |            |               |   |               |  
|                                 |  |                               |           |                               |   |                           |  |                           |            |               |   |               |  

| | 
| | 

|(1) | Classified as Other Real Estate Investment (mortgage paid in full September 13, 2004).
|--- | --------------------------------------------------------------------------------------

|(2) | Mortgage Loan Receivable (Originated January 2004).
|--- | ---------------------------------------------------

|(3) | Net investment income for the year ended December 31, 2005 reflects partial period results.
|--- | -------------------------------------------------------------------------------------------

Net Investment Income

Net investment income for the Partnerships retail properties was $4.4 million for the year ended December 31,
    2005, a decrease of $0.3 million from the prior year period. The decrease
    in net investment income was primarily due to (a) increased expenses at the
    retail centers in Kansas City, Kansas and Kansas City, Missouri, (b) increased
    vacancy at the retail center in Ocean City, Maryland and (c) interest income
    received the prior year in connection with the loan made by the Partnership
    to the
retail center in Westminster, Maryland that was paid in full on September 13, 2004. Partially offsetting the decrease was (a) an increase in net investment income at the retail center in Roswell, Georgia due to higher occupancy resulting from the opening of an anchor retailer,
Publix, (b) interest income received in connection with the mortgage loan made by the Partnership to the retail center in Westminster, Maryland in January 2004 and (c) income received from the preferred equity investment made by the partnership on December 16, 2005.

Unrealized Gain/(Loss)

The retail properties recorded an aggregate net unrealized gain of $3.0 million for the year ended December 31, 2005, compared to an aggregate net unrealized gain of $2.1 million for the prior year period. The 2005 unrealized gains were primarily due to (a) continued
investor demand for retail centers that resulted in combined net unrealized gains of $6.4 million at the Hampton, Virginia and Ocean City, Maryland properties and (b) the completion of a redevelopment at the retail center in Roswell, Georgia that recorded a net unrealized
gain of approximately $1.7 million. Partially offsetting these gains was a net unrealized loss of $5.1 million recorded at the retail centers located in Kansas City, Kansas and Kansas City, Missouri. The retail centers located in Kansas City, Kansas and Kansas City, Missouri
were marketed for sale during 2005 which resulted in a value decline of $5.1 million reflective of offers received in connection with the marketing efforts and an estimate of the prepayment penalties related to the existing debt.

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INDUSTRIAL PROPERTIES

|Year Ended December 31, |  | Net InvestmentIncome/Loss2005 |         | Net InvestmentIncome/Loss2004 |   | UnrealizedGain/(Loss)2005 |   | UnrealizedGain/(Loss)2004 |           | Occupancy2005 |   | Occupancy2004 |  
|----------------------- |  | ----------------------------- | ------- | ----------------------------- | - | ------------------------- | - | ------------------------- | --------- | ------------- | - | ------------- | -
|                        |  |                               |         |                               |   |                           |   |                           |           |               |   |               |  
|Property                |  |                               |         |                               |   |                           |   |                           |           |               |   |               |  
|Aurora, CO              |  | $                             | 574,977 |                               | $ | 936,264                   |   | $                         | 1,369,434 |               | $ | (190,659      | )
|Bolingbrook, IL (1)     |  |                               |        |                               |   | 2,603                     |   |                           |          |               |   |              |  
|Salt Lake City, UT (1)  |  |                               |        |                               |   | (5,614                    | ) |                           |          |               |   |              |  
|                        |  |                               |         |                               |   |                           |   |                           |           |               |   |               |  
|                        |  | $                             | 574,977 |                               | $ | 933,253                   |   | $                         | 1,369,434 |               | $ | (190,659      | )
|                        |  |                               |         |                               |   |                           |   |                           |           |               |   |               |  
|                        |  |                               |         |                               |   |                           |   |                           |           |               |   |               |  

| | 
| | 

|(1) | The Bolingbrook, Illinois
          and Salt Lake City, Utah industrial properties were sold in September
          2002 and January 2003, respectively, but certain post-closing adjustments
          were incurred in 2004.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Net Investment Income

Net investment income for the Partnerships industrial property was $0.6 million for the year ended December 31, 2005, a decrease of $0.3 million from the prior year period. The decrease was primarily due to a decrease in occupancy as a result of a 2004 lease
termination at the Partnerships Aurora, Colorado industrial property.

Unrealized Gain/(Loss)

The Aurora, Colorado industrial property owned by the Partnership recorded a net unrealized gain of approximately $1.4 million for the year ended December 31, 2005, compared to a net unrealized loss of approximately $0.2 million for the prior year period. The 2005
net unrealized gain was primarily due to investor demand for this product type.

HOTEL PROPERTY

|Year Ended December 31, |  | Net InvestmentIncome/Loss2005 |           | Net InvestmentIncome/Loss2004 |   | UnrealizedGain/(Loss)2005 |  | UnrealizedGain/(Loss)2004 |           | Occupancy2005 |   | Occupancy2004 | 
|----------------------- |  | ----------------------------- | --------- | ----------------------------- | - | ------------------------- |  | ------------------------- | --------- | ------------- | - | ------------- | 
|                        |  |                               |           |                               |   |                           |  |                           |           |               |   |               | 
|Property                |  |                               |           |                               |   |                           |  |                           |           |               |   |               | 
|Lake Oswego, OR         |  | $                             | 1,086,783 |                               | $ | 640,660                   |  | $                         | 1,045,129 |               | $ | 99,387        | 

Net Investment Income

Net investment income for the Partnerships hotel property was $1.1 million for the year ended December 31, 2005, an increase of $0.5 million from the prior year period. The increase was primarily due to increased occupancy and higher average daily rates generated
at the hotel during 2005, compared to the prior year period.

Unrealized Gain/(Loss)

The Lake Oswego, Oregon hotel property
    recorded a net unrealized gain of $1.0 million for the year ended December 31,
    2005, compared to a net unrealized gain of approximately $0.1 million for
    the prior year period. The 2005 net  unrealized gain was primarily due to
    strengthening market fundamentals and benefits associated with completion
    of a renovation.

Other

The Blue Springs, Missouri land investment owned by the Partnership realized a net gain of approximately $0.6 million for the year ended December 31, 2005. The Partnership sold this land investment, prior to funding, for $2.3 million on November 28, 2005.

Other net investment income increased $0.9 million during the year ended December 31, 2005 from the prior year period. Other net investment income included interest income from short-term investments, investment management fees, and portfolio level expenses.

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(c) Inflation

The Partnerships leases with a majority of its commercial tenants provide for recoveries of expenses based upon the tenants proportionate share of, and/or increases in, real estate taxes and certain operating costs, which may partially reduce the Partnerships exposure to
increases in operating costs resulting from inflation.

Critical Accounting Policies

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the application of accounting policies that often involve a significant degree of judgment. Management reviews critical estimates
and assumptions on an ongoing basis. If management determines, as a result of its consideration of facts and circumstances, that modifications in assumptions and estimates are appropriate, results of operations and financial position as reported in the audited Consolidated
Financial Statements of the Account and the Partnership may change significantly.

The following sections discuss those
    critical accounting policies applied in preparing the audited Consolidated
    Financial
    Statements of the Account and the Partnership that are most dependent on
    the application of estimates and assumptions.

Valuation of Investments

Real Estate Investments  Real
    estate investments are shown at estimated market value in accordance with
    the terms of the Partnerships contracts. Properties owned are initially
    recorded at the purchase price plus closing costs. Development costs and
    major renovations  are capitalized as a component of cost, and routine maintenance
    and repairs are charged to expense as incurred. Real estate costs include
    the cost of acquired property, including all the tangible and intangible
    assets. Tangible assets include the value of all land, building and
tenant improvements at the time of acquisition. Intangible assets include the
    value of any above and below market leases, in-place leases, and tenant relationships
    at the time of acquisition. Market value estimates are based upon property
    appraisal reports prepared by  independent real estate appraisers (members
    of the Appraisal Institute or an equivalent organization) within a reasonable
    amount of time following acquisition of the real estate and no less frequently
    than annually thereafter. The Chief Real Estate Appraiser of Prudential Investment
    Management (PIM) is
responsible to assure that the valuation process provides independent and reasonable
    property market value estimates. American Appraisal Associates (the Appraisal
    Management Firm), an entity not affiliated with PIM, has been appointed
    by PIM to assist the Chief Real  Estate Appraiser in maintaining and monitoring
    the independence and the accuracy of the appraisal process. Unless a property
    is currently held for sale, the market value of real estate investments does
    not reflect the transaction sale costs, which may be incurred upon
disposition of the real estate investments.

Unconsolidated real estate partnerships are valued at the Partnerships equity in net assets as reflected in the partnerships financial statements with properties valued as described above. Under the equity method, the investment is initially recorded at the original
investment amount, plus or minus additional amounts invested or distributed, and is subsequently adjusted for the Partnerships share of undistributed earnings or losses (including unrealized appreciation and depreciation) from the underlying entity.

Land and redevelopment properties held for future development via a forward contract are carried at cost plus cost incurred to hold the land and redevelopment properties as stated in the take out provisions of the contract.

As described above, the estimated market value of real estate and real estate related assets is determined through an appraisal process. These estimated market values may vary significantly from the prices at which the real estate investments would sell, since market
prices of real estate investments can only be determined by negotiation between a willing buyer and seller and could be material to the consolidated financial statements. Although the estimated market values represent subjective estimates, management believes these estimated
market values are reasonable approximations of market prices and the aggregate estimated value of investments in real estate is fairly presented as of December 31, 2005, and 2004.

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Other Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the
audited Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Item 7A.
      Quantitative and Qualitative Disclosures About Market Risk

Interest Rate Risk  The Partnerships exposure to market rate risk for changes in interest rates relates to approximately 40.37% (as of December 31, 2005) of its investment portfolio consisting primarily of short-term fixed rate commercial paper and fixed and variable
interest rate debt. The Partnership does not use derivative financial instruments. By policy, the Partnership places its investments with high quality debt security issuers, limits the amount of credit exposure to any one issuer, limits duration by restricting the term, and holds
investments to maturity except under unusual circumstances.

The table below presents the amounts and related weighted interest rates of the Partnerships cash equivalents and short-term investments at December 31, 2005:

|                          |  | Maturity |            | Estimated Market Value(in $ millions) |   | AverageInterest Rate | 
|------------------------- |  | -------- | ---------- | ------------------------------------- | - | -------------------- | 
|                          |  |          |            |                                       |   |                      | 
|Cash and Cash equivalents |  |          | 0-3 months |                                       | $ | 45.5                 | 

The table below discloses the Partnerships debt as of December 31, 2005. All of the Partnerships long-term debt bears interest at fixed rates and therefore the fair value of these instruments is affected by changes in market interest rates. The following table presents
principal cash flows (in thousands) based upon maturity dates of the debt obligations and the related weighted-average interest rates by expected maturity dates for the fixed rate debt.

|Debt (in $ thousands),       |  |      |       |      |   |       |  |      |        |      |   |            |  |       |       | Estimated  |  
|---------------------------- |  | ---- | ----- | ---- | - | ----- |  | ---- | ------ | ---- | - | ---------- |  | ----- | ----- | ---------- | -
|including current portion    |  | 2006 |       | 2007 |   | 2008  |  | 2009 |        | 2010 |   | Thereafter |  | Total |       | Fair Value |  
|                             |  |      |       |      |   |       |  |      |        |      |   |            |  |       |       |            |  
|Average Fixed Interest Rate  |  |      | 5.38% |      |   | 5.35% |  |      | 5.74%  |      |   | 6.75%      |  |       | 6.75% |            |  
|Fixed Rate                   |  | $    | 549   |      | $ | 588   |  | $    | 16,026 |      | $ | 9,277      |  | $     | 565   |            | $
|Variable Rate                |  |      |      |      |   |      |  |      |       |      |   |           |  |       |      |            |  
|                             |  |      |       |      |   |       |  |      |        |      |   |            |  |       |       |            |  
|Total Mortgage Loans Payable |  | $    | 549   |      | $ | 588   |  | $    | 16,026 |      | $ | 9,277      |  | $     | 565   |            | $
|                             |  |      |       |      |   |       |  |      |        |      |   |            |  |       |       |            |  

The Partnership is exposed to market risk from tenants. While the Partnership has not experienced any significant credit losses, in the event of significant increases in interest rates and/or an economic downturn, delinquencies could increase and result in losses to the
Partnership and the Account that would adversely affect its operating results and liquidity.

Item 8. Financial Statements and Supplementary Data

The financial statements and supplementary data are listed in the accompanying Index to the Financial Statements and Supplementary Data on F-1.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A: Controls and Procedures

In order to ensure that the information
    we must disclose in our filings with the Securities and Exchange Commission
    is recorded, processed, summarized, and reported on a timely basis, the Companys
    management, including our Chief Executive Officer and Chief  Accounting Officer,
    have reviewed and evaluated the effectiveness of our disclosure controls
    and procedures, as defined in Exchange Act Rules 13a-15(e) and 15d-15(e),
    as of December 31, 2005. Based on such evaluation, the Chief Executive
    Officer and Chief Accounting
Officer have concluded that, as of December 31, 2005, our disclosure controls
and procedures were effective in timely alerting them to material information
relating to us required to be included in our periodic SEC filings. There has
been no change in our internal control over financial reporting during the year
ended December 31, 2005, that has materially affected, or is reasonably
likely to materially affect, our internal control over financial reporting.

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Item 9B: Other Information

None.

