================================================================================

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K

(Mark One)

[x]   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, 2004
                          -----------------

                                       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 JERSEY

                                  in respect of

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

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

              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 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 [X]    NO [_]

Amendment ______________________________________________________________________

Indicate  by check mark  whether  the  Registrant  is an  accelerated  filer (as
defined in Rule 12b-2 of the Exchange Act).                    YES [_]    NO [X]


End of Amendment________________________________________________________________

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<PAGE>


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


                                      INDEX
                                      -----

   Item                                                                     Page
    No.                                                                      No.
   -----                                                                   -----

         Cover Page

         Index                                                                2

         Forward-Looking Statement Disclosure                                 3

PART I

   1.    Business                                                             4

   2.    Properties                                                           6

   3.    Legal Proceedings                                                    6

   4.    Submission of Matters to a Vote of Security Holders                  6

PART II

   5.    Market for the Registrant's Interests, Related Security
         Holder Matters and Issuer Purchases of Equity Securities             7

   6.    Selected Financial Data                                              7

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

   7A.   Quantitative and Qualitative Disclosures About Market Risk          14

   8.    Financial Statements and Supplementary Data                         14

   9.    Changes in and Disagreements with Accountants on Accounting
         and Financial Disclosure                                            14

   9A.   Controls and Procedures                                             14

   9B.   Other Information                                                   14

PART III

   10.   Directors and Executive Officers of the Registrant                  15

   11.   Executive Compensation                                              16

   12.   Security Ownership of Certain Beneficial Owners and Management      16

   13.   Certain Relationships and Related Transactions                      16

   14.   Principal Accounting Fees and Services                              16

PART IV

   15.   Exhibits, Financial Statement Schedules                             17

   Exhibit Index                                                             17

   Signatures                                                                19

                                       2
<PAGE>


                      FORWARD-LOOKING STATEMENT DISCLOSURE


Certain 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,  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",  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
assurance  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  without  limitation:  general
economic,  market  and  political  conditions,   including  the  performance  of
financial markets, interest rate fluctuations and the continuing negative impact
of the current economic environment;  various domestic or international military
or terrorist  activities or conflicts,  economic  conditions in local markets in
which the property in the Real Property  Account are located;  volatility in the
securities  markets;  reestimates of our reserves for future policy benefits and
claims; changes in our assumptions related to deferred policy acquisition costs;
our exposure to contingent  liabilities;  catastrophe losses;  investment losses
and defaults; changes in our claims-paying or credit ratings; competition in our
product lines and for personnel; fluctuations in foreign currency exchange rates
and foreign  securities  markets;  risks to our  international  operations;  the
impact of  changing  regulation  or  accounting  practices;  adverse  litigation
results;  and changes in tax law. The Company  does not intend,  and is under no
obligation to, update any particular  forward-looking statement included in this
document.

                                       3
<PAGE>


                                     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 The Prudential  Insurance  Company of America,  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 and
      Oakbrook Terrace, Illinois;  Brentwood,  Tennessee; and Beaverton, Oregon.
      Total  square  footage  owned is  approximately  494,284  of which  68% or
      333,951 square feet are leased between 1 and 10 years.

      Apartment Complexes--The  Partnership owns apartment complexes in Atlanta,
      Georgia;  Raleigh,  North Carolina;  Jacksonville,  Florida; and Salem and
      Gresham,  Oregon.  There are a total of 1,253 apartment units available of
      which 91% or 1,135 units are leased.  Leases  range from month to month to
      one year. Two of the  Partnership's  Salem,  Oregon  apartment  complexes,
      which had a total of 188 units, were sold on December 14, 2004.

      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  1,163,464 of which
      84% or 979,251 square feet are leased between 1 and 30 years.

      Industrial  Properties--The  Partnership  owns an  industrial  building in
      Aurora,  Colorado.  Total square footage owned is approximately 277,930 of
      which 66% or184,047 square feet are leased between 1 and 10 years.

      Hotel Property--On  December 10, 2003, the Partnership invested in a hotel
      located in Lake Oswego,  Oregon.  This joint  venture  investment  has 161
      rooms. Occupancy for the year ended 2004 averaged 68.3%.

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  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.

For information regarding the Partnership's  investments,  operations, and other
significant  events,  see  Item  2,  Management's  Discussion  and  Analysis  of
Financial  Condition and Results of  Operations  and  Financial  Statements  and
Supplementary Data.

                                       4
<PAGE>


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 in this section are
not necessarily relevant in the Partnership's  portfolio.  The results described
are not indicative of future performance of the industry, or this account.

REAL ESTATE MARKET OVERVIEW

Real estate market  fundamentals in most property  sectors and markets  remained
relatively weak in 2004, but began to improve modestly in the second half of the
year.  Despite the generally  weak property  market  conditions,  robust capital
flows into the sector and low interest  rates  continued to support asset values
and  drive  investment  performance.  Private  and  public  equity  real  estate
investment benchmarks posted large gains in the fourth quarter and 2004 overall.
The National Council of Real Estate  Investment  Fiduciaries'  (NCREIF) Property
Index,  the  benchmark  for  unleveraged   private   institutional  real  estate
investments in the U.S., gained nearly 4.7% in the fourth quarter,  which pushed
the Index's one-year total return to more than 14.5%.

OFFICE MARKET

Office  market  fundamentals  continued  to  improve  during 4th  quarter  2004.
According to Torto Wheaton  Research,  a Boston-based real estate research firm,
the national average office vacancy rate declined to 15.4% in the fourth quarter
from 15.9% at the end of 3rd quarter 2004 and 16.8% at year-end  2003.  Notably,
the fourth quarter marked the sixth  consecutive  quarter of declining  vacancy.
The average  suburban  office  vacancy  rate  declined to 16.6%,  which marked a
substantial  improvement over the 18.6% vacancy rate at year-end 2003.  Downtown
vacancy  rates also improved  last year.  The average  vacancy rate for downtown
office properties fell to 13.2% by year-end 2004 from 13.6% at the end of 2003.

Although  market rents for suburban and downtown  office space remain soft,  the
improving job market and healthy  investor demand for office  properties  helped
the NCREIF office subindex  deliver one-year total returns of about 12% in 2004,
which included 4% appreciation and a one-year income return of nearly 7.8%.

APARTMENT MARKET

Property market trends remain most troubling in the apartment sector. Excess new
supply,  weak tenant demand,  the rising  homeownership rate and weak job market
have eroded tenant demand in most markets.  However,  according to REIS, Inc., a
national real estate  research firm,  market rents for apartment units appear to
have  stabilized and vacancies  have improved  modestly since year-end 2003. The
national average  apartment  vacancy rate improved to 6.7% at year-end 2004 from
7.1% at the end of 2003.

Despite the generally poor apartment  market  fundamentals,  investor demand for
apartment  properties  remains  strong.  Condo  converters,  investors  who  buy
apartment  and other  properties  for  conversion to  residential  condominiums,
emerged as aggressive capital sources in many markets last year and helped drive
capitalization  rates for apartment  properties to very low levels. As a result,
the apartment  subindex of the NCREIF Property Index delivered a total return of
13.2% in 2004. The apartment  return included more than 6.8%  appreciation and a
one-year income return of about 6.1%.

RETAIL MARKET

The retail sector benefited from favorable  national trends in 2004. In addition
to  positive  employment  growth and an increase  in  consumer  confidence,  the
International  Council of Shopping Centers (ICSC) reports that chain store sales
increased 3.8% in 2004, the largest gain since 2000.

Landlords and investors  enjoyed the strongest  absorption in years as retailers
continued to expand their store base. As a result,  despite healthy construction
activity,  the vacancy rate for neighborhood and community shopping centers fell
to 6.8% in 4th quarter  2004,  according to REIS.  This marked the 11th straight
quarter  with a vacancy rate at or below 7.1%.  Retail rents  continued to climb
last year, increasing nearly 2.9% from year-end 2003, according to REIS.

                                       5
<PAGE>


The retail  subindex  remained the  best-performing  sector in the NCREIF index,
returning  7.8%  during 4th  quarter  2004 and nearly 23% for the year  overall.
Robust  appreciation  accounted for a significant  share of the retail  sector's
total return in the 4th quarter and for the year overall. Retail property values
gained  5.9% in the  fourth  quarter  and more than  14.4%  for the year,  which
exceeded the total returns in all other property sectors.

INDUSTRIAL MARKET

Industrial   space  market   fundamentals   benefited   from   improvements   in
manufacturers'  shipments,  inventories and orders in 2004. The national average
industrial  vacancy rate  continued to decline in 4th quarter  2004,  falling to
10.8% at year-end,  according  to Torto  Wheaton  Research.  This marks a modest
improvement  from year-end 2003,  when the average  vacancy rate peaked at about
11.6%. During the last property market downturn in the early 1990s, the national
industrial  vacancy  rate  peaked at about  10.7%.  Despite the  improvement  in
vacancy rates, the average rental rate at the end of 2004 was unchanged from one
year earlier.

The NCREIF industrial subindex delivered a 12.1% total return in 2004, including
about 3.9% appreciation and an income return of 7.9%.

HOTEL MARKET

Although  operating  fundamentals  in the hotel  industry  improved in 2004, the
hotel sector  remained the weakest of the NCREIF  property  types.  According to
Smith Travel  Research,  a national  lodging  industry  research  firm,  average
revenue per available  room (RevPAR)  improved 8.4% during 2004 versus  year-end
2003. Importantly,  improving occupancy and average daily room rates contributed
to the  improvement in RevPAR.  Since year-end 2003, the average  occupancy rate
increased 3.5% to 56.9%,  while the average daily room rate (ADR) increased 4.8%
to $86.23.

The NCREIF hotel subindex delivered a 10.2% total return in 2004, which included
2.0%  appreciation,  the lowest among the five  property  subtypes in the NCREIF
index, and an 8.1% income return.

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.

                                       6
<PAGE>


                                     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 will
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, thus a discussion of market information is not relevant.

As of December 31, 2004 there were approximately 1,894 contract owners of record
investing in the Real Property Account.

ITEM 6.   SELECTED FINANCIAL DATA

<TABLE>
<CAPTION>
                                                                            YEAR ENDED DECEMBER 31,
                                                    ---------------------------------------------------------------------------
                                                        2004           2003            2002            2001            2000
                                                        ----           ----            ----            ----            ----
<S>                                                 <C>            <C>             <C>             <C>             <C>
RESULTS OF OPERATIONS:
Total Investment Income .........................   $ 29,076,163   $ 27,060,494    $ 27,077,048    $ 27,480,593    $ 26,387,938
                                                    ============   ============    ============    ============    ============
Net Investment Income ...........................   $  7,799,606   $ 10,613,409    $ 10,864,043    $ 12,350,306    $ 13,638,117
Net Realized and Unrealized Gain (Loss)
on Investment in Partnership ....................      3,280,394     (6,467,364)     (8,517,663)     (2,547,749)      4,487,022
                                                    ------------   ------------    ------------    ------------    ------------
Net Increase in Net Assets
Resulting From Operations .......................   $ 11,080,000   $  4,146,045    $  2,346,380    $  9,802,557    $ 18,125,139
                                                    ============   ============    ============    ============    ============


FINANCIAL POSITION:
<CAPTION>
                                                                            YEAR ENDED DECEMBER 31,
                                                    ---------------------------------------------------------------------------
                                                        2004           2003            2002            2001            2000
                                                        ----           ----            ----            ----            ----
<S>                                                 <C>            <C>             <C>             <C>             <C>
Total Assets ....................................   $240,575,611   $235,627,852    $229,720,113    $234,594,652    $221,512,296
                                                    ============   ============    ============    ============    ============
Mortgage Loan Payable ...........................   $ 43,773,767   $ 43,934,494    $ 35,699,108    $ 28,994,521    $ 10,092,355
                                                    ============   ============    ============    ============    ============
</TABLE>

ITEM 7.   MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF  FINANCIAL  CONDITION  AND
          RESULTS OF OPERATIONS

All of the assets of the Real Property  Account (the  "Account") are invested in
the Prudential Variable Contract Real Property  Partnership (the "Partnership").
Correspondingly,  the liquidity, capital resources and results of operations for
the Real Property Account are contingent upon the Partnership. Therefore, all of
management's discussion of these items is at the Partnership level. The partners
in the Partnership are The Prudential  Insurance Company of America,  Pruco Life
Insurance Company, and Pruco Life Insurance Company of New Jersey (collectively,
the "Partners").

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

(A)  LIQUIDITY AND CAPITAL RESOURCES

As of December 31, 2004, the Partnership's  liquid assets consisting of cash and
cash equivalents were  approximately  $17.6 million, a decrease of approximately
$1.3  million  from $18.9  million at December  31,  2003.  Sources of liquidity
include  net cash  flow  from  property  operations,  interest  from  short-term
investments,  sales,  and  financings.  The  Partnership  uses cash for its real
estate  investment  activities  and  for  distribution  to its  partners.  As of
December 31, 2004, 7.3% of the Partnership's  total assets consisted of cash and
short-term obligations.

Dispositions for the year included the sale of two apartment  complexes  located
in Salem,  Oregon. The Joint Venture between the Partnership and its co-investor
sold the two apartment complexes for a total of $7.1 million., which resulted in
a realized gain of $1.7 million.

                                       7
<PAGE>


Subsequent to the end of the reporting  period,  one additional  apartment asset
located in Salem, Oregon sold for $4.65 million on March 10, 2005. Proceeds from
the sale were used to fully  payoff the Special  Loan,  resulting  in a realized
loss of approximately $1.6 million for the property.

The  Partnership  spent  approximately  $8.3 million on capital  improvements to
existing  properties.  Approximately  $2.5 million was  associated  with leasing
related costs and tenant  improvements at one of the office buildings located in
Brentwood,  Tennessee.  $1.6  million  was  associated  with  renovation  of the
apartment  complex in Atlanta,  Georgia and $0.8  million  was  associated  with
renovation  and  redevelopment  of the  retail  center  in  Roswell,  GA. Of the
remaining $3.4 million  balance,  $2.0 million was associated with the expansion
of the retail  center  located in Ocean City,  Maryland.  The  Partnership  also
increased  its  investment  by  approximately  $0.2 million in  connection  with
redevelopment  and expansion  activities at the retail centers located in Kansas
City, Missouri.

The Partnership provided, to a developer,  short-term financing of approximately
$5.0 million for the  acquisition  of a retail  center  located in  Westminster,
Maryland.  The loan was repaid to the Partnership on September 13, 2004 together
with interest at 10.5% upon obtaining  third party  construction  financing.  In
addition,  the  Partnership  invested  in a  Leasehold  Mortgage  Loan  for  the
acquisition  and  redevelopment  of an adjacent  retail  center in  Westminster,
Maryland.  As of December 31, 2004,  approximately  $1.3 million was funded with
interest accruing at 10% per annum.

(B)  RESULTS OF OPERATIONS

DECEMBER 31, 2004 VS. DECEMBER 31, 2003

The following  table  presents a  year-to-date  comparison of the  Partnership's
sources of net investment income, and realized and unrealized gains or losses by
investment type.

                                                        TWELVE MONTHS ENDED
                                                           DECEMBER 31,
                                                        2004           2003
                                                     -----------    -----------
NET INVESTMENT INCOME:

Office properties ................................   $ 2,102,465    $ 2,039,750
Apartment complexes ..............................     2,191,107      3,361,638
Retail properties ................................     4,728,171      6,638,838
Industrial properties ............................       933,253        993,962
Hotel property ...................................       640,660             --
Other (including interest income,
  investment mgt fee, etc.) ......................    (2,796,050)    (2,420,779)
                                                     -----------    -----------
TOTAL NET INVESTMENT INCOME ......................   $ 7,799,606    $10,613,409
                                                     ===========    ===========

                                       8
<PAGE>


                                                        TWELVE MONTHS ENDED
                                                           DECEMBER 31,
                                                        2004           2003
                                                     -----------    -----------

NET REALIZED GAIN (LOSS) ON REAL ESTATE INVESTMENTS:

Apartment complexes ..............................   $ 1,730,000    $        --
Industrial properties ............................            --        466,061
                                                     -----------    -----------
TOTAL NET REALIZED GAIN (LOSS) ON
  REAL ESTATE INVESTMENTS ........................   $ 1,730,000    $   466,061
                                                     ===========    ===========

NET UNREALIZED GAIN (LOSS) ON REAL ESTATE INVESTMENTS:

Office properties ................................   $   222,384    $(5,776,072)
Apartment complexes ..............................      (653,211)      (141,845)
Retail properties ................................     2,072,493       (455,340)
Industrial properties ............................      (190,659)      (560,168)
Hotel property ...................................        99,387             --
                                                     -----------    -----------
TOTAL NET UNREALIZED GAIN (LOSS) ON
  REAL ESTATE INVESTMENTS ........................     1,550,394     (6,933,425)
                                                     ===========    ===========
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
  REAL ESTATE INVESTMENTS ........................   $ 3,280,394    $(6,467,364)
                                                     ===========    ===========

NET INVESTMENT INCOME OVERVIEW

The Partnership's net investment income for the year ended December 31, 2004 was
$7.8  million,  a decrease of $2.8  million when  compared to the  corresponding
period in 2003.  The decrease is due to the sale of two  apartment  complexes in
Salem,  Oregon,  increased  vacancy at the  retail  center  located in  Roswell,
Georgia  due to a late 2003  lease  termination,  increased  rental  concessions
within the apartment  portfolio,  and soft market  conditions and vacancy within
the office portfolio. The Partnership's acquisition of a controlling interest in
a 161-room  hotel  located in Lake  Oswego,  Oregon  resulted  in a full year of
operating  income,  partially  offsetting  the decrease in total net  investment
income.

In addition,  net investment  income in 2003 benefited from a $1.9 million lease
termination fee with respect to the retail center located in Roswell, Georgia.

Revenue increased $1.6 million in 2004 compared to 2003. Administrative expenses
increased $1.7 million in 2004 compared to 2003.  Operating  expenses  increased
$2.4 million in 2004 compared to 2003.  All of these  increases  were due to the
Partnership's  acquisition of a controlling interest in a 161-room hotel located
in Lake Oswego, Oregon as discussed above.

Equity in income of real  estate  partnership  increased  $0.07  million in 2004
compared to 2003. The increase is due to an increase in revenue  associated with
expansion of an existing retail center located in Ocean City, Maryland.

Interest  and  equity  income on  mortgage  loans  receivable  and  other  loans
receivable was $0.14 million for the year ended  December 2004.  This was due to
the Leasehold Mortgage Loan associated with the redevelopment of a retail center
in Westminster, Maryland.

Income from other real estate  investments  was $0.25 million for the year ended
December 31, 2004. This was due to short-term financing for the acquisition of a
retail center located in Westminster, Maryland.

Interest on short-term investments decreased approximately $0.03 million in 2004
when compared to 2003. The decrease is due primarily to lower cash balances.

                                       9
<PAGE>


VALUATION OVERVIEW

The  Partnership  recorded an unrealized gain of $3.3 million for the year ended
December 31, 2004  compared to an  unrealized  loss of $6.9  million  during the
corresponding  period in 2003.  The 2004  unrealized  gain was attributed to the
retail and  apartment  sectors.  The retail sector  recorded an unrealized  gain
totaling  $2.1  million,  primarily due to  strengthening  market  fundamentals,
renovation and  re-leasing  efforts at the  Partnership's  retail  centers.  The
apartment portfolio recorded unrealized and realized gain of $1.1 million. While
market conditions remain soft in the apartment sector, continued investor demand
has increased valuations. The two office assets located in Brentwood,  Tennessee
recorded unrealized gains of $3.4 million in 2004;  however,  this was offset by
continued weak market fundamentals in the office sector.

OFFICE PORTFOLIO

<TABLE>
<CAPTION>
                                    NET           NET
                                INVESTMENT    INVESTMENT     UNREALIZED      UNREALIZED
                                  INCOME        INCOME       GAIN/(LOSS)     GAIN/(LOSS)     OCCUPANCY      OCCUPANCY
PROPERTY                         12/31/04      12/31/03       12/31/04        12/31/03       12/31/04       12/31/03
------------                    ----------    ----------     ----------      ----------      ---------      ---------
<S>                              <C>            <C>          <C>             <C>                 <C>            <C>
YEAR TO DATE
------------
Lisle, IL                        $ 498,150      $ 709,818    $(2,161,087)    $(1,910,862)        43%            47%
Brentwood, TN                      806,096        714,837      1,626,824        (515,685)        91%            79%
Oakbrook Terrace, IL               404,805        102,262       (613,875)     (1,528,934)        41%            42%
Beaverton, OR                      904,462        930,822       (400,000)       (800,000)        72%            81%
Brentwood, TN                     (511,048)      (417,989)     1,770,522      (1,020,591)       100%             0%
--------------------------------------------------------------------------------------------
                                $2,102,465     $2,039,750      $ 222,384     $(5,776,072)
--------------------------------------------------------------------------------------------
</TABLE>


NET INVESTMENT INCOME

Net investment  income for the  Partnership's  office portfolio was $2.1 million
for the year ended December 31, 2004, an increase of $0.1 million, when compared
to the corresponding period in 2003.

UNREALIZED GAIN/LOSS

The five  office  properties  owned by the  Partnership  recorded  an  aggregate
unrealized  gain of  approximately  $0.2 million  during 2004.  Large gains were
recorded at both assets in  Brentwood,  Tennessee,  mainly due to  strengthening
market conditions,  increasing rents, and stabilized occupancy. Offsetting these
gains were losses recorded at the office complexes located in Lisle and Oakbrook
Terrace,  Illinois and  Beaverton,  Oregon  primarily due to lower market rents,
decreased occupancy, and lease up costs associated with attracting new tenants.

The five  office  properties  owned by the  Partnership  recorded  an  aggregate
unrealized  loss of  approximately  $5.8 million  during  2003.  The losses were
primarily due to decreased occupancy, lower market rents, and increased lease up
costs.