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PART III

|Item 10. Directors and Executive Officers of the Registrant
|-----------------------------------------------------------

|Name                  |  | Position |                                             | Age | 
|--------------------- |  | -------- | ------------------------------------------- | --- | 
|                      |  |          |                                             |     | 
|James J. Avery, Jr.   |  |          | Vice Chairman and Director                  |     | 
|C. Edward Chaplin     |  |          | Treasurer and Director                      |     | 
|Helen M. Galt         |  |          | Director                                    |     | 
|Bernard J. Jacob      |  |          | President and Director                      |     | 
|Ronald P. Joelson     |  |          | Director                                    |     | 
|David R. Odenath, Jr. |  |          | Director                                    |     | 
|John Chieffo          |  |          | Vice President and Chief Accounting Officer |     | 
|Clifford E. Kirsch    |  |          | Chief Legal Officer and Secretary           |     | 
|Melody C. McDaid      |  |          | Senior Vice President                       |     | 
|Esther H. Milnes      |  |          | Senior Vice President                       |     | 
|James M. OConnor     |  |          | Senior Vice President and Actuary           |     | 
|Shirley H. Shao       |  |          | Senior Vice President and Chief Actuary     |     | 

JAMES J. AVERY, JR.,Vice Chairman and Director President, Prudential Individual Life Insurance since 1998.

C. EDWARD CHAPLIN,Treasurer and Director Senior Vice President and Treasurer, Prudential since 2000.

HELEN M. GALT,Director Senior Vice President and Company Actuary, Prudential since 2005; prior to 2005: Company Actuary, Prudential.

BERNARD J. JACOB,President and Director Vice President, Prudential Individual Life and Annuities since 2004; 2002 to 2004: Vice President, Group Executive Strategy and Business Development; prior to 2002: Executive Vice President, Proact Technologies
Corporation.

RONALD P. JOELSON,Director Senior Vice President, Prudential Asset, Liability and Risk Management since 1999.

DAVID R. ODENATH, JR.,Director President, Prudential Annuities since 2003; prior to 2003: President, Prudential Investments.

JOHN CHIEFFO,Chief Financial Officer Vice President and Individual Life Controller since 1998.

CLIFFORD E. KIRSCH,Chief Legal Officer and Secretary Vice President and Senior Corporate Counsel, Variable Products, Prudential Law Department since 1995.

MELODY C. MCDAID,Senior Vice President Vice President and Site Executive, Individual Life Insurance since 1995.

ESTHER H. MILNES,Senior Vice President Vice President and Chief Actuary, Prudential Individual Life Insurance since 1999.

JAMES M. OCONNOR,Senior Vice President and Actuary Vice President, Guaranteed Products since 2001.

SHIRLEY H. SHAO,Senior Vice President and Chief Actuary Vice President and Actuary, Prudential since 1996.

The business address of all directors and officers of Pruco Life of New Jersey is 213 Washington Street, Newark, New Jersey 07102-2992. Pruco Life of New Jersey directors and officers are elected annually.

Code of Ethics

We have adopted a code of business conduct and ethics, known as Making the Right Choices, which applies to our Chief Executive Officer, Chief Financial Officer, as well as to our directors and other employees. Making the Right Choices is posted on our website at www.investor.prudential.com. Our code of business conduct and ethics, any amendments and any waiver granted to any of our
directors or executive officers are available free of charge on our website at www.investor.prudential.com.

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The Board of Directors has not designated a separate audit committee, and therefore the full Board serves as the Companys audit committee. None of the members of the Board of Directors is independent of management within the meaning of SEC rules. The Board of
Directors has determined that at least one of its members, Mr. Joelson, has the requisite experience to be designated an audit committee financial expert as that term is defined by rules of the SEC. Specifically, Mr. Joelson has accounting and financial management expertise,
which he gained through his experience as Senior Vice President and head of the Asset, Liability and Risk Management area of Prudential Financial, Inc., the New York Stock Exchange listed parent of the Company, as well as experience in senior financial management
positions and other similar positions. Mr. Joelson also received an M.B.A. degree in Finance and Accounting from the Columbia University School of Business.

Item 11. Executive Compensation

The Real Property Account does not pay any fees, compensation or reimbursement to any Director or Officer of the Registrant.

Item 12. Security Ownership of Certain Beneficial Owners and Management

Not applicable.

Item 13. Certain Relationships and Related Transactions

See Related Transactions in note 7 of Notes to Financial Statements of the Partnership on page F  24.

Item 14. Principal Accounting Fees and Services.

The Audit Committee of the Board of Directors of Prudential Financial has appointed PricewaterhouseCoopers LLP as the independent registered public accounting firm of Prudential Financial and certain of its domestic and international subsidiaries, including the
Registrant. The Audit Committee has established a policy requiring its pre-approval of all audit and permissible non-audit services provided by the independent auditor. The specific information called for by this item is hereby incorporated by reference to the section entitled
Item 2  Ratification of the Appointment of Independent Auditors in Prudential Financials definitive proxy statement for the Annual Meeting of Shareholders to be held on May 9, 2006, to be filed with the Securities and Exchange Commission pursuant to Regulation 14A
within 120 days after the year ended December 31, 2005.

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PART IV

|Item 15. Exhibits, Financial Statement Schedules
|------------------------------------------------

|    |                                                          
|--- | ---------------------------------------------------------
|(a) | The following documents are filed as part of this report:

| |    |                     
| | -- | --------------------
| | 1. | Financial Statements

| |  |                                                                          
| |  | -------------------------------------------------------------------------
| |  | See the Index to Financial Statements and Supplementary Data on page F-1.

| |    |                              
| | -- | -----------------------------
| | 2. | Financial Statement Schedules

| |  |                                                                                                                                                                                                                    
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The following financial statement schedules of The Prudential Variable Contract Real Property Partnership should be read in conjunction with the financial statements in Item 8 of this Annual Report on Form 10-K:

| |  |                                            
| |  | -------------------------------------------
| |  | Schedule III. Real Estate Owned: Properties

| |  |                                                        
| |  | -------------------------------------------------------
| |  | Schedule III. Real Estate Owned: Interest in Properties

| |  |                                                                          
| |  | -------------------------------------------------------------------------
| |  | See the Index to Financial Statements and Supplementary Data on page F-1.

| |    |                                    
| | -- | -----------------------------------
| | 3. | Documents Incorporated by Reference

| |  |                                    
| |  | -----------------------------------
| |  | See the following list of exhibits.

| |    |         
| | -- | --------
| | 4. | Exhibits

| |  |                                    
| |  | -----------------------------------
| |  | See the following list of exhibits.

|    |      
|--- | -----
|(b) | None.

|    |                                                                                                                                                                                                                                                                                                                                                                                                                              
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(c) | The following is a list of Exhibits to the Registrants Annual Report on Form 10-K for the fiscal year ended December 31, 2005. The Registrant will furnish a copy of any Exhibit listed below to any security holder of the Registrant who requests it upon payment of a fee of 15
cents per page. All Exhibits are either contained in this Annual Report on Form 10-K or are incorporated by reference as indicated below.

| |     |                                                                                                                                                                                                                                                           
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 3.1 | Amended Articles of Incorporation of Pruco Life Insurance Company of New Jersey filed as Exhibit 1.A.(6)(a) to Post Effective Amendment No. 17 to Form S-6, Registration Statement No. 2-89780, filed March 1, 1991, and incorporated herein by reference.

| |     |                                                                                                                                                                                                                                          
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 3.2 | Amended By-Laws of Pruco Life Insurance Company of New Jersey, filed as Exhibit 1.A.(6)(b) to Post-Effective Amendment No. 17 to Form S-6, Registration Statement No. 2-89780, filed March 1, 1991, and incorporated herein by reference.

| |     |                                                                                                                                                                                                                                                              
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 3.3 | Resolution of the Board of Directors establishing the Pruco Life of New Jersey Variable Contract Real Property Account, filed as Exhibit (3C) to Form S-1, Registration Statement No. 33-20018, filed February 5, 1988, and incorporated herein by reference.

| |     |                                                                                                                                                                         
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 4.1 | Variable Life Insurance Contract filed as Exhibit A(5) to Form N-8B-2, Registration Statement No. 2-81243, filed January 10, 1983, and incorporated herein by reference.

| |     |                                                                                                                                                                                                                                                         
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 4.2 | Revised Variable Appreciable Life Insurance Contract with fixed death benefit, filed as Exhibit 1.A.(5)(c) to Post-Effective Amendment No. 5 to Form S-6, Registration Statement No. 2-89780, filed July 11, 1986, and incorporated herein by reference.

| |     |                                                                                                                                                                                                                                                            
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 4.3 | Revised Variable Appreciable Life Insurance Contract with variable death benefit, filed as Exhibit 1.A.(5)(d) to Post-Effective Amendment No. 5 to Form S-6, Registration Statement No. 2-89780, filed July 11, 1986, and incorporated herein by reference.

| |     |                                                                                                                                                                               
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 4.4 | Single Premium Variable Annuity Contract, filed as Exhibit 4(i) to Form N-4, Registration Statement No. 2- 99616, filed August 13, 1985, and incorporated herein by reference.



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| | 4.5 | Flexible Premium Variable Life Insurance Contract, filed as Exhibit 1.A.(5) to Form S-6, Registration Statement No. 2-99537, filed August 8, 1985, and incorporated herein by reference.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |    |      
| | -- | -----
| | 9. | None.

| |      |                                                                                                                                                                                                                                                                                                              
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 10.1 | Investment Management Agreement between Prudential Investment Management, Inc. and The 31.2 Prudential Variable Contract Real Property Partnership, filed as Post-Effective Amendment No. 16 to Form S-1, Registration Statement No. 33-20083-01, filed
April 10, 2003, and incorporated herein by reference.

| |      |                                                                                                                                                                                                                                                         
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 10.2 | Service Agreement between The Prudential Insurance Company of America and The Prudential Investment Corporation, filed as Exhibit (10B) to Form S-1, Registration Statement No. 33-8698, filed September 12, 1986, and incorporated herein by reference.

| |      |                                                                                                                                                                                                                                                          
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 10.3 | Partnership Agreement of The Prudential Variable Contract Real Property Partnership filed as Exhibit (10C) to Post-Effective Amendment No. 2 to Form S-1, Registration Statement No. 33-20018, filed April 6, 1990, and incorporated herein by reference.

| |     |                
| | --- | ---------------
| | 11. | Not applicable.

| |     |                
| | --- | ---------------
| | 12. | Not applicable.

| |     |      
| | --- | -----
| | 16. | None.

| |     |      
| | --- | -----
| | 18. | None.

| |     |                
| | --- | ---------------
| | 22. | Not applicable.

| |     |      
| | --- | -----
| | 23. | None.

| |     |                              
| | --- | -----------------------------
| | 24. | Filed herewith as Exhibit 24.

| |      |                                                      
| | ---- | -----------------------------------------------------
| | 31.1 | Section 302 Certification of Chief Executive Officer.

| |      |                                                       
| | ---- | ------------------------------------------------------
| | 31.2 | Section 302 Certification of Chief Accounting Officer.

| |      |                                                      
| | ---- | -----------------------------------------------------
| | 32.1 | Section 906 Certification of Chief Executive Officer.

| |      |                                                       
| | ---- | ------------------------------------------------------
| | 32.2 | Section 906 Certification of Chief Accounting Officer.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

PRUCO LIFE INSURANCE COMPANY OF NEW JERSEYin respect ofPruco Life of New Jersey VariableContract Real Property Account(Registrant)

|Date: March 28, 2006 | By: |  |                               | 
|-------------------- | --- |  | ----------------------------- | 
|                     |     |  | Bernard J. Jacob              | 
|                     |     |  | President and Director        | 
|                     |     |  | (Principal Executive Officer) | 

|Date: March 28,
            2006 | By: |  |                                                      | 
|-------------------------------- | --- |  | ---------------------------------------------------- | 
|                                 |     |  | John Chieffo                                         | 
|                                 |     |  | Chief Accounting Officer                             | 
|                                 |     |  | (Principal Accounting and
        Financial Officer) | 

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

|Signature             |  | Title |           | Date | 
|--------------------- |  | ----- | --------- | ---- | 
|                      |  |       |           |      | 
|                      |  |       |           |      | 
|*                     |  |       | Director  |      | 
|James J. Avery, Jr.   |  |       |           |      | 
|                      |  |       |           |      | 
|*                     |  |       | Treasurer |      | 
|C. Edward Chaplin     |  |       |           |      | 
|                      |  |       |           |      | 
|*                     |  |       | Director  |      | 
|Helen M. Galt         |  |       |           |      | 
|                      |  |       |           |      | 
|*                     |  |       | Director  |      | 
|Ronald P. Joelson     |  |       |           |      | 
|                      |  |       |           |      | 
|*                     |  |       | Director  |      | 
|David R. Odenath, Jr. |  |       |           |      | 

| | *By: |  |                    | 
| | ---- |  | ------------------ | 
| |      |  | Thomas C. Castano  | 
| |      |  | (Attorney-in-Fact) | 
| |      |  |                    | 

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PRUCO LIFE OF NEW JERSEY VARIABLE CONTRACT REAL PROPERTY ACCOUNT(Registrant)

INDEX

|                                                                                         | Page |     
|---------------------------------------------------------------------------------------- | ---- | ----
|                                                                                         |      |     
|A.     PRUCO LIFE OF NEW JERSEY VARIABLE CONTRACT REAL PROPERTY ACCOUNT                  |      |     
|                                                                                         |      |     
|Financial Statements:                                                                    |      |     
|                                                                                         |      |     
|Report of Independent Registered Public Accounting Firm                                  |      | F-2 
|                                                                                         |      |     
|Statements of Net Assets  December 31, 2005 and 2004                                    |      | F-3 
|                                                                                         |      |     
|Statements of Operations  Years Ended December 31, 2005, 2004, 2003                     |      | F-3 
|                                                                                         |      |     
|Statements of Changes in Net Assets  Years Ended December 31, 2005, 2004, 2003          |      | F-3 
|                                                                                         |      |     
|Notes to Financial Statements                                                            |      | F-4 
|                                                                                         |      |     
|B.     THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP                        |      |     
|                                                                                         |      |     
|Financial Statements:                                                                    |      |     
|                                                                                         |      |     
|Report of Independent Registered Public Accounting Firm                                  |      | F-8 
|                                                                                         |      |     
|Report of Independent Registered Public Accounting Firm on Financial Statement Schedules |      | F-9 
|                                                                                         |      |     
|Statements of Assets and Liabilities  December 31, 2005 and 2004                        |      | F-10
|                                                                                         |      |     
|Statements of Operations  Years Ended December 31, 2005, 2004 and 2003                  |      | F-11
|                                                                                         |      |     
|Statements of Changes in Net Assets  Years Ended December 31, 2005, 2004 and 2003       |      | F-12
|                                                                                         |      |     
|Statements of Cash Flows  Years Ended December 31, 2005, 2004 and 2003                  |      | F-13
|                                                                                         |      |     
|Schedule of Investments  December 31, 2005 and 2004                                     |      | F-14
|                                                                                         |      |     
|Notes to Financial Statements                                                            |      | F-16
|                                                                                         |      |     
|Financial Statement Schedules:                                                           |      |     
|                                                                                         |      |     
|For the period ended December 31, 2005                                                   |      |     
|                                                                                         |      |     
|Schedule III  Real Estate Owned: Properties                                             |      | F-24
|                                                                                         |      |     
|Schedule IV Mortgage
          Loans on Real Estate                                     |      | F-25

All other schedules are omitted because they are not applicable, or because the required information is included in the financial statements or notes thereto.