APARTMENT COMPLEXES

<TABLE>
<CAPTION>
                                      NET           NET
                                  INVESTMENT    INVESTMENT     UNREALIZED      UNREALIZED
                                    INCOME        INCOME       GAIN/(LOSS)     GAIN/(LOSS)     OCCUPANCY      OCCUPANCY
PROPERTY                           12/31/04      12/31/03       12/31/04        12/31/03       12/31/04       12/31/03
------------                      ----------    ----------     ----------      ----------      ---------      ---------
<S>                              <C>            <C>          <C>               <C>                 <C>            <C>
YEAR TO DATE
------------
Atlanta, GA                        $ 814,285      $ 819,908    $(1,946,818)     $ (588,553)        88%            91%
Raleigh, NC                          559,605        738,292        262,271          95,512         95%            93%
Jacksonville, FL                     972,604      1,096,620         69,368       1,419,362         89%            91%
Gresham/Salem, OR                   (155,387)       706,818      2,691,965      (1,068,166)        91%            90%
----------------------------------------------------------------------------------------------
                                  $2,191,107     $3,361,638     $1,076,786      $ (141,845)
----------------------------------------------------------------------------------------------
</TABLE>

                                       10
<PAGE>


NET INVESTMENT INCOME

Net investment income for the Partnership's apartment complexes was $2.2 million
for the year ended December 31, 2004, a decrease of $1.2 million,  when compared
to the  corresponding  period in 2003.  The  decrease was  primarily  due to (a)
mortgage  interest  incurred for the complex located in Raleigh,  North Carolina
that was not  applicable  during the first six  months of 2003,  (b) the loss of
income resulting from the sale of two apartment complexes in Salem,  Oregon, and
(c) soft market  conditions  affecting the  remaining  two  apartment  complexes
located in Gresham/Salem, Oregon and Jacksonville, FL.

UNREALIZED GAIN/LOSS

The  Partnership  recorded an aggregate  unrealized gain of $1.2 million for the
year ended December 31, 2004 compared to an unrealized  loss of $0.1 million for
the year ended December 31, 2003 on its apartment complexes. The 2004 unrealized
gain was  primarily  due to  continued  investor  demand,  which  has  caused an
increase in valuations.  The unrealized  loss of $0.1 million in 2003 was mainly
attributable to increased  operating expenses at the apartment complexes located
in Gresham/Salem, Oregon.

RETAIL PROPERTIES

<TABLE>
<CAPTION>
                                      NET           NET
                                  INVESTMENT    INVESTMENT     UNREALIZED      UNREALIZED
                                    INCOME        INCOME       GAIN/(LOSS)     GAIN/(LOSS)     OCCUPANCY      OCCUPANCY
PROPERTY                           12/31/04      12/31/03       12/31/04        12/31/03       12/31/04       12/31/03
-------------                     ----------    ----------     -----------     -----------     ---------      ---------
<S>                               <C>            <C>           <C>             <C>                 <C>            <C>
YEAR TO DATE
------------
Roswell, GA                       $1,576,783     $4,403,743    $(2,536,369)    $(1,571,423)        74%            76%
Kansas City, KS; MO                  623,917        560,660      2,727,694        (934,885)        81%            83%
Hampton, VA                        1,220,607      1,077,627        981,574         570,136        100%           100%
Ocean City, MD                       921,803        596,808        899,597       1,480,832         93%           100%
Westminster, MD*                     246,765             --             --              --         N/A            N/A
Westminster, MD**                    138,296             --             --              --         N/A            N/A
----------------------------------------------------------------------------------------------
                                  $4,728,171     $6,638,838     $2,072,496      $ (455,340)
----------------------------------------------------------------------------------------------
</TABLE>

*  Other Real Estate Investment (Acquired October 2003)
** Mortgage Loan Receivable (Acquired January 2004)

NET INVESTMENT INCOME

Net  investment  income  for  the  Partnership's   retail  properties  decreased
approximately $1.9 million for the year ended December 31, 2004 when compared to
the  corresponding  period  in 2003.  The  principal  component  of  higher  net
investment  income  in 2003  was the  $1.9  million  lease  termination  payment
received at the retail center located in Roswell, Georgia.  Partially offsetting
the decreases  attributable to the Roswell,  Georgia  property were increases in
net investment  income at the center in Ocean City,  Maryland as a result of the
expansion  and the interest  income  generated by the  Leasehold  Mortgage  Loan
associated with the two Westminster,  Maryland redevelopments. It should also be
noted  that on April  15,  2003  the  Partnership  acquired  its  joint  venture
partner's membership interest in the retail center located in Hampton, Virginia,
thus entitling the Partnership to all of the net investment  income generated by
the investment thereafter.

In late 2004, a new lease was executed for a 45,600  square foot Publix  grocery
store in  Roswell,  Georgia;  the lease term is 20 years;  rent  commences  upon
completion of a new store (estimated to be in late 2005).

UNREALIZED GAIN/LOSS

The retail properties recorded an aggregate  unrealized gain of $2.1 million for
the year ended December 31, 2004. The Kansas City, Kansas and Hampton,  Virginia
retail centers recorded  unrealized gains primarily due to strengthening  market
fundamentals.  The Ocean City,  Maryland  retail  center  recorded a gain due to
completion of a pre-leased  expansion of the center.  Partially offsetting these
gains was an  unrealized  loss of $2.5  million  recorded  at the retail  center
located in Roswell,  Georgia due to the likely loss of a major anchor  tenant at
the expiration of its lease in January 2009.

                                       11
<PAGE>


The retail properties recorded an aggregate  unrealized loss of $0.5 million for
the year ended December 31, 2003. The retail center located in Hampton, Virginia
had  recorded  an  unrealized  gain of $0.6  million  in 2003  due to  continued
strengthening market fundamentals. The retail center in Ocean City, Maryland had
recorded a net  unrealized  gain of $1.5 million in 2003 due to  renovation  and
re-leasing  efforts.  Offsetting  these  gains was the  unrealized  loss for the
Kansas City,  Kansas  retail  centers,  primarily  due to  renovations  from the
expansion of the existing  grocery store anchor,  which were not reflected as an
increase in market  value.  In  addition,  an  unrealized  loss for the Roswell,
Georgia  retail  center was recorded due to decreases in market rental rates and
shorter-term lease renewals.

INDUSTRIAL PROPERTIES

<TABLE>
<CAPTION>
                                      NET           NET        UNREALIZED/     UNREALIZED/
                                  INVESTMENT    INVESTMENT      REALIZED        REALIZED
                                    INCOME        INCOME       GAIN/(LOSS)     GAIN/(LOSS)     OCCUPANCY      OCCUPANCY
PROPERTY                           12/31/04      12/31/03       12/31/04        12/31/03       12/31/04       12/31/03
-------------                     ----------    ----------     -----------     -----------     ---------      ---------
<S>                                <C>            <C>           <C>              <C>               <C>            <C>
YEAR TO DATE
------------
Aurora, CO                         $ 936,264      $ 687,743     $ (190,659)      $(560,168)        66%            70%
Bolingbrook, IL                        2,603           (146)            --              --         Sold September 2002
Salt Lake City, UT                    (5,614)       306,365             --         466,061          Sold January 2003
---------------------------------------------------------------------------------------------
                                   $ 933,253      $ 993,962     $ (190,659)      $ (94,107)
---------------------------------------------------------------------------------------------
</TABLE>

NET INVESTMENT INCOME

Net  investment  income for the  Partnership's  industrial  properties  was $0.9
million for the year ended  December 31, 2004, a decrease of $0.1 million,  when
compared to the  corresponding  period in 2003. The decrease was due to the loss
of rent  associated  with the 2003 sale of the Salt Lake  City  asset.  This was
offset by an early termination penalty payment at the Aurora, Colorado asset.

UNREALIZED GAIN/LOSS

The Aurora,  Colorado industrial  property owned by the Partnership  recorded an
unrealized  loss of $0.2 million for the year ended December 31, 2004,  compared
to an unrealized loss of approximately  $0.6 million for the year ended December
31, 2003. The unrealized  loss recorded in 2004 and 2003 were due to soft market
conditions and capital  improvements  at the property that were not reflected as
an increase in market value.

REALIZED GAIN

On January 28, 2003 the industrial  property located in Salt Lake City, Utah was
sold for a realized gain of $0.5 million.

HOTEL PROPERTY

<TABLE>
<CAPTION>
                                      NET           NET
                                  INVESTMENT    INVESTMENT     UNREALIZED      UNREALIZED
                                    INCOME        INCOME       GAIN/(LOSS)     GAIN/(LOSS)     OCCUPANCY      OCCUPANCY
PROPERTY                           12/31/04      12/31/03       12/31/04        12/31/03       12/31/04       12/31/03
--------                          ----------    ----------     -----------     -----------     ---------      ---------
YEAR TO DATE
------------
<S>                                <C>              <C>          <C>              <C>             <C>            <C>
Lake Oswego, OR*                   $ 640,660        N/A          $ 99,387         N/A             66%            50%
</TABLE>

* Hotel purchased in December 2003

NET INVESTMENT INCOME

On December 10,  2003,  the  Partnership  acquired a  controlling  interest in a
161-room hotel located in Lake Oswego,  Oregon for $8.0 million.  Net investment
income from hotel  operations  was $0.6 million for the year ended  December 31,
2004.

                                       12
<PAGE>


UNREALIZED GAIN/LOSS

The Lake Oswego,  Oregon hotel  property  owned by the  Partnership  recorded an
unrealized gain of $0.1 million for the year ended December 31, 2004.

OTHER

Other net  investment  income  decreased  $0.4  million  during  the year  ended
December  31,  2004  compared  to the  corresponding  period in 2003.  Other net
investment  income  includes   interest  income  from  short-term   investments,
investment management fees, and portfolio level expenses.

(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 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, on an ongoing basis, reviews critical estimates and assumptions.  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  Consolidated
Financial Statements may change significantly.  Actual results could differ from
those estimates.

The following sections discuss critical accounting policies applied in preparing
our consolidated financial statements that are most dependent on the application
of estimates and assumptions.

VALUATION OF INVESTMENTS

REAL  ESTATE  INVESTMENTS--The  Partnership's  investments  in real  estate  are
initially carried at their purchase price. Subsequently, real estate investments
are  reported at their  estimated  market  values based upon  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,  with independent updates quarterly. The Chief Real Estate Appraiser
of Prudential  Investment  Management  ("PIM") is responsible to assure that the
valuation process provides objective and reasonable market value estimates.

The purpose of an appraisal is to estimate the market value of real estate as of
a specific  date.  Market value has been defined as the most probable  price for
which the  appraised  real estate will sell in a  competitive  market  under all
conditions  requisite  for a fair sale,  with the buyer and seller  each  acting
prudently,  knowledgeably,  and for self interest,  and assuming that neither is
under undue duress.

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.

Mortgage  and other loans  receivable,  which are  accounted  for as loans,  are
independently   valued  according  to  the  same  appraisal   process  as  other
investments in real estate.

Other real estate investments include notes receivable,  which are valued at the
amount due and approximate market value.

As described  above,  the estimated  market value of real estate and real estate
related assets is determined through an appraisal process, except for other real
estate investments, which are determined as stated above. 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.  Although the
estimated  market values represent  subjective  estimates,  management  believes
these estimated market values are reasonable approximations of market prices and
the  aggregate  value of  investments  in real estate is fairly  presented as of
December 31, 2004 and December 31, 2003.

                                       13
<PAGE>


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 about 32.85% 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 rare 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, 2004:

                                             ESTIMATED MARKET
                                                   VALUE             AVERAGE
                               MATURITY       (IN $ MILLIONS)     INTEREST RATE
--------------------------------------------------------------------------------
Cash equivalents............  0-3 months           $17.6              5.18%

The table below discloses the  Partnership's  fixed rate debt as of December 31,
2004. 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.