F-1

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Report of Independent Registered
      Public Accounting Firm



To the Contract Owners of the
Pruco Life of New Jersey Variable Contract Real Property Account
and the Board of Directors of
Pruco Life Insurance Company of New Jersey

In our opinion, the accompanying
    statements of net assets and the related statements of operations and of changes
    in net assets present fairly, in all material respects, the financial position
    of Pruco Life of New Jersey Variable Contract Real Property Account at
December 31, 2005 and 2004, and the results of its operations and the changes
in its net assets for each of the three years in the period ended December 31,
2005, in conformity with accounting principles generally accepted in the United
States of America. These  financial statements are the responsibility of the
management of Pruco Life Insurance Company of New Jersey; our responsibility
is to express an opinion on these financial statements based on our audits. We
conducted our audits of these financial statements
in accordance with the standards of the Public Company Accounting Oversight Board
(United States). Those standards require
that
we
plan
and
perform the audit to obtain reasonable assurance about whether the financial
statements
are
free
of material misstatement.
An audit  includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement
presentation. We believe that our audits, which included confirmation of shares
at December 31, 2005 with The Prudential Variable Contract Real Property
Partnership, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP
New York, New York
March 30, 2006

F-2

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FINANCIAL STATEMENTS OFPRUCO LIFE OF NEW JERSEY VARIABLE CONTRACT REAL PROPERTY ACCOUNT

|STATEMENT OF NET ASSETS
December 31, 2005 and 2004
|--------------------------------------------------
|                                                  

|                                                                                               |  | 2005 |           | 2004 |   |           |   |  
|---------------------------------------------------------------------------------------------- |  | ---- | --------- | ---- | - | --------- | - | -
|                                                                                               |  |      |           |      |   |           |   |  
|ASSETS                                                                                         |  |      |           |      |   |           |   |  
|Investment in The Prudential Variable Contract Real Property Partnership                       |  | $    | 8,924,959 |      | $ | 8,082,948 |   |  
|                                                                                               |  |      |           |      |   |           |   |  
|Net Assets                                                                                     |  | $    | 8,924,959 |      | $ | 8,082,948 |   |  
|                                                                                               |  |      |           |      |   |           |   |  
|NET ASSETS, representing:                                                                      |  |      |           |      |   |           |   |  
|Equity of contract owners                                                                      |  | $    | 6,812,311 |      | $ | 6,042,260 |   |  
|Equity of Pruco Life Insurance Company of New Jersey                                           |  |      | 2,112,648 |      |   | 2,040,688 |   |  
|                                                                                               |  |      |           |      |   |           |   |  
|                                                                                               |  | $    | 8,924,959 |      | $ | 8,082,948 |   |  
|                                                                                               |  |      |           |      |   |           |   |  
|Units outstanding                                                                              |  |      | 3,374,357 |      |   | 3,438,311 |   |  
|                                                                                               |  |      |           |      |   |           |   |  
|Portfolio shares held                                                                          |  |      | 301,619   |      |   | 309,093   |   |  
|Portfolio net asset value per share                                                            |  | $    | 29.59     |      | $ | 26.15     |   |  
|                                                                                               |  |      |           |      |   |           |   |  
|STATEMENT OF OPERATIONS                                                                        |  |      |           |      |   |           |   |  
|For the periods ended December 31, 2005, 2004 and 2003                                         |  |      |           |      |   |           |   |  
|                                                                                               |  |      | 2005      |      |   | 2004      |   |  
|                                                                                               |  |      |           |      |   |           |   |  
|INVESTMENT INCOME                                                                              |  |      |           |      |   |           |   |  
|Net investment income from Partnership operations                                              |  | $    | 399,203   |      | $ | 336,966   |   | $
|                                                                                               |  |      |           |      |   |           |   |  
|EXPENSES                                                                                       |  |      |           |      |   |           |   |  
|Charges to contract owners for assuming mortality risk and expense risk and for administration |  |      | 36,704    |      |   | 34,222    |   |  
|                                                                                               |  |      |           |      |   |           |   |  
|NET INVESTMENT INCOME                                                                          |  |      | 362,499   |      |   | 302,744   |   |  
|                                                                                               |  |      |           |      |   |           |   |  
|NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS                                         |  |      |           |      |   |           |   |  
|Net change in unrealized gain (loss) on investments from Partnership                           |  |      | 399,181   |      |   | 66,677    |   |  
|Realized gain (loss) on sale of investments from Partnership                                   |  |      | 269,283   |      |   | 74,741    |   |  
|                                                                                               |  |      |           |      |   |           |   |  
|NET GAIN (LOSS) ON INVESTMENTS                                                                 |  |      | 668,464   |      |   | 141,418   |   |  
|                                                                                               |  |      |           |      |   |           |   |  
|NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS                                           |  | $    | 1,030,963 |      | $ | 444,162   |   | $
|                                                                                               |  |      |           |      |   |           |   |  
|STATEMENT OF CHANGES IN NET ASSETS                                                             |  |      |           |      |   |           |   |  
|For the periods ended December 31, 2005, 2004 and 2003                                         |  |      |           |      |   |           |   |  
|                                                                                               |  |      | 2005      |      |   | 2004      |   |  
|                                                                                               |  |      |           |      |   |           |   |  
|OPERATIONS                                                                                     |  |      |           |      |   |           |   |  
|Net investment income                                                                          |  | $    | 362,499   |      | $ | 302,744   |   | $
|Net change in unrealized gain (loss) on investments in Partnership                             |  |      | 399,181   |      |   | 66,677    |   |  
|Net realized gain (loss) on sale of investments in Partnership                                 |  |      | 269,283   |      |   | 74,741    |   |  
|                                                                                               |  |      |           |      |   |           |   |  
|NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS                                           |  |      | 1,030,963 |      |   | 444,162   |   |  
|                                                                                               |  |      |           |      |   |           |   |  
|CAPITAL TRANSACTIONS                                                                           |  |      |           |      |   |           |   |  
|Net withdrawals by contract owners                                                             |  |      | 13,036    |      |   | (128,598  | ) |  
|Net contributions (withdrawals) by Pruco Life Insurance Company of New Jersey                  |  |      | (201,988  | )    |   | (78,853   | ) |  
|                                                                                               |  |      |           |      |   |           |   |  
|NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL TRANSACTIONS                      |  |      | (188,952  | )    |   | (207,451  | ) |  
|                                                                                               |  |      |           |      |   |           |   |  
|TOTAL INCREASE (DECREASE) IN NET ASSETS                                                        |  |      | 842,011   |      |   | 236,711   |   |  
|NET ASSETS                                                                                     |  |      |           |      |   |           |   |  
|Beginning of period                                                                            |  |      | 8,082,948 |      |   | 7,846,237 |   |  
|                                                                                               |  |      |           |      |   |           |   |  
|End of period                                                                                  |  | $    | 8,924,959 |      | $ | 8,082,948 |   | $
|                                                                                               |  |      |           |      |   |           |   |  

The accompanying notes are an
      integral part of these financial statements.

F-3

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NOTES TO THE FINANCIAL STATEMENTS OFPRUCO LIFE OF NEW JERSEY VARIABLE CONTRACT REAL PROPERTY ACCOUNTDecember 31, 2005

|Note 1: | General
|------- | -------

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|Pruco Life of New Jersey Variable Contract Real Property Account (Account) was established on October 30, 1987 by resolution of the Board of Directors of Pruco Life Insurance Company of New Jersey (Pruco Life of New Jersey), an
  indirect wholly-owned subsidiary of The Prudential Insurance Company of America (Prudential), a wholly-owned subsidiary of Prudential Financial, Inc. (PFI) as a separate investment account pursuant to New Jersey law and is registered
  under the Securities Act of 1933. The assets of the Account are segregated from Pruco Life of New Jerseys other assets. The Account is used to fund benefits under certain variable life insurance and variable annuity contracts issued by Pruco
  Life of New Jersey. These products are Appreciable Life (VAL), Variable Life (VLI), Discovery Plus (SPVA), and Discovery Life Plus (SPVL).

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|The assets of the Account are invested in The Prudential Variable Contract Real Property Partnership (the Partnership). The Partnership is the investment vehicle for assets allocated to the real estate investment option under certain variable
  life insurance and annuity contracts. The Account, along with the Pruco Life Variable Contract Real Property Account and The Prudential Variable Contract Real Property Account, are the sole investors in the Partnership. These financial
  statements should be read in conjunction with the financial statements of the Partnership.

|                                                                                                                                                                     | 
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|The Partnership has a policy of investing at least 65% of its assets in direct ownership interests in income-producing real estate and participating mortgage loans.

|        |                                           
|------- | ------------------------------------------
|Note 2: | Summary of Significant Accounting Policies

|                       | 
|---------------------- | 
|A. Basis of Accounting

|                                                                                                                                                                                                                                                                                                                                                                                         | 
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|The accompanying financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (GAAP). The preparation of the financial statements in conformity with GAAP requires
  management to make estimates and assumptions that affect the reported amounts and disclosures. Actual results could differ from those estimates.

|                                      | 
|------------------------------------- | 
|B. Investment in Partnership Interest

|                                                                                                                                                                                                                                                                    | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|The investment in the Partnership is based on the Accounts proportionate interest of the Partnerships market value. At December 31, 2005 and 2004 the Accounts interest in the Partnership was 4.3% or 301,619 shares and 4.3% or 309,093
  shares respectively.

|                      | 
|--------------------- | 
|C. Income Recognition

|                                                                                                                                                                         | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | 
|Net investment income and realized and unrealized gains and losses are recognized daily. Amounts are based upon the Accounts proportionate interest in the Partnership.

|                                                        | 
|------------------------------------------------------- | 
|D. Equity of Pruco Life Insurance Company of New Jersey

|                                                                                                                                                                                                                                                                            | 
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|Pruco Life of New Jersey maintains a position in the Account for liquidity purposes, including unit purchases and redemptions, Partnership share transactions, and expense processing. The position does not affect contract owners accounts or
  the related unit values.

|        |      
|------- | -----
|Note 3: | Taxes
|        |      

|Pruco Life is taxed as a life insurance company as defined by the Internal Revenue Code. The results of operations of the Account form a part of PFIs consolidated federal tax return. Under current federal law, no federal income taxes are
  payable by the Account. As such, no provision for the tax liability has been recorded in these financial statements.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-4

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NOTES TO THE FINANCIAL STATEMENTS OFPRUCO LIFE OF NEW JERSEY VARIABLE CONTRACT REAL PROPERTY ACCOUNTDecember 31, 2005

|Note 4: | Net Withdrawals by Contract Owners
|------- | ----------------------------------

|                                                                                                                                                                                                            | 
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|Net contract owner withdrawals for the real estate investment option in Pruco Lifes variable insurance and variable annuity products for the years ended December 31, 2005, 2004 and 2003 were as follows:
|                                                                                                                                                                                                            | 

|2005:                                                    |  | VAL |          | VLI |   | SPVA    |   | SPVL |        | TOTAL |  
|-------------------------------------------------------- |  | --- | -------- | --- | - | ------- | - | ---- | ------ | ----- | -
|                                                         |  |     |          |     |   |         |   |      |        |       |  
|Contract Owner Net Payments:                             |  | $   | 292,838  |     | $ | 55,247  |   | $    | 0      |       | $
|Policy Loans:                                            |  |     | (99,753  | )   |   | (19,434 | ) |      | 0      |       |  
|Policy Loan Repayments and Interest:                     |  |     | 140,745  |     |   | 29,734  |   |      | 0      |       |  
|Surrenders, Withdrawals, and Death Benefits:             |  |     | (138,982 | )   |   | (64,806 | ) |      | 0      |       |  
|Net Transfers To Other Subaccounts or Fixed Rate Option: |  |     | 17,392   |     |   | 4,075   |   |      | 27,050 |       |  
|Administrative and Other Charges:                        |  |     | (196,947 | )   |   | (33,527 | ) |      | 0      |       |  
|                                                         |  |     |          |     |   |         |   |      |        |       |  
|Net Withdrawals by Contract Owners                       |  | $   | 15,293   |     | $ | (28,711 | ) | $    | 27,050 |       | $
|                                                         |  |     |          |     |   |         |   |      |        |       |  
|                                                         |  |     |          |     |   |         |   |      |        |       |  

|2004:                                                    |  | VAL |          | VLI |   | SPVA    |   | SPVL |        | TOTAL |  
|-------------------------------------------------------- |  | --- | -------- | --- | - | ------- | - | ---- | ------ | ----- | -
|                                                         |  |     |          |     |   |         |   |      |        |       |  
|Contract Owner Net Payments:                             |  | $   | 310,624  |     | $ | 57,735  |   | $    | 0      |       | $
|Policy Loans:                                            |  |     | (119,474 | )   |   | (22,106 | ) |      | 0      |       |  
|Policy Loan Repayments and Interest:                     |  |     | 122,527  |     |   | 7,829   |   |      | 0      |       |  
|Surrenders, Withdrawals, and Death Benefits:             |  |     | (191,894 | )   |   | (37,613 | ) |      | (1,940 | )     |  
|Net Transfers To Other Subaccounts or Fixed Rate Option: |  |     | (20,098  | )   |   | 4,924   |   |      | 0      |       |  
|Administrative and Other Charges:                        |  |     | (199,446 | )   |   | (33,301 | ) |      | 0      |       |  
|                                                         |  |     |          |     |   |         |   |      |        |       |  
|Net Withdrawals by Contract Owners                       |  | $   | (97,761  | )   | $ | (22,532 | ) | $    | (1,940 | )     | $
|                                                         |  |     |          |     |   |         |   |      |        |       |  
|                                                         |  |     |          |     |   |         |   |      |        |       |  

|2003:                                                    |  | VAL |          | VLI |   | SPVA    |   | SPVL |         | TOTAL |  
|-------------------------------------------------------- |  | --- | -------- | --- | - | ------- | - | ---- | ------- | ----- | -
|                                                         |  |     |          |     |   |         |   |      |         |       |  
|Contract Owner Net Payments:                             |  | $   | 325,435  |     | $ | 66,854  |   | $    | 0       |       | $
|Policy Loans:                                            |  |     | (96,224  | )   |   | 6,196   |   |      | 0       |       |  
|Policy Loan Repayments and Interest:                     |  |     | 150,021  |     |   | 11,474  |   |      | 0       |       |  
|Surrenders, Withdrawals, and Death Benefits:             |  |     | (209,965 | )   |   | (48,272 | ) |      | (6,000  | )     |  
|Net Transfers To Other Subaccounts or Fixed Rate Option: |  |     | 5,501    |     |   | 847     |   |      | (17,828 | )     |  
|Administrative and Other Charges:                        |  |     | (213,640 | )   |   | (34,797 | ) |      | 0       |       |  
|                                                         |  |     |          |     |   |         |   |      |         |       |  
|Net Withdrawals by Contract Owners                       |  | $   | (38,872  | )   | $ | 2,302   |   | $    | (23,828 | )     | $
|                                                         |  |     |          |     |   |         |   |      |         |       |  

|Note 5: | Unit Activity
|------- | -------------

Transactions in units for the years ended December 31,
2005, 2004 and 2003 were as follows:

|2005:                  |          |   |                               | VAL      |   | VLI     |   | SPVA    |   | SPVL    |  
|---------------------- | -------- | - | ----------------------------- | -------- | - | ------- | - | ------- | - | ------- | -
|                       |          |   |                               |          |   |         |   |         |   |         |  
|Company Contributions: | 87,397   |   | Contract Owner Contributions: | 188,975  |   | 27,168  |   | 12,293  |   | 356     |  
|Company Redemptions:   | (158,586 | ) | Contract Owner Redemptions:   | (182,362 | ) | (38,560 | ) | (1      | ) | (635    | )
|                       |          |   |                               |          |   |         |   |         |   |         |  
|2004:                  |          |   |                               |          |   |         |   |         |   |         |  
|                       |          |   |                               | VAL      |   | VLI     |   | SPVA    |   | SPVL    |  
|                       |          |   |                               |          |   |         |   |         |   |         |  
|Company Contributions: | 138,338  |   | Contract Owner Contributions: | 189,069  |   | 30,893  |   | 0       |   | 6,992   |  
|Company Redemptions:   | (164,449 | ) | Contract Owner Redemptions:   | (231,016 | ) | (40,269 | ) | (920    | ) | (10,186 | )
|                       |          |   |                               |          |   |         |   |         |   |         |  
|2003:                  |          |   |                               |          |   |         |   |         |   |         |  
|                       |          |   |                               | VAL      |   | VLI     |   | SPVA    |   | SPVL    |  
|                       |          |   |                               |          |   |         |   |         |   |         |  
|Company Contributions: | 134,817  |   | Contract Owner Contributions: | 219,562  |   | 38,081  |   | 0       |   | 765     |  
|Company Redemptions:   | (626,880 | ) | Contract Owner Redemptions:   | (237,355 | ) | (37,038 | ) | (12,153 | ) | (993    | )

F-5

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NOTES TO THE FINANCIAL STATEMENTS OFPRUCO LIFE OF NEW JERSEY VARIABLE CONTRACT REAL PROPERTY ACCOUNTDecember 31, 2005

|Note 6:                                                                                                                                                            | Purchases and Sales of
Investments
|------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ----------------------------------
|                                                                                                                                                                   |                                   
|The aggregate costs of purchases and proceeds from sales of investments in the Partnership for the years ended
  December 31, 2005, 2004 and 2003 were as follows:

|           | December 31, 2005 |          | December 31, 2004 |   | December 31, 2003 |  
|---------- | ----------------- | -------- | ----------------- | - | ----------------- | -
|           |                   |          |                   |   |                   |  
|Purchases: | $                 | 0        |                   | $ | 0                 |  
|Sales:     | $                 | (225,656 | )                 | $ | (241,673          | )

|        |                     
|------- | --------------------
|Note 7: | Financial Highlights

|                                                                                                                                                                                                                                                                                                                                                                                          | 
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|Pruco Life Insurance Company of New Jersey (the Company or Prudential) sells a number of variable annuity and variable life insurance products. These products have unique combinations of features and fees that are charged against the
  contract owners account balance. Differences in the fee structures result in a variety of unit values, expense ratios and total returns.

|                                                                                                                                                                                                                                                                                                                                                                                                                | 
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|The following table was developed by determining which products offered by Pruco Life of New Jersey have the lowest and highest total expense ratio. The summary may not reflect the minimum and maximum contract charges offered by the
  Company as contract owners may not have selected all available and applicable contract options as discussed in Note 1. The table reflects contract owner units only.
|                                                                                                                                                                                                                                                                                                                                                                                                                | 

|                      | At year ended |       | For the year ended |  
|--------------------- | ------------- | ----- | ------------------ | -
|                      |               |       |                    |  
|                      | Units         |       | Unit Value         |  
|                      | (000s)       |       | Lowest- Highest    |  
|                      |               |       |                    |  
|December 31,
    2005 |               | 2,570 |                    | $
|December 31,
    2004 |               | 2,563 |                    | $
|December 31,
    2003 |               | 2,618 |                    | $
|December 31,
    2002 |               | 2,647 |                    | $
|December 31,
    2001 |               | 2,712 |                    | $

|The table above reflects information for units held by contract owners. Pruco Life of New Jersey also maintains a position in the Real Property Account, to provide for property acquisitions and capital expenditure funding needs. Pruco Life of New Jersey held 804,224 875,413, 901,524, 1,393,587 and 1,304,664 units representing $2,112,648, $ 2,040,688,
$1,993,278, $3,036,542 and $2,826,338 of net assets as of December 31, 2005, 2004, 2003, 2002 and 2001, respectively. Charges for mortality risk, expense risk and administrative expenses are used by Pruco Life of New Jersey to purchase additional units in its account resulting in no impact of its net assets.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

| | 
| | 

|* | This amount represents the proportionate share of the net investment income from the underlying Partnership divided by the total average assets of the Account. This ratio excludes those expenses, such as mortality and expense charges, that result in direct reductions in the unit values.
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|** | These ratios represent the annualized contract expenses of the separate account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to contract owner accounts through the redemption of units and expenses of the
underlying Partnership are excluded.
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|*** | These amounts represent the total return for the periods indicated, including changes in the value of the underlying Partnership, and reflect deductions for all items included in the expense ratio. The total return does not include any expense assessed through the redemption of units; inclusion of these expenses in the calculation would result in a reduction
in the total return presented.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                     | 
|-------------------- | 
|Charges and Expenses

|                                           | 
|------------------------------------------ | 
|A. Mortality Risk and Expense Risk Charges

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | 
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|Mortality risk and expense risk charges are determined daily using an effective annual rate of 0.6%, 0.35%, 0.9% and 0.9% for VAL, VLI, SPVA, SPVL, respectively. Mortality risk is that life insurance contract owners may not live as long as
  estimated or annuitants may live longer than estimated and expense risk is that the cost of issuing and administering the policies may exceed related charges by Pruco Life of New Jersey. The mortality risk and expense risk charges are
  assessed through reduction in unit values.

|                          | 
|------------------------- | 
|B. Administrative Charges
|                          | 

|Administrative charges are determined daily using an effective annual rate of 0.35% applied daily against the net assets representing equity of contract owners held in each subaccount for SPVA and SPVL. Administrative charges include costs
  associated with issuing the contract, establishing and maintaining records, and providing reports to contract owners. The administrative charge is assessed through reduction in unit values.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-6

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NOTES TO THE FINANCIAL STATEMENTS OFPRUCO LIFE OF NEW JERSEY VARIABLE CONTRACT REAL PROPERTY ACCOUNTDecember 31, 2005

|C. Cost of Insurance and Other Related Charges
|----------------------------------------------

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|Contract owner contributions are subject to certain deductions prior to being invested in the Real Property Account. The deductions for VAL and VLI are (1) state premium taxes; (2) sales charges, not to exceed 5% for VAL and 9% for VLI, which
  are deducted in order to compensate Pruco Life of New Jersey for the cost of selling the contract and (3) transaction costs, applicable to VAL, are deducted from each premium payment to cover premium collection and processing costs.
  Contracts are also subject to monthly charges for the costs of administering the contract to compensate Pruco Life of New Jersey for the guaranteed minimum death benefit risk. These charges are assesseed through the redemption of units.

|                         | 
|------------------------ | 
|D. Deferred Sales Charge

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | 
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|Subsequent
          to a contract owner redemption, a deferred sales charge is imposed
          upon surrenders of certain variable life insurance contracts to compensate
          Pruco Life of New Jersey for sales and other marketing expenses. The
          amount of any  sales charge will depend on the number of years that
          have elapsed since the contract was issued but will not exceed 45%
          of one scheduled annual premium for VAL contracts and 9% of the initial
          premium payment for SPVL. No sales charge will
  be imposed after the sixth and tenth year of the contract for SPVL and VAL,
          respectively. No sales charge will be imposed on death benefits. A
          deferred sales charge is assessed through the redemption of units.

|                             | 
|---------------------------- | 
|E. Partial Withdrawal Charge

|                                                                                                                                                                                                                                                                                                                 | 
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|A charge is imposed by Pruco Life of New Jersey on partial withdrawals of the cash surrender value for VAL. A charge equal to the lesser of $15 or 2% will be made in connection with each partial withdrawal of the cash surrender value of a
  contract. A charge is assessed through the redemption of units.

|        |              
|------- | -------------
|Note 8: | Related Party
|        |              

|Prudential and its affiliates perform various services on behalf of the Partnership in which the Account invests and may receive fees for the services performed. These services include, among other things, shareholder communications,
  preparation, postage, fund transfer agency and various other record keeping and customer service functions.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-7

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Report of Independent Accountants



To the Partners of The Prudential
Variable Contract Real Property Partnership:

In our opinion, the accompanying consolidated statements of assets and liabilities, including the schedule of investments, and the related consolidated statements of operations, of changes in net assets and of cash flows present fairly, in all material
respects, the financial position of The Prudential Variable Contract Real Property Partnership (the Partnership) at December 31, 2005 and 2004, and the results of its operations and its cash flows for each of the three years in the period ended December 31,
2005 in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the management of The Prudential Insurance Company of America; our responsibility is to express an opinion
on these financial statements based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audits to obtain reasonable
assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP
New York, New York
February 28, 2006

F-8

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Report of Independent Accountants onFinancial Statement Schedules

To the Partners of The Prudential
Variable Contract Real Property Partnership:

Our audits of the consolidated financial
    statements referred to in our report dated February 28, 2006 appearing
    in this Annual Report on Form
10-K also included an audit of the financial statement schedules listed in Item 14(a)(2) of this Form 10-K. In our
opinion, these financial statement schedules present fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements.

PricewaterhouseCoopers LLP
New York, New York
February 28, 2006

F-9

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THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIPCONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES

|                                                                   | December 31, 2005 |             | December 31, 2004 |  
|------------------------------------------------------------------ | ----------------- | ----------- | ----------------- | -
|                                                                   |                   |             |                   |  
|ASSETS                                                             |                   |             |                   |  
|REAL ESTATE INVESTMENTS  At estimated market value:               |                   |             |                   |  
|Real estate and improvements                                       |                   |             |                   |  
|(cost: 12/31/2005  $183,767,148; 12/31/2004  $224,584,885)       | $                 | 178,628,645 |                   | $
|Real estate partnerships (cost: 12/31/2005  $18,578,394;          |                   |             |                   |  
|12/31/2004  $11,286,826)                                          |                   | 14,348,816  |                   |  
|Mortgage and other loans receivable (cost: 12/31/2005  $4,277,769 |                   |             |                   |  
|12/31/2004  $1,332,060)                                           |                   | 4,277,769   |                   |  
|                                                                   |                   |             |                   |  
|Total real estate investments                                      |                   | 197,255,230 |                   |  
|CASH AND CASH EQUIVALENTS                                          |                   | 45,467,485  |                   |  
|OTHER ASSETS, NET                                                  |                   | 3,292,400   |                   |  
|                                                                   |                   |             |                   |  
|Total assets                                                       | $                 | 246,015,115 |                   | $
|                                                                   |                   |             |                   |  
|LIABILITIES & PARTNERS EQUITY                                     |                   |             |                   |  
|INVESTMENT LEVEL DEBT                                              | $                 | 33,195,607  |                   | $
|ACCOUNTS PAYABLE AND ACCRUED EXPENSES                              |                   | 2,545,052   |                   |  
|DUE TO AFFILIATES                                                  |                   | 760,926     |                   |  
|OTHER LIABILITIES                                                  |                   | 472,336     |                   |  
|MINORITY INTEREST                                                  |                   | 3,638,343   |                   |  
|                                                                   |                   |             |                   |  
|Total liabilities                                                  |                   | 40,612,264  |                   |  
|                                                                   |                   |             |                   |  
|COMMITMENTS AND CONTINGENCIES                                      |                   |             |                   |  
|PARTNERS EQUITY                                                   |                   | 205,402,851 |                   |  
|                                                                   |                   |             |                   |  
|Total liabilities and partners equity                             | $                 | 246,015,115 |                   | $
|                                                                   |                   |             |                   |  
|NUMBER OF SHARES OUTSTANDING AT END OF PERIOD                      |                   | 6,941,631   |                   |  
|                                                                   |                   |             |                   |  
|SHARE VALUE AT END OF PERIOD                                       | $                 | 29.59       |                   | $
|                                                                   |                   |             |                   |  

The accompanying notes are an
      integral part of these consolidated financial statements.