<TABLE>
<CAPTION>
DEBT (IN $ THOUSANDS),                                                                            ESTIMATED
INCLUDING CURRENT PORTION            2005      2006      2007       2008   THEREAFTER   TOTAL    FAIR VALUE
-------------------------            ----      ----      ----       ----   ----------   -----    ----------
<S>                                  <C>       <C>        <C>    <C>        <C>        <C>         <C>
Average Fixed Interest Rate......    5.22%     5.20%      5.18%     4.99%      6.75%      6.17%
Fixed Rate.......................    $512      $549       $588   $26,090    $16,034    $43,773     $44,816
-----------------------------------------------------------------------------------------------------------
Total Mortgage Loans Payable.....    $512      $549       $588   $26,090    $16,034    $43,773     $44,816
</TABLE>

The  Partnership is exposed to market risk from tenants.  While the  Partnership
has not experienced any significant credit losses, in the event of a significant
rising  interest rate  environment  and/or  economic  downturn,  defaults  could
increase and result in losses to the  Partnership,  which 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 Financial  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,  2004.  Based on such
evaluation,  the Chief  Executive  Officer  and  Chief  Financial  Officer  have
concluded that, as of December 31, 2004, 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,
2004,  that has  materially  affected,  or is  reasonably  likely to  materially
affect, our internal control over financial reporting.

ITEM 9B: OTHER INFORMATION

None.

                                       14
<PAGE>


                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

NAME                        POSITION                                         AGE
-----                       -------                                          ---

JAMES J. AVERY, JR.         VICE CHAIRMAN AND DIRECTOR                       53
C. Edward Chaplin           Treasurer and Director                           48
Helen M. Galt               Director                                         57
Bernard J. Jacob            President and Director                           49
Ronald P. Joelson           Director                                         46
Andrew J. Mako              Director                                         48
David R. Odenath, Jr.       Director                                         48
John Chieffo                Vice President and Chief Accounting Officer      41
Clifford E. Kirsch          Chief Legal Officer and Secretary                45
Melody C. McDaid            Senior Vice President                            55
Esther H. Milnes            Senior Vice President                            54
James M. O'Connor           Senior Vice President and Actuary                49
Shirley H. Shao             Senior Vice President and Chief Actuary          50

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; prior to 2000, Vice President and Treasurer, Prudential.

HELEN M. GALT, DIRECTOR--Company Actuary, Prudential since 1993.

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 2001:  Executive  Vice  President,
Proact Technologies Corporation.

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

ANDREW  J.  MAKO,   DIRECTOR--Vice  President,   Finance,   Insurance  Division,
Prudential Financial since 1999.

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

JOHN CHIEFFO,  VICE PRESIDENT AND CHIEF ACCOUNTING  OFFICER--Vice  President and
Individual Life Controller since 1998.

CLIFFORD E. KIRSCH, CHIEF LEGAL OFFICER AND SECRETARY--Chief  Counsel,  Variable
Products, Prudential Law Department since 1995.

MELODY C. MCDAID,  SENIOR VICE  PRESIDENT--Vice  President  and Site  Executive,
Prudential Financial Services Customer Service Office 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;  prior  to 2000:  Corporate  Vice  President,  Guaranteed
Products, Prudential Retirement.

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.

                                       15
<PAGE>


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     Prudential     Financial's     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.

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 June 7, 2005,  to be filed with the  Securities  and
Exchange  Commission  pursuant to Regulation  14A within 120 days after the year
ended December 31, 2004.

                                       16
<PAGE>


                                     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, 2004.  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(a) The Articles of Incorporation (as amended through May 11, 1983) of
              Pruco Life  Insurance  Company of New Jersey are  incorporated  by
              reference to  Post-Effective  Amendment No. 26 to the Registration
              Statement  on  Form  S-6 of  Pruco  Life  of New  Jersey  Variable
              Appreciable  Account as filed  April 28,  1997,  Registration  No.
              2-89780.

       3.1(b) Amendment to the Articles of Incorporation dated February 12, 1998
              is incorporated by reference to Post-Effective Amendment No. 12 to
              the  Registration  Statement  on Form  S-1,  of Pruco  Life of New
              Jersey Variable  Contract Real Property  Account as filed on April
              16, 1999, Registration No. 33-20018.

       3.2    By-Laws of Pruco Life Insurance  Company of New Jersey (as amended
              through June 7, 1999) are  incorporated  by reference to Form S-6,
              Registration  No.  333-85117,  filed  August 13, 1999 on behalf of
              Pruco Life of New Jersey Variable Appreciable Account.

       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.

                                       17
<PAGE>


       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.

       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.

       32.2   Investment  Management  Agreement  between  Prudential  Investment
              Management,   Inc.  and  The  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.    Not applicable.

       24.    Powers of Attorney are filed herewith.

       31.1   Section 302 Certification of Chief Executive Officer

       31.2   Section 302 Certification of Chief Financial Officer

       32.1   Section 906 Certification of Chief Executive Officer

       32.2   Section 906 Certification of Chief Financial Officer

                                       18
<PAGE>


                                   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 JERSEY
                                  IN RESPECT OF
        PRUCO LIFE OF NEW JERSEY VARIABLE CONTRACT REAL PROPERTY ACCOUNT
        ----------------------------------------------------------------
                                  (REGISTRANT)



Date:     March 31, 2005                    By:  /s/ Bernard J. Jacob
         --------------                         ------------------------------
                                                 Bernard J. Jacob
                                                 President and Director
                                                 (Principal Executive 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
---------                                  ----                        ----

/s/ Bernard J. Jacob        President and Director                March 31, 2005
------------------------    (Principal Executive Officer)
Bernard J. Jacob

/s/ John Chieffo            Chief Accounting Officer              March 31, 2005
------------------------    (Principal Accounting and
John Chieffo                Financial Officer)

*                           Director                              March 31, 2005
------------------------
James J. Avery, Jr.

*                           Treasurer and Director                March 31, 2005
------------------------
C. Edward Chaplin

*                           Director                              March 31, 2005
------------------------
Helen M. Galt

*                           Director                              March 31, 2005
------------------------
Ronald P. Joelson

*                           Director                              March 31, 2005
------------------------
Andrew J. Mako

*                           Director                              March 31, 2005
------------------------
David R. Odenath, Jr.



                                               *BY:  /s/ Thomas C. Castano
                                                    -----------------------
                                                THOMAS C. CASTANO
                                                (ATTORNEY-IN-FACT)


                                       19
<PAGE>


        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, 2004 and 2003 .........   F-3

         Statements of Operations -- Years Ended
         December 31, 2004, 2003, 2002 ..................................   F-3

         Statements of Changes in Net Assets -- Years Ended
         December 31, 2004, 2003, 2002 ..................................   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, 2004
         and 2003 .......................................................   F-10

         Statements of Operations -- Years Ended December 31, 2004,
         2003 and 2002 ..................................................   F-11

         Statements of Changes in Net Assets -- Years Ended
         December 31, 2004, 2003 and 2002 ...............................   F-12

         Statements of Cash Flows -- Years Ended December 31, 2004,
         2003 and 2002 ..................................................   F-13

         Schedule of Investments -- December 31, 2004 and 2003 ..........   F-14

         Notes to Financial Statements ..................................   F-16

     Financial Statement Schedules:

         For the period ended December 31, 2004

         Schedule III -- Real Estate Owned: Properties ..................   F-23

         Schedule III -- Real Estate Owned: Interest in Properties ......   F-24


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
<PAGE>


             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  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, 2004 and 2003, 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, 2004, 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  auditing   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 provide a reasonable basis for our opinion.


PricewaterhouseCoopers LLP
New York, New York
March 18, 2005


                                      F-2
<PAGE>


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

<TABLE>
<CAPTION>
STATEMENT OF NET ASSETS
December 31, 2004 and 2003
                                                                                 2004            2003
                                                                             -----------     -----------
<S>                                                                          <C>              <C>              <C>
ASSETS
   Investment in The Prudential Variable Contract
      Real Property Partnership ........................................     $ 8,082,948     $ 7,846,237
                                                                             -----------     -----------
   Net Assets ..........................................................     $ 8,082,948     $ 7,846,237
                                                                             ===========     ===========
NET ASSETS, representing:
   Equity of contract owners ...........................................     $ 6,042,260     $ 5,852,959
   Equity of Pruco Life Insurance Company of New Jersey ................       2,040,688       1,993,278
                                                                             -----------     -----------
                                                                             $ 8,082,948     $ 7,846,237
                                                                             ===========     ===========
Units outstanding ......................................................       3,438,311       3,519,859
                                                                             ===========     ===========
Portfolio shares held ..................................................         309,093         318,217
Portfolio net asset value per share ....................................     $     26.15     $     24.66

STATEMENT OF OPERATIONS
For the periods ended December 31, 2004, 2003 and 2002
                                                                                 2004             2003             2002
                                                                             -----------      -----------      -----------
INVESTMENT INCOME
Net investment income from Partnership operations ......................     $   336,966      $   505,887      $   489,257
                                                                             -----------      -----------      -----------
EXPENSES
Charges to contract owners for assuming mortality risk and
   expense risk and for administration .................................          34,222           33,146           33,639
                                                                             -----------      -----------      -----------
NET INVESTMENT INCOME ..................................................         302,744          472,741          455,618
                                                                             -----------      -----------      -----------
NET REALIZED AND UNREALIZED GAIN
   (LOSS) ON INVESTMENTS
Net change in unrealized gain (loss) on investments from Partnership ...          66,677         (328,761)        (400,009)
Realized gain (loss) on sale of investments from Partnership ...........          74,741           22,215           17,722
                                                                             -----------      -----------      -----------
NET GAIN (LOSS) ON INVESTMENTS .........................................         141,418         (306,546)        (382,287)
                                                                             -----------      -----------      -----------
NET INCREASE IN NET ASSETS
   RESULTING FROM OPERATIONS ...........................................     $   444,162      $   166,195      $    73,331
                                                                             ===========      ===========      ===========

STATEMENT OF CHANGES IN NET ASSETS
For the period ended December 31, 2004, 2003 and 2002

                                                                                    2004             2003             2002
                                                                             -----------      -----------      -----------
OPERATIONS
Net investment income ..................................................     $   302,744      $   472,741      $   455,618
Net change in unrealized gain (loss) on investments in Partnership .....          66,677         (328,761)        (400,009)
Net realized gain (loss) on sale of investments in Partnership .........          74,741           22,215           17,722
                                                                             -----------      -----------      -----------
NET INCREASE IN NET ASSETS
   RESULTING FROM OPERATIONS ...........................................         444,162          166,195           73,331
                                                                             -----------      -----------      -----------
CAPITAL TRANSACTIONS
Net withdrawals by contract owners .....................................        (128,598)         (60,848)        (139,939)
Net contributions (withdrawals) by Pruco Life Insurance
   Company of New Jersey ...............................................         (78,853)      (1,114,015)         173,578
                                                                             -----------      -----------      -----------
NET INCREASE (DECREASE) IN NET ASSETS
   RESULTING FROM CAPITAL TRANSACTIONS .................................        (207,451)      (1,174,863)          33,639
                                                                             -----------      -----------      -----------
TOTAL INCREASE (DECREASE) IN NET ASSETS ................................         236,711       (1,008,668)         106,970
NET ASSETS
   Beginning of period .................................................       7,846,237        8,854,905        8,747,935
                                                                             -----------      -----------      -----------
   End of period .......................................................     $ 8,082,948      $ 7,846,237      $ 8,854,905
                                                                             ===========      ===========      ===========
</TABLE>

   THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

                                      F-3
<PAGE>


                      NOTES TO THE FINANCIAL STATEMENTS OF
        PRUCO LIFE OF NEW JERSEY VARIABLE CONTRACT REAL PROPERTY ACCOUNT
                                DECEMBER 31, 2004

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, 2004 and 2003 the
Account's  interest in the  Partnership  was 4.3% or 309,093  shares and 4.3% or
318,217 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 of New Jersey 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
<PAGE>


NOTE 4: NET WITHDRAWALS BY CONTRACT OWNERS

Net contract owner  withdrawals for the real estate  investment  option in Pruco
Life of New Jersey's  variable  insurance and variable  annuity products for the
years ended December 31, 2004, 2003 and 2002 were as follows:


<TABLE>
<CAPTION>
2004:
-----
                                             VAL             VLI           SPVA           SPVL           TOTAL
                                          ---------       --------       --------       --------       ---------
<S>                                       <C>             <C>            <C>            <C>            <C>
Contract Owner Net Payments:              $ 310,624       $ 57,735       $      0       $    (13)      $ 368,346
Policy Loans:                              (119,474)       (22,106)             0           (565)       (142,145)
Policy Loan Repayments and Interest:        122,527          7,829              0         13,970         144,326
Surrenders, Withdrawals, and
  Death Benefits:                          (191,894)       (37,613)        (1,940)       (14,101)       (245,548)
Net Transfers To Other Subaccounts
  or Fixed Rate Option:                     (20,098)         4,924              0         (5,000)        (20,174)
Administrative and Other Charges:          (199,446)       (33,301)             0           (656)       (233,403)
                                          ---------       --------       --------       --------       ---------
NET WITHDRAWALS BY CONTRACT OWNERS        $ (97,761)      $(22,532)      $ (1,940)      $ (6,365)      $(128,598)
                                          =========       ========       ========       ========       =========

2003:
-----
                                             VAL             VLI           SPVA           SPVL           TOTAL
                                          ---------       --------       --------       --------       ---------
Contract Owner Net Payments:              $ 325,435       $ 66,854       $      0       $      0       $ 392,289
Policy Loans:                               (96,224)         6,196              0         (1,166)        (91,194)
Policy Loan Repayments and Interest:        150,021         11,474              0          1,501         162,996
Surrenders, Withdrawals, and
  Death Benefits:                          (209,965)       (48,272)        (6,000)             0        (264,237)
Net Transfers To Other Subaccounts
  or Fixed Rate Option:                       5,501            847        (17,828)             0         (11,480)
Administrative and Other Charges:          (213,640)       (34,797)             0           (785)       (249,222)
                                          ---------       --------       --------       --------       ---------
NET WITHDRAWALS BY CONTRACT OWNERS        $ (38,872)      $  2,302       $(23,828)      $   (450)      $ (60,848)
                                          =========       ========       ========       ========       =========

2002:
-----
                                             VAL             VLI           SPVA           SPVL           TOTAL
                                          ---------       --------       --------       --------       ---------
Contract Owner Net Payments:              $ 342,282       $ 62,548       $      0       $      9       $ 404,839
Policy Loans:                              (134,116)       (11,582)             0         (1,524)       (147,222)
Policy Loan Repayments and Interest:        130,162          9,722              0          1,741         141,625
Surrenders, Withdrawals, and
  Death Benefits:                          (237,764)       (32,072)             0           (112)       (269,948)
Net Transfers To Other Subaccounts
  or Fixed Rate Option:                     (26,640)        14,945              0         (4,840)        (16,535)
Administrative and Other Charges:          (218,522)       (33,382)             0           (794)       (252,698)
                                          ---------       --------       --------       --------       ---------
NET WITHDRAWALS BY CONTRACT OWNERS        $(144,598)      $ 10,179       $      0       $ (5,520)      $(139,939)
                                          =========       ========       ========       ========       =========
</TABLE>

                                      F-5
<PAGE>


NOTE 5: UNIT ACTIVITY

Transactions  in units for the years ended December 31, 2004, 2003 and 2002 were
as follows:

<TABLE>
<CAPTION>
2004:
-----

                                                                            VAL        VLI        SPVA        SPVL
                                                                         --------    -------     ------      ------
<S>                          <C>                                          <C>         <C>             <C>     <C>
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)

2002:
-----
                                                                            VAL        VLI        SPVA        SPVL
                                                                         --------    -------     ------      ------
Company Contributions:       158,361   Contract Owner Contributions:      211,561     38,915          0       5,731
Company Redemptions:         (69,438)  Contract Owner Redemptions:       (278,286)   (34,428)        (2)     (8,453)
</TABLE>

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,  2004,  2003 and 2002  were as
follows:

               DECEMBER 31, 2004       DECEMBER 31, 2003      DECEMBER 31, 2002
               -----------------       -----------------      -----------------
PURCHASES:                 $0                      $0                     $0
SALES:              $(241,673)            $(1,208,010)                    $0


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.

<TABLE>
<CAPTION>
                                   AT YEAR ENDED                                  FOR THE YEAR ENDED
                     -----------------------------------------     --------------------------------------------------
                      UNITS        UNIT VALUE       NET ASSETS      INVESTMENT     EXPENSE RATIO**    TOTAL RETURN***
                     (000'S)     LOWEST-HIGHEST       (000'S)      INCOME RATIO*   LOWEST-HIGHEST     LOWEST-HIGHEST
                     -------  --------------------  ----------     -------------   ---------------    ---------------
<S>                   <C>     <C>                     <C>              <C>         <C>                <C>
December 31, 2004     2,563   $2.08645 to $2.45484    $6,042           4.15%       0.35% to 1.25%     4.74% to 5.68%
December 31, 2003     2,618   $1.99197 to $2.32279    $5,853           5.77%       0.35% to 1.25%     0.98% to 1.89%
December 31, 2002     2,647   $1.97263 to $2.27966    $5,818           5.59%       0.35% to 1.25%    -0.03% to 0.87%
December 31, 2001     2,712   $1.97316 to $2.26011    $5,922           5.89%       0.35% to 1.25%     3.50% to 4.42%
</TABLE>

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  875,413,  901,524,  1,393,587  and  1,304,664  units
representing $2,040,688,  $1,993,278, $3,036,542 and $2,826,338 of net assets as
of December 31, 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.

                                      F-6
<PAGE>


***  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.

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
<PAGE>


             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



To the Partners of The Prudential
Variable Contract Real Property Partnership

In  our  opinion,  the  accompanying   consolidated  statements  of  assets  and
liabilities, including the consolidated 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 at December 31, 2004 and
2003, and the results of its operations and its cash flows for each of the three
years in the period  ended  December  31,  2004 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 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 provide a reasonable basis for our opinion.



PricewaterhouseCoopers LLP
New York, New York
March 16, 2005

                                      F-8
<PAGE>


             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
                          FINANCIAL 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 March 16, 2005  appearing in this Annual  Report also included an audit of
the financial  statement schedules listed in Item 15(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
March 16, 2005

                                      F-9
<PAGE>


           THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

                CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES

<TABLE>
<CAPTION>
                                                                                    YEAR ENDED DECEMBER 31,
                                                                                ------------------------------
                                                                                    2004              2003
                                                                                ------------      ------------
<S>                                                                             <C>               <C>
ASSETS
REAL ESTATE INVESTMENTS -- At estimated market value:
   Real estate and improvements
      (cost: 12/31/2004 -- $224,584,885; 12/31/2003 -- $223,943,870) .....      $203,246,069      $201,144,866
   Real estate partnerships (cost: 12/31/2004 -- $11,286,826;
      12/31/2003 -- $10,609,273) .........................................        12,126,566         8,721,319
   Mortgage and other loans receivable (cost: 12/31/2004 -- $1,332,060
      12/31/2003 -- $0) ..................................................         1,332,060                --
   Other real estate investments (cost: 12/31/2004 -- $0;
      12/31/2003 -- $500,000) ............................................                --           500,000
                                                                                ------------      ------------
      Total real estate investments ......................................       216,704,695       210,366,185
CASH AND CASH EQUIVALENTS ................................................        17,557,182        18,901,814
OTHER ASSETS, NET ........................................................         6,313,734         6,359,853
                                                                                ------------      ------------
      Total assets .......................................................      $240,575,611      $235,627,852
                                                                                ============      ============
LIABILITIES & PARTNERS' EQUITY
MORTGAGE LOANS PAYABLE ...................................................      $ 43,773,767      $ 43,934,494
ACCOUNTS PAYABLE AND ACCRUED EXPENSES ....................................         3,096,006         2,998,752
DUE TO AFFILIATES ........................................................           721,419         1,017,932
OTHER LIABILITIES ........................................................           622,900           947,110
MINORITY INTEREST ........................................................         5,638,458         5,086,503
                                                                                ------------      ------------
      Total liabilities ..................................................        53,852,550        53,984,791
                                                                                ------------      ------------
COMMITMENTS AND CONTINGENCIES
PARTNERS' EQUITY .........................................................       186,723,061       181,643,061
                                                                                ------------      ------------
      Total liabilities and partners' equity .............................      $240,575,611      $235,627,852
                                                                                ============      ============
NUMBER OF SHARES OUTSTANDING AT END OF PERIOD ............................         7,140,308         7,366,835
                                                                                ============      ============
SHARE VALUE AT END OF PERIOD .............................................            $26.15            $24.66
                                                                                ============      ============
</TABLE>


                  THE ACCOMPANYING NOTES ARE AN INTEGRAL PART
                  OF THESE CONSOLIDATED FINANCIAL STATEMENTS.

                                      F-10
<PAGE>


           THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                                    YEAR ENDED DECEMBER 31,
                                                                        -----------------------------------------------
                                                                               2004              2003              2002
                                                                        -----------       -----------       -----------
<S>                                                                     <C>               <C>               <C>
INVESTMENT INCOME:
   Revenue from real estate and improvements .....................      $27,810,539       $26,217,891       $26,345,500
   Equity in income of real estate partnership ...................          629,190           560,660           276,209
   Interest and equity income on mortgage
      and other loans receivable .................................          138,296                --                --
   Income from other real estate investments .....................          246,764                --                --
   Interest on short-term investments ............................          251,374           281,943           455,339
                                                                        -----------       -----------       -----------
      Total investment income ....................................       29,076,163        27,060,494        27,077,048
                                                                        -----------       -----------       -----------
INVESTMENT EXPENSES:
   Operating .....................................................        7,545,335         5,116,001         5,261,674
   Investment management fee .....................................        2,666,103         2,493,957         2,486,639
   Real estate taxes .............................................        2,687,018         2,590,600         2,824,719
   Administrative ................................................        5,243,944         3,496,973         3,345,192
   Interest expense ..............................................        2,910,841         2,557,294         1,989,473
   Minority interest .............................................          223,316           192,260           305,308
                                                                        -----------       -----------       -----------
         Total investment expenses ...............................       21,276,557        16,447,085        16,213,005
                                                                        -----------       -----------       -----------
NET INVESTMENT INCOME ............................................        7,799,606        10,613,409        10,864,043
                                                                        -----------       -----------       -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON REAL ESTATE
   INVESTMENTS:
   Net proceeds from real estate investments sold ................        7,105,000         5,689,488         6,282,075
   Less: Cost of real estate investments sold ....................        7,307,410         6,620,263         9,101,381
   Realization of prior years' unrealized
      gain (loss) on real estate investments sold ................       (1,932,410)       (1,396,836)       (3,212,838)
                                                                        -----------       -----------       -----------
   Net gain (loss) realized on real estate
      investments sold ...........................................        1,730,000           466,061           393,532
                                                                        -----------       -----------       -----------
   Change in unrealized gain (loss) on real estate investments ...        2,457,887        (6,169,630)       (8,739,488)
   Less: Minority interest in unrealized gain (loss) on
      real estate investments ....................................          907,493           763,795           171,707
                                                                        -----------       -----------       -----------
   Net unrealized gain (loss) on real estate investments .........        1,550,394        (6,933,425)       (8,911,195)
                                                                        -----------       -----------       -----------
NET REALIZED AND UNREALIZED GAIN (LOSS)
   ON REAL ESTATE INVESTMENTS ....................................        3,280,394        (6,467,364)       (8,517,663)
                                                                        -----------       -----------       -----------
INCREASE (DECREASE) IN NET ASSETS RESULTING
   FROM OPERATIONS ...............................................      $11,080,000       $ 4,146,045       $ 2,346,380
                                                                        ===========       ===========       ===========
</TABLE>

                   THE ACCOMPANYING NOTES ARE AN INTEGRAL PART
                  OF THESE CONSOLIDATED FINANCIAL STATEMENTS.

                                      F-11
<PAGE>


           THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

                CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
                                                                                     YEAR ENDED DECEMBER 31,
                                                                        --------------------------------------------------
                                                                            2004               2003               2002
                                                                        ------------       ------------       ------------
<S>                                                                     <C>                <C>                <C>
INCREASE (DECREASE) IN NET ASSETS
   RESULTING FROM OPERATIONS:
   Net investment income .........................................      $  7,799,606       $ 10,613,409       $ 10,864,043
   Net gain (loss) realized on real estate investments sold ......         1,730,000            466,061            393,532
   Net unrealized gain (loss) from real estate investments .......         1,550,394         (6,933,425)        (8,911,195)
                                                                        ------------       ------------       ------------
   Increase (decrease) in net assets resulting from operations ...        11,080,000          4,146,045          2,346,380
                                                                        ------------       ------------       ------------
INCREASE (DECREASE) IN NET ASSETS RESULTING
   FROM CAPITAL TRANSACTIONS:
   Withdrawals by partners
      (2004 --226,527; 2003 -- 278,014; and
      2002 -- 672,622 shares, respectively) ......................        (6,000,000)        (6,856,490)       (16,143,510)
                                                                        ------------       ------------       ------------
         Increase (decrease) in net assets
            resulting from capital transactions ..................        (6,000,000)        (6,856,490)       (16,143,510)
                                                                        ------------       ------------       ------------
INCREASE (DECREASE) IN NET ASSETS ................................         5,080,000         (2,710,445)       (13,797,130)
NET ASSETS -- Beginning of period ................................       181,643,061        184,353,506        198,150,636
                                                                        ------------       ------------       ------------
NET ASSETS -- End of period ......................................      $186,723,061       $181,643,061       $184,353,506
                                                                        ============       ============       ============
</TABLE>


                   THE ACCOMPANYING NOTES ARE AN INTEGRAL PART
                   OF THESE CONSOLIDATED FINANCIAL STATEMENTS.

                                      F-12
<PAGE>


           THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                    YEAR ENDED DECEMBER 31,
                                                                        -----------------------------------------------
                                                                            2004              2003              2002
                                                                        -----------       -----------       -----------
<S>                                                                     <C>               <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net increase in net assets from operations .......................      $11,080,000       $ 4,146,045       $ 2,346,380
Adjustments to reconcile net increase in net assets
   to net cash from operating activities
   Net realized and unrealized loss (gain) .......................       (3,280,394)        6,467,364         8,517,663
   Amortization of deferred financing costs ......................         (108,232)         (523,586)         (189,826)
   Distributions in excess of (less than) equity in income
      of real estate partnership operations ......................         (209,678)          648,193           (53,459)
   Minority interest in consolidated partnerships ................          223,316           192,260           305,308
   Bad debt expense ..............................................          459,103           185,844           184,242
   (Increase) decrease in:
      Dividend receivable ........................................               --                --            20,802
      Other assets ...............................................         (304,747)         (502,655)       (2,246,510)
   Increase (decrease) in:
      Accounts payable and accrued expenses ......................           97,254           (93,346)         (377,144)
      Due to affiliates ..........................................         (296,513)          110,429            11,369
      Other liabilities ..........................................         (324,210)           35,865           (61,165)
                                                                        -----------       -----------       -----------
   Net cash flows from (used in) operating activities ............        7,335,899        10,666,413         8,457,660
                                                                        -----------       -----------       -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Net proceeds from real estate investments sold ................        7,105,000         5,689,488         6,282,075
   Acquisition of real estate and improvements ...................               --        (8,008,729)       (2,610,723)
   Additions to real estate and improvements .....................       (7,746,015)       (6,963,127)       (2,629,708)
   Contributions to real estate partnerships .....................         (467,875)       (1,326,071)       (2,851,395)
   Origination of mortgage loan receivable .......................       (1,332,060)               --                --
   Collection of other real estate investments ...................        4,975,000                --                --
   Origination of other real estate investments ..................       (4,475,000)         (500,000)               --
                                                                        -----------       -----------       -----------
   Net cash flows from (used in) investing activities ............       (1,940,950)      (11,108,439)       (1,809,751)
                                                                        -----------       -----------       -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Withdrawals ...................................................       (6,000,000)       (6,856,490)      (16,143,510)
   Proceeds from mortgage loans payable ..........................        8,750,000         8,750,000                --
   Principal payments on mortgage loans payable ..................       (8,910,727)         (514,614)         (696,828)
   Contributions from minority interest partners .................               --           242,354         2,268,461
   Distributions to minority interest partners ...................         (578,854)         (868,559)         (100,528)
                                                                        -----------       -----------       -----------
   Net cash flows from (used in) financing activities ............       (6,739,581)          752,691       (14,672,405)
                                                                        -----------       -----------       -----------
NET CHANGE IN CASH AND CASH EQUIVALENTS ..........................       (1,344,632)          310,665        (8,024,496)
CASH AND CASH EQUIVALENTS - Beginning of period ..................       18,901,814        18,591,149        26,615,645
                                                                        -----------       -----------       -----------
CASH AND CASH EQUIVALENTS - End of period ........................      $17,557,182       $18,901,814       $18,591,149
                                                                        ===========       ===========       ===========
</TABLE>


                   THE ACCOMPANYING NOTES ARE AN INTEGRAL PART
                   OF THESE CONSOLIDATED FINANCIAL STATEMENTS.

                                      F-13
<PAGE>


           THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

                      CONSOLIDATED SCHEDULES OF INVESTMENTS

<TABLE>
<CAPTION>
                                                                                                      DECEMBER 31,
                                                              TOTAL RENTABLE ------------------------------------------------------
                                                                SQUARE FEET            2004                        2003
                                                                  UNLESS     --------------------------  --------------------------
                                                                 OTHERWISE                  ESTIMATED                     ESTIMATED
                                                                 INDICATED                    MARKET                        MARKET
PROPERTY NAME              OWNERSHIP       CITY, STATE          (UNAUDITED)      COST         VALUE          COST           VALUE
------------------------------------------------------------------------------------------------------------------------------------
<C>                           <C>    <C>                         <C>         <C>           <C>           <C>           <C>
REAL ESTATE INVESTMENTS

OFFICES
750 Warrenville               WO            Lisle, IL              103,193   $ 23,173,036  $ 10,098,838  $ 23,023,835  $ 12,110,725
Oakbrook Terrace              WO          Oakbrook, IL             123,734     14,833,796     9,698,734    14,619,120    10,097,932
Summit @ Cornell Oaks         WO         Beaverton , OR             72,109     11,934,209     9,644,005    11,890,209    10,000,005
Westpark                      WO          Nashville, TN             97,199     10,708,970    11,151,327    10,423,727     9,239,260
Financial Plaza               WO          Brentwood, TN             98,049     12,333,151    10,966,233     9,837,482     6,700,041
------------------------------------------------------------------------------------------------------------------------------------
                                    Offices % as of 12/31/04           28%     72,983,162    51,559,137    69,794,373    48,147,963
APARTMENTS
Brookwood Apartments          WO           Atlanta, GA           240 Units     17,344,994    16,616,914    15,781,263    17,000,000
Dunhill Trace Apartments      WO           Raleigh, NC           250 Units     16,083,715    18,000,660    16,010,326    17,665,000
Riverbend Apartments          CJV       Jacksonville, FL         458 Units     20,015,959    22,600,000    19,946,920    22,400,000
SIMA Apartments               CJV       Gresham/Salem, OR        493 Units     12,004,323    13,900,000    19,281,738    17,975,000
------------------------------------------------------------------------------------------------------------------------------------
                               Apartments % as of 12/31/04             38%     65,448,991    71,117,574    71,020,247    75,040,000
RETAIL
King's Market                 WO          Rosewell, GA             314,358     33,864,392    21,765,286    33,102,401    23,539,665
Hampton Towne Center          WO           Hampton, VA             174,540     18,031,495    21,000,000    18,013,068    20,000,000
White Marlin Mall             CJV        Ocean City, MD            186,016     15,229,878    19,300,000    13,198,649    15,900,000
Kansas City Portfolio         EJV      Kansas City, KS;MO          487,660     11,286,726    12,126,466    10,609,273     8,721,319
------------------------------------------------------------------------------------------------------------------------------------
                                     Retail % as of 12/31/04           40%     78,412,491    74,191,752    74,923,391    68,160,984
INDUSTRIAL
Smith Road                    WO           Aurora, CO              277,930     10,692,625    10,204,072    10,806,403    10,508,509
Walsh Higgins                 WO       Salt Lake City, UT          182,500             --            --            --            --
------------------------------------------------------------------------------------------------------------------------------------
                                   Industrial % as of 12/31/04          5%     10,692,625    10,204,072    10,806,403    10,508,509
HOTEL
Portland Crown Plaza          CJV         Portland, OR           161 Rooms      8,334,342     8,300,000     8,008,729     8,008,729
------------------------------------------------------------------------------------------------------------------------------------
                               Hotel % as of 12/31/04                   4%      8,334,342     8,300,000     8,008,729     8,008,729
LAND
Gateway Village               EJV       Blue Springs, MO                              100           100            --            --
------------------------------------------------------------------------------------------------------------------------------------
                                      Land % as of 12/31/04             0%            100           100            --            --
MORTGAGE AND OTHER LOANS RECEIVABLE
Westminster West             Eloan       Westminster, MD                        1,332,060     1,332,060            --            --
------------------------------------------------------------------------------------------------------------------------------------
       Mortgage and Other Loans Receivable% as of 12/31/04              1%      1,332,060     1,332,060            --            --
OTHER REAL ESTATE INVESTMENTS
Englar Lowes Loan             NR         Westminster, MD                 --            --            --       500,000       500,000
------------------------------------------------------------------------------------------------------------------------------------
       Other Real Estate Investments% as of 12/31/04                    0%             --            --       500,000       500,000