F-10

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THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIPCONSOLIDATED STATEMENTS OF OPERATIONS

|                                                                                                              | Year Ended December 31, |           
|------------------------------------------------------------------------------------------------------------- | ----------------------- | ----------
|                                                                                                              | 2005                    |           
|                                                                                                              |                         |           
|INVESTMENT INCOME:                                                                                            |                         |           
|Revenue from real estate and improvements                                                                     | $                       | 27,087,813
|Equity in income of real estate partnership                                                                   |                         | 252,618   
|Interest and equity income on mortgage and other loans receivable                                             |                         | 281,134   
|Income from other real estate investments                                                                     |                         |          
|Interest on short-term investments                                                                            |                         | 1,022,706 
|                                                                                                              |                         |           
|Total investment income                                                                                       |                         | 28,644,271
|                                                                                                              |                         |           
|INVESTMENT EXPENSES:                                                                                          |                         |           
|Operating                                                                                                     |                         | 7,420,509 
|Investment management fee                                                                                     |                         | 2,845,519 
|Real estate taxes                                                                                             |                         | 2,382,626 
|Administrative                                                                                                |                         | 4,438,482 
|Interest expense                                                                                              |                         | 2,173,789 
|Minority interest                                                                                             |                         | 164,175   
|                                                                                                              |                         |           
|Total investment expenses                                                                                     |                         | 19,425,100
|                                                                                                              |                         |           
|NET INVESTMENT INCOME                                                                                         |                         | 9,219,171 
|                                                                                                              |                         |           
|REALIZED AND UNREALIZED GAIN (LOSS) ON REAL ESTATE INVESTMENTS:                                               |                         |           
|Net proceeds from real estate investments sold                                                                |                         | 55,054,217
|Less: Cost of real estate investments sold                                                                    |                         | 47,015,948
|Realization of prior years unrealized gain (loss) on real estate
                           investments sold |                         | (655,341  
|Minority interest in realized gain (loss) on real estate investments sold                                     |                         | 2,474,788 
|                                                                                                              |                         |           
|NET GAIN (LOSS) REALIZED ON REAL ESTATE INVESTMENTS SOLD                                                      |                         | 6,218,822 
|                                                                                                              |                         |           
|Change in unrealized gain (loss) on real estate investments                                                   |                         | 10,475,654
|Less: Minority interest in unrealized gain (loss) on real estate investments                                  |                         | 1,233,857 
|                                                                                                              |                         |           
|Net unrealized gain (loss) on real estate investments                                                         |                         | 9,241,797 
|                                                                                                              |                         |           
|NET REALIZED AND UNREALIZED GAIN (LOSS) ON REAL ESTATE INVESTMENTS                                            |                         | 15,460,619
|                                                                                                              |                         |           
|INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS                                                   | $                       | 24,679,790
|                                                                                                              |                         |           

The accompanying notes are an
      integral part of these consolidated financial statements.

F-11

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THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIPCONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS

|                                                                        | Year Ended December 31, |            
|----------------------------------------------------------------------- | ----------------------- | -----------
|                                                                        | 2005                    |            
|                                                                        |                         |            
|INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS:            |                         |            
|Net investment income                                                   | $                       | 9,219,171  
|Net gain (loss) realized on real estate investments sold                |                         | 6,218,822  
|Net unrealized gain (loss) from real estate investments                 |                         | 9,241,797  
|                                                                        |                         |            
|Increase (decrease) in net assets resulting from operations             |                         | 24,679,790 
|                                                                        |                         |            
|INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL TRANSACTIONS:  |                         |            
|Withdrawals                                                             |                         |            
|(2005 -198,677; 2004 -226,527; and 2003  278,014 shares, respectively) |                         | (6,000,000 
|                                                                        |                         |            
|Increase (decrease) in net assets resulting from capital transactions   |                         | (6,000,000 
|                                                                        |                         |            
|INCREASE (DECREASE) IN NET ASSETS                                       |                         | 18,679,790 
|NET ASSETS  Beginning of period                                        |                         | 186,723,061
|                                                                        |                         |            
|NET ASSETS  End of period                                              | $                       | 205,402,851
|                                                                        |                         |            

The accompanying notes are an
      integral part of these consolidated financial statements.

F-12

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THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIPCONSOLIDATED STATEMENTS OF CASH FLOWS

|                                                                                              |  | Year Ended December 31, |            
|--------------------------------------------------------------------------------------------- |  | ----------------------- | -----------
|                                                                                              |  | 2005                    |            
|                                                                                              |  |                         |            
|CASH FLOWS FROM OPERATING ACTIVITIES:                                                         |  |                         |            
|Net increase in net assets from operations                                                    |  | $                       | 24,679,790 
|Adjustments to reconcile net increase in net assets to net cash from operating activities     |  |                         |            
|Net realized and unrealized loss (gain)                                                       |  |                         | (15,460,619
|Amortization of deferred financing costs                                                      |  |                         | (34,620    
|Distributions in excess of (less than) equity in income of real estate partnership operations |  |                         | (148,668   
|Minority interest in consolidated partnerships                                                |  |                         | 164,175    
|Bad debt expense                                                                              |  |                         | 240,176    
|(Increase) decrease in:                                                                       |  |                         |            
|Other assets                                                                                  |  |                         | 2,815,778  
|Increase (decrease) in:                                                                       |  |                         |            
|Accounts payable and accrued expenses                                                         |  |                         | (550,954   
|Due to affiliates                                                                             |  |                         | 39,507     
|Other liabilities                                                                             |  |                         | (150,564   
|                                                                                              |  |                         |            
|Net cash flows from (used in) operating activities                                            |  |                         | 11,594,001 
|                                                                                              |  |                         |            
|CASH FLOWS FROM INVESTING ACTIVITIES:                                                         |  |                         |            
|Net proceeds from real estate investments sold                                                |  |                         | 41,676,816 
|Acquisition of real estate and improvements                                                   |  |                         |           
|Additions to real estate and improvements                                                     |  |                         | (6,198,211 
|Contributions to real estate partnerships                                                     |  |                         | (7,142,900 
|Origination of mortgage loan receivable                                                       |  |                         | (2,945,709 
|Collection of other real estate investments                                                   |  |                         |           
|Origination of other real estate investments                                                  |  |                         |           
|                                                                                              |  |                         |            
|Net cash flows from (used in) investing activities                                            |  |                         | 25,389,996 
|                                                                                              |  |                         |            
|CASH FLOWS FROM FINANCING ACTIVITIES:                                                         |  |                         |            
|Withdrawals                                                                                   |  |                         | (6,000,000 
|Proceeds from investment level debt                                                           |  |                         |           
|Principal payments on investment level debt                                                   |  |                         | (853,525   
|Contributions from minority interest partners                                                 |  |                         |           
|Distributions to minority interest partners                                                   |  |                         | (2,220,169 
|                                                                                              |  |                         |            
|Net cash flows from (used in) financing activities                                            |  |                         | (9,073,694 
|                                                                                              |  |                         |            
|NET CHANGE IN CASH AND CASH EQUIVALENTS                                                       |  |                         | 27,910,303 
|CASH AND CASH EQUIVALENTS  Beginning of period                                               |  |                         | 17,557,182 
|                                                                                              |  |                         |            
|CASH AND CASH EQUIVALENTS  End of period                                                     |  | $                       | 45,467,485 
|                                                                                              |  |                         |            

The accompanying notes are an
      integral part of these consolidated financial statements.

F-13

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THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIPCONSOLIDATED SCHEDULE OF INVESTMENTS

|                                                                                                                                                                                                  |                                                     |                |             |                             |                      | December 31, |          
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------- | -------------- | ----------- | --------------------------- | -------------------- | ------------ | ---------
|                                                                                                                                                                                                  |                                                     |                |             | 2005
    Total Rentable     |                      |              |          
|                                                                                                                                                                                                  |                                                     |                |             | Square
    Feet             |                      | 2005         |          
|                                                                                                                                                                                                  |                                                     |                |             | Unless
    Otherwise        |                      |              |          
|Property Name                                                                                                                                                                                     |                                                     | 2005 Ownership | City, State |                             | Indicated(Unaudited) |              | Cost     
|                                                                                                                                                                                                  |                                                     |                |             |                             |                      |              |          
|REAL
            ESTATE INVESTMENTS                                                                                                                                                               |                                                     |                |             |                             |                      |              |          
|                                                                                                                                                                                                  |                                                     |                |             |                             |                      |              |          
|OFFICES                                                                                                                                                                                           |                                                     |                |             |                             |                      |              |          
|750 Warrenville                                                                                                                                                                                   |                                                     | WO             |             | Lisle, IL                   |                      |              | 103,193  
|Oakbrook Terrace                                                                                                                                                                                  |                                                     | WO             |             | Oakbrook, IL                |                      |              | 123,734  
|Summit @ Cornell Oaks                                                                                                                                                                             |                                                     | WO             |             | Beaverton , OR              |                      |              | 72,109   
|Westpark                                                                                                                                                                                          |                                                     | WO             |             | Nashville, TN               |                      |              | 97,199   
|Financial Plaza                                                                                                                                                                                   |                                                     | WO             |             | Brentwood, TN               |                      |              | 98,049   
|                                                                                                                                                                                                  |                                                     |                |             |                             |                      |              |          
|                                                                                                                                                                                                  |                                                     |                |             | Offices % as of 12/31/05    |                      |              | 22%      
|                                                                                                                                                                                                  |                                                     |                |             |                             |                      |              |          
|APARTMENTS                                                                                                                                                                                        |                                                     |                |             |                             |                      |              |          
|Brookwood Apartments                                                                                                                                                                              |                                                     | WO             |             | Atlanta, GA                 |                      |              | 240 Units
|Dunhill Trace Apartments                                                                                                                                                                          |                                                     | WO             |             | Raleigh, NC                 |                      |              | 250 Units
|Riverbend Apartments                                                                                                                                                                              |                                                     | CJV            |             | Jacksonville, FL            |                      |              | 458 Units
|SIMA Apartments                                                                                                                                                                                   |                                                     | CJV            |             | Gresham/Salem, OR           |                      |              | 493 Units
|                                                                                                                                                                                                  |                                                     |                |             |                             |                      |              |          
|                                                                                                                                                                                                  |                                                     |                |             | Apartments % as of 12/31/05 |                      |              | 18%      
|                                                                                                                                                                                                  |                                                     |                |             |                             |                      |              |          
|RETAIL                                                                                                                                                                                            |                                                     |                |             |                             |                      |              |          
|Kings Market                                                                                                                                                                                     |                                                     | WO             |             | Rosewell, GA                |                      |              | 314,358  
|Hampton Towne Center                                                                                                                                                                              |                                                     | WO             |             | Hampton, VA                 |                      |              | 174,540  
|White Marlin Mall                                                                                                                                                                                 |                                                     | CJV            |             | Ocean City, MD              |                      |              | 186,016  
|Kansas City Portfolio                                                                                                                                                                             |                                                     | EJV            |             | Kansas City, KS;MO          |                      |              | 487,660  
|CARS Preferred Equity                                                                                                                                                                             |                                                     | EJV            |             | Various                     |                      |              | N/A      
|                                                                                                                                                                                                  |                                                     |                |             |                             |                      |              |          
|                                                                                                                                                                                                  |                                                     |                |             | Retail % as of 12/31/05     |                      |              | 43%      
|                                                                                                                                                                                                  |                                                     |                |             |                             |                      |              |          
|INDUSTRIAL                                                                                                                                                                                        |                                                     |                |             |                             |                      |              |          
|Smith Road                                                                                                                                                                                        |                                                     | WO             |             | Aurora, CO                  |                      |              | 277,930  
|                                                                                                                                                                                                  |                                                     |                |             |                             |                      |              |          
|                                                                                                                                                                                                  |                                                     |                |             | Industrial % as of 12/31/05 |                      |              | 6%       
|                                                                                                                                                                                                  |                                                     |                |             |                             |                      |              |          
|HOTEL                                                                                                                                                                                             |                                                     |                |             |                             |                      |              |          
|Portland Crown Plaza                                                                                                                                                                              |                                                     | CJV            |             | Portland, OR                |                      |              | 161 Rooms
|                                                                                                                                                                                                  |                                                     |                |             |                             |                      |              |          
|                                                                                                                                                                                                  |                                                     |                |             | Hotel % as of 12/31/05      |                      |              | 5%       
|                                                                                                                                                                                                  |                                                     |                |             |                             |                      |              |          
|LAND                                                                                                                                                                                              |                                                     |                |             |                             |                      |              |          
|Gateway Village                                                                                                                                                                                   |                                                     | EJV            |             | Blue Springs, MO            |                      |              |          
|                                                                                                                                                                                                  |                                                     |                |             |                             |                      |              |          
|                                                                                                                                                                                                  |                                                     |                |             | Land % as of 12/31/05       |                      |              | 0%       
|                                                                                                                                                                                                  |                                                     |                |             |                             |                      |              |          
|MORTGAGE
            AND
OTHER LOANS RECEIVABLE                                                                                                                                                   |                                                     |                |             |                             |                      |              |          
|Westminster West                                                                                                                                                                                  |                                                     | Eloan          |             | Westminster, MD             |                      |              |          
|                                                                                                                                                                                                  |                                                     |                |             |                             |                      |              |          
|                                                                                                                                                                                                  | Mortgage and Other Loans Receivable% as of 12/31/05 | 2%             |             |                             | 4,277,769            |              |          
|                                                                                                                                                                                                  |                                                     |                |             |                             |                      |              |          
|                                                                                                                                                                                                  |                                                     |                |             |                             |                      |              |          
|Total Real Estate Investments as a Percentage of Net Assets as of 12/31/05                                                                                                                        |                                                     | 96%            |             |                             | 206,623,311          |              |          
|                                                                                                                                                                                                  |                                                     |                |             |                             |                      |              |          
|                                                                                                                                                                                                  |                                                     |                |             |                             |                      |              |          
|WO  Wholly Owned InvestmentCJV  Consolidated Joint VentureEJV  Joint Venture Investment accounted for under the equity method
    Eloan  Mezzanine loan accounted for under the equity method

The accompanying notes are an
      integral part of these consolidated financial statements.