TOTAL REAL ESTATE INVESTMENTS AS A PERCENTAGE OF
    NET ASSETS AS OF 12/31/04                                         116%    237,203,771   216,704,695   235,053,143   210,366,185
</TABLE>

WO -- Wholly Owned Investment
CJV -- Consolidated Joint Venture
EJV -- Joint Venture Investment accounted for under the equity method
NR -- Note
Receivable Eloan -- Mezzanine loan accounted for under the equity method

                                      F-14
<PAGE>


           THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

                      CONSOLIDATED SCHEDULE OF INVESTMENTS

<TABLE>
<CAPTION>
                                                                                   DECEMBER 31, 2004           DECEMBER 31, 2003
                                                                              --------------------------   -------------------------
                                                                                              ESTIMATED                  ESTIMATED
                                                                FACE AMOUNT       COST      MARKET VALUE      COST      MARKET VALUE
                                                                 ----------   -----------    -----------   -----------   -----------
<S>                                                              <C>          <C>            <C>           <C>           <C>
CASH AND CASH EQUIVALENTS -- PERCENTAGE OF NET ASSETS ........                                      9.4%                       10.4%
Federal National Mortgage Assoc., 1.06%, February 4, 2004  ...   $5,974,000   $        --    $        --   $ 5,967,907   $ 5,967,907
Federal Home Loan Mortgage Corp., 0.88%, January 2, 2004 .....   12,331,000            --             --    12,330,520    12,330,520

Federal Home Loan Bank, 6.450%, January 3, 2005 ..............   19,457,000    19,455,135     19,455,135            --            --
                                                                 ----------   -----------    -----------   -----------   -----------
TOTAL CASH EQUIVALENTS .......................................                 19,455,135     19,455,135    18,298,427    18,298,427
   CASH ......................................................                 (1,897,953)    (1,897,953)      603,387       603,387
                                                                              -----------    -----------   -----------   -----------
   TOTAL CASH AND CASH EQUIVALENTS ...........................                $17,557,182    $17,557,182   $18,901,814   $18,901,814
                                                                              ===========    ===========   ===========   ===========
</TABLE>

                   THE ACCOMPANYING NOTES ARE AN INTEGRAL PART
                  OF THESE CONSOLIDATED FINANCIAL STATEMENTS.

                                      F-15
<PAGE>


                NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OF

           THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

                FOR YEARS ENDED DECEMBER 31, 2004, 2003, AND 2002

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.

Prudential  Real Estate  Investors  ("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 9.

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.  It is the  Partnership's
          policy to consolidate those real estate partnerships in which it has a
          controlling  interest.  All  significant   intercompany  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 financial  statements and accompanying  notes.  Actual
          results could differ from those estimates.

     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

                                      F-16
<PAGE>


               NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OF

           THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

                FOR YEARS ENDED DECEMBER 31, 2004, 2003, AND 2002


          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.
          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 additional amounts invested,  and is
          subsequently  adjusted for the  Partnership's  share of  undistributed
          earnings   or   losses   (including   unrealized    appreciation   and
          depreciation) from the underlying entity.

          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.  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, 2004.

     D:   OTHER REAL ESTATE  INVESTMENTS--Other  real estate investments include
          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.

     G:   OTHER  ASSETS--Cash  of $212,989 and $216,883  was  maintained  by the
          wholly  owned and  consolidated  properties  at December  31, 2004 and
          2003,  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 $46,690 and $76,800 at December 31, 2004
          and 2003, respectively.

     H:   MORTGAGE  LOANS  PAYABLE--Mortgage  loans  payable  are  stated at the
          principal  amount  of  the  obligation   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 $391,666 and $313,425,  which are net of
          accumulated  amortization  of $878,316 and $713,990 as of December 31,
          2004 and 2003,  respectively,  and which are being  amortized over the
          term of the related obligation.

                                      F-17
<PAGE>


                NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OF

           THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

                FOR YEARS ENDED DECEMBER 31, 2004, 2003, AND 2002


     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, 2004,  2003, and 2002
was $2,595,651, $2,462,387, and $1,989,473, respectively.

During the fourth  quarter 2002, in conjunction  with the  acquisition of a real
estate  investment,  the  Partnership  assumed  mortgage loan  financing of $7.4
million.

                                      F-18
<PAGE>


                NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OF

           THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

                FOR YEARS ENDED DECEMBER 31, 2004, 2003, AND 2002


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 at
December  31,  2004 and 2003,  and  results of  operations  for the years  ended
December 31, 2004, 2003, and 2002 are summarized as follows (in 000's):

                                                     DECEMBER 31,
                                                   2004        2003
                                                 -------     -------
Partnership Assets and Liabilities
   Real estate at estimated market value ...     $34,200     $29,450
   Other assets ............................       1,217       1,536
                                                 -------     -------
   Total assets ............................      35,417      30,986
                                                 -------     -------

    Mortgage loans payable .................      18,564      18,834

   Other liabilities .......................         370         321
                                                 -------     -------
   Total liabilities .......................      18,934      19,155
                                                 -------     -------
   Net Assets ..............................     $16,483     $11,831
                                                 =======     =======
Partnership's Share of Net Assets ..........     $12,127     $ 8,721
                                                 =======     =======

                                                      YEAR ENDED DECEMBER 31,
                                                   2004        2003        2002
                                                 -------     -------     -------
Partnership Operations
   Rental revenue ..........................     $ 3,125     $ 3,114     $ 3,017
   Other revenue ...........................       1,710       1,360       1,153
                                                 -------     -------     -------
   Total revenue ...........................       4,835       4,474       4,170
                                                 -------     -------     -------
   Real estate expenses and taxes ..........       2,481       2,196       2,065
   Interest expense ........................       1,500       1,555       1,652
                                                 -------     -------     -------

   Total expenses ..........................       3,981       3,751       3,717

                                                 -------     -------     -------
   Net Investment Income ...................     $   854     $   723     $   453
                                                 =======     =======     =======
Partnership's equity in income of
  real estate partnerships .................     $   629     $   561     $   276
                                                 =======     =======     =======

                                      F-19
<PAGE>


                NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OF

           THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

                FOR YEARS ENDED DECEMBER 31, 2004, 2003, AND 2002


NOTE 5: MORTGAGE LOANS PAYABLE:

Debt includes mortgage loans payable as summarized below (in 000's):

<TABLE>
<CAPTION>
                                                                                AS OF
                                                       AS OF 12/31/04         12/31/03              AS OF 12/31/04
                                                 -------------------------   -----------    ------------------------------
                                                             PARTNERSHIP'S
                                                    100%       SHARE OF         100%
                                                  PRINCIPAL    PRINCIPAL      PRINCIPAL
                                                   BALANCE      BALANCE        BALANCE      INTEREST   MATURITY
                                                 OUTSTANDING  OUTSTANDING*   OUTSTANDING     RATE**      DATE     TERMS***
                                                 -----------  ------------   -----------    --------   --------   --------
<S>                                                 <C>          <C>          <C>             <C>        <C>      <C>
MORTGAGES OF WHOLLY OWNED PROPERTIES & CONSOLIDATED PARTNERSHIPS
Jacksonville, FL                                    $10,000      $ 8,933      $ 10,000        4.34%      2008       PP, I
Hampton, VA                                           9,075        9,075         9,451        6.75%      2018     PP, P&I
Ocean City, MD                                        7,199        4,655         7,299        7.24%      2008     PP, P&I
Raleigh, NC                                           8,750        8,750         8,750        3.09%      2008       PP, I
Atlanta, GA                                           8,750        8,750            --        4.90%      2009     PP, P&I
Gresham/Salem, OR                                        --           --         8,434          --       Paid off in 2004
--------------------------------------------------------------------------------------------------------------------------
Total                                               $43,774      $40,163       $43,934

MORTGAGES ON EQUITY PARTNERSHIPS
Kansas City, MO - Ten Quivira                       $ 6,680      $ 4,914       $ 6,776        8.16%      2007     PP, P&I
Kansas City, MO- Ten Quivira Parcel                     961          707           975        8.16%      2007     PP, P&I
Kansas City, MO - Cherokee Hill                       3,083        2,268         3,129        7.79%      2007     PP, P&I
Kansas City, KS - Devonshire                          2,140        1,575         2,172        8.16%      2007     PP, P&I
Kansas City, MO - Brywood Center                      5,700        4,193         5,782        8.16%      2007     PP, P&I
---------------------------------------------------------------------------------------------------------------------------
Total                                               $18,564      $13,657       $18,834

TOTAL MORTGAGE LOANS PAYABLE                        $62,338      $53,820       $62,768        5.84%
</TABLE>

* 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, 2004.  It does not  represent the
Partnership's legal obligation.

** The  Partnership's  weighted  average  interest rate at December 31, 2004 and
2003 were 5.84% and 6.33%,  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.

*** Loan Terms  PP=Prepayment  penalties  applicable to loan,  I=Interest  only,
P&I=Principal and Interest


As of December 31, 2004,  mortgage loans payable on wholly owned  properties and
consolidated partnerships are payable as follows:

YEAR ENDING DECEMBER 31,                                                 (000'S)
------------------------                                                 -------
   2005.......................................................           $   512
   2006.......................................................               549
   2007.......................................................               588
   2008.......................................................            26,090
   2009.......................................................             8,745
   Thereafter.................................................             7,290
                                                                         -------
   Total......................................................           $43,774
                                                                         =======

The  mortgage  loans  payable  of  wholly  owned   properties  and  consolidated
partnerships  are secured by real estate  investments  with an estimated  market
value of $97,517,574.

As of December  31, 2004,  principal  amounts of mortgage  loans  payable on the
equity partnership are payable as follows:


                                       100% LOAN BALANCE     PARTNERSHIP'S SHARE
YEAR ENDING DECEMBER 31,                    (000'S)                (000'S)
------------------------               -----------------     -------------------
   2005.............................       $   291                 $   214
   2006.............................           315                     232
   2007.............................        17,958                  13,211
                                           -------                 -------
   Total............................       $18,564                 $13,657
                                           =======                 =======

                                      F-20
<PAGE>


                NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OF

           THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

                FOR YEARS ENDED DECEMBER 31, 2004, 2003, AND 2002


NOTE 5: MORTGAGE LOANS PAYABLE: (CONTINUED)

     Based on borrowing  rates available to the Partnership at December 31, 2004
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  $44.8 million,  which is net of deferred financing costs
of $350,577 and a carrying value of $43.7 million.  The  Partnership's  share of
equity  partnership  debt has an  estimated  fair value of  approximately  $20.0
million and a carrying value of $18.6 million.  Different assumptions or changes
in future market conditions could significantly affect estimated fair value.

NOTE 6: CONCENTRATION OF RISK ON REAL ESTATE INVESTMENTS

At December  31,  2004,  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                                             (000'S)        REGION %
   ------                                          ------------      --------
   East North Central.........................      $ 19,798              9%
   Mideast....................................        59,633             28%
   Mountain...................................        10,204              5%
   Pacific....................................        31,844             15%
   Southeast..................................        83,100             37%
   West North Central.........................        12,126              6%
                                                    --------            ----
   Total......................................      $216,705            100%
                                                    ========            ====

The above  allocations  are based on (1) 100% of the  estimated  market value of
wholly-owned  properties and consolidated joint ventures,  and (2) the estimated
market value of the Partnership's net equity in non-consolidated ventures.