F-14

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THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIPCONSOLIDATED SCHEDULE OF INVESTMENTS

|                                                         |             |            | December 31, 2005 |   | December 31, 2004 |     
|-------------------------------------------------------- | ----------- | ---------- | ----------------- | - | ----------------- | ----
|                                                         |             |            |                   |   |                   |     
|                                                         |             |            |                   |   | Estimated         |     
|                                                         | Face Amount |            | Cost              |   | Market Value      |     
|                                                         |             |            |                   |   |                   |     
|CASH AND CASH
    EQUIVALENTS  Percentage of Net Assets |             |            |                   |   |                   | 22.1
|Federal Home Loan Bank, 1.75%, January 3, 2006           | $           | 488,000    |                   | $ | 487,908           |     
|Federal Home Loan Bank, 0 coupon bond, January 30, 2006  |             | 44,184,000 |                   |   | 44,033,621        |     
|Federal Home Loan Bank, 6.450%, January 3, 2005          |             | 19,457,000 |                   |   |                  |     
|                                                         |             |            |                   |   |                   |     
|Total Cash Equivalents                                   |             |            |                   |   | 44,521,529        |     
|                                                         |             |            |                   |   |                   |     
|Cash                                                     |             |            |                   |   | 945,956           |     
|                                                         |             |            |                   |   |                   |     
|Total Cash and Cash Equivalents                          |             |            |                   | $ | 45,467,485        |     
|                                                         |             |            |                   |   |                   |     

The accompanying notes are an
      integral part of these consolidated financial statements.

F-15

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OFTHE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIPFor Years Ended December 31, 2005, 2004, and 2003

|Note 1: | Organization
|------- | ------------

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|On April 29, 1988, The Prudential Variable Contract Real Property Partnership (the Partnership), a general partnership organized under New Jersey law, was formed through an agreement among The Prudential Insurance Company of
  America (Prudential), Pruco Life Insurance Company (Pruco Life), and Pruco Life Insurance Company of New Jersey (Pruco Life of New Jersey). The Partnership was established as a means by which assets allocated to the real estate
  investment option under certain variable life insurance and variable annuity contracts issued by the respective companies could be invested in a commingled pool. The partners in the Partnership are Prudential, Pruco Life and Pruco Life of New
  Jersey.

|                                                                                                                                                                 | 
|---------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|The Partnerships policy is to invest at least 65% of its assets in direct ownership interests in income-producing real estate and participating mortgage loans.

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|The estimated market value of the Partnerships shares is determined daily, consistent with the Partnership Agreement. On each day during which the New York Stock Exchange is open for business, the net asset value of the Partnership is
  estimated using the estimated market value of its assets, principally as described in Notes 2A, 2B and 2C below, reduced by any liabilities of the Partnership. The periodic adjustments to property values described in Notes 2A, 2B and 2C below
  and other adjustments to previous estimates are made on a prospective basis. There can be no assurance that all such adjustments to estimates will be made timely.

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|Shares of the Partnership are held by The Prudential Variable Contract Real Property Account, Pruco Life Variable Contract Real Property Account and Pruco Life of New Jersey Variable Contract Real Property Account (the Real Property
  Accounts) and may be purchased and sold at the then current share value of the Partnerships net assets. Share value is calculated by dividing the estimated market value of net assets of the Partnership as determined above by the number of
  shares outstanding. A contract owner participates in the Partnership through interests in the Real Property Accounts.

|                                                                                                                                                                                                                                                                                                                             | 
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|PREI is the real estate advisory unit of Prudential Investment Management, Inc. (PIM), which is an indirectly owned subsidiary of Prudential Financial Inc. (PFI). PREI provides investment advisory services to the Partnerships partners
  pursuant to the terms of the Advisory Agreement as described in Note 10.

|        |                                           
|------- | ------------------------------------------
|Note 2: | Summary of Significant Accounting Policies

| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | A: | Basis of Presentation The accompanying consolidated financial statements of the Partnership have been presented on the market value basis of accounting in conformity with accounting principles generally accepted in the United
States of America. The consolidated financial statements of Partnership include wholly owned entities, and those real estate partnerships in which the Partnership has a controlling interest. All significant inter-company balances and
transactions have been eliminated in consolidation.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

| | B: | Managements Use of Estimates in the Financial Statements The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make
estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-16

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OFTHE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIPFor Years Ended December 31, 2005, 2004, and 2003

|Note 2: | Summary of Significant Accounting Policies (continued)
|------- | ------------------------------------------------------

| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | C: | Real Estate Investments Real estate investments are shown at estimated market value in accordance with the terms of the Partnerships contracts. Properties owned are initially recorded at the purchase price plus closing costs.
Development costs and major renovations are capitalized as a component of cost, and routine maintenance and repairs are charged to expense as incurred. Real estate costs include the cost of acquired property, including all the
tangible and intangible assets. Tangible assets include the value of all land, building and tenant improvements at the time of acquisition. Intangible assets include the value of any above and below market leases, in-place leases, and
tenant relationships at the time of acquisition. Market value estimates are based upon property appraisal reports prepared by independent real estate appraisers (members of the Appraisal Institute or an equivalent organization) within
a reasonable amount of time following acquisition of the real estate and no less frequently than annually thereafter. The Chief Real Estate Appraiser of PIM is responsible to assure that the valuation process provides independent and
reasonable property market value estimates. American Appraisal Associates (the Appraisal Management Firm), an entity not affiliated with PIM, has been appointed by PIM to assist the Chief Real Estate Appraiser in maintaining and
monitoring the independence and the accuracy of the appraisal process. Unless a property is currently held for sale, the market value of real estate investments does not reflect the transaction sale costs, which may be incurred upon
disposition of the real estate investments.

| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Unconsolidated real estate partnerships are valued at the Partnerships equity in net assets as reflected in the partnerships financial statements with properties valued as described above. Under the equity method, the investment is
initially recorded at the original investment amount, plus or minus additional amounts invested or distributed, and is subsequently adjusted for the Partnerships share of undistributed earnings or losses (including unrealized
appreciation and depreciation) from the underlying entity.

| |  |                                                                                                                                                                                                                                
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Land and redevelopment properties held for future development via a forward contract are carried at cost plus cost incurred to hold the land and redevelopment properties as stated in the take out provisions of the contract.

| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | As described above, the estimated market value of real estate and real estate related assets is determined through an appraisal process. These estimated market values may vary significantly from the prices at which the real estate
investments would sell, since market prices of real estate investments can only be determined by negotiation between a willing buyer and seller and could be material to the consolidated financial statements. Although the estimated
market values represent subjective estimates, management believes these estimated market values are reasonable approximations of market prices and the aggregate estimated value of investments in real estate is fairly presented as
of December 31, 2005, and 2004.

| |    |                                                                                                                                                                   
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | D: | Other Real Estate Investments Other real estate investments include short term notes receivable, which are valued at the amount due and approximate market value.

| |    |                                                                                                                                                                                                                                                                                                                                                     
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | E: | Cash and Cash Equivalents Cash and cash equivalent are comprised of all short-term investments and investments in money market funds with a maximum maturity of three months. Cash equivalents consist of investments in the
Prudential Investment Liquidity Pool offered and managed by an affiliate of PFI and are accounted for at market value.
| |    |                                                                                                                                                                                                                                                                                                                                                     

| | F: | Marketable Securities Marketable securities are highly liquid investments with maturities of more than three months when purchased and are carried at estimated market value.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-17

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OFTHE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIPFor Years Ended December 31, 2005, 2004, and 2003

|Note 2: | Summary of Significant Accounting Policies (continued)
|------- | ------------------------------------------------------

| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | G: | Other Assets Cash of $156,268 and $212,989 was maintained by the wholly owned and consolidated properties at December 31, 2005 and 2004, respectively, for tenant security deposits and is included in Other Assets on the
Consolidated Statements of Assets and Liabilities. Other assets also includes tenant receivable and is net of allowance for uncollectible accounts of $51,162 and $46,690 at December 31, 2005 and 2004, respectively.

| |  |  | 
| |  |  | 

| | H: | Investment Level
Debt  Investment level debt is stated at the principal amount of the
obligations outstanding. At times the Partnership may assume debt
in connection with the purchase of real estate. For debt
assumed, the Partnership allocates a portion of the purchase price
to the below/above market debt and amortizes the premium/ discount
over the remaining life of the
debt.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                             
| | I: | Deferred Financing Costs Included in Other Assets are deferred financing costs amounting to $246,495 and $391,666 which are net of accumulated amortization of $80,227 and $878,316 as of December 31, 2005 and 2004,
respectively, and which are being amortized over the term of the related obligation.                                                                                 

| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | J: | Revenue Recognition Revenue from real estate is recognized when earned in accordance with the terms of the respective leases. Revenue from certain real estate investments is net of all or a portion of related real estate expenses,
as lease arrangements vary as to responsibility for payment of these expenses between tenants and the Partnership. Since real estate is stated at estimated market value, net income is not reduced by depreciation or amortization
expense.

| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | K: | Equity in Income of Real Estate Partnership Equity in income from real estate partnership operations represents the Partnerships share of the current years partnership income as provided for under the terms of the partnership
agreements. As is the case with wholly owned real estate, partnership net income is not reduced by depreciation or amortization expense. Frequency of distribution of income is determined by formal agreements or by the executive
committee of the partnership.

| |    |                                                                                                                                                                                                                                                                                                                                                                
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | L: | Federal Income Taxes The Partnership is not a taxable entity under the provisions of the Internal Revenue Code. The income and capital gains and losses of the Partnership are attributed, for federal income tax purposes, to the
Partners in the Partnership. The Partnership may be subject to state and local taxes in jurisdictions in which it operates.

| |    |                                                                                                                                                                                                                                                         
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | M. | New Accounting Pronouncements FASB Interpretation No. 46, Consolidation of Variable Interest Entities, (FIN 46) was issued in January 2003. In December 2003, FASB issued a revised interpretation of FIN 46 (FIN 46-R),
which supersedes FIN 46.

| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | FIN 46-R defers the effective date for applying the provisions of FIN-46 for those companies currently accounting for their investments in accordance with the AICPA Audit and Accounting Guide, Audits of Investment Companies (the
Audit Guide). The effective date is delayed while the AICPA finalizes the proposed Statement of Position (SOP) on the clarification of the scope of the Audit Guide. Following the issuance of the final SOP, the FASB will consider
modifying FIN 46-R to provide an exception for companies that apply the Audit Guide. The Partnership is awaiting the final determination from the FASB in order to evaluate the extent in which, if any, its equity investments may need to
be consolidated as a result of this FIN 46-R.

|        |                                                                                               
|------- | ----------------------------------------------------------------------------------------------
|Note 3: | Disclosure of Supplemental Cash Flow Information and Non-Cash Investing and Financing Activity

|                                                                                                                                          | 
|----------------------------------------------------------------------------------------------------------------------------------------- | 
|Cash paid for interest during the years ended December 31, 2005, 2004, and 2003 was $2,324,397, $2,595,651, and $2,462,387, respectively.
|                                                                                                                                          | 

|During the fourth quarter of 2005, a minority interest partner bought out the Accounts investment in a consolidated real estate partnership resulting in net proceeds of $15.9 million. This transaction resulted in the assumption of a mortgage loan
  by the partner of approximately $10.0 million and a reduction of the partners minority interest of $3.7 million.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-18

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OFTHE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIPFor Years Ended December 31, 2005, 2004, and 2003

|Note 4: | Real Estate Partnership
|------- | -----------------------

|                                                                                                                                                                                                                                                                                                         | 
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|Real estate partnership is valued at the Partnerships equity in net assets as reflected by the partnerships financial statements with properties valued as indicated in Note 2C above. The Partnerships combined financial position and results of
  operations are summarized as follows (in 000s):
|                                                                                                                                                                                                                                                                                                         | 

|                                      |  | December 31, |       
|------------------------------------- |  | ------------ | ------
|                                      |  | 2005         |       
|                                      |  |              |       
|Partnership Assets and Liabilities    |  |              |       
|Real estate at estimated market value |  | $            | 34,365
|Other assets                          |  |              | 1,384 
|                                      |  |              |       
|Total assets                          |  |              | 35,749
|                                      |  |              |       
|Investment level debt                 |  |              | 18,272
|Other liabilities                     |  |              | 551   
|                                      |  |              |       
|Total liabilities                     |  |              | 18,823
|                                      |  |              |       
|Net assets                            |  | $            | 16,926
|                                      |  |              |       
|Partnerships share of net assets     |  | $            | 14,349
|                                      |  |              |       

|                                                           |  | Year Ended December 31, |      
|---------------------------------------------------------- |  | ----------------------- | -----
|                                                           |  | 2005                    |      
|                                                           |  |                         |      
|Partnership Operations                                     |  |                         |      
|Rental revenue                                             |  | $                       | 4,115
|Other revenue                                              |  |                         |     
|                                                           |  |                         |      
|Total revenue                                              |  |                         | 4,115
|                                                           |  |                         |      
|Real estate expenses and taxes                             |  |                         | 2,326
|Interst Expense                                            |  |                         | 1,477
|                                                           |  |                         |      
|Total Expenses                                             |  |                         | 3,803
|                                                           |  |                         |      
|Net Investment Income                                      |  | $                       | 312  
|                                                           |  |                         |      
|Partnerships equity in income of real estate partnerships |  | $                       | 253  
|                                                           |  |                         |      

F-19

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OFTHE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIPFor Years Ended December 31, 2005, 2004, and 2003

|Note 5: | Investment Level Debt
|------- | ---------------------

|                                                                     | 
|-------------------------------------------------------------------- | 
|Debt includes mortgage loans payable as summarized below (in 000s):
|                                                                     | 

|                                                                             | As of 12/31/05 |        | As of 12/31/04    |   | As of 12/31/05 | 
|---------------------------------------------------------------------------- | -------------- | ------ | ----------------- | - | -------------- | 
|                                                                             |                |        |                   |   |                | 
|                                                                             |                |        | Partnerships     |   |                | 
|                                                                             | 100% Principal |        | Share of          |   | 100% Principal | 
|                                                                             | Balance        |        | Principal Balance |   | Balance        | 
|                                                                             | Outstanding    |        | Outstanding (1)   |   | Outstanding    | 
|                                                                             |                |        |                   |   |                | 
|Mortgages
            of Wholly Owned Properties & Consolidated Partnerships |                |        |                   |   |                | 
|Jacksonville, FL                                                             | $              |       |                   | $ |               | 
|Hampton, VA                                                                  |                | 8,671  |                   |   | 8,671          | 
|Ocean City, MD                                                               |                | 7,025  |                   |   | 5,220          | 
|Raleigh, NC                                                                  |                | 8,750  |                   |   | 8,750          | 
|Atlanta, GA                                                                  |                | 8,749  |                   |   | 8,749          | 
|                                                                             |                |        |                   |   |                | 
|Total                                                                        | $              | 33,196 |                   | $ | 31,390         | 
|                                                                             |                |        |                   |   |                | 
|Mortgages on Equity Partnerships                                             |                |        |                   |   |                | 
|Kansas
          City, MO  Ten Quivira                                      | $              | 6,575  |                   | $ | 4,839          | 
|Kansas City, MO- Ten Quivira Parcel                                          |                | 946    |                   |   | 696            | 
|Kansas
          City, MO  Cherokee Hill                                    |                | 3,032  |                   |   | 2,232          | 
|Kansas
          City, KS  Devonshire                                       |                | 2,108  |                   |   | 1,551          | 
|Kansas
          City, MO  Brywood Center                                   |                | 5,611  |                   |   | 4,130          | 
|                                                                             |                |        |                   |   |                | 
|Total                                                                        | $              | 18,272 |                   | $ | 13,448         | 
|                                                                             |                |        |                   |   |                | 

| | 
| | 

|(1) | Represents the Partnerships interest in the loan based upon the estimated percentage of net assets which would be distributed to the Partnership if the partnership were liquidated at December 31, 2005. It does not represent the Partnerships legal obligation.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | The Partnerships weighted average interest rate at December 31, 2005 and 2004 were 6.14% and 5.84%, respectively. The weighted average interest rates were calculated using the Partnerships annualized interest expense for each loan (derived using the same percentage as that in (*) above) divided by the Partnerships share of total debt.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Loan Terms PP=Prepayment penalties applicable to loan, I=Interest only, P&I=Principal and Interest
|--- | --------------------------------------------------------------------------------------------------

|As of December 31, 2005, mortgage loans payable on wholly owned properties and consolidated partnerships are payable as follows:
|--------------------------------------------------------------------------------------------------------------------------------

|Year Ending December 31, |  | (in 000s) |       
|------------------------ |  | ---------- | ------
|                         |  |            |       
|2006                     |  | $          | 549   
|2007                     |  |            | 588   
|2008                     |  |            | 16,026
|2009                     |  |            | 9,277 
|2010                     |  |            | 565   
|Thereafter               |  |            | 6,191 
|                         |  |            |       
|Total                    |  | $          | 33,196
|                         |  |            |       

|The mortgage loans payable of wholly owned properties and consolidated partnerships are secured by real estate investments with an estimated market value of $84.0 million.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                                                                                        | 
|----------------------------------------------------------------------------------------------------------------------- | 
|As of December 31, 2005, principal amounts of mortgage loans payable on the equity partnerships are payable as follows:

|                         |  | 100% Loan Balance |        | Partnerships Share |  
|------------------------ |  | ----------------- | ------ | ------------------- | -
|Year Ending December 31, |  | (in 000s)        |        | (in 000s)          |  
|                         |  |                   |        |                     |  
|2006                     |  | $                 | 291    |                     | $
|2007                     |  |                   | 17,981 |                     |  
|                         |  |                   |        |                     |  
|Total                    |  | $                 | 18,272 |                     | $
|                         |  |                   |        |                     |  

F-20

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OFTHE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIPFor Years Ended December 31, 2005, 2004, and 2003

|Note 5: | Investment Level Debt (continued)
|------- | ---------------------------------

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|Based on borrowing rates available to the Partnership at December 31, 2005 for loans with similar terms and average maturities, the Partnerships mortgages on wholly owned properties and consolidated partnerships have an estimated fair
  value of approximately $33.8 million, and a carrying value of $33.2 million. The Partnerships share of equity partnership debt has an estimated fair value of approximately $13.2 million and a carrying value of $13.4 million. Different assumptions
  or changes in future market conditions could significantly affect estimated fair value.

|        |                                
|------- | -------------------------------
|Note 6: | Purchase Commitment Obligations

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|Purchase commitments includes forward commitments without conditions waived, commitments to purchase real estate and/or fund additional expenditures on previously acquired properties and loan take out agreements. Certain purchases
  of real estate are contingent on a developer building the real estate according to plans and specifications outlined in the pre-sale agreement or the property achieving a certain level of leasing. It is anticipated that funding will be provided by
  operating cash flow, real estate investment sales and deposits from the Partnership.

|                                                                                             | 
|-------------------------------------------------------------------------------------------- | 
|As of December 31, 2005, the Partnership had the following outstanding purchase commitments:
|                                                                                             | 

|              |  | Commitments |       
|------------- |  | ----------- | ------
|Property Type |  | (000s)     |       
|              |  |             |       
|Apartments    |  | $           | 20,805
|Retail        |  |             | 23,044
|              |  |             |       
|Total         |  | $           | 43,849
|              |  |             |       

|NOTE 7: | Concentration of Risk on Real Estate Investments
|------- | ------------------------------------------------

|                                                                                                                                                                                                                                             | 
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|At December 31, 2005, the Partnership had real estate investments located throughout the United States. The diversification of the Partnerships holdings based on the estimated market values and established NCREIF regions is as follows:

|                   |  | Estimated    |         |          |  |       
|------------------ |  | ------------ | ------- | -------- |  | ------
|                   |  | Market Value |         |          |  |       
|Region             |  | (in 000s)   |         | Region % | 
|                   |  |              |         |          |  |       
|East North Central |  | $            | 10,000  |          |  | 5.07  
|Mideast            |  |              | 71,080  |          |  | 36.03 
|Midwest            |  |              | 1,053   |          |  | 0.53  
|Mountain           |  |              | 11,705  |          |  | 5.93  
|Northeast          |  |              | 1,469   |          |  | 0.74  
|Northwest          |  |              | 107     |          |  | 0.05  
|Pacific            |  |              | 20,866  |          |  | 10.58 
|Southeast          |  |              | 71,119  |          |  | 36.05 
|Southwest          |  |              | 1,777   |          |  | 0.90  
|West               |  |              | 896     |          |  | 0.45  
|West North Central |  |              | 7,184   |          |  | 3.64  
|                   |  |              |         |          |  |       
|Total              |  | $            | 197,255 |          |  | 100.00
|                   |  |              |         |          |  |       

F-21

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OFTHE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIPFor Years Ended December 31, 2005, 2004, and 2003

|Note 7: | Concentration of Risk on Real Estate Investments (continued)
|------- | ------------------------------------------------------------

|                                                                                                                                                                                                                                                                                                | 
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|The allocations on the previous page are based on (1) 100% of the estimated market value of wholly-owned properties and consolidated joint ventures and mortgage and other loans receivable, and (2) the estimated market value of the
  Partnerships net equity in non-consolidated ventures.

|        |                 
|------- | ----------------
|Note 8: | Leasing Activity

|                                                                                                                                                                                                                                                                                                                                                                                                  | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|The Partnership leases space to tenants under various operating lease agreements. These agreements, without giving effect to renewal options, have expiration dates ranging from 2006 to 2025. At December 31, 2005, the aggregate future
  minimum base rental payments under non-cancelable operating leases for wholly owned and consolidated joint venture properties by year are as follows:

|Year Ending December 31, |  | (in 000s) |       
|------------------------ |  | ---------- | ------
|                         |  |            |       
|2006                     |  | $          | 11,829
|2007                     |  |            | 11,218
|2008                     |  |            | 10,252
|2009                     |  |            | 7,458 
|2010                     |  |            | 6,188 
|Thereafter               |  |            | 18,316
|                         |  |            |       
|Total                    |  | $          | 65,261
|                         |  |            |       

|Note 9: | Commitments and Contingencies
|------- | -----------------------------

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | 
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|In 1986, Prudential committed to fund up to $100 million to enable the Partnership to acquire real estate investments. Contributions to the Partnership under this commitment have been utilized for property acquisitions, and were to be returned
  to Prudential on an ongoing basis from contract owners net contributions and other available cash. The amount of the commitment has been reduced by $10 million for every $100 million in current value net assets of the Partnership. As of
  December 31, 2005, the cost basis of Prudentials equity interest in the Partnership under this commitment (held through the Real Property Accounts) was $44.2 million. Prudential terminated this commitment on December 31, 2002.

|                                                                                                                                                                                                                                                                                                                           | 
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|The Partnership is subject to various legal proceedings and claims arising in the ordinary course of business. These matters are generally covered by insurance. In the opinion of Prudentials management, the outcome of such matters will not
  have a significant effect on the financial position of the Partnership.

|         |                                 
|-------- | --------------------------------
|Note 10: | Other Related Party Transactions
|         |                                 

|Pursuant to an investment management agreement, PIM charges the Partnership a daily investment management fee at an annual rate of 1.25% of the average daily gross asset valuation of the Partnership. For the years ended December 31,
  2005, 2004 and 2003 management fees incurred by the Partnership were $2.8 million, $2.7 million, and $2.5 million for each of the years, respectively.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-22

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OFTHE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIPFor Years Ended December 31, 2005, 2004, and 2003

|Note 10: | Other Related Party Transactions (continued)
|-------- | --------------------------------------------

|                                                                                                                                                                                                                                                                                                                      | 
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|The Partnership also reimburses PIM for certain administrative services rendered by PIM. The amounts incurred for the years ended December 31, 2005, 2004 and 2003 were $123,630; $141,130; and $132,380, respectively, and are classified
  as administrative expenses in the Consolidated Statements of Operations.

|                                                                                                                           | 
|-------------------------------------------------------------------------------------------------------------------------- | 
|During the years ended December 31, 2005, 2004 and 2003, the Partnership made the following distributions to the Partners:

|Year Ended December 31, |  | (000s) |      
|----------------------- |  | ------- | -----
|                        |  |         |      
|2005                    |  | $       | 6,000
|2004                    |  | $       | 6,000
|2003                    |  | $       | 6,856

|Note 11: | Financial Highlights
|-------- | --------------------
|         |                     

|                                                       | For the Year Ended December 31, |      
|------------------------------------------------------ | ------------------------------- | -----
|                                                       | 2005                            |      
|                                                       |                                 |      
|Per Share(Unit) Operating Performance:                 |                                 |      
|Net Asset Value, beginning of period                   | $                               | 26.15
|Income From Investment Operations:                     |                                 |      
|Investment income, before management fee               |                                 | 1.67 
|Management fee                                         |                                 | (0.40
|Net realized and unrealized gain (loss) on investments |                                 | 2.17 
|                                                       |                                 |      
|Net Increase in Net Assets Resulting from Operations   |                                 | 3.44 
|                                                       |                                 |      
|Net Asset Value, end of period                         | $                               | 29.59
|                                                       |                                 |      
|Total Return, before Management Fee (a):               |                                 | 14.76
|Ratios/Supplemental Data:                              |                                 |      
|Net Assets, end of period (in millions)                | $                               | 205  
|Ratios to average net assets (b):                      |                                 |      
|Total Portfolio Level Expenses                         |                                 | 1.46 
|Net Investment Income                                  |                                 | 4.89 
|                                                       |                                 |      

| | 
| | 

|(a) | Total Return, before management fee is calculated by geometrically linking quarterly returns which are calculated using the formula below:
|--- | ------------------------------------------------------------------------------------------------------------------------------------------

|Net Investment Income + Net Realized and Unrealized Gains/(Losses)
|------------------------------------------------------------------

|Beg. Net Asset Value
          + Time Weighted Contributions  Time Weighted Distributions
|------------------------------------------------------------------------------------------

|(b) | Average net assets are based on beginning of quarter net assets.
|--- | ----------------------------------------------------------------