NOTE 7: PURCHASE COMMITMENT OBLIGATIONS

PURCHASE COMMITMENTS:

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, 2004, the Partnership had the following  outstanding purchase
commitments:


                                                                    COMMITMENTS
PROPERTY TYPE                                                         (000'S)
-------------                                                       -----------
   Other......................................................         1,600
                                                                      ------
   Total......................................................        $1,600
                                                                      ======

                                      F-21
<PAGE>


                NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OF

           THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

                FOR YEARS ENDED DECEMBER 31, 2004, 2003, AND 2002


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 2005 to 2050. At December 31, 2004, 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,                                               (000'S)
-----------------------                                                -------
   2005.......................................................        $11,978
   2006.......................................................         11,392
   2007.......................................................         10,464
   2008.......................................................          9,346
   2009.......................................................          6,672
   Thereafter.................................................         18,900
                                                                      -------
   Total......................................................        $68,752
                                                                      =======

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,  2004,  the cost basis of  Prudential's  equity
interest  in the  Partnership  under  this  commitment  (held  through  the Real
Property  Accounts) was $44 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, 2004,
2003 and 2002  management  fees incurred by the  Partnership  were $2.7 million,
$2.5 million, and $2.5 million for each of the three years, respectively.

The Partnership also reimburses PIM for certain administrative services rendered
by PIM.  The amounts  incurred for the years ended  December 31, 2004,  2003 and
2002 were $141,130; $132,380; and $132,380,  respectively, and are classified as
administrative expenses in the Consolidated Statements of Operations.

During the years ended December 31, 2004,  2003 and 2002, the  Partnership  made
the following distributions to the Partners:


YEAR ENDING DECEMBER 31,                                                (000'S)
-----------------------                                                -------
   2004.......................................................         $ 6,000
   2003.......................................................         $ 6,856
   2002.......................................................         $16,143

                                      F-22
<PAGE>


                NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OF

           THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP

                FOR YEARS ENDED DECEMBER 31, 2004, 2003, AND 2002


NOTE 11: FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
                                                                           FOR THE YEAR ENDED DECEMBER 31,
                                                             ----------------------------------------------------------
                                                              2004         2003         2002         2001         2000
                                                             ------       ------       ------       ------       ------
<S>                                                          <C>          <C>          <C>          <C>          <C>
PER SHARE (UNIT) OPERATING PERFORMANCE:
Net Asset Value, beginning of period ...................     $24.66       $24.11       $23.82       $22.74       $20.86
INCOME FROM INVESTMENT OPERATIONS:
Investment income, before management fee ...............       1.44         1.71         1.63         1.66         1.67
Management fee .........................................      (0.36)       (0.33)       (0.30)       (0.30)       (0.26)
Net realized and unrealized gain (loss) on investments .       0.41        (0.83)       (1.04)       (0.28)        0.47
                                                             ------       ------       ------       ------       ------
Net Increase in Net Assets Resulting from Operations ...       1.49         0.55         0.29         1.08         1.88
                                                             ------       ------       ------       ------       ------
NET ASSET VALUE, END OF PERIOD .........................     $26.15       $24.66       $24.11       $23.82       $22.74
                                                             ======       ======       ======       ======       ======
TOTAL RETURN, BEFORE MANAGEMENT FEE (a): ...............       7.61%        3.63%        2.52%        6.14%       10.40%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, end of period (in millions) ................       $187         $182         $184         $198         $206
Ratios to average net assets (b):
Total portfolio level expenses .........................       1.43%        1.35%        1.28%        1.27%        1.28%
Net investment income ..................................       5.76%        7.12%        6.85%        7.11%        7.76%
</TABLE>

(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.

NOTE 12: SUBSEQUENT EVENTS:

On March 10, 2005, one additional  apartment asset located in Salem, Oregon sold
for $4.65 million,  resulting in a realized loss of  approximately  $1.6 million
for the property.

                                      F-23
<PAGE>


           THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP
                  SCHEDULE III -- REAL ESTATE OWNED: PROPERTIES
                                DECEMBER 31, 2004

<TABLE>
<CAPTION>
                                                                                         GROSS AMOUNT AT WHICH
                    INITIAL COSTS TO THE PARTNERSHIP                                    CARRIED AT CLOSE OF YEAR
                  -------------------------------------     COSTS      ------------------------------------------------------------
                                                         CAPITALIZED                                             YEAR OF
                  ENCUMBRANCES              BUILDING &  SUBSEQUENT TO              BUILDING &   2004     TOTAL   CONSTRUC-   DATE
DESCRIPTION        AT 12/31/04    LAND     IMPROVEMENTS  ACQUISITION      LAND    IMPROVEMENTS  SALES  (A)(B)(C)   TION    ACQUIRED
-----------       ------------  ---------  ------------ -------------  ---------  ------------  -----  --------- --------- --------
<S>                 <C>         <C>         <C>          <C>           <C>         <C>                 <C>         <C>         <C>
PROPERTIES:

Office Building

Lisle, IL..........      None   1,780,000   15,743,881   5,649,155     1,958,000   21,215,036          23,173,036  1985  Apr., 1988
Garden Apartments
Atlanta, GA........ 8,750,000   3,631,212   11,168,904   2,544,878(b)  4,206,097   13,138,897          17,344,994  1987  Apr., 1988
Retail Shopping
  Center
Roswell, GA........      None   9,454,622   21,513,677   2,896,093    11,135,594   22,728,798          33,864,392  1988  Jan., 1989
Garden Apartments
Raleigh, NC........ 8,750,000   1,623,146   14,135,553     325,016     1,623,146   14,460,569          16,083,715  1995  Jun., 1995
Office Building
Nashville, TN......      None   1,797,000    6,588,451   2,323,519     1,797,378    8,911,592          10,708,970  1982  Oct., 1995
Office Park
Oakbrook
Terrace, IL........      None   1,313,310   11,316,883   2,203,603     1,313,821   13,519,975          14,833,796  1988  Dec., 1995
Office Building
Beaverton, OR......      None     816,415    9,897,307   1,220,487       845,887   11,088,322          11,934,209  1995  Dec., 1996
Industrial Building
Aurora, CO.........      None   1,338,175    7,202,411   2,152,039     1,415,159    9,277,466          10,692,625  1997  Sep., 1997
Office Complex
Brentwood, TN......      None   2,425,000    7,063,755   2,844,396     2,453,117    9,880,034          12,333,151  1987  Oct., 1997
Retail Shopping
  Center
Hampton, VA........ 9,074,608   2,339,100   12,767,956   2,924,439     3,462,107   14,569,388          18,031,495  1998   May, 2001
                   ----------  ----------  -----------  ----------    ----------  -----------  -----  -----------
                   26,574,608  26,517,980  117,398,778  25,083,625    30,210,306  138,790,077      0  169,000,383
                   ==========  ==========  ===========  ==========    ==========  ===========  =====  ===========

<CAPTION>
                                              2004         2003          2002        2001
                                           -----------  -----------  -----------  -----------
<S>                                        <C>          <C>          <C>          <C>
(a) Balance at beginning of year....       163,507,834  150,548,805  158,410,798  154,613,404
    Additions:
       Acquistions...................               --           --            0            0
       Improvements, etc.............        5,492,550    1,545,443    1,231,735    3,797,394
       Conversions from JV to WO.....               --   18,013,068            0            0
    Deletions:
       Sale..........................               --   (6,599,482)  (9,093,728)           0
                                           -----------  -----------  -----------  -----------
Balance at end of year...............      169,000,384  163,507,834  150,548,805  158,410,798
                                           ===========  ===========  ===========  ===========

(b) Net of $1,000,000 settlement received from lawsuit.
</TABLE>

                                      F-24

<PAGE>


           THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP
            SCHEDULE III -- REAL ESTATE OWNED: INTEREST IN PROPERTIES
                                DECEMBER 31, 2004

<TABLE>
<CAPTION>
                                                                                      GROSS AMOUNT AT WHICH
                   INITIAL COSTS TO THE PARTNERSHIP    COSTS                         CARRIED AT CLOSE OF YEAR
                 ----------------------------------- CAPITALIZED ------------------------------------------------------------
                                                     SUBSEQUENT                                                YEAR OF
                ENCUMBRANCES             BUILDING &   TO ACQUI-              BUILDING &                        CONSTRUC-    DATE
DESCRIPTION      AT 12/31/04    LAND    IMPROVEMENTS   SITION       LAND    IMPROVEMENTS    SOLD      TOTAL      TION     ACQUIRED
-----------     ------------ ---------- ------------ ----------  ---------- ------------ ---------- ---------- --------- ----------
<S>              <C>         <C>         <C>          <C>         <C>        <C>        <C>         <C>         <C>      <C>
INTEREST IN
 PROPERTIES:
Garden
 Apartments
Jacksonville,
 FL............. 10,000,000   2,750,000  14,650,743   2,615,216   2,750,000  17,265,959             20,015,959  1973     Sept., 1999
Retail Shopping
 Center
Kansas City MO
 and KS* ....... 13,657,622   5,710,916  15,211,504   3,174,520   5,710,916  18,386,024             24,096,940  Various  Sept., 1999
                                                                                                                Ranging
                                                                                                                From
                                                                                                                1972-1992
Garden
 Apartments
Gresham/
 Salem, OR. ....         --   3,063,000  15,318,870     483,796   3,063,000  15,802,666 (6,861,343) 12,004,323  Various  Feb., 2001
Retail Shopping                                                                                                 Ranging
 Center
Ocean City, MD..  7,199,158   1,517,099   8,495,039   5,217,740   1,517,099  13,712,779             15,229,878  1986     Nov., 2002
Hotel
Portland, OR....         --   1,500,000   6,508,729     325,613   1,500,000   6,834,342              8,334,342  1989     Dec., 2003
Land
Blue Springs,
 MO.............         --         100          --          --         100          --                    100
                 ----------  ----------  ----------  ----------  ----------  ----------  ---------  ----------
                 30,856,780  14,541,115  60,184,885  11,816,885  14,541,115  72,001,770 (6,861,343) 79,681,542
                 ==========  ==========  ==========  ==========  ==========  ==========  =========  ==========

<CAPTION>
                                                        2004         2003         2002        2001
                                                    ----------   ----------   ----------   ----------
<S>                                                 <C>          <C>          <C>          <C>
(a) Balance at beginning of year.                   71,045,309   74,974,865   60,659,900   25,121,329

   Additions:
      Acquistions................................            0    8,008,729   10,012,138   33,488,926
      Improvements, etc..........................    2,444,168    3,392,575    4,097,329    1,674,862
   Deletions:
      Sale.......................................  (6,861,343)            0            0            0
      Conversions from JV to WO..................          --   (16,446,908)
   Encumbrances on Joint Ventures
      accounted for by the equity method ........      243,195    1,116,048      205,498      374,783
                                                    ----------   ----------   ----------   ----------
   Balance at end of year........................   66,871,329   71,045,309   74,974,865   60,659,900
                                                    ==========   ==========   ==========   ==========
</TABLE>

* Partnership interest accounted for by the equity method.

                                      F-25