F-23

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THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIPSCHEDULE III  REAL ESTATE OWNED: PROPERTIESDECEMBER 31, 2005

|                                       |  | Initial
    Costs to the Partnership |  |            |  | Gross
          Amount at Which
          Carried
    at Close of Year | 
|-------------------------------------- |  | ------------------------------------ |  | ---------- |  | ---------------------------------------------------------------------- | 
|                                       |  |                                      |  |            |  |                                                                        | 
|Description                            |  | Encumbrances
    at 12/31/05         |  | Land       |  | Building &
    Improvements                                            | 
|                                       |  |                                      |  |            |  |                                                                        | 
|Properties:                            |  |                                      |  |            |  |                                                                        | 
|                                       |  |                                      |  |            |  |                                                                        | 
|Office
    Building
    Lisle, IL      |  | None                                 |  | 1,780,000  |  | 15,743,881                                                             | 
|                                       |  |                                      |  |            |  |                                                                        | 
|Garden
    Apartments
    Atlanta, GA  |  | 8,749,000                            |  | 3,631,212  |  | 11,168,904                                                             | 
|                                       |  |                                      |  |            |  |                                                                        | 
|Retail Shopping Center
    Roswell, GA |  | None                                 |  | 9,454,622  |  | 21,513,677                                                             | 
|                                       |  |                                      |  |            |  |                                                                        | 
|Garden Apartments
    Raleigh, NC      |  | 8,750,000                            |  | 1,623,146  |  | 14,135,553                                                             | 
|                                       |  |                                      |  |            |  |                                                                        | 
|Office
    Building
    Nashville, TN  |  | None                                 |  | 1,797,000  |  | 6,588,451                                                              | 
|                                       |  |                                      |  |            |  |                                                                        | 
|Retail Shopping Center
Ocean City, MD  |  | 7,025,473                            |  | 1,517,099  |  | 8,495,039                                                              | 
|                                       |  |                                      |  |            |  |                                                                        | 
|Hotel
    Portland, OR                 |  |                                     |  | 1,500,000  |  | 6,508,729                                                              | 
|                                       |  |                                      |  |            |  |                                                                        | 
|Office Building
    Beaverton, OR      |  | None                                 |  | 816,415    |  | 9,897,307                                                              | 
|                                       |  |                                      |  |            |  |                                                                        | 
|Industrial Building
    Aurora, CO     |  | None                                 |  | 1,338,175  |  | 7,202,411                                                              | 
|                                       |  |                                      |  |            |  |                                                                        | 
|Office Complex
    Brentwood, TN       |  | None                                 |  | 2,425,000  |  | 7,063,755                                                              | 
|                                       |  |                                      |  |            |  |                                                                        | 
|Retail Shopping Center
    Hampton, VA |  | 8,671,134                            |  | 2,339,100  |  | 12,767,956                                                             | 
|                                       |  |                                      |  |            |  |                                                                        | 
|                                       |  | 33,195,607                           |  | 28,221,769 |  | 121,085,663                                                            | 
|                                       |  |                                      |  |            |  |                                                                        | 

|    |                                                     | 2005 |             | 2004 |  | 2003        |   |  |             |  
|--- | --------------------------------------------------- | ---- | ----------- | ---- |  | ----------- | - |  | ----------- | -
|    |                                                     |      |             |      |  |             |   |  |             |  
|(a) | Balance at beginning of year                        |      | 224,584,885 |      |  | 223,943,870 |   |  | 215,592,277 |  
|    | Additions:                                          |      |             |      |  |             |   |  |             |  
|    | Acquisitions                                        |      |             |      |  |            |   |  | 8,008,729   |  
|    | Improvements, etc.                                  |      | 6,187,973   |      |  | 7,502,358   |   |  | 6,942,346   |  
|    |                                                     |      |             |      |  |             |   |  |             |  
|    | Deletions:                                          |      |             |      |  |             |   |  |             |  
|    | Sale                                                |      | (47,005,710 | )    |  | (6,861,343  | ) |  | (6,599,482  | )
|    |                                                     |      |             |      |  |             |   |  |             |  
|    | Balance at end of year                              |      | 183,767,148 |      |  | 224,584,885 |   |  | 223,943,870 |  
|    |                                                     |      |             |      |  |             |   |  |             |  
|    |                                                     |      |             |      |  |             |   |  |             |  
|(b) | Net of $1,000,000 settlement received from lawsuit.

F-24

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|Mortgage Loan Receivable                                            
|--------------------------------------------------------------------
|                                                                    
|THE PRUDENTIAL VARIABLE CONTRACT
          REAL PROPERTY PARTNERSHIP
|SCHEDULE IV  MORTGAGE
          LOANS ON REAL ESTATE               
|DECEMBER 31, 2005                                                   
|                                                                    
|Description                                                         
|                                                                    
|Loans Receivables:                                                  
|                                                                    
|Westminster West                                                    
|Westminster, MD                                                     
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                    

F-25

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POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS that the person whose signature appears below constitutes and appoints Thomas C. Castano, John Chieffo, Clifford E. Kirsch and Bernard J. Jacob, each of them severally, his true and lawful attorney-in-fact and
agent with power of substitution and resubstitution to sign in his name, place and stead, in any and all capacities, to do any and all things and execute any and all instruments that such attorney may deem necessary or advisable under the Securities Exchange
Act of 1934, as amended, and any rules, regulations and requirements of the U.S. Securities and Exchange Commission (the Commission), in connection with filing with the Commission of an Annual Report on Form 10-K for Pruco Life Insurance Company of
New Jersey in respect of the Pruco Life of New Jersey Variable Contract Real Property Account (the Registrant) for the fiscal year ended December 31, 2005 (the Form 10-K), including specifically, but without limiting the generality of the foregoing, the
power and authority to sign his name in his respective capacity as a member of the Board of Directors of the Registrant to the Form 10-K and such other form or forms as may be appropriate to be filed with the Commission as any of them may deem appropriate,
together will all exhibits thereto, and to any and all amendments thereto and to any other documents filed with the Commission, as fully for all intents and purposes as he might or could do in person, and hereby ratifies and confirms all said attorneys-in-fact and
agents, each acting alone, and his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.


IN WITNESS WHEREOF, I have hereunto set my hand this 23rd day of February 2006.


| | /s/ |  | James J. Avery | 
| | --- |  | -------------- | 
| |     |  |                | 
| |     |  | James J. Avery | 
| |     |  | Director       | 

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POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS that the person whose signature appears below constitutes and appoints Thomas C. Castano, John Chieffo, Clifford E. Kirsch and Bernard J. Jacob, each of them severally, his true and lawful attorney-in-fact
and agent with power of substitution and resubstitution to sign in his name, place and stead, in any and all capacities, to do any and all things and execute any and all instruments that such attorney may deem necessary or advisable under the Securities
Exchange Act of 1934, as amended, and any rules, regulations and requirements of the U.S. Securities and Exchange Commission (the Commission), in connection with filing with the Commission of an Annual Report on Form 10-K for Pruco Life Insurance
Company of New Jersey in respect of the Pruco Life of New Jersey Variable Contract Real Property Account (the Registrant) for the fiscal year ended December 31, 2005 (the Form 10-K), including specifically, but without limiting the generality of the
foregoing, the power and authority to sign his name in his respective capacity as a member of the Board of Directors of the Registrant to the Form 10-K and such other form or forms as may be appropriate to be filed with the Commission as any of them may
deem appropriate, together will all exhibits thereto, and to any and all amendments thereto and to any other documents filed with the Commission, as fully for all intents and purposes as he might or could do in person, and hereby ratifies and confirms all said
attorneys-in-fact and agents, each acting alone, and his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.


IN WITNESS WHEREOF, I have hereunto set my hand this 28th day of February 2006.


| | /s/ |  | C. Edward Chaplin | 
| | --- |  | ----------------- | 
| |     |  |                   | 
| |     |  | C. Edward Chaplin | 
| |     |  | Director          | 

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POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS that the person whose signature appears below constitutes and appoints Thomas C. Castano, John Chieffo, Clifford E. Kirsch and Bernard J. Jacob, each of them severally, her true and lawful
attorney-in-fact and agent with power of substitution and resubstitution to sign in her name, place and stead, in any and all capacities, to do any and all things and execute any and all instruments that such attorney may deem necessary or advisable under the
Securities Exchange Act of 1934, as amended, and any rules, regulations and requirements of the U.S. Securities and Exchange Commission (the Commission), in connection with filing with the Commission of an Annual Report on Form 10-K for Pruco Life
Insurance Company of New Jersey in respect of the Pruco Life of New Jersey Variable Contract Real Property Account (the Registrant) for the fiscal year ended December 31, 2005 (the Form 10-K), including specifically, but without limiting the generality of
the foregoing, the power and authority to sign her name in her respective capacity as a member of the Board of Directors of the Registrant to the Form 10-K and such other form or forms as may be appropriate to be filed with the Commission as any of them may
deem appropriate, together will all exhibits thereto, and to any and all amendments thereto and to any other documents filed with the Commission, as fully for all intents and purposes as she might or could do in person, and hereby ratifies and confirms all said
attorneys-in-fact and agents, each acting alone, and her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.


IN WITNESS WHEREOF, I have hereunto set my hand this 24th day of February 2006.


| | /s/ |  | Helen M. Galt | 
| | --- |  | ------------- | 
| |     |  |               | 
| |     |  | Helen M. Galt | 
| |     |  | Director      | 



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POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS that the person whose signature appears below constitutes and appoints Thomas C. Castano, John Chieffo, Clifford E. Kirsch and Bernard J. Jacob, each of them severally, his true and lawful attorney-in-fact
and agent with power of substitution and resubstitution to sign in his name, place and stead, in any and all capacities, to do any and all things and execute any and all instruments that such attorney may deem necessary or advisable under the Securities
Exchange Act of 1934, as amended, and any rules, regulations and requirements of the U.S. Securities and Exchange Commission (the Commission), in connection with filing with the Commission of an Annual Report on Form 10-K for Pruco Life Insurance
Company of New Jersey in respect of the Pruco Life of New Jersey Variable Contract Real Property Account (the Registrant) for the fiscal year ended December 31, 2005 (the Form 10-K), including specifically, but without limiting the generality of the
foregoing, the power and authority to sign his name in his respective capacity as a member of the Board of Directors of the Registrant to the Form 10-K and such other form or forms as may be appropriate to be filed with the Commission as any of them may
deem appropriate, together will all exhibits thereto, and to any and all amendments thereto and to any other documents filed with the Commission, as fully for all intents and purposes as he might or could do in person, and hereby ratifies and confirms all said
attorneys-in-fact and agents, each acting alone, and his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.


IN WITNESS WHEREOF, I have hereunto set my hand this 23rd day of February 2006.


| | /s/ |  | Bernard J. Jacob | 
| | --- |  | ---------------- | 
| |     |  |                  | 
| |     |  | Bernard J. Jacob | 
| |     |  | Director         | 

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POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS that the person whose signature appears below constitutes and appoints Thomas C. Castano, John Chieffo, Clifford E. Kirsch and Bernard J. Jacob, each of them severally, his true and lawful attorney-in-fact
and agent with power of substitution and resubstitution to sign in his name, place and stead, in any and all capacities, to do any and all things and execute any and all instruments that such attorney may deem necessary or advisable under the Securities
Exchange Act of 1934, as amended, and any rules, regulations and requirements of the U.S. Securities and Exchange Commission (the Commission), in connection with filing with the Commission of an Annual Report on Form 10-K for Pruco Life Insurance
Company of New Jersey in respect of the Pruco Life of New Jersey Variable Contract Real Property Account (the Registrant) for the fiscal year ended December 31, 2005 (the Form 10-K), including specifically, but without limiting the generality of the
foregoing, the power and authority to sign his name in his respective capacity as a member of the Board of Directors of the Registrant to the Form 10-K and such other form or forms as may be appropriate to be filed with the Commission as any of them may
deem appropriate, together will all exhibits thereto, and to any and all amendments thereto and to any other documents filed with the Commission, as fully for all intents and purposes as he might or could do in person, and hereby ratifies and confirms all said
attorneys-in-fact and agents, each acting alone, and his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.


IN WITNESS WHEREOF, I have hereunto set my hand this 3rd day of March 2006.


| | /s/ |  | Ronald P. Joelson | 
| | --- |  | ----------------- | 
| |     |  |                   | 
| |     |  | Ronald P. Joelson | 
| |     |  | Director          | 

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POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS that the person whose signature appears below constitutes and appoints Thomas C. Castano, John Chieffo, Clifford E. Kirsch and Bernard J. Jacob, each of them severally, his true and lawful attorney-in-fact
and agent with power of substitution and resubstitution to sign in his name, place and stead, in any and all capacities, to do any and all things and execute any and all instruments that such attorney may deem necessary or advisable under the Securities
Exchange Act of 1934, as amended, and any rules, regulations and requirements of the U.S. Securities and Exchange Commission (the Commission), in connection with filing with the Commission of an Annual Report on Form 10-K for Pruco Life Insurance
Company of New Jersey in respect of the Pruco Life of New Jersey Variable Contract Real Property Account (the Registrant) for the fiscal year ended December 31, 2005 (the Form 10-K), including specifically, but without limiting the generality of the
foregoing, the power and authority to sign his name in his respective capacity as a member of the Board of Directors of the Registrant to the Form 10-K and such other form or forms as may be appropriate to be filed with the Commission as any of them may
deem appropriate, together will all exhibits thereto, and to any and all amendments thereto and to any other documents filed with the Commission, as fully for all intents and purposes as he might or could do in person, and hereby ratifies and confirms all said
attorneys-in-fact and agents, each acting alone, and his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.


IN WITNESS WHEREOF, I have hereunto set my hand this 22nd day of February 2006.


| | /s/ |  | David R. Odenath | 
| | --- |  | ---------------- | 
| |     |  |                  | 
| |     |  | David R. Odenath | 
| |     |  | Director         | 



